One of the fund's best investments

Fondita European Micro Cap

2021-10-20

Bio-based building materials

 

steico bild

Steico is a German family-owned company that works with developing and manufacturing bio-based building materials and mainly insulation materials for houses and buildings. The products are made of wood and wood pulp and are 100% bio-based. The products are environmentally friendly and can also be reused in the future. The products are used in the construction industry, where the transition to more environmentally friendly product solutions is driven by both increased environmental awareness among consumers and legislation. Here, Europe is at the forefront from a global perspective. This trend will drive the company's growth for many years to come, as penetration in Europe today is only 6–7% when it comes to the use of bio-based insulation in houses and buildings. Steico is one of the few companies that focuses only on environmentally friendly products, the company is also the market leader in its niche in a very fragmented market.

Steico sales have grown by 8-10% p.a. the last 10 years. As of this year, we see a clear acceleration of growth driven by increased demand for this type of environmentally friendly products. We see that the company's profit will double this year compared to two years ago. The investment is one of the fund's best this year. Since we made the investment in the summer of 2018, the return has grown 5 times the invested capital (as of 15.10.2021).

steico log

Steico return (31.7.2018-21.10.2021) Source: Bloomberg.

The company continues to grow strongly. Steico is a well-run company and has in recent years expanded its capacity to meet the demand driven by new environmental goals in Europe 2030. Now we see that the company with its niche strategy continues to gain market share in the fragmented European market. The company's products, which are 100% recyclable, are at the forefront of both the products themselves and their production. The company's products help to make properties more energy efficient combined with the fact that these products are completely bio-based. The company and its products thus contribute to a better environment and lower CO2-emissions and thus help us to influence the climate and the environment in a positive long-term way. The strong trend where wood as a building material is becoming increasingly popular in new construction, this trend will also benefit companies such as Steico in the future.

Kenneth Blomqvist, portfolio manager 

Kenneth

 

 

 

 

 

 

 

 

The past performance of the investment fund does not provide any guarantee of future results. Depending on market conditions, the fund unit value may rise or fall. The future performance of the fund depends on the development of the markets and the Fund Manager’s success with the chosen investments. The fund is euro denominated. Thereby changes in currency values may affect the value of the investments. The fund is not covered by the Deposit Guarantee Fund nor the Investor’s Compensation Fund.The fund prospectus and KIID are available on our website www.fondita.com.

Our Funds