Annual Report • Feb 5, 2016
Annual Report
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Long-term asset manager and active owner of internationally active Nordic quality companies
www.industrivarden.net
NET ASSET VALUE
During the last ten-year period, net asset value has increased by 3% per year, and by 6% per year incl. reinvested dividend.
AB Industrivärden (publ) Reg. no. 556043-4200 Box 5403 SE-114 84 Stockholm, Sweden Phone +46 8 666 64 00 [email protected]
Since taking office as CEO nearly a half-year ago I have dedicated myself primarily to learning more about Industrivärden and our investments. A great deal of time has also been spent on the review of Industrivärden's strategy. The aim is to improve our asset management model with the goal of maximizing our full potential. This work has been conducted in close dialog with Industrivärden's board of directors. I have also benefited greatly from all of the meetings I have had with shareholders, co-investors and other key stakeholder groups as well as with my co-workers. A few important insights that I have gained from this review are that there are not any direct synergies between the portfolio companies, and that every investment must be evaluated on its own merits. It is also important that we increase our room to maneuver by achieving a lower level of debt over time. Last, but not least, Industrivärden should have a dividend policy that enables a positive cash flow and that gives us flexibility to adapt to external circumstances.
Based on my analysis and on my previous, professional experience, I can say that Industrivärden stands on firm ground. We have substantial knowledge and experience as an owner, a long-term asset management perspective, strong positions of influence, and investments with good growth potential. At the same time, there are areas in need of development. Industrivärden's overall strategy – to be a long-term, value-creating asset manager through active ownership in Nordic companies – remains firm. Within the framework of this strategy we are now taking a number of important development steps in order to strengthen our ability to create shareholder value. In some cases it is a matter of more concrete measures, while in others it is about a changed approach that will bear effect over time. In short, it is a matter of bringing about an accelerated pace of change and having less patience with low-performing investments.
The development steps that are now being taken are summarized in the following points:
Industrivärden invests with a long-term time perspective. This is a natural consequence of the fact that we have chosen an asset management strategy that builds upon involvement through active ownership. Long-termism is a strength that gives us the opportunity to support short-term, difficult development steps that can generate a high return over time. At the same time, it is a challenge to determine when it is time to exit or reduce our holding in a portfolio company in favor of some other alternative. We are now sharpening our focus on returns, which will likely affect the pace of change in the portfolio over time.
As an active owner with substantial shareholdings, we have the opportunity to exert influence over our investments. It is therefore important that we become clearer in exercising
our ownership role. We are doing this by strengthening our involvement in the board nomination process, among other measures. Industrivärden will be represented by individuals from the Company's board or management. I personally have the benefit of participating in this important work in my position as chair of the nominating committees of Handelsbanken, SCA, Skanska and SSAB. Within the framework of this nominating committee work we are continuously broadening our network with talented individuals who we can nominate for board election. This is having an impact already during the current board nomination season.
We will also work in various ways to bring about a faster pace of change in portfolio companies facing substantial challenges. The appointments of new CEOs at Sandvik and Volvo by those companies' boards are good examples of important changes that we support in our role as an engaged owner. Finally, steps have been taken to strengthen Industrivärden's corporate governance structure, among other things by preventing so-called personal constellations.
By developing our relationships and cooperation with other owners and important market actors, we can increase our ownership influence. We will be a responsive and professional investor that is perceived as being an attractive business partner. This is work that will permeate the entire organization, and for my own part, I have already met a large number of representatives in the areas I mentioned above, and this work is continuing.
Industrivärden will continue to invest in Nordic, listed companies with good return potential. Our active ownership in companies will build upon a foundation of trust and ownership-based influence. Our share of ownership should therefore amount to at least 10% of the votes. We are now broadening our investment universe by also looking at slightly smaller companies than previously. For new investments, a portfolio company candidate should have a minimum market cap of roughly SEK 3 billion. In cases where we invest in a company with a market cap between SEK 3 billion and SEK 10 billion, an ownership share of 20%– 30% of the capital is desirable. The idea is to have a genuine position of influence and that the investment's potential return will make a tangible contribution to the equities portfolio as a whole.
Global growth slowed somewhat in 2015, but remained on par with a year earlier and the IMF's forecast for 2016– 2017. Certain, positive signs can be seen in the U.S. and Europe, while emerging markets such as China have shown weaker performance. This also applies for Latin America as a result of falling commodity prices and political uncertainty, among other factors. From a global perspective, falling commodity prices, low productivity growth and geopolitical tensions are a major challenge.
Despite the uncertain outlook, the stock market continued to perform well, and in 2015 the Stockholm Stock Exchange gained 7%, after reaching a peak in April, when the market was up 19%. Industrivärden's equities portfolio had mixed performance in 2015, with SCA's stock generating a very good total return of nearly 50%. For other portfolio companies the total return was below the market, and SSAB showed a clear negative return. From a three-year perspective, ICA Gruppen and SCA have generated clear excess returns, while Volvo, Sandvik and SSAB have performed considerably worse than the market. Other portfolio companies have generated a return that is level with the market's return index.
