Interim report January – June 2023

NET ASSET VALUE AND THE LATOUR SHARE

• The net asset value rose to SEK 193 per share, compared with SEK 159 per share at the start of the year. This is an increase of 24.3 per cent, adjusted for dividends. By comparison, the Stockholm Stock Exchange’s Total Return Index (SIXRX) increased by 11.3 per cent. The net asset value was SEK 178 per share at 18 August.¹
• The total return on the Latour share was 10.3 per cent during the period, compared to SIXRX which rose 11.3 per cent.

INDUSTRIAL OPERATIONS

The second quarter

• The industrial operations’ order intake fell by 3 per cent to SEK 6,129 m (6,297 m). Adjusted for foreign exchange effects, this represents a decrease of 13 per cent for comparable entities.
• The industrial operations’ net sales rose by 19 per cent to SEK 6,605 m (5,561 m). Adjusted for foreign exchange effects, this equates to growth of 7 per cent for comparable entities.
• The industrial operations’ operating profit increased by 26 per cent to SEK 1,020 m (812 m), which equates to an operating margin of 15.4 (14.6) per cent.

INDUSTRIAL OPERATIONS

January - June

• During the first quarter, Swegon completed the acquisition of the British company Dalair. 
• The industrial operations’ order intake rose by 3 per cent to SEK 12,449 m (12,137 m), which represents a 9 per cent decrease for comparable entities adjusted for foreign exchange effects.
• The industrial operations’ net sales rose by 23 per cent to SEK 12,977 m (10,580 m). Adjusted for foreign exchange effects, this equates to growth of 10 per cent for comparable entities.
• The operating profit rose by 36 per cent to SEK 2,009 m (1,481 m), which equates to an operating margin of 15.5 (14.0) per cent.

THE GROUP

• Consolidated net sales totalled SEK 12,977 m (10,580 m), and profit after financial items was SEK 4,360 m (2,406 m).
• Impairments and reversals of impairments of stock market holdings during the period had a positive net impact of SEK 777 m (-613 m).
• Consolidated profit after tax was SEK 3,935 m (2,071 m), which equates to SEK 6.15 (3.23) per share.
• The Group reported net debt of SEK 13,690 m (11,042 m). Net debt, excluding lease liabilities recognised under IFRS 16, was SEK 12,738 m (9,814 m) and is equivalent to 9 (9) per cent of the market value of total assets.

INVESTMENT PORTFOLIO

• During the first six months, the value of the investment portfolio increased by 20.6 per cent adjusted for dividends. The benchmark index (SIXRX) rose by 11.3 per cent.
• During the first quarter, Latour participated in the issue of new shares by Alimak Group during the month of March, pro rata to its holding, purchasing 16,016,809 shares in the company for SEK 747 m. In the same month, Latour participated in the issue of preference shares by CTEK, pro rata to its holding, purchasing 6,112,324 shares in the company for SEK 107 m.

EVENTS AFTER THE REPORTING PERIOD

• On 13 July, Latour Future Solutions invested in the Swedish company Quandify through a directed new issue of shares and became a minority shareholder with approximately 22 per cent of the shares.

¹ The calculation of the net asset value on 18 August was based on the value of the investment portfolio at 1.00 p.m. on 18 August, and the same values as at 30 June were used for the unlisted portfolio.

Comments from the CEO
“Latour’s industrial operations once again delivered a strong performance and we can report yet another record-breaking quarter. We are still witnessing stable underlying demand on most markets, and we have not noticed any sharp slowdown in the economy to date. Order intake is at a slightly lower level than before, however, and we are monitoring developments closely in order to make adjustments if necessary. Our assessment is that the slowdown is partly due to a slight downturn in the economy, but also to a normalisation of the way customers are planning and placing their orders.

During the second quarter, order intake fell by a total of 3 per cent. Adjusted for acquisitions and foreign exchange effects, this corresponds to a decrease of 13 per cent. Net sales grew by 19 per cent, of which 7 per cent was on an organic basis. Operating profit is strong, increasing by 26 per cent to SEK 1,020 m (812 m), and the operating margin reached 15.4 (14.6) per cent. It has been our best quarter to date, which is very gratifying and once again confirmation that we own quality companies.

It is difficult to deduce exactly how much of the decline in order intake that can be attributed to a weaker economy or to normalised buying behaviour on the part of customers. We are still fulfilling deliveries in respect of the substantial order book we had at the start of the year, which is reflected in the strong invoicing trend. The order backlog remains at a high level, however, at SEK 6,474 m compared to SEK 6,564 m at the start of the year. Caljan in particular has a significantly lower order backlog than at the start of the year, while the situation is more stable in other business areas.

The disruptions experienced in the supply of goods remain to some extent, but the situation has improved further and we are maintaining a high service level in relation to our customers, with good delivery capacity.

The good profitability combined with Latour’s strong financial position means that we can continue to implement forward-looking investments in our operations, even in the event of a further deterioration in the economic climate. In order to maintain competitiveness and promote sustainable growth, we are continuously investing in our operations in respect of sustainability, digitalisation and product development. We want our businesses to remain at the forefront.

After intensive acquisition activity in 2022, we have maintained a slower pace during the spring. Analysis work and discussions have been ongoing, however, and we are anticipating a somewhat more active autumn. During the first quarter, we completed an acquisition through Swegon, which acquired the British company Dalair at the start of January. On 13 July, we invested in the Swedish company Quandify through Latour Future Solutions. More details can be found on page 4.

The stock market has developed positively during the first half of the year. Latour’s net asset value has risen by 24.3 per cent to SEK 193 per share and our listed investment portfolio has increased by 20.6 per cent. By comparison, the benchmark index SIXRX has increased by 11.3 per cent. The major part of our listed holdings have reported a positive trend during the quarter. Activities relating to acquisitions are continuing, for example with ASSA ABLOY completing the significant acquisition of the American company HHI.”

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 in a webcasted teleconference today at 10.00 AM (CEST). The conference call will be held in English.

Webcast
Via the webcast you are able to ask written questions.
If you wish to participate via webcast, please use the link: https://ir.financialhearings.com/latour-q2-2023

Teleconference
You can ask questions verbally via the teleconference.
If you wish to participate via teleconference, please register on the link below.
After registration you will be provided phone numbers and a conference ID to access the conference.
https://conference.financialhearings.com/teleconference/?id=2001154

The information contained in this report constitutes information which Investment AB Latour (publ) is required to disclose under the EU Market Abuse Regulation. The information was provided by the above contact persons for publication on 21 August 2023 at 08.30 CEST.