Alfa Laval AB

Analysis

Business Description

Alfa Laval AB (Alfa Laval) is a supplier of specialized products and solutions for heat transfer, separation and fluid handling across the world. Its products are designed to optimize various processes such as heating, cooling, separating, and transporting of products including oil, water, chemicals, beverages, and foodstuffs. The company operates 37 manufacturing facilities across Europe, Asia, the US, and Latin America.

The company classifies its operations into five reportable segments: Energy, Food & Water, Marine, Greenhouse, and Operations & Other.

Alfa Laval operates through a global network of more than 110 service centers. The company's distribution centers are located in Sweden, Singapore, China, Denmark, India, Japan, and the US.

R&D Overview

R&D efforts focus on investing in new technology to develop high-performance and energy-efficient products. The company’s research activities enable it to strengthen its product line and develop new products for the industry.

In FY2020, Alfa Laval spent SEK1,039 million on R&D, which grew 4.3% YoY and accounted for 2.5% of the company’s revenue. As of December 31, 2020, the company had more than 3,900 patents.

Business Segments
Overview

Operates through brazed & fusion bonded heat exchangers, energy separation, gasketed plate heat exchangers and welded heat exchangers units.

Consists of construction-related applications namely heating, cooling, and ventilation and offers to customers in the mining, metal, and lighter industries.

Caters to oil and gas extraction, oil and gas processing and transport, refineries, petrochemicals, and power generation.

Focuses on energy efficiency and helps to reduce energy consumption economically and environmentally.

Performance

Reported revenue of SEK12,187 million for FY2020, which decreased 11.8% YoY, and reported a negative CAGR of 0.9% during 2018-20.

Accounted for 29.4% of the company's revenue in FY2020.

Reported operating income of SEK1,882 million in FY2020, which decreased 9% YoY.

Inventore veritatis
Overview

Consists of food, pharmaceuticals, vegetable oils, biotech, breweries, dairy, and body care products.

Operates through food heat transfer, food systems, hygienic fluid handling, and high-speed separators divisions.

Focuses on public and industrial water treatment, and wastewater and waste treatment.

Performance

Reported revenue of SEK13,414 million for FY2020, which decreased 5.5% YoY, and reported a CAGR of 0.8% during 2018-20.

Accounted for 32.3% of the company's revenue in FY2020.

Reported operating income of SEK2,371 million in FY2020, which grew 4.5% YoY.

Overview

Offers air heat exchangers and heat exchanger systems.

Performance

Did not generate any revenue in FY2020.

Overview

Offerings include heat transfer equipment, high-speed separators, and pumping systems as well as different environmental products such as ballast water treatment systems.

Caters to shipowners, shipyards, manufacturers of diesel and gas engines and companies that specialize in offshore extraction of oil and gas.

Performance

Reported revenue of SEK15,867 million for FY2020, which decreased 11.8% YoY, and reported a CAGR of 8.1% during 2018-20.

Accounted for 38.3% of the company's revenue in FY2020.

Reported operating income of SEK2,758 million in FY2020, which decreased 19.5% YoY.

Decline in revenue was due to lower level of deliveries among majority of the product groups.

Overview

Carries out procurement, production and logistics, and corporate overhead and non-core businesses.

Performance

Did not generate any revenue in FY2020.

Reported operating loss of SEK629 million and SEK742 million in FY2020 and FY2019, respectively.

Geographical Segments
Performance

Reported revenue of SEK418 million for FY2020, which decreased 14.7% YoY, and reported a negative CAGR of 3.6% during 2018-20.

Accounted for 1.0% of the company's revenue in FY2020.

Inventore veritatis
Performance

Reported revenue of SEK6,180 million for FY2020, which decreased 6.1% YoY, and reported a CAGR of 8.4% during 2018-20.

Accounted for 14.9% of the company's revenue in FY2020.

Performance

Reported revenue of SEK1,630 million for FY2020, which decreased 20.9% YoY, and reported a negative CAGR of 5.8% during 2018-20.

Accounted for 3.9% of the company's revenue in FY2020.

Performance

Reported revenue of SEK490 million for FY2020, which grew 5.8% YoY, and reported a negative CAGR of 7% during 2018-20.

Accounted for 1.3% of the company's revenue in FY2020.

Performance

Reported revenue of SEK6,984 million for FY2020, which decreased 13.9% YoY, and reported a negative CAGR of 2.5% during 2018-20.

Accounted for 16.8% of the company's revenue in FY2020.

Performance

Reported revenue of SEK11,205 million for FY2020, which decreased 5.1% YoY, and reported a CAGR of 0.8% during 2018-20.

Accounted for 27% of the company's revenue in FY2020.

Performance

Reported revenue of SEK3,247 million for FY2020, which decreased 3.2% YoY, and reported a CAGR of 5.5% during 2018-20.

Accounted for 7.8% of the company's revenue in FY2020.

Performance

Reported revenue of SEK946 million for FY2020, which decreased 10.9% YoY, and reported a CAGR of 2.8% during 2018-20.

Accounted for 2.3% of the company's revenue in FY2020.

Performance

Reported revenue of SEK3,456 million for FY2020, which decreased 17.9% YoY, and reported a CAGR of 6.6% during 2018-20.

Accounted for 8.3% of the company's revenue in FY2020.

Performance

Reported revenue of SEK989 million for FY2020, which grew 0.8% YoY, and reported a CAGR of 3.5% during 2018-20.

Accounted for 2.4% of the company's revenue in FY2020.

Performance

Reported revenue of SEK5,923 million for FY2020, which decreased 19.9% YoY, and reported a negative CAGR of 3.8% during 2018-20.

Accounted for 14.3% of the company's revenue in FY2020.