IVTBF (IVTBF) Q2 2026 Earnings Report, Transcript and Summary

Good morning, and welcome to the presentation of Investment AB Latour's Interim Report for the Second Quarter 2026. [Operator Instructions]. And with that, I hand over to CEO, Johan Hjertonsson; and CFO, Mikael Albrektsson.

Thank you very much, Katarina. Welcome, everybody. This is Johan Hjertonsson, and welcome to our presentation of the Q2 report. I'm here together with our CFO, Mikael Albrektsson. So the presentation is divided into 2 sections. Firstly, we will walk you through the Latour Group's development in Q2, commenting on the development for the investment portfolio and the wholly owned operations. Then we open up for questions together with Mikael. Then we have a second part where we will make a deep dive into Nord-Lock Group, one of Latour's 7 wholly owned operations. There, we will invite Daniel Westberg, CEO of Nord-Lock Group for this section. Finally, we'll have a Q&A session altogether with Daniel on the Nord-Lock Group presentation. If we go to the first slide, I would say on commenting overall, solid second quarter performance, supported by positive market developments, especially toward the end of the quarter. Order intake grew organically by 13% and net sales by 4%. Adjusted EBIT amounted to SEK 999 million with a margin of 13.8%. The order backlog increased to just over SEK 8 billion, which provides a solid foundation for continued growth in net sales going forward for the remainder of the year. As you all know, geopolitical uncertainty remains with delays in some project start-ups as one effect. Our assessment is that no business has been lost, rather deliveries and revenues that has been postponed to upcoming quarters. The turmoil in the Middle East, unfortunately, continues. However, Latour has limited exposure to the region and no material negative impact has been identified or recorded to date. I will comment more on the financial outcome in details later in this presentation. The investment portfolio has seen some activities during the quarter. In May, we made a partial divestment of our holdings in ASSA ABLOY and in Securitas. This is something that we don't do often, and it's important to emphasize that we remain as the largest shareholder in both companies with full support for their respective long-term strategies. By realizing a small portion of the value created in ASSA ABLOY and Securitas, we can continue to develop and expand our wholly owned operations as we communicated earlier. The acquisitions activity in the wholly owned operations has been high during the quarter with 5 completed acquisitions. Thereby, I'd like to hand over to Mikael to comment on our net asset value development. So over to you, Mikael.

Thank you very much, Johan. When summarizing the first half of the year in figures, we can conclude that the net asset value decreased by 3.7% during the 6 months, and this is adjusted for dividend and amounted to SEK 203 per share to be compared to the SIXRX that increased by 8.1%. The share price at the end of June was SEK 193, which means that there was a discount of 5% compared to how we present the net asset value. As of yesterday, the net asset value was SEK 204 per share, and the share price on the same day closed at SEK 188, which gives a discount to our way of describing the net asset value of about 8%. The consolidated net debt decreased during the quarter from SEK 15.3 billion to SEK 12.3 billion, and this is driven by proceeds from divestments in the investment portfolio and partly offset by dividend payments. The net debt corresponds to about 9% of the market value of our investments, leaving headroom for further acquisition as we go forward. And with that, I hand over back to you, Johan.

