Alfa Laval Corporate AB (ALFVF) Q3 2023 Earnings Call Transcript


Alfa Laval Corporate AB (OTCPK:ALFVF) Q3 2023 Earnings Conference Call October 25, 2023 3:00 AM ET

Company Participants

Tom Erixon – President and Chief Executive Officer

Fredrik Ekstrom – Chief Financial Officer

Conference Call Participants

Klas Bergelind – Citi

John Kim – Deutsche Bank

Max Yates – Morgan Stanley

Sebastian Kuenne – RBC Capital Markets

Johan Eliason – Kepler Cheuvreux

Sven Weier – UBS

Gustaf Schwerin – Handelsbanken

Andreas Koski – BNP Paribas Exane

Vlad Sergievskiy – Barclays

Operator

Tom Erixon

Good morning, and welcome to Alfa Laval’s Earnings Call for the Third Quarter. Fredrik and I, we will go through our normal presentation and after that, we will open up for Q&A.

So, let me start with a few introductory comments as always. Let me remind you first that in 2022, we had several imbalances in the portfolio, both in the Energy division and in the Marine division. It triggered a restructuring program in the fourth quarter last year, which now is completed according to plan, supporting the margin improvement in the quarter. The imbalances from 2022 are now corrected.

Additionally, the strong order intake continued for Marine pumping system with a healthy order back book for 2023 and ’24. The Marine division margins started to recover in the third quarter, as previously guided.

Global supply chains continue to stabilize with customer service and lead times gradually returning to normal levels. The resulting improvement in the operating cash flow to almost SEK3 billion was expected and welcomed.

And with that, let me move on to the key figures. Order intake remained on a good level in the quarter and grew 12% compared to last year, and sequentially, seasonally, somewhat lower as indicated before. Invoicing grew 20% and provided a good volume support to the margin improvement, which ended on 16.7%. Note that the book-to-bill remained positive in the quarter. In



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