Earnings Release • Apr 25, 2023
Earnings Release
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"Market conditions are expected to remain positive, although demand is expected to be sequentially lower in the next quarter."
Earlier published outlook (February 2, 2023): "We expect demand in the first quarter to be about the same as in the fourth quarter."
The Board of Directors will propose a dividend of SEK 6.00 (6.00) per share to the Annual General Meeting.
The Q1 2023 report has not been subject to review by the company's auditors.
| Q1 | ||||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | % | % * |
| Order intake | 18,385 | 13,255 | 39 | 32 |
| Net sales | 14,111 | 10,615 | 33 | 25 |
| Adjusted EBITA ** | 2,387 | 1,816 | 31 | |
| - adjusted EBITA margin (%) ** | 16.9 | 17.1 | ||
| Result after financial items | 2,048 | 1,260 | 63 | |
| Net income for the period | 1,515 | 932 | 63 | |
| Earnings per share (SEK) | 3.64 | 2.22 | 64 | |
| Cash flow from operating activities | 1,004 | 767 | 31 | |
| Impact on adjusted EBITA of foreign exchange effects | 145 | 40 | ||
| Impact on result after financial items | ||||
| of comparison distortion items | - | -327 | ||
| Return on capital employed (%) ** | 18.5 | 18.8 | ||
| Net debt to EBITDA, times ** | 1.32 | 0.79 |
Summary
* Excluding currency effects. ** Alternative performance measures.
President and CEO
"The demand was strong in the first quarter, with order intake growing to a record level of SEK 18.4 billion.
The Marine Division was especially strong with order intake amounting to SEK 7.2 billion, corresponding to 89 percent growth compared to last year. Order intake was exceptionally high for pumping systems, driven by high demand in offshore. The tanker market also continued the recovery from last quarter with a clearly positive effect for the cargo pumping segment. Structurally, the demand for the division's decarbonization solutions continued to develop well.
The Energy Division continued the strong growth path mainly driven by energy efficiency solutions. While the energy transition is structurally driving demand, supported by the ongoing capacity investment program, a recovery in the refinery sector increased demand also for welded heat exchangers. In all, the division grew 43 percent and reached SEK 5.4 billion in order intake in the quarter.
The Food & Water Division was stable compared to last year with an order intake of SEK 5.8 billion. The organic growth was negative, mainly due to variations in large order bookings between quarters. The demand trends across most end-markets were unchanged sequentially.
As global supply chains continue to stabilize, the invoicing increased with 33 percent to SEK 14.1 billion. The positive trend is expected to continue in the second quarter. Despite inflationary pressure, the adjusted EBITA margin was stable at 17 percent compared to last year and improved sequentially. The sales and admin cost ratio improved significantly in the quarter on the back of strong sales. The volatility in commodity prices and currencies continue to affect the margin, both negatively and positively. On a group level these effects are largely neutralized, but it does generate some margin variations on a divisional level, also in the next quarters.
Despite geopolitical tensions and an element of unrest in financial markets, the demand situation remains robust in almost all geographies. The weakness in many consumer sectors due to interest rate hikes are still not visible in Alfa Laval´s end markets.
Alfa Laval expects to have largely completed the previously stated wind down of business activities in Russia by mid-2023. Alfa Laval has not accepted any new orders for delivery in Russia or for use in Russia since 3 March 2022.
The group will monitor the global macro-economic development, but market conditions are expected to remain positive, although demand is expected to be sequentially lower in the next quarter."
Tom Erixon, President and CEO
Orders received was SEK 18,385 (13,255) million in the first quarter 2023. A further SEK 148 (602) million of order backlog for Russia has been cancelled in the quarter in compliance with extended sanctions.
Orders received from Service constituted 27.3 (29.6) percent of the Group's total orders received during the first quarter 2023.
Excluding currency effects and adjusted for acquisition and divestment of businesses the order backlog was 33.2 percent higher than the order backlog at March 31, 2022 and 11.5 percent higher than the order backlog at the end of 2022.
Order backlog
Net invoicing was SEK 14,111 (10,615) million for the first quarter 2023.
Net invoicing relating to Service constituted 31.4 (30.7) percent of the Group's total net invoicing in the first quarter 2023.
| Order bridge | |
|---|---|
| SEK millions/% | Q1 |
| 2022 | 13,255 |
| Organic 1) | 24.5% |
| Structural 1) | 7.5% |
| Currency | 6.7% |
| Total | 38.7% |
| 2023 | 18,385 |
1) Change excluding currency effects.
| Order bridge Service |
|
|---|---|
| SEK millions/% | Q1 |
| 2022 | 3,928 |
| Organic 1) | 18.5% |
| Structural 1) | 0.8% |
| Currency | 8.4% |
| Total | 27.7% |
| 2023 | 5,018 |
1) Change excluding currency effects.
| Sales bridge | |
|---|---|
| SEK millions/% | Q1 |
| 2022 | 10,615 |
| Organic 1) | 14.9% |
| Structural 1) | 10.0% |
| Currency | 8.0% |
| Total | 32.9% |
| 2023 | 14,111 |
1) Change excluding currency effects.
| Sales bridge Service |
|
|---|---|
| SEK millions/% | Q1 |
| 2022 | 3,268 |
| Organic 1) | 25.6% |
| Structural 1) | 1.0% |
| Currency | 9.0% |
| Total | 35.6% |
| 2023 | 4,433 |
1) Change excluding currency effects.
| Q1 | Jan-Dec | Last 12 | ||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| Net sales | 14,111 | 10,615 | 52,135 | 55,631 |
| Adjusted gross profit * | 5,106 | 4,146 | 18,589 | 19,549 |
| - adjusted gross margin (%) * | 36.2 | 39.1 | 35.7 | 35.1 |
| Expenses ** | -2,376 | -1,972 | -8,911 | -9,315 |
| - in % of net sales | 16.8 | 18.6 | 17.1 | 16.7 |
| Adjusted EBITDA * | 2,730 | 2,174 | 9,678 | 10,234 |
| - adjusted EBITDA margin (%) * | 19.3 | 20.5 | 18.6 | 18.4 |
| Depreciation | -343 | -358 | -1,449 | -1,434 |
| Adjusted EBITA * | 2,387 | 1,816 | 8,229 | 8,800 |
| - adjusted EBITA margin (%) * | 16.9 | 17.1 | 15.8 | 15.8 |
| Amortisation of step-up values | -241 | -214 | -943 | -970 |
| Comparison distortion items | - | -327 | -767 | -440 |
| Operating income | 2,146 | 1,275 | 6,519 | 7,390 |
* Alternative performance measures. ** Excluding comparison distortion items.
Gross margins remain stable or have improved in most business units, boosted by new pricing and a favourable service mix in the quarter. Current purchasing prices reflecting inflationary increases have a negative impact on margin for orders with long lead times that are up for invoicing from backlog. Capacity utilization imbalances persist in some products but new order intake and restructuring activities will support margin improvements starting in the third quarter.
Sales and administration expenses were SEK 2,179 (1,801) million during the first quarter 2023, corresponding to 15.4 (17.0) percent of net sales. Excluding currency effects and acquisition/divestment of businesses, sales and administration expenses increased by 9.1 percent during the first quarter 2023 compared to the corresponding period last year.
The costs for research and development during the first quarter 2023 corresponded to 2.5 (3.0) percent of net sales. Excluding currency effects and acquisition/divestment of businesses, the costs for research and development increased by 5.8 percent during the first quarter 2023 compared to the corresponding period last year.
