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After losing more than 10% over 2022, Investor closed the Q2-23 with a record adjusted NAV of SEK 773bn or SEK 252 per share, corresponding to an increase of 9% over Q2 and 17% YTD. The Swedish HoldCo outperformed its benchmark SIXRX, posting a modest 2% increase qoq. Despite healthy performances across all business areas, Investor remains cautious on the macroeconomic environment, given the lingering inflation, high interest rates likely to weigh on consumer spending, and China’s weaker-than-expected recovery.
Investor
While the environment is not particularly favorable for holding companies with the tightening of central bank monetary policies, Investor did record a good first quarter marked by a 7% increase in its NAV and a total shareholder return in line with its benchmark, the SIXRX. Aside from EQT, both listed and unlisted companies experienced positive developments during the quarter.
Weak stock markets did not spare Investor in FY 2022, which saw its NAV decline by 10% yoy. Q4, however, turned the tide, with an 7% qoq increase in NAV per share from SEK 204 to SEK 220. The increase was driven by the listed asset portfolio up 12% in Q4 and the value of EQT’s investments up 2%, while Patricia Industries’ unlisted assets declined by 4%. To cut to the chase, the results were above our expectations.
Investor reported a somewhat encouraging set of Q3 results within a challenging environment with NAV up 3%. This slight increase was driven by all entities with a total return of 2% for the listed assets, 2% in EQT and 5% for Patricia Industries. While the group is beginning to see a glimmer of hope on the back of strong order books and exposure to resilient sectors i.e. medtech and pharmaceuticals, soaring inflation, interest rates and energy prices should continue to weigh on the portfolio.
Investor reported Q2 2022 results posting a 9% decline in NAV qoq, mainly driven by the poor performance of its listed assets (-8%) heavily impacted by the current supply chain disruptions, soaring inflation, rising interest rates and, more recently, the lockdowns in China. On the unlisted companies side, Patricia Industries registered a modest 2% increase on the back of revenue and EBITDA growth. Simply put, Q2 still suggests a downbeat outlook for Investor’s portfolio.
Investor posted a 10% decrease in NAV over Q1, mainly driven by the poor performance of its listed assets (-10%) impacted by the current Ukraine-Russia war. On the unlisted companies side, Patricia Industries also fell by 5% due to the normalization of Mölnlycke’s post-Covid activity. In view of the unfavorable economic and geopolitical environment, as well as the current supply chain disruptions, the HoldCo has a cautious outlook for 2022.
Investor posted a subdued Q3 in terms of NAV progression, as the timid rise of the listed portfolio (driven by the share price performances of SEB and Sobi) was partly offset by a 2% valuation decline of Patricia Industries. The unlisted portfolio was affected by contractions of multiples and lower earnings, particularly from Mölnlycke. Supply-chain woes and high raw material prices paint a less upbeat outlook for Investor’s portfolio, probably explaining the widening discount to NAV.
Investor posted a modest NAV increase over Q2, mainly driven by its listed portfolio thanks to a good start to the year for many of the high quality companies that compose it. Investment-wise, Q2 was rather quiet with the HoldCo opting to support its existing holdings, as management warns of the current level of valuations as a potential short- to medium-term risk.
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