Slide 1: Interim Report, Q3, 2003
Interim Report, Q3, 2003 Industrivärden, October 31, 2003 AN_Pres_KV303_eng No 1
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 market turns V
Slide 3: Industrivärden in brief
Industrivärden in brief Number of shares: 193 million shares Market cap: Appr. USD 2.9 bn (SEK 23 bn) Free float: Appr. 60% of shares No of shareholders: 36.000 Average daily turnover: Appr. 180.000 shares Volatility: 30 (60 days) Coverage: Carnegie, Johan Sjöberg, +46 8 676 88 00 Ensk
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
Slide 5: Two dimensional strategy
Two dimensional strategy Professional invest- ment operation Active ownership Generate high growth in net asset value over time AN_Pres_KV303_eng No 5
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
Slide 7: Ownership structure
Ownership structure % of No. shares shares votes AMF Pension Fund 25 418 094 13 7 Lundbergföretagen 14 000 000 7 10 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 8 920
Slide 8: Long-term excess returns
Long-term excess returns The average annual excess return was: +5% / year for the last five years +3% / year for the last ten years Total Return Index (Index) (c) SIX AB 2003 1211 1000 Industrivärden Stock 800 600 400 Total Return Index (SIXRX) 200 100 1993 1994 1995 1996 1997 1998 1999 2000 2001 20
Slide 9: Turn around in development of net asset value
Turn around in development of net asset value SEK M 54,0 42,4 39,4 29,1 29,6 25,6 59,1 22,9 24,4 48,1 44,6 30,9 32,0 26,4 28,5 25,5 -5,1 -5,7 -5,2 -1,3 -2,0 -2,6 -2,9 -2,9 31 dec-00 30 jun-01 31 dec-01 30 jun-02 31 dec-02 31-mar-03 30-jun-03 29-okt-03 SEK/share 280 222 204 153 126 119 133 151 Aktiep
Slide 10: Major activities during the last two years
Major activities during the last two years INVESTMENTS ACTIVE OWNERSHIP SALES Identified value potential Value creation Realization of values Subscription in Ericsson’s new issue Development of new work Pharmacia 16% of the orthopedics comp. Össur methods and models Lundbeck 11% of the moi
Slide 11: Transactions during the last 24 months
Transactions during the last 24 months Mkr Date Transaction Holding Sector Average Price Capital price gain Nov. 01 Sale Pharmacia Pharmaceuticals SEK 471 780 130 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
Slide 12: New active holdings
New active holdings Orthopedics company, leader in prosthetic legs Distinct customer need Very good position in Nordic region, strong position in the U.S. Robust expansion in Europe Fast growth with high profitability Market cap: SEK 1,5 bn, turnover: SEK 706 M, earnings a. taxes: SEK 87 M
Slide 13: Continued strong financial position
Continued strong financial position Net debt (SEK billion) Net debt-equity ratio* 7,0 18% 17% 6,3 16% 6,0 5,1 14% 4,9 5,0 11% 12% 12% 12% 10% 4,0 4,1 10% 9% 9% 9% 9% 3,0 7% 8% 2,7 2,8 2,4 2,7 2,2 6% 1,9 2,0 4% 1,0 *Parent company’s 2% interest-bearing net debt in relation 0,0 0% to the market valued
Slide 14: Composition of net asset value
Composition of net asset value SEK billion SEK per share Oct. 29 Sept. 30 Dec. 31 Oct. 29 Sept. 30 Dec. 31 2003 2003 2002 2003 2003 2002 Equities portfolio 32.0 29.9 26.4 166 155 136 Net debt -2.9 -2.9 -2.0 -15 -15 -10 Net asset value 29.1 27.0 24.4 151 140 126 AN_Pres_KV303_eng No 14
Slide 15: Development of net asset value
Development of net asset value Share of net asset value, % 100% 90% 80% Other Övrigt Össur 70% Munters 60% Skandia SSAB 50% Skanska 40% Sandvik SCA 30% Handelsbanken 20% Ericsson 10% 0% Dec Dec Dec Mar Jun Sep Dec Mar Jun Sep 99 00 01 02 02 02 02 03 03 03 AN_Pres_KV303_eng No 15
Slide 16: Sector breakdown, equities portfolio
Sector breakdown, equities portfolio Health care (3%) Other (<1%) Construction (5%) Össur o Trading (5%) Ska Banking and In nsk e du Handelsbanken insurance (27%) th. tr a ad Skandia Telecom (15%) Ericss on Sandvik SSAB SCA Isaberg Rapid Forestry Munters and consumer others Engineering (26%) product
Slide 17: Equities portfolio as per September 30, 2003
Equities portfolio as per September 30, 2003 % of % of Market value % of votes portfolio capital In In SEK M SEK/share value Stock No. shares company company Handelsbanken A 51.755.900 6.806 35 23 7,2 7,9 SCA A 16.982.000 5.366 28 18 8,1 28,4 SCA B 2.000.000 Sandvik 21.000.000 4.452 23 15 8,0 8,0 Er
Slide 18: Equities portfolio as per Sept. 30 and Oct. 29
Equities portfolio as per Sept. 30 and Oct. 29 Sept. 30, 2003 Total return,Average % annual total return, % October 29, 2003 Market- Period, 5 yrs., 10 yrs., Market- Stock value, SEK MJan 03-Sept. 03 No. shares Sept. 98-Sept. 03 Sept. 93-Sept. 03 No. sharesvalue, SEK M Handelsbanke 51.755.90 6.806 1
Slide 19: Development of internal methods and systems
Development of 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_KV303_eng No 19
Slide 20: Work process in brief
Work process in brief Investment operation Sale Database Active Priori- owner- Asset management tizing ship Organization Methods & systems External Purchase contacts Database Network Analysis Decision Manage- In-depth ment analysis team AN_Pres_KV303_eng No 20
Slide 21: Work process in brief
Work process in brief 1. Database: Monitoring of companies that meet our investment criteria 2. Priority: Companies that are interesting are examined more carefully 3. External contacts: Contacts with company management, experts, etc. 4. Analysis: Fundamental analysis of selected companies 5. Manage
Slide 22: Major knowledge about possible investments
Major knowledge about possible investments Listed companies in the Nordic region: approx. 900 Continuous Structured Continuous analysis of Ability for quick scanning of all monitoring of selected companies entries companies all interesting that meet investment companies criteria. Documentation in da
Slide 23: Value creation
Value creation Agenda Value creation Active Investment Exit ownership Analysis Value potential Business model, growth, profitability, other value-creating measures Market opportunities Organic growth for the market and company. Acquisition opportunities Strategic positioning Strategy, acquisit
Slide 24: 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) +4 %pts annually in 10 yrs +6 %pts annually in 7 yrs +3 %pts annually in 5 yrs +6 %pts 3 yrs 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003/10/
Slide 25: 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