Industrivarden Ab Class A · OMXSTO:INDU_A
Industrivarden Ab Class A — Q2 2003 Earnings Presentation
30 slides from Industrivarden Ab Class A's earnings presentation, Aug 6, 2003
Slide 1: Interim Report, Q2, 2003
Interim Report, Q2, 2003 Industrivärden, August 6, 2003 Pres_KV203_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 2.5 bn (SEK 20 bn) Free float: Appr. 60% of shares No of shareholders: 35.000 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 Pres_KV203_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: Long-term excess returns
Long-term excess returns The average annual excess return was: +4% / year for the last five years +4% / 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 8: Turn around in development of net asset value
Turn around in development of net asset value Index 900 800 Development Jan.-Aug., 2003 700 600 +SEK 3,267 M 500 or +SEK 18/share 400 300 200 100 93 94 95 96 97 98 99 00 01 02 03 Total return for share Total Return Index Net asset value, incl. dividend payout Pres_KV203_eng No 8
Slide 9: 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 10: 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 11: 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 1.6 bn, turnover: SEK 706 M, earnings a. taxes: SEK 87 M
Slide 12: 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% 3,0 7% 8% 2,7 2,8 2,4 2,2 6% 1,9 2,0 4% 1,0 2% *Parent company’s interest-bearing net debt in relation 0,0 0% to the market valued 30-sep
Slide 13: Composition of net asset value
Composition of net asset value SEK billion SEK per share Aug. 4 Jun. Dec. 31 Aug. 4 Jun. 30 Dec. 31 2003 30 2002 2003 2003 2002 2003 Equities portfolio 30.6 26.4 158 147 136 Net debt -2.9 28.5 -2.0 -14 -14 -10 -2.9 Net asset value 27.7 24.4 144 133 126 25.6 Pres_KV203_eng No 13
Slide 14: Development of net asset value
Development of net asset value SEK M 54,0 42,4 39,4 29,6 59,1 27,7 24,4 25,6 48,1 44,6 30,9 28,5 30,6 26,4 -5,1 -5,7 -5,2 -1,3 -2,0 -2,9 -2,9 31 dec-00 30 jun-01 31 dec-01 30 jun-02 31 dec-02 30-jun-03 04-aug-03 SEK/share 280 222 204 153 126 133 144 Equities portfolio Aktieportföljen Net debt Nettol
Slide 15: Development of net asset value
Development of net asset value Share of net asset value, % 228 283 214 222 166 204 193 153 115 126 119 133 SEK/share 100% 90% Other Övrigt 80% Össur 70% Munters 60% Skandia SSAB 50% Skanska 40% Sandvik 30% SCA Handelsbanken 20% Ericsson 10% 0% Dec Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 99 00 01
Slide 16: Sector breakdown, equities portfolio
Sector breakdown, equities portfolio Health care (3%) Other (1%) Construction (5%) Össur o Ska Trading (6%) In Banking and nsk du tra Handelsbanken insurance (27%) th. a de Skandia Telecom (13%) Ericss on Sandvik SSAB SCA Isaberg Rapid Forestry Munters and consumer others Engineering (27%) products
Slide 17: Equities portfolio as per June 30, 2003
Equities portfolio as per June 30, 2003 % of % of Market value % of votes portfolio capital In In SEK M SEK/share value Stock No. shares company company Handelsbanke 51,655,900 6,767 35 24 7.2 7.9 nA SCA A 16,982,000 5,200 27 18 8.1 28.1 SCA B 2,000,000 Sandvik 21,000,000 4,400 23 15 8.0 8.0 Ericsso
Slide 18: Equities portfolio as per June 30 and Aug. 4
Equities portfolio as per June 30 and Aug. 4 June 30, 2003 Total return,Average % annual total return, % August 4, 2003 Market- Period, 5 yrs., 10 yrs., Market- Stock value, SEK MJan 03-June 03 No. shares June 98-June 03 June 93-June 03 No. sharesvalue, SEK M Handelsbanke 51,655,90 6,767 17 4 22 51.
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 Pres_KV203_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 Pres_KV203_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 Total market cap: SEK 4,800 billion (August ’03) Continuous Structured Continuous analysis of Ability for quick scanning of all monitoring of selected companies entries companies all interesting that meet i
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) +5 %pts annually in 10 yrs +7 %pts annually in 7 yrs +4 %pts annually in 5 yrs +8 %pts 3 yrs 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003/08/
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
Slide 26: Skandia in a ten years perspective
Skandia in a ten years perspective Total Return, % 3000 2500 2000 1500 Skandia 1000 500 315 SIXRX 0 213 Pres_KV203_eng No 26
Slide 27: Munters
Munters Trust diagram 19971021 - 20030728 (c) SIX AB 2003 < norm (79.5, MTRS (Senast)) Dag < norm (79.5, AFGX (Köp)) Dag Moisture control 233.5 180 Industrivärden’s holding as per June 30, 2003: 140 2,7 million shares 100 Value SEK 471 M 60 Share of capital and votes 10,8% Board member with ties to
Slide 28: Össur
Össur Medtech 140 120 Össur 100 Industrivärden’s holding as per June 30, 2003: 80 SAX 52 million shares 60 40 Value SEK 282 M 20 Share of capital and votes 16% 0 Board member with ties to Industrivärden: Bengt Kjell • Orthopedics company, leader in prosthetic legs • Distinct customer need • Very goo
Slide 29: Dividend policy and tax rules
Dividend policy and tax rules Industrivärden's dividend policy is to pay a higher long-term dividend yield than the average for the Stockholm Stock Exchange Taxable Deductible Dividends received Dividends distributed Interest income Interest expenses Standard tax rate, 1.5% of the Admini
Slide 30: Development of dividend
Development of dividend 7,0% 6,0% 5,0% 4,0% Direktavkastning Dividend yield Ordinarie Ordinary direktavkastning dividend yield 3,0% SSEXdirektavkastning SSEX dividend yield 2,0% 1,0% 0,0% 1998 1999 2000 2001 2002 Ordinary dividend: 4.50 5.00 5.00 5.00 5.00 SEK/share Bonus dividend: - 1.20 3.40 3.35