Ericsson Revival Still High on Do-List of Holder Industrivaerden

  • Stake in network-products maker down 18% in nine months
  • CEO Stjernholm: ‘What I need to do in the current situation’

Industrivaerden AB Chief Executive Officer Helena Stjernholm said she’s still immersed in the turnaround effort at Ericsson AB, the biggest loser this year in the portfolio of the Swedish investment company she leads.

While she’s actively searching for new investment opportunities among listed companies in the Nordic region, Stjernholm’s most pressing task is to look after current holdings, she said in a phone interview. Ericsson, where Stjernholm is a director, generated a negative 18 percent return in the first nine months of 2016, Industrivaerden said in an earnings report released Thursday.

“I’m still putting a lot of my time into Ericsson,” Stjernholm said, declining to discuss details. “That’s what I need to do in the current situation.”

Stjernholm in May delivered an unusually blunt critique of Ericsson, where Industrivaerden has been a shareholder for decades and she’s a relatively new member of the board. Since then, the struggling network maker has replaced its chief executive officer and said it will eliminate one-fifth of the workforce in Sweden, and reduce manufacturing in the last two local towns in its home country where the company still has production.

Industrivaerden has about a 15 percent voting stake in Ericsson, though only 2.6 percent of its capital. Stjernholm also sits on the boards of portfolio companies Volvo AB, the heavy truck maker, and engineering group Sandvik AB.

Ericsson has targeted cost cuts aimed at saving 9 billion kronor ($1.1 billion) a year by 2017. The company is searching for a new CEO to replace interim chief Jan Frykhammar, who has said he doesn’t want to lead the company on a permanent basis. Former CEO Hans Vestberg left in July.

Shares of Ericsson fell 1 percent to 60.50 kronor at 2:02 p.m. in Stockholm. Industrivaerden declined 0.6 percent to 172.40 kronor.

Industrivaerden, a Stockholm-listed holding company controlled by billionaire Fredrik Lundberg, counts eight listed companies in its portfolio. The company has 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 Volvo. Its combined equity holdings generated a 12 percent return for the first nine months of the year, bringing the total value to 87.8 billion kronor.

Investor AB, the publicly-traded holding company of the Wallenberg family, controls about 22 percent of the voting rights in Ericsson. Stjernholm said she sees no problem with the two sharing influence at Ericsson.

“We have other companies where we cooperate with other owners,” Stjernholm said. “What’s important for a company is that there are distinct owners that sit on the board and have an idea of how the development should be over three to five years.”

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