Earnings per share was SEK 3.64 (2.22) for the first quarter 2023. The corresponding figure excluding amortisation of step-up values and the corresponding tax, was SEK 4.10 (2.64).
| Q1 | Jan-Dec | Last 12 | ||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| Other operating costs | ||||
| Comparison distortion items: - Provision for financial consequences of |
||||
| Russia's war on Ukraine | - | -327 | -400 | -73 |
| - Restructuring costs | - | - | -367 | -367 |
| Net comparison distortion items | - | -327 | -767 | -440 |
The comparison distortion items during the first quarter 2022 were relating to costs triggered by Russia's war on Ukraine.
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2020 2021 2022 2023
Adjusted EBITA margin in %
Adjusted EBITA
0.0
0.6
1.2
0
4
The financial net for the first quarter 2023 was SEK -98 (-53) million, excluding realised and unrealised exchange rate losses and gains. The main elements of costs were interest on the debt to the banking syndicate of SEK -4 (-1) million, interest on the bilateral term loans of SEK -24 (-) million, interest on the corporate bonds of SEK -23 (-31) million, interest on the commercial paper programme of SEK -4 (-) and a net of dividends, changes in fair value and other interest income and interest costs of SEK -8 (-21) million. The net of realised and unrealised exchange rate differences was SEK -35 (38) million.
The tax on the result after financial items was SEK -533 (-328) million in the first quarter 2023.
During the first quarter 2023 cash flows from operating and investing activities were SEK 479 (494) million. The figure for 2023 has been burdened with SEK -861 (-1 219) million for build-up of inventories due to the volume growth and to secure our ability to deliver.
Depreciation, excluding allocated step-up values, was SEK 343 (358) million during the first quarter 2023.
Acquisition of businesses during the first quarter 2023 amount to SEK -86 (-4) million. The figure for 2023 is relating to the acquisition of the remaining shares in Marine Performance Systems with SEK -24 million, the acquisition of additional shares in StormGeo's subsidiary Climatempo in Brazil with SEK -104 million and a reduction of the purchase price for Desmet with SEK 42 million. The figure for 2022 was relating to payment of withheld purchase price for the acquisition of Airec with SEK -4 million.
| Key figures | Mar 31 | Dec 31 | |
|---|---|---|---|
| 2023 | 2022 | 2022 | |
| Return on capital employed (%) 1) | 18.5 | 18.8 | 17.3 |
| Return on equity (%) 2) | 15.0 | 14.7 | 13.5 |
| Solidity (%) 3) | 44.0 | 46.3 | 43.9 |
| Net debt to EBITDA, times 1) | 1.32 | 0.79 | 1.47 |
| Debt ratio, times 1) | 0.36 | 0.19 | 0.37 |
| Number of employees 4) | 20,448 | 18,265 | 20,300 |
1) Alternative performance measure.
2) Net income in relation to average equity, calculated on 12 months' revolving basis, expressed in percent.
3) Equity in relation to total assets at the end of the period, expressed in percent.
4) At the end of the period.
The division targets customers in HVAC and refrigeration markets as well as process industries such as chemicals, petrochemical industry and the oil & gas industry.
Focus is on increased energy efficiency, waste heat recovery and sustainable solutions.
| Q1 | Jan-Dec | Last 12 | ||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| Orders received | 5,437 | 3,808 | 17,294 | 18,923 |
| Order backlog 1) | 10,149 | 6,669 | 8,517 | 10,149 |
| Net sales | 4,196 | 3,209 | 15,074 | 16,061 |
| Operating income 2) | 1,020 | 697 | 2,761 | 3,084 |
| Adjusted EBITA 3) | 1,037 | 738 | 2,927 | 3,226 |
| Adjusted EBITA margin 4) | 24.7% | 23.0% | 19.4% | 20.1% |
| Depreciation | 80 | 77 | 352 | 355 |
| Amortisation | 17 | 41 | 166 | 142 |
| Investments 5) | 207 | 117 | 535 | 625 |
| Assets 1) | 18,852 | 14,491 | 17,330 | 18,852 |
| Liabilities 1) | 7,670 | 6,095 | 6,574 | 7,670 |
| Number of employees 1) | 5,466 | 5,241 | 5,457 | 5,466 |
1) At end of period. 2) Excluding comparison distortion items. 3) Alternative performance measure. 4) Adjusted EBITA/net sales. 5) Excluding new leases.
* "Process industry" consists of inorganic chemicals, metals, petrochemicals and pulp & paper and "other" consists mainly of manufacturing and mining.
The Energy Division reported good order growth in the first quarter compared to the same quarter last year. Demand remained strong for energy efficiency solutions across most end markets and order intake grew for solutions in the emerging clean energy and circularity areas. The service business developed in a positive way. Order intake was strong across all geographical markets. The biggest increases were seen in North America and Northeast Asia.
The largest end market, HVAC** & refrigeration continued to grow compared to last year driven by high demand for heat pumps and investments in datacentre cooling. Supply chain concerns have led to a shift towards investments in semi-conductor manufacturing outside Asia, which has benefitted the sales of heat exchangers. During the quarter a large order concerning equipment to a major district heating project in China was received. Demand from customers in the process industries grew in the quarter. This was mainly driven by inorganic chemicals, with increased investments in both traditional manufacturing processes as well as in plants to generate green hydrogen. The order intake increased in the refinery sector, driven by investments in new equipment for both traditional refinery processes and for biofuel processing. Good growth was noted in power, mainly related to equipment and aftermarket sales to the nuclear sector. Demand in oil & gas continued to gradually improve, as customers invest in gas production.
Service grew well in the quarter. A positive development was seen across most industries and geographical markets.
Net sales grew in almost all end markets, despite some remaining capacity constraints and supply chain challenges. Service sales grew faster than capital sales.
The increased net sales in the quarter had a positive volume effect. Despite increased raw material costs, the mix effect was positive due to price increases and a positive impact from revaluation of inventory. The overhead costs increased due to increased sales activities and inflationary pressure. Currency had a small positive impact.
| Order bridge | ||
|---|---|---|
| -------------- | -- | -- |
| SEK millions/% | Q1 |
|---|---|
| 2022 | 3,808 |
| Organic 1) | 34.5% |
| Structural 1) | - |
| Currency | 8.3% |
| Total | 42.8% |
| 2023 | 5,437 |
1) Change excluding currency effects.
| Sales bridge | |
|---|---|
| SEK millions/% | Q1 |
| 2022 | 3,209 |
| Organic 1) | 22.6% |
| Structural 1) | - |
| Currency | 8.2% |
| Total | 30.8% |
| 2023 | 4,196 |
1) Change excluding currency effects.
| Income bridge | |
|---|---|
| SEK millions | Q1 |
| Adjusted EBITA 2022 | 738 |
| Volume 1) | 309 |
| Mix 1) | 39 |
| Costs 1) | -75 |
| Currency | 26 |
| Adjusted EBITA 2023 | 1,037 |
7 26 ** Heating, Ventilation & Air Conditioning.
1) Change excluding currency effects.
The division offers different types of products for heat transfer, separation and hygienic fluid handling and targets customers in food, pharmaceuticals, biotech, vegetable oils, brewery, dairy and body care products. In addition, the division focuses on public and industrial water treatment as well as wastewater and waste treatment.
| Q1 | Jan-Dec | Last 12 | ||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| Orders received | 5,776 | 5,652 | 21,909 | 22,033 |
| Order backlog 1) | 14,779 | 9,146 | 14,381 | 14,779 |
| Net sales | 5,722 | 3,742 | 20,691 | 22,671 |
| Operating income 2) | 967 | 639 | 3,339 | 3,667 |
| Adjusted EBITA 3) | 1,027 | 649 | 3,458 | 3,836 |
| Adjusted EBITA margin 4) | 17.9% | 17.3% | 16.7% | 16.9% |
| Depreciation | 129 | 118 | 449 | 460 |
| Amortisation | 60 | 10 | 119 | 169 |
| Investments 5) | 85 | 64 | 360 | 381 |
| Assets 1) | 20,861 | 12,929 | 21,196 | 20,861 |
| Liabilities 1) | 7,700 | 5,726 | 8,291 | 7,700 |
| Number of employees 1) | 8,223 | 6,812 | 8,052 | 8,223 |
1) At end of period. 2) Excluding comparison distortion items. 3) Alternative performance measure. 4) Adjusted EBITA/net sales. 5) Excluding new leases.
