CEO Interview #2: Johan Steene (Teqnion AB)
10 timeless questions for every CEO — plus 5 company-specific questions that matter most for long-term value creation
After completing my deep dive on Teqnion, I had the opportunity to follow up with a written CEO interview.
In case you missed the deep dive, check it out here:
The goal of this format is simple: ask the same set of timeless, investor-relevant questions across companies (questions 1-10), and complement them with a small number of company-specific questions that go directly to the core economic drivers of the business (questions 11-15).
The intention is to create comparable, long-form insights into how CEOs think about capital allocation, competition, growth constraints, and long-term value creation.
About the CEO
The answers below were provided by Johan Steene, Co-Founder and CEO of Teqnion AB.
Under his leadership, Teqnion has evolved into one of Sweden’s most disciplined micro-cap serial acquirers—built around a decentralized operating model, a steady cadence of founder-led acquisitions, and a clear focus on long-term per-share value creation through patient capital allocation.
I highly recommend listening to Johan Steene and his Co-CEO and CXO Daniel Zhang:
A note on the format
All answers are reproduced word for word, without edits, paraphrasing, or compression. The length, depth, and level of detail of each response are entirely the CEO’s choice. The goal is to preserve the original thinking, tone, and emphasis.
The Interview
1. When you generate incremental free cash flow, how do you decide between reinvestment, acquisitions, debt reduction, and returning capital to shareholders?
Cash is our raw material. We nourish the cash-generating businesses we already own, securing them to continue producing cash. With the cash we prefer to acquire more cash-generating companies with stable financial histories, light balance sheets and better cash flows than the group average. If we didn’t see great potential and the best return on capital in this scope, we would have to consider other options. But it is nowhere on my horizon at this stage. We are in the beginning.
2. What capital allocation decision turned out worse than expected, and what did it teach you about risk and valuation?
Once we paid a dividend… That was in my mind suboptimal capital allocation. 😊 I’m happy that it’s no longer promoted by shareholders. We’ve bought companies in the past that we would never buy today even though that reflects affordability and gaining experience rather than clear mistakes at the time. Our standards have improved as the group has evolved. We can afford to acquire better companies than before. We need to keep this learning machine operating as we grow. We know this, but have done it anyway, don’t buy turnarounds. It can look easy and fast but someone needs the dedication, skill set and time to do the actual work. That effort is often better spent partnering with companies that are already performing well.
3. Do you have explicit return thresholds for reinvestment or acquisitions (IRR, ROIC, payback), and how strictly are they enforced in practice?
Yes. We value acquisitions based on free cash flow and aim to recover our capital within approximately five years.
4. What’s a decision you’ve made that was unpopular at first but proved to be right?
Since I’ve been here for many years I’ve made many unpopular decisions. Some were wrong, like deciding to only report every half year instead of every quarter back when we were listed… Some were probably right, like fighting against dividends during many AGMs. It’s not a popular contest, we’re here to create value and any changes always trigger some friction. Growth also forces change. The reorganization we implemented last year was not universally popular. Together with improved reporting and follow-up procedures, some colleagues initially felt that control had increased. We are a highly decentralized group. Our companies are free to operate in their own way, but we do expect them to stay on the agreed strategic map. If they drift away, we step in and help bring things back. Creating value over time requires decisions that create friction in the moment. We’re constantly growing, which has put us in continually changing mode.
5. Can you describe a situation where you deliberately chose long-term value creation over short-term reported growth — even if it made the company look worse in the short term?
We only make a deal if it fits and fulfills the right acquisition criteria. We don’t make a deal because it is on the table. We have at times deliberately slowed acquisition activity to strengthen cash flow, balance sheets, and operational focus. The aim is to try to do the right thing for the long run. The numbers reported temporarily might look weaker, but the underlying businesses improve. Our target is in the future and we’re locked in to achieve it and more.
6. What do you believe will matter most for your competitive advantage ten years from now — and what do you think investors overestimate today?
