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1. Company Snapshot

1.a. Company Description

Alfa Laval AB (publ) provides heat transfer, separation, and fluid handling products and solutions worldwide.The company operates in three divisions: Energy, Food & Water, and Marine.It offers oil/gas-fired steam and composite steam boilers, exhaust gas economizer, and ballast water treatment systems, and exhaust gas cleaning products.


The company also provides sensing and control, cleaning validation, condition monitoring, agitators, tank, powder mixers, fittings, and tubes, as well as wall mounted cleaning nozzles, rotary jet and heads; and tank accessories and covers.In addition, the company offers centrifugal, rotary lobe, three screw, twin screw, and circumferential piston pumps.Further, the company provides butterfly, control/check, double seal, diaphragm, double seat, regulating, safety, sampling, shutter, single seat, and ball valves.


Additionally, the company offers heat exchanger, tube-in-tube heat exchangers, and process shell-and-tube heat exchangers.Furthermore, the company provides finned tube air heat, scraped surface heat exchangers, and various plate heat exchangers, wet surface, and HYAC hybrid air coolers.It also offers decanters and separator related products.


The company serves energy, utilities, home, personal care, food, dairy, beverage, marine, transportation, pharma, biotech, water, and wastewater industries.Alfa Laval AB (publ) was founded in 1883 and is headquartered in Lund, Sweden.

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1.b. Last Insights on ALFA

Alfa Laval's recent performance was driven by strong order book and robust cash flow, despite market headwinds in certain segments. The company reported a record order book, indicating a positive outlook for future revenue. Additionally, the acquisition of NRG Marine is expected to advance innovative anti-fouling technology, which is poised to increase in demand. Furthermore, the establishment of a Food Innovation Centre will support food producers in addressing global food challenges. However, the company's ability to navigate market headwinds and execute its growth strategies effectively will be key to its future success.

1.c. Company Highlights

2. Alfa Laval's Record 2025: A Strong Finish with Mixed Divisional Performance

Alfa Laval reported a record 2025 with invoicing reaching SEK 19.1 billion in Q4, up 4.6% year-over-year, and earnings per share (EPS) of SEK 20 for the full year, with Q4 EPS at SEK 4.79. The adjusted EBITA margin was 16.9% in Q4 and 17.7% for the full year, indicating a strong operational performance. Operating income grew 8.3% in Q4 and 12.6% for the full year. The actual Q4 EPS of SEK 4.79 was below estimates of SEK 5.29.

Publication Date: Feb -16

📋 Highlights
  • Record Financial Performance in 2025:: Full-year earnings per share climbed to SEK 20 (up from SEK 15.7 in 2024), with invoicing reaching SEK 19.1 billion (4.6% YoY growth) in Q4.
  • Energy Division Growth:: Achieved a record order intake of SEK 6.1 billion, driven by HVAC/CleanTech and 15% contribution from data center applications.
  • Capital Expansion:: Launched a SEK 1 billion CapEx program to boost data center production capacity, aligning with strong market demand and project pipelines.
  • Margin Stability:: Full-year adjusted EBITA margin of 17.7% with operating income up 12.6% YoY, despite Q4 margin contraction to 16.9% due to project costs.
  • Market Guidance & Risks:: Q1 2026 demand expected to stabilize (Q4 levels), with Energy slightly lower, Marine down, and Food & Water up; currency impacts of SEK 271 million on EBIT highlighted.

Divisional Performance

The Energy division had an all-time high order intake of SEK 6.1 billion, driven by HVAC and CleanTech applications, with data center orders increasing to around 15% of divisional orders. A new SEK 1 billion CapEx program was launched to expand capacity for data center applications. In contrast, the Food & Water division had flat orders, while the Marine division had stable orders. The Pumping Systems business had a normalized order intake of around SEK 6 billion in 2025, following a strong 2024.

Guidance and Outlook

The company guides for CapEx of SEK 2.5-3 billion and an amortization of SEK 670 million for 2026. For Q1 2026, sequential demand is expected to be on the same level as Q4, with the Energy division being somewhat lower, Food & Water higher, and Marine lower. The company's invoicing levels may decrease depending on market conditions, but the current contracting level supports its infrastructure. Analysts estimate next year's revenue growth at 5.5%.

Valuation Metrics

With a P/E Ratio of 25.44 and an EV/EBITDA of 16.14, the market appears to have priced in a certain level of growth and profitability. The ROE of 19.64% and ROIC of 13.61% indicate a strong return on equity and invested capital, respectively. The Net Debt / EBITDA ratio of 1.22 suggests a manageable debt level.

Operational Highlights

The company's currency hedging strategy covers a substantial part of revenues, mitigating the impact of FX volatility. Regulatory demands are driving changes to group functions, with the company aiming to adjust its structure to support a SEK 100 billion goal by 2030. The Energy business's margin profile will be influenced by the brazed heat exchangers product, but the company doesn't foresee significant mix changes.

Segment-specific Trends

The Marine division's product tanker market is soft, but the company has a strong pipeline for 2026. The Food & Water division is expected to have a margin impact from its growth strategy in 2026, but the company aims to keep the margin above 15%. Raw material price movements, such as copper, may have a tangible price impact in 2026, but the company has frame agreements with metal suppliers and has hedged some metals.

