Interim report January – June 2022

NET ASSET VALUE AND THE LATOUR SHARE

• The net asset value fell to SEK 158 per share, compared with SEK 216 per share at the start of the year. This is a decrease of 25.5 per cent, adjusted for dividends. By comparison, the Stockholm Stock Exchange’s Total Return Index (SIXRX) decreased by 27.9 per cent. The net asset value was SEK 169 per share at 22 August.¹
• The total return on the Latour share was -44.3 per cent during the period measured against the SIXRX, which fell 27.9 per cent.

INDUSTRIAL OPERATIONS

The second quarter

• The industrial operations’ order intake rose 11 per cent to SEK 6,297 m (5,678 m), a 1 per cent increase for comparable entities adjusted for foreign exchange effects.
• The industrial operations’ net sales rose 17 per cent to SEK 5,561 m (4,748 m), which represents a 6 per cent increase for comparable entities adjusted for foreign exchange effects.
• The industrial operations’ operating profit increased by 8 per cent to SEK 812 m (753 m), which equates to an operating margin of 14.6 (15.9) per cent.
• Swegon acquired the Swiss company Barcol-Air on 3 June.

INDUSTRIAL OPERATIONS

January - June

• In the first quarter, Latour Industries acquired the Italian company Essi-Ti S.R.L, Bemsiq acquired the German company Consens GmbH, Hultafors acquired the Swedish company Telesteps and Caljan acquired the Austrian company PHS Logistiktechnik. The divestment of Neuffer Fenster + Türen GmbH was finalized in January.
• The industrial operations' order intake rose 19 per cent to SEK 12,137 m (10,178 m), which represents a 6 per cent increase for comparable entities adjusted for foreign exchange effects.
• The industrial operations' net sales rose 22 per cent to SEK 10,580 m (8,672 m), which represents an 8 per cent increase for comparable entities adjusted for foreign exchange effects.
• Operating profit increased by 12 per cent to SEK 1,481 m (1,322 m), which equates to an operating margin of 14.0 (15.2) per cent.

THE GROUP

• Consolidated net sales totalled SEK 10,580 m (8,810 m), and profit after financial items was SEK 2,406 m (2,659 m). A SEK -613 m (+198 m) impairment charge related to Alimak was recognised in the income statement for the period.
• Consolidated profit after tax was SEK 2,071 m (2,390 m), which is equivalent to SEK 3.23 (3.74) per share.
• The Group reported net debt of SEK 11,042 m (7,532 m). Net debt, excluding lease liabilities recognised under IFRS 16, was SEK 9,814 m (6,748 m) and is equivalent to 9 (5) per cent of the market value of total assets.

INVESTMENT PORTFOLIO

• During the first six months, the value of the investment portfolio fell by 33.3 per cent adjusted for dividends. The benchmark index (SIXRX) decreased by 27.9 per cent. 

EVENTS AFTER THE REPORTING PERIOD

• On August 2, the listed company Alimak Group announced that they had entered into an agreement to acquire Tractel. Latour supports the acquisition and, as the principal owner, has undertaken to participate with its pro rata share in the new issue which is part of Alimak’s financing of the acquisition.
• On August 22, Swegon signed an agreement to acquire ABC Ventilationsprodukter.  

¹ The calculation of the net asset value on 22 August was based on the value of the investment portfolio at 1.00 p.m. on 22 August, and the same values as at 30 June were used for the unlisted portfolio.

Comments from the CEO
“The industrial operations are maintaining a positive trajectory and we are seeing good underlying demand across our markets. Order intake and invoiced sales are both growing organically. Despite major challenges with component shortages and benchmarking our performance against increasingly tough comparative figures, we are once again posting a record set of results in absolute terms. The rate of order intake growth decelerated somewhat during the quarter and invoiced sales remained at a good level. Overall, the growth in the order book continued which bodes well for a strong increase in invoiced sales in the coming quarter.

The quarter was marked by the ongoing shortage of components and general price inflation, which place high demands on our organisations. Price increases have been implemented to compensate for the higher costs. For some entities, however, the effect has not yet been fully felt. As before, our priority is to maintain a high level of service to our customers, which we are successfully managing to do, albeit at a higher cost than normal. These factors are having a short-term adverse impact on profitability, which is reflected in a somewhat lower yet still good operating margin. We are confident that we will maintain our competitive edge over the long term and gain market share by making our customers our priority.

In total, the order intake increased 11 per cent and net sales were up by 17 per cent. Adjusted for acquisitions and foreign exchange effects, order intake grew by 1 per cent and invoiced sales by 6 per cent during the quarter. Profit increased to SEK 812 m (753 m) with an operating margin of 14.6 (15.9) per cent.

Latour has a strong financial position and we are continuing to make forward-looking investments in our companies. Sustainability is as relevant as ever and has the same priority as in the past. During the quarter, we took the next step and integrated sustainability into our financing operations. We published our first green framework in May, and this was followed in June by a successful issue of two green bonds. Enabling green financing is a natural next step for us and strengthens Latour’s overall sustainability commitments.

The level of acquisition activity is high and, as in the past, we are engaged in numerous discussions. It is currently a challenging time to be acquiring companies as it is difficult to strike a balance between the price expected by the seller and what the buyer is willing to pay. During the quarter, we concluded an acquisition through Swegon which acquired Barcol-Air. Read more about our acquisitions on page 4.

Global events are continuing to have a negative impact on the stock market which has generally continued on a downward trajectory. This has also had an impact on our holdings. In the first six months, Latour’s net asset value fell 25.5 per cent to SEK 158 per share, and Latour’s investment portfolio diminished by 33.3 per cent. By comparison, the benchmark index SIXRX fell 27.9 per cent. With little exception, our listed companies reported continued positive growth during the quarter. Supply chain issues and price inflation are having a short-term impact on the companies’ gross margins to varying degrees. On the whole, however, demand remains high. Our listed companies are continuing their acquisition activities at a good pace. Recent activities include the acquisition by Alimak of the French company Tractel. This is a major acquisition that will significantly enhance Alimak’s global position. Latour is supporting the deal and we have committed to participate in the new share issue with our pro rata portion.”

Johan Hjertonsson
President and CEO

For further information please contact:
Johan Hjertonsson, President and CEO, Tel. +46 702-29 77 93 or
Anders Mörck, CFO, Tel. +46 706-46 52 110

Conference call
President and CEO Johan Hjertonsson and CFO Anders Mörck present the report and answers to questions by telephone today at 10.00 AM (CEST). The conference call will be held in English.
To follow the meeting, please call +46 (0)8 566 427 07.
To follow the webcast please visit our webpage, www.latour.se, or use the link:

https://onlinexperiences.com/Launch/QReg/ShowUUID=1C5641CA-44A5-4151-861F-9E0E1BF00A36