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Interim Report January - March 2015
NET ASSET VALUE AND THE LATOUR SHARE
- The net asset value rose to SEK 291 per share, compared to SEK 250 per share at the beginning of the year. This is an increase of 16 per cent. By comparison, the Stockholm Stock Exchange's Total Return Index (SIXRX) increased by 15.8 per cent. The net asset value was SEK 304 per share at 28 April.
- The total return on the Latour share was 21.5 per cent for the period, which is better than the SIXRX index.
INDUSTRIAL OPERATIONS
- The industrial operations' order intake increased by 16 per cent to SEK 2,144 m (1,842), which means a 1 per cent increase for comparable entities adjusted for foreign exchange effects.
- The industrial operations recorded net sales of SEK 2,030 m (1,730), which represents a 1 per cent increase for comparable entities adjusted for foreign exchange effects.
- The operating profit increased by 67 per cent to SEK 207 m (124), which is equivalent to an operating margin of 10.2 (7.1) per cent for continuing operations.
- REAC concluded an agreement for the acquisition of a business in Poland, which manufactures components for actuators and tilt and lift systems. The business generates sales of approximately SEK 30 m.
GROUP
- The Group's profit after financial items was SEK 889 m (406).
- The Group's profit after tax was SEK 833 m (376) included a capital gain of SEK 301 m, which is equivalent to SEK 5.22 (2.36) per share.
- Net debt at the end of March was SEK 3,394 m (2,164) and is equivalent to xx per cent of the market value of total assets.
- The entire shareholding in Academic Work was sold in March, resulting in a capital gain of SEK 301 m.
INVESTMENT PORTFOLIO
- During the quarter, the value of the investment portfolio increased by 19.3 per cent adjusted for dividends. The comparable index (SIXRX) increased by 15.8 per cent.
- Acquisition of 30.1 per cent of the shares in Troax, which began trading on the Nasdaq Stockholm market shortly after the acquisition. Troax has annual net sales of about SEK 900 m.
1) The calculation of the net asset value at 28 April 2015 was based on the value of the investment portfolio at 1 p.m. on 28 April and the same values at 31 March were used for the unlisted portfolio.
Comments from the CEO
"It gives us satisfaction to be able to report that we have had yet another quarter with excellent performance. This is despite the fact that volume growth is still fairly sluggish. However, March was far better than January and February and several of our operations are more optimistic about growth in volumes in the future.
On the whole, Sweden, Norway, Denmark, Ireland and the UK have experienced the strongest growth. The important German market also showed more stable growth towards the end of the quarter. However, Eastern Europe is still having problems.
We can sum up the first quarter for the industrial operations by reporting that both order intake and invoiced sales grew by one per cent, when adjusted for foreign exchange effects and acquisitions. Including acquisitions and foreign exchange effects, order intake grew by 16 per cent and invoiced sales by 17 per cent. In this context, it is important to understand that the exchange rate effect is all of 6 per cent of the reported growth. Order intake exceeds invoiced sales by more than SEK 100 m. With the exception of Swegon, all of the business areas are reporting organic growth in invoiced sales. Nord-Lock is by far the best, with an increase in invoiced sales of almost 8 per cent, when adjusted for acquisitions and foreign exchange effects. Considering that the market in general is not showing any appreciable growth, we anticipate that Nord-Lock will take market share from rival bolt-securing manufacturers. The operating profit increased by 67 per cent to SEK 207 m (124), which is equivalent to an operating margin of 10.2 (7.1) per cent. In absolute terms, Latour Industries accounts for the largest increase in profits from a previously low level. Nord-Lock, Hultafors Group and Specma Group have all contributed with significant growth in profits.
We can still see good potential for reporting strong earnings even while market growth is relatively weak. Although the market growth was positive at the end of the quarter, it is difficult to speak of any sustained upswing. It is therefore still difficult to predict how the current economic situation will help us.
There was little acquisition activity in the first quarter in the wholly-owned operations. However, this does not mean that we are inactive in this area. We are currently in the process of analysing several companies that could potentially be merged with existing areas or form completely new businesses. During the quarter, REAC in Latour Industries concluded an agreement for the acquisition of parts of the Ergolet Group in Poland. This acquisition consolidates REAC's market position in the field of electric wheelchairs. (Further details are presented under Acquisitions on page 3.)
This quarter, several of our listed holdings are reporting after Latour, which means it is difficult to provide any comprehensive review. However, the companies that have reported all made strong statements. We are pleased to report that we expanded our portfolio with another business this quarter. At the end of March, Latour acquired a 30.1 per cent shareholding in Troax AB, shortly before the company began trading on the Nasdaq Stockholm market.
The value of the investment portfolio rose no less than 19.3 per cent during the quarter. This is higher than the comparable index (SIXRX), which rose 15.8 per cent. The net asset value in Latour increased by 16 per cent to SEK 291 per share in the first quarter of 2015.
Finally, Latour sold its 20 per cent holding in Academic Work in the quarter. Latour has been a co-owner of Academic Work since 2006, when SäkI AB, as it was then, acquired a minority stake in Academic Work. The investment is a good example of how Latour has been able to contribute to the positive growth of a company by giving it support during an expansive phase. However, the sale is a natural step in Latour's strategy to be the principal owner of the operations in which we invest."
INVESTMENT AB LATOUR
Jan Svensson
President and CEO
For further information please contact:
Jan Svensson, President and CEO, Tel. +46 705-77 16 40 or
Anders Mörck, CFO, Tel. +46 706-46 52 110