* Edible oil has been renamed to Oils & Fats
Order intake was on about the same level as last year. Excluding Desmet, the order intake for the Food & Water Division was down compared to the very strong first quarter last year which was impacted by a record order in brewery. Demand was positive in Europe and adjusted for last year's record order, demand was stable in North America. Order intake decreased in Asia, mainly due to lower activity in China.
Order intake in oils & fats grew as a result of the positive contribution of recently acquired Desmet. Excluding Desmet, the order intake for HVO** for biodiesel was down, mainly due to high comparative numbers from last year. Traditional oils and fats excluding Desmet declined, mainly driven by lower activity in Asia. The order intake for dairy decreased somewhat compared to last year. Investments in the industry are now catching up with the capacity demand that became evident after the pandemic. The pharma & biotech markets declined after several quarters of consecutive growth. Europe grew whereas order intake was down in North America and Asia. The industry is now normalizing to pre-COVID levels. In ethanol, starch & sugar, the order intake was unchanged for ethanol globally whereas it grew strongly for starch and sugar. Order intake for waste & water grew, driven by good demand in the important North American market and by a very strong development in Europe. Order intake in brewery was down as a result of last year's record order. Underlying demand however remains positive, driven by replacements and yield improving products and solutions.
Service showed double digit growth in almost all end-markets. Growth was strong for both the service portfolio and spare parts.
Net sales grew strongly in the quarter, supported by a further easing of the global supply chain situation. Service grew faster than capital sales. Industry wise, the strongest increase in sales was noted in brewery, followed by ethanol, starch & sugar and pharma & biotech. Geographically, growth rates in net sales were similar across all geographical regions.
The strong net sales growth in the quarter significantly contributed to an increased adjusted EBITA. The mix effect benefitted from a higher service share but was burdened by the inclusion of the Desmet project business. Costs increased as a result of general inflationary pressure and the addition of Desmet, partly mitigated by a positive currency effect.
| * Comments excluding currency effects. | ||||
|---|---|---|---|---|
| -- | ---------------------------------------- | -- | -- | -- |
** Hydrotreated Vegetable Oil.
| Order bridge | |
|---|---|
| SEK millions/% | Q1 |
| 2022 | 5,652 |
| Organic 1) | -20.5% |
| Structural 1) | 16.1% |
| Currency | 6.6% |
| Total | 2.2% |
| 2023 | 5,776 |
1) Change excluding currency effects.
| Sales bridge | |
|---|---|
| SEK millions/% | Q1 |
| 2022 | 3,742 |
| Organic 1) | 16.4% |
| Structural 1) | 26.4% |
| Currency | 10.1% |
| Total | 52.9% |
| 2023 | 5,722 |
1) Change excluding currency effects.
| Income bridge | |
|---|---|
| SEK millions | Q1 |
| Adjusted EBITA 2022 | 649 |
| Volume 1) | 591 |
| Mix 1) | -80 |
| Costs 1) | -184 |
| Currency | 51 |
| Adjusted EBITA 2023 | 1,027 |
1) Change excluding currency effects.
The division's customers include shipowners, shipyards, manufacturers of diesel and gas engines, as well as companies that work with offshore extraction of oil and gas. The offering includes pumping systems, boilers, heat transfer equipment, high speed separators digital solutions and several different environmental products, including systems to clean ballast water and exhaust gases.
| Q1 | Jan-Dec | Last 12 | ||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| Orders received | 7,172 | 3,795 | 19,442 | 22,819 |
| Order backlog 1) | 17,247 | 10,829 | 14,122 | 17,247 |
| Net sales | 4,193 | 3,664 | 16,370 | 16,899 |
| Operating income 2) | 393 | 390 | 1,741 | 1,744 |
| Adjusted EBITA 3) | 556 | 553 | 2,399 | 2,402 |
| Adjusted EBITA margin 4) | 13.3% | 15.1% | 14.7% | 14.2% |
| Depreciation | 69 | 73 | 312 | 308 |
| Amortisation | 163 | 163 | 658 | 658 |
| Investments 5) | 42 | 43 | 235 | 234 |
| Assets 1) | 30,344 | 29,942 | 30,932 | 30,344 |
| Liabilities 1) | 7,608 | 6,346 | 7,241 | 7,608 |
| Number of employees 1) | 5,410 | 5,038 | 5,465 | 5,410 |
1) At end of period. 2) Excluding comparison distortion items. 3) Alternative performance measure. 4) Adjusted EBITA/net sales. 5) Excluding new leases.
* Business Units Boilers and Gas Systems (within Environmental Products) have been merged into Heat & Gas Systems. The Business Unit Separation & Heat Transfer has been renamed to Water, Wind & Fuel Solutions and includes Ballast Water Treatment that previously was reported within Environmental Products.
Order intake for the Marine Division was significantly higher compared to the same quarter last year. Growth was driven by a stronger demand in most product areas and especially in pumping systems and in the service business.
The underlying market sentiment related to the building of new vessels was on a slightly lower level compared to the same period last year. New contracting has been driven primarily by tankers and vehicle carriers. The lower shipbuilding activity was compensated by a continued growing demand for sustainability related solutions which mitigate CO2 emissions, including solutions around energy efficiency and low and zero carbon fuels. Demand for PureBallast has eased further as fewer vessels remain to be retrofitted before the approaching 2024 regulatory deadline and the market gets more oriented to new vessels. Order intake for pumping systems increased significantly compared to the same quarter last year. Growth was primarily driven by offshore. The underlying market sentiment in this area remained strong due to increased oil prices and new projects to safeguard long term energy supply. Demand also improved for marine cargo pumping systems.
Order intake for service improved compared to the same quarter last year. Growth was driven by higher activity level in shipping and a growing environmental installed base. High freight rates in most vessel segments and the need to keep vessel assets in good operational readiness resulted in increased on-board maintenance and higher demand for spare parts and service.
Net sales were at a higher level than the same quarter last year. Sales growth for service and for most product groups in capital sales, particularly within oil & gas, offset the lower sales for marine cargo pumping systems and PureBallast.
Adjusted EBITA remained flat in the first quarter compared to last year. Although net sales grew, the mix was unfavourable due to a lower profitability level in the capital sales product mix, material cost increases, negative currency impact on hedging and a low factory load for Pumping Systems. The overhead cost decreased due to the restructuring activities in PureBallast and lower royalties to Wallenius due to the decline of the retrofit business.
| Order bridge | |
|---|---|
| SEK millions/% | Q1 |
| 2022 | 3,795 |
| Organic 1) | 81.6% |
| Structural 1) | 2.2% |
| Currency | 5.2% |
| Total | 89.0% |
| 2023 | 7,172 |
1) Change excluding currency effects.
| Sales bridge | |
|---|---|
| SEK millions/% | Q1 |
| 2022 | 3,664 |
| Organic 1) | 6.6% |
| Structural 1) | 2.0% |
| Currency | 5.8% |
| Total | 14.4% |
| 2023 | 4,193 |
1) Change excluding currency effects.
| Income bridge | |
|---|---|
| SEK millions | Q1 |
| Adjusted EBITA 2022 | 553 |
| Volume 1) | 123 |
| Mix 1) | -177 |
| Costs 1) | 38 |
| Currency | 19 |
| Adjusted EBITA 2023 | 556 |
1) Change excluding currency effects.
