Value-based ownership- and leadership

SEB NextGen Seminar, London

January 28, 2017

Johan H. Andresen

jha@ferd.no

@FerdOwner

Slides can be used with aknowledgement of source

Agenda – building sustainability on values (hypothesis)

• From Andresens to Ferd

• From businesses, to business areas, to strategies

• From «Hiding», to «Building Credibility (trying to)

Johan H. Andresen

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Johan H. Andresen

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The oldest of four

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From Andresen to Ferd

• 1804 – Andresen comes to Norway

• 1849 – 1st industrial generation aquires J.L.Tiedemanns Tobaksfabrik (JLT)

• 1925/28 – Joh. H. Andresen with 3 co-investors refinance the

Andresens Bank

• 1955 – 4th . Generation (my father) takes over

• 1957 – Elopak start-up

• 1978 – Swix aquired

• 1985 – Salmon farming start-up

• 1987 – Aquires100 % of Elopak

• 1996 – TiTech start-up

• 1998 – 5. generation takes over (that’s me)– JLT is sold

• 2001 – Ferd is launched

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The Owner’s responsibility

• Self-insight & horizon

– How and what do I contribute as an owner, and therefore, how longshould I be an owner?

• Risk & Allocation

– What kind of risk do I want to take, and how much?

• Recruitment & Succession

– Into the ownership and onto the Board?

• «The Brand»

– What do I want to accomplish with my company?

– Impact/legacy/sustainability/other ?

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Johan H. Andresen

Conservative

Emotional

values

Instrumental

values

VISION

«Maintain a steady ship» so that the next

generation may take over something that is

worth more

POSITION

A Financial Investment Company with a

long term horizonCapital

?

Administration

Intuitive

Honest

Worried

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MISSION

Manage the tobacco fortune in the best

possible way

VisjonConclusion on Interview Process (1999)

Vision and Values

VISION

We shall create enduring value and

leave clear footprints

Instrumental values:

• Capital

• Competance

• Networks

Emotional values:

• Credibility

• Spirit of

adventure

• Team play

• Long term

horizon

02.02.2017

Johan H. Andresen

Visjonen – ord for ord

02.02.2017

NAKSO MAOS

Vi - Som har ansettelse eller verv i Ferd. Styre og ledelse i operative virksomheter som

er kontrollert av Ferd (50%+) må også forstå visjonen for å forstå Ferds eierskap

Skal - I motsetning til "kan". Med andre ord, dette er noe vi er forpliktet til.

Skape -Som i å kreere, som ikke var der før, men som ved vårt arbeid blir til.

Varige - Som i bestandige, som ikke forgår, men overlever, i hvert fall hvis det står på oss.

Verdie r - Eiermiljøer, selskaper, bedrifter, organisasjoner, og endringer i systemer som bidrar

til menneskers og samfunnets utvikling.

Og - Som i at begge "delene" av visjonen er viktige, hører sammen, og forsterker

hverandre.

Sette - Som i å prege, gå foran, gjennom proakti v adferd.

Tydelige - Som i noe som synes, hvor effekten kan føles/måles og som vi er stolte av.

Spor - Virtuelle og fysiske avtrykk satt ved modige og tidlige initiativ.

De emosjonelle verdiene – slik vi ønsker å bli beskrevet

Troverdighet Eventyrlyst Lagspill Langsiktighet

- Vi holder våre løfter- Vi er forutsigbare i

våre verdivalg- Vi legger listen langt

høyere enn lover og konvensjoner

- Vi er proaktivt åpne for omverden

- Vi rekrutterer basert på verdier

- Vi søker å lære og utvikle selvinnsikt

- Vi er til å stole på- Våre bedrifter bidrar

med verdiskapning i samfunnet

- Vi har et etisk kompass basert på personlig og felles integritet

- Vi ser utover neste horisont

- Vi prøver, og feiler- Vi tar risiko, men er

bevisst den- Vi tar initiativ til nye

måter å skape verdi på

- Vi utvider bedriftens positive effekt i samfunnet

- Vi er generøse- Vi deler- Vi spiller hverandre

gode, og liker det- Vi tør si ifra til

hverandre- Vi er en pålitelig

partner- Vi samarbeider svært

godt med de tillitsvalgte

- Vi har insentivordninger som fremmer helheten

- «Vi kan være utålmodige veldiglenge»

