Year-end report 2021

NET ASSET VALUE AND THE LATOUR SHARE

• The net asset value rose to SEK 216 per share, compared with SEK 153 per share at the start of the year. This is an increase of 43.4 per cent, adjusted for dividends. By comparison, the Stockholm Stock Exchange's Total Return Index (SIXRX) increased by 39.3 per cent. The net asset value was SEK 190 per share at 10 February.¹
• The total return on the Latour share was 86.8 per cent during the period measured against the SIXRX, which rose 39.3 per cent.
• The Board of Directors proposes an increased dividend of SEK 3.30 (3.00) per share.

INDUSTRIAL OPERATIONS
Fourth quarter

• The industrial operations' order intake rose 37 per cent to SEK 5,348 m (3,903 m), which represents a 17 per cent increase for comparable entities adjusted for foreign exchange effects.
• The industrial operations' net sales rose 32 per cent to SEK 5,252 m (3,989 m), which represents a 13 per cent increase for comparable entities adjusted for foreign exchange effects.
• The industrial operations' operating profit increased by 22 per cent to SEK 723 m (593 m), which equates to an operating margin of 13.8 (14.8) per cent for continuing operations.
• Hultafors Group acquired the Danish company Scangrip A/S. Latour-Gruppen signed an agreement to sell Neuffer Fenster + Türen GmbH, which was concluded in January 2022. Latour Future Solutions invested in Swedish Hydro Solutions through a directed new issue of shares and became a minority shareholder.

Full year

• The industrial operations' order intake rose 35 per cent to SEK 20,119 m (14,857 m), which represents a 25 per cent increase for comparable entities adjusted for foreign exchange effects.
• The industrial operations' net sales rose 24 per cent to SEK 18,280 m (14,783 m), which represents a 14 per cent increase for comparable entities adjusted for foreign exchange effects.
• Operating profit increased by 26 per cent to SEK 2,663 m (2,117 m), which equates to an operating margin of 14.6 (14.3) per cent for continuing operations.

THE GROUP

• Consolidated net sales totalled SEK 18,567 m (15,028 m), and profit after financial items was SEK 4,985 m (5,753 m).
• A SEK -282 m impairment charge related to Alimak was recognised in this year's income statement. Capital gains and other items that affect the comparability of results had a favourable SEK 1,856 m impact on last year's income statement.
• Consolidated profit after tax was SEK 4,381 m (5,324 m), which is equivalent to SEK 6.85 (8.32) per share.
• The Group reported net debt of SEK 9,513 m (5,273 m). Net debt, excluding lease liabilities recognised under IFRS 16, was SEK 8,443 m (4,613 m) and is equivalent to 6 (4) per cent of the market value of total assets.

INVESTMENT PORTFOLIO

• The value of the investment portfolio increased by 44.6 per cent during the year when adjusted for portfolio changes. The benchmark index (SIXRX) rose 39.3 per cent. 
• In December, Securitas announced that it had entered into an agreement to acquire Stanley Black & Decker Security Solutions. Latour views the acquisition positively and, as the principal owner, has undertaken to participate in the new share issue that is part of Securitas' financing of the acquisition, partly with our pro rata share corresponding to approximately USD 100 m and a further USD 122 m should full subscription to the new share issue not be obtained.

EVENTS AFTER THE REPORTING PERIOD

• Hultafors Group acquired Telesteps AB on 1 February. Bemsiq signed an agreement for the acquisition of Consens GmbH on 7 February. Latour Industries acquired Esse-Ti S.r.l. on 9 February.  

¹The calculation of the net asset value on 10 February was based on the value of the investment portfolio at 1 p.m. on 10 February and the same values as at 31 December were used for the unlisted portfolio.

Comments from the CEO
“The strong underlying demand that we have experienced throughout the year continued into the fourth quarter, and Latour's industrial operations ended the year on a very positive note. The challenges caused by supply chain disruptions continue to put considerable pressure on us. It is important that all our businesses maintain a high level of customer service and we have generally succeeded well with this, albeit at a higher cost than normal, which leads to a short-term negative impact on our gross margins. Adjusted for acquisitions and foreign exchange effects, order intake grew by 17 per cent and sales by 13 per cent during the quarter. Sales are not growing in the same pace as order intake, partly due to disruptions in production and delays in supplies. However, we are also seeing a clear trend of orders being placed increasingly earlier, which results in a difference between order intake and invoicing. Operating profit in the quarter rose 22 per cent to SEK 723 m (592 m) with a strong operating margin of 13.8 (14.8) per cent. Our best fourth quarter to date.

The year as a whole has been marked by the pandemic and its effects, such as the steep rise in raw material prices, component shortages and disruptions to logistics. Our operations have handled the challenges well and developed positively while keeping employee safety a top priority. Net sales rose 24 per cent to SEK 18,280 m (14,783 m) and operating profit rose 26 per cent to SEK 2,663 m (2,117 m), giving an operating margin of 14.6 (14.3) per cent. A record year in several respects and confirmation that we own high-quality companies.

As we reported in the previous interim report, Bemsiq is reported as a separate business area as of the fourth quarter. Bemsiq has grown strongly in recent years, both organic and through acquisitions, and has now formed our sixth business area, which we are very happy about.

Latour has a strong financial position and we are investing in the future to maintain our competitive edge and increase market share. The pace of investment has been high throughout the year and we have established several new production units and expanded existing ones in our industrial operations. In all areas of the business, we are committed to a constant focus on sustainability and digitalisation, which are key components of future growth and long-term profitability. In the fourth quarter, Latour Future Solutions became a minority shareholder in its third holding, Swedish Hydro Solutions AB, which provides sustainable water treatment solutions. This is another exciting acquisition for a portfolio whose goal is to consist of holdings that play a role in building a more sustainable society.

Hultafors Group acquired the Danish company Scangrip A/S in the fourth quarter. In addition, an agreement was signed to divest all our shares in the part-owned holding Neuffer Fenster + Türen GmbH. The agreement was concluded in January 2022. Read more about our acquisitions on page 4. 

The stock market in general has had very strong growth during the year. Since the start of the year, Latour's investment portfolio has increased by 44.6 per cent when adjusted for portfolio changes, while the benchmark index (SIXRX) increased by 39.3 per cent. During the year, we added a tenth holding, CTEK, to our listed investment portfolio. CTEK is a leading global supplier of premium battery chargers and also specialises in chargers and charging accessories for electric vehicles.

To date, half of our ten listed holdings have published full-year results. We are therefore unable to draw any general conclusions about the underlying earnings performance. Earlier in the year, however, the performance was generally similar to our wholly-owned operations, with increasing order intake, slightly weaker sales and order books at a record high. Acquisition activities are high in the listed holdings. In the fourth quarter, Securitas signed an agreement to acquire Stanley Black and Decker Security, which entails a new share issue where we have committed our pro rata share of almost USD 100 m, and a further USD 122 m should full subscription to the new share issue not be obtained. 

During the year, the net asset value in Latour has increased to SEK 216 per share. Supported by the strong performance of our investment portfolio and industrial operations, we can once again propose an increased dividend. The Board of Directors proposes an increased dividend of SEK 3.30 (3.00) per share.”

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)8 566 427 04.
To follow the webcast please visit our webpage, www.latour.se, or use the link:

https://onlinexperiences.com/Launch/QReg/ShowUUID=BEE7E0E0-512D-4B28-898C-E6EEDE5AAC09