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Alfa Laval says fourth quarter dip can’t spoil successful 2011

By Rory Harrington , 08-Feb-2012

Alfa Laval hailed 2011 as “successful” as orders and operating income grew year-on-year but the company noted slowing in demand in the final quarter.

The Sweden-based company, which specializes in heat transfer, separation and fluid handling technologies, said full year order intake had climbed 28% to SEK 28.6bn (€3.2bn), while net sales jumped by a quarter to the same amount. EBITA, at over SEK 5bn, also showed an increase compared to 2010’s total of SEK 4.6bn.

But demand and market adjustments had also seen it cut hundreds of staff from its European sales operations.

Food technology

For the three months ending 31 December the picture was mixed. Year-on-year orders rose 6% to SEK 6.7bn but this figure marked a 15% drop compared to the previous three months. The company said this fall had come on the back of a strong Q3.

For order intake in the Process Technology unit, which includes food processing, demand in most geographical areas declined with the exception of central and Eastern Europe and the Nordic regions. Overall demand in the BRIC countries (Brazil, Russia, India and China) continued to grow.

Food Technology demand also saw a drop compared to Q3 – with beverage, viscous foods and vegetable oil all affected. But vegetable oil still registered growth in Asia “driven by continued capacity investments in the industry”, said Alfa Laval.

But for the full year 2011 orders received for Process Technology increased by a quarter and net sales by 23% compared to last year.

Extra costs

The company said it had paid SEK 170m in extra costs – with SEK80m of this related to integration costs following the takeover of Aalorg Industries.

It also announced that some 250 staff would lose their jobs after the firm scaled back its sales operations, mainly in Western Europe. This, and costs related to capacity reductions and manufacturing savings, made up the further SEK 90m.

Outlook

The company said that performance in the first three months of 2012 was likely to mirror the slight dip seen in Q4.

"We expect that demand during the first quarter 2012 will be in line with or somewhat higher than in the fourth quarter,” said Lars Renström, Alfa Laval president and CEO.

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