Other information

Personnel

The number of employees is measured and reported as full time equivalents.

The parent company does not have any employees.

The Group has on average had 21,907 (20,803) employees. At the end of December 2024, the Group had 22,323 (21,321) employees.

Alfa Laval has the ambition to develop the employees on all levels within the Group. The largest part of the competence development takes place in the daily work when our employees continuously get more demanding tasks as well as get the opportunity to participate in different projects together with more experienced colleagues. Local training and development efforts in the different factories and sales companies around the world are equally important, for instance ALPS (Alfa Laval Production System) that is based on the well-known concepts of Lean and Six Sigma and also on ALPAS (Alfa Laval Product & Application School). The ALPAS trainings are designed and developed by the product responsible Business Unit.

All training programmes and development projects are performed within the Alfa Laval Academy framework, to ensure they follow the Alfa Laval Learning Principles. Further examples of such training programmes are Challenger (for young talents with international leadership potential), Evolve (training and mentor programme for employees with high potential in leadership positions), Project Management, Information Security (mandatory training via E-learning), Inclusion & Diversity (for all employees), Pure Leadership (for middle management) and Drive (for senior management).

Alfa Laval has a global certification in “Learning Facilitation Capabilities” called “Licence to Train” to guarantee quality and consistency in the way we deliver our learning programmes internally as well as towards customers and partners.

Alfa Laval is promoting inclusion and diversity at all levels to give all employees fair and equal opportunities for development and career. While we consciously work towards increasing the share of female managers and the share of female employees in the total workforce, leadership programs like Challenger, Evolve and Drive are important to drive the shift in leadership and inclusion to reach the goal.

Remuneration policy for executive officers

The remuneration policy for executive officers is established by the Annual General Meeting, see further description in Note 6 and the complete policy in Note 37.

The Board of Directors decided in 2024 to implement another step in the cash based long-term incentive programme for maximum 150 senior managers in the Group including the Chief Executive Officer and the persons defined as executive officers. The outcome of the programme depends on how the adjusted EBITA margin and the net sales growth have developed during a three-year period, with a 50/50 weight between the targets. This means that there will be no award during the first two years since it is first in year three that it can be determined to what extent the targets have been achieved. Maximum outcome is awarded when the targets are exceeded. The remuneration from the long-term incentive programme can constitute maximum 25, 40 or 50 percent of the fixed remuneration depending on position. Payment to the participants in the programme is made after year three, provided that they are still employed at the date of payment.

Research and development

As the result of an intensive and consistent commitment over many years to research and development, Alfa Laval has achieved a world-leading position within the areas of separation and heat transfer. The product development within fluid handling has resulted in a strong market position for a number of products. In order to strengthen the Group’s position and to support the organic growth, by identifying new applications for existing products as well as developing new products, research and development is always an activity of high priority. Research and development is conducted at approximately twenty facilities around the world.

The costs for research and development have amounted to SEK 1,656 (1,563) million, corresponding to 2.5 (2.5) percent of net sales.

Ethics and social responsibility

Two of Alfa Laval’s four business principles are: ”Respect for human rights is fundamental” and ”High ethical standards guide our conduct”. This means that Alfa Laval respects human rights and the very different social cultures in which the company works and supplies its products and services and that Alfa Laval conducts its business with honesty, integrity and respect for others.

Globalisation gives Alfa Laval new business opportunities for increased sales as well as lower costs for manufacturing the products. But when part of the supply chain is moved to countries with lower costs the company is often confronted with ethical questions in a more obvious manner. Health, security and working conditions for the employees at the company’s suppliers are some of Alfa Laval’s main concerns. When Alfa Laval procures products from quickly growing economies like China and India it is important for the company to secure that the cost reduction opportunities are not at the expense of those performing the work in each country. Alfa Laval regards it as an obligation to make sure that its suppliers develop quickly if the work, health and security conditions are not acceptable.

Alfa Laval has developed an internal training programme to give salespeople and purchase departments knowledge on legal business practice.

