“Long-term industrial developer of listed Nordic companies”
Full year 2010 Industrivärden, February 9, 2011
Pres_KV410 Nr 1 – Long-term industrial developer of listed Nordic companies
Ericsson
Volvo SSAB
Sandvik Skanska SCA
Pres_KV410 Nr 2 Strong base for value creation
Our competitive advantages Our portfolio
Holding Market value, Portfolio Share of SEK bn share, % votes, %
Long-term Sandvik 18.2 25 11.7 active ownership Handelsbanken 14.0 20 10.6 Volvo 10.7 15 10.7 Blue-chip portfolio SCA 7.5 11 29.5 SSAB 6.3 9 22.5 Ericsson 5.8 8 13.8 Skanska 4.3 6 27.8 Indutrade 3.4 5 36.8 Höganäs 0.9 1 8.1 Leveraged Extensive influence structural capital Total AUM 71,1 100
As per December 31, 2010
Our rating
Standard & Poors: A/stable/A–1
A strong, competitive long-term track record with limited risk
Pres_KV410 Nr 3 Focused strategy
Strong value potential and long-term perspective
Portfolio Conditions Sectors: Sector generalist Scope: Concentrated portfolio – focus Business models: Geographically scalable Individual investments Market value: Large and midcap Cash generation: Good ability companies Ownership Major owner with board Type: Listed stocks representation
Geography: Nordic companies Evaluation horizon: 5-8 years Business cycle: Expansion or management phase Requirement: Strong potential for value Exit: Appropriate exit once target creation value has been achieved
Pres_KV410 Nr 4 Long-term value creation
Development of net asset value
200 SEK/share 180 187 160 181
140 +12% annually during 149 120 the last 20 years period 100 (incl. reinvested dividends)
80
60
40 32 58 52 20 23 0 1989-12-31 1990-12-31 1991-12-31 1992-12-31 1993-12-31 1994-12-31 1995-12-31 1996-12-31 1997-12-31 1998-12-31 1999-12-31 2000-12-31 2001-12-31 2002-12-31 2003-12-31 2004-12-31 2005-12-31 2006-12-31 2007-12-31 2008-12-31 2009-12-31 2010-12-31
Pres_KV410 Nr 5 2010 in brief
. Net asset value SEK 57.7 bn, or SEK 149/share increase of SEK 14.9 bn, or 37%* for the year . Total return of 40% for the A-shares and 48% for the C-shares the return index was 27% . Net share purchases for a total of 2.5 bn, with accumulated growth in value of 41% . Additional purchases of shares in Volvo for 1.8 bn at an average price of SEK 78/share . The holding in Munters was sold for SEK 0.8 bn, representing a total return of 50% . Proposed dividend of SEK 4.00 (3.00) per share
*Including reinvested dividends.
Pres_KV410 Nr 6 Sharp increase in net asset value
SEK 58 bn as per December 31, 2010
Sandvik + SEK 6.2 bn Volvo + SEK 4.7 bn +15 bn Indutrade + SEK 1.4 bn +37%* Other + SEK 2.7 bn
SEK 43 bn as per December 31, 2009
*Incl. reinvested dividends.
Pres_KV410 Nr 7 Net asset value
SEK billion SEK per share Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 2010 2009 2008 2010 2009 2008
Equities portfolio 71.1 53.5 34.7 184 139 90 Net debt -13.4 -10.8 -10.8 -35 -28 -28
Net asset value 57.7 42.8 23.9 149 111 62
Debt-equity ratio 19% 20% 31%
Net asset value after full conv. 144
Debt-equity ratio after full conv. 13%
Pres_KV410 Nr 8 Active ownership in brief
Focus on value enhancement drivers: strategy, development and positioning
Board participation/ Company, competitors and industry owner Analyst presentations cooperation Megatrends
Nominating In-depth committee analysis Company visits participation Value creation
Ownership Database monitoring agenda incl. action plan
AGM Direct dialog participation with company management
Pres_KV410 Nr 9 Active ownership in practice
Handelsbanken SSAB . New market-oriented organization. . Consistently applied business model. . Cost-cutting program has had faster impact than . Organic growth in home markets in the Nordic countries planned. and the UK. . Acquisition of IPSCO’s North American steel mills . Strong financial and market position in a turbulent and coming capacity investments in environment. North America strengthen position as leading player and enable continued global expansion. Ericsson . Strong position ahead of operators’ investments in Sandvik next generation of telecom systems (LTE) . Favourable growth in Services segment. . Consolidation of completed acquisitions. . Acquisition of Nortel’s U.S. mobile systems business, . Restructuring program designed to adapt together with central customer contracts, makes costs and production capacity to market Ericsson a leader also in North America. situation.