Operations and Other covers procurement and logistics as well as corporate overhead and non-core businesses.
| Q1 | Jan-Dec | Last 12 | ||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| Orders received | 0 | 0 | 0 | 0 |
| Order backlog 1) | 0 | 0 | 0 | 0 |
| Net sales | 0 | 0 | 0 | 0 |
| Operating income 2) | -215 | -122 | -507 | -600 |
| Adjusted EBITA 3) | -214 | -122 | -507 | -599 |
| Depreciation | 65 | 90 | 336 | 311 |
| Amortisation | 1 | 0 | 0 | 1 |
| Investments 5) | 106 | 50 | 723 | 779 |
| Assets 1) | 2,084 | 1,477 | 1,983 | 2,084 |
| Liabilities 1) | 1,067 | 823 | 1,097 | 1,067 |
| Number of employees 1) | 1,349 | 1,174 | 1,326 | 1,349 |
1) At end of period. 2) Excluding comparison distortion items. 3) Alternative performance measure.
4) Adjusted EBITA/net sales. 5) Excluding new leases.
Adjusted EBITA decreased in the first quarter 2023 compared to the corresponding quarter last year reflecting a higher activity level in turn driven by the high sales and order level.
| Q1 | Jan-Dec | Last 12 | ||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| Adjusted EBITA | ||||
| Total for divisions | 2,406 | 1,818 | 8,277 | 8,865 |
| Amortisation | -241 | -214 | -943 | -970 |
| Comparison distortion items | - | -327 | -767 | -440 |
| Consolidation adjustments * | -19 | -2 | -48 | -65 |
| Total operating income | 2,146 | 1,275 | 6,519 | 7,390 |
| Financial net | -98 | -15 | -340 | -423 |
| Result after financial items | 2,048 | 1,260 | 6,179 | 6,967 |
| Assets ** | ||||
| Total for divisions | 72,141 | 58,839 | 71,441 | 72,141 |
| Corporate *** | 8,970 | 15,035 | 9,808 | 8,970 |
| Group total | 81,111 | 73,874 | 81,249 | 81,111 |
| Liabilities ** | ||||
| Total for divisions | 24,045 | 18,990 | 23,203 | 24,045 |
| Corporate *** | 21,401 | 20,684 | 22,342 | 21,401 |
| Group total | 45,446 | 39,674 | 45,545 | 45,446 |
* Difference between management accounts and IFRS. ** At the end of the period. *** Corporate refers to
items in the statement on financial position that are interest bearing or are related to taxes.
| Large orders (>EUR 5 million) in the first quarter | ||||
|---|---|---|---|---|
| Division | Order | Total per Business Unit | ||
| Business Unit | Delivery | amount | Q1 2023 | Q1 2022 |
| Scope of supply | date | SEK millions | ||
| Energy | ||||
| Welded Heat Exchangers | ||||
| Air coolers for a gas plant in the US. | 2023 | 70 | 70 | - |
| Gasketed Plate Heat Exchangers | ||||
| Heat exchangers for a hydrogen plant in the Middle East. | 2023 | 63 | ||
| Heat exchangers for district heating in China. | 2023 | 119 | 182 | - |
| Food & Water | ||||
| Food Systems | - | 778 | ||
| Desmet | ||||
| Equipment for soy bean extraction in the US. | 2024 | 208 | ||
| Equipment for sunflower oil refinery in Kazakhstan. | 2024 | 58 | 266 | - |
| Marine | ||||
| Pumping Systems | ||||
| Firewater pumps for FPSO* vessels in South America. | 2024 | 820 | ||
| Seawater lift pumps for FPSO* vessel in Australia. | 2023 | 135 | ||
| Firewater pumps for oil platform in Norway. | 2024 | 161 | ||
| Water injection and firewater pumps for oil platform in Norway. | 2024 | 218 | ||
| Cargo oil pumps for FPSO* vessels in South America. | 2024 | 393 | 1,727 | 267 |
| Total | 2,245 | 1,045 |
* Floating Production, Storage and Offloading.
| Q1 | Jan-Dec | Last 12 | ||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| Own products within: | ||||
| Separation | 2,224 | 1,672 | 8,613 | 9,165 |
| Heat transfer | 5,582 | 4,290 | 20,149 | 21,441 |
| Fluid handling | 2,885 | 2,603 | 11,275 | 11,557 |
| Marine environmental | 928 | 945 | 3,995 | 3,978 |
| Other | 0 | 0 | 0 | 0 |
| Associated products | 1,559 | 384 | 4,567 | 5,742 |
| Services | 933 | 721 | 3,536 | 3,748 |
| Total | 14,111 | 10,615 | 52,135 | 55,631 |
* The split of own products within separation, heat transfer and fluid handling is a reflection of the current three main technologies. Marine environmental is a growing new product area basically outside the main technologies. Other is own products outside these four product areas. Associated products are mainly purchased products that compliment Alfa Laval's product offering. Services cover all sorts of service and service agreements excluding spare parts.
During the first quarter Alfa Laval has introduced among others the following new products:
Alfa Laval Cooling Pod is a plug-and-play cooling solution for edge data centres. Alfa Laval is launching the Cooling Pod to meet the demand for more flexible and sustainable cooling solutions for edge computing data centres. The new solution consists of a 20-foot container with all the components needed to deliver cooling for direct-to-chip and immersion cooling applications. The Cooling Pod comes in 500 kW and 1 MW versions for single or dual loop as well as for direct-to-chip or immersion cooling. This allows customer to mix and match any combination of modules to meet their unique cooling needs.
Alfa Laval ThinkTop V20 is the next generation of Industry 4.0 ready hygienic valve indication units. It raises the bar on process control, making it more reliable and accurate while saving time and money on installation, commissioning, operation and maintenance. The ThinkTop V20 is the first pure valve-sensing unit that is maintenance-free, does not require manual adjustment or programming, and provides 40% faster setup than conventional valve indication units. In addition to 360° LED visual status indication from all directions, it provides convenient control-room monitoring of the real-time status and historical data of Alfa Laval hygienic valves used across the dairy, food, beverage, home and personal care, biotechnology, pharmaceutical, and many other industries.
The new AlfaNova GL50 is the first Alfa Laval heat exchanger developed for fuel cell system requirements. The GL50 is an asymmetric gas-to-liquid plate heat exchanger made from 100% stainless steel and features our patented AlfaFusion technology. It can handle gas flows of 250 cubic meters per hour, as well as inlet gas temperatures up to 750°C, with exceptional performance. The GL50 is compact, space-saving and robust and with very low pressure drop. Its ability to condense water vapour makes it ideal for use in systems where fuels such as ammonia, methanol or methane require reforming.
The compact, easy-to-install and cost-efficient centrifugal separation solution for cleaning oily water will help both small and large vessels to meet compliance and sustainability targets. PureBilge Compact is designed for 24/7 unmanned operation, regardless of variations in feed, oil shocks and rough weather conditions, just like PureBilge. The lack of requirement for chemicals, adsorption filters or membranes eliminates the filter replacement cost and lowers maintenance costs. Its continuous, single-stage operation requires less holding tank volume and provides more payload capacity. Its capacity flow of 600 l/h as compared to 2500 l/h to 5000 l/h for PureBilge, makes it significantly smaller and easy to install or retrofit. With its integrated oil content monitor, PureBilge Compact cleans bilge water effectively by removing oil pollution below the 15 ppm IMO requirements and has the potential to reduce oil content even further, reaching below 5 ppm.
