Industrivärden

Quarterly Report • Apr 7, 2022

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	2022	2021	2021
	March 31	March 31	Dec 31
Net asset value, SEK M	123,547	139,576	143,455
Net asset value per share, SEK	286	321	332
Share price Industrivärden C, SEK	263.90	306.40	284.10
Debt-equities ratio, %	4%	4%	4%
	2022	2021	2021
SEK M	Jan - March	Jan - March	Jan - Dec
Earnings per share, SEK	-45.88	42.25	61.57
Dividend income	2,018	1,720	8,081
Dividend paid	–	–	3,590
Equities portfolio:
Purchases Sales	1,173 –	501 –	4,263 2,004

CEO's message

The beginning of 2022 was characterized by Russia's invasion of Ukraine and its effects. We are witnessing an enormous human tragedy for millions of people who live in or have fled from Ukraine. It is now important to work in various ways to support the people and communities in need, and to try to bring an end to this war.

As a result of the outbreak of the war in Ukraine, several of the trends that could be noticed already in 2021 accelerated and we saw sharply increased energy and commodity prices, supply shortages for certain commodities and components, various types of logistics problems and higher inflation and rising interest rates. In addition, the situation that has arisen has caused substantial geopolitical uncertainty. In summary, these factors have been reflected in falling stock market prices and lower valuations, and during the first quarter of 2022 the Stockholm Stock Exchange fell by a full 14%.

As a consequence of the falling share prices, Industrivärden's net asset value decreased to SEK 123.5 billion, which corresponds to a decrease of 14% during the first quarter, including reinvested dividend. Industrivärden's Class A and C shares generated total returns of -7%, compared with -14% for the total return index. During the first three months of the year, we increased investments in a few of our portfolio companies through purchases of shares for approximately SEK 1.2 billion.

Our portfolio companies are active in various sectors and markets, which is why the changed situation in the world is affecting them in different ways. On the whole, the portfolio companies have limited exposure to Russia and Ukraine, but the situation that has arisen and the subsequent macroeconomic effects affect the portfolio companies both directly, and they work determinately to limit the negative effects in the best possible way.

Industrivärden's Annual General Meeting will be held on April 21. Owing to Covid-19, the AGM will be held through a postal voting procedure with support of the temporary legal rules that apply in 2022. Postal voting forms and other customary documents for the AGM are available on our website. Ahead of the AGM the Board of Directors has recommended that the AGM resolve in favor of a dividend of SEK 6.75 per share.

During recent years our portfolio companies have made a determined effort to strengthen their balance sheets and their operational and financial flexibility, which has put them in a good position to deal with various types of challenges in a time of greater uncertainty. This strengthened resilience will over time benefit the portfolio companies as well as Industrivärden.

Helena Stjernholm Chief Executive Officer

Long-term value creation at balanced risk

Industrivärden is a listed investment company that contributes to long-term development and value creation in its portfolio companies through active ownership. Operations are based on a concentrated portfolio of quality companies with

strong market positions and good value potential.

Industrivarden's active ownership is based on strong positions of influence, longterm perspective and extensive knowledge. Industrivärden thereby contributes to a sustainable perspective, delivering a long-term, attractive return at balanced risk.

				March 31, 2022
		Share of ownership, %		Market value		Share of value
Holdings	No. of shares	Capital	Votes	SEK M	SEK/share	%
Sandvik	168,700,000	13.4	13.4	33,909	79	26
Volvo A	166,600,000			30,155
Volvo B	11,600,000	8.8	27.8	2,049	75	25
Handelsbanken A	219,200,000	11.1	11.3	19,048	44	15
Essity A	33,257,000			7,416
Essity B	38,400,000	10.2	29.6	8,532	37	12
SCA A	33,785,290	10.3	29.3	6,162	31	10
SCA B	38,300,000			7,026
Ericsson A	86,052,615	2.6	15.1	7,796	18	6
Ericsson B	1,000,000			86
Skanska A	12,667,500	7.4	24.3	2,678	15	5
	18,500,000			3,911
Skanska B				483	1	0
Other				129,252	299	100
Equities portfolio
Net debt Net asset value				-5,705 123,547	-13 286

			March 31, 2022
				Total return
			Net asset value*	Index (SIXRX)
2022, 3 months			-14%	-14%
1 year			-9%	5%
3 years			9%	18%
5 years			8%	13%
7 years			9%	11%
10 years			12%	14%
* Including reinvested dividend
SEK M	March 31, 2022		Jan - March 2022
Holdings	Market value	Change in value	Purchase (+) / sales (-)	Dividend
Sandvik	33,909	-8,705	–	–
Volvo	32,203	-5,603	794	–
	19,048	-2,387	181	1,096
Handelsbanken
Essity	15,949	-5,201	199	502
SCA	13,189	1,579	–	–