- Vi har både evner og vilje til å stå igjennom sykler og andre utfordringer

- Vi støtter våre bedrifter når verdiskapningen ligger foran oss

- Vi er eier så lenge vi er den beste eier

02.02.2017

Johan H. Andresen

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1998

Tiedemanns

Real Estate Finance

Industry

Trade

Elopak Swix Sport TiMar Group TiTechAutosort

Agronova

Erling Sande TiMarSeafood

Food Packaging

Systems

Brand

ProductsSeafood

Environmental

Technology

Ferd is organised across 5 business areas

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Ferd

Capital Invest Hedge funds Real estate

Social

entrepre-

neurship

• Active owner in wholly-owned and partially owned

companies

• Invests in both privately held and listed companies

• Flexibility to invest across asset classes, including bonds

and hybrid capital

• Invests in Nordic

listed stocks

• Invests in hedge

funds globally

• Real estate

developer in

Norway

• Invests in social

entrepreneurship

with a main focus

on children

Privately

held

companies

Listed

companies

Special

Investments

10,3 6,3 3,9 1,9

Equity capital, NOKbn

Ferd Capital will comprise the key growth engine of the Ferd Group going forward and has an investment capacity

of more than NOK [6]bn

Turnover NOK 27 mrd, 26.000 employees (incl. 50%+ owned companies)

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Listed Private

Active owner

Financial owner

Deg

ree

of

acti

ve

ow

nersh

ip

Investments and degrees of active ownership

Fund

Ferd Capital invests in listed and privately-held companies; Often in

collaboration with other shareholders

Company ActivityRevenue,

NOKmYear of investment Ownership %

Listed

companies

Partially-owned

companies

Wholly-owned

companies

World’s largest offshore seismic

company8,473 2014 10%

Solar park developer 881 2016 10%

Leading Norwegian ferry company 899 2015 45%

Maintenance and modification

services to oil and gas companies7,150 2007/2012 50%

Well intervention technology to

oil and gas companies817 2010 58%

Leading Norwegian DYI retailer 2,700 2011 86%

Global leader in packaging for

milk and juice7,542 1957 100%

Global #1 in apparel and

equipment for Nordic skiing918 1978 100%

Hydraulic products to the

offshore industry797 2013 100%

Highly successful experience with active ownership

Collaboration with other shareholders is embedded in the Ferd Capital ownership philosphy

Ownership initiatives, methods (and companies involved)

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1849 First large aquisition (J.L. Tiedemanns)1957 Start-Up (Elopak)1978 Buy-Out (Swix)1993 Establishing project in waste management (TiTech)1994 Fundsinvestments (Venture)1998 Co-investment with fund (Venture)2001 Ferd Venture – separate business area2001 Sponsor of Energy Ventures - Fund I2002 Launches Ferd Private Equity (Herkules)2004 Sponsor of EV Fund II & III2007 Co-Investment with PE (Aibel)2008 Launches microfinance fund (NMI-Norwegian Microfinance Initiative)2009 Buys listed stake through Club Deal (Telecomputing)2010 Co-Investment with entrepreneurs (Interwell)2011 Public-to-Private (Telecomputing)2011 Buy-Out (Mestergruppen)2012 Co-investering med Swedish Listed PE company (Aibel)2014 Venture portfolio sold2015 Partnership with private investor (Fjordline)2016 Co-Investment vehicles & Pledgefunds established

Annual return of 11,3 % in the period 31.12.2005 til 31.12.2015

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Returns last 10 years

Value Adusted EquityReturn %

26,6

24,924,3

16,115,0

11,5

13,1

10,0

8%

3%

31%33%

0

2

4

6

8

10

12

14

16

18

20

22

24

26

28

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

201520142013

EK NOK bill

25%

2012

19,6

23%

2011

-4%

2010

17,0

16%

20092008

-26%

2007

15,3

17%

20062005

Questions we ask ourselves while doing DDs…

• Can we,

– operate in this country

– compete in this industry (or compete with a certain company)

– work with this partner

– source from this supply chain

……without a high risk of breach of our values and ethical norms ?