Thank you, Mikael. Then we would like to continue by commenting on the investment portfolio. As I said in the beginning of this presentation, we made a partial divestment of our holdings in ASSA ABLOY and Securitas in May. Following the divestment, we hold 29% of the voting rights in ASSA ABLOY and 27.6% of the voting rights in Securitas and remain, as I said, the principal owner of both companies. The stock market improved slightly in Q2, while volatility remained elevated due to the geopolitical tensions and trade uncertainty. Adjusted for dividends and portfolio changes, the value development of our portfolio of listed holdings amounted to minus 8.8% during the first half of the year, whereas SIXRX was plus 8.1%. Some of our holdings have shown weaker stock market performance, while others have been better. Until yesterday, August 18, the portfolio value was SEK 75 billion, and the total return amounted to minus 7.9% so far this year, whereas the SIXRX is plus 10.6%. If we go to the next slide, the holdings, to comment on the holdings results that are reported are mixed, but the majority of the companies continue to show positive underlying performance and are adapting well to the changing market conditions. As in the wholly owned operations, market conditions improved towards the end of the quarter and several companies reported strong demand in their key segments during their Q2 reports. Over the past decade, our holdings have demonstrated strong underlying growth and earnings development despite the more challenging market conditions in recent years. We believe we own high-quality companies and continue to act as active principal owners in all our holdings, providing strong support for their long-term strategies. Then we go to comment on the wholly owned operations. Market conditions continue to improve, although the picture remains mixed across regions and sectors. Within the construction industry, demand is particularly strong within the building renovation, energy efficiency in industrial and infrastructure sectors, which benefit from several -- which benefits to several of our companies. Most of our holdings report solid underlying demand with healthy order intake and growing order books. As I said, some projects start-ups have been delayed, which has somewhat impacted net sales during the quarter. However, we expect revenues to be recognized in the coming quarters and do not believe any significant orders have been lost. During the quarter, order increased organically by a strong 13% and net sales increased organically by a healthy 4%. Currency headwinds continue to give negative effects compared to last year, however, somewhat lower effects now than in the beginning of the year. The adjusted operating result for the quarter amounted to SEK 999 million with an operating margin of 13.8%. The profit development reflects good cost control and efficiency improvements in the operations. Overall, I'm pleased with the quarter. Strong organic growth, especially in order intake, but also in net sales, as I said, and improving market positions and the impact of implemented measures provide a solid platform for the second half of the year to come. Then if we continue to comment on the acquisitions and divestitures, we have had a high pace within the acquisition area. During the quarter, we completed 5 acquisitions across our wholly owned operations. Swegon accounted for 3 of these through the acquisitions of Western Airconditioning in the Netherlands, LaminAir in Switzerland and the residential ventilation business of Dantherm in Denmark. Caljan acquired WyCo in the U.S., enhancing its service offering and market presence in North America. Bemsiq acquired U.K.-based cThings, strengthening its presence in the energy metering market. Two acquisitions was made in the first quarter. Latour Industries completed the acquisition of Alstor and Densiq within Latour Industries acquired Scandinavian Sealing. Both companies are based in Sweden. Finally, as mentioned in the last quarter, Swegon also streamlines its operation and have divested noncore holdings. The transactions will have a positive impact on Swegon's margins. All in all, we have added net sales of SEK 700 million on an annualized basis so far this year, and I'm looking forward to see what the upcoming quarters can bring. Then I hand back to Mikael to comment on the performance of respective wholly owned holdings. So over to you, Mikael.

