Long-term industrial developer of listed Nordic companies First nine months 2012 Industrivärden, September 5, 2012

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1 Long-term industrial developer of listed Nordic companies First nine months 2012 Industrivärden, September 5, 2012 KV312_eng Nr 1

2 Long-term industrial developer of listed Nordic companies Ericsson Volvo SSAB Sandvik Skanska SCA KV312_eng Nr 2

3 Strong base for value creation Our competitive advantages Our portfolio Blue-chip portfolio Leveraged influence Long-term active ownership Extensive structural capital Holding Market value, Portfolio Share of SEK bn share, % votes, % Handelsbanken 15, ,3 Sandvik 12, ,6 Volvo 11, ,1 SCA 8, ,3 Ericsson 4,7 7 14,3 Skanska 3,5 5 24,5 Indutrade 2,9 5 36,8 SSAB 2,7 4 23,0 Höganäs 1,0 2 10,0 Total 63,4 100 As per September 30, 2012 A strong, competitive long-term track record with limited risk KV312_eng Nr 3

4 Focused strategy Strong value potential and long-term perspective Portfolio Conditions Scope: Concentrated portfolio focus Sectors: Sector generalist Individual investments Business models: Geographically scalable Market value: Large and midcap companies Cash generation: Good ability Type: Listed stocks Ownership: Major owner with board representation Geography: Nordic companies Evaluation horizon: 5-8 years Business cycle: Expansion or management phase Requirements: Strong potential for value creation Exit: Appropriate exit once target value has been achieved KV312_eng Nr 4

5 Long-term value creation Development of net asset value 20 years SEK/share % annualy during the last 20 years period (incl. reinvested dividends) KV312_eng Nr 5

6 9M: 2012 in brief Net asset value on Sep. 30, 2012, was SEK 121/share, an increase of 21% since the start of the year including reinvested dividends. The value of the equities portfolio increased by SEK 6.8 billion to SEK 63.4 billion, or by 12%, during the first 9 months of the year. The Stockholm Stock Exchange gained 8% The total return during the first 9 months of the year was 18% for the Class A shares and 20% for the Class C shares, compared with 12% for the return index Income for the period for first 9 months of the year, including unrealized changes in value, totaled SEK 8,2 billion (-20.2), corresponding to SEK in earnings per share (-52.33) KV312_eng Nr 6

7 Net asset value Sep SEK billion Dec Dec Sep SEK per share Dec Dec Equities portfolio Net debt Interest-bearing debt Convertible loan 63,4-16,6-8,4-8,2 56,9-16,8-8,2-8,6 71,1-13,4-9,2-4, Net asset value 46,8 40,1 57, Debt-equity ratio 26% 29% 19% Net asset value after full conv Debt-equity ratio after full conv. 13% 14% 13% KV312_eng Nr 7

8 Industrivärden s stock - good performance Average annual excess return of 3% - points/year vs. MSCI World Average annual excess return of 4% - points/year vs. MSCI Europe Average annual excess return of 1% - points/year vs. Nasdaq OMX Nordic, Stockholm 400 Index Total return 15 yrs INDU C SAX MXWO MXEU As per September 30, 2012 KV312_eng Nr 8

9 Active ownership in brief Focus on value enhancement drivers; strategy, development and positioning Nominating committee participation Board participation/ owner cooperation Boardpresentations In-depth analysis Company, competitors and industry Megatrends Company visits Value creation Fundamental analysis incl. action plan Databases AGM participation Direct dialog with company management KV312_eng Nr 9

10 Active ownership in practise Consistently applied business model Organic growth in home markets in the Nordic countries and the UK Favorable financial position and strengthened market position Strong capitalization with sizable liquidity buffer Stronger focus on highly profitable specialty products Strategic investment program carried out to increase capacity in quenched steels and strengthen presence in China New finishing line in China put in operation Market leader in telecom systems North America s leading supplier of network systems, with major upgrading and development contracts Acquisition of U.S. company Telcordia strengthens offering of operational support for telecom operators Interest in Sony Ericsson sold to Sony New executive management team Strategic focus and new organization Acquisition of Seco Tools and sale of Medtech Important contracts in emerging markets in Asia, Latin America and Australia, among others Efficient construction operations generates good cash flows Successful model for value-creating project development Construction and operation of New Karolinska in Stockholm Start of first U.S. infrastructure project and sale of first commercial real estate development project in the U.S. New executive management team Strategic focus and new organization Volvo Aero divested for SEK 6.9 billion as part of the strategic focus Launch of world s most modern heavy trucks through new FH series Strong position in Asia and other emerging markets Increased activity in emerging markets, such as Asia and Brazil Focus on collaboration with customers on development of new products Divestment of packaging business to DS Smith Acquisition of Georgia-Pacific s European tissue business Strengthened exposure in hygiene segment in Brazil, Chile, Russia and Turkey Acquisition of Asian hygiene products company, strengthens positions in China and Southeast Asia Continued growth through acquisitions Flexibility through decentralized business model KV312_eng Nr 10

11 Portfolio of industry leading companies 63,4 Market value Billion Portfolio value: 63,4 Billion Portfolio share % 100% A well developed universal banking operation and decentralized branch network with local customer responsibility contribute to high customer satisfaction and good profitability. Through a niche focus and strong R&D profile, Sandvik has established a worldleading position in materials technology with products primarily for manufacturing, mining and construction industries. Through innovative, customer-adapted product development and high quality, Volvo has a world-leading position in commercial transport solutions. 15,8 25% 12,9 20% 11,2 18% SCA is a global hygiene products and paper company with a rapidly growing offering of personal care products. Europe s largest private forest owner. The market s largest and most profitable supplier of mobile telecom infrastructure, with a leading position in telecom development. Unique turnkey know-how in construction combined with a process focus has created a leading construction services company with world-class value-creating project development. 8,7 14% 4,7 7% 3,5 5% The combination of sales of high-tech industrial consumables, good organic growth and a highly refined model for acquisition-based growth has resulted in strong profitability growth. World-leading niche position in high strength steel sheet creates solid foundation for growth and sustained high profitability. Market leader in growing niche of metal powders, used primarily for component manufacturing within the automotive industry. 2,9 5% 2,7 4% 1,0 2% (As Per Sep. 30, 2012) KV312_eng Nr 11

12 Debt provides financial leverage Net debt development 10 yrs Interest bearing net debt (SEK bn) Net debt-equity ratio 20,0 18,0 16,0 14,0 35% 30% 25% SEK 16,6 bn 26% 12,0 10,0 8,0 6,0 4,0 2,0 0,0 20% 15% 10% 5% 0% SEK bn Sep Dec Dec Equities portfolio Net debt Net debt eq. ratio 26% 29% 19% Net debt eq. ratio after full conv. S&P rating 13% 14% 13% A-/stable/A 2 KV312_eng Nr 12

13 High dividend yield 6 10% 9% 5 8% 4 7% 5,5% 6% Utdelning Dividend 3 5,2% 5% 4% Direktavkastning Dividend yield Indu-A Direktavkastning Dividend yield Indu-C Direktavkastning Dividend yield OMXSPI Börsen 2 3,8% 3% 1 2% 1% % Dividend: 2,90 2,75 3,00 3,50 4,50 5,00 4,50 3,00 4,00 4,50* SEK/share * Yield for 2012 by Dec stock market values KV312_eng Nr 13

14 Industrivärden online Reuters code Bloomberg code INDUa.ST INDUA SS Box 5403, SE Stockholm, Sweden KV312_eng Nr 14