Industrivarden Ab Class A · OMXSTO:INDU_A
Industrivarden Ab Class A — Q1 2005 Earnings Presentation
27 slides from Industrivarden Ab Class A's earnings presentation, May 3, 2005
Slide 1: Interim Report, January 1 – March 31, 2005
Interim Report, January 1 – March 31, 2005 Industrivärden, May 3, 2005 AN_Pres_KV105 Nr 1
Slide 2: Company in brief
Company in brief Established: 1944 Stock: 193 million shares, listed on SSEX Market cap: Approx. USD 4.2 bn (SEK 30 bn) Free float: Approx. 53% of shares No. shareholders: 37,000 Average daily turnover: Approx. 130,000 shares Coverage: Carnegie, Johan Sjöberg, +46 8 676 88 00 Enskilda
Slide 3: 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_KV105 Nr 3
Slide 4: 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 5: Ownership structure
Ownership structure capital, % votes, % AMF Pension 12 5 Lundbergföretagen 11 14 SCA Pension Foundations 9 11 SHB Pension Foundation 7 9 SHB Pension Fund 7 9 Wallander & Hedelius Foundation 6 8 SCA Pension Foundation 9 11 Skandia Life 4 1 Oktogonen 3 5 SCA 2 3 Other shareholders 39 35 Total 100 100
Slide 6: 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 7: Proven success concept
Proven success concept Active 1. Ability to find holdings with holdings: Nordic listed companies: 810 good value potential 10 Active 2. Ability to hold and ownership develop companies in order to actively contribute to good growth in value 3. Ability to build net asset value – competitive return to
Slide 8: Long-term excess returns
Long-term excess returns The average annual excess return was: +4%/year for last five years +4%/year for last ten years Total return index (Index) (c) SIX AB 2005 687 600 Industrivärden share 500 400 300 Total Return Index (SIXRX) 200 100 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 05 As per A
Slide 9: 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 value/ adaptation of strategy Subscription in Ericsson’s new issue Continuous development of work methods and models Lundbeck 22% of the orthopedics comp.
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: High activity – good return
High activity – good return March 31, 2005 Dec. 31, 1999 Dec. 31, 1994 Equities portfolio (SEK bn) Handelsbanken 11 Ericsson 26 PLM 4 Sandvik 8 Sandvik 6 Inductus* 4 Ericsson 8 Handelsbanken 5 AGA 2 SCA 5 SCA 5 SCA 2 Skanska 3 Skanska 3 Ericsson 2 SSAB 2 SSAB 2 Handelsbanken 1 Indutrade 2 Indutrade
Slide 12: Long-term favorable development of net asset value
Long-term favorable development of net asset value Kr/aktie SEK/share Mdkr M SEK 70 350 298 60 283 300 50 250 40 204 200 189 189 185 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 Substansvärde per aktie AN_Pres_KV105
Slide 13: 1Q, 2005 in summary
1Q, 2005 in summary Net asset value was unchanged at SEK 189 per share The total return for Industrivärden's stock was 22% during the last 12 months, or 4 percentage points higher than the return index Stock was purchased in SCA B and Ossur hf for SEK 0.3 billion Stocks were purchased for SE
Slide 14: Major transactions Q1, 2005
Major transactions 1 Q, 2005 Net purchases Thousands SEK M Net sales Thousands SCA B 981 259 SEK M Ossur hf 6,000 57 Pfizer Inc. 1,000 Other 45 170 Total 361 Nokia 1,293 145 Other 10 Total 325 AN_Pres_KV105 Nr 14
Slide 15: Continued strong financial position
Continued strong financial position Net debt (SEK M) Net debt equity-ratio 7,0 20% 18% 6,0 16% 5,0 14% 12% 4,0 10% 3,0 8% 2,0 6% 4% 1,0 2% 0,0 0% AN_Pres_KV105 Nr 15
Slide 16: 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 17: 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 18: 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 19: Presentations
Active ownership Board Presentations Guidelines for active ownership Information exchange Investment organization Proposals for board directors Team / investment manager Dialog / company visits Active holdings Action plans Networks Boards/committees Active board- and committee work Management AN_Pre
Slide 20: 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 21: Equities portfolio as per April 29, 2005
Equities portfolio as per April 29, 2005 Value % of % of % of votes distribution portfolio capital in in SEK M SEK/share value Stock No. shares company company Handelsbanken A 66.364.100 10.618 55 26 9,6 10,1 Ericsson A 372.000.000 7.849 40 19 2,3 13,3 Sandvik 26.927.500 7.486 39 18 10,2 10,2 SCA A
Slide 22: Equities portfolio as per April 29, 2005
Equities portfolio as per April 29, 2005 Health care (2%) Trading (5%) Ossur oth Construction (7%) Indu Engineering (28%) Sk Sandvik trad an Forestry and SSAB sk e a consumer Munters . SCA Isaberg Rapid products (13%) others Ericsson Handelsbanken Telecom (19%) Banking (26%) AN_Pres_KV105 Nr 22
Slide 23: Industrivärdens dividend
Industrivärdens dividend 9 7% 8 6% 7 5% 6 Bonusutdelning Bonus dividend 5 4% Ordinarie Ordinary utdelning dividend 3,5% SSEX SSEXdirektavkastning dividend yield 4 3% Direktavkastning Dividend yield 2,9% 3 2% 2 1% 1 0 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Dividend: 2,75 3,25 3,75 4,50
Slide 24: Industrivärden
Industrivärden A successful value investor with focus on investments and active value enhancement in listed Nordic companies AN_Pres_KV105 Nr 24
Slide 25: Good growth over time
Good growth over time Annual excess return (change in value, dividends incl.) for Industrivärden’s shares compared with total return index (SIXRX) +4 %pts annually in 10 yrs +4 %pts annually in 7 yrs +4 %pts annually in 5 yrs 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 05 Average annual total
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
Slide 27: Changed tax situation 2005/2006
Changed tax situation 2005/2006 Since September 2004, all active holdings are classified as business-related shares (corresponds to 97% of portfolio value) Holdings that are not included in base for standard income assumption: - Approx. 50% of portfolio value in 2005 (active holdings excl. SHB*