Industrivarden Ab Class A · OMXSTO:INDU_A

Industrivarden Ab Class A — Q2 2003 Earnings Presentation

30 slides from Industrivarden Ab Class A's earnings presentation, Aug 6, 2003

  1. Slide 1: Interim Report, Q2, 2003

    Interim Report, Q2, 2003 Industrivärden, August 6, 2003 Pres_KV203_eng No 1

  2. Slide 2: Industrivärden – investment case

    Industrivärden – investment case  Value investor with a focus on investments in listed Nordic shares  Proven track record - excess returns under a long period of time  Portfolio of Swedish blue-chip companies  Conservative gearing provides opportunity for increased leverage when market turns  V

  3. Slide 3: Industrivärden in brief

    Industrivärden in brief  Number of shares: 193 million shares  Market cap: Appr. USD 2.5 bn (SEK 20 bn)  Free float: Appr. 60% of shares  No of shareholders: 35.000  Average daily turnover: Appr. 180.000 shares  Volatility: 30 (60 days)  Coverage: Carnegie, Johan Sjöberg, +46 8 676 88 00 Ensk

  4. Slide 4: Mission, goal and vision

    Mission, goal and vision 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 give shareholders a high total return Vision To be perceived as the leading in

  5. Slide 5: Two dimensional strategy

    Two dimensional strategy Professional invest- ment operation Active ownership Generate high growth in net asset value over time Pres_KV203_eng No 5

  6. Slide 6: Our investment criteria

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

  7. Slide 7: Long-term excess returns

    Long-term excess returns The average annual excess return was: +4% / year for the last five years +4% / year for the last ten years Total Return Index (Index) (c) SIX AB 2003 1211 1000 Industrivärden Stock 800 600 400 Total Return Index (SIXRX) 200 100 1993 1994 1995 1996 1997 1998 1999 2000 2001 20

  8. Slide 8: Turn around in development of net asset value

    Turn around in development of net asset value Index 900 800 Development Jan.-Aug., 2003 700 600 +SEK 3,267 M 500 or +SEK 18/share 400 300 200 100 93 94 95 96 97 98 99 00 01 02 03 Total return for share Total Return Index Net asset value, incl. dividend payout Pres_KV203_eng No 8

  9. Slide 9: Major activities during the last two years

    Major activities during the last two years INVESTMENTS ACTIVE OWNERSHIP SALES Identified value potential Value creation Realization of values  Subscription in Ericsson’s new issue Development of new work  Pharmacia  16% of the orthopedics comp. Össur methods and models  Lundbeck  11% of the moi

  10. Slide 10: Transactions during the last 24 months

    Transactions during the last 24 months Mkr Date Transaction Holding Sector Average Price Capital price gain Nov. 01 Sale Pharmacia Pharmaceuticals SEK 471 780 130 Apr. 02 Sale Lundbeck Pharmaceuticals DKK 231 2,400 1,500 Apr. 02 Sale Besam Door automation - 3,050 2,300 June 02 Sale Biodisk Meditech

  11. Slide 11: New active holdings

    New active holdings Orthopedics company, leader in prosthetic legs  Distinct customer need  Very good position in Nordic region, strong position in the U.S.  Robust expansion in Europe  Fast growth with high profitability  Market cap: SEK 1.6 bn, turnover: SEK 706 M, earnings a. taxes: SEK 87 M

  12. Slide 12: Continued strong financial position

    Continued strong financial position Net debt (SEK billion) Net debt-equity ratio* 7,0 18% 17% 6,3 16% 6,0 5,1 14% 4,9 5,0 11% 12% 12% 12% 10% 4,0 4,1 10% 9% 9% 9% 3,0 7% 8% 2,7 2,8 2,4 2,2 6% 1,9 2,0 4% 1,0 2% *Parent company’s interest-bearing net debt in relation 0,0 0% to the market valued 30-sep

  13. Slide 13: Composition of net asset value

    Composition of net asset value SEK billion SEK per share Aug. 4 Jun. Dec. 31 Aug. 4 Jun. 30 Dec. 31 2003 30 2002 2003 2003 2002 2003 Equities portfolio 30.6 26.4 158 147 136 Net debt -2.9 28.5 -2.0 -14 -14 -10 -2.9 Net asset value 27.7 24.4 144 133 126 25.6 Pres_KV203_eng No 13

  14. Slide 14: Development of net asset value

    Development of net asset value SEK M 54,0 42,4 39,4 29,6 59,1 27,7 24,4 25,6 48,1 44,6 30,9 28,5 30,6 26,4 -5,1 -5,7 -5,2 -1,3 -2,0 -2,9 -2,9 31 dec-00 30 jun-01 31 dec-01 30 jun-02 31 dec-02 30-jun-03 04-aug-03 SEK/share 280 222 204 153 126 133 144 Equities portfolio Aktieportföljen Net debt Nettol

  15. Slide 15: Development of net asset value

    Development of net asset value Share of net asset value, % 228 283 214 222 166 204 193 153 115 126 119 133 SEK/share 100% 90% Other Övrigt 80% Össur 70% Munters 60% Skandia SSAB 50% Skanska 40% Sandvik 30% SCA Handelsbanken 20% Ericsson 10% 0% Dec Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 99 00 01

