Industrivarden Ab Class A · OMXSTO:INDU_A
Industrivarden Ab Class A — Q3 2004 Earnings Presentation
26 slides from Industrivarden Ab Class A's earnings presentation, Oct 29, 2004
Slide 1: Interim Report, 3Q, 2004
Interim Report, 3Q, 2004 Industrivärden, October 29, 2004 AN_Pres_KV304 Nr 1
Slide 2: Industrivärden
Industrivärden A successful value investor with focus on investments and active value enhancement in listed Nordic companies AN_Pres_KV304 Nr 2
Slide 3: Investment case – comparable advantages
Investment case – comparable advantages Proven track record – excess returns over a long period of time High quality portfolio of blue-chip companies Good financial resources and long-term perspective First-rate model for exercising value enhancement by active ownership Professional manage
Slide 4: Long term positive development of net asset value
Long term positive development of net asset value Kr/aktie Mdkr M SEK SEK/share 70 350 298 60 300 283 50 250 40 204 200 172 178 180 180 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 AN_Pres_KV304 Nr 4
Slide 5: Long-term excess returns
Long-term excess returns The average annual excess return was: +6% / year for the last five years +6% / year for the last ten years Total return index (Index) (c) SIX AB 2004 654 600 Industrivärden stock 500 400 300 200 Total return index (SIXRX) 100 93 1994 1995 1996 1997 1998 1999 2000 2001 2002 2
Slide 6: 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 give shareholders a high total return AN_Pres_KV304 Nr 6
Slide 7: Vision
Vision To be perceived as the leading investment company with a focus on large and medium-sized listed Nordic companies Nordic companies Public sector Startup phase Expansion Management Restructuring phase phase phase Private equity investor in Venture capitalists mature companies Industrivärden AN_
Slide 8: 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 9: Ownership structure
Ownership structure capital, % votes, % AMF Pension 12 5 Lundbergföretagen 10 14 SHB Pension Foundation 7 9 SHB Pension Fund 7 9 Wallander & Hedelius Foundation 6 8 SCA Pension Foundation 4 6 Skandia Life 4 1 SCA Pension Foundation 4 5 Oktogonen 4 5 SCA Pension Foundation, production managers 2 2 Ot
Slide 10: 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 11: Major transactions during the last three years
Major transactions during the last three years INVESTMENTS ACTIVE OWNERSHIP SALES Identified value potential Value creation Realization of values/ adaptation of strategy Subscription in Ericsson’s new issue Development of new work methods and models Lundbeck 20% of the orthopedics comp. Ossur
Slide 12: Development 2004 in summary
Development 2004 in summary Net asset value has risen by SEK 24/share, or by SEK 4.674 M, since the start of the year As of October 27, Industrivärden’s stock had generated a total return of 30%, which is 17 percentage points higher than the return index. During the year, shares in Handelsbanken
Slide 13: Continued strong financial position
Continued strong financial position SEK MdkrM % 6,0 14 12 5,0 10 4,0 8 Nettoskuld Net debt 3,0 Net debt-equity ratio* Nettoskuldsättningsgrad* 6 2,0 4 1,0 2 0,0 0 dec 99 dec 00 dec 04 dec 04 dec 04 mar 04 jun 04 sep 04 okt 04 *Parent company’s interest-bearing net debt, adjusted for liabilities to i
Slide 14: Equities portfolio as per October 27, 2004
Equities portfolio as per October 27, 2004 Value % of % of % of votes distribution portfolio capital in in Stock SEK M SEK/share value No. shares company company Handelsbanken A 65.553.800 10.063 52 25 9,5 10,0 Ericsson A 372.000.000 8.110 42 20 2,3 13,3* Sandvik 26.355.600 7.076 37 18 10,0 10,0 SCA
Slide 15: Equities portfolio as per September 30 and October 27, 2004
Equities portfolio as per September 30 and October 27, 2004 Sept. 30, 2004 Total return, % Average annual total return, % Oct. 27, 2004 Value distri- Period 5 yrs., 10 yrs., Value distri- Stock No. shares bution, SEK MJan. 04-Oct. 04 Oct. 99-Oct. 04 Oct. 94-Oct. 04 No. shares bution, SEK M Handelsba
Slide 16: Portfolio development
Portfolio development Share of portfolio value, % 100% 90% Övrigt Other 80% Isaberg Rapid 70% Munters Ossur 60% SSAB 50% Indutrade Skanska 40% SCA 30% Sandvik Ericsson 20% Handelsbanken 10% 0% dec-99 dec-00 dec-01 dec-02 dec-03 jun-04 sep-04 okt-04 AN_Pres_KV304 Nr 16
Slide 17: Equities portfolio as per October 27, 2004
Equities portfolio as per October 27, 2004 Health care (2%) Other (4%) Trading (5%) Ossur ot Ind Construction (6%) Sandvik utra Engineering (25%) Sk SSAB an de Munters h. sk a Isaberg Rapid Forestry and others consumer SCA products (13%) Handelsbanken Ericsson Telecom (20%) Banking (25%) As per Octo
Slide 18: Upweighting in SHB, Sandvik, SSAB and Ossur
Upweighting in SHB, Sandvik, SSAB and Ossur* Handelsbanken Sandvik SSAB Munters Ossur 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, 2004 8,0 V% 147 sek 8,0 V% 248 sek 17,0 V% 129 sek 10,8 V% 174 sek 15,
Slide 19: Two dimensional strategy
Two dimensional strategy Generate high growth in net asset value over time Professional Active investment ownership operation AN_Pres_KV304 Nr 19
Slide 20: Professional ownership and investment operation
Professional ownership and investment operation Project-oriented organization – investment teams Lean, cost-efficient organization Professional company and equity analyses Strucutred work process and uniform methods Highly developed databases and information systems Capital market presen
Slide 21: Operations main processes
Operations main processes 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 in-
Slide 22: Major knowledge about possible investments
Major knowledge about possible investments Listed companies in the Nordic region: approx. 830 Total market cap: SEK 5,900 billion (October ’04) Continuous Structured Continuous analysis of Ability for quick scanning of all monitoring of selected companies entries companies all interesting that meet
Slide 23: Active ownership presentations
Active ownership Board Presentations Guidelines for active ownership Information exchange Investment organization Proposals for directors with ties to Industrivärden Team / investment manager Portfolio companies Dialog / company visits with significant ownership stakes Action plans Networks Boards/c
Slide 24: 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
Slide 25: 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) +6 %pts annually in 10 yrs +7 %pts annually in 7 yrs +6 %pts annually in 5 yrs 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 04 Average annual tota
Slide 26: 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