Release Date: January 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alleima AB (STU:M46, Financial) achieved revenue growth and stable earnings despite a challenging economic environment in 2024.
- The company saw strong performance in the Oil and Gas, Nuclear, and Medical segments, contributing positively to revenue.
- Alleima AB (STU:M46) maintained a solid order backlog, particularly in key segments like Nuclear and Medical, ensuring future revenue streams.
- The company is actively investing in growth initiatives, including reopening facilities and expanding capacity in strategic regions like Japan and Malaysia.
- A proposed dividend increase of 37% reflects Alleima AB (STU:M46)'s commitment to shareholder value.
Negative Points
- Organic order intake growth declined by 6% over a rolling 12-month period, primarily due to a weaker Oil and Gas segment.
- The Industrial segment remains less profitable, and the company is not prioritizing growth in this area.
- Free operating cash flow decreased compared to the previous year, impacted by higher capital expenditures.
- The Chemical and Petrochemical segment faced weakness, particularly in Europe, affecting overall performance.
- The company is experiencing challenges in the Renewable Energy segment, with some slowdown in the green transition.
Q & A Highlights
Q: Is Alleima considering further Nuclear capacity expansion given the backlog on both old and new production lines?
A: Goran Bjorkman, President and CEO, stated that while the backlog is strong, Alleima is not currently planning to invest in additional Nuclear capacity beyond what has already been decided.
Q: Can you elaborate on the improvement in Kanthal's order intake and whether it indicates a trend or is just quarterly volatility?
A: Goran Bjorkman explained that while Medical continues to grow, the Industrial Heating segment has stabilized with a slight positive increase in Q4. However, these are small numbers contributing to the overall Kanthal performance.
Q: Regarding the SMR order announced, is it a pilot order or a commercial one?
A: Goran Bjorkman clarified that the SMR order is a commercial order for a project with Doosan and NuScale, involving 200 kilometers of steam generator tubes, indicating it's not a small or pilot order.
Q: How is Alleima optimizing production capacity towards higher refinement, and what impact does this have on margins?
A: Goran Bjorkman noted that Alleima is prioritizing higher value-added products over Industrial segments, which has positively impacted the product mix and aligns with their long-term strategy.
Q: With strong demand in Nuclear and Medical segments, is Alleima increasing prices for new orders?
A: Goran Bjorkman mentioned that while they don't disclose specific pricing strategies, positive market conditions and technological leadership in these segments allow for favorable pricing, although challenges remain in less positive areas.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
