Interim report January – September 2022

NET ASSET VALUE AND THE LATOUR SHARE

• The net asset value fell to SEK 148 per share, compared with SEK 216 per share at the start of the year. This is a decrease of 30.5 per cent, adjusted for dividends. By comparison, the Stockholm Stock Exchange’s Total Return Index (SIXRX) decreased by 30.5 per cent. The net asset value was SEK 151 per share at 7 November.¹
• The total return on the Latour share was -48.9 per cent during the period measured against the SIXRX, which fell 30.5 per cent.

INDUSTRIAL OPERATIONS

The third quarter

• The industrial operations’ order intake rose 15 per cent to SEK 5,281 m (4,593 m), a 1 per cent increase for comparable entities adjusted for foreign exchange effects.
• The industrial operations’ net sales rose 29 per cent to SEK 5,629 m (4,356 m), which represents a 13 per cent increase for comparable entities adjusted for foreign exchange effects.
• The industrial operations’ operating profit increased by 27 per cent to SEK 784 m (618 m), which equates to an operating margin of 13.9 (14.2) per cent.
• Swegon acquired the Swedish company ABC Ventilationsprodukter on 22 August. Latour Industries acquired the Swedish company MAXAGV on 1 September.

INDUSTRIAL OPERATIONS

January - September

• In the first quarter, Latour Industries acquired the Italian company Esse-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 completed in January. Swegon acquired the Swiss company Barcol-Air in the second quarter. 
• The industrial operations’ order intake rose 18 per cent to SEK 17,418 m (14,772 m), which represents a 4 per cent increase for comparable entities adjusted for foreign exchange effects.
• The industrial operations’ net sales rose 24 per cent to SEK 16,209 m (13,028 m), which represents a 9 per cent increase for comparable entities adjusted for foreign exchange effects.
• The operating profit increased by 17 per cent to SEK 2,265 m (1,940 m), which is equivalent to an operating margin of 14.0 (14.9) per cent.

THE GROUP

• Consolidated net sales totalled SEK 16,209 m (13,243 m), and profit after financial items was SEK 3,270 m (3,881 m).
• Losses of SEK -1,465 m (+37 m) resulting from a write-down of holdings were recognised in the income statement for the period.
• Consolidated profit after tax was SEK 2,753 m (3,448 m), which is equivalent to SEK 4.30 (5.39) per share.
• The Group reported net debt of SEK 11,175 m (9,106 m). Net debt, excluding lease liabilities recognised under IFRS 16, was SEK 9,933 m (8,477 m) and is equivalent to 10 (7) per cent of the market value of total assets.

INVESTMENT PORTFOLIO

• During the 9-month period, the value of the investment portfolio decreased by 37.6 per cent adjusted for dividends. The benchmark index (SIXRX) decreased by 30.5 per cent.

EVENTS AFTER THE REPORTING PERIOD

• Hultafors Group acquired the American company Martinez Tool Company on 3 October. Latour Future Solutions signed an agreement on 24 October to invest in the Swedish company SenseNode. LSAB Group, within Latour Industries, acquired Finnish Lahden Teräteos Oy on 1 November. On 7 November, Latour Future Solutions signed an agreement to invest in the Swedish company Anolytech Holding AB.
• Latour participated in Securitas' share issue during October, with its pro rata share of just over SEK 1 billion.

¹The calculation of the net asset value on 7 November was based on the value of the investment portfolio at 1 p.m. on 7 November, and the same values as at 30 September were used for the unlisted portfolio.

Comments from the CEO
“We saw continued positive growth for the industrial operations in the third quarter. There is strong underlying demand in most markets, apart from China where lockdown measures and rising protectionism are keeping demand subdued. Despite the challenges that still exist in the supply chains, there has been a marginal improvement in the situation. The third quarter too was marked by rising energy prices, general inflation in the economy, impacts of currency fluctuations and Russia’s invasion of Ukraine. The turbulent situation affecting the global economy is placing increasing demands on our organisations. However, we are managing to navigate this uncertain climate well and have been able to deliver another very strong quarter.

In total, the order intake increased 15 per cent and net sales were up by 29 per cent. Adjusted for acquisitions and foreign exchange effects, order intake grew by 1 per cent and invoiced sales by 13 per cent during the quarter. The operating profit increased by 27 per cent to SEK 784 m (618 m) with an operating margin of 13.9 (14.2) per cent. We’re proud to report that, in absolute terms, this is our best third quarter to date.

We wish to reiterate that we are maintaining a high level of service to our customers, among other things by increasing stock capacity. This has resulted in a lower than normal cash flow and a short-term negative effect on the gross margin. Price increases have been introduced gradually during the year in response to the rising costs of raw materials, freight and more. The order book remains at a good level although it has dropped slightly during the quarter due to the current high rate of invoicing. This augurs well for the continuation of good growth in invoiced sales in the fourth quarter.

Latour is in a strong financial position and we are continuously investing in all our operations in order to drive sustained growth moving forward. As well as investing in sales and marketing activities, we focus on investments that support the sustainability efforts of our operations. For example, the new facility that Caljan’s German company moved into during the quarter has been designed and constructed to ensure a high level of sustainable performance and is fitted with solar panels and other energy-efficiency solutions.

During the quarter, we completed two acquisitions in the industrial operations. Swegon acquired the Swedish company ABC Ventilationsprodukter, and Latour Industries acquired the Swedish company MAXAGV. Subsequent to the close of the quarter, Hultafors Group acquired the US company Martinez Tool Company and LSAB Group, within Latour Industries AB, acquired Finnish Lahden Teräteos Oy. Also, Latour Future Solutions has signed agreements to invest in the Swedish company SenseNode and in the Swedish company Anolytech Holding AB. Read more about our acquisitions on page 4.

The current geopolitical tensions and uncertain economic climate have caused global stock markets to fall during the year and this has also impacted our holdings. Over the 9-month period, Latour’s net asset value has dropped 30.5 per cent to SEK 148 per share, and our listed investment portfolio has diminished by 37.6 per cent. By comparison, the benchmark index SIXRX has fallen by 30.5 per cent. Our listed companies that have so far reported third-quarter results have generally recorded positive growth, with some reporting particularly strong growth. In a few cases, however, order intake has stalled somewhat. Supply chain disruptions, inflation in the economy and impacts of currency fluctuations are challenges that our listed companies are having to deal with too.

The listed companies continue to undertake acquisition activities and several add-on acquisitions have been closed. These include the takeover of Stanley Security by Securitas in July, and the signing of an agreement by Alimak Group to acquire the French company Tractel, which in one fell swoop will consolidate Alimak’s position in the global market and significantly expand the company.”

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 (CET). The conference call will be held in English.

To follow the meeting, please call +46 (0)8 505 583 53.
To follow the webcast please visit our webpage, www.latour.se, or use the link:

https://onlinexperiences.com/Launch/QReg/ShowUUID=F109C5B3-DFF6-43A5-8CFC-18AD158A89E9

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 8 November 2022 at 08.30 CET.