Biofuels are a current and accessible fuel option that can help marine customers decarbonize. Yet while biofuels reduce CO2 footprint, they also pose new operational challenges. Alfa Laval is first in the market to address them with biofuel-optimized separators and separator upgrades. To ensure optimal biofuel separation, Alfa Laval has modified both internal bowl components and the separator software. This makes setting up for HVO, FAME blends or conventional fuels a simple parameter change. Incorporated into new Alfa Laval separators for purchase, the developments are also available as upgrades for existing separators.
The region reported strong growth in order intake compared to the same quarter last year. Energy grew driven by HVAC and refinery. Food & Water grew driven by prepared food & beverage and waste & water. Marine grew mainly in offshore. Service reported doubledigit growth in all divisions.
The order intake in the region increased strongly compared to the same quarter last year and the effects of the war in Russia and Ukraine has slowly petered out. Energy had a strong demand in HVAC. Food & Water reported a solid growth in oils & fats and prepared food & beverage. Marine noted a weaker demand in shipbuilding & shipping. Excluding Russia and Ukraine, service reported double-digit growth in all divisions.
The region reported a decreased order intake compared to the same quarter last year, mainly due to a non-repeat order in Food & Water. Energy noted a double-digit growth driven by refinery and HVAC & refrigeration. Marine experienced growth driven by shipbuilding & shipping. Service grew in all three divisions.
The order intake in the region grew compared to the same quarter last year. Energy reported strong demand in oil & gas and process industry. Food & Water reported a strong underlying demand in oils & fats and prepared food & beverage. Marine grew mainly in industrial boilers. Service reported growth in Energy and Food & Water.
The region reported strong double-digit growth in order intake compared to last year. Energy reported a strong demand in HVAC & refrigeration and process industry. Food & Water noted a strong underlying demand in oils & fats and brewery. Marine reported a strong growth in shipbuilding & shipping. Service reported growth in all three divisions.
The order intake in the region increased compared to the same quarter last year. Energy reported strong underlying demand for mining and HVAC & refrigeration. Food & Water had a double-digit growth in oils & fats and dairy. Marine reported a solid growth in offshore and shipbuilding & shipping. Service reported growth in Food & Water and Marine.
| Net sales | Q1 | Jan-Dec | Last 12 | |
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| To customers in: | ||||
| Sweden | 344 | 268 | 1,206 | 1,282 |
| Other EU | 3,549 | 2,646 | 12,889 | 13,792 |
| Other Europe | 1,219 | 1,181 | 4,812 | 4,850 |
| USA | 2,536 | 1,706 | 8,784 | 9,614 |
| Other North America | 262 | 271 | 1,081 | 1,072 |
| Latin America | 766 | 490 | 2,388 | 2,664 |
| Africa | 300 | 104 | 778 | 974 |
| China | 1,662 | 1,353 | 7,153 | 7,462 |
| South Korea | 798 | 874 | 3,801 | 3,725 |
| Other Asia | 2,489 | 1,578 | 8,559 | 9,470 |
| Oceania | 186 | 144 | 684 | 726 |
| Total | 14,111 | 10,615 | 52,135 | 55,631 |
Net sales are reported by country on the basis of invoicing address, which is normally the same as the delivery address.
| Non-current assets | Mar 31 | |||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | |
| Sweden | 2,934 | 2,318 | 2,942 | |
| Denmark | 5,387 | 4,853 | 5,348 | |
| Other EU | 8,962 | 3,970 | 8,829 | |
| Norway | 14,323 | 16,153 | 15,393 | |
| Other Europe | 410 | 372 | 416 | |
| USA | 4,079 | 3,741 | 4,236 | |
| Other North America | 154 | 140 | 158 | |
| Latin America | 338 | 329 | 379 | |
| Africa | 8 | 8 | 9 | |
| Asia | 4,415 | 3,844 | 4,394 | |
| Oceania | 117 | 117 | 118 | |
| Subtotal | 41,127 | 35,845 | 42,222 | |
| Other long-term securities | 460 | 411 | 475 | |
| Pension assets | 230 | 99 | 201 | |
| Deferred tax asset | 1,311 | 1,756 | 1,895 | |
| Total | 43,128 | 38,111 | 44,793 |
Alfa Laval does not have any customer that accounts for 10 percent or more of net sales. Tetra Pak within the Tetra Laval Group is Alfa Laval's single largest customer with a volume representing approximately 5 percent of net sales.
| Consolidated cash flows | Q1 | Jan-Dec | Last 12 | |
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| Operating activities | ||||
| Operating income | 2,146 | 1,275 | 6,519 | 7,390 |
| Adjustment for depreciation, amortisation and write down | 584 | 572 | 2,392 | 2,404 |
| Adjustment for other non-cash items | 22 | 338 | 105 | -211 |
| 2,752 | 2,185 | 9,016 | 9,583 | |
| Taxes paid | -436 | -481 | -1,834 | -1,789 |
| 2,316 | 1,704 | 7,182 | 7,794 | |
| Changes in working capital: | ||||
| Increase(-)/decrease(+) of receivables | -962 | -647 | -2,155 | -2,470 |
| Increase(-)/decrease(+) of inventories | -861 | -1,219 | -3,140 | -2,782 |
| Increase(+)/decrease(-) of liabilities | 546 | 715 | 2,058 | 1,889 |
| Increase(+)/decrease(-) of provisions | -35 | 214 | -654 | -903 |
| Increase(-)/decrease(+) in working capital | -1,312 | -937 | -3,891 | -4,266 |
| 1,004 | 767 | 3,291 | 3,528 | |
| Investing activities | ||||
| Investments in fixed assets (Capex) | -440 | -274 | -1,853 | -2,019 |
| Divestment of fixed assets | 1 | 5 | 20 | 16 |
| Acquisition of businesses | -86 | -4 | -3,685 | -3,767 |
| -525 | -273 | -5,518 | -5,770 | |
| Financing activities | ||||
| Received interests and dividends | 27 | 12 | 99 | 114 |
| Paid interests | -152 | -36 | -290 | -406 |
| Realised financial exchange gains | 21 | 11 | 68 | 78 |
| Realised financial exchange losses | -86 | -57 | -147 | -176 |
| Repurchase of shares | - | -539 | -661 | -122 |
| Dividends to owners of the parent | - | - | -2,480 | -2,480 |
| Dividends to non-controlling interests | - | - | -12 | -12 |
| Increase(-) of financial assets | -19 | -3,655 | -457 | 3,179 |
| Decrease(+) of financial assets | 17 | 1,006 | 1,002 | 13 |
| Increase of loans | 406 | 6,408 | 12,546 | 6,544 |
| Amortisation of loans | -900 | - | -6,575 | -7,475 |
| -686 | 3,150 | 3,093 | -743 | |
| Cash flow for the period | -207 | 3,644 | 866 | -2,985 |
| Cash and cash equivalents at the beginning of the period | 4,352 | 3,356 | 3,356 | 7,042 |
| Translation difference in cash and cash equivalents | -5 | 42 | 130 | 83 |
| Cash and cash equivalents at the end of the period | 4,140 | 7,042 | 4,352 | 4,140 |
| Free cash flow per share (SEK) * | 1.37 | 1.20 | 3.52 | 3.69 |
| Capex in relation to net sales | 3.1% | 2.6% | 3.6% | 3.6% |
| Average number of shares** | 413,326,315 | 414,542,550 | 413,637,227 | 413,337,364 |
* Free cash flow is an alternative performance measure. It is the sum of cash flows from operating activities, investments and divestments of fixed assets.