3. NewsRoom

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North America's Largest Heat Transfer Manufacturer to Double Capacity at Richmond, VA Facility by 2028

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Alfa Laval Launches Flexible Decanter Rental Program to Empower Ethanol Producers

Feb -10

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Alfa Laval Renews M&A Push As Investors Weigh Growth And Dividend Balance

Feb -05

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Assessing Alfa Laval (OM:ALFA) Valuation After Recent Share Price Momentum

Feb -05

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Alfa Laval AB (ALFVF) Q4 2025 Earnings Call Highlights: Record Invoicing and Strategic ...

Feb -05

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Alfa Laval (publ) Fourth quarter and full year 2025

Feb -03

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Buy These 5 Dividend Growth Stocks Amid Fed Policy Uncertainty

Feb -02

Source: zacks.com

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Is Alfa Laval (ALFVY) Stock Outpacing Its Construction Peers This Year?

Jan -23

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.31%)

6. Segments

Food & Water

Expected Growth: 4%

Alfa Laval's Food & Water segment growth is driven by increasing demand for sustainable food processing, rising global food safety concerns, and growing need for efficient water management solutions. Additionally, the segment benefits from the company's strong brand reputation, innovative product offerings, and expanding presence in emerging markets.

Energy

Expected Growth: 6%

Alfa Laval's 6% growth in Energy segment is driven by increasing demand for heat exchangers and boilers in the oil and gas industry, coupled with growing adoption of renewable energy sources such as solar and biomass. Additionally, the company's focus on energy efficiency and emission reduction solutions contributes to its growth momentum.

Marine

Expected Growth: 3%

Alfa Laval's Marine segment growth is driven by increasing demand for energy-efficient and environmentally friendly solutions, such as ballast water treatment systems and exhaust gas cleaning systems, which support the maritime industry's transition to more sustainable operations. Additionally, the growing need for marine transportation and the increasing adoption of LNG as a fuel source also contribute to the segment's growth.

7. Detailed Products

Heat Exchangers

Alfa Laval's heat exchangers are designed to provide efficient heat transfer in various industries, including HVAC, refrigeration, and power generation.

Pumps

Alfa Laval's pumps are designed for efficient and reliable fluid handling in various industries, including food, pharmaceutical, and chemical processing.

Valves

Alfa Laval's valves are designed for precise control and shut-off in various industries, including oil and gas, chemical processing, and power generation.

Separation Technology

Alfa Laval's separation technology is designed for efficient separation of liquids, gases, and solids in various industries, including food, pharmaceutical, and chemical processing.

Marine Equipment

Alfa Laval's marine equipment is designed for efficient and reliable operation in the marine industry, including propulsion, cooling, and waste management systems.

Air Heat Exchangers

Alfa Laval's air heat exchangers are designed for efficient heat transfer in air-based systems, including HVAC, refrigeration, and power generation.

Filtration Systems

Alfa Laval's filtration systems are designed for efficient and reliable fluid filtration in various industries, including food, pharmaceutical, and chemical processing.

8. Alfa Laval AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

Alfa Laval AB (publ) operates in a industry with moderate threat of substitutes. The company's products and services are specialized, but there are some alternatives available in the market.

Bargaining Power Of Customers

Alfa Laval AB (publ) has a diverse customer base, which reduces the bargaining power of individual customers. The company's products and services are also customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Alfa Laval AB (publ) has a moderate bargaining power of suppliers. The company relies on a few key suppliers for critical components, but it also has some flexibility to switch to alternative suppliers if needed.

Threat Of New Entrants

Alfa Laval AB (publ) operates in an industry with high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to enter the market.

Intensity Of Rivalry

Alfa Laval AB (publ) operates in a highly competitive industry with several established players. The company faces intense competition in terms of pricing, product offerings, and innovation.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.00%
Debt Cost 4.33%
Equity Weight 72.00%
Equity Cost 9.67%
WACC 8.18%
Leverage 38.89%

11. Quality Control: Alfa Laval AB (publ) passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Alfa Laval

A-Score: 5.3/10

Value: 2.4

Growth: 6.8

Quality: 6.6

Yield: 3.8

Momentum: 3.0

Volatility: 9.0

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Siemens

A-Score: 5.2/10

Value: 3.5

Growth: 5.0

Quality: 5.6

Yield: 5.0

Momentum: 6.5

Volatility: 5.7

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Schindler

A-Score: 5.2/10

Value: 0.8

Growth: 3.9

Quality: 7.4

Yield: 3.1

Momentum: 6.0

Volatility: 10.0

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KONE

A-Score: 4.4/10

Value: 1.3

Growth: 3.3

Quality: 6.7

Yield: 5.6

Momentum: 6.5

Volatility: 2.7

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Eaton

A-Score: 4.2/10

Value: 1.3

Growth: 5.9

Quality: 7.3

Yield: 3.1

Momentum: 3.0

Volatility: 4.3

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Schneider Electric

A-Score: 4.1/10

Value: 1.5

Growth: 5.6

Quality: 6.6

Yield: 2.5

Momentum: 3.5

Volatility: 5.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

528.6$

Current Price

528.6$

Potential

-0.00%

Expected Cash-Flows