Industrivarden Ab Class A · OMXSTO:INDU_A

Industrivarden Ab Class A — FY2003 Earnings Presentation

28 slides from Industrivarden Ab Class A's earnings presentation, Feb 18, 2004

  1. Slide 1: Year End Report 2003

    Year End Report 2003 Industrivärden, February 18, 2004 AN_Pres_KV403 Nr 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 opportunities oc

  3. Slide 3: Industrivärden in brief

    Industrivärden in brief  Number of shares: 193 million shares  Market cap: Appr. USD 3.4 bn (SEK 25 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 ABG

  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 Generate high growth in net asset value over time Professional Active investment ownership operation AN_Pres_KV403 Nr 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: Ownership structure

    Ownership structure % of No. shares shares votes AMF Pension Fund 24 055 100 13 6 Lundbergföretagen 15 000 000 8 11 SHB Pension Foundation 12 900 000 7 9 Wallanders & Hedelius Foundation 11 400 000 6 8 SHB Pension Fund 10 750 000 6 8 SCA Pension Foundation 8 925 540 5 6 Skandia Life Insurance 8 286

  8. Slide 8: Long-term excess returns

    Long-term excess returns The average annual excess return was: +5% / year for the last five years +2% / year for the last ten years Total return index (Index) (c) SIX AB 2004 645 Industrivärden Stock 500 400 300 Total Return Index (SIXRX) 200 100 81.5 1994 1995 1996 1997 1998 1999 2000 2001 2002 200

  9. Slide 9: Positive development of net asset value in 2003

    Positive development of net asset value in 2003 SEK bn 54,1 42,4 39,4 32,9 30,1 29,6 25,7 59,2 24,4 48,1 44,6 36,1 30,9 32,9 26,4 28,6 -5,1 -5,7 -5,2 -1,3 -2,0 -2,8 -2,8 -3,2 31 dec-00 30 jun-01 31 dec-01 30 jun-02 31 dec-02 30-jun-03 31-dec-03 16-feb-04 SEK/share 280 222 204 153 126 133 156 170 Net

  10. Slide 10: 2003 in brief

    2003 in brief  Net asset value on December 31, 2003:  SEK 30,070 M (24,415), an increase of SEK 5,655 M in 2003  SEK 156 (126), an increase, reinvested dividends included, of SEK 37 per share in 2003  Munters new active holding after purchase of 11% of the total stock for SEK 490 M  Purchase of

  11. Slide 11: Development of dividend

    Development of dividend 7,0% 6,0% 5,8% 5,1% 5,0% 4,5% Dividend yield 4,1% 4,0% 4,1% 3,4% 2,8% 3,0% 2,5% SSEX dividend yield 2,0% 2,0% 1,9% 2,0% 1,5% 1,0% 0,0% 1998 1999 2000 2001 2002 2003 Dividend: 4.50 6.20 8.40 8.35 5.80 5.50 SEK/share AN_Pres_KV403 Nr 11

  12. Slide 12: 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

  13. Slide 13: Major activities during the last 24 months

    Major activities during the last 24 months INVESTMENTS ACTIVE OWNERSHIP SALES Identified value potential Value creation Realization of values/ adaption of strategy  Subscription in Ericsson’s new issue Development of new work methods and models  Lundbeck  16% of the orthopedics comp. Ossur Stron

  14. Slide 14: Transactions during the last 24 months

    Transactions during the last 24 months 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 - 1,250 -

  15. Slide 15: Latest active holdings

    Latest active holdings Orthopedics company, leader in prosthetic legs  Distinct customer need and fast growth  Very good position in Nordic region, strong position in the U.S.  Robust expansion in Europe  Market cap: SEK 1.4 bn, turnover: SEK 769 M, earnings a. taxes: SEK 38 M  2003: Higher R&D

