AB INDUSTRIVÄRDEN (publ) Interim Report, January 1 - March 31, 2007
• Net asset value increased by SEK 7,626 M (SEK 20 per share), or 13%, to SEK
66,137 M (SEK 171 per share) as per April 30, 2007. Net asset value on March 31,
2007, was SEK 65,144 M (55,570), or SEK 169 (144) per share
• Consolidated earnings for the first quarter totaled SEK 6,653 M (SEK 17.22 per
share), compared with SEK 7,320 M for the corresponding period in 2006 (SEK
18.95 per share)
• The total return during the first four months of the year was 16% for the
Class A shares and 18% for the Class C shares, compared with 14% for the return
index
• During the first four months of the year, shares were bought for SEK 2,230 M
and sold for SEK 1,488 M. The entire holding in Tandberg Television was sold for
SEK 728 M
• A 2:1 stock split was carried out on April 25, 2007
CEO'S MESSAGE
The year has begun well for Industrivärden. During the first four months our net
asset value increased by 8 billion kronor, to 66 billion kronor, or by 13%. The
total return for the Class A and C shares was 16% and 18%, respectively,
compared with 14% for the return index.
Nearly all of the companies in our portfolio have been benefited from the
continued strong economy. With leading global positions in many cases, the
companies are well positioned to benefit from the favorable economic conditions.
As for first-quarter performance, I would like to mention two portfolio
companies in particular, SSAB and Sandvik. Both companies have clear strategies
that are adapted to their respective business climates and conditions. However,
having the wind in your sails from a favorable economy is not enough. Companies
must all make sure that their productivity and market offerings are conducive to
higher market shares and thereby set the stage for profitable growth. Both SSAB
and Sandvik have demonstrated this.
There are currently no signs of a weakening in the generally favorable economic
climate. However, as a growing amount of production resources, such as raw
materials and labour, begin showing signs of scarcity, there is a certain risk
for higher inflation. Thus there is also a risk of rising long-term interest
rates. However, it appears that the apparently infinitely liquid credit market
is posing a counterweight to these tendencies.
During the first four months of the year we purchased stocks for SEK 2,230 M and
sold for SEK 1,488 M. Among other things, we sold our entire holding in Tandberg
Television, in connection with Ericsson's bid for all of the shares in that
company. Our assessment of Tandberg Television when we took a position in the
company was that it represented an attractive growth market - digital TV.
Ericsson's motive for its offer confirms this analysis. We believe that Tandberg
Television will fit well into Ericsson and contribute to Ericsson's continued
favorable performance.
In closing, I am happy to note that our short-term trading in these favorable
conditions generated a profit of SEK 93 M for the first three months of the
year, compared with SEK 67 M for the first quarter of 2006.
Anders Nyrén