			March 31, 2022
				Total return
1 year			-9%	5%
3 years			9%	18%
5 years			8%	13%
7 years			9%	11%
10 years * Including reinvested dividend			12%	14%
SEK M	March 31, 2022		Jan - March 2022
Holdings	Market value	Change in value	Purchase (+) / sales (-)	Dividend
Sandvik	33,909	-8,705	–	–
Volvo	32,203	-5,603	794	–
Handelsbanken	19,048	-2,387	181	1,096
Essity	15,949	-5,201	199	502
SCA	13,189	1,579	–	–
Ericsson	7,883	-840	–	109
Skanska	6,589	-711	–	312
Other	483	-8	–	–

SEK M	2022 March 31	2021 March 31	2021 Dec 31
Non-current financial liabilities	5,503	4,506	5,504
Current financial liabilities	2,153	3,806	1,720
Provisions for pensions	7	35	14
Current financial receivables	-460	-888	-41
Cash and cash equivalents	-1,498	-964	-697

Share class	No. of shares	No. of votes	Capital, %	Votes, %
A (1 vote) C (1/10 vote)	260,794,174 171,104,934	260,794,174 17,110,493	60.4 39.6	93.8 6.2

Average annual growth in value for respective perfoods

		March 31, 2022 Total return
1 year	-12%	5%
3 years	13%	18%
5 years	9%	13%
7 years	10%	11%
10 years	14%	14%

Other

Events after the balance sheet date

No significant events have taken place after March 31, 2022.

Annual General Meeting and dividend

The 2022 Annual General Meeting (AGM) will be held on April 21. Due to covid-19, the Board of Directors has decided that the Annual General Meeting is to be held only through postal voting in accordance with temporary legislation being in effect in 2022. This means that the AGM will be conducted without the physical presence of shareholders, representatives or external parties. Shareholders will only be able to exercise their voting rights by postal voting in advance of the AGM in the manner described in the AGM notice.

The Board of Directors proposes an ordinary dividend of SEK 6.75 per share for the 2021 financial year, with April 25, 2022, as the record date. In total the proposed dividend amounts to SEK 2,915 M.

Further disclosures and information about the AGM, including the Board's and Nominating Committee's complete proposals, are available on Industrivärden's website.

This interim report has not been reviewed by the Company's auditors.

Stockholm, April 7, 2022

Helena Stjernholm Chief Executive Officer

	2022	2021	2021
SEK M	Jan - Mar	Jan - Mar	Jan - Dec
Dividend income	2,018	1,720	8,081
Change in value of shares, etc.	-21,836	16,636	18,774
Management cost	-33	-33	-127
Operating income	-19,851	18,323	26,728
Financial items	-15	-14	-53
Income after financial items	-19,866	18,309	26,675
Tax	51	-60	-81
Net income for the period	-19,815	18,249	26,594
Earnings per share (no dilution exists), SEK	-45.88	42.25	61.57
	2022	2021	2021
SEK M	Jan - Mar	Jan - Mar	Jan - Dec
Net income for the period	-19,815	18,249	26,594
Items that are not to be reclassified in the inc. statement:
Actuarial gains and losses on pensions	–	–	18
Comprehensive income for the period	-19,815	18,249	26,612
	2022	2021	2021
SEK M Tangible fixed assets	March 31 17	March 31 20	Dec 31 18
Equities	129,252	146,071	149,955
Total non-current assets	129,269	146,091	149,973
Current financial receivables	460	888	41
	30	44	41
	1,498	964	697
Other current receivables Cash and cash equivalents Total current assets Total assets	1,988 131,257	1,896 147,987	779 150,752

Items that are not to be reclassified in the inc. statement:

		2021
		Dec 31
17	20	18
129,252	146,071	149,955
129,269	146,091	149,973
		41
		41
		697
		779
		150,752
123,265	139,225	143,079
		5,504
		14
		164
		103
5,686	4,855	5,785
		1,720
		168
		1,888
131,257	147,987	150,752
	2022 March 31 460 30 1,498 1,988 131,257 5,503 7 113 63 2,153 153 2,306	2021 March 31 888 44 964 1,896 147,987 4,506 35 200 114 3,806 101 3,907

	2022	2021	2021
SEK M	Jan - March	Jan - March	Jan - Dec
Opening shareholders' equity as per balance sheet	143,079	120,976	120,976
Net income for the period	-19,815	18,249	26,594
Other comprehensive income	–	–	18
Transaction in own shares	–	–	-922
Cancelation of shares	–	–	0
Bond issue	–	–	0
Dividend to shareholders	–	–	-3,590
Share savings program	1	0	3
Closing shareholders' equity as per balance sheet	123,265	139,225	143,079
	2022	2021	2021
SEK M	Jan - March	Jan - March	Jan - Dec
Dividend received	1,598	870	7,159
Management cost paid	-30	-39	-137
Other	-24	-17	-34
	1,544	814	6,988
Cash flow from operating activities
Purchases of shares	-1,173	-501	-4,263
Sales of shares	–	–	2,004
Cash flow from investing activities	-1,173	-501	-2,258

