Capital

Main Features

New investments in Norkart and TRY as part of an increased focus on the technology sector

Elopak was listed on the Oslo Stock Exchange after 64 years of Ferd’s ownership, positioning the company for future growth

Ferd Capital reports a return of 21% in 2021

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Market

Covid-19 continued to have a significant effect on society and economies globally throughout 2021, and the spread of new variants has prolonged the pandemic and delayed the return to social normality. The measures imposed by the authorities have included extensive restrictions from time to time on activity in certain sectors, but have also helped to maintain economic activity and support the purchasing power of both households and the corporate sector. However, many industries experienced major supply chain challenges, with high raw material prices and problems with delivery chains. Despite these difficulties, the broad-based S&P 500 index ended the year up by around 27%, while the NASDAQ, which is heavily weighted towards tech companies, ended the year up by around 21%. The Norwegian stock-market also performed very strongly with an increase of 23%, driven by rising energy and raw material prices.

In 2021, Ferd Capital continued it´s focuson investment opportunities that reflect Ferd’s ability to be flexible and take a long-term approach. In the private transaction market we  experienced a high level of competition for new investment opportunities, and we expect this to continue into 2022.

Portfolio companies

  • Aibel reported sound earnings for 2021, with a high level of activity and good progress on projects in all business areas. Through the course of 2021 the company further improved its already strong position in “green” business areas, and projects in the areas of offshore wind and electrification now account for more than 60% of its order book.
  • Brav took further steps to continue its transformation, with particular focus on growth in its own distribution channels, broader contact with end-users and the development of digital platforms and arenas. Market conditions over the course of 2021 saw good demand for sporting and outdoor goods, and Brav is well-positioned for further growth and development in 2022.
  • Broodstock Capital invested in 2021 in Calanus, a company which is commercialising an omega-3 product based on zooplankton harvested off the coast of northern Norway. In addition, Broodstock sold Therma Industri to Francks Kylindustri, realising a sizeable gain. The portfolio of companies owned by Broodstock Capital continued to show sizeable organic and inorganic growth, and the portfolio is focused on some of the most exciting trends in aquaculture: fish health, digitalisation, water recycling and healthy proteins.
  • Dr. Fürst Medisinsk Laboratorium was strongly affected by the pandemic throughout 2021, with a continuing extraordinarily high level of activity in relation to analysis of SARS-CoV-2 tests. Fürst analysed far more SARS-CoV-2 tests in 2021 than any other independent private lab in Norway, and also delivered the majority of the analyses of mutant strains that were the subject of increased focus over the course of the year. The lab focused in 2021 on maintaining its operations through quality control procedures to enable it to analyse as many tests as possible and to deliver on response times. In August 2021, Fürst announced the acquisition of Patogen, the leading supplier of preventative and diagnostic analyses for the fish farming sector. Fürst’s subsidiary WebMed carried out a successful full launch of its WebMed electronic patient journal in 2021, and reported strong performance throughout the year with a significant number of new medical practices joining its customer list. The company Helseapps, which is 55% owned by Fürst, enjoyed an enormous upturn in 2021, and has secured its place as the leading player for the administration of Covid testing and vaccination. The company has in parallel built a strong market position for its services in other market segments.
  • 2021 was a very eventful year for Elopak, with the company’s listing on the Oslo Stock Exchange in June and the signing of an acquisition agreement for Naturepak Beverage Packaging in October representing the most important milestones (transaction closed on March 29th, 2022). In financial terms, Elopak delivered a robust top line with around 3.5% growth in 2021, with underlying stable revenue in Europe, growth in aseptic packaging and a strong Q4 performance in the American market. In 2021 the company reported a satisfactory EBITDA margin (12.9%) despite higher raw material prices and increases in SG&A. Elopak has a strong capital structure, with gearing of 2.0 x Net debt/EBITDA as at Q4’21.
  • Fjord Line again experienced a challenging year in 2021 because of the Covid-19 pandemic. The autumn months saw a return to more normal conditions, with significantly higher passenger numbers than in autumn 2020. The outlook for 2022 is characterised by significant uncertainty over passenger numbers and gas prices.
  • Interwell delivered a very strong year in 2021. Despite the adverse effect of Covid-19 in certain markets, the company achieved sound overall revenue growth, with good profitability. All regions reported satisfactory results, and Norway in particular delivered strong growth in revenue. The company achieved commercial breakthroughs for a number of new products in 2021, and continues to focus on developing new solutions both for existing segments and for new markets that are involved in the shift towards more sustainable energy sources. The company’s growth outlook continues to be very strong.