  16. Slide 16: Strong financial position

    Strong financial position Interest-bearing net debt (SEK billion) Net debt-equity ratio* 6,0 12% 5,4 11% 5,0 10% 9% 5,0 4,0 8% 7% 7% 3,0 6% 2,5 2,0 4% 1,9 *Parent company’s interest-bearing net debt, 1,2 adjusted for liabilities to 1,0 2% 2% internal companies, in relation to the market value of the

  17. Slide 17: Composition of net asset value

    Composition of net asset value SEK billion SEK per share Feb. 16 Dec. 31 Dec. 31 Feb. 16 Dec. 31 Dec. 31 2004 2003 2002 2004 2003 2002 Equities portfolio 36.1 32.9 26.4 186 170 136 Net debt -3.2 -2.8 -2.0 -16 -14 -10 Net asset value 32.9 30.1 24.4 170 156 126 AN_Pres_KV403 Nr 17

  18. Slide 18: Development of net asset value

    Development of net asset value Share of net asset value, % 100% 90% 80% Övrigt Other 70% Ossur Munters 60% SSAB 50% Skanska Sandvik 40% SCA 30% Handelsbanken Ericsson 20% 10% 0% Dec Dec Dec Dec Dec Feb 99 00 01 02 03 04 AN_Pres_KV403 Nr 18

  19. Slide 19: Equities portfolio as per December 31, 2003

    Equities portfolio as per December 31, 2003 Health care (2%) Other (2%) Trading (5%) Ossur ot Construction (7%) Indu Sandvik Engineering (26%) Sk trad SSAB an Munters h. sk e a Isaberg Rapid others Telecom (15%) Ericsson Handelsbanken SCA Forestry and consumer Banking (24%) products (19%) As per Dec

  20. Slide 20: Equities portfolio as per December 31, 2003

    Equities portfolio as per December 31, 2003 % of % of Market value % of votes portfolio capital In In SEK M SEK/share value Stock No. shares company company Handelsbanken A 52.751.900 7.754 40 24 7,4 8,0 SCA A 16.982.000 6.235 32 19 9,0 29,1 SCA B 4.224.600 Sandvik 21.167.500 5.249 27 16 8,0 8,0 Eri

  21. Slide 21: Equities portfolio as per February 16, 2004

    Equities portfolio as per February 16, 2004 Ossur (<1%) Isaberg Rapid (1%) Other (7%) Munters (1%) SSAB (5%) Ericsson (22%) Indutrade (5%) Skanska (6%) Sandvik (14%) Handelsbanken (21%) SCA (17%) AN_Pres_KV403 Nr 21

  22. Slide 22: Equities portfolio as per December 31, 2003 and February 16, 2004

    Equities portfolio as per December 31, 2003 and February 16, 2004 Dec. 31, 2003 Average annual total return, % February 16, 2004 Market- 5 yrs., 10 yrs., Market- Stock value, SEK M No. shares Dec. 98-Dec. 03Dec. 93-Dec. 03 No. sharesvalue, SEK M Handelsbanke 51.751.90 7.754 8 18 54.806.400 7.783 n 0

  23. Slide 23: Well developed internal methods and systems

    Well developed 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 AN_Pres_KV403 Nr 23

  24. Slide 24: Work process at a glance

    Work process at a glance New investments Active ownership Exit evaluation Database/ Information Company prioritization Action plan collection analysis Buildup of Decision/ Exit plan holdings Analysis execution Teamwork/ Board/ External committee work contacts Investment- Decision Continuous committe

  25. Slide 25: Major knowledge about possible investments

    Major knowledge about possible investments Listed companies in the Nordic region: approx. 900 Total market cap: SEK 5,4 billion (December ’03) Continuous Structured Continuous analysis of Ability for quick scanning of all monitoring of selected companies entries companies all interesting that meet i

  26. Slide 26: Value creation

    Value creation  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 rationalization

  27. Slide 27: 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) +2 %pts annually in 10 yrs +4 %pts annually in 7 yrs +5 %pts annually in 5 yrs 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003/10/29 Average ann

  28. Slide 28: Industrivärden online

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

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