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    INDU A   SE0000190126

AB INDUSTRIV─RDEN (PUBL)

(INDU A)
  Report
Delayed Quote. Delayed Nasdaq Stockholm - 01/14 11:29:39 am
294.4 SEK   -2.00%
2021AB INDUSTRIVÄRDEN : Download Minutes
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2021Net asset value as per October 31, 2021
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2021New number of votes and shares outstanding
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AB Industrivńrden : 2021 9M

10/11/2021 | 01:42am EST

Interim Report 9M:2021

January 1-September 30, 2021

  • Net asset value on September 30, 2021, amounted to SEK 128.6 billion, or SEK 295 per share, an increase during the first nine months of the year of SEK 16 per share. Includ- ing reinvested dividend, net asset value increased by 8%.
  • The total return for the first nine months 2021 was 5% for the Class A and Class C shares, compared with 24% for the Stockholm Stock Exchange's total return index (SIXRX).
  • Earnings per share for the period were SEK 24.98.
  • During the first nine months 2021, shares were purchased in Sandvik for SEK 1.9 billion, in Volvo for SEK 0.8 billion, in Essity for SEK 0.5 billion and in Handelsbanken for SEK 0.3 billion.
  • The shareholding in SSAB was divested in May for SEK 2.0 billion.
  • The debt-equities ratio as per September 30, 2021, was 4%.

Value performance

Average annual change as per September 30, 2021

Total return

Net asset value*

Industrivärden C

Index (SIXRX)

9M:2021

8%

5%

24%

1 year

17%

17%

32%

3 years

9%

13%

18%

5 years

13%

14%

16%

7 years

12%

15%

15%

10 years

15%

18%

16%

*Including reinvested dividend.

AB Industrivärden (publ) Reg. no. 556043-4200 www.industrivarden.net

CEO's message

During the third quarter, the extensive vaccination against Covid-19 being conducted in large parts of the world, is enabling societies to now open up again. From a real economic perspective it can be ascertained that the easing of restrictions combined with large stimulus packages has created conditions for strong demand. On the supply side, however, we are seeing major disruptions in global supply chains, including a shortage of semiconductors, rising prices for input goods, labor shortages in certain areas, and higher transport costs. In recent time this strong development has led to rising inflation, a slight rise in interest rates and higher volatility in the stock market. On the whole, how- ever, despite a number of challenges at the moment, there are long-term prospects for continued good economic growth.

Industrivärden's net asset value amounted to SEK 128.6 billion on September 30, 2021, or SEK 295 per share, representing an increase of 8% during the first nine months of the year. The total return for Industrivärden's Class A as well as C shares during the same period was 5%, compared with 24% for the total return index (SIXRX).

During the year we have invested approximately SEK 3.5 billion in several of our existing portfolio companies. We have done this against the backdrop of our conviction that these companies have good value potential over time. Shares were bought in Sandvik for SEK 1.9 billion, in Volvo for SEK

0.8 billion, in Essity for SEK 0.5 billion, and in Handels- banken for SEK 0.3 billion.

Industrivärden's business model, where shareholder value is created mainly through active ownership in a con- centrated portfolio of listed Swedish companies, entails that we engage ourselves in and put strong emphasis on the port- folio companies' ability to adapt and develop. I therefore want to mention a few examples of noteworthy steps taken by the portfolio companies during the third quarter.

Sandvik continues to successively carry out well-consid- ered add-on acquisitions that are strengthening its core businesses. During the quarter, two acquisitions were an- nounced in the CAM software field, and against this back- ground the company raised its 2025 revenue target for Sandvik Manufacturing Solutions.

Volvo is showing continued high activity in all parts of its operations, with strong focus on the ongoing industry transformation. During the third quarter - in North America

  • Volvo received its largest commercial order to date for its heavy-duty electric truck model. The company is currently working intensively to reduce the effects of disruptions in its supply chains.
    As part of a refocusing and review of its payment busi- ness, Handelsbanken has agreed to sell its card acquiring business to Worldline for approximately SEK 2 billion.
    Within the framework of its renewable fuels investment program, SCA - together with an energy company - has started a joint venture company to produce and sell liquid biofuels.
    At the end of September Handelsbanken's board of directors announced that they have proposed an extra divi- dend of approximately SEK 4 per share for approval by an Extraordinary General Meeting. The dividend, which will be conducted in the form of Industrivärden shares, will reduce the bank's exposure to shares in pension manage- ment, which will increase the long-term stability of its capi- talization. We are evaluating various alternatives for how to manage a potentially received dividend of own shares and will communicate the Board's decision when it has been made.
    Given the portfolio companies' strong positions and proven ability to continuously develop and strengthen their businesses over time, I see favorable opportunities for Industrivärden to continue generating long-term share- holder value with balanced risk.

