Year-end report 2019
NET ASSET VALUE AND THE LATOUR SHARE
- The net asset value rose to SEK 136 per share, compared with SEK 100 per share at the start of the year. This is an increase of 39.4 per cent, adjusted for dividends. By comparison, the Stockholm Stock Exchange's Total Return Index (SIXRX) increased by 35.0 per cent. The net asset value was SEK 137 per share at 13 February. (1)
- The total return on the Latour share was 39.1 per cent during the year measured against the SIXRX, which rose 35.0 per cent.
- The Board of Directors proposes an increased dividend of SEK 2.75 (2.50) per share.
The fourth quarter
- The industrial operations' order intake rose 17 per cent to SEK 3,632 m (3,116 m), which represents a 4 per cent increase for comparable entities adjusted for foreign exchange effects.
- The industrial operations' net sales rose 12 per cent to SEK 3,591 m (3,216 m), which is unchanged for comparable entities adjusted for foreign exchange effects.
- The operating profit increased by 8 per cent to SEK 434 m (401 m), which equates to an operating margin of 12.1 (12.5) per cent for continuing operations.
- The Danish company Caljan was acquired in the fourth quarter. Caljan, which now comprises a new business area within Latour, generates annual sales of approximately EUR 100 m and has some 450 employees.
- Latour Industries reached an agreement, through Bemsiq, to acquire the German company S+S Regeltechnik. Further to this, Latour Industries acquired the lift installation companies Invalift and Ability Lifts in England through Aritco.
- The industrial operations' order intake rose 16 per cent to SEK 13,663 m (11,817 m), which represents a 5 per cent increase for comparable entities adjusted for foreign exchange effects.
- The industrial operations' net sales rose 17 per cent to SEK 13,519 m (11,586 m), which represents a 6 per cent increase for comparable entities adjusted for foreign exchange effects.
- The operating profit increased by 23 per cent to SEK 1,817 m (1,476 m), which equates to an operating margin of 13.4 (12.7) per cent for continuing operations.
- Consolidated net sales totalled SEK 13,738 m (11,785 m), and profit after financial items was SEK 5,725 m (2,646 m). Capital gains and other items impacting comparability amounting to SEK 1,134 m (-1,164 m) are recognised in the income statement.
- Consolidated profit after tax was SEK 5,310 m (2,324 m), which is equivalent to SEK 8.33 (3.66) per share.
- Net debt, excluding impacts of IFRS 16, was SEK 7,478 m (4,812 m) and is equivalent to 8 (7) per cent of the market value of total assets. Recognised Group net debt, where IFRS 16 had full impact, amounted to SEK 8,095 m.
- During the year, the value of the investment portfolio increased by 40.0 per cent adjusted for dividends and net investments. The benchmark index (SIXRX) rose 35.0 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. In the fourth quarter, Latour continued to increase its ownership in Fagerhult when it acquired additional shares in the amount of SEK 221 m, thereby increasing its ownership to 46.6 per cent.
EVENTS AFTER THE REPORTING PERIOD
- In January, Hultafors Group AB acquired Emma Safety Footwear and Latour Industries acquired Batec Mobility through MS Group. Further to this, Latour Industries completed the previously announced acquisition of S+S Regeltechnik via the Group's subsidiary Bemsiq.
(1) The calculation of the net asset value on 13 February was based on the value of the investment portfolio at 1 p.m. on 13 February and the same values as at 31 December were used for the unlisted portfolio.
Comments from the CEO
“As the fourth quarter unfolded, it became increasingly clear that the economic climate was worsening. While the overall growth rate in order intake remains positive, it has slowed compared to before. Net sales are unchanged for comparable entities, but there are variations and some of our operations are experiencing negative organic growth. In our assessment, operations that are indirectly dependent on investments in the European automotive industry are facing the greatest challenges at the moment. A large share of our holdings is exposed to economic trends in the construction industry, which is experiencing a smaller lapse.
During the fourth quarter, the order intake in our industrial operations grew by 17 per cent and, excluding acquisitions and foreign exchange effects, growth was 4 per cent. Net sales rose 12 per cent during the quarter and, excluding acquisitions and foreign exchange effects, growth was unchanged. The order backlog at the end of the quarter was SEK 2,544 m (1,866 m), and for comparable entities this corresponds to an increase of approximately 5 per cent over the previous year. The operating profit for the quarter increased by 8 per cent to SEK 434 m (401 m) with an operating margin of 12.1 (12.5) per cent. We can thus sum up yet another record year for the industrial operations, where net sales rose 17 per cent to SEK 13,519 m (11,586 m) and the operating profit increased by 23 per cent to SEK 1,817 m (1,476 m) with an operating margin of 13.4 (12.7) per cent.
We remain confident as we have skilled leaders and own businesses that are well equipped and prepared for a possible continued economic decline. We should be able to continue to advance our positions even in a harsher climate. We continue to take a forward-looking perspective and are investing with undiminished strength in product development, sales and marketing in our business areas. Sustainability is a key aspect of our investments and is critical to underpinning further growth; an aspect that remains central to all 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 began the quarter with the acquisition of a completely new business area for Latour, the Danish company Caljan, a leading supplier of automation technology for parcel handling in the logistics and e-commerce sectors.
We also acquired the German sensor manufacturer S+S Regeltechnik and the British lift installation companies Invalifts and Ability Lifts for Latour Industries. As reported above, our run of acquisitions has continued into the new year too with the acquisition of the Dutch company Emma Safety Footwear for Hultafors Group and the Spanish company Batec Mobility for Latour Industries. Read more about our acquisitions on page 4.
The stock market performed very well in the fourth quarter. Since the beginning of the year, our investment portfolio has increased by 40.0 per cent, adjusted for dividends and changes in the portfolio, while the benchmark index SIXRX increased by 35.0 per cent. The net asset value in Latour increased by 39.4 per cent adjusted for dividends to SEK 136 per share in the same period.
Most of our listed holdings have now submitted reports. In the light of the uncertainty currently seen in the economy, these reports are stable, which again corroborates the high quality of the companies in our portfolio. Following a relatively high level of acquisition activity in the listed companies of the investment portfolio during the first half of the year, the second half was marked by slightly less activity.
Although we are experiencing an economic situation that is increasingly uncertain and, to some extent, challenging, we are pleased to see that, thanks to the strong development of our industrial operations combined with the excellent performance of our investment portfolio, we can once again propose an increased dividend. The Board of Directors proposes an increased dividend of SEK 2.75 (2.50) per share.”
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)8 566 427 03.
To follow the webcast please visit our webpage, www.latour.se, or use the link: