Alfa Laval Corporate AB

Record orders + strong, broad demand tailwinds (but Q4 deceleration expected) - Q3 order intake: SEK 23.2bn (new record; notable given seasonally softer Q3). - Order book: new record just below SEK 60bn; Energy/Food & Pharma/Ocean all within target profitability ranges. - Sales & profit growth were “normalized”: Sales +8%, profit +6% YoY (vs. orders much stronger than sales). - Divisional themes: - Energy: strong; data centers + HVAC/heat pumps + power/fuel. - Food & Pharma: solid; transactional business at record; biofuels projects notable. - Ocean (Marine): ship contracting exceptional; cargo pumping converting to orders. - Outlook/Q4 expectation: after two record quarters, management expects somewhat lower demand in Q4 than Q3 (Energy ~same; Food & Pharma ~lower; Ocean lower).

CapEx increased—investment cycle likely peaks in 2028 (key investor watch item) - CapEx guidance raised (accelerated growth): from SEK 3bn to SEK 4bn per year. - Planned peaks next: guided 2026 CapEx increased; Q4 2026 ≈ SEK 1bn, 2027 ≈ SEK 4bn (and amortization step-ups guided too). - Why increase: ramping capacity for data centers (Energy) and other growth needs; also manufacturing footprint optimization and service/systems capacity. - “Peak cycle” narrative: management believes CapEx peak around 2027–2028, then returns to lower run-rate after completion; no new major capacity decisions expected to materially impact 2030.

Profitability steady at targets; margins affected by mix (especially in Ocean service/pumping dynamics) - Group profitability: Adjusted EBITA margin ~18.1% in Q3 (all 3 divisions at target ranges). - Divisional EBITA margins (Q3): Energy 18.1%, Food & Pharma 15.5%, Ocean 21.3%. - Cost/R&D: sales & admin +10% (inflation, acquisitions, added resources); R&D +7%. - Ocean headwinds/negative surprise: Service declined in Ocean (sanctions—~4,000 ships out of scope from ~60,000 merchant fleet), plus intense fleet utilization delaying service intervals; mix also swung toward less pumping/service in Q3.