Helena Stjernholm

Chief Executive Officer

  • Industrivärden 9M:2021

Overview

Equities portfolio

The equities portfolio is made up of large shareholdings in seven portfolio companies with strong market positions and a good value potential, in which Industri- värden exercises long-term active owner- ship.

A significant share of the equities portfolio is exposed to the industrial equip- ment, commercial vehicles, banking and consumer products sectors.

Other 0.5 bn; 0%

Skanska 6.9 bn; 5%

Ericsson 8.7 bn; 6%

SCA 9.8 bn; 7%

Portfolio value

September 30, 2021:

Essity 19.2 bn; 14%

SEK 134 bn

Handelsbanken 21.2 bn; 16%

Volvo 34.6 bn; 26%

Market value in SEK bn

Share of portfolio in %

Sandvik 33.4 bn; 25%

Composition of the equities portfolio and net asset value

09/30/2021

Share of

ownership, %

Market value

Share of

Portfolio companies

No. of shares

Capital

Votes

SEK M

SEK/share

value, %

Volvo A

166,600,000

8.6

27.7

33,120

80

26

Volvo B

7,600,000

1,498

Sandvik

166,200,000

13.2

13.2

33,439

77

25

Handelsbanken A

215,200,000

10.9

11.0

21,158

49

16

Essity A

33,257,000

10.1

29.4

9,013

44

14

Essity B

37,600,000

10,227

SCA A

33,785,290

10.3

29.3

4,608

23

7

SCA B

38,300,000

5,224

Ericsson A

86,052,615

2.6

15.1

8,588

20

6

Ericsson B

1,000,000

99

Skanska A

12,667,500

7.4

24.3

2,796

16

5

Skanska B

18,500,000

4,083

Other

453

1

0

Equities portfolio

134,307

309

100

Interest-bearing net debt

-5,730

-13

Net asset value

128,577

295

Debt-equities ratio

4%

9M:2021

Total return, holdings

SEK M

%

4,511

14

766

2

4,217

24

732

4

-524

-5

-319

-3

639

10

705

10,728

8

Industrivärden is a long-term asset manager that invests in listed Nordic companies with good value potential. Shareholder value is created through a professional investment operation and active ownership aimed at contributing to the portfolio companies' strategic development and long-term value creation.

For further information, visit www.industrivarden.net

Industrivärden 9M:2021

3

Performance

Net asset value

Net asset value on September 30, 2021, was SEK 128.6 billion, or SEK 295 per share, an increase of SEK 16 per share during the first nine months 2021. Including reinvested dividend, net asset value increased by 8%. The total return index (SIXRX) increased by 24% during the same period.

During the last three-, five- and ten-year periods, net asset value grew annually by 9%, 13% and 15%, respectively, including reinvested dividend. The total return index (SIXRX) increased by 18%, 16% and 16%, respectively, during the same periods.

Net asset value

09/30/2021

12/31/2020

SEK bn

SEK/share

SEK bn

SEK/share

Equities portfolio

134.3

309

128.9

296

Interest-bearing net

debt

-5.7

-13

-7.7

-18

Net asset value

128.6

295

121.2

279

Growth in net asset value, 10 years

SEK M 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000

0 -20,000

11

12

13

14

15

16

17

18

19

20

9M:21

Equities portfolio

Interest-bearing net debt

Net asset value

Equities portfolio

During the first nine months 2021 the value of the equities portfolio, adjusted for purchases and sales, increased by SEK 3.9 billion. On September 30, 2021, the equities portfolio was worth SEK 134.3 billion, or SEK 309 per share. On May 10, 2021, the entire shareholding in SSAB of 44,334,933 Class A shares was divested for SEK 45.53 per share, corresponding to total proceeds of SEK 2.0 billion. The largest contributors in value in Industrivärden's equites portfolio during the period were Volvo with SEK 4.5

billion, Handelsbanken with SEK 4.2 billion and Sandvik with SEK 0.8 billion. Handelsbanken showed a total return in line with the total return index (SIXRX). The other portfolio companies showed a lower total return than the total return index (SIXRX), as shown in the table on page 3.

During the first nine months 2021 dividend income from the equities portfolio totaled SEK 7.2 billion.

The total return for the shareholdings for the last three- year period is shown in the table to the right.

