Industrivarden Ab Class A · OMXSTO:INDU_A
Industrivarden Ab Class A — FY2004 Earnings Presentation
24 slides from Industrivarden Ab Class A's earnings presentation, Feb 17, 2005
Slide 1: Year-End Report 2004
Year-End Report 2004 Industrivärden, February 17, 2005 AN_Pres_KV404 Nr 1
Slide 2: Company in brief
Company in brief Established: 1944 Stock: 193 million shares, listed on SSEX Market cap: Approx. USD 4.6 bn (SEK 32 bn) Free float: Approx. 53% of shares No. shareholders: 37,000 Average daily turnover: Approx. 130,000 shares Coverage: Carnegie, Johan Sjöberg, +46 8 676 88 00 Enskilda
Slide 3: 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_KV404 Nr 3
Slide 4: 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
Slide 5: Historically favorable returns – 2004 a strong year
Historically favorable returns – 2004 a strong year Total return, % 2004 5 yrs. 10 yrs. Return index 21 -21 233 Industrivärden’s stock 46 15 451 Excess return, total +25 +36 +218 Excess return, yearly +25 +8 +6 AN_Pres_KV404 Nr 5
Slide 6: Proven success concept
Proven success concept Active 1. Ability to find holdings with holdings: Nordic listed companies: 941 good value potential 10 Active 2. Ability to hold and ownership develop companies in order to actively contribute to good growth in value 3. Ability to build net asset value – competitive return to
Slide 7: Major transactions during the last three years
Major transactions during the last three years SEK M Date Transaction Holding Sector Average Price Result price 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 - 130 110 Nov/Dec 03 Sale Skandia Fin. services - 1
Slide 8: High activity – good return
High activity – good return Dec. 31, 2004 Dec. 31, 1999 Dec. 31, 1994 Equities portfolio (SEK bn) Handelsbanken 11 Ericsson 26 PLM 4 Ericsson 8 Sandvik 6 Inductus* 4 Sandvik 7 Handelsbanken 5 AGA 2 SCA 5 SCA 5 SCA 2 Skanska 3 Skanska 3 Ericsson 2 SSAB 2 SSAB 2 Handelsbanken 1 Indutrade 2 Indutrade 2
Slide 9: Long-term favorable development of net asset value
Long-term favorable development of net asset value Kr/aktie Mdkr M SEK SEK/share 70 350 298 60 283 300 50 250 40 204 200 189 191 30 160 156 150 150 126 20 114 100 78 83 10 0 50 -10 0 Aktieportföljen Portfolio Nettoskuld Net debt Substansvärde Net asset value Substansvärde per aktie AN_Pres_KV404 Nr
Slide 10: Long-term excess returns
Long-term excess returns The average annual excess return was: +8%/year for last five years +6%/year for last ten years Total return index (Index) (c) SIX AB 2005 688 600 Industrivärden 500 400 300 200 Total return index (SIXRX) 100 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 05 As per Decembe
Slide 11: 2004 in summary
2004 in summary Net asset value rose 22%, corresponding to SEK 33/share or Mdkr SEK bn % 50 50 SEK 6.5 billion NAV 45 +46% Total return was 46%, or 25 40 Total return percentage points higher than the +22% 40 36.6 return index 30 30.1 35 Shares purchased in 20 Handelsbanken and Sandvik for 30
Slide 12: Favorable portfolio development 2004
Favorable portfolio development 2004 Value, SEK M % of Total 31 Dec 2004 portfolio return, % Handelsbanken 11,481 28 22 Ericsson 8,072 19 56 Sandvik 7,224 17 13 SCA 5,254 13 1 Skanska 2,576 6 31 SSAB 2,258 5 30 Indutrade 2,022 5 Munters 644 2 17 Ossur 537 1 75 Other holdings 1,623 4 Total portfolio
Slide 13: Major transactions 2004
Major transactions 2004 Net purchases Thousands SEK M Net sales Thousands Handelsbanken A 13,612 1,980 SEK M Sandvik 5,786 1,452 SCA B 2,824 Ericsson B 7,961 255 811 SSAB A 1,001 128 Scania A (entire holding) 1,952 Munters 514 91 478 Ossur hf 13,118 89 Scania B (entire holding) 1,050 Other 582 251 T
Slide 14: Upweighting in SHB, Sandvik, SSAB, Munters and Ossur during 2004
Upweighting in SHB, Sandvik, SSAB Munters and Ossur during 2004* Handelsbanken Sandvik SSAB Munters Ossur 2004 Millions SEK M Millions SEK M Millions SEK M Millions SEK M Millions SEK M Holding 52.7 7,754 21.2 5,249 13.1 1,685 2.7 471 52.0 230 January 1 8.0 V% 147 sek 8.0 V% 248 sek 17.0 V% 129 sek
Slide 15: Continued strong financial position
Continued strong financial position Net debt (SEK M) Net debt equity-ratio 7,0 20% 18% 6,0 16% 5,0 14% 12% 4,0 10% 3,0 8% 2,0 6% 4% 1,0 2% 0,0 0% AN_Pres_KV404 Nr 15
Slide 16: 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
Slide 17: Main processes of operations
Main processes of operations Organization Methods & Systems Networks Company Action plan analysis Possible Info collecting, Continuous buildup of analysis and evaluation/ Exit plan holding prioritization update New Board/ Exit investments Active ownership Teamwork evaluation committee work Possible
Slide 18: 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
Slide 19: Our view of distribution and capital structure matters in our holdings
Our view of distribution and capital structure matters in our holdings Must have a stable dividend growth Must have an optimal capital structure over time Important to choose suitable approaches to achieve desired capital structure AN_Pres_KV404 Nr 19
Slide 20: Our investment criteria
Our 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 medium- sized companies Investment horizon: 3-8 years Type: Mainly listed Geography: Nord
Slide 21: Equities portfolio as per February 15, 2005
Equities portfolio as per February 15, 2005 Value % of % of % of votes distribution portfolio capital in in SEK M SEK/share value Stock No. shares company company Handelsbanken A 66.364.100 11.415 59 27 9,6 10,1 Ericsson A 372.000.000 7.775 40 19 2,3 13,3* Sandvik 26.953.500 7.709 40 18 10,2 10,2 SC
Slide 22: Industrivärdens dividend
Industrivärdens dividend 9 7% 8 6% 7 5% 6 Bonusutdelning Bonus dividend 5 4% Ordinarie Ordinary utdelning dividend 3,5% SSEX SSEXdirektavkastning dividend yield 4 3% Direktavkastning Dividend yield 3 2,9% 2% 2 1% 1 0 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Dividend: 2,75 3,25 3,75 4,50
Slide 23: Industrivärden
Industrivärden A successful value investor with focus on investments and active value enhancement in listed Nordic companies AN_Pres_KV404 Nr 23
Slide 24: Industrivärden online
Industrivärden online Reuters code INDUa.ST Bloomberg code INDUA SS Datastream code W :IU www.industrivarden.net info@industrivarden.se +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