Interim report January – March 2024

NET ASSET VALUE AND THE LATOUR SHARE

• The net asset value rose to SEK 204 per share, compared with SEK 198 per share at the start of the year. This is an increase of 2.8 per cent. By comparison, the Stockholm Stock Exchange’s Total Return Index (SIXRX) increased by 7.9 per cent. The net asset value was SEK 198 per share at 25 April.¹
• The total return on the Latour share was 7.3 per cent measured against the SIXRX, which rose 7.9 per cent.

INDUSTRIAL OPERATIONS

• The industrial operations’ order intake fell by 1 per cent to SEK 6,264 m (6,320 m). Adjusted for foreign exchange effects, this represents a decrease of 3 per cent for comparable entities.
• The industrial operations’ net sales fell by 4 per cent to SEK 6,122 m (6,372 m). Adjusted for foreign exchange effects, this represents a decrease of 6 per cent for comparable entities.
• The industrial operations’ operating profit decreased by 13 per cent to SEK 857 m (989 m), which equates to an operating margin of 14.0 (15.5) per cent.
• Latour Industries acquired all the shares in the German company BS Tableau on 9 January, Bemsiq acquired 51 per cent of the shares in Eelectron on 15 January and Nord-Lock Group acquired all the shares in Precision Bolting Ltd and Condor Machinery Ltd on 18 January.  

THE GROUP

• Consolidated net sales totalled SEK 6,122 m (6,372 m), and profit after financial items was SEK 2,154 m (2,224 m).
• Impairments and reversals of impairments of shares in associates had a positive net impact of SEK 583 m (472 m) during the period.
• Consolidated profit after tax was SEK 1,994 m (2,033 m), which equates to a share price of SEK 3.11 (3.18).
• The Group reported net debt of SEK 11,783 m (13,285 m). Net debt, excluding lease liabilities recognised under IFRS 16, was SEK 10,298 m (11,877 m) and is equivalent to 8 (9) per cent of the market value of total assets.

INVESTMENT PORTFOLIO

• The value of the investment portfolio rose by 5.4 per cent in the first quarter. The benchmark index (SIXRX) rose 7.9 per cent.

EVENTS AFTER THE REPORTING PERIOD

• Latour participated in HMS Networks’ new issue of shares with SEK 362 m, corresponding to their pro-rata share, in order to part-finance their acquisition of Red Lion Control.
• As of the second quarter of 2024, Innovalift will be reported as a separate business area. Further details on page 6.

¹ The calculation of the net asset value on 25 April was based on the value of the investment portfolio at 1 p.m. on 25 April and the same values as at 31 March were used for the unlisted portfolio.

Comments from the CEO
“Given the current economic situation, we are able to sum up yet another good quarter for Latour’s industrial operations. During the first quarter, order intake decreased by a total of 1 per cent. Adjusted for acquisitions and exchange rate effects, this corresponds to a decrease of 3 per cent. Net sales decreased by 4 per cent. The comparative figures are tough, as we achieved a record high in the corresponding quarter last year, and adjusted for acquisitions and exchange rate effects, net sales decreased by 6 per cent.

The operating profit was affected by the slightly lower volumes, decreasing by 13 per cent to SEK 857 m (989 m) with an operating margin of 14.0 (15.5) per cent. Following supply chain disruptions in 2022, invoicing in 2023 was positively impacted. There was no corresponding effect in the first quarter of 2024, which is why the comparison figures are tough. The gross margins are strong and the cost control is generally very good. If we add calendar effects to the analysis, where the slightly more quiet Easter week fell in the first quarter this year, we are satisfied with the results achieved in the first quarter.

The overall demand scenario includes many areas that are still demonstrating relatively strong demand, despite the economic conditions. The construction and real estate markets are in general challenging. For our three business areas that are exposed to these markets, the picture is mixed. Order intake for Swegon is relatively good, Bemsiq is slightly weaker and Hultafors Group is yet a bit weaker, in terms of organic growth. Latour Industries and Nord-Lock Group have developed well. Finally, we consider that Caljan has bottomed out at a low level in terms of order intake. Just as before, we are well prepared in the event demand should fall further.

Despite the weaker external circumstances, our businesses are profitable, and Latour’s strong financial position is allowing us to continue with our forward-looking approach. We are continuously investing in our factories, including in areas such as product development and digitalisation, and especially in our employees. Sustainability is another important area for us, and we have recently held our fourth Latour Sustainability Day, which was attended and greatly appreciated by participants from all of our holdings, both wholly-owned and listed.

Following 2023, with deliberately low acquisition pace, three acquisitions were completed in quick succession at the start of 2024. Latour Industries acquired the German company BS Tableau GmbH, Bemsiq acquired 51 per cent of the shares in the Italian company Eelectron S.P.A. and finally Nord-Lock Group acquired the Canadian companies Precision Bolting Ltd (PBL) and Condor Machinery Ltd (Condor). After the end of the reporting period, Latour Future Solutions invested 13 per cent of the Swedish company Plant An Idea AB through a new share issue. Read more about our acquisitions on page 4. We are confident that we will be able to make more acquisitions during 2024.

We are also delighted to announce that Innovalift, a business unit within Latour Industries, will be reported as a separate business area as of the second quarter of 2024. Through organic growth and acquisitions, the companies included in Innovalift have been on an exciting journey of growth and, as late as the fourth quarter of 2023, we consolidated them in a group under the name of Innovalift, which is now set to become our seventh business area. Read more about Innovalift on page 6.

Latour’s net asset value increased by 2.8 per cent to SEK 204 per share during the quarter, and the value of our portfolio of listed holdings increased by 5.4 per cent. By comparison, the benchmark index SIXRX rose by 7.9 per cent. Several of our listed holdings have now reported for the first quarter, and the emerging picture is relatively consistent, with a slight reduction in order intake and invoicing and results that have weakened, albeit from a good starting point. After the end of the reporting period, HMS Networks has completed the acquisition of the US company Red Lion Control, and Latour, in our role as principal owner, has contributed SEK 362 m, corresponding to our pro-rata share, in HMS’ new issue of shares in order to part-finance the acquisition.”

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-q1-report-2024

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=50047087

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 26 April 2024 at 08.30 CEST.