Industrivarden Ab Class A · OMXSTO:INDU_A

Industrivarden Ab Class A — Q3 2006 Earnings Presentation

29 slides from Industrivarden Ab Class A's earnings presentation, Oct 31, 2006

  1. Slide 1: Interim Report, Q3, 2006

    Interim Report, Q3, 2006 Industrivärden, October 31, 2006 AN_Pres_KV306 Nr 1

  2. Slide 2: Industrivärden

    Industrivärden ”A long-term industrial developer of listed companies” AN_Pres_KV306 Nr 2

  3. Slide 3: Company in brief

    Company in brief  Established: 1944  Stock: 193 million shares, listed on SSEX  Market cap: Approx. USD 6.5 bn (SEK 45 bn)  Free float: Approx. 40% of shares  No. shareholders: 38,000  Average daily trading vol.: Approx. 130,000 shares  Coverage: Carnegie, Björn Enarson, +46 8 676 88 00 Enski

  4. Slide 4: Mission and goal

    Mission and goal Business mission Create shareholder value based on a professional investment operation and active ownership Our goal Generate high growth in net asset value over time  Industrivärden’s stock will deliver a high total return to shareholders AN_Pres_KV306 Nr 4

  5. Slide 5: Portfolio of quality companies, professional organization, high class methods

    Portfolio of quality Professional High class companies organization methods and models AN_Pres_KV306 Nr 5

  6. Slide 6: Investment focus

    Investment focus Nordic companies Public sector Startup phase Expansion Management Restructuring phase phase phase Venture capitalists Private equity investor in mature companies Industrivärden AN_Pres_KV306 Nr 6

  7. Slide 7: Investment criteria

    Investment criteria Portfolio Conditions Scope: Concentrated portfolio Sectors: Sector generalist Individual investments Ownership Possibility to be major or structure: largest owner Market value: Large and midcap companies Investment horizon: 3-8 years Type: Mainly listed Geography: Nordic companie

  8. Slide 8: Investment case – comparable advantages

    Investment case – comparable advantages  Proven track record – excess returns over a long period of time  Cost-efficient organization – less than 0.2% in management costs  High quality portfolio of blue-chip companies  Good financial resources and long-term perspective  First-rate model for exe

  9. Slide 9: Ownership structure

    Ownership structure capital, % votes, % AMF Pension 12 5 SCA Pension Foundations 11 16 Lundbergföretagen 11 14 Handelsbanken Pension Foundation 7 9 Handelsbanken Pension Fund 7 9 Jan Wallander & Tom Hedelius Foundation 6 8 Oktogonen 3 5 Skandia Liv 3 1 Handelsbanken 2 2 Other shareholders 38 31 Tota

  10. Slide 10: First ten months 2006 in summary

    First ten months 2006 in summary As per October 27  Net asset value: SEK 54.4 bn, an increase of SEK +6.1 bn or +13%  Total return for the stock: 29% for Class A-shares (last 12 months) 32% for Class C-shares 35% for return index  Stocks were purchased for SEK 3,142 M and sold for SEK 2,002 M. AN

  11. Slide 11: Favorable development of net asset value...

    Favorable development of net asset value... Kr/aktie SEK/share Mdkr M SEK 70 350 60 298 300 283 282 270 50 250 250 40 204 200 189 30 150 160 156 150 20 126 114 10 100 83 0 50 -10 0 t 06 06 oc t oc Aktieportföljen Portfolio Nettoskuld Net debt Substansvärde Net asset value Substansvärde per aktie AN_

  12. Slide 12: ... and long-term excess returns

    ... and long-term excess returns The average annual excess return was: +2%-points/year for last five years +4%-points/year for last ten years Total return index (Index) (c) SIX AB 2006 519 Industrivärden stock 400 300 200 Total Return Index (SIXRX) 100 96 1997 1998 1999 2000 2001 2002 2003 2004 2005

  13. Slide 13: Good long-term growth in value

    Good long-term growth in value Annual average total return Industrivärden A SIXRX Difference 12 months, 2006/05 +29% +35% -6 %pts 5 years 16% 14% +2 %pts 10 years 17% 13% +4 %pts 61 years 16% 14% +2 %pts As per October 27, 2006 AN_Pres_KV306 Nr 13

  14. Slide 14: Major transactions in the 21th Century

    Major transactions in the 21th Century INVESTMENTS ACTIVE OWNERSHIP SALES Identified value potential Value creation Realization of value  Subscription in Ericsson’s new issue For example:  Lundbeck - Capital structure  Investment in Munters - Strategy & operational matters  Besam - Board/managem

  15. Slide 15: Major transactions in the 21th Century

    Major transactions in the 21th Century SEK M Date Transaction Holding Sector Average Price Result price Apr. 02 Sale Lundbeck Pharmaceuticals - 2,400 1,500 Apr. 02 Sale Besam Door automation - 3,050 2,300 Nov/Dec 03 Sale Skandia Fin. services - 1,250 -1,510 Oct 05 IPO/Sale Indutrade Technical tradin

