- The total return for the first nine months of the year was 5% for the Class A shares and 7% for the Class C shares, compared with 9% for the SIXRX total return index. For longer periods of time, the shares have generated a higher total return than the total return index.
- Net asset value on September 30, 2014, was SEK 152/share, which adjusted for conversions and reinvested dividend amounted to a rise of 5% year to date. Earnings per share for the first nine months of the year were SEK 7.54 (21.31).
- SSAB’s merger with Finnish Rautaruukki has been concluded, and the integration proceeds according to plan.
- The short-term equity trading generated a strong profit of SEK 175 (83) million during the first nine months, despite relatively low volatility in the market.
CEO’s message
Global recovery continues, though with major geographic differences
The global economy is expected to grow slightly in 2014, but there is a lack of robust growth momentum and there are major differences between geographic areas. It appears that Europe will improve somewhat going forward, although the geopolitical tensions in the region are a distinct concern. Further stabilization in Europe requires that measures be taken to address the deficiencies that remain in banking system capitalization. An efficient corporate credit market is essential to the growth of European companies. Reforms implemented in several European countries to address structural problems that came to light during the financial crisis are a positive sign. There is a distinct rebound in the U.S. economy and many indications of continued growth during 2015. American industry is developing with strong support from, among other things, cheap energy from shale gas and oil. Consumption has increased due to stabilization of the job market and increased confidence in the domestic economy. In Asia, the subdued growth seems to continue, although growth rates remain high from a European perspective. China is the region’s undisputed economic engine – an engine that is now focused on developing domestic consumption, which slows down growth rates to some extent.
With portfolio companies operating in over 190 countries, Industrivärden has broad exposure to global growth. Several of our portfolio companies have established a strong position in the key growth markets that constitute an increasing proportion of their total sales. U.S. operations performs well in the wake of a stronger American economy. Half of our portfolio companies’ total sales originate in Europe, and Europe therefore plays a key role in the value development of Industrivärden’s equities portfolio.
SSAB’s merger with Finnish company Rautaruukki has been concluded and the integration proceeds according to plan
Finnish company Rautaruukki has been part of SSAB since late July, and intensive integration work is underway to capture synergies and create a global player within specialty steel and a leading European market player within standard strip, plate and tubular products. The merger was approved by the EU Commission contingent upon the divestment of a number of small units within the Nordic distribution operation. The new organization is in place, and the new SSAB’s board of directors was appointed at an extraordinary board meeting in September. The election of directors was based on the proposal of SSAB’s nominating committee, which includes the major Finnish owner, Solidium.
The return during the year
At the end of the third quarter, net asset value totalled SEK 65 820 million, or SEK 152 per share, which adjusted for conversions and reinvested dividend amounted to a rise of 5% year to date. The total return was 5 percent for Class A shares and 7 percent for Class C shares, compared with 9 percent for the total return index.
Short-term equity trading showed strong profit
Despite the year’s difficult market conditions with weak volatility, our short-term equity trading has generated a profit of SEK 175 (83) million – which more than covers our total management costs of SEK 108 million.
Anders Nyrén
The information provided in this interim report is such that AB Industrivärden (publ) is obligated to publish pursuant to the Securities Market Act. Submitted for publication at 09:00 a.m. on October 6, 2014.
