Johan Forssell Vice President and Head of Core Holdings

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1 Johan Forssell Vice President and Head of Core Holdings Our Core Holdings Healthcare Technology Engineering Financial Services 1

2 Major transactions (> 1 billion SEK) Ericsson ABB ABB 2004 Sept 30 + Ainax + SEB + Ericsson SAS SKF Stora Enso AstraZeneca Marginal changes in several holdings AstraZeneca Portfolio mix September 2004 SEB OMX AstraZeneca Electrolux Ainax Scania Gambro Atlas Copco Ericsson ABB Saab WM-data Healthcare Technology SEK m. Engineering Financial Services 2

3 Core Holdings Investor as an owner STRATEGY PEOPLE Evaluate companies strategy and goals Industry benchmarking M&A activities Capital structure & Distribution policy Network of proven business leaders and experts Nominate board members In-house industrial and financial expertise Remuneration Building best-in-class companies Core Holdings Organization of 12 analysts Health Care Peter Sellei Financial Services Martin Feltner Technology Helena Saxon Engineering Johan Grip Business Teams (1-3 board members and 1-2 analysts) AstraZeneca Gambro OMX SEB Ericsson Saab WM-data ABB Atlas Copco Electrolux Scania Support and facilitate Investor AB s role as a long-term owner Deep knowledge of companies and industries necessary to create value 3

4 Key roles 3.Support Corporate finance activities Investor AB Management 2. Support Investor AB Management in investment decisions Investor AB Corporate Finance Investor AB Business Team Board 1. Support Board members by evaluating value creating opportunities Management of holdings Core Holdings Examples of activities NAV, SEK bn. IPO and divestment 160 of Saab shares Divestment of Scania shares Merger Astra/Zeneca Swap with the Wallenberg Foundations Merger OM/HEX New issue ABB Divestment of AstraZeneca shares Investment in Ainax 40 0 New issue Ericsson and increased ownership in ABB Sept

5 Ranking of core holdings Growth + Profitability + Quality A, B, C or D company A structured approach to evaluate our holdings A framework to evaluate how to improve C/B companies to A/B companies Global Benchmarking (operating margin*) 12% 20% 9% 15% 6% 10% 3% 5% 0% Paccar Truck and Other Scania Vehicles and Service Volvo Trucks + Buses DCX Commercial Vehicles MAN Commercial Vehicles Fiat Iveco 0% Atlas Copco Compressor Technique Ingersoll-Rand Industrial Solutions Gardner Denver Compressor and Vacuum Products 8% 16% 6% 12% 4% 8% 2% 4% 0% Merloni Whirlpool Electrolux Appliances and Floorcare Maytag Home Appliances * First 9 months % Rockwell Emerson Schneider Honeywell Siemens (A&D+I&S) ABB Automation Invensys 5

6 Identifying value potential within core holdings Operational improvements/ benchmarking and additional growth Balance sheet management Value potential Acquisitions/ divestitures Market value Value according to base case Improvement case Key drivers and uncertainties in Core Holdings industries Healthcare Drivers Demographics Unmet medical needs Emerging markets Uncertainties Regulatory hurdles for approval R&D productivity Pricing Technology Drivers Increased mobility Technological development Emerging markets Uncertainties Consumer behavior Competitive dynamics Pricing 6

7 Key drivers and uncertainties in Core Holdings industries Engineering Drivers New products and applications Service and spare parts China, India, Eastern Europe Energy, productivity, transport Uncertainties Business cycle and USD Cost increases vs. pricing power Globalization Financial Services Drivers Ageing population increased savings Eastern Europe, Russia Product innovation Uncertainties Regulatory changes Pricing Building best-in-class companies High focus on innovation Grow revenues from service and spare parts Expansion in emerging markets Cost and capital efficiency Good discipline when conducting acquisitions Strong management and corporate culture is key to succeed 7

8 Summary Value creating ownership In-depth knowledge about our companies and industries makes it possible to recommend value creating opportunities Ranking used as a tool to identify value creating opportunities in Core Holdings Profitable growth, the key value driver, but also the toughest challenge 8