Q4 2024 Alfa Laval AB Earnings Call Transcript
Key Points
- Alfa Laval AB (ALFVF) reported strong growth in the fourth quarter and full year 2024, with favorable market conditions across most applications.
- The company enters 2025 with a solid SEK52 billion order book and good momentum in the short cycle business.
- Operational cash flow was robust, reaching a record SEK12 billion for the full year 2024.
- The Marine division achieved a record year with a 40% order intake growth in Q4, indicating strong market conditions.
- Service division saw a 13% organic growth in Q4, contributing to an 8% growth for the full year, supported by momentum across all divisions.
- Q4 margins were affected by one-off restructuring costs and project risk exposures, leading to a somewhat weaker seasonal performance.
- The Energy division faced challenges with a weak HVAC and heat pump market, although this was offset by growth in other areas.
- Currency fluctuations had a negative impact on the full year, mainly due to the movement of the US dollar to euro.
- The heat pump market is expected to recover only in the second half of 2025, indicating ongoing challenges in this segment.
- There is uncertainty regarding the order intake for the Marine division from Q2 2025 onwards, particularly in the cargo pumping business.
Good morning, and welcome to Alfa Laval's fourth-quarter earnings call and also for the full year. So Fredrik and I, we will give you a run down on the year and the quarter. As always, let me start with a couple of introductory overview comments from the year.
Growth continues strong in the fourth quarter and the full year of '24, ahead of expectations with favorable market conditions in most applications. It was especially good momentum in the short cycle business, in the Food & Water and in Service overall. Now, we enter 2025 with a solid SEK52 billion order book and good momentum on the short cycle side.
The full year '24 margin was at 16.6%, ahead of last year and also slightly above our expectations when we entered the year. Q4 was seasonally a bit weaker but also affected by some one-off charges. The operational cash flow was solid in Q4 with SEK4 billion and the new record level of SEK12 billion for the full year '24. And so consequently, our balance sheet is strong at the moment and supportive of various options
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