1 / 27

Interim Report, January 1 – March 31, 2005 Industrivärden, May 3, 2005

Interim Report, January 1 – March 31, 2005 Industrivärden, May 3, 2005. 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

bell
Download Presentation

Interim Report, January 1 – March 31, 2005 Industrivärden, May 3, 2005

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Interim Report, January 1 – March 31, 2005 Industrivärden, May 3, 2005

  2. 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 Securities, Andreas Joelsson, +46 8 52 2295 00 ABG Sundal Collier, Jacob Wall, +46 8 566 286 00 Danske Equities, Fasial Kalim Ahmad, +45 33 4404 26 • Low administrative expenses, USD 10 M or less than 0.2% of AUM • “Holding company” tax status: no tax on capital gains, dividends received/rendered are taxable/deductible • Discount to NAV approx. 16%, historical average 28%

  3. 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

  4. Vision To be perceived as the leading investment company with a focus on large and medium-sized listed Nordic companies Nordic companies Public sector Expansion phase Management phase Restructuring phase Startup phase Private equity investor in mature companies Venture capitalists Industrivärden

  5. Ownership structure Number of shareholders: 37 000 Source: VPC as per 041231

  6. 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 exercising value enhancement by active ownership • Professional management team and organization • Experienced directors nominated in our active holdings • Valuable contact network with Nordic ties

  7. Proven success concept Active holdings: 10 1. Ability to find holdings with good value potential Nordic listed companies: 810 Active ownership 2. Ability to hold and develop companies in order to actively contribute to good growth in value 3. Ability to build net asset value – competitive return to shareholders

  8. 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 Industrivärden share 600 500 400 300 Total Return Index (SIXRX) 200 100 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 05 As per April 29, 2005

  9. Major transactions during the last three years SALES ACTIVE OWNERSHIP INVESTMENTS Identified value potential Value creation Realization of value/ adaptation of strategy • Subscription in Ericsson’s new issue • 22% of the orthopedics comp. Ossur • 13% of the moisture ctrl. comp. Munters • Increase of ownership in Sandvik, SHB and SSAB • Others Continuous development of work methods and models Strong ability moving forward • Lundbeck • Besam • Skandia • Others Value creation enables growth in net asset value Price: SEK 9.7 bn Price: SEK 11.2 bn Cap. gain: SEK 2.7 bn • Result from trading activities: SEK 229 M March 2002 - March 2005

  10. Major transactions during the last three years SEK M March 2002 - March 2005

  11. 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 2 Skanska 1 Munters <1 Besam 2 Fundament 1 Ossur hf <1 Isaberg Rapid <1 Indutrade 1 Isaberg Rapid <1 Other 7 Other 1 Other 1 Total 42 Total 58 Total 18 Net debt: -5 -1 -3 Net asset value: 37 57 15 Percentage listed companies: 94% 93% 54% 3M, 2005 5 yrs 10 yrs Major transactions (>SEK 500 M), period: - 15 40 Annual total return: (12 mån)22% 3% 19% Return index, yearly: (12 mån)18% -5% 13% Excess return IV (%pts/year): (12 mån)4... 8... 6... * Total of 8 wholly owned subsidiaries, incl. Indutrade, Besam and Isaberg Rapid.

  12. Long-term favorable development of net asset value SEK/share SEK M Portfolio Net debt Net asset value

  13. 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 SEK 0.4 billion and sold for SEK 0.3 billion • Trading profits more than amply covered management costs • Decision to introduce Indutrade on the stock market during 2H:2005

  14. Major transactions 1 Q, 2005 Net purchases Thousands SEK M SCA B 981 259 Ossur hf 6,000 57 Other 45 Total 361 Net sales Thousands SEK M Pfizer Inc. 1,000 170 Nokia 1,293 145 Other 10 Total 325

  15. Continued strong financial position Net debt (SEK M) Net debt equity-ratio

  16. The strength of our strategy • Focus and transparency • Lean, efficient and professional organization • Short-term trading - Concentrated portfolio - Primarily listed holdings - Significant influence a requirement - Long-term perspective - Active ownership - Investment activities - Market operations - Current market information - Financing of management costs

  17. Main processes of operations Organization Methods & Systems Networks Exit evaluation Active ownership Market operations

  18. 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 rationalization Dividend, capital reduction, stock buybacks, refinancing, working capital • Board and management, business culture Competence and capacity • Operational improvements Cost-cutting, market position, etc.

  19. Active ownership Board Guidelines for active ownership Presentations Investment organization Proposals for board directors Information exchange Team / investment manager Active holdings Networks Action plans Dialog / company visits Boards/committees Active board- and committee work Management

  20. Our investment criteria Conditions Portfolio Scope: Concentrated portfolio Sectors: Sector generalist Ownership Possibility to be major or structure: largest owner Investment horizon: 3-8 years Geography: Nordic companies Requirement: Major potential for value creation Individual investments Market value: Large and medium- sized companies Type: Mainly listed Exit: Appropriate exit once target value has been created

  21. Equities portfolio as per April 29, 2005

  22. Equities portfolio as per April 29, 2005 Health care (2%) Trading (5%) Construction (7%) Engineering (28%) Ossur oth. Sandvik SSAB Munters Isaberg Rapid others Indutrade Forestry and consumer products (13%) Skanska SCA Telecom (19%) Ericsson Handelsbanken Banking (26%)

  23. Industrivärdens dividend Bonus dividend Ordinary dividend SSEX dividend yield Dividend yield 3,5% 2,9% Dividend: 2,75 3,25 3,75 4,50 6,20 8,40 8,35 5,80 5,50 6,00 SEK/share Of which ordinary 2,75 3,25 3,75 4,50 5,00 5,00 5,00 5,00 5,50 6,00

  24. Industrivärden A successful value investor with focus on investments and active value enhancement in listed Nordic companies

  25. Good growth over time Annual excess return (change in value, dividends incl.) for Industrivärden’s shares compared with total return index (SIXRX) 10 yrs +4 %pts annually in 7 yrs +4 %pts annually in 5 yrs +4 %pts annually in 05 2003 2004 1995 1996 1997 1998 1999 2000 2001 2002 Average annual total return for the respective periods through 05/04/30.

  26. 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... www.waymaker.se / Latest News / Subscribe Press release direct:

  27. 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* and Sandvik*) - Approx. 100% of portfolio value in 2006 (all active holdings) • From now own, any nonbusiness-related shares consist only of: - Liquidity holdings - Marginal purchases in active holdings held less than a year - Holdings under buildup/sale in which the share of votes is less than 10% Taxable Deductible • Dividends received • Interest income • Any standard-calculated earnings • Dividends rendered • Interest expense • Management costs Tax-exempt Nondeductible • Capital gains on stocks • Capital losses on stocks *Holdings correspond to 10% of the number of votes for less than a year, following complementary purchases in 2004.

More Related