** Average number of shares has been impacted by repurchase of shares.
| Consolidated comprehensive income | Q1 | Jan-Dec | Last 12 | |
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | months |
| Net sales | 14,111 | 10,615 | 52,135 | 55,631 |
| Cost of goods sold | -9,246 | -6,683 | -34,489 | -37,052 |
| Gross profit | 4,865 | 3,932 | 17,646 | 18,579 |
| Sales costs | -1,505 | -1,222 | -5,634 | -5,917 |
| Administration costs | -674 | -579 | -2,305 | -2,400 |
| Research and development costs | -359 | -318 | -1,356 | -1,397 |
| Other operating income | 222 | 183 | 772 | 811 |
| Other operating costs | -416 | -737 | -2,652 | -2,331 |
| Share of result in joint ventures | 13 | 16 | 48 | 45 |
| Operating income | 2,146 | 1,275 | 6,519 | 7,390 |
| Dividends and other financial income and costs | 1 | 1 | 5 | 5 |
| Interest income and financial exchange rate gains | 113 | 110 | 267 | 270 |
| Interest expense and financial exchange rate losses | -212 | -126 | -612 | -698 |
| Result after financial items | 2,048 | 1,260 | 6,179 | 6,967 |
| Taxes | -533 | -328 | -1,610 | -1,815 |
| Net income for the period | 1,515 | 932 | 4,569 | 5,152 |
| Other comprehensive income: | ||||
| Items that will subsequently be reclassified to net income | ||||
| Cash flow hedges | -519 | 571 | -346 | -1,436 |
| Translation difference | -1,087 | 1,013 | 1,872 | -228 |
| Deferred tax on other comprehensive income | 157 | -123 | 211 | 491 |
| Sum | -1,449 | 1,461 | 1,737 | -1,173 |
| Items that will subsequently not be reclassified to net income | ||||
| Revaluations of defined benefit obligations | 24 | 60 | 329 | 293 |
| Market valuation of external shares | 0 | -14 | -13 | 1 |
| Deferred tax on other comprehensive income | -7 | -43 | -109 | -73 |
| Sum | 17 | 3 | 207 | 221 |
| Comprehensive income for the period | 83 | 2,396 | 6,513 | 4,200 |
| Net income attributable to: | ||||
| Owners of the parent | 1,504 | 920 | 4,503 | 5,087 |
| Non-controlling interests | 11 | 12 | 66 | 65 |
| Earnings per share (SEK) | 3.64 | 2.22 | 10.89 | 12.31 |
| Average number of shares* | 413,326,315 | 414,542,550 | 413,637,227 | 413,337,364 |
| Comprehensive income attributable to: | ||||
| Owners of the parent | 68 | 2,373 | 6,427 | 4,122 |
| Non-controlling interests | 15 | 23 | 86 | 78 |
* Average number of shares has been impacted by repurchase of shares.
| Consolidated financial position | Mar 31 | Dec 31 | ||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | |
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 30,661 | 26,574 | 31,417 | |
| Property, plant and equipment | 10,432 | 9,184 | 10,710 | |
| Other non-current assets | 2,035 | 2,353 | 2,666 | |
| 43,128 | 38,111 | 44,793 | ||
| Current assets | ||||
| Inventories | 15,037 | 11,565 | 14,775 | |
| Assets held for sale | 100 | 25 | 100 | |
| Accounts receivable | 9,764 | 7,184 | 9,717 | |
| Other receivables | 8,610 | 5,431 | 6,596 | |
| Derivative assets | 13 | 1,035 | 605 | |
| Other current deposits | 319 | 3,481 | 311 | |
| Cash and cash equivalents * | 4,140 | 7,042 | 4,352 | |
| 37,983 | 35,763 | 36,456 | ||
| TOTAL ASSETS | 81,111 | 73,874 | 81,249 | |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||||
| Equity | ||||
| Owners of the parent | 35,355 | 33,930 | 35,382 | |
| Non-controlling interests | 310 | 270 | 322 | |
| 35,665 | 34,200 | 35,704 | ||
| Non-current liabilities | ||||
| Liabilities to credit institutions etc. | 13,529 | 9,273 | 13,362 | |
| Lease liabilities | 1,776 | 1,525 | 1,549 | |
| Provisions for pensions and similar commitments | 1,150 | 1,737 | 1,192 | |
| Provision for deferred tax | 1,694 | 1,691 | 2,293 | |
| Other non-current liabilities | 581 | 462 | 590 | |
| 18,730 | 14,688 | 18,986 | ||
| Current liabilities | ||||
| Liabilities to credit institutions etc. | 1,232 | 5,290 | 1,700 | |
| Accounts payable | 5,079 | 3,532 | 5,314 | |
| Advances from customers | 6,901 | 5,485 | 6,634 | |
| Other provisions | 2,153 | 2,150 | 2,164 | |
| Other liabilities | 10,695 | 8,276 | 10,054 | |
| Derivative liabilities | 656 | 253 | 693 | |
| 26,716 | 24,986 | 26,559 | ||
| Total liabilities | 45,446 | 39,674 | 45,545 | |
| TOTAL SHAREHOLDERS' EQUITY & LIABILITIES | 81,111 | 73,874 | 81,249 |
* The item cash and cash equivalents is mainly relating to bank deposits and liquid deposits.
| Financial assets and liabilities at fair value | Valuation hierarchy | Mar 31 | Dec 31 | |
|---|---|---|---|---|
| SEK millions | level | 2023 2022 |
2022 | |
| Financial assets | ||||
| Other non-current securities | 1 and 2 | 241 | 230 | 270 |
| Bonds and other securities | 1 | 115 | 171 | 114 |
| Derivative assets | 2 | 47 | 1,121 | 700 |
| Financial liabilities | ||||
| Derivative liabilities | 2 | 765 | 288 | 833 |
Valuation hierarchy level 1 is according to quoted prices in active markets for identical assets and liabilities.
Valuation hierarchy level 2 is out of directly or indirectly observable market data outside level 1.
| Borrowings and net debt | Mar 31 | Dec 31 | |
|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 |
| Credit institutions | 846 | 154 | 829 |
| Swedish Export Credit | 2,256 | - | 2,227 |
| Handelsbanken | 1,129 | - | 1,114 |
| Commercial papers | 397 | - | 892 |
| Corporate bonds | 10,133 | 14,409 | 10,000 |
| Borrowings | 14,761 | 14,563 | 15,062 |
| Cash and cash equivalents and current deposits | -4,459 | -10,523 | -4,663 |
| Net debt excluding lease liabilities* | 10,302 | 4,040 | 10,399 |
| Lease liabilities | 2,583 | 2,417 | 2,671 |
| Net debt including lease liabilities* | 12,885 | 6,457 | 13,070 |
* Alternative performance measure.
Alfa Laval has a revolving credit facility of EUR 700 million corresponding to SEK 7,908 million on March 31, 2023 with a banking syndicate. The facility has a maturity of five years from April 2023 and includes a possibility to increase it by EUR 200 million. At March 31, 2023 SEK 500 million of the facility was utilised.
Alfa Laval has two loans of EUR 100 million from Svensk Exportkredit that matures in 2027 and 2028 respectively and one loan of EUR 100 million from Svenska Handelsbanken that matures in 2024, with a possibility to extend it for another year.
The commercial paper programme of SEK 4,000 million, was utilised with SEK 400 million at March 31, 2023.
