Objectives and Outcomes
We are committed to generating an attractive long-term total return. Our long-term return requirement is the risk free interest rate plus an equity risk premium, in total 8-9 percent annually. Our operating priorities are to grow our net asset value, operate efficiently and pay a steadily rising dividend.
Grow our net asset value
To achieve attractive net asset value growth, we own high-quality companies and are an engaged owner, supporting our companies to achieve profitable growth. We strive to allocate our capital wisely.
Progress in 2018:
Our reported net asset value amounted to SEK 327.5bn at year-end 2018 (336.3), a change, with dividend added back, of 0 percent (15).
The SIXRX total return index was –4 percent (9).
The average annualized return on reported net asset value including dividends added back has been 14 percent over the past ten years and 9 percent over the past 20 years.
We maintain cost discipline to remain efficient and in order to maximize our operating cash flow. Our target, set in 2015, is that annual management costs should not exceed SEK 500m adjusted for wage inflation and currency effects.
Progress in 2018:
Management costs amounted to SEK 478m (455), corresponding to approximately 0.15 percent of our reported net asset value (0.14).
Pay a steadily rising dividend
Our dividend policy is to distribute a large percentage of the dividends received from the listed companies, as well as to make a distribution from other net assets corresponding to a yield in line with the equity market. The goal is to pay a steadily rising dividend.
Progress in 2018:
The Annual General Meeting decided on a SEK 13.00 dividend per share (12.00), to be paid in two installments, SEK 9.00 per share in May, 2019, and SEK 4.00 per share in November, 2019. Based on this decision, on average our dividend has increased by 10 percent annually over the past five years and 13 percent over the past ten years.
Here we have summarized the outcome of our sustainability work and key priorities. Read more about our sustainability approach and outcome
Acting responsibly and ethically is crucial for our companies to maintain high levels of credibility.
100% of our companies have a Code of Conduct.
Investor does not tolerate bribery or corruption under any circumstances.
100% of our companies have an Anti-corruption palicy and training in place.
Our companies are expected to comply with all applicable laws, regulations, adhere to the UN Global Compact, commit to the UN SDGs, and support the ILO convetions and the OECD guidelines for Multinational companies.
83% of our companies have signed the UN Global Compact
100% of our companies have a whistleblowing system in place to report violations.
In 2018, we encouraged our companies to make the whistleblowing procedures available for external stakeholders.
Our companies are expected to encourage and promote diversity in their organizations.
The share of women in the companies’ boards of directors amounts to 25 (25) percent. In the listed portfolio, the share is 35 percent. In the total portfolio, the average age is 53 (57) and there are 16 nationalities represented (18).
The share of women in the companies’ management groups amounts to 24 percent (25). The average age is 51 (51) and there are 22 nationalities represented (23).
Our companies are expected to pursue sustainable products, energy efficient processes, and to reduce their CO2 emissions over time. Our share of the companies’ CO2 emissions: 449,170 tonnes (427,010).
1) The figures are based on direct and indirect emissions in scope 1 and 2, for the two latest available years as reported by our companies. Sobi’s carbon emissions only include its Swedish operations.
Investor’s indirect economic impact contributes to, for example, job creation and technological innovation in our companies.
In 2018, our total paid dividend amounted to SEK 9.2bn, whereof approx. SEK 2.1bn was distributed to the Wallenberg Foundations, whose purpose is to grant funding to scientific research in Sweden. Our corporate citizenship activities with various partners such as Young Enterprises and Business Challenge and support to universities amounted to SEK 10m.
With nearly 500,000 coworkers world-wide, it is crucial that our companies work with competence development, employee engagement and ensure a safe and healthy work environment.
96% of our companies measure employee satisfaction on a regular basis.
Investment in innovation is a key component in the development of sustainable and efficient products and services.
1) Patricia Industries’ data excludes Aleris, Grand Group, Sarnova, Vectura and Three Scandinavia, due to limited R&D.