Environment

One of Alfa Laval’s four business principles is: ”Optimizing the use of natural resources in the most efficient manner is our business”. The company’s products make a significant contribution to reducing the environmental impact of industrial processes and are used to produce renewable energy.

All sites have an environmental management system in place. More than 95 percent of the delivery value comes from production sites with ISO 14001 certification.

The subsidiary Alfa Laval Corporate AB is involved in operational activities that are subject to an obligation to report and compulsory licensing according to Swedish environmental legislation. The permits mainly relate to the manufacturing of heat exchangers in Lund and Ronneby and the manufacturing of separators in Eskilstuna. The impact on the external environment is through limited discharges into the air and water and through waste and noise.

The foreign manufacturing sites within the Alfa Laval Group are engaged in operational activities with a similar effect on the external environment. To what extent this activity is subject to an obligation to report and/or compulsory licensing according to local environmental legislation varies from country to country. Alfa Laval has an overall intention to operate well within the limits that are set by local legislation.

Russia’s war on Ukraine

Alfa Laval had a factory and a sales company in Russia and a sales company in Ukraine. Historically the order intake from the markets in Russia and Ukraine has been approximately SEK 1 billion per year. The implications of the war on the Russian market have led to a full closure of the operations. The total cost for the closure amounted to appr. SEK 400 million and was reported as a comparison distortion item during 2022.

Before the war, Alfa Laval had a competent team of approximately 230 employees in Russia and 10 employees in Ukraine. At December 31, 2024 the number of employees in Russia had decreased to 6.

Asbestos-related lawsuits

The Alfa Laval Group was as of December 31, 2024, named as a co-defendant in a total of 401 asbestos-related lawsuits with a total of approximately 401 plaintiffs. Alfa Laval strongly believes the claims against the Group are without merit and intends to vigorously contest each lawsuit.

Based on current information and Alfa Laval’s understanding of these lawsuits, Alfa Laval continues to believe that these lawsuits will not have a material adverse effect on the Group’s financial condition or results of operation.

Result for the parent company

The parent company’s result after financial items for 2024 was SEK 638 (4,271 ) million, out of which dividends from subsidiaries SEK 406 (4,037 ) million, net interests SEK 258 (252) million, realized and unrealized exchange rate gains and losses SEK 0 (-1) million, costs related to the listing SEK -4 (-4) million, fees to the Board SEK -10 (-9) million, cost for annual report and annual general meeting SEK -2 (-1) million and other operating income and operating costs the remaining SEK -10 (-3) million. Change of tax allocation reserve has been made with SEK 355 (-48) million. Group contributions amount to SEK 599 (1,314) million. Tax on this year’s result amount to SEK -212 (-271) million. Net income for the year was SEK 1,379 (5,266) million.

Unrestricted equity for the parent company

The unrestricted equity of Alfa Laval AB (publ) was SEK 7,573 (9,293) million.

Disclosure on share related information

Paragraph 2a in chapter 6 of the Swedish Annual Accounts Act requires listed companies to disclose certain information relating to the company’s shares in the Board of Directors’ Report. This information is found in the following paragraphs, in the “Changes in consolidated equity” and in Note 6.

Proposed disposition of earnings

The Board of Directors propose a dividend of SEK 8.50 (7.50) per share corresponding to SEK 3,513 (3,100) million and that the remaining income available for distribution in Alfa Laval AB (publ) of SEK 4,059 (6,193) million be carried forward, see Note 40.

The Board of Directors are of the opinion that the proposed dividend is consistent with the requirements that the type and size of operations, the associated risks, the capital needs, liquidity and financial position put on the company.

Number of shares

The number of shares has developed as follows:

Outlook for the first quarter

In the fourth quarter and full year 2024 report issued on February 5, 2025 the President and Chief Executive Officer Tom Erixon stated:

“We expect demand in the first quarter to be on about the same level as in the fourth quarter.”

Earlier published outlook (October 24, 2024):

“We expect demand in the fourth quarter to be lower than in the third quarter.”

Date for the next financial reports 2025

Alfa Laval will publish financial reports at the following dates:

Interim report for the first quarter April 29

Interim report for the second quarter July 22

Interim report for the third quarter October 28