  • Mestergruppen experienced continuing strong demand for building materials in 2021, particularly in the first half of the year. Over the course of the year global prices for timber increased markedly, which resulted in higher revenue despite modest growth in volumes. Saltdalshytta saw continuing good demand for holiday cabins. The strong market conditions combined with good cost control helped the company to achieve another year of historically strong results. Mestergruppen also used 2021 to adopt new strategic positions, and in July it completed its acquisition of Malorama, Norway’s leading wholesaler for paint and surface treatments.
  • Mnemonic saw a greater focus on information security over the course of 2021, driven by increased use of digital collaboration solutions and increasing awareness of critical security events. This led to continuing strong demand for the company’s products and services. Mnemonic continued its growth in 2021, and won a number of major contracts for operations monitoring both in Norway and Europe. The company is investing sizeable amounts in research and development, as well as investing in international growth, and this is causing short-term profitability to fall short of the underlying potential to some extent. Mnemonic experienced low employee turnover and was able to recruit numerous talented new employees.
  • Norkart achieved good organic growth in 2021 in its ARR base and other types of revenue streams. The strongest area of growth was transaction-based revenue from sales of data to the construction/real estate market. Norkart also confirmed its continued role as a leading player in its areas of activity, and as an important strategic and specialist partner for organisations including the Norwegian Mapping Authority. Ferd became the sole owner of Norkart in April 2021, and this was followed by a comprehensive 100-day program, the establishment of a share incentive program for employees and the appointment of a new CEO. The process of digitalising the public sector and the ecosystem encompassing digital public sector/private sector interaction continues to offer exciting growth opportunities for Norkart, and there are signs of further consolidation in this ecosystem.
  • Servi experienced fluctuating levels of activity over the course of 2021 as a result of the  Covid-19 pandemic. A climate of uncertainty and delays caused customers to hold back from awarding new orders and making decisions on projects. As in 2020, service jobs were particularly challenging to access in 2021 with maintenance work being deferred. The negative market trend bottomed out towards the end of 2021, with some improvement in order intake in December 2021, which has continued into 2022. Over the course of 2021 Servi focused on developing its position in new verticals such as aquaculture and wind power. Servi completed the sale of a facility at Rissa in December 2021.
  • Simployer continued to deliver growth and a good level of profitability in 2021. The company increased its investment in product development significantly, and opened an office in Oslo to increase the pace of recruitment. The company also appointed a new CEO at the end of 2021. Simployer announced a further acquisition in September 2021 of the Swedish company EdgeHR. The market for HR technology and expertise is growing strongly, and the extensive changes seen in the labour market as a result of the pandemic are having a positive effect on long-term growth in demand for Simployer’s services.
  • TRY delivered a strong year in 2021, with both revenue growth and margin ahead of expectations at the time of acquisition. Ferd purchased a majority interest in TRY in October 2021, and has entered into a partnership with the employee shareholders who own around 40% of the business. In connection with the acquisition, the ownership structure of the TRY group was restructured, with most subsidiaries now wholly owned by TRY and the ownership interests gathered together in TRY AS. In December 2021 TRY AS increased its ownership of TRY Pearl to 100%, and also increased its ownership interest in Netlife Bergen to 51%. TRY is well-positioned for further growth at the intersection of creativity, strategy and technology.

Transactions

2021 was an active year for Ferd Capital. We increased Ferd Capital’s stake in a number of listed companies and completed the acquisitions of Norkart and TRY. In addition, Elopak was listed on the Oslo Stock Exchange after 64 years as a company wholly-owned by Ferd.

Organisation

Ferd Capital invests through three investment mandates: Private companies, Listed companies and Special Investments. At the end of the year, the Ferd Capital business area consisted of 16 employees who have a broad range of experience from both Ferd and other companies.

Future prospects

Ferd Capital has a portfolio of companies in a range of sectors that we believe are well-positioned to create value in 2022 and beyond. Ferd also has sizeable unused investment capacity, and it will emphasise working proactively on new investment opportunities. Our three investment mandates give us significant flexibility in terms of the types of investment we can make, and we will in 2022 continue to focus on opportunities where we can make use of Ferd’s competitive advantages, both in the form of add-on investments to existing portfolio companies and potential new portfolio companies.