  16. Slide 16: Sector breakdown, equities portfolio

    Sector breakdown, equities portfolio Health care (3%) Other (1%) Construction (5%) Össur o Ska Trading (6%) In Banking and nsk du tra Handelsbanken insurance (27%) th. a de Skandia Telecom (13%) Ericss on Sandvik SSAB SCA Isaberg Rapid Forestry Munters and consumer others Engineering (27%) products

  17. Slide 17: Equities portfolio as per June 30, 2003

    Equities portfolio as per June 30, 2003 % of % of Market value % of votes portfolio capital In In SEK M SEK/share value Stock No. shares company company Handelsbanke 51,655,900 6,767 35 24 7.2 7.9 nA SCA A 16,982,000 5,200 27 18 8.1 28.1 SCA B 2,000,000 Sandvik 21,000,000 4,400 23 15 8.0 8.0 Ericsso

  18. Slide 18: Equities portfolio as per June 30 and Aug. 4

    Equities portfolio as per June 30 and Aug. 4 June 30, 2003 Total return,Average % annual total return, % August 4, 2003 Market- Period, 5 yrs., 10 yrs., Market- Stock value, SEK MJan 03-June 03 No. shares June 98-June 03 June 93-June 03 No. sharesvalue, SEK M Handelsbanke 51,655,90 6,767 17 4 22 51.

  19. Slide 19: Development of internal methods and systems

    Development of internal methods and systems  Good up-to-date knowledge about interesting companies  Ability to act quickly when business opportunities arise  Structured investment process  Flexible organization at low cost  Efficiency and quality Pres_KV203_eng No 19

  20. Slide 20: Work process in brief

    Work process in brief Investment operation Sale Database Active Priori- owner- Asset management tizing ship  Organization  Methods & systems External Purchase contacts  Database  Network Analysis Decision Manage- In-depth ment analysis team Pres_KV203_eng No 20

  21. Slide 21: Work process in brief

    Work process in brief 1. Database: Monitoring of companies that meet our investment criteria 2. Priority: Companies that are interesting are examined more carefully 3. External contacts: Contacts with company management, experts, etc. 4. Analysis: Fundamental analysis of selected companies 5. Manage

  22. Slide 22: Major knowledge about possible investments

    Major knowledge about possible investments Listed companies in the Nordic region: approx. 900 Total market cap: SEK 4,800 billion (August ’03) Continuous Structured Continuous analysis of Ability for quick scanning of all monitoring of selected companies entries companies all interesting that meet i

  23. Slide 23: Value creation

    Value creation Agenda Value creation Active Investment Exit ownership Analysis  Value potential Business model, growth, profitability, other value-creating measures  Market opportunities Organic growth for the market and company. Acquisition opportunities  Strategic positioning Strategy, acquisit

  24. Slide 24: Good growth over time

    Good growth over time Annual excess return (change in value, dividends incl.) for the Industrivärden shares compared with Total Return Index (SIXRX) +5 %pts annually in 10 yrs +7 %pts annually in 7 yrs +4 %pts annually in 5 yrs +8 %pts 3 yrs 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003/08/

  25. Slide 25: Industrivärden online

     Industrivärden online  Reuterskod INDUa.ST Bloombergskod INDUA SS Datastream kod 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.se / IR / Ask… / Info...  Press release direct: www.waymaker.se

  26. Slide 26: Skandia in a ten years perspective

    Skandia in a ten years perspective Total Return, % 3000 2500 2000 1500 Skandia 1000 500 315 SIXRX 0 213 Pres_KV203_eng No 26

  27. Slide 27: Munters

    Munters Trust diagram 19971021 - 20030728 (c) SIX AB 2003 < norm (79.5, MTRS (Senast)) Dag < norm (79.5, AFGX (Köp)) Dag Moisture control 233.5 180 Industrivärden’s holding as per June 30, 2003: 140 2,7 million shares 100 Value SEK 471 M 60 Share of capital and votes 10,8% Board member with ties to

  28. Slide 28: Össur

    Össur Medtech 140 120 Össur 100 Industrivärden’s holding as per June 30, 2003: 80 SAX 52 million shares 60 40 Value SEK 282 M 20 Share of capital and votes 16% 0 Board member with ties to Industrivärden: Bengt Kjell • Orthopedics company, leader in prosthetic legs • Distinct customer need • Very goo

  29. Slide 29: Dividend policy and tax rules

    Dividend policy and tax rules Industrivärden's dividend policy is to pay a higher long-term dividend yield than the average for the Stockholm Stock Exchange Taxable Deductible  Dividends received  Dividends distributed  Interest income  Interest expenses  Standard tax rate, 1.5% of the  Admini

  30. Slide 30: Development of dividend

    Development of dividend 7,0% 6,0% 5,0% 4,0% Direktavkastning Dividend yield Ordinarie Ordinary direktavkastning dividend yield 3,0% SSEXdirektavkastning SSEX dividend yield 2,0% 1,0% 0,0% 1998 1999 2000 2001 2002 Ordinary dividend: 4.50 5.00 5.00 5.00 5.00 SEK/share Bonus dividend: - 1.20 3.40 3.35

Industrivärden — Q2 2003 Earnings Presentation on 6ix