Ericsson's Second-Biggest Shareholder Finds Performance Lacking

  • Industrivaerden CEO says problems are taking up more time
  • Rare critique from investor follows recent stock decline

Ericsson AB’s second-biggest shareholder delivered an unusually blunt critique of the Swedish telephone-equipment maker, saying problems at the company are taking up more of its time.

"Ericsson hasn’t performed as a share and neither has the company," said Helena Stjernholm, chief executive officer of Industrivaerden AB, which controls about a fifth of the voting rights in the Stockholm-based wireless network maker.

Helena Stjernholm

Source: Industrivaerden AB

The remarks signal growing impatience with the turnaround plan of Ericsson CEO Hans Vestberg, who has been contending with growing competition in a mature marketplace with little to no growth. Stjernholm declined to comment on Vestberg’s leadership, saying decisions about his tenure are for the board, not for her to make now.

Industrivaerden, an Ericsson shareholder for decades, has rarely gone public with criticism. Ericsson stock has declined about 20 percent since Stjernholm left private-equity firm IK Investment Partners to become CEO of Industrivaerden in September.

“We will spend a lot of energy and time to fix the problems because for us it is an important holding,” Stjernholm said Monday in an interview at Industrivaerden’s annual shareholder meeting. “What is fact is that the stock has underperformed and the company hasn’t been able to grow its revenue or profits.”

Representatives for Ericsson declined to comment on Stjernholm’s remarks. Ericsson shares were up 0.3 percent to 63.60 kronor at 11:10 a.m. in the Swedish capital on Tuesday.

Investor AB, the publicly-traded holding company of the Wallenberg family, controls about 22 percent of the voting rights in Ericsson. Like Industrivaerden and its associated companies, Investor controls the majority of its votes in Ericsson through vote-heavy A shares.

Ericsson is creating business units targeting media and enterprise customers as part of Vestberg’s plan to seek out new revenue and compete against rivals Huawei Technologies Co. and Nokia Oyj. Stjernholm, who joined Ericsson’s board last month, said the company has seen a large degree of transformation in its market.

Industrivaerden, a Stockholm-listed holding company controlled by billionaire Fredrik Lundberg, holds 10 percent of the votes of lender Svenska Handelsbanken AB, 30 percent of forest and hygiene-products maker Svenska Cellulosa AB, and 21 percent of truckmaker Volvo AB. Lundberg became chairman of Industrivaerden last year.

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