Industrivarden Ab Class A · OMXSTO:INDU_A
Industrivarden Ab Class A — Q1 2006 Earnings Presentation
24 slides from Industrivarden Ab Class A's earnings presentation, May 8, 2006
Slide 1: Interim Report, Q1, 2006
Interim Report, Q1, 2006 Industrivärden, May 8, 2006 AN_Pres_KV106 Nr 1
Slide 2: Industrivärden
Industrivärden A successful value investor with focus on investments and active value enhancement in listed Nordic companies AN_Pres_KV106 Nr 2
Slide 3: Company in brief
Company in brief Established: 1944 Stock: 193 million shares, listed on SSEX Market cap: Approx. USD 6.5 bn (SEK 48 bn) Free float: Approx. 40% of shares No. shareholders: 38,000 Average daily turnover: Approx. 130,000 shares Coverage: Carnegie, Björn Enarson, +46 8 676 88 00 Enskilda
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_KV106 Nr 4
Slide 5: 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_KV106 Nr 5
Slide 6: 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 7: 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 8: 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 9: First quarter 2006 in summary
First quarter 2006 in summary Net asset value: SEK 55.6 bn, an increase of +SEK 7.3 bn or +15% Total return for the stock: 10% for the Class A-share 11% for the Class C-share 12% for the return index Stocks were purchased for SEK 1,384 M and sold for SEK 57 M. Disclosure notice regarding mor
Slide 10: A favorable development of net asset value...
A favorable development of net asset value... Kr/aktie SEK/share Mdkr M SEK 70 350 298 304 60 283 288 300 50 250 250 40 204 200 189 30 150 160 156 150 20 126 114 10 100 83 0 50 -10 0 06 06 ay ay m m Aktieportföljen Portfolio Nettoskuld Net debt Substansvärde Net asset value Substansvärde per aktie A
Slide 11: ... and Long-term excess returns
... and Long-term excess returns The average annual excess return was: +2%-points/year for last five years +6%-points/year for last ten years Total return index (Index) (c) SIX AB 2006 700 600 Industrivärden share 500 400 300 200 Total Return Index (SIXRX) 100 1996 1997 1998 1999 2000 2001 2002 2003
Slide 12: Good long-term growth in value as well
Good long-term growth in value as well Annual average total return Industrivärden A SIXRX Difference Q1, 2006 10% 12% -2 %pts 2 years 35% 31% +4 %pts 5 years 12% 11% +1 %pts 10 years 21% 15% +6 %pts 61 years 16% 14% +2 %pts Through March 31, 2006 AN_Pres_KV106 Nr 12
Slide 13: Major transactions during the last years
Major transactions during the last 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/manag
Slide 14: 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 15: High activity – good return
High activity – good return May 4, 2006 Dec. 31, 2000 Dec. 31, 1995 Equities portfolio (SEK bn) Handelsbanken 14 Ericsson 20 Ericsson 3 Sandvik 14 Handelsbanken 8 AGA 3 Ericsson 10 Skandia 7 SCA 2 SCA 8 Sandvik 5 PLM 2 SSAB 7 SCA 4 Handelsbanken 2 Skanska 4 Skanska 3 Besam 1 Indutrade 2 Besam 2 Indu
Slide 16: Continued 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_KV106 a 30 r- 0 -ju 1 Nr 16 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 17: Equities portfolio as per May 4, 2006
Equities portfolio as per May 4, 2006 Trading (3%) Other (4%) Construction (7%) Indu ska Engineering (34%) Sk Sandvik trad an Forestry and SSAB e consumer Munters SCA Höganäs products (13%) Ericsson Handelsbanken Telecom (16%) Banking (23%) AN_Pres_KV106 Nr 17
Slide 18: Equities portfolio as per May 4, 2006
Equities portfolio as per May 4, 2006 Value % of % of % of votes distribution portfolio capital in in Stock No. shares SEK M SEK/share value company company Handelsbanken A 67,000,000 14,328 74 23 10.0 10.3 Sandvik 26,000,000 13,546 70 21 11.0 11.0 Ericsson A 372,000,000 9,801 51 16 2.3 13.4 Ericsso
Slide 19: A transparent portfolio of leading companies
A transparent portfolio of leading companies March 31, 2006 Total return, % Total return, % May 4, 2006 Value distri- Jan.-March Annual average Value distri- Portf. Stock No. shares bution, SEK M 2006 March 96-March 06 No. sharesbution, SEK M share, % Handelsbanke 67,000,00 14,506 10 21 67,000,000 1
Slide 20: Industrivärdens dividend
Industrivärdens 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 21: 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 22: Presentations
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_KV106 Nr
Slide 23: 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 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