On March 31, 2023, Alfa Laval has three tranches of corporate bonds listed on the Irish stock exchange, each of EUR 300 million that matures in June 2024, in February 2026 and in February 2029 respectively.
| Changes in consolidated equity | Jan-Mar | Jan-Dec | ||
|---|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 | |
| At the beginning of the period | 35,704 | 32,344 | 32,344 | |
| Changes attributable to: | ||||
| Owners of the parent | ||||
| Comprehensive income | ||||
| Comprehensive income for the period | 68 | 2,373 | 6,427 | |
| Transactions with shareholders | ||||
| Repurchase of shares | - | -539 | -661 | |
| Cancellation of repurchased shares | - | - | -15 | |
| Bonus issue of shares | - | - | 15 | |
| Increase of ownership in subsidiaries | ||||
| with non-controlling interests | -95 | - | - | |
| Dividends | - | - | -2,480 | |
| -95 | -539 | -3,141 | ||
| Subtotal | -27 | 1,834 | 3,286 | |
| Non-controlling interests | ||||
| Comprehensive income | ||||
| Comprehensive income for the period | 15 | 23 | 86 | |
| Transactions with shareholders | ||||
| Decrease of non-controlling interests | -27 | - | - | |
| Non-controlling interests in acquired companies | - | -1 | 0 | |
| Dividends | - | - | -12 | |
| -27 | -1 | -12 | ||
| Subtotal | -12 | 22 | 74 | |
| At the end of the period | 35,665 | 34,200 | 35,704 |
Order backlog 2023 2022 2021
Net sales 2023 2022 2021
SEK millions Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Energy 4,196 4,500 3,726 3,639 3,209 3,556 3,146 3,123 Food & Water 5,722 7,407 5,402 4,140 3,742 4,388 3,678 3,458 Marine 4,193 4,577 4,056 4,073 3,664 3,748 3,451 3,394 Operations & Other 0 0 0 0 0 0 0 0 Total 14,111 16,484 13,184 11,852 10,615 11,692 10,275 9,975
SEK millions Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Energy 10,149 8,517 8,582 7,625 6,669 5,791 5,969 5,436 Food & Water 14,779 14,381 16,158 10,169 9,146 6,823 7,044 6,458 Marine 17,247 14,122 12,870 11,712 10,829 10,340 9,927 9,586 Operations & Other 0 0 0 0 0 0 0 0 Total 42,175 37,020 37,610 29,506 26,644 22,954 22,940 21,480 Last 12 months
Marine
Energy Food & Water
March 31, 2023
| Adjusted EBITA* | 2023 | 2022 | 2021 | |||||
|---|---|---|---|---|---|---|---|---|
| SEK millions | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 |
| Energy | 1,037 | 746 | 735 | 708 | 738 | 621 | 517 | 518 |
| Food & Water | 1,027 | 1,292 | 833 | 684 | 649 | 775 | 708 | 653 |
| Marine | 556 | 664 | 490 | 692 | 553 | 757 | 710 | 697 |
| Operations & Other | -214 | -151 | -113 | -121 | -122 | -141 | -99 | -121 |
| Total | 2,406 | 2,551 | 1,945 | 1,963 | 1,818 | 2,012 | 1,836 | 1,747 |
Last 12 months
| Adjusted EBITA | ||||||||
|---|---|---|---|---|---|---|---|---|
| margin* | 2023 | 2022 | 2021 | |||||
| % | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 |
| Energy | 24.7 | 16.6 | 19.7 | 19.5 | 23.0 | 17.5 | 16.4 | 16.6 |
| Food & Water | 17.9 | 17.4 | 15.4 | 16.5 | 17.3 | 17.7 | 19.2 | 18.9 |
| Marine | 13.3 | 14.5 | 12.1 | 17.0 | 15.1 | 20.2 | 20.6 | 20.5 |
| Total | 17.1 | 15.5 | 14.8 | 16.6 | 17.1 | 17.2 | 17.9 | 17.5 |
* In management accounts, see reconciliation on page 12.
Alfa Laval First quarter 2023 Q1
The parent company's result after financial items for the first quarter 2023 was SEK 39 (-2) million, out of which net interests SEK 40 (-0) million, realised and unrealised exchange rate gains and losses SEK -0 (1) million, costs related to the listing SEK -4 (-4) million, fees to the Board SEK -2 (-2) million, cost for annual report and annual general meeting SEK -0 (-0) million and other operating income and operating costs the remaining SEK 5 (3) million.
| Q1 | Jan-Dec | ||
|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 |
| Administration costs | -6 | -6 | -14 |
| Other operating income | 5 | 3 | 2 |
| Other operating costs | 0 | 0 | -1 |
| Operating income | -1 | -3 | -13 |
| Revenues from interests in group companies | - | - | 62 |
| Interest income and similar result items | 40 | 1 | 46 |
| Interest expenses and similar result items | 0 | 0 | 0 |
| Result after financial items | 39 | -2 | 95 |
| Change of tax allocation reserve | - | - | 578 |
| Group contributions | - | - | 509 |
| Result before tax | 39 | -2 | 1,182 |
| Tax on this year's result | -8 | 0 | -241 |
| Net income for the period | 31 | -2 | 941 |
* The statement over parent company income also constitutes its statement over comprehensive income.
| Mar 31 | Dec 31 | ||
|---|---|---|---|
| SEK millions | 2023 | 2022 | 2022 |
| ASSETS | |||
| Non-current assets | |||
| Shares in group companies | 4,669 | 4,669 | 4,669 |
| Current assets | |||
| Receivables on group companies | 6,330 | 8,543 | 6,402 |
| Other receivables | 238 | 184 | 141 |
| Cash and cash equivalents | 0 | 42 | 0 |
| 6,568 | 8,769 | 6,543 | |
| TOTAL ASSETS | 11,237 | 13,438 | 11,212 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Equity | |||
| Restricted equity | 2,387 | 2,387 | 2,387 |
| Unrestricted equity | 6,538 | 8,167 | 6,507 |
| 8,925 | 10,554 | 8,894 | |
| Untaxed reserves | |||
| Tax allocation reserves, taxation 2017-2023 | 2,293 | 2,871 | 2,293 |
| Current liabilities | |||
| Liabilities to group companies | 19 | 13 | 22 |
| Accounts payable | 0 | 0 | 1 |
| Other liabilities | - | - | 2 |
| 19 | 13 | 25 | |
| TOTAL EQUITY AND LIABILITIES | 11,237 | 13,438 | 11,212 |
Alfa Laval AB (publ) is the parent company of the Alfa Laval Group. The company had 54,641 (46,275) shareholders on March 31, 2023. The largest owner is Winder Holding AG, Switzerland (formerly Tetra Laval International SA, Switzerland), who owns 29.5 (29.1) percent. The increase compared to last year is due to the cancellation of repurchased shares that was made on May 16, 2022. Next to the largest owner, there are nine institutional investors with ownership in the range of 7.2 to 1.5 percent. These ten largest shareholders owned 62.5 (61.8) percent of the shares.
The Board of Directors propose a dividend of SEK 6.00 (6.00) per share corresponding to SEK 2,480 (2,480) million to the Annual General Meeting and that the remaining income available for distribution in Alfa Laval AB (publ) of SEK 4,027 (6,227) million be carried forward.
The Board of Directors are of the opinion that the proposed dividend is consistent with the requirements that the type and size of operations, the associated risks, the capital needs, liquidity and financial position put on the company.
The Annual General Meeting 2021 mandated the Board to decide on repurchase of up to 5 percent of the issued shares with the purpose to cancel the repurchased shares and reduce the share capital. Under the mandate 6,130,000 shares were repurchased at a cost of SEK 2,000 million.
On March 18, 2022 when the notice to the Annual General Meeting was sent the number of repurchased shares was 5,579,492. The Annual General Meeting 2022 decided to cancel these repurchased shares. This meant that the number of shares has developed as follows:
| Specification of number of shares | |
|---|---|
| Number | |
| Number of shares at January 1, 2022 | 419,456,315 |
| Cancellation of re-purchased shares at May 16, 2022 | -5,579,492 |
| Number of shares at December 31, 2022 | 413,876,823 |
This means that 550,508 shares repurchased in the period March 21, 2022 to April 25, 2022 under the old mandate are left to be cancelled by the Annual General Meeting 2023.
