Alfa Laval (OTCPK:ALFV.Y) 2025 Capital Markets Day Transcript

Summary of Alfa Laval Capital Markets Day - November 24, 2025 Company Overview - Company: Alfa Laval (OTCPK:ALFV.Y) - Event: 2025 Capital Markets Day - Date: November 24, 2025 Key Industry Insights Global Economic Context - The global economy has experienced significant volatility due to factors like COVID-19, geopolitical issues, and inflation, but the situation is not as dire as perceived [4][5][6] - U.S. industrial production is stable, with labor force access being a primary growth constraint rather than capital availability [5][6] - China is a critical market, contributing over 20% of Alfa Laval's turnover, with significant growth potential in sectors like carbon capture and sustainable technologies [7][9] Energy Transition - Alfa Laval is committed to leading the energy transition, with a target for net-zero emissions by 2027 for scope one and two [10][11] - The company acknowledges the challenges of aligning with the Paris Agreement, emphasizing a gradual transition rather than rapid changes [12][13] - Investment in renewable energy and clean technologies is increasing, with a focus on hydrogen and other sustainable solutions [11][31] Company Strategy and Growth Financial Targets - Alfa Laval aims to reach SEK 100 billion in revenue by 2030, currently operating at a rate of about SEK 70 billion [27][39] - The company plans to achieve this through organic growth and potential mergers and acquisitions, estimating an additional SEK 20-30 billion from M&A activities [28][39] Divisional Focus - The company has restructured its divisions, with a focus on Energy, Food & Pharma, and Ocean divisions, each with specific growth strategies [29][49] - The Food & Pharma division is expected to grow at a rate of 7% annually, driven by increasing demand for food and healthcare products due to population growth and urbanization [50][57] Innovation and R&D - Alfa Laval is increasing its R&D investment from 2.4% to 3% of net invoicing to support innovation across its product lines [58][59] - The company is focusing on digital solutions and application innovations to enhance customer processes and extend equipment lifetimes [60][61] Market Dynamics Food & Pharma Market - The food market is projected to grow at 2-3% annually, with a significant addressable market of SEK 152 billion, where Alfa Laval holds a 12% market share [53][54] - The water treatment market is growing at 3-4% annually, driven by urbanization and climate change, with an addressable market of SEK 21 billion [55] - The pharmaceutical market is the fastest-growing segment at 5-6% annually, presenting a significant opportunity for Alfa Laval to increase its market share [56][57] Competitive Positioning - Alfa Laval is positioned among the top three in several market segments, with a focus on expanding its share in the pharmaceutical sector where it currently has a low market share [56][57] Conclusion - Alfa Laval is navigating a complex global landscape with a clear strategy focused on sustainable growth, innovation, and market expansion. The company is well-positioned to capitalize on emerging opportunities in the energy transition and food & pharma sectors while maintaining a robust commitment to R&D and customer-centric solutions.