  16. Slide 16: High activity – good return

    High activity – good return Oct. 27, 2006 Dec. 31, 2001 Dec. 31, 1996 Equities portfolio (SEK bn) Handelsbanken 13 Ericsson 11 Ericsson 5 Sandvik 12 Handelsbanken 7 AGA 3 Ericsson 10 SCA 5 SCA 3 SCA 8 Sandvik 5 Handelsbanken 3 SSAB 6 Skanska 2 Skanska 1 Skanska 4 Indutrade 2 Besam 1 Indutrade 1 Besa

  17. Slide 17: Strong financial position

    31 -d 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 31 ec - -m 00 AN_Pres_KV306 a 30 r- 0 -j 1 30 un- Nr 17 -s 01 31 e p- -d 01 Net debt (SEK M) 31 ec - -m 01 a 30 r- 0 -j 2 30 un- -s 02 31 e p- -d 02 31 ec - -m 02 a 30 r- 0 -j 3 30 un- -s 03 31 e p- -d 03 31 ec- -m 03 30 ar- 0 -j 4 30 un- -s 04 31 e p- -d 04 30

  18. Slide 18: Equities portfolio as per Oct. 27, 2006

    Equities portfolio as per Oct. 27, 2006 Trading (3%) Other (3%) Construction (7%) Indu Engineering (34%) Sk Sandvik trad an Forestry and SSAB sk e consumer Munters a SCA Höganäs products (14%) Ericsson Telecom (16%) Handelsbanken Banking (22%) AN_Pres_KV306 Nr 18

  19. Slide 19: Equities portfolio as per Oct. 27, 2006

    Equities portfolio as per Oct. 27, 2006 Value % of % of % of votes distribution portfolio capital in in Stock No. shares SEK M SEK/share value company company Handelsbanken A 68,000,000 12,852 67 22 10,5 10,7 Sandvik 130,000,000 11,570 60 20 11.0 11.0 Ericsson A 372,000,000 10,273 53 17 2.3 13.4 Eri

  20. Slide 20: A transparent portfolio of leading companies

    A transparent portfolio of leading companies Sept. 30, 2006 Total return, % Total return, % Oct. 27, 2006 Value distri- Jan.-June Annual average Value distri- Portf. Stock No. shares bution, SEK M 2006 June 96-June 06 No. sharesbution, SEK M share, % Handelsbanke 68,000,00 13,464 4 17 68,000,000 12,

  21. Slide 21: Industrivärden’s dividend

    Industrivärden’s dividend 9 7% 8 6% 7 5% 6 Bonusutdelning Bonus dividend 5 4% 3.2% Ordinarie Ordinary utdelning dividend SSEX dividend yield Direktavkastning börsen 4 3% Dividend yield Direktavkastning 3 2.8% 2% 2 1% 1 0 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Dividend: 3.25 3.75 4.50 6

  22. Slide 22: The strength of our strategy

    The strength of our strategy  Focus and transparency - Concentrated portfolio - Primarily listed holdings - Significant influence a requirement - Long-term perspective  Lean, efficient and professional organization - Active ownership - Investment activities - Market operations  Short-term trading

  23. Slide 23: Professional organization

    Professional organization  Project-oriented organization – investment teams  Lean and cost-efficient organization (25 employees)  Professional company- and equity analysts  Structured work process and uniform methods  Highly developed databases and information systems  Experienced board member

  24. Slide 24: Value creation through structured methods and models

    Value creation through structured methods and models Organization Lean, efficient and professional organization. Team-oriented work by uniform methods. New investments Active ownership Exit evaluation  Aims to identify new investments  Participation in nominating committees  Aim is to optimize th

  25. Slide 25: Investments based on good market knowledge

    Investments based on good market knowledge Listed companies in the Nordic region: approx. 830 Total market cap: SEK 9,200 billion (September 2006) Continuous Structured Continuous analysis of Ability for quick scanning of all monitoring of selected companies entries companies all interesting that me

  26. Slide 26: Presentations

    Active ownership Board Presentations Feedback Guidelines for active ownership Information exchange Investment organization Active work Team / investment manager Dialog / visits / action plans Active holdings Action plans Networks AGM Nominating committee Board Committees Management AN_Pres_KV306 Nr

  27. Slide 27: Active ownership

    Active ownership  Value potential Business model, growth, profitability, other value-creating measures  Market potential Organic growth for the market and company. Entrance obstructions. Acquisition opportunities  Strategic positioning Strategy, acquisitions or divestments  Capital rationalizati

  28. Slide 28: Industrivärden online

     Industrivärden online  Reuters code INDUa.ST Bloomberg code INDUA SS Datastream code W :IU  www.industrivarden.net  [email protected]  +46-8-666 64 00  +46-8-661 46 28  Box 5403, SE-114 84 Stockholm, Sweden www.industrivarden.net / IR / Ask… / Info...  Press release direct: www.waymake

  29. Slide 29: Changed tax situation 2005/2006

    Changed tax situation 2005/2006  Since September 2004, all active holdings are classified as business-related shares (i e share of votes more than 10%). (Corresponds to 97% of portfolio value)  Holdings that are not included in base for standard income assumption: - Approx. 50% of portfolio value

Industrivärden — Q3 2006 Earnings Presentation on 6ix