Latour’s net asset value is calculated using EBIT multiples, which are applied to the 12-month historical rolling operating profit (adjusted EBIT) for each business area. The key to a fair valuation is identifying appropriate multiples. This is done by selecting comparable publicly listed companies operating in industries similar to Latour’s wholly owned operations. For each company, an EBIT multiple is calculated by relating its operating profit to its Enterprise Value (EV).
The EV is the market capitalization adjusted for the company’s net debt. Since listed companies are valued differently by the market, a range of EBIT multiples is formed for each of Latour’s business areas. This range indicates the market’s valuation of Latour’s wholly owned operations.
The net asset value of the wholly owned operations is then combined with the market value of the listed holdings. The value of other assets is added, and the group’s net debt is subtracted. The remaining amount represents Latour’s reported net asset value. This valuation should be seen as indicative and not a complete market valuation. For example, the valuation model does not consider future forecasts for Latour’s holdings or for the comparable companies. Economic fluctuations may cause the results of both the business areas and the comparable companies to vary. This means that the valuation multiples are spread across a wide range. In this presentation, adjustments have therefore been made to the applied multiples to avoid unreasonable values..
How the Method Works – Step by Step
1. Identification of Comparable Companies
Latour identifies publicly listed companies operating in industries similar to its wholly owned industrial operations.
2. Calculation of EBIT Multiples
Once the comparable companies are identified, their EBIT multiples are reviewed. An EBIT multiple is based on the company’s Enterprise Value (EV), which is calculated by adding the company’s net debt to its market capitalization. The EV is then divided by the operating profit (EBIT).
For example, a company with a market capitalization of SEK 90 million, net debt of SEK 10 million, and EBIT of SEK 10 million has an EBIT multiple of 10.
3. Conversion to a Multiple Range
Once an EBIT multiple is calculated for each company, they are grouped so that each business area receives a range of multiples.
If there are two comparable companies for, say, Swegon—one with a multiple of 14 and the other 18—the EBIT multiple used to value Swegon will be in the range of 14–18.
4. Aggregation of the Net Asset Value of Wholly Owned Operations
Once the EBIT multiple ranges are established, the business areas are valued. First, the 12-month rolling operating profit (adjusted EBIT, pro forma) is calculated. This is then multiplied by the EBIT multiple.
If Swegon shows a 12-month rolling operating profit of SEK 100 million, and the EBIT multiple is 14–18, the value will be SEK 1.4–1.8 billion.
Once calculations are made for all business areas, the results are compiled into a total value range.
5. Aggregation with the Value of Listed Holdings
To determine the value of the listed portfolio, the share prices at the end of the period are multiplied by the number of shares held in each company. This is combined with the net asset value of the wholly owned operations (from steps 1–4).
The sum, after adding other assets and subtracting net debt, constitutes Latour’s total net asset value—also presented as a range.