Interim report, January 1-March 31, 2009
Value development
- Net asset value on April 30, 2009, was SEK 80 per share, an increase of 30%
since the start of the year. Net asset value on March 31, 2009, was SEK 60 per
share.
- The value of the equities portfolio increased by SEK 5.2 billion to SEK 39.9
billion, or 15%, during the first four months of the year.
- The total return for the Class A shares was 29% for the first four months of
the year.
- Earnings per share for the first quarter of the year were SEK -1.98 (-16.73)
and amounted to SEK 18.43 as per April 30.
Long-term return
- During the last ten-year period, the annual total return for Industrivärden's
Class A shares has exceeded the return index by an average of 2 percentage
points.
Current status
“As a responsible long-term owner we have participated in important decisions in
our portfolio companies. A great deal of work has been dedicated to
strengthening the companies' financial flexibility. Moreover, the adaptation to
new market conditions has resulted in painful decisions on operational cutbacks
and employee layoffs by the companies. Our clear focus is the long-term
potential for growth in the portfolio companies so that they can take advantage
of opportunities that arise once the wheels begin to spin again,” comments
Anders Nyrén, President and CEO of Industrivärden.
CEO's message
The global recession that has ensued in the wake of the financial crisis
triggered by the Lehman collapse bore full impact against the real economy
during the first four months of the year, which the interim reports now coming
out from our portfolio companies and other listed companies bear witness to.
International bodies such as the OECD, the IMF and others are repeatedly coming
out with downward adjustments of their growth outlook for 2009 and 2010 as its
becomes clear how dramatic the GDP declines have been since early autumn 2008;
it is the most dramatic slowdown in the world economy at any time since the
Second World War. However, there are now signs that point - if not to a recovery
- to a stabilization of the situation. As we now begin to see a spark of life in
the market, it is taking place at a low level for broad parts of the
manufacturing industry. In addition, the global market for financing and credits
is slowly returning to a more normalized level. Despite this, there is a long
way to go with respect to accessibility to financing at reasonable terms for
most businesses.
As I have said previously, the strong stimulus measures that have been taken by
governments around the world - together with the extensive monetary easing in
the form of interest rate cuts and liquidity-enhancing measures in the banking
systems that have been taken by the world's central banks - will produce
results. Against this background it is reasonable to assume that we are at the
end of a period of decline. However, indications are strong that a global
economic recovery to previous growth levels will take time. So it would be wise
to plan for a more drawn-out scenario.
The year started out with continued declines in the world's stock markets, above
all for financial companies and traditional manufacturing industries. However,
during the spring we have seen a slight uptick in pace with a stabilization of
the macroeconomic situation and a steady improvement in earnings ability shown
by U.S. banks. Since the low point in mid-January, NASDAQ OMX Stockholm has
risen by 27% and the U.S. markets by 30%.
Through the end of April, Industrivärden's net asset value including reinvested
dividends has risen by SEK 7.1 billion, or 30%, compared with 20% for the total
return index. The corresponding increase is 29% for Industrivärden's Class A
shares and 37% for the Class C shares.
We work as an active owner of a portfolio of well-positioned companies - several
with leading positions in their respective niches. They all have very good
future potential, even though we currently find ourselves in a very challenging
period. How well a company succeeds at managing tumultuous changes in the market
is a result of its structure when the conditions change as well as how well it
adapts to the new conditions. As a responsible owner, through our board
representation we have participated in making important decisions in our
portfolio companies. A great deal of work has been dedicated to strengthening
the companies' financial flexibility. Unfortunately, the credit markets have
worked poorly, which has led to significantly higher financing costs both within
the banking system and in the bond markets.
Rebuilding a well-working credit market is therefore the most central challenge
at the moment. A general bank guarantee with international coverage, like the
one we had locally here in Sweden during the crisis in the 1990s, could be a
possible solution. In a situation like this it would be wrong not to try
measures that have been proven to work on a national level. The adaptation to
new market conditions has also resulted in painful decisions on operational
cutbacks and employee layoffs by the companies. Our overarching mission and
clear focus is the long-term potential for growth in our portfolio companies so
that they can take advantage of opportunities that arise once the wheels begin
to spin again. This is to the benefit of the shareholders, employees and society
in general.
Anders Nyrén
Contact information
Anders Nyrén, President and CEO, tel. +46-8-666 64 00
Sverker Sivall, IR, tel. +46-8-666 64 19
Carl-Olof By, Executive Vice President, tel. +46-8-666 64 00
Martin Hamner, CFO, tel. +46-8-666 64 00
