Latour (LATO) Q2 2024 earnings summary

Executive summary

• Net asset value per share rose 1.8% to SEK 198 at the end of June, with a total return of 5.7% YTD, underperforming the SIXRX index's 10.6% gain.

• Industrial operations saw a 5–7% organic order intake growth in Q2, but net sales declined 1% and operating profit fell 8% year-over-year.

• Several acquisitions in 2024 are expected to add SEK 2.4 billion in annual sales, expanding presence in Europe and North America.

• Wholly-owned operations and the investment portfolio remain core, with new business areas like Innovalift launched.

• Demand remains solid in many markets, though construction and real estate-exposed businesses face headwinds.

Financial highlights

• Q2 net sales decreased by 1% (organic -4%), with operating profit at SEK 939 million and a margin of 14.4%.

• Swegon and Hultafors Group maintained stable net sales, while Caljan saw a significant decline in both sales and margin.

• Nord-Lock Group and Bemsiq reported strong operating margins above 20%.

• Group net sales for H1 2024 were SEK 12,644m (-3%), with profit after tax at SEK 3,651m (SEK 5.68/share).

• Net debt at period end was SEK 13,011m, about 8% of investment market value, with an equity ratio of 83%.

Outlook and guidance

• Order intake volatility expected in the short term, but positive signals from key business areas and nearly 10% acquired growth signed for the year.

• Financial targets remain: annual growth above 10%, operating margin and return on operating capital above 15%.

• Focus on international growth, with 61% of net sales now outside the Nordics, up from 14% in 2018.

• Management expects continued investment in factories, product development, and digitalization.

• Long-term growth potential remains, especially outside Europe, with 81% of sales still in Europe.