Thank you very much, Johan. We start with Bemsiq Group. Bemsiq had a continued positive and stable performance in the quarter. Good growth in order intake amounted to 14%, driven by organic growth and partly offset by negative currency effects. The total organic growth in net sales was 6% with a strong development on the North American market and within the Building Automation business. The Metering business is somewhat slower, and this is driven by a weak demand in the Nordics. The adjusted operating profit amounted to SEK 124 million with a good margin of 21.3%. As Johan just mentioned, Bemsiq acquired cThings in the U.K. during the quarter, an end-to-end hardware and software solution provider, primarily focused on energy usage. The company has an annual turnover of GBP 2.5 million with a profitability level well above Latour's financial targets. With that, we shift page and take a look at Caljan, where we could see that the positive momentum continues during the quarter with a strong demand from the large customers. Order intake more than doubled compared to the same quarter last year and driven by larger project orders within loading and unloading. Net sales grew organically by 3%, and the order backlog is at solid levels for coming quarters. The gross margin remains at a healthy level. However, adjusted operating profit for the quarter was adversely affected by approximately SEK 20 million on a net basis, and this is reflecting a provision for a previously underpaid Section 232 steel tariffs in the U.S. and the impact of refunded IEEPA tariffs also in the U.S. As mentioned just before, Caljan acquired WyCo in the U.S. during the quarter, and WyCo is a premium provider of maintenance and installation services within the material handling sector. WyCo has an annual turnover of USD 23 million with a profitability level above Latour's financial targets. We then continue with Hultafors Group, where we saw that the net sales grew organically by 4%, reflecting strategic investments in product development, sustainability and digitalization. Strong performance in the personal protective equipment with 6% year-on-year growth, while the hardware division continues to face a more challenging market. Gross margin remained at a high level, which combined with good cost control, supported an increase in adjusted operating profit to SEK 252 million, corresponding to a margin of 15.2%. The adjusted operating profit was positively impacted in the quarter by SEK 13 million following the repayment of U.S. IEEPA tariffs that was implemented during 2025. We then turn page again and take a look at Innovalift. Order intake is in line with last year despite challenging markets in the Middle East and Asia. We see stable net sales development with positive growth when adjusted for currency effects. The gross margin continues to improve step by step, and this is driven by good price management and cost control. Adjusted operating profit amounted to SEK 98 million, corresponding to a margin of 11.4%, demonstrating resilience in a challenging market conditions and continued currency headwinds. We then continue with Latour Industries. Latour Industries saw the order intake grew by 14%, of which 5% was organic growth. REAC and Alstor continues to see a good underlying demand, while the other business units operate in a more challenging market. Net sales increased by 9% during the quarter driven by acquisitions, while the organic growth decreased by 1% in the quarter. The adjusted operating profit was driven by strong performance in REAC and Alstor and the margin increased to 10.3% in the quarter. As the heading on the slide states, Latour Industries remains focused on developing its existing holders while continuing to identify new platform investments opportunities for the future. We turn page and take a look at Nord-Lock. Nord-Lock continues to deliver a very strong performance. Underlying demand remains solid, although order intake was below last year's level, but this is primarily due to a SEK 100 million project order received in the corresponding quarter last year. Net sales grew organically by 8%, and all regions contributed to the growth and the order backlog remains at a healthy level. The adjusted operating profit increased to SEK 162 million in the quarter, corresponding to a strong operating margin of 28%. You will all get the opportunity to learn more about the Nord-Lock Group later in this presentation as we welcome CEO, Daniel Westberg, to the call in just a few minutes. But before that, we turn the page and we take a look at Swegon. For Swegon, order intake continued to develop positively during the quarter with organic growth of healthy 20%, supported by strong demand in the Netherlands, North America and India. Net sales was in line with last year's level, negatively affected by divestments and currency headwinds and organic growth amounted to 5%, where North America and Sweden performed well, delivering solid growth. The adjusted operating profit came in at SEK 268 million with a margin of 10.4%. As Johan mentioned earlier, Swegon completed 3 acquisitions during the quarter. We had Western Airconditioning, a supplier of high-quality HVAC solutions in the Netherlands; LaminAir, a Swiss distributor of room unit products for air distribution and Danther's Danish residential ventilation business, strengthening Swegon's position in the residential indoor climate segment in Denmark. Swegon has also completed 3 strategic divestments since December 2025, and this is as part of its efforts to streamline the core business and strengthen long-term competitiveness. While these divestments have impacted growth figures compared to last year, they are expected to contribute positively to the margins going forward. That wraps up the run-through of the business areas, and we change slide to our financial targets, and I hand over back to you, Johan.

Thank you, Mikael. The financial targets, let's comment on those and where we are. Summary of our financial targets. During the last 12 months, we have had a growth of 3.8%, EBIT margin of 14% and return on operating capital of 14%. This is an outcome that we're very pleased with and keep in mind that the targets are to be seen over a business cycle. Growth is driven by both by acquisitions and organic growth, but with currency headwind. Adjusted for currency, the growth amounts to 8%. EBIT margin is on a good level and return on operating capital is satisfying. If we comment a bit on our long-term perspective on the next slide. Overall, we're pleased with the quarter and the progress made across the group. A strong order backlog provides a solid foundation, as I said, for revenue growth in the coming quarters, and our organizations are well positioned to capitalize on the improving market conditions. As a long-term principal owner, we remain committed to supporting our holdings for both opportunities and challenges. Our focus continues to be on the long-term sustainable value creation, and we remain dedicated to creating attractive returns for our shareholders over time. With strong market positions, committed teams and a long-term perspective, we are confident in our ability to continue creating sustainable value for our shareholders. Thank you. That was the presentation so far from Mikael and myself. Then we open up for the first Q&A session here to answer questions on the overall Q2 results, and then we will go into the Nord-Lock presentation. So open for Q&A.

[Operator Instructions] The next question comes from Linus Sigurdson from DNB Carnegie.

So starting off, could you give some color on these comments about postponed project starts? Like what kinds of extended time lines are we talking about? And which parts of the business would you say are mainly affected?

Mikael, would you like to start to comment on that?

Yes, I can do that. In terms of timing, I mean, we are not talking about very lengthy postponements. So we are -- but rather, I mean, possibly a push forward into the coming quarter or so. In terms of what type of business that these are reflecting is where you see a bit of a more project orientation for element certain aspects of the Swegon business, and you can also see some elements of it in, for example, the Caljan business. But in terms of timing, it's not an extensive time line extension that we are looking, but more push from quarter to a quarter or so.

