Board of Directors’ Report

The Board of Directors and the President of Alfa Laval AB (publ) hereby submit their annual report for the financial year 2024.

Financial statements

The following parts of the annual report are financial statements: the Board of Directors’ Report, the ten-year overview, the consolidated cash flows, the consolidated comprehensive income, the consolidated financial position, the changes in consolidated equity, the parent company cash flows, the parent company income, the parent company financial position, the changes in parent company equity and the notes. All of these have been audited by the auditors.

The Corporate Governance Report, which has also been reviewed by the auditors, is to be found on page 62.

The statutory sustainability report for the parent company and the consolidated Group, which has also been reviewed by the auditors, is to be found on pages 26–58. Supplementary sustainability notes are to be found on Alfa Laval’s website Alfa Laval – Publications. The supplementary sustainability notes were published on the website at the same time as the annual report.

Ownership and legal structure

Alfa Laval AB (publ) is the parent company of the Alfa Laval Group.

The company had 56,542 (54,178) shareholders on December 31, 2024. The largest owner is Winder Holding AG, Switzerland, who owns 29.5 (29.5) percent. Next to the largest owner, there are nine institutional investors with ownership in the range of 7.4 to 1.8 percent. These ten largest shareholders owned 63.1 (61.3) percent of the shares.

Operations

Alfa Laval, a world leader in heat transfer, centrifugal separation and fluid handling, is active in the areas of Energy, Marine, and Food & Water, offering its expertise, products, and service to a wide range of industries in some 100 countries. The company is committed to optimizing processes, creating responsible growth, and driving progress to support customers in achieving their business goals and sustainability targets. Alfa Laval is engaged in the development, production and sales of products and systems based on three main technologies: separation/filtration, heat transfer and fluid handling.

Alfa Laval’s business is divided into three Business Divisions ”Energy”, ”Food & Water” and ”Marine” that sell to external customers and are responsible for the manufacturing of the products and one division “Operations & Other” covering procurement and logistics as well as corporate overhead and non-core businesses. These four divisions constitute Alfa Laval’s four operating segments.

The customers to the Energy Division purchase products and systems for energy applications, whereas the customers to the Food & Water Division purchase products and systems for food and water applications. The customers to the Marine Division purchase products, systems and digital solutions for marine and offshore applications.

The three Business Divisions are in turn split into a number of Business Units. The Energy Division consists of five Business Units: Brazed & Fusion Bonded Heat Exchangers, Electrolyzer & Fuel Cell Technologies, Energy Separation, Gasketed Plate Heat Exchangers and Welded Heat Exchangers. The Food & Water Division consists of six Business Units: Decanters, Food Heat Transfer, Food Systems, Hygienic Fluid Handling, High Speed Separators and Desmet. The Marine Division consists of four Business Units: Pumping Systems, Water, Wind & Fuel Solutions, Heat & Gas Systems and Digital Solutions.

Material factors of risk and uncertainty

The main factors of risk and uncertainty facing the Group concern the business cycle, the consequences of geo-political tensions, the price development of metals, inflationary pressures, the interest rate development and volatile fluctuations in major currencies. For additional information, see the sections on financial and operational risks and disclosure of material accounting principles, which includes judgements, estimates and assumptions.

Acquisition of businesses

2024

No new acquisitions were made during 2024. On March 14, 2024, Alfa Laval acquired the remaining 10.3 percent of StormGeo’s subsidiary Climatempo in Brazil from the minority owners. Alfa Laval now owns 100%. The transaction is reported as a change within equity.

2023

On March 2, 2023, Alfa Laval acquired an additional 38.7 percent of StormGeo’s subsidiary Climatempo in Brazil from the minority owners. Alfa Laval’s ownership thereby increased from 51 percent to 89.7 percent. The transaction was reported as a change within the equity.

In 2021, Alfa Laval acquired a minority stake of 16.5 percent in the Netherland-based company Marine Performance Systems (MPS) with an option to acquire the remaining part later. In 2023, Alfa Laval executed on that option and completed the acquisition to own 100 percent of MPS. The closing date for the acquisition was March 21, 2023.

On July 31, 2023 Alfa Laval acquired 100 percent of a European service provider. The company operates under its own name as an independent channel.

On July 31, 2023 Alfa Laval acquired 51 percent of the Danish company Header-coil Company A/S that develops and manufactures heat exchangers and steam generation system equipment components based on its header-coil design for the concentrated solar power (CSP) industry, thermal energy storage etc.

Investments in joint ventures and other companies

During 2024, Alfa Laval invested SEK 2 million in Industrikraft i Sverige AB. The company was established to support the expansion of the Swedish electricity supply. The initiative is initially a collaboration with Alfa Laval, Boliden, SKF, Stora Enso and Volvo Group with 20% shareholding respectively.

The value of the shareholding in Malta Inc. has been written down with SEK 125 million during 2024.

During 2023 Alfa Laval acquired additional shares in Malta Inc amounting to SEK 50 million, whereby the ownership increased from 18.3 percent to 19.2 percent.

During 2023 Alfa Laval made a capital contribution of SEK 62 million into AlfaWall Oceanbird, which is a joint venture together with Wallenius to supply innovative wind propulsion solutions for cargo vessels and other ship types. Alfa Laval also made a capital contribution of SEK 1 million into Stadion Laks, which is a joint venture together with the Norwegian fish farming company Lingalaks to develop pumping technology for more sustainable fish farming.

Sale of real estate

During 2024, properties in Singapore and the UK have been sold for SEK 93 (71) million with a realized result of SEK 73 (68) million.

The property in Alonte in Italy, Camberley in the UK and four smaller properties in India are for sale and are expected to be sold within the next year. These have therefore been classified as current assets held for sale with SEK 47 (59) million. The fair value of the properties for sale exceeds the book value by approximately SEK 282 (373) million.

Financial performance during 2024

In the below table you find an overview of key figures for the financial performance during 2024 and 2023. For more detailed comments, please refer to the sections related to Operating segments and comments for Total comprehensive income and Financial position.

¹⁾ At end of period.

²⁾ Excluding comparison distortion items.

³⁾ Alternative performance measure.

⁴⁾ Adjusted EBITA/net sales.

⁵⁾ Excluding new leases.