Press release
Year-end Report 2014
NET ASSET VALUE AND THE LATOUR SHARE
- The net asset value rose to SEK 250 per share, compared to SEK 212 per share at the beginning of the year. This is an increase of 21.1 per cent, adjusted for dividends. By comparison, the Stockholm Stock Exchange's Total Return Index (SIXRX) increased by 15.8 per cent. The net asset value was SEK 278 per share at 17 February.(1)
- The total return on the Latour share was 22.1 per cent for 2014, which is better than the SIXRX index for the ninth consecutive year.
- The Board of Directors proposes an increase of the annual dividend to SEK 6.00 (5.50) per share.
INDUSTRIAL OPERATIONS
Fourth quarter
- The industrial operations' incoming orders increased to SEK 1,994 m (1,800), which means a 1 per cent decrease for comparable entities adjusted for foreign exchange effects.
- The industrial operations recorded net sales of SEK 2,018 m (1,839), which represents a 2 per cent decrease for comparable entities adjusted for foreign exchange effects.
- The operating profit before restructuring and non-recurring expenses increased to SEK 229 m (180), which corresponds to an adjusted operating margin of 11.4 (9.8) per cent for continuing operations. Restructuring and non-recurring expenses amounted to SEK 0 m (10) during the quarter.
- Hultafors acquired Tradeport AB. The company has 23 employees and generates an annual turnover of approximately SEK 70 m. Tradeport develops and markets premium safety footwear and workwear.
Full year
- The industrial operations' incoming orders increased to SEK 7,663 m (6,988), which means an unchanged level for comparable entities adjusted for foreign exchange effects.
- The industrial operations recorded net sales of SEK 7,581 m (6,897), which means an unchanged level for comparable entities adjusted for foreign exchange effects.
- The operating profit before restructuring and non-recurring expenses increased to SEK 796 m (686), which corresponds to an adjusted operating margin of 10.5 (9.9) per cent for continuing operations. Restructuring and non-recurring expenses amounted to SEK 41 m (37) during the year.
- The annual sales of the seven acquisitions made for the industrial operations during the year add up to approximately SEK 730 m. SEK 300 m of this have been consolidated in 2014.
GROUP
- The Group's profit after financial items was SEK 2,064 m (1,658).
- The Group's profit after tax was SEK 1,874 m (1,483), which is equivalent to SEK 11.75 (9.31) per share.
- Net debt at the end of December was SEK 3,516 m (1 787) and is equivalent to 8.1 per cent of the market value of total assets.
INVESTMENT PORTFOLIO
- During the year, the value of the investment portfolio increased by 26.4 per cent adjusted for dividends. The comparable index (SIXRX) increased by 15.8 per cent.
(1) The calculation of the net asset value at 17 February 2015 was based on the value of the investment portfolio at 1 p.m. on 17 February and the same values at 31 December were used for the unlisted portfolio.
Comments from the CEO
"We are very pleased to be able to report yet another quarter with excellent performance. And this is despite the fact that volume growth is still slow. This reaffirms that we are maintaining a high level of efficiency and good cost control in our operations.
Growth remains weak in European markets, but the picture is not uniform. The UK, Irish and Scandinavian markets are showing good growth. Russia, Finland, France and southern Europe are weak markets and there are many uncertainties surrounding growth in the all-important German market.
For the whole of the industrial operations, it has been a year in which both incoming orders and invoiced sales were unchanged, when adjusted for foreign exchange effects and acquisitions. A decrease of 1 per cent in incoming orders and 2 per cent in invoiced sales was reported for the fourth quarter. The picture
across the business areas is still mixed, just as it was earlier in the year. All of the business areas, with the exception of Swegon, continue to report organic growth in both the full year and fourth quarter. Growth has been especially good in Nord-Lock, despite a slight slow-down towards the end of the year. Our
largest business area Swegon is exhibiting negative growth, adjusted for acquisitions. Nevertheless, growth during 2014, including acquisitions, was 9 per cent.
Incoming orders increased during the fourth quarter overall by 11 per cent to SEK 1,994 m (1,800). This is equivalent to a 1 per cent organic decline when adjusted for foreign exchange effects and acquisitions. Invoicing increased by 10 per cent to SEK 2,018 m (1,839). The adjusted operating profit was SEK 229 m
(180), which corresponds to an adjusted operating margin of 11.4 (9.8) per cent. Nord-Lock and Hultafors Group continue to show a strong earnings trend. Latour Industries has stabilised and Swegon is reporting healthy margins set in relation to the weak growth in volumes. Thanks to the measures that we have
undertaken and the acquisitions that we have made, we now have favourable conditions for a continuation of the positive earnings trend in the industrial operations. However, it still remains uncertain whether market developments will give us any other help.
Although there was less acquisition activity in the fourth quarter, we made a very interesting addition to Hultafors through the acquisition of the footwear company Tradeport AB, which markets and develops premium safety footwear and workwear.
Acquisition activity was relatively high in the previous quarters in 2014. This mainly took place in Swegon, where we made a total of four acquisitions, P. Lemmens in Belgium to Commercial Ventilation, Econdition in Germany in Cooling, Luftmiljö in Home Solutions and Vibro-Acoustics® in North America.
Furthermore, Latour Industries acquired Elvaco and Bastec in 2014. In total this year’s acquisitions adds SEK 730 m I annual sales and 350 employees. More details about the acquisitions can be found later on in this interim report. The coming period will be marked by the integration of the acquisitions that we
have made, and Swegon, above all, has a period of consolidation ahead. At the same time, we are focusing again on compiling a list of potential new acquisitions.
In all essential respects, our listed holdings are continuing to show very good progress. The value of the investment portfolio rose 26.4 per cent, adjusted for dividends, during 2014. This is significantly higher than the comparable index (SIXRX), which rose 15.8 per cent. Several of our listed companies have been
active and have made acquisitions and, it should be pointed out, that the underlying earnings growth has been consistently very positive.
In 2014, the net asset value in Latour increased by 21.1 per cent, adjusted for paid dividends. Overall, 2014 delivered a very strong performance and consequently the Board is able to propose an increase in the dividend to SEK 6.00 (5.50) per share."
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