Yes. I could just add to that, that you have dynamics effects. I mean I would argue that 13% order income growth organically is very strong in the quarter. But I would also argue that actually 4% organic growth in net sales is quite healthy in the quarter. However, there is a material difference between order income and net sales. I think it's effect -- and the lion effect of the difference is because of the order income is recorded in the quarter. Normally, we have kind of an average delay of 60 to 90 days from order income to sales. That's the main effect. I think the minor effect is this postponed projects that we have seen.

Correct.

It was probably correct for us.

And then moving to Swegon, positive to see the organic momentum picking up. Just a question on the margin development. I mean, given the organic growth and that these divested businesses were margin dilutive, if I'm not mistaken, what's driving this lower margin year-over-year? Is it just as simple as cost inflation?

Yes, I can start by commenting and then please you add, Mikael. I think of the divested businesses, it was kind of nonstrategic businesses. You're correct, Linus, they were margin dilutive. So just by investing those businesses, we look forward to improve margins just by that effect. In the Swegon case on the margin, I mean, it is quite volume dependent, Swegon. Swegon is a manufacturer and have factories and quite a lot of fixed assets in that sense. However, I think they defended the margins fairly well, even though on lower volumes in early quarters. With increased volume and the market coming back and Swegon continuing to take market share with a good, healthy gross margin development, we look forward to a quite strong drop-through coming in the coming quarters in Swegon. That's what we expect. Mikael, would you like to add to that?

No, I can just add. We have had a rather long stint of positive book-to-bill with Swegon where order income has been coming in. Which means, of course, that we feel confident that this will be funneling through to revenue over time. Of course, when you build a company, you need to take on some costs. It's very hard to do that exactly one-on-one with how the net sales develop. But that, as Johan said, we -- as those volumes funnel through, there is no reason to believe that the fundamental profitability of the company has reduced. So...

That's fair. And then on Hultafors, I mean, same there, positive to see good momentum in PPE in particular. I mean, is there any kind of project or type of customer, especially that's driving the improvement there in PPE?

Mikael, would you like to start?

Yes. I mean I think -- I would say more that Hultafors is doing a good job and moving towards the end customer. That it's been a very strong -- I mean, the underlying organic growth in that industry of construction have been a bit subdued, but I would say that Hultafors has done a great job in stepping forward, working toward the end customer, being more active in the market, driving campaigns. I think as we see it, it's a receipt of well-done market activities and being close to the customers more than any specific big projects. I think they have a really good portfolio of products, but I think they have been serving the market and being out there in a good way, which we now see the fruits of.

Yes. I'd like to add, I think the lion's share of Hultafors sales is to the business-to-business sector, other professionals. But there is a fairly large share also of the Hultafors sales that is more exposed to private consumption. That has been more subdued during the last couple of years. I think maybe we see some early signs of that coming back as well.

Then just finally on Hultafors, the reorganizing of the segment structure, is there anything we should be aware of there? What's the rationale behind that?

Mikael?

Yes. No, I mean to be -- that's, I would say, just a way of presenting. It's the figures for you guys in the market really. It doesn't mean that there is a significant underlying difference in how they operate. It makes more sense from a business content perspective to bucket it in this way for -- and it's also a closer way of how they operate in Hultafors. There is no significant change underlying that has landed in that segmentation.

Yes. I think that's the important part, the latter thing you said there, Mikael, it's more correct way of describing the business in the quarters how it's operated actually.

Yes.

The next question comes from Derek Laliberte from ABG Sundal Collier.

I wanted to follow up on the order intake, which was clearly strong while the sales and particularly EBIT growth were more muted. How much would you say of this is -- this gap is timing and how much reflects any slower conversion mix or margin pressure?

Thank you, Derek, for the question. Sorry, I dropped you in the beginning. Was it on the overall group results.

Yes, on the overall industrial operations.

On the overall industrial operations. Mikael, would you like to take the first one?

Yes. I mean we see them primarily as a timing effect rather than that there is a difference in more increased margin pressure on the businesses overall. As Johan commented earlier, as that the order intake funnel through the system as revenue, we feel confident that, that will funnel through with a good drop-through. That's why we see it more as a timing effect rather than anything else really.

