Investment AB Latour (publ) (IVTBF) Q2 2025 Earnings Call Transcript

Investment AB Latour (IVTBF) reported continued strong Q2 2025 performance, achieving organic growth in both order intake and net sales despite a challenging geopolitical and business climate. While negative currency effects impacted gross margins, the company emphasized its commitment to long-term investments for sustained profitability. A key external factor highlighted was the new 15% U.S. tariffs on European imports, which affects 11% of Latour's total net sales, though specific product exemptions remain uncertain.

Analysis

Investment AB Latour (IVTBF) reported solid Q2 2025 results, demonstrating resilience with organic growth in both order intake and net sales despite a challenging business climate and geopolitical instability. Management highlighted that general demand remains quite good across many of its markets. However, this top-line performance was partially offset by headwinds from negative currency effects, which specifically compressed gross margins. A significant forward-looking risk has emerged with the introduction of 15% U.S. tariffs on European imports. Given that the U.S. market constitutes 11% of Latour's total net sales, this development presents a material headwind, although the ultimate financial impact remains uncertain pending clarification on product-specific exemptions. In response to the macro environment, the company reiterated its core strategy of continuing to invest through cycles to ensure long-term growth and profitability.

Key Decisions for Investors

• Investors should closely monitor for further clarifications regarding the new 15% U.S. tariffs, as the specific product exemptions will be critical in quantifying the actual impact on the 11% of total net sales derived from the U.S.
• Given the stated negative currency effects on gross margins, it is prudent to assess the potential for continued margin pressure if adverse foreign exchange movements persist.
• Consider balancing the company's demonstrated operational strength and organic growth against the tangible and mounting external risks from trade policy and currency fluctuations before making new capital allocation decisions.