Release Date: August 20, 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) achieved a 5% organic growth in order intake despite a weak business climate.
- The company's total return for the year so far is 11.3%, outperforming the SIXRX index at 11.1%.
- Strong cost control and gross margin resulted in a robust operating margin of 14.4%.
- Investment AB Latour (FRA:18LB) completed several strategic acquisitions, adding SEK2.4 billion in acquired growth.
- The company maintains a conservative net debt level, providing headroom for further acquisitions.
Negative Points
- Net sales decreased by 1% organically compared to the previous year.
- Exposure to the construction and real estate markets has negatively impacted some business areas.
- Caljan's order intake and net sales are significantly lower than the previous year due to conservative capital expenditures by customers.
- Hultafors Group experienced a slight decline in net sales, particularly in the European market.
- Innovalift's order intake was hampered by a weak construction market and lower demand in China.
Q & A Highlights
Q: Can you expand on the demand and margin development for Swegon, particularly in North America, and your expectations for H2?
A: The heat pumps are not growing in North America; it's the ventilation business seeing positive development. Heat pumps are growing significantly in Europe. We don't make forecasts, but we have a strong position and have seen great orders coming in. (Anders Morck, CFO)
Q: Regarding Caljan, you mentioned order intake is starting to bottom out. Is this due to easier comparables for Q3 or underlying demand changes?
A: Caljan is doing well given the macro environment. During the pandemic, logistic companies over-invested, leading to a backlog. We are now seeing signs of normalization in growth rates for the industry. (Johan Hjertonsson, CEO)
Q: Innovalift showed better margins than expected. Can you discuss its market exposure and growth expectations?
A: Innovalift has two divisions: home elevators and modernization of existing elevators. The home elevator market is down, especially in China, but has strong long-term growth. The modernization business is expected to grow significantly, driven by environmental concerns. We expect high growth rates and aim for a 15% EBIT margin over time. (Johan Hjertonsson, CEO)
Q: Can you provide more details on the recent acquisitions and their expected impact?
A: We acquired HC Groep, Arkel, and QEL, adding about SEK2.4 billion in acquired growth, nearly 10% of our net sales. These acquisitions have profit levels in line with or above our wholly owned operations, and we are very happy with them. (Johan Hjertonsson, CEO)
Q: What are your financial targets and how are you performing against them?
A: Our targets are 10% growth, 15% operating margin, and 15% return on operating capital. Over the last 12 months, we had 1% growth, 14.3% EBIT margin, and 15.3% return on operating capital. We are pleased with these results given the economic climate. (Johan Hjertonsson, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