Just to underline again, which Mikael said, we have had for many quarters, positive book-to-bill. We have -- and as yes, I think I said in the beginning, we have an order stock of over SEK 8 billion orders on hand, which is a record high for us.

Okay. Great. And that SEK 8 billion, I think you alluded to it a bit, but we should see then, I suppose, most of that to be converted into revenue at least during the second half, I would presume.

Yes, absolutely. I cannot promise everything will be converted in Q3, but in Q3 and Q4 together, absolutely, it should be converted.

Perfect. And then in the report, you described this gradual market recovery, but also the sort of the construction trends looking at it overall here, which end markets are actually improving? And where would you say that demand is still weak, if you could give some more flavor on that?

Yes, very good question, Derek. As you know, since you follow Latour, we are fairly heavily exposed to the building construction industry at large, right? But that's a huge industry in most economies around the world, right? I think it's important to look deeper down into the different segments of that industry. You see segments like air quality, air handling, the air climate, the indoor air climate, there is a strong demand there. Then we're well positioned with Swegon and with Bemsiq, for instance. You see big investments coming into infrastructure development, defense. Defense is, of course, not only weapon and weapon system, but it's also a lot of buildings and roads and things to be construction. You see a segment as data centers with extremely high growth in that area. So it's -- I think it's important to look at the building industry in its different segments. Then you have segments like residential building. I would argue strongly that it's very, very subdued in most markets, both in the U.S. and in Europe. There, you have some examples of good, strong expanding segments, but also an example of a subdued segment in the residential construction area.

All right. I appreciate the clarity there. I wanted to ask on Swegon also. I'm not sure exactly how to look at this, but you mentioned it benefiting from data center and industry-related projects here sort of. I mean, can we view this as this now being sort of enough to offset any, say, remaining weakness in the commercial and residential construction areas?

Yes, Derek, I think you can -- it's important to remember, Swegon is exposed to the residential segment, but that's a small part of the Swegon business. The absolute lion's share of the Swegon business is on business-to-business to commercial buildings and infrastructure and so on. I would say the short answer is yes to your question.

Okay. Great. And finally, after this sell-down here in ASSA ABLOY and Securitas, I mean, can you say something about how quickly you expect to deploy this additional financial flexibility into the wholly owned industrial operations?

No. But over time, we will deploy that in the wholly owned industrial operations. But I think you can expect the same pace as we have had and maybe somewhat increased pace, but it's also a way to assure that we long-term can follow and support and add -- provide capital to our wholly owned businesses when they expand both organically, but also inorganically via M&A going forward. It's kind of a long-term action that we've taken to be able to support this very fine businesses that we believe a lot in and I think has proven throughout the years to create a lot of value, and we expect to continue to do that. So this has assured us that we can do this over a long period of time going forward. There's no more questions there. Any written questions, Mikael?

No, we do not have any written questions here.

Good. Then we are done with the Q&A session then on the overall report. Then to the highlight of this day's presentation, I'd like to introduce again then Daniel Westberg, CEO of Nord-Lock Group, to give us an overview of Nord-Lock. As I said before, after Daniel's presentation, we will have a Q&A. Mikael, I and Daniel together with all of you. So by saying that, I hand over to you, Daniel. Please, you have the floor.

