Year-end report 2017
NET ASSET VALUE AND THE LATOUR SHARE
The net asset value rose to SEK 95 per share, compared with SEK 87 per share at the beginning of the year. This is an increase of 11.6 per cent, adjusted for dividends. By comparison, the Stockholm Stock Exchange's Total Return Index (SIXRX) increased by 9.5 per cent. The net asset value was SEK 93 per share at 14 February. (1)
The total return on the Latour share was 20.3 per cent during the year compared with 9.5 per cent for the SIXRX.
The Board of Directors proposes that the dividend be increased to SEK 2.25 (2.00) per share.
The industrial operations' order intake rose 11 per cent to SEK 2,528 m (2,276), which represents a 4 per cent increase for comparable entities adjusted for foreign exchange effects.
The industrial operations' net sales rose 16 per cent to SEK 2,645 m (2,278), which represents an 8 per cent increase for comparable entities adjusted for foreign exchange effects.
The operating profit increased by 18 per cent to SEK 321 m (272), which equates to an operating margin of 12.1 (11.9) per cent for continuing operations.
Latour Industries made three minor acquisitions during the quarter. These were Micor AB for LSAB, NODA AB for BEMSIQ and Hakaser Oy for DENSIQ.
The industrial operations' order intake rose 18 per cent to SEK 9,901 m (8,384), which represents a 6 per cent increase for comparable entities adjusted for foreign exchange effects.
The industrial operations' net sales rose 19 per cent to SEK 9,748 m (8,199), which represents a 6 per cent increase for comparable entities adjusted for foreign exchange effects.
The operating profit increased by 12 per cent to SEK 1,181 m (1,052), which equates to an operating margin of 12.1 (12.8) per cent for continuing operations.
Seven acquisitions were completed in the wholly-owned industrial operations during the year. These contribute annualised net sales of around SEK 750 m.
Consolidated net sales totalled SEK 9,930 m (8,344) and profit after financial items rose 7 per cent to SEK 3,063 m (2,864) adjusted for capital gains. The capital gains amounted to SEK 6 m (890).
Consolidated profit after tax was SEK 2,788 m (3,670), which is equivalent to SEK 4.37 (5.75) per share. Excluding capital gains, profit increased to SEK 4.36 (4.07) per share. This represents an increase of 7.1 per cent.
Net debt at the end of December was SEK 4,084 m (1,446) and is equivalent to 6.3 per cent of the market value of total assets.
During the year, the value of the investment portfolio increased by 11.9 per cent adjusted for dividends and net investments. The benchmark index (SIXRX) rose 9.5 per cent.
The acquisition of 689,000 shares increased the ownership stake in Tomra to 26.3 per cent of the capital in the first and second quarters.
During the third quarter, 26.7 per cent of the shares in Alimak Group were acquired, making it a new long-term holding in Latour's investment portfolio.
EVENTS AFTER THE REPORTING PERIOD
In There were no material events subsequent to the end of the reporting period.
(1) The calculation of the net asset value on 14 February 2018 was based on the value of the investment portfolio at 1 p.m. on 14 February and the same values as at 31 December were used for the unlisted portfolio.
Comments from the CEO
“The wholly-owned industrial operations have experienced vigorous growth throughout the year and in the fourth quarter too. We can report organic growth of 4 per cent in order intake and of 8 per cent in invoiced sales for the fourth quarter. Including acquisitions and foreign exchange effects, order intake grew in total by 11 per cent and invoiced sales by 16 per cent in 2017. At the close of the year, the order backlog stood at SEK 1,183 m (1,023), up 16 per cent on the previous year. Although comparative figures gradually became tougher as the year progressed, we have managed to continue our organic growth. In absolute terms, we are yet again able to report the best quarter ever, with an operating profit that rose to SEK 321 m (272) to give an operating margin of 12.1 (11.9) per cent. Moreover, this excellent close has given us our best full-year profit to date of SEK 1,181 m (1,052).
We are continuing to invest resources consistently in product development, sales and marketing, and to improve the digital presence of our business areas. As far as we can see, the economic climate remains strong in the markets where we are primarily represented, i.e. mainly in the Nordic countries and the rest of western Europe. However, we are still finding that capacity issues in the construction industry are hampering growth somewhat and this is resulting in delays. In our industrial operations, it is mainly Swegon that is feeling the repercussions of this. Outside of Europe, we are viewing developments in Asia, including China and India, with continued optimism, even though the industrial operations do not yet have a significant stake there. Nord-Lock is continuing to report pleasing growth in Asia, with organic growth exceeding 20 per cent in 2017. There is still some uncertainty about North America, although not for Nord-Lock which has experienced 19 per cent growth during the year.
Three minor acquisitions were made in the industrial operations in the fourth quarter, all of them within Latour Industries. Read more about our acquisitions and disposals on page 4 in the report. All in all, this means that transactions made during 2017 represent approximately 8 per cent growth on an annual basis for the industrial operations.
Thanks to our growth and stable earnings performance, we are as firmly positioned as before to think and act ahead no matter how the markets change. Our healthy financial position allows for investments of more than SEK 3 billion.
Those of our listed holdings that have reported so far have posted strong, stable reports for the fourth quarter and the pleasing performance for the whole of 2017 means that dividends received in spring 2018 increases by about 17 per cent.
The value of the investment portfolio has increased during the year by 11.9 per cent, adjusted for dividends and net investments, while the benchmark index (SIXRX) was up 9.5 per cent. In the same period, the net asset value in Latour increased by 11.6 per cent to SEK 95 per share, adjusted for dividends.
Once again, it gives me great pleasure to be able to round off a year with the assurance that our businesses are stronger than ever. Overall, we are able to report that the operating profit continues to grow, despite major investments that are recognised in the income statement. The Board of Directors proposes that the dividend be increased by 12.5 per cent to SEK 2.25 (2.00) per share.”
Jan Svensson President and CEO
For further information please contact:
Jan Svensson, President and CEO, Tel. +46 705-77 16 40 or
Anders Mörck, CFO, Tel. +46 706-46 52 110
President and CEO Jan Svensson and CFO Anders Mörck present the report and answers to questions by telephone today at 10.00 AM (CET). The conference call will be held in English.
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