Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Investment AB Latour (FRA:18LB, Financial) reported a strong total return of 18.2% for the year, outperforming the SIXRX index's 11.4%.
- The company achieved a 3% increase in order intake during the quarter, with a 2% organic growth, indicating resilience in a subdued market.
- Investment AB Latour (FRA:18LB) completed six acquisitions in 2024, adding approximately SEK2.4 billion in annual revenue, enhancing its portfolio.
- The operating margin for the quarter was a robust 14.9%, reflecting strong cost control and profitability despite economic challenges.
- The company maintains a healthy net debt level, corresponding to about 9% of the market value of its investments, allowing room for further acquisitions.
Negative Points
- Demand remains subdued in many markets, particularly affecting businesses with exposure to the construction and real estate sectors.
- The net sales for some divisions, such as Caljan and Innovalift, were below the previous year's levels due to lower order intake and weak market conditions.
- Currency effects negatively impacted net sales and profits for certain business areas, such as NORDH.
- The economic downturn has led to a slightly negative growth of -0.6% over the last 12 months, falling short of the company's growth target.
- The acquisition of Arkel in Turkey is delayed due to slow handling by authorities, impacting the expected timeline for integration.
Q & A Highlights
Q: Would you say that you've pushed your expectations of markets improving further into 2025, or how should we think about this?
A: Johan Hjertonsson, President and CEO, responded that predicting the future is challenging, but he anticipates a prolonged but not deep recession. He expects market improvements sometime next year, although it's difficult to pinpoint exactly when.
Q: How would you characterize the current pipeline for M&A in the industrial operations?
A: Johan Hjertonsson stated that the pipeline is healthy, with numerous opportunities to add good acquisitions to their seven wholly-owned industrial holdings. He expressed optimism about future acquisitions materializing.
Q: Could you give some color on what's driving the slightly weaker order intake for Swegon in Q3 versus the first half?
A: Johan Hjertonsson explained that despite seasonal variations, Swegon experienced organic growth in Q3. Anders Mörck, CFO, added that the order intake is seasonally lower in autumn compared to spring, but the company still shows growth in a challenging construction market.
Q: What is the impact of the current economic climate on Latour's financial targets?
A: Johan Hjertonsson mentioned that despite a slight negative growth over the last 12 months, the operating margin and return on operating capital are satisfactory. He emphasized that the targets are long-term and meant to be achieved over a business cycle.
Q: Can you provide insights into the acquisition activities within the listed holdings?
A: Johan Hjertonsson highlighted high acquisition activity, mentioning Tomra's acquisition of Trace Aoy to expand its digital waste management solutions. He noted that such acquisitions broaden offerings and enhance competitiveness.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
