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TEN YEARS AS CEO
“Johan’s time as CEO has been special, as there have been zero
interest rates almost all the time, at times even negative interest rates,”
says Rune Andersson. “I think those interest rate levels have been
downright painful and are the basis for most of the bubbles we have
now, mainly in real estate and tech companies. I feel a great sense of
relief that we’re back in a better interest rate environment, which is still
low for me as I’ve been in business for over 50 years.”
MELLBY MODEL STANDS FIRM
The world has experienced several major world events in recent years,
most notably the 2020 pandemic but also continued unrest, with wars,
conflicts and geopolitical tensions.
“The pandemic years were undoubtedly the toughest period,” says
Johan Andersson. “We’re proud of the way we handled it. Sure, we did
some refinancing and had discussions with banks, but we managed
the situation well and then the market started to recover. It was also
challenging during Russia’s full-scale invasion of Ukraine when we
closed a couple of subsidiaries in Russia, but that was a simpler and
more natural decision.”
For a period, the situation with inflation has also been challenging.
The Group has focused on compensating for higher input, transport
and energy prices.
“An internal mantra that Dad has always worked by is ‘set the
right price’, which has been more important than ever,” says Johan
Andersson. “There’s a built-in culture at Mellby Gård that makes
everyone understand the importance of pricing.”
Mellby Gård’s investment philosophy – the Mellby model – has been
around for many years, but it has only recently been articulated and
described in more detail. It consists of three components: a long-
term approach, partnership and active ownership. In times of market
volatility, the Mellby model has proved more relevant than ever.
“Our definition of active ownership means that there are almost
always two people on company boards,” he says. “Most often we
take the role of chair. Many other owners often let someone from the
industry take the gavel. There’s a logic to this, but we believe that when
we take the chair ourselves, we’re obliged to really get to know the
companies and their operations in detail.”
This active ownership and proximity to the companies ensures that
all companies know how Mellby Gård thinks. This in turn means that
the companies focus on fundamentals central to Mellby Gård’s DNA,
such as the importance of pricing, organic growth, add-on acquisitions
at reasonable multiples and not presenting five- or ten-year plans, as
the mantra is always to beat the previous year.
“I have great respect for the fact that some companies want to make
a budget so they can plan better – some of them also have payroll
systems directly linked to the budget,” says Johan Andersson. “But
budgeting can be time-consuming. ‘While others are making a budget,
we’re out making sales’ is a saying we subscribe to, even if we didn’t
coin it ourselves.”
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STRONG SOCIAL COMMITMENT
Mellby Gård has always recognized the importance of giving back
to the community, but its commitment to various social issues has
grown over the past ten years.
“In particular, we’ve established a clearer framework for setting
aside a portion of the profits each year,” says Johan Andersson.
“We’ve also formalized it in Mellby Gård AB and a foundation. We’ve
also said that we’re aiming for fewer and larger commitments. The
partnership with Karolinska Institutet is a good example, where
we’ve invested 35 million Swedish Kronor in research into cluster
headaches.”
Soccer is close to the hearts of both Johan Andersson and
Rune Andersson and for several years, Mellby Gård has supported
Trelleborgs FF soccer club.
“It was therefore very gratifying that the TFF women’s team were
promoted to the Swedish league,” says Johan Andersson. “We’ve now
also started to sponsor the Mjällby AIF soccer club in the county of
Blekinge, which means that in 2024 we will be involved in both the
women’s and men’s Swedish leagues. Mellby Gård isn’t a company
based in a big city, and we think it’s more fun to be associated with
clubs from smaller towns. The environment around Mjällby fits well
with our family, and my father grew up in a small village in Blekinge.”
He continues:
“Another interesting aspect is the public debate on profits in
welfare, linked to our ownership of AcadeMedia. At its core, it’s about
conviction. My father got involved in the ‘No to EMU’ movement in
Sweden, and as convinced as he is about that, I’m equally convinced
that we should have private schools that have to make a profit. This is
an issue I’ll be happy to pursue for the rest of my life. We’re a socially
engaged family and talked a lot about these kinds of issues at the
kitchen table. It feels natural for me to take part in this debate.”
TEN-YEAR PLAN IRRELEVANT
With the mantra of ‘beat the previous year’, neither Johan Andersson
nor Rune Andersson wants to predict where Mellby Gård will be in ten
years. They don’t work with plans in the traditional sense, even if they
are making investments for the long term.
“It becomes irrelevant, because our goal is to beat last year,” says
Johan Andersson and laughs. “Seriously, I think a ten-year plan could
go very wrong. Many companies say that in ten years, they’ll achieve a
certain level of net sales from certain geographies or sectors. I believe
it’s basically impossible to predict the future so far ahead. If we were
to do a ten-year plan, we would have to redo it after a year.”
But both Rune Andersson and Johan Andersson still hope that
Mellby Gård will remain a family business.
“As a family business, it’s interesting and crucial to note that in
ten years’ time, three of the members of the third generation of the
Andersson family will be over 20 years old and one of them almost
25. It will be exciting to see what plans they make in life, what skills
they develop and what they want to get involved in,” concludes Johan
Andersson.