Interim report January - September 2019
NET ASSET VALUE AND THE LATOUR SHARE
- The net asset value rose to SEK 127 per share, compared with SEK 100 per share at the start of the year. This is an increase of 29.9 per cent, adjusted for dividends. By comparison, the Stockholm Stock Exchange's Total Return Index (SIXRX) increased by 23.0 per cent. The net asset value was SEK 133 per share at 4 November.(1)
- The total return on the Latour share was 17.9 per cent during the period measured against the SIXRX, which rose 23.0 per cent.
The third quarter
- The industrial operations' order intake rose 13 per cent to SEK 3,134 m (2,787 m), which represents a 4 per cent increase for comparable entities adjusted for foreign exchange effects.
- The industrial operations' net sales rose 15 per cent to SEK 3,276 m (2,857 m), which represents a 6 per cent increase for comparable entities adjusted for foreign exchange effects.
- The operating profit increased by 16 per cent to SEK 464 m (399 m), which equates to an operating margin of 14.2 (14.0) per cent for continuing operations.
- Swegon acquired the Norwegian company Klimax AS on 13 August. Hultafors Group acquired Custom LeatherCraft Mfg. LLC (CLC) based in Los Angeles, USA, on 16 September. Produal within Latour Industries acquired the UK company SyxthSense Ltd on 3 September.
January – September
- The industrial operations' order intake rose 15 per cent to SEK 10,031 m (8,701 m), which represents a 6 per cent increase for comparable entities adjusted for foreign exchange effects.
- The industrial operations' net sales rose 19 per cent to SEK 9,928 m (8,371 m), which represents an 8 per cent increase for comparable entities adjusted for foreign exchange effects.
- The operating profit increased by 29 per cent to SEK 1,382 m (1,075 m), which equates to an operating margin of 13.9 (12.8) per cent for continuing operations.
- Consolidated net sales totalled SEK 10,091 m (8,517 m), and profit after financial items was SEK 4,399 m (1,952 m). Capital gains and other items impacting comparability amounting to SEK 849 m (-570 m) are recognised in the income statement.
- Consolidated profit after tax was SEK 4,063 m (1,697 m), which is equivalent to SEK 6.35 (2.66) per share.
- Net debt, excluding impacts of IFRS 16, was SEK 5,268 m (5,233 m) and is equivalent to 6 per cent of the market value of total assets. Recognised Group net debt, where IFRS 16 had full impact, amounted to SEK 5,913 m.
- During the first three quarters, the value of the investment portfolio increased by 27.6 per cent adjusted for dividends and net investments. The benchmark index (SIXRX) rose 23.0 per cent.
- In the first quarter, all of the class A shares in Loomis were divested.
- In the second quarter, the investment in Fagerhult increased by SEK 995 m in connection with a preference share issue.
EVENTS AFTER THE REPORTING PERIOD
- On 11 October, Latour signed an agreement for the acquisition of Caljan, a company based in Denmark, which generates net sales of EUR 100 m and has 450 employees. The acquisition is subject to approval by European authorities and closing is expected to take place at the end of the year. Caljan will become a new wholly-owned business area once the acquisition is completed.
- On 22 October, Bemsiq in Latour Industries acquired S+S Regeltechnik in Germany. The company generates net sales of EUR 16.3 m and has 65 employees.
- On 2 October, the maximum amount for an existing Medium Term Note (MTN) programme was increased from SEK 4 billion to SEK 6 billion.
(1) The calculation of the net asset value on 4 November was based on the value of the investment portfolio at 1 p.m. on 4 November, and the same values as at 30 September were used for the unlisted portfolio.
Comments from the CEO
“It is with great confidence and also with great humility that I have taken over the reins of one of Sweden's finest companies. This is evinced not least by the fact that Latour's industrial operations have seen continued positive growth during the third quarter despite signs of a global economic slowdown. Our wholly-owned holdings are reporting organic growth in both their order intakes and sales. However, it should be noted that our growth has slowed down from its previous high rate and some segments are experiencing a decline in demand, with customers reducing stock levels and becoming far more cautious. The fact that our operations as a whole nevertheless continue to report positive growth is confirmation that we are well positioned and prepared for a more widespread downturn in the economy.
During the third quarter, the order intake grew by 13 per cent and, excluding acquisitions and foreign exchange effects, growth was 4 per cent. Sales rose 15 per cent during the quarter and, excluding acquisitions and foreign exchange effects, growth was 6 per cent. At the end of the quarter, the order backlog amounted to SEK 2,169 m (1,556 m) and was thus up 39 per cent on the previous year's value. The operating profit for the quarter increased by 16 per cent to SEK 464 m (399 m) with an operating margin of 14.2 (14.0) per cent, which we are very pleased with.
We continue to take a forward-looking perspective and are investing with undiminished strength in product development, sales and marketing in our business areas to drive growth and further strengthen the positions of our operations. Sustainability is a key aspect and critical to underpinning further growth, and we focus sharply on it in all of our business operations. Our portfolio today comprises companies with long-term sustainable businesses that offer the market products that contribute to the building of a better world. We are committed to the daily challenge of continuously developing sustainable practices.
Our level of acquisition activity during the quarter has been high and our determination to seek out and evaluate new interesting companies has yielded excellent results. We acquired three new companies for our industrial operations in August and September. Swegon acquired the Norwegian company Klimax AS, Hultafors Group acquired CLC based in Los Angeles, USA, and Produal in Latour Industries acquired SyxthSense in the UK. In October, we also signed an agreement for the acquisition of Caljan, which will become a new business area, and for the acquisition of S+S Regeltechnik to Latour Industries. Read more about our acquisitions on page 4.
Growth in the stock market was slower in the third quarter compared with the very strong growth seen in the first six months of the year. Since the beginning of the year, our investment portfolio has increased by 27.6 per cent, adjusted for dividends and changes in the portfolio, while the benchmark index SIXRX increased by 23.0 per cent. The net asset value in Latour increased by 29.9 per cent to SEK 127 per share in the same period.
Several of our listed holdings have, at this point, already reported their results. With a couple of exceptions, these reports are good and stable, which again corroborates the high quality of the companies in our portfolio. Following a relatively high level of activity in the first six months, the third quarter was marked by slightly less acquisition activity.”
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
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)8 566 426 92.
To follow the webcast please visit our webpage, www.latour.se, or use the link: