ALFVF - Alfa Laval Corporate AB (ALFVY) Q1 2024 Earnings Call Transcript
2024-04-26 17:07:10 ET
Alfa Laval Corporate AB (ALFVY)
Q1 2024 Results Conference Call
April 25, 2024 8:00 AM ET
Company Participants
Tom Erixon - CEO
Fredrik Ekstrom - CFO
Conference Call Participants
Klas Bergelind - Citi
Sebastian Kuenne - RBC
John Kim - Deutsche Bank
Sven Weier - UBS
Johan Eliason - Kepler Cheuvreux
Daniela Costa - GS
Alexander Virgo - Bank of America
Max Yates - Morgan Stanley
Presentation
Tom Erixon
So good afternoon and welcome to Alfa Laval's First Quarter Earnings Call in 2024. And joining me is Fredrik, our CFO, and so we will go through the presentation. We have an AGM starting in a while so we're going to be a little bit tight in the meeting and we intend to finish at quarter to. With that, let me go to a couple of introductory comments as always. First, as you noticed, overall demand remained strong in the quarter despite volatility in several end markets. A good conversion of the product pipeline and strong growth in service compensated for weakness in end markets like HVAC and offshore.
Invoicing was lower than expected for several reasons with some negative margin impact especially on the Food & Water side. Invoicing is expected to return to anticipated levels in the next quarters. Finally, the group continues to exceed all communicated financial targets. At the same time, we are in a heavy investment period both within R&D and the capacity expansion program. We remain committed to lead the energy transition while maintaining healthy profitability and a strong balance sheet.
And with that, let's go to the key figures for the quarter. Order intake was stable year-on-year and grew 8% sequentially with invoicing slightly below the expectations. Consequently, the orderbook grew to about SEK 48 billion and the book-to-bill in the quarter was 1.23. EBITA improved slightly versus last year, but with a margin that decreased somewhat. Let me comment on the margin development on the divisional levels. So moving on to the Energy division.
Most end markets continue to grow on a healthy level with the exception of the HVAC market, especially the heat pump market was weak as expected. Lack in volumes have to a degree been compensated by gains in other applications related to the brazed heat exchangers. The order intake and margin will continue to be negatively affected in the next quarter by the weak HVAC market, but as previously guided, a gradual improvement is expected in the second half of 2024. The elevated margin in the first quarter 2023 was, as you know, partly due to the positive inventory reval effects at the time. Excluding that, the financial performance was stable compared to last year. The unusually high growth in service continued in the quarter with the growth in the Energy division of 20% and service accounted for 31% of order intake in the quarter....
Alfa Laval Corporate AB (ALFVY) Q1 2024 Earnings Call Transcript