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INVEST IN VESTUM

UPDATED 2024/04/20 17:28:58

6.68

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-1.76 % -0.12
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FOCUSED INDUSTRIAL GROUP POSITIONED FOR STRUCTURAL GROWTH WITH HIGH PROFITABILITY.

Vestum as an investment

 

Our business environment and market trends

 

Vestum operates in Sweden, Norway, Denmark, and the United Kingdom, countries largely characterised by significantly outdated infrastructure due to decades of underinvestment. Meanwhile, we observe a growing investment debt as societal developments and new directives continue to create new needs. The greatest market need is seen within water infrastructure. The combination of neglected existing infrastructure, more extreme weather events, and a general population increase creates an urgent need for rapid solutions. Overall, there is a structurally increasing need and steadily growing demand for the solutions that Vestum provides. Furthermore, this demand is relatively insensitive to economic cycles, given the significant public investments in this area, and Vestum is well positioned to meet society's aggregated needs. 

Decentralised operations, centralised capital allocation

 

One of the keys to value creation for Vestum's shareholders lie in our business model and how we position the group for scalability and to meet market trends. The business model is built on a decentralised management structure for operational activities, where group companies are led by entrepreneurs with extensive experience in their core business, strategically supported by Vestum. At the same time, capital allocation within the group is based on centralised governance. This allows us, with clear alignment with the group's strategic focus and current market trends, to utilise our cash flows in the most effective manner to continue driving profitable, stable growth through both organic initiatives and new acquisitions.

A successful and growth-driving acquisition strategy

 

An important component of Vestum's strategy to grow our cash flows and increase profitability is the acquisition and development of profitable niche companies. The companies acquired by Vestum are leaders in their respective fields, driven by structural organic growth, and demonstrate stable earnings and cash flow generation over time. The criteria for acquisitions aim to ensure that new companies in the group contribute to growth, stability, and resilience. Additionally, Vestum's acquisitions are intended to strengthen and advance our position within existing segments by adding new expertise, geographic expansion, and enhancing existing offerings.

Business Development Strategy - Organic Growth

 

Business development is a central aspect of Vestum's operations, where group companies evolve together with their management teams. This work is based on a strong customer orientation combined with the collective expertise and resources within the group, focused on maintaining steady organic growth. Vestum supports portfolio companies by providing experience, expertise, processes, leadership, and financial resources to achieve or cement a leading position for all portfolio companies within their respective areas and contribute to increased value creation. Vestum's portfolio companies have, on a standalone basis, generated an accumulated compounded annual growth rate in sales of 10% and in EBITA of 11% during the period from 2009 to 2022.*

 

*Figures sourced from the report "Vestum - A Growth Journey Renewed" (21/03/2024), by ABG Sundal Collier.