Contribution analysis of equities portfolio, 9M:2021

Volvo

4.5

Handelsbanken

4.2

Sandvik

0.8

Essity

0.7

Skanska

0.6

Ericsson

-0.3

Total return, SEK bn

SCA

-0.5

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

Performance of shareholdings, 3 years

Annual average total return, %

Class of shares

Total return index (SIXRX)

18

Volvo A

15

Volvo B

15

SCA B

12

SCA A

12

Skanska B

12

Sandvik

10

Ericsson B

10

Essity B

9

Ericsson A

9

Essity A

9

Handelsbanken A

-1

Cash flow

Investment activities

During the first nine months 2021 shares were purchased in Sandvik for SEK 1,939 M, in Volvo B for SEK 808 M in Essity B for SEK 482 M and in Handelsbanken A for SEK 295 M. Furthermore, the entire shareholding in SSAB A was divested for SEK 2,004 M.

Dividend paid out

The Annual General Meeting on April 21, 2021 decided in accordance with the Board's proposal on an ordinary dividend of SEK 6.25 (0.00) per share and an extra dividend of SEK 2.00 per share. In total, the dividend amounted to SEK 3,590 M (0).

Dividends received

During the first nine months 2021, dividends received amounted to SEK 7,072 M (65).

Management cost

The management cost during the first nine months 2021 was SEK 98 M (97), which on a yearly basis corresponds to 0.10% (0.11) of the equities portfolio's value on September 30, 2021.

  • Industrivärden 9M:2021

Financing

Interest-bearing net debt

Interest-bearing net debt amounted to SEK 5.7 billion (6.2) on September 30, 2021. The debt-equities ratio was 4% (5), and the equity ratio was 94% (94). The debt-equities ratio is calculated as interest-bearing net debt in relation to the market value of the equities portfolio.

Within the framework of the existing MTN program, during the first quarter a new bond of SEK 1.5 billion was issued with a five-year maturity. In addition, during the third quarter a bond of SEK 1.0 billion was issued with a maturity of 30 months. The loans pertain mainly to refinancing of matured MTNs and commercial papers. The terms of the loans are available on the Company's website.

No part of Industrivärden's borrowings is conditional upon any covenants.

Interest-bearing net debt

SEK M

09/30/2021

12/31/2020

MTN program

7,000

5,751

Commercial paper

-

1,800

Provisions for pensions

22

42

Other interest-bearing liabilities

187

225

Total interest-bearing liabilities

7,209

7,818

Less:

Interest-bearing receivables

-129

-164

Cash and cash equivalents

-1,350

0

Total

5,730

7,654

Development of interest-bearing net debt, 5 years

SEK M

16,000

20%

12,000

15%

8,000

10%

4,000

5%

0

0%

2016

2017

2018

2019

2020

9M:2021

Interest-bearing net debt

Debt-equities ratio

Credit rating

S&P Global Ratings has assigned Industrivärden a credit rating of A+/Stable/A-1. The rating was confirmed on May 27, 2021.

Industrivärden share data

Share performance

The market prices for Industrivärden's Class A and C shares on September 30, 2021, were SEK 281.20 and SEK 272.00, respectively. The corresponding prices on December 31, 2020, were SEK 274.20 and SEK 265.50, respectively.

The total return during the first nine months 2021 was

5% for the Class A and the Class C shares. The Stockholm Stock Exchange's total return index (SIXRX) was 24% during the same period. The total returns for longer periods of time are shown in the table on page 1 and for specific years in the chart below.

Value performance for respective years

Total return 40%

30%

20%

10%

0%

-10%

-20%

2016

2017

2018

2019

2020

9M:2021

Total return index (SIXRX)

Industrivärden C

At the 2011 Annual General Meeting, a share conversion clause was added to the Articles of Association. Shareholders have the right at any time to request conversion of Class A shares to Class C shares. During the first nine months 2021, 73 shares were converted.

Share structure, September 30, 2021

Capital,

Votes,

Share class

No. of shares

No. of votes

%

%

A (1 vote)

267,111,711

267,111,711

61.4

94.1

C (1/10 vote)

168,098,166

16,809,816

38.6

5.9

Total

435,209,877

283,921,527

100.0

100.0

Industrivärden 9M:2021

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

AB Industrivärden published this content on 11 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 October 2021 05:41:10 UTC.


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Net income 2021 9 984 M 1 106 M 1 106 M
Net Debt 2021 6 398 M 709 M 709 M
P/E ratio 2021 12,8x
Yield 2021 2,55%
Capitalization 126 B 14 039 M 14 004 M
EV / Sales 2021 18,1x
EV / Sales 2022 30,1x
Nbr of Employees 15
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Helena Stjernholm President, Chief Executive Officer & Director
Jan Íhman Chief Financial Officer
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