As we entered 2024, we anticipated some headwinds in the market. We knew the HVAC application would be weak due to exceptional low demand for heat pumps and a slow construction market in general. In addition, both the biofuel segment and cargo pumping had strong order bookings in 2023, which was not expected to repeat in 2024.

As we summarize the year, it turned out very different. Order intake and invoicing reached new record levels. The organic growth was exceptionally strong in the Marine Division with 39 percent, while the Energy Division and Food & Water Division compensated specific market weaknesses with solid growth in all other product areas. The group order intake amounted to 75 BSEK, a growth of 4 BSEK compared to 2023.

The growth is partially supported by good market conditions, but also a result of a growth strategy that has guided Alfa Laval during the last eight years. Over the last 5 years, the company has grown orders with 9 percent per year in average, driven by some important focus areas.

First, the service business has grown at 16 percent per year, supported by a strong investment program. Many service centers, especially in Turkey, Singapore, and the U.S. have been expanded and modernized. The recruiting and training of the service team has been strengthened, and the global team has increased by around 25 percent in the five-year period. New equipment sold with service agreements is increasing as planned together with remote monitoring. It is our service team that ensures that the efficiency benefits of our solutions are yielding the benefits our customers expects decades after the equipment has been commissioned.

Second, the high pace of technology investments and new product launches remained the core aspect of our “Transition Leader” strategy. Across the three divisions new technology supporting the decarbonization of the global industrial systems accounted for approximately 10 BSEK, or 13 percent of the group´s order intake. Despite concerns about the pace of the energy transition, the growth in sustainable solutions is faster than ever. In the Energy Division specifically in applications for clean tech, such as carbon capture and green chemicals, grew with 40 percent in 2024. From a technology perspective it was a significant year with important product launches related to ammonia fuel conditioning for marine engines and new semi-welded heat exchangers also suitable for ammonia.

Third, the investment in our digital capabilities is supporting the growth both now and in the future. The acquisition of StormGeo has been successful and the business unit continues to grow in line with plans. Today, around 7,000 vessels are supported by StormGeo´s software and digital services on a daily basis. The technical team at StormGeo is supporting the connectivity solutions for all Alfa Laval equipment onboard ships. Our global service operations are now supported by remote diagnostics tools and remote service capabilities. Last year more than 10,000 remote service hours were invoiced. A central taskforce for AI implementation was established in 2024. The team works with prioritizing use cases in the group such as product configurators, thermal image analysis, and productivity enhancement in general.

Fourth, the growth was supported by a long-term capex program, in 2024 amounting to 3.3 BSEK. The production platform is now well geared towards further growth towards 2030 in almost all product areas. In 2024 a special focus has been on the global parts distribution system, which had outgrown our capacity related to the service and channel partner business. New distribution centers were under construction in both Lund, Sweden and in Indianapolis, USA.

Alfa Laval has doubled in size over the last eight years. Scaling a large and diverse global company is not only about production capacity and number of employees. In 2024 an important project was initiated to review the reach of the Alfa Laval brand, the efficiency of parts of our systems and operating model and assess the merits and opportunities of parts of the product portfolio. With growth comes an occasional need to streamline the way we operate. In 2025 that work will be important.

At Alfa Laval we have the view that when you develop and sell sustainability solutions, you have to start in your own back yard. In 2024 the progress and results were rewarding. The safety at work program continued to lower the accident frequency, and the so-called LTIFR reached the target level of 1.8 for the group. Both water and energy consumption continue to improve well in line with our targets. In fact, the net zero target for CO2 emissions in Scope 1-2, which had been set for 2030, was accelerated with a new target date of 2027. We know how to get there, so why wait?

Our main ambition in 2024, and in every year, is to make the company stronger. In that regard we feel well positioned for 2025. Our team of more than 22,000 employees is stronger than ever before. Our market positions strengthened in almost all areas as did our market share. Our global channel partner network has grown and added capabilities. With few exceptions, our end-markets are expected to grow despite the never-ending geopolitical turbulence. Finally, after a record operating cashflow amounting to 12 BSEK we enter 2025 with a strong balance sheet and a broad set of options for how to invest in further growth.

As we close 2024 I want to thank all our diverse channel- and technology partners for a great collaboration, our customers for your trust in Alfa Laval and the employees for their dedication to always pioneer positive impact.