The business model describes the fundamental components and the processes in Industrivärden’s strategy
Distinguished portfolio companies
Industrivärden’s mission presupposes a long-term perspective and entails a natural concentration to large ownership stakes in a selection of portfolio companies with clear value potential.
Sizable ownership positions have been built up in the listed Swedish companies Volvo, Sandvik, Handelsbanken, Essity, SCA, Ericsson, Skanska and Alleima. Each of the portfolio companies comprises a number of interesting and developable businesses. Industrivärden thereby provides exposure to a large breadth of underlying business areas.
The portfolio companies are characterized by proven business models and strong market positions in their respective businesses, which creates conditions for favorable earnings and strong cash flows. They are also distinguished by a good capacity for innovation and development. On the whole these characteristics give the companies conditions to be able to further develop their businesses and pay dividends to their shareholders.
The portfolio companies’ shared characteristics increase their long-term value potential and reduce risk.
Sizable ownership stakes
Industrivärden has many years of experience in exercising ownership within the framework of the Swedish corporate governance model and has a strong, locally based network. Investments are therefore made in listed Swedish companies.
To ensure significant influence in the portfolio companies, with representation on their nominating committees and boards, the share of votes shall amount to at least 10%. To give Industrivärden’s shareholders a reasonable financial return from this ownership, normally an equity stake of at least 10% is strived for.
Good investment capacity and continuous investments
Industrivärden’s dividend policy aims to ensure that Industrivärden generates a positive cash flow, which builds investment capacity over time and ensures a strong financial position with the flexibility to support the portfolio companies when needed. Major emphasis is therefore put on good profitability and strong cash flows in the portfolio companies, which enables favorable dividends for Industrivärden.
To enhance the financial exchange from its active ownership, Industrivärden continuously makes investments in the portfolio companies. Investments are made when it has been judged that there is potential for long-term value creation.