Lundbergs as an investment company
By being a long-term, active owner, Lundbergs manages and develops a number of portfolio companies. Clear leadership, accountability and sound, sustainable business acumen are important values that characterize Lundbergs’ activities. Responsible, long-term ownership is a key prerequisite for enabling the companies to develop and invest in sustainable and profitable operations.
Objective
Lundbergs’ objective is to generate a return for shareholders that comfortably meets the market’s return requirement. This is achieved through growth in divi- dends and net asset value.
Business concept
Lundbergs is an investment company that manages and develops a number of portfolio companies based on long-term, active ownership.
Strategy
A favorable return and value growth are to be achieved by Lundbergs
being an active owner in its portfolio companies
investing in accordance with clear criteria
having a strong financial position that creates freedom of action.
Long-term, active ownership
Lundbergs invests to develop companies and values over a long period of time. Through long-term, stable ownership, the portfolio companies and their respective management teams are provided with the opportunity to achieve strengthened market positions, increased competitiveness and sustainable value creation. In this way, Lundbergs also has the opportunity to promote sustainable development and value creation outside the borders of its own company. Lundbergs’ ownership takes its starting point in a sound understanding of its portfolio companies and the conditions under which they operate. The boards of directors of the portfolio companies play an important role in their companies’ development and take decisions on overall strategies. Lundbergs’ active ownership is effected through genuine and committed work on the companies’ boards. A board of directors that possesses broad competence has greater potential to see the big picture and, at the same time, identify material risks and opportunities. Being engaged in the nomination committees’ work to appoint the companies’ boards of directors is thus one of Lundbergs’ priority areas for promoting sustainable value creation. Lundbergs places particular emphasis on the selection of the chair of the board in the respective companies. Ownership is also characterized by a strong belief in the management’s importance to the success of the companies and in competent leaders taking and being given responsibility. Decentralization is crucial for the companies’ successful development.
Investment criteria
Investments focus on wholly owned businesses and in publicly traded Swedish companies that have solid market positions, strong and stable cash flows and their own products and brands. Lundbergs has sound knowledge of the companies and industries in which it invests. This knowledge, in combination with the organization’s collective experience and in-depth analysis, constitutes the foundation for investment decisions.
Financial freedom of action and preparedness
Lundbergs places a high priority on work to ensure it has the financial capacity to leverage opportunities and address challenges. The financial risk is minimized by combining low indebtedness with good access to funds. Lundbergs Fastigheter’s properties are leveraged to a maximum of 50% of the market value; listed shareholdings must be unleveraged. In addition to bank loans, operations are financed through corporate bonds and commercial papers.
Favorable and even growth in dividends and net asset value
Lundbergs’ mission is to generate a healthy absolute return for its shareholders. This is achieved through growth in dividends and net asset value. Over the past five years, net asset value per share, excluding dividends and after deferred tax, has grown by an average of 10.7% annually. Annual dividend growth over the same period has been 6.3%. During 2024, net asset value per share after deferred tax decreased by 1.9%. The total annual return on the share has averaged 4.7% per year over the past five years and 12.4% over the past ten years. The total annual return over the past 20-year period has averaged 11.8%. Management expenses in relation to the market value of holdings during 2024 amounted to 0.06% (0.08).
Cash flows reinvested in operations
One of the fundamental criteria for a Lundbergs investment is to be an owner in companies with strong cash flows. During 2024, Lundbergs received a total of SEK 4,488 m. in dividends from portfolio companies and funds from real estate operations, as well as sales of securities and properties. SEK 2,282 m. was invested in shares and SEK 580 m. in properties.
Organization
Lundbergs’ investment activities are performed in a small organization with many years of collective experience and solid expertise. The organization consists of some ten employees, including the personnel of the subsidiary L E Lundberg Kapitalförvaltning AB. Organizationally, the wholly owned real estate company is separated from the Parent Company and is assigned the same status as the Group’s other portfolio companies.