Alfa Laval Finishes 2021 With a Record High Order Intake; Strong Guidance Heading Into 2022

Wide-moat Alfa Laval reported a 26% increase in orders in the fourth quarter, largely flat sequentially from third-quarter 2021 and in line with expectations. Full-year order intake grew 18.4% organically to reach a record high of SEK 45.7 billion, which has fully recovered to exceed 2019 levels by 4%. Management’s guidance was strong: it expects first-quarter demand in 2022 to increase sequentially from the high levels of fourth-quarter 2021. We expect Alfa Laval to capture demand from the structural shift of industrial and marine customers toward energy efficiency and decarbonization, given its track record for product innovation and recently announced investment programme to expand its product portfolio. We maintain our SEK 265 fair value estimate and view shares as fairly valued.