SCA Skanska . Efficient construction operation generates good . Focus on profitable growth with strong brands cash flows. in hygiene segment. . Proven model for value-creating project . Efficiency improvement measures in packaging development. operations. . Strategic focus on environmentally adapted, . Extensive restructuring in product portfolio. energy-efficient solutions.
Höganäs Indutrade . Continued company acquisitions. . Strong focus on collaboration with . Decentralized business model. customers in new product development. . Establishment in new geographic . Acquisition of U.S. powders business. markets. . Strong measures reduce working capital. . Strong position in energy segment.
Pres_KV410 Nr 10 Our portfolio of blue-chip companies
18.2 14.0 10.7 7.5
Through a niche focus and strong position A decentralized branch operation with Through innovative, custom-tailored product in R&D, the company has built up a world- local customer responsibility has resulted development and high quality, the company has The leading European manufacturer of leading position in materials technology with in high level of customer satisfaction and a world-leading position in commercial transport personal care products, with rapidly growing products primarily in the manufacturing and enables good profitability solutions niche products, as well as packaging solutions mining industries 25% 20% 15% 11%
6.3 5.8 4.3 3.4
Uniqe, comprehensive know-how in World-leading position in the niche segment The market’s largest and most profitable By combining sales of industrial consumables construction combined with process focus of quenched steels and advanced, high- supplier of mobile telecom systems, with a with strong organic growth and a well- has resulted in a leading construction strength sheet creates solid base for growth leading position in telecom development developed model for acquisition-based company with value-creating project and high profitability growth, the company has been able to show development impressive profitability 9% 8% 6% 5%
0.9 Market value SEK bn Market leader in the growing niche of metal powders, used primarily for component Portfolio value: SEK 71.1 bn manufacture in the auto industry
Portfolio 1% As per December 31, 2010 share, %
Pres_KV410 Nr 11 Strong financial position
Interest bearing net debt (SEK bn) Net debt-equity ratio 15,0 35%
13,0 30% SEK 13.4 bn
11,0 25% 19% 9,0 20% 7,0 15% 5,0 Dec 31 Dec 31 Dec 31 SEK bn 2010 2009 2008 10% 3,0 Listed stocks 71 54 35 Net debt -13 -11 -11 1,0 5% Net debt eq. ratio 19% 20% 31% Net debt eq. ratio a. full conversion 13% - - -1,0 0%
S&P rating: A/stable/A–1
Pres_KV410 Nr 12 Industrivärden online
Reuters code INDUa.ST Bloomberg code INDUA SS www.industrivarden.net
+46-8-666 64 00
+46-8-661 46 28
Box 5403, SE-114 84 Stockholm, Sweden
Pres_KV410 Nr 13 Ownership structure
Percentage of Shareholder, Dec. ’2010 capital, % votes, %
Handelsbanken sphere* 26 36 SCA sphere* 13 17 L E Lundbergföretagen 12 17 Swedbank Robur Funds 6 1 Other shareholders 43 29
Total 100 100
Of which, foreign owners ~10 ~10
Number of shareholders: Approx. 50,000
*Primarily held by associated pension funds and foundations
Pres_KV410 Nr 14