Thank you, Johan. So my name is Daniel Westberg, I'm CEO of the Nord-Lock Group, as Johan said. My ambition here, I will try to give you an overview of how we work to create both shareholder value and customer value in the Nord-Lock Group. Also by the end of my presentation here, you should understand what's behind our tagline, build connections that last. With that, if we can move to the next slide. The group is a truly global group today. You see on the map here, we've got presence in most industrial companies. 95% of our sales are outside of Sweden today, although the origin is very Swedish. Being global, it's one of the things that makes Nord-Lock good. We're able to serve our customers globally wherever they are and follow them around the world. It's also a good way to fence off competition. We meet them early and make sure we're better than competitors in every part of the world. But it's also good in terms of tariffs, high transport costs, currency fluctuations and also not to forget from a sustainability aspect to try to minimize tariffs. But the main driver being global, it's absolutely being close to the customer, being able to work with the customers in local language, their time zone, et cetera. You see this as well. I will not go through all the numbers here, but the 10 tech centers we have is a good example. These are centers where we can bring in customers, we can do tests on their applications to make sure that they perform as they should. We have this in 10 places around the world. This is something where we are significantly better than competition today. Also here, the geographical expansion, and I'll show you later how we've created value for Latour over time. But also now we're able to continue to expand into new geographies. The end of last year, we opened our own sales center in Brazil. Typically, we do an investment like this and around 24 months later, we see a positive EBIT impact from investments into new markets. We still have areas where we can grow within the countries and within regions. I think especially Southeast Asia is an area where we can continue to be more active to grow long-term. Let's move to the next slide. If we look at this global perspective here from a numbers perspective, you see that we've got a healthy split here, Europe, Middle East and Africa, 40%; Americas, 35% and APAC 25%. Good, all regions grow for us. That is important also in a slower growth region like Europe, we are growing, and we're growing above industrial production. Fastest growing for us is as it should be, it's the APAC region. It's probably more than 50% of the relevant market for us. That being 25% of our share today, I mean, we want to grow faster than the other regions, and we're doing that. If we look at the segment exposure, also here, we have a healthy mix of segments. We sell into a lot of industries, and that's making the group very stable over a business cycle, it kind of even out a little bit. But also when we look where we are right now, we are active in some industries that are attractive to be in like power generation, of course, is an attractive area to be. It's our largest segment. Mining is an area where we're very active as well and growing in. Also in the others part here, we see rapid growth in the defense side for all our product lines basically. We're quite pleased with the exposure we have, and we're continuously playing that to try to maximize our growth. Let's move to the next one. The Nord-Lock Group today, we're -- all our activities are based on 5 product lines and 5 brands. It's important for us that we have these 5 brands because we tailor our go-to-market per brand. This is one of the things that is accelerating the growth, I think, a little bit in the last 2 years where we're really emphasizing that -- make sure we sell each product in the best way we can. As an example, the well-known Nord-Lock washers, the origin of the group, we serve primarily via distribution. We work with OEMs and end users to get in spec'd in, but we supply via distribution. Whilst on the mechanical tensioning side and the hydraulic tensioning with the Superbolt and Boltight brand, it's very engineered. There's an engineer from our side involved in almost every sale. Here, we sell directly to OEMs and end users and normally don't go via distribution. It's important to have this tailored approach to make sure we're as good as we can for every customer. As you see on the right, we are always looking at, okay, what can we do more? What brands can we add and so forth. That leads us to the next slide. When we look at how we shall develop our company, we are very strict on where we want to be strategically. If we look at the market as a pyramid, it's quite a traditional way to look at the market. We are in the top of the pyramid. This is an area where we want to be. This is where we have a lot of application challenges. This is where it's really safety critical. The cost of failures is high when something goes wrong. There's a lot of engineering often needed. This is also where the customers are prepared to pay more. This is where we are today, and this is also where we will stay. We don't want to become a commodity supplier. Also, as you can see here, one of the reasons why we're growing well and have been over a long time is that we're able to convert applications that are using what we believe is less good solutions, more commodity type of solutions into our premium solutions that are more safe. This is fueling growth, and this is something that we've been able to industrialize on a global basis, finding the applications around the world that we want to turn to Nord-Lock solutions. I believe we have a solid idea of where we are and where we want to be also in the future and also what will continue to drive growth for us over time. Let's move to the next one, Katarina. Another important aspect claiming to be leaders, it's easy to claim, but you also need to make sure you are a leader in every aspect. We also need to follow the customers through the full -- through their full journey. We're very active in the predesign phase. As I mentioned before, we've got engineers out in most industrial companies working with the customers answering their specific questions. We help with product verification. We can do on-site assessments. We do a lot of testing and validation. Then, of course, we manufacture, we supply, we invoice, and that's where we make the money. But we need to be there in the whole -- through the whole lifetime of the design and assembly process as well. This as well is something where we are well ahead of competition and making it quite difficult for smaller companies to come in and start competing on a global basis because this takes time to build up. If we move to the next one, we can see what has this resulted in over the years. As you see here, I mean, there's been a phenomenal growth. Here, I just shows the value creation since 2009, Latour has owned Nord-Lock longer than that. But you see an average growth here of around 13% organically and via acquisitions and then also including currency effects. If we look at where we are right now, we're in a good period right now. If I exclude currency effects and M&A effects, we grew by just over 10% last year. So far this year, 12.6%. This is, of course, the result of everything we are doing around the world and not becoming complacent as a leader and continue to have high ambitions. Conversion, I mean, that's probably the main one. As I said, identifying the right applications driving growth globally and also this world-class service that we try to provide engineering, but also availability, quality, we offer lifetime warranty on all our products, among others. There's a lot of things behind this fantastic financial development that is very sustainable as well over time. With that, Katarina, I think we're down to the last slide here. When safety really matters, that's when we want customers to work with Nord-Lock. Here you see a picture of Oresundsbron. Our solutions keep the cables in place. I hope you can feel quite safe next time you pass the Oresundsbron. With that, that's all I had and open for questions, I'll leave it to Johan.

