Latour (LATO) Q4 2024 earnings summary

Executive summary

• Net asset value per share increased by 11% to SEK 215, outperforming the SIXRX index's 8.6% rise, with strong profit after tax and robust performance from both the investment portfolio and wholly owned operations.

• Order intake and net sales grew organically in 2024, with profitability at healthy levels despite a weak business climate and global turbulence.

• Several acquisitions were completed, adding nine businesses and close to SEK 3 billion in annual net sales, with further deals expected to contribute additional growth.

• Strong cash flow generation, with almost SEK 3.7 billion, nearly matching EBIT, supporting increased dividend and M&A activity.

• Board proposes a dividend increase, with figures of SEK 4.60 per share (up 12.2%) and SEK 5.00 per share both cited.

Financial highlights

• Net asset value at year-end: SEK 137.7 billion, or SEK 215 per share; total return on investment portfolio: 14.3%.

• Consolidated net sales reached SEK 25,886m, up 1% year-over-year; operating profit for industrial operations was SEK 3,708m, margin 14.3%.

• Q4 EBIT for wholly owned industrial operations increased to SEK 986 million, margin 14.1%.

• Listed portfolio value reached SEK 93.7 billion, with a total return of 5.6% (SIXRX: 7.6%).

• Net debt at year-end: SEK 14,021m, representing 8% of market value of investments.

Outlook and guidance

• Management expects margin recovery to 2023 levels or above if market conditions improve, with strong cost control and gross margins.

• Acquisitions in 2024 and early 2025 are expected to add 9% acquired growth to 2025 top-line figures.

• Dividend policy targets 40-60% of net profit from wholly owned operations and 100% of received dividends from the investment portfolio.

• The company is well-prepared for changes in demand and maintains a long-term investment horizon.

• Acquisition activity expected to remain high, with substantial scope for further investments.