NET ASSET VALUE AND THE LATOUR SHARE
- The net asset value rose to SEK 188 per share, compared with SEK 153 per share at the start of the year. This is an increase of 25.4 per cent. By comparison, the Stockholm Stock Exchange's Total Return Index (SIXRX) increased by 22.4 per cent. The net asset value was SEK 197 per share at 20 August.1
- The total return on the Latour share was 42.3 per cent during the period measured against the SIXRX, which rose 22.4 per cent.
The second quarter
- The industrial operations' order intake rose 61 per cent to SEK 5,676 m (3,527 m), which represents a 51 per cent increase for comparable entities adjusted for foreign exchange effects.
- The industrial operations' net sales rose 34 per cent to SEK 4,748 m (3,542 m), which represents a 26 per cent increase for comparable entities adjusted for foreign exchange effects.
- The industrial operations' operating profit increased by 59 per cent to SEK 753 m (474 m), which equates to an operating margin of 15.9 (13.4) per cent for continuing operations.
- Produal, within the Latour Industries business area, acquired the Finnish company HK Instruments OY in May. Latour Future Solutions made an investment in Aqua Robur Technologies AB in June.
January - June
- Within Latour Industries, January saw the acquisitions of Vega S.R.L. and Elsys AB finalised and the Danish company VM Kompensator A/S acquired. Hultafors Group finalised the acquisitions of Fristads AB, Kansas A/S, Kansas GmbH and Leijona Group Oy on 1 March.
- The industrial operations' order intake rose 35 per cent to SEK 10,176 m (7,523 m), which represents a 31 per cent increase for comparable entities adjusted for foreign exchange effects.
- The industrial operations' net sales rose 21 per cent to SEK 8,672 m (7,172 m), which represents a 17 per cent increase for comparable entities adjusted for foreign exchange effects.
- Operating profit increased by 43 per cent to SEK 1,322 m (922 m), which equates to an operating margin of 15.2 (12.9) per cent for continuing operations.
- Consolidated net sales totalled SEK 8,810 m (7,283 m), and profit after financial items was SEK 2,659 m (2,925 m). A revaluation of Alimak has had a positive impact on this year's income statement in the amount of SEK 189 m. Last year's income statement was positively affected by items impacting comparability in the amount of SEK 1,359 m.
- Consolidated profit after tax was SEK 2,390 m (2,746 m), which is equivalent to SEK 3.74 (4.29) per share.
- The Group reported net debt of SEK 7,532 m (6,843 m). Net debt, excluding lease liabilities recognised under IFRS 16, was SEK 6,748 m (6,267 m) and is equivalent to 5 (7) per cent of the market value of total assets.
- The Board's proposal for a dividend of SEK 3 per share for the 2020 financial year was approved by the Annual General Meeting.
- During the first half of the year, the value of the investment portfolio increased by 22.2 per cent adjusted for changes in the portfolio. The benchmark index (SIXRX) rose 22.4 per cent.
EVENTS AFTER THE REPORTING PERIOD
- On 5 July, Swegon signed an agreement to acquire a majority shareholding of the Finnish software company 720° (Seven Twenty degrees). And on 9 July, Aritco, within Latour Industries, signed an agreement to acquire the entire shareholding of the Swedish company Motala Hissar.
1 The calculation of the net asset value on 20 August was based on the value of the investment portfolio at 1.00 p.m. on 20 August, and the same values as at 30 June were used for the unlisted portfolio.
Comments from the CEO
"The development seen during the second quarter was very favourable for Latour. Industrial operations delivered record earnings with good organic growth. Although the pandemic is not over, the negative effects of measures such as restrictions and lockdowns gradually eased during the quarter. Should we encounter any further setbacks, we are well prepared to quickly adapt to new conditions as they arise. During the quarter, challenges regarding the supply of goods were significant. Component shortages, supply chain disruptions and increased raw material prices have affected our companies to varying extents. Product prices have been increased to compensate for rising raw material prices, not least that of steel.
Order intake for the quarter was up 51 per cent and invoiced sales 26 per cent when adjusted for acquisitions and foreign exchange effects. Prior-year comparatives have been negatively affected by the pandemic, although growth has been significant even compared to 2019. Our operations are well positioned in markets with good growth potential, as reflected in the reported strong growth.
Operating profit increased by 59 per cent in the quarter to SEK 753 m (473 m) with a strong operating margin of 15.9 (13.4) per cent. In absolute terms, this is our best quarter to date. This strong performance is driven to some extent by continued strict cost management but mostly by increased volumes.
We are maintaining our high investment rate and continuing to invest in product development, sales and marketing to retain our competitiveness and increase our market shares. The increasing volumes resulting from the strong growth of our industrial operations also require investments in production and logistics as well as the workforce, and several of our business areas are recruiting many new employees, which is pleasing.
Sustainability and digitalisation remain, as always, important focus areas for Latour. We have made great progress, but as owners we want to push for even greater progress. During the quarter, we began implementing TCFD (Task Force on Climate Related Financial Disclosures) at ownership level as well as across our business areas. TCFD aims to identify and analyse risks and opportunities linked to climate change, in both the short term and the long term. Following the extreme weather seen in various parts of the world this summer, the relevance has increased further for this work. We plan to publish the outcome of our analyses in our sustainability report for 2021.
The level of acquisition activity remains high. Produal, part of Latour Industries, acquired the Finnish company HK Instruments in May while Latour Future Solutions made an investment in Aqua Robur Technologies AB in June. After the second quarter came to an end, Swegon made an investment in the software company 720° to strengthen its digital services offering while Aritco signed an agreement to acquire Motala Hissar. Read more about our acquisitions on page 4.
Since the beginning of the year, the investment portfolio has increased by 22.2 per cent when adjusted for portfolio changes, while the benchmark index (SIXRX) increased by 22.4 per cent. Essentially all of our listed holdings have submitted their reports, showing favourable growth in order intake, invoicing and earnings, again confirming that we have quality companies in our portfolio. Acquisition activities are fervent here too, with, for example, ASSA ABLOY announcing four acquisitions during the quarter and Sweco three. The net asset value in Latour increased during the first half of the year by 25.4 per cent to SEK 188 per share.
All things considered, a very strong first half of the year, and we are pleased with how we have handled the pandemic thus far, in terms of both employee health and protecting and developing our holdings."
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 (CEST). The conference call will be held in English.
To follow the meeting, please call +46 (0)8 505 583 75.
To follow the webcast please visit our webpage, www.latour.se, or use the link:
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