Yes. Thank you, Daniel. Excellent overview flying over the Nord-Lock Group, fantastic. We open up for the Q&A session. It's Mikael, myself and Daniel will try and answer the questions you have on Nord-Lock. No questions?

The next question comes from Linus Sigurdson from DNB Carnegie.

Thank you, Daniel, for being on this morning. First off, a question on APAC, and I assume China is obviously a big market opportunity for you. But what do you see as the main challenges to grow in that?

We see this regionalization very clearly and China has been driving the Make in China 2025, that started that a long time ago. There is a strong push in China for having it domestically produced. We are moving in that direction as well. We have good presence in China today. If we look on the mechanical tensioning side, we're doing that locally now in China to support the growth. If we look on the washer side, we are supplying that out of Europe still. We've got enormous advantages of scale, and it's massive investments to duplicate that. But today, we see this clearly, and we're trying to navigate this actively in the group.

Yes. No, but it's impressive. I think Nord-Lock, as you alluded to, Daniel, has been present in China during a very long time, and we've been taking part of the growth in China over a long time, and we have many great examples of customers and infrastructure projects in China where we have provided our solutions. I think we're well positioned to continue the growth also the coming years in China with Nord-Lock. We have very good contacts, very good local team. We have a very strong presence in China.

APAC is a region, but if we split it up, we develop as well in China as we do in the other part of APAC. So...

Yes.

I don't see a situation where we're now losing China due to the regionalization and tariffs and so forth. We're on track.

And then if you could talk a bit about this opportunity that you see in specialty bolting and how this area can command the same kind of margins that you have in sort of the legacy washer business?

That's a good question because specialty bolting, it's an area where it's typically bolts and nuts manufactured to customer specs where you have a lot of certifications around it. It could be for different energy applications, could be like nuclear, could be defense certifications, et cetera. Typically, what we supply, it's a machine product that is all not that complicated, but it's fully traceable down to an individual level. It's been -- full manufacturing process is documented. There's normally a lot of coatings on it, a lot of nondestructive testing, so they're often ultrasonically tested, so you don't have cracks in them and often in quite unique materials to withstand corrosive materials, et cetera, and so forth. The paperwork and that aspect often has a higher value and cost than the product in itself. It's quite difficult for a local machine shop to replicate this because they don't have that infrastructure in place. This is a large market. It's -- we estimate it's between SEK 10 billion and SEK 30 billion if we look at this from a global space. So it's quite an attractive area for us to enter as a group.

A very interesting new growth segment for Nord-Lock in the coming years. I agree with Daniel.

And then could you explain a bit more how you work strategically with Vusion? I mean we've seen you buying some distribution businesses in the past. And I assume this is something we could see more of going forward.

Yes, we've been -- typically, Nord-Lock has been buying the distribution companies in a specific country, and that's been a very successful way to grow the group. When we look at distribution today, they are our main channel to market for the washers. We try to stay very loyal to our distributors. More than 90% of all products -- all the washers we supply go via distribution. The way we work is we try to create the market in every country, working with OEMs and end users. But these are C items supplied in high volume, often going together with other C item components. We have this great synergy between Nord-Lock as the engineering partner and the product owner and then the distributor that makes sure that they can get the right quantity at the right time when they need it. This is an ecosystem that is serving us extremely well on the Nord-Lock side. But as I explained before, we've got the different dynamics on the more engineered part of the group. Did that answer your question?

Yes. Yes, that's helpful. And then I had a final question more broadly on M&A and the opportunity there and what your pipeline looks like currently?

We have a pipeline. I think naturally, I cannot go into more details for that. But of course, we have both dimension of growth that are important to us. Always foremost is organic growth. I mean we should grow organically above 10% every year. That is very important for us. Then we can absolutely grow via acquisitions as well. We want to do both.

