Letter from the CEO
2020 was an unprecedented and challenging year. The pandemic has hit businesses very differently and the contrasts are striking. Some industries and companies have been hit hard, while others have seen increased activity and demand. Some companies have seen new opportunities open up, while others suffer great losses due to lockdowns and restrictions. Many people have been furloughed or lost their jobs, while others have never been busier. The shared feeling seems to be that the pandemic has created great uncertainty and unpredictability.
The Norwegian government have displayed great willingness to support vulnerable industries through the crisis. As a long term and responsible owner, we at Ferd feel a great responsibility to help protect jobs and to ensure that our businesses can withstand the crisis and stay competitive.
Our role as an active and long-term owner has never felt more meaningful than in 2020. We worked closely with our companies’ management teams and boards and saw how many went to great lengths to protect their employees and businesses.
I would like to say a big thank you to everyone who contributed to this collective effort and the shared team spirit. The people in our portfolio companies and at Ferd have dealt with all kinds of challenges in the best possible way, while also managing to seize the opportunities that emerged.
Despite a turbulent year, the investment activity at Ferd was high by historic standards, and in 2020 we invested significant amounts in real estate, individual companies and the financial markets in Norway and internationally. At the same time, we also spent a great deal of time supporting our portfolio companies. It is great to see that the underlying fundamentals in these companies are making good progress, and for the fourth year in a row, the combined operating profit of our companies was higher than in the previous year. Ferd’s return for 2020 was an impressive 18%, equivalent to over NOK 6 billion. This is the biggest annual return in the group’s history.
Covid 19 is only one of the many crises that we at Ferd will face. Although we have been both nervous and concerned, 2020 also confirmed that the system value that we have built up at Ferd over time made us resilient to this crisis and even stronger for the future. In the coming years we will continue to prioritise active and long-term ownership of sound companies with skilled boards, management and employees, and to combine this with diversification across industries and geographies. We will also continue explore future-oriented sectors such as seafood, tech, healthcare and renewable energy while using our position as one of the Nordic region’s largest active owners to contribute to the development of more sustainable business models.
Financial, social and environmental sustainability have been on the agenda at Ferd for a long time and are becoming ever more important factors in our investment decisions and ownership agendas. Our assessment of the impact that companies have on the climate is now an integral part of all our investment decisions in the same way as our analysis of their financial results and cash flow, and we evaluate businesses’ conduct, engagement, impact and culture in relation to social and environmental considerations. At the same time, we are open to make long-term investments in companies that are less sustainable today with the aim to lift that to our expectation and in that way contribute to the achievement of climate goals and increased sustainability. We will continue to challenge ourselves, the companies we own and our partners in the years ahead.
We are prepared for many different outcomes in 2021, and with a solid performance last year, we enter 2021 in a strong position and with significant investment capacity. Whichever way the wind blows, we are well prepared to seize any good opportunities that emerge and to deal with any challenges that will arise.
At Ferd we are always looking for high-quality companies, real estate, funds and people capable of contributing to our vision of creating enduring value and leaving clear footprints.
Morten Borge
CEO
