Latour (LATO) Q3 2024 earnings summary

Executive summary

• Net asset value per share increased by 11.3% to SEK 216 at September-end, with the investment portfolio delivering a 17.0% total return, outperforming the SIXRX index.

• Six acquisitions completed or agreed in 2024, adding SEK 2.4 billion in annual net sales and expanding the portfolio.

• Profitability remains strong, with healthy operating and gross margins across business areas, though industrial operating profit declined in Q3 and YTD.

• Wholly-owned operations and investment portfolio contributed significantly to value creation.

• The Latour share delivered a 22.5% total return, exceeding the benchmark.

Financial highlights

• Q3 order intake increased by 3% to SEK 5,739m and net sales by 2% to SEK 6,228m; organic growth was 2% and 1% respectively.

• Quarterly EBIT reached SEK 927 million, with an operating margin of 14.9%.

• Net asset value totaled SEK 138.1 billion after deducting net debt; net asset value per share was SEK 216 at September-end and SEK 218 as of November 5.

• Net debt increased to SEK 14,790m, mainly due to acquisitions; equity ratio at 83%.

• Group profit after financial items was SEK 5,315m; EPS SEK 7.36.

Outlook and guidance

• Management expects a prolonged but not deep economic downturn, with recovery likely in 2025; robust demand is expected in most segments.

• M&A pipeline remains healthy, with further acquisitions anticipated.

• Financial targets reaffirmed: >10% annual growth, >15% operating margin, >15% return on operating capital; current LTM figures: -0.6% growth, 14.1% EBIT margin, 15.1% return.

• Focus remains on responsible, active ownership and value creation for shareholders.