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MWV and Alfa Laval see food and beverage segments stay strong

By Joe Whitworth , 24-Oct-2012

MWV and Alfa Laval both reported positive results in food and beverage despite tough conditions elsewhere.

MWV reported sales from Food and Beverage declined marginally but volumes from the Industrial segment, which includes corrugated packaging, reported growth in meat, produce and consumer product volumes.

Alfa Laval said Q3 figures were “somewhat below our expectations” as order intake, net sales and adjusted EBITDA all fell year on year but food and beverage sectors were mostly productive.

MWV outlook

In the Food & Beverage segment, sales were $806m in Q3 2012 compared to $808m in Q3 2011, benefiting from increased volumes and improved pricing and product mix, as well as contribution from the new caps and closures business (Polytop) acquired in Q4 2011.

In an analyst conference call about the results, James A. Buzzard, MWV president, said: “Looking at the end markets we serve in this segment, in beverage, the overall market trends this year have been flat in North America, weak in Europe, as you might expect and positive in Asia and Latin America.”

He added that the growth in beverage is mostly coming from energy drinks, tea and bottled water where multipacks do not currently participate.

“In North America, our volume was positive in the quarter as we added business with Dr Pepper Snapple. In Asia, our business continues to grow as we place beverage packaging machines with new customers and in new geographies including the emerging markets and then capture the benefits in terms of additional carton volumes.”

Profit was $93m in the third quarter of 2012 compared to $94m in the third quarter of 2011 reflecting higher volumes, pricing and product mix improvement, offset by currency exchange and by higher input costs.

Alfa Laval rundown

Alfa Laval reported its Equipment Division’s order intake declined due to volumes connected to refrigeration and general manufacturing applications resulting in net sales falling from SEK 2.8bn (€324m) to SEK 2.4bn.

Demand for parts and services for dairy, ice cream and HVAC applications were up and food and beverage had a strong quarter.

The Process Technology Division saw net sales coming in at SEK 2.9bn from SEK 3.1bn in Food Technology with fewer large projects relating to vegetable oil in Asia and Eastern Europe but the brewery sector continued to develop favourably.

The most significant development was noted in the energy and oil & gas related sectors followed by Food but applications for the Process Industry declined.

In Asia order intake showed a decline in Q3 compared to Q2 as large orders booked in the second quarter for the Process Industry and Food Technology segments were not repeated.

Lars Renström, president and CEO, said the outcome was below the firm’s expectations.

“Order intake was SEK 7.3bn during the third quarter, a decrease with 9% compared to the corresponding quarter 2011 and a sequential decline with 8%.

“North and South America were the regions that delivered growth both compared to 2011 and sequentially. China reported continued growth, partly driven by an increased local presence.

“We expect that demand during the fourth quarter 2012 will be in line with or somewhat lower than in the third quarter.”

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