• «Culture eats strategy for breakfast»

– ….but perhaps we are not that hungry (for profit)

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The power of example works, but where and how?

• Elopak, WWF, and others

• Aibel and ABB

• Mestergruppen and Monsterbedriften

• Swix and Sintef

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Sustainability for a lifetime - yours!

- Join the circulation economy

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Photo: Ivar Østtun

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Social «results»: NMIs direct investments*

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92%

8%

Kjønnsfordeling

Kvinner

Menn

66%

34%

Kundelokalisering

Rural

Urban

2010 2011 2012 2013 2Q2014 Δ 2013-2Q2014

Δ 2012-2Q2014

CAGR 2010-2Q2014

# MFIer 4 7 8 8 10 25 % 25 % 30 %

# Låntagere 500 353 799 460 915 239 1 272 520 2 601 916 104 % 184 % 60 %

95%

5%

Låneformål

Inntektsgenerering

Forbruk

*USD 38 mill. -> 2.6. mill householdsUSD 41/11 investeringer -> 3.2mill households (q4 2014)

Social entrepreneurs

• New solutions to chronical problems in society

• Driven by creating social impact

• Using business methods to build a sustainable organisation

And some even change the system

Ferd Social Entrepreneurs

Portfolio(5):

MONSTERBEDRIFTENEntry level (5): Alumni (9):

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From entreprenership in schools to LTDYouth engage elderly – as a part time job

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Foto: Krister Sørbø

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Transparancy & Openness…..and why

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Transparancy

Openness

HIGH

HIGHLOW

«COMPLYING»

«MARKETING»«HIDING»

«BUILDINGCREDIBILITY»

Business reasons- Talent- Partners- Deals

Family reasons- Values- Next Gen- Legacy

Platforms & unique users

2013 2014 2015 2016 9months

Magazine- Paper- Digital

1397 16032414

16102847

16111032

Ferd.no 40.446 73.032

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Transparancy does not

help unless you guide

people to your platforms

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…fun aspects of openness

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…and new possibilites to make a difference

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«Results»: Attractiveness through reputation

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1998 vs. 2016

Kriterier og krav til nyansatte

Attraktivitet ansatte

Turnover# ansatte i Ferd på Godthaab

# ansatte i konsernet

Snittalder (Ferd HQ)

Antall samlivsbrudd siste 18 år

Antall barn født de siste 18 år

Uklare

Ingen ble head-huntet

Ingen

30

2 042

46,3 år

-

-

Tar kun de beste (for oss)

Head-hunting forekommer

Målrettet

45, hvorav 39 nye

27 000 (inkl. 50%-selskaper)

34 år

3

83

Deal-flow – eksternt generert

- intern generert

Sist i køen, i feil kø

Kun start-ups

Først, eller i konkurranse

Mange

Kapitalforvaltning Overlater til andre Initierer egne team & miljø

Eksterne verv Få eller ingen Etikkrådet, SEB, Gjensidige, PGS, Klaveness, Møller, NMI etc

Media coverage Negative Neutral, even positive !

Web site - unique visits monthly

Ferd Magazine – ekstern distrib.

150

50

6000+

1800+

Speaches

Twitter followers

Few

-

30 – 50 yearly

73.000

External board members 5 15+

What we look for when we recruit

• Attitudes & values-- SELF INSIGHT

– Personal values – empathy & intergrity

– Likes responsibilty and challenges

– Risk– understanding and willingess

– Understands own weaknesses and strengths

– Sense of humor and self-irony

– Enjoys seeing others succeed

• Abilities and Potential

– To teach onself and understand complex issues quickly

– Creative AND analytically critical

– To «see value»; make decisions, take action and create it

– – Full of initiative AND crafty

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