Inderes Group - International expansion 2.0 - SEB

Inderes' key CMD message was that based on the first years’ experience from the Swedish market, the go-to-market strategy is reshaped. The company has now three units and each unit has a focused strategy for international growth acceleration. Inderes leans to its unique and holistic offering made to serve listed companies' IR needs. To us, the upside in the case requires success in internationalisation, while the solid home market foundation limits the downside.

Winning the Swedish market by exploiting the Finnish foundation

In research business international expansion the Swedish market has been a testing ground now for few years and the growth has not materialised as expected, resulting Inderes to re-think the go-to-market strategy. Now, the company aims to gain more attention by breaking the content and community language barriers, meaning that the vast content production in Finnish and the community will be exploited in the Swedish market. The key question is that will the Swedish investor community find the Finnish market appealing enough. We believe being successful in this plan require investing in marketing and continuing relationship work with the media participants. We remind that the break-through in Finland was built partially by earning the place in media. Furthermore, we note that Inderes is exploiting opportunities in using AI in research. While we understand the works is still in early phase AI could enable more efficient ways to produce relevant content to increase engagement among the Swedish investors.

In terms of customer work, Inderes aims to win new clients with more focused approach and by building deeper relationships, which differentiates from the volume-based approach during the past strategy period. Noteworthy that the is plenty of potential and prospects in the Swedish market which remains roughly 4x vs. the Finnish market and only some 30% of the listed companies have equity research coverage whereas close to 90% of listed Finnish companies have equity research. We think that winning one-by-one together with growing public awareness is the right way to go. However, winning the critical mass and building the public awareness takes time. The positive side is that once the critical mass has been reached the growth can accelerate significantly, which was the case in the Finnish market during last decade. However, assessing how the company will succeed in this task in Sweden is extremely difficult and we do not expect the next 1-2 years to mark the break-through. Hence, the Swedish business continues to weigh the profitability of the Research.