	2022	2021	2021
SEK M	Jan - March	Jan - March	Jan - Dec
Dividend received	1,598	870	7,159
Management cost paid	-30	-39	-137
Other	-24	-17	-34
Cash flow from operating activities	1,544	814	6,988
Purchases of shares	-1,173	-501	-4,263
Sales of shares Cash flow from investing activities	– -1,173	– -501	2,004 -2,258
Loans raised	1,999	1,789	2,489
Amortization of debt	-1,568	-1,263	-3,056
Change in financial investments	–	125	125
Dividend paid	–	–	-3,590
Cash flow from financing activities	431	651	-4,033
Cash flow for the period	801	964	697
Cash and cash equivalents at end of period	1,498	964	697
	2022	2021	2021
SEK M	Jan - March	Jan - March	Jan - Dec
Operating income	-15,183	12,805	17,547
Income after financial items	-15,197	12,792	17,495
Income for the period	-15,197	12,792	17,495
Comprehensive income for the period	-15,197	12,792	17,513
	2022	2021	2021
SEK M	March 31	March 31	Dec 31
Non-current assets	81,014	95,134	95,831
Current assets	449	425	41
Total assets	81,463	95,559	95,872
Shareholders' equity	72,774	86,836	87,970
Non-current liabilities	5,573	4,655	5,621
Current liabilities	3,116	4,068	2,281

	2022	2021	2021
SEK M		Jan - March Jan - March	Jan - Dec
Operating income	-15,183	12.805	17.547
Income after financial items	-15,197	12.792	17,495
Income for the period	-15,197	12.792	17.495
Comprehensive income for the period	-15,197	12,792	17,513

Comprehensive income for the period	-15,197	12,792	17,513
	2022	2021	2021
SEK M	March 31	March 31	Dec 31
Non-current assets	81,014	95,134	95,831
Current assets	449	425	41
Total assets	81,463	95,559	95,872
Shareholders' equity	72,774	86,836	87,970
Non-current liabilities Current liabilities	5,573 3,116	4,655 4,068	5,621 2,281

SEK M Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Equities 128,769 – 483 129,252 149,464 – 491 149,955 Total assets 128,769 – 483 129,252 149,464 – 491 149,955 Derivatives, etc. – 65 – 65 – 103 – 103 Total liabilities – 65 – 65 – 103 – 103

	March 31, 2022				December 31, 2021
Assets
Liabilities

Alternative performance measures and definitions

This report includes financial key ratios that are based on IFRS (earnings per share). In addition, other key ratios (Alternative Performance Measures – APMs) are used by the Company and other interests to describe the Group's operations and which cannot be discerned or derived from the financial statements. These APMs are to be regarded as a complement to the financial reporting presented in accordance with IFRS. It should be noted that the APMs defined below may differ somewhat from other companies' definitions of the same terms.

Market value of equities portfolio

The value of the equities portfolio based on the companies' share prices on the balance sheet date.

Market's required rate of return

Risk-free interest (return on a government bond) plus a risk premium (excess return to compensate for the higher risk in an equity investment).

Net debt

Financial liabilities and provisions for pensions less financial receivables and cash and cash equivalents.

Earnings per share

Net income for the year divided by the total number of shares outstanding.

Debt-equities ratio

Net debt in relation to the market value of the equities portfolio.

Equity ratio

Shareholders' equity as a share of total assets.

Net asset value

The market value of the equities portfolio less net debt.

Net asset value including reinvested dividend

To calculate the development of net asset value before dividends paid out, the dividends paid out by the Company are reversed and recalculated to take into account the performance of the equities portfolio. This gives a measure of how net asset value would have developed if Industrivärden had not paid any dividend.

Total return, shares

Change in the share price taking into account reinvested dividends. The total return is compared with the return index (SIXRX), which indicates the price development for stocks listed on the Stockholm Stock Exchange including reinvested dividends.

Total return, shareholding

Change in value of a shareholding including calculated reinvested dividends. Reported only for the current reporting period.

Change in value of shares

For shares held at both the start and end of the year, the change in market value consists of the difference in value between these two points in time. For shares sold during the year, the change in market value consists of the difference between the payment received for the shares and their value at the start of the year. For shares acquired during the year, the change in market value consists of the difference between the cost of the shares and their value at the end of the year.

Information

Financial calendar

Annual General Meeting: April 21, 2022 Interim report Jan - June: July 7, 2022 Interim report Jan - Sept: October 6, 2022

Contact persons

Sverker Sivall Head of Corporate Communications and Sustainability +46-8-666 64 19 ssl@industrivarden.se Jan Öhman CFO +46-8-666 64 45 jon@industrivarden.se

Contact information

AB Industrivärden (publ) Box 5403 SE-114 84 Stockholm, Sweden Registered office: Stockholm Reg. no.: 556043-4200 Switchboard: +46-8-666 64 00 info@industrivarden.net

Ticker codes, Class C shares

INDUC:SS in Bloomberg INDUc.ST in Reuters INDU C in Nasdaq Stockholm

Further information

Further information, including interim reports, annual reports and press releases, is available on Industrivärden's website: www.industrivarden.net.

This report is a translation of the Swedish original.

Publication

This information is such that AB Industrivärden is required to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the Head of Corporate Communications and Sustainability named above, at 10 a.m. CEST on April 7, 2022.

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