EN 
SE 
The first month ended with a return of 0.7%, after fees, following a 2023 that returned 23% and a 2022 that returned ~8% after fees. At the time of writing, the fund is up two percent in February.
Among the holdings that contributed the most to the return in January were Dustin and Insight Enterprises (which also had a strong December). However, we lost in EG7 and Ericsson. We have since increased in Ericsson, but keep EG7.
Among the companies that reported, the following were noted:
Dustin: The company still has the potential to pick up margins, and the quarter offered a mixed bag, with the larger client segment in particular turning all the way back to pre-2023 levels (Dustin has been plagued by too much supply and too little demand, while as they had to manage product and wage inflation internally). It bodes well for the future. But the segment for small companies, which is much more concentrated in Sweden, has still not turned around. Our investment is up to the entire 42% at the time of writing, since the new issue at the end of October 2023.
SKF reported declining volumes as we expected, as we are in an industrial recession. However, the company continues to take out costs structurally according to our forecasts. The company is undergoing a change process similar to the one Atlas Copco and ABB underwent, i.e. a more decentralized and automated manufacturing footprint, which is closer to the customer. The company is also running a digitization process that will increase market shares in service. All of this should result in higher margins. The fact is that SKF is the largest in its market but has far from the highest margins. Our assessment is that it depends on exactly what the manufacturing looks like, but also what the go to market and product strategy looks like. SKF generally has good margins in segments where the rate of product development is high. Cars today are going through a huge product development cycle, with the rise of electric cars. Cevian is an active owner in the company, together with FAM.
Ericsson: Ericsson's results in Q4 were as we expected. Demand has weight, but it is mainly the USA that lost approx. 50% of the volumes on an annual basis. Some things we took away from the report.
The cost savings go beyond plan and are actually very impressive. When the volumes come back, it will have a real effect on the profits.
Inventory levels at customers in the US have normalized. This suggests that demand there should begin to increase already next quarter, on an annual basis. If not then soon.
The second is that the giant order Ericsson won (over Nokia) for AT&T was not won primarily by price, but by more efficient delivery, supported by technology. This order will start to kick in during 2H 2024 and is so large that it covers the entire US market's loss of 50%, on an annual basis, for five years. The order is also significant for three other reasons.
The order shows that the American market is far from dead, on the contrary.
The order will force other operators on the American market to act, so as not to fall behind competitively.
The order confirms our thesis that Ericsson currently has the lead in 5G over Nokia. We have not counted on increased market shares for Ericsson.