I think we can add, Daniel, that we look for acquisition opportunities in all of the product segments, which Daniel alluded to. But especially, I would say there is quite interesting acquisitions opportunities in this new energy bolting segment also going forward, right.

That's correct, Johan.

Let's see if we have somebody else who would like to ask some questions.

The next question comes from Derek Laliberte from ABG Sundal Collier.

Great. I wanted to ask on your fantastic high-quality products here and looking over time, their pricing power has remained intact and whether customers are still accepting premium pricing in the safety critical applications.

Good interesting question, Derek, and I'm sure Daniel can answer it.

It's a difficult question to answer, of course, there is price competition, and there are competing products on the market. We then actively work how do we defend our position. I alluded to some of the aspects that are making us great. I mean it is the absolute service levels we have and the proximity to customers, being able to solve their problems. I think moving forward, also being able to support our customers digitally in a superior way. It is important. We're also working quite hard to make sure that we are perceived as a leader as well. The brand is very important for us here. When you look at safety critical applications and safety product critical there is a reluctance to take risk. This is benefiting us quite well when -- if it fails, it could result in massive asset damages with large costs, personal damage, environmental damage, et cetera. The willingness in a lot of cases is, okay, it's not worth it. We want with Nord-Lock. We know it works, it's proven, et cetera. I think it's a large cocktail of activities that positions us where we are. Yes, anything to add from Mikael or Johan?

Mikael, would like to add.

Yes. I think in that assessment, I think it's also important to add that the Nord-Lock product in the applications that they go into is a very, very small part of the total cost of material for the applications, which means back to the comment that Daniel had to take risk on that, is that where you want to save the extra cent. It's a typically very good position also to be a very small part of the total solution, but very safety critical, which helps in maintaining and arguing for that price position over time.

I think Daniel's example with the Oresund Bridge is a pretty good example, right, massive investment to build that bridge, but quite important that those bolts for the cables hold up, right, but still a fairly comparatively small part of the whole investment of the bridge. I think it's just important to underline, yes, we sell the best product, but we also sell knowledge in this area. The engineers building the bridge, they want a knowledge partner that are really experts on secure bolting. I think that's important as well to remember. It's a knowledge business as well. Right, Daniel.

Absolutely. I think we can -- so coming back to the margin question, I think if we look on the last 2 years, I mean, we are able to increase margins actually. I think when we see margin development, it will be more mix effect, our portfolio rather than margin dilution. That I don't see, at least not in the next few coming years. We will be able to maintain that.

Yes. Got it. It's very interesting points there. I really appreciate it. And finally, I was wondering if you could give also some flavor on anything to say about how much of Nord-Lock's demand, you would say is structural versus sort of cycle driven, particularly in the infrastructure, energy and I suppose, industrial applications.

Daniel?

Yes. I think most of our applications actually are exposed to the business cycle and follow the demand like any other industrial product. The big difference, if you would compare, I come from SKF, for example, and if you look on the growth we have compared to SKF, I mean, it's a lot higher all the time and there's a lot smoother. It's because we have this constant inflow of new customers all the time. We're able to convert customers to the Nord-Lock Solutions. The business cycle doesn't really matter. It should never be an excuse for us for not doing well. But of course, it will maybe be a difference, do we grow by 11% or 14%. That is the business cycle. That is -- we are affected by the business cycle in every industry and follow that. But you don't really see it. I don't think you will see it if we do a good job.

Having said that, Daniel, as we said in the beginning of your presentation, we are in quite many industrial segments. One is energy, for instance, and energy has its cycle, depending on oil price and other things. Infrastructure has its cycle. These cycles are not necessarily always in tune and are in the same. They also even out throughout the year. You can say we limit our cycle exposure in that sense that we are in different segments, if you understand.

Absolutely. And also the regional exposure, I mean...

Thank you, Derek. And then just to check if there's any other questions. No and no written ones, Mikael?

No written questions recorded, no?

Great. Thank you so much, Daniel, for the presentation of Nord-Lock Group, and thank you all for listening into both the presentation of Latour's Q2 report and a deep dive into Nord-Lock. We look forward to speak to you again when we release our Q3 reports later this autumn. That concludes the whole session. We would like to -- from Mikael and Daniel and myself, thank you very much for listening in. Thank you.