Alfa Laval Finishes 2022 With Record Order Intake and Revenue

Wide-moat Alfa Laval alleviated investors' concerns about macroeconomic factors hitting demand after the company reported record fourth-quarter 2022 organic order and revenue growth of 16% and 14%, respectively. The outlook for 2023 is positive with management guidance for demand to remain at a similar high level during the first quarter of 2023 and the backlog is 61% higher than the previous year. To support strong demand, particularly customers’ decarbonization ambitions, the group will invest SEK 3.8 billion in capacity expansion, and guided for annual capital expenditure between SEK 2.5 billion and SEK 3 billion per year during the next three to four years, above our average annual estimate of SEK 2.2 billion. We maintain our SEK 280 fair value estimate and view shares as fairly valued.