Industrivarden Ab Class A · OMXSTO:INDU_A
Industrivarden Ab Class A — Q2 2006 Earnings Presentation
27 slides from Industrivarden Ab Class A's earnings presentation, Aug 3, 2006
Slide 1: Interim Report, Q2, 2006
Interim Report, Q2, 2006 Industrivärden, August 3, 2006 AN_Pres_KV206 Nr 1
Slide 2: Industrivärden
Industrivärden ”A long-term industrial developer of listed companies” AN_Pres_KV206 Nr 2
Slide 3: Company in brief
Company in brief Established: 1944 Stock: 193 million shares, listed on SSEX Market cap: Approx. USD 5.5 bn (SEK 39 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
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_KV206 Nr 4
Slide 5: Quality portfolio, Professional organization, High class methods and models
Quality portfolio Professional High class organization methods and models AN_Pres_KV206 Nr 5
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_KV206 Nr 6
Slide 7: 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 midcap companies Investment horizon: 3-8 years Type: Mainly listed Geography: Nordic comp
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
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
Slide 10: First seven months 2006 in summary
First seven months 2006 in summary Net asset value: SEK 47.7 bn, a decrease of -SEK 0.6 bn or -1% Total return for the stock: 15% for Class A-shares (last 12 months) 18% for Class C-shares 17% for return index Stocks were purchased for SEK 2,885 M and sold for SEK 840 M. AN_Pres_KV206 Nr 10
Slide 11: Favorable development of net asset value...
Favorable development of net asset value... Kr/aktie SEK/share Mdkr M SEK 70 350 60 298 300 283 256 247 50 250 250 40 204 200 189 30 150 160 156 150 20 126 114 10 100 83 0 50 -10 0 06 l 06 Ju ju l Aktieportföljen Portfolio Nettoskuld Net debt Substansvärde Net asset value Substansvärde per aktie AN_
Slide 12: ... and long-term excess returns
... and long-term excess returns The average annual excess return was: +-0%-points/year for last five years +5%-points/year for last ten years Total return index (Index) 700 600 Industrivärdenaktien 500 400 300 200 Total Return Index (SIXRX) 100 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
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 15% 17% -2 %pts 5 years 9% 9% +-0 %pts 10 years 18% 13% +5 %pts 61 years 16% 14% +2 %pts As per July 31, 2006 AN_Pres_KV206 Nr 13
Slide 14: Major transactions in recent years
Major transactions in recent years 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/management
Slide 15: Major transactions during the last years
Major transactions during the last years 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 trad
Slide 16: High activity – good return
High activity – good return July 31, 2006 Dec. 31, 2000 Dec. 31, 1995 Equities portfolio (SEK bn) Handelsbanken 13 Ericsson 20 Ericsson 3 Sandvik 10 Handelsbanken 8 AGA 3 Ericsson 9 Skandia 7 SCA 2 SCA 7 Sandvik 5 PLM 2 SSAB 6 SCA 4 Handelsbanken 2 Skanska 4 Skanska 3 Besam 1 Indutrade 1 Besam 2 Ind
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_KV206 a 30 r- 0 -ju 1 Nr 17 30 n- 0 -s 1 e 31 p-0 -d 1 e Net debt (SEK M) 31 c -0 -m 1 a 30 r- 0 -ju 2 30 n- 0 -s 2 e 31 p-0 -d 2 31 ec - -m 02 a 30 r- 0 -ju 3 30 n- 0 -s 3 e 31 p-0 -d 3 e 31 c-0 -m 3 a 30 r- 0 -ju 4 30 n- 0 -s 4 e 31 p-0 -
Slide 18: Equities portfolio as per July 31, 2006
Equities portfolio as per July 31, 2006 Trading (3%) Other (3%) Construction (7%) Indu Engineering (33%) Sk Sandvik trad an Forestry and SSAB sk e consumer Munters a SCA Höganäs products (14%) Ericsson Telecom (16%) Handelsbanken Banking (23%) AN_Pres_KV206 Nr 18
Slide 19: Equities portfolio as per July 31, 2006
Equities portfolio as per July 31, 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 12,410 64 23 10,5 10,7 Sandvik 130,000,000 9,750 50 18 11.0 11.0 Ericsson A 372,000,000 9,012 47 17 2.5 13.4 Erics
Slide 20: A transparent portfolio of leading companies
A transparent portfolio of leading companies June 30, 2006 Total return, % Total return, % July 31, 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 67,000,00 12,429 -3 19 68,000,000 1,.
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
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
Slide 23: Business model
Business model Value creation through structured processes 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 optim
Slide 24: Investments based on good market knowledge
Investments based on good market knowledge Listed companies in the Nordic region: approx. 830 Total market cap: SEK 9,900 billion (June 2006) Continuous Structured Continuous analysis of Ability for quick scanning of all monitoring of selected companies entries companies all interesting that meet in
Slide 25: Active ownership
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_KV206 Nr
Slide 26: 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 27: 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