Keeping the passion and the drive amongst us. Secure a culture without prestige but promoting curiosity and constant learning. Scaling responsibly in order to identify mistakes and wrong turns early. Keeping it humble. Investors tends to be interested in the last quarters margins. 😉
7. What is the biggest threat posed by competitors that you think the market underappreciates?
I don’t see any real threats from competitors on the holding level. Of course, it is harder to find reasonably priced acquisitions in good times when more buyers, in my view, overpay in order to close a deal. But those trends reverse over time and we’ve always been able to find vendors/entrepreneurs that prefer us and the eternal home we offer.
8. What do you see as a competitive advantage you offer that others can’t?
My honest answer is us. Trust. We run it like we owned it. I believe the vendors see that we see them, understand them, that we are people they dare hand over the responsibility of their lives work to. They experience that we understand what they have had to endure in order to build a quality company. This is why we never win a case by paying the most. We offer them cash. But more importantly a permanent harbor for their company, a place where they can secure their legacy and someone that will take care of their coworkers.
9. What is the most significant bottleneck preventing faster growth — and what concrete actions are you taking to alleviate this constraint over time?
It differs over time but to keep things simple for now. More cash.
10. If you were to start this business again today, with everything you know now, what would you do differently?
I don’t have the space available here to write this answer... 😊 We’ve made endless mistakes along the way but hopefully learned as we moved forward. That’s probably why I still think this adventure is the best way to spend my days and why I still feel like we are in the beginning of the journey. This means I don’t have to start again today. I’m already there on the first day.
11. How do you evaluate organic growth opportunities when you acquire a company— what specific indicators convince you it’s a “grower” and not just a stable cash generator? After closing, what are the few operating metrics you watch to detect early whether the organic growth thesis is playing out?
We normally make sure we have answers to many questions… How stable has the earnings growth been historically? Will the market still be there in ten years? Who has been running the show and how? Are customers happy? Are there any low hanging fruit in terms of reaching new customers and markets? Value creation is the most important piece...
12. When you look at potential acquisitions today, what are the three biggest “must-haves” and what are the three fastest deal-killers that make you walk away immediately? How did that change over the last 1-2 years as you became much stricter with your acquisition criteria?
Must-haves: A team that can and wants to win, strong cash flow, light balance sheet, value creator in a narrow niche.
Deal-killers: Lack of trust, unhealthy culture, turnarounds, high CAPEX requirements, uncertainty, lack of knowledge from our side, margin compression, very high growth, customer churn, employment churn, bad reputation, young company, fad products, no true value creating, overearning, reliance on 1-2 persons… the list can be made long!
The criteria didn’t change much over the years, they were tweaked in the right direction.
13. Do you now have minimum profitability thresholds for acquisitions—specifically a minimum gross margin and a minimum EBITA margin? If yes, what are they, and is it a strict threshold or would you, under some circumstances, still buy a business that falls below those levels, ?
Yes. We’re looking for margins above the group average and EBT earnings roughly above 10MSEK. Exceptions might be considered when we see potential and capital risk is limited.
14. The 2025 acquisition cohort looks extremely compelling. You bought higher-quality businesses (around ~25 % EBITA margins) while paying record-low multiples. Was this a “one-off” window of opportunity, or should investors expect similar deal economics going forward? How was it possible to buy higher-quality companies at lower valuation multiples?
It was a hectic period 😊 However, Daniel is a sharp tool and a disciplined buyer, as long as we can provide him with cash he tends to find the right opportunities. The volume will vary, the principles will not. The nuggets are out there.
15. When you introduced more structure over the last 1–2 years, what was the trade-off? Where did you gain control or speed—and where did you lose something culturally? Can you share one concrete example of a change that worked well and one that you would implement differently today?
The new structure gives us better clarity for everyone when it comes to responsibility, better resource allocation, and defined individual goals for subsidiaries that are both grounded and actively followed up. I think we’ve mainly seen positive responses to the new organization and processes. Some friction has occurred but within what can be expected. I don’t think of it as a cultural change. We still aim high and support each other along the journey. We’ve taken necessary steps in professionalism to continue scaling and growing. We are still the same people and we all really value who we are.
15. Additional question: Do you have a personal long-term vision for Teqnion in terms of where you’d like the company to be—whether that’s a certain level of revenue, profitability, or market capitalization?
A market cap of SEK 1,000 billion. After that, it might be time for me to hand over the wheel. 😊