Alfa Laval Earnings: Robust Order Book Sets Up Growth in 2024 Despite Softening Demand Environment

Wide-moat Alfa Laval’s fourth-quarter 2023 results fell short of our expectations, with the external demand environment representing more of a headwind than we’d anticipated and restructuring efforts also tracking behind our forecasts. New orders in late 2023 were soft relative to our expectations, with a number of puts and takes at the divisional level that led Alfa Laval’s full-year 2023 order intake to trail our forecast for the group by about 3%. Full-year 2023 group EBITA of SEK 10.2 billion also fell somewhat short of our expectations, owing primarily to a weaker-than-expected marine division profit margin, with previously announced restructuring efforts for the division taking longer to bear fruit than we’d previously credited.