Alfa Laval AB (publ)

Record demand / order strength (most bullish signal) - Q3 order intake: SEK 23.2bn (record), unusual for a typically softer Q3. - Invoicing & profitability growth: Sales +8% YoY, profitability +6% YoY (in line with “normalized” invoicing after prior seasonality). - Order book: new record just below SEK 60bn; book-to-bill ~1.25; y/e growth visibility into Q4 looks strong. - YTD orders: SEK 63.1bn (+23% YoY) of which +22% organic (indicates underlying demand, not only acquisitions).

CapEx stepped up due to growth ramp (good opportunity, near-term execution burden) - Why higher CapEx: structural capacity build for data centers plus broader “full utilization + future demand” capacity needs across divisions. - CapEx guidance increase: from ~SEK 3bn to SEK 4bn per year (near term). - Next years: company expects 2026 CapEx ~SEK 3–4bn, with 2027 ~SEK 4bn (and peak during the cycle). - Context investors should note: company says peak CapEx likely completes in 2028, then CapEx should fall back while supporting the long-term SEK 100bn revenue plan by 2030. - Cash flow / investment cadence: Q3 CapEx SEK 819m; operating cash flow SEK 3.4bn (strong cash conversion).

Division performance: strong margins but mix-driven Ocean volatility (important “good vs bad”) - Group profitability: Adjusted EBITA margin ~18.1% (Q3); company says all 3 divisions are within target profitability ranges. - Energy: target 17%+; Q3 ~18.1%; strong demand (esp. data centers + power & fuel + heat pumps). - Food & Pharma: Q3 margin ~15.5%; transactional business at record level, but invoicing slightly below expectations due to delivery schedules, not supply constraints. - Ocean (Marine): margin ~21.3% but sequential softness / service decline noted - Service grew organically overall at group level (+6%), but Ocean service declined due to sanctions (ships out of Alfa Laval service scope) + high fleet utilization delaying service cycles. - Investor takeaway: Ocean profitability is still high, but timing/mix are driving quarter-to-quarter changes rather than structural collapse.