The Annual General Meeting 2022 mandated the Board to decide on repurchase of up to 5 percent of the issued shares with the purpose to cancel the repurchased shares and reduce the share capital at the Annual General Meeting 2023. The reduction of the share capital will be met by a corresponding bonus issue without issuing any new shares so that the size of the share capital is restored. No shares have been repurchased under this new mandate.
The Board will propose to the Annual General Meeting 2023 to cancel the repurchased shares. At March 31, 2023, 550,508 shares are held by the company. Cancellation of these shares means that the share capital will decrease with SEK 1 million. At the same time the Board will propose that the Annual General Meeting decides to increase the share capital by a bonus issue with the same amount without issuing any new shares. In this way the size of the share capital is restored and the company avoids having to obtain permission from Bolagsverket or if disputed the local court to cancel the repurchased shares.
It is the number of repurchased shares when the notice to the Annual General Meeting is sent that is the basis for the decision on cancellation of shares at the Annual General Meeting.
In 2021, Alfa Laval acquired a minority stake of 16.5 percent in the Netherland-based company Marine Performance Systems (MPS) with an option to acquire the remaining part later. Now Alfa Laval has executed that option and completed the acquisition to own 100 percent of MPS. The closing date for the acquisition was March 21, 2023. MPS' innovative technology significantly reduces the friction from vessels when sailing, resulting in fuel savings. Friction between the hull and the water when sailing is the most significant driver of a vessel's fuel consumption, and the cost of fuel represents up to 60 percent of a vessel's operating costs. Fuel consumption has a direct impact on greenhouse gas emissions, as reducing 1 ton of fossil fuel consumption equals the reduction of approximately 3 tonnes of CO2 emissions. Marine Performance Systems' air lubrication technology generates micro bubbles under a ship's hull, reducing friction between the vessel and the water by 50-70 percent and enabling substantial fuel cost savings and improvement in overall ship efficiency, during normal service speed. The technology was first tested on a sea-going vessel in 2020 and the fuel savings have been confirmed by the shipowner based on several months of operation. The patented solution can be installed on vessels of any size or fuel type at point of building or retrofitted on already operating vessels.
On March 2, 2023, Alfa Laval acquired an additional 38.7 percent of StormGeo's subsidiary Climatempo in Brazil from the minority owners. Alfa Laval's ownership thereby increased from 51 percent to 89.7 percent . The transaction is reported as a change within the equity.
The main factors of risk and uncertainty facing the Group concern the business cycle, the consequences of Russia's war on Ukraine, the price development of metals, continued supply chain and logistical disruptions, volatile fluctuations in major currencies and the development of the COVID-19 pandemic. It is the company's opinion that the description of risks made in the Annual Report for 2022 is still correct.
Alfa Laval has a factory and a sales company in Russia and a sales company in Ukraine. Historically the order intake from the markets in Russia and Ukraine has been approximately SEK 1 billion per year, equivalent to 2 percent of the total order intake for the company. When the war started on February 24, 2022, the total order backlog in Russia and Ukraine amounted to approximately SEK 750 million. In addition, Alfa Laval companies in other countries had orders from Russian end customers of SEK 360 million. Since then, the order backlog has been re-assessed and as a result orders of SEK 973 million have been removed from the order backlog. This is mainly due to sanctions, but also when Alfa Laval has assessed that the company will not be able to deliver or get paid. Also orders where Alfa Laval supplies equipment to ship yards in other countries building ships for ship owners under sanctions have been removed from the order backlog.
In the interim reports and the annual report for 2022 a detailed description was made of how Alfa Laval has calculated and provided for the company's costs for cancelled orders, late delivery fees, accounts receivable that we do not believe we will get paid for, foreign exchange losses and advance payments to suppliers in Russia and Ukraine where we do not expect any delivery or the advance being repaid to us.
Before the war, Alfa Laval had a competent team of approximately 230 employees in Russia and 10 employees in Ukraine. At March 31, 2023 the number of employees in Russia was 60. Alfa Laval's assessment is that the longer-term implications of the war on the Russian market are of such a magnitude that the company in the fourth quarter 2022 provided for a closure of the operations.
The total cost for these provisions amounted to SEK 400 million and was reported as a comparison distortion item in the first quarter 2022 with SEK 327 million and in the fourth quarter 2022 with an additional SEK 73 million.
The Alfa Laval Group was as of March 31, 2023 named as a co-defendant in a total of 480 asbestos-related lawsuits with a total of approximately 480 plaintiffs. Alfa Laval strongly believes the claims against the Group are without merit and intends to vigorously contest each lawsuit.
Based on current information and Alfa Laval's understanding of these lawsuits, Alfa Laval continues to believe that these lawsuits will not have a material adverse effect on the Group's financial condition or results of operation.
A restructuring program covering parts of the Marine Division and the Business Unit for Welded Heat Exchangers in the Energy Division was initiated in the fourth quarter 2022 to adjust capacity imbalances in the supply organization and manage the impact as we transit from fossil to sustainable energy solutions.
The interim report for the first quarter 2023 is prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The accounting principles are according to IFRS (International Financial Reporting Standards) as adopted by the European Union. In the report, alternative performance measures are used. See the annual report 2022 for definitions. Alfa Laval follows the Guidelines on Alternative Performance Measures issued by ESMA (European Securities and Markets Authority).
In the first quarter 2023 the alternative performance measure "Adjusted EBITA" has been added per division. The reason is that Adjusted EBITA is the most important performance measure used for the consolidated Group. In order to show how it is arrived at, information on amortisation has been added by division (operating income by division less amortisation by division equals Adjusted EBITA by division). The definition of free cash flow has been changed to the sum of cash flows from operating activities, investments and divestments of fixed assets. The reason is that the new definition is more meaningful for investors. It is presented per share in the statement of consolidated cash flows. Net debt is presented both excluding and including lease liabilities. The reason is that lease liabilities have nothing to do with the company's loans.
"Q1" and "First quarter" refer to the period January 1 to March 31. "Jan-Dec" and "Full year" refers to the period January 1 to December 31. "Last 12 months" refers to the period April 1, 2022 to March 31, 2023. "The corresponding period last year" refers to the first quarter 2022.
"Currency effects" only relate to translation effects, whereas "foreign exchange effects" also relate to transactional effects. "Mix" in the operating income bridge also includes a price effect. Comparison distortion items are reported in the comprehensive income statement on each concerned line but are specified on page 4.
The accounting and valuation principles of the parent company comply with the Swedish Annual Accounts Act and the recommendation RFR 2 Accounting for legal entities issued by the Council for Financial Reporting in Sweden.
The interim report has been issued at CET 13.00 on April 25, 2023 by the President and Chief Executive Officer Tom Erixon by proxy from the Board of Directors.
Lund, April 25, 2023,
Tom Erixon President and Chief Executive Officer Alfa Laval AB (publ)
Box 73 SE-221 00 Lund Sweden Corporate registration number: 556587-8054
Johan Lundin, Head of Investor Relations Phone: +46 46 36 65 10, Mobile: +46 730 46 30 90, E-mail: [email protected]
Alfa Laval will publish financial reports at the following dates: Interim report for the second quarter July 20 Interim report for the third quarter October 25
This information is information that Alfa Laval AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at CET 13.00 on April 25, 2023.
Visiting address: Rudeboksvägen 1 Tel: + 46 46 36 65 00 Website: www.alfalaval.com
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