During the year, net asset value grew by SEK 0.7 billion to SEK 69.1 billion, or 5% including reinvested dividend, compared with 10% for the total return index. The total return was 15% for the Class A shares and 11% for the Class C shares. The considerably higher growth in the share price during the year than the growth in net asset value points to a sharp narrowing in the discount to net asset value. During 2015 stocks were sold for SEK 1.9 billion, net. The single largest stock sale pertained to Kone, where the entire holding was sold for SEK 1.2 billion.
During 2015 our portfolio companies had varying performance. Handelsbanken, SCA, Ericsson, ICA Gruppen and Skanska are showing favorable, stable performance, while Sandvik and Volvo are undergoing major, strategic change processes. Following its merger with Ruukki, SSAB is developing in the right direction, but is affected by very difficult market conditions.
Handelsbanken continues to perform well and is growing organically primarily in the UK. Like other banks, its business is adapting to changed regulations and digitalization in society. During the year Frank Vang-Jensen took office as new CEO, and Pär Boman was elected as new Chairman of the Board.
SCA is performing very well both operationally and in terms of value. Over several years the company has focused its business, carried out a number of product portfolio changes, and strengthened its positions in its core businesses, hygiene and forest products. A split into two divisions is therefore a natural step in SCA's ongoing development. In 2015 Magnus Groth took office as new CEO, and Pär Boman was elected as new Chairman of the Board.
The Volvo Group is currently in a process of change and is facing major challenges. This work is being led by CEO Martin Lundstedt, who newly took office during the year and has many years of experience from the heavy automotive industry. An extensive process is now being carried out in an effort to simplify the company's structure, increase profitability and strengthen its presence in key growth markets. Volvo has overall strong market positions and favorable conditions to develop well over time.
Significant management changes were also carried out at Sandvik in 2015. Johan Molin was elected as new Chairman of the Board, and Björn Rosengren took office as new CEO. The company has been carrying out a transformation process for the past couple of years, but a number of important steps remain before Sandvik will be able to realize its full potential. With a foundation in the company's exceptional products, dedicated employees and strong brand, I feel that Sandvik has good prospects for future value creation.
Ericsson is showing an impressive ability to adapt and build strong positions in a rapidly changing industry with continuously shifting technology. Ericsson's strategic partnership with the IP company Cisco is a good example. At the same time, Ericsson must gain a better financial outcome from its positions of strength and increase profitability in several areas of its business.
During 2015 ICA Gruppen made several important structural deals, including the divestment of ICA Norway and the acquisition of Apotek Hjärtat. The company has an impressive market position and is showing favorable, stable performance.
Skanska continued to deliver growth in its profitable construction business and value-creating project development business. At the end of 2015 a new, strategic plan was presented for the coming five years. Skanska's business plan and financial targets have been updated, but is strategic direction remains firm. The company's nominating committee has proposed Hans Biörck for election as Chairman of the Board at the 2016 Annual General Meeting.
For SSAB, 2015 largely involved creating continued synergies following its merger with Ruukki as well as improving the efficiency of operations and adapting to the difficult market situation. At its 2015 Annual General Meeting, Bengt Kjell was elected as the new Chairman of the Board.
Industrivärden is in a favorable position in many respects to conduct a successful, long-term asset management operation with a foundation in active ownership. With a starting point from our strengths, a professional organization and the development steps that are now being taken, I look forward to lead the business to generate competitive shareholder value over time.
Stockholm, February 5, 2016
Helena Stjernholm
COMPOSITION OF NET ASSET VALUE AND TOTAL RETURN FOR THE PORTFOLIO COMPANIES
| 12/31/2015 | 12M: 2015 | |||||||
|---|---|---|---|---|---|---|---|---|
| Portfolio companies | Ownership in company, % |
Market value | Total return |
|||||
| No. of shares | Capital | Votes | Share of value, % |
SEK M | * SEK/share |
SEK M | % | |
| Handelsbanken A | 193 985 037 | 10.2 | 10.3 | 27 | 21 901 | 51 | -841 | -4 |
| SCA A | 35 250 000 | 10.0 | 29.6 | 21 | 8 661 | 40 | 5 904 | 49 |
| SCA B | 35 550 000 | 8 763 | ||||||
| Volvo A | 142 154 571 | 6.7 | 21.3 | 14 | 11 507 | 27 | -287 | -2 |
| Volvo B | 1 500 000 | 119 | ||||||
| Sandvik | 148 584 257 | 11.8 | 11.8 | 13 | 11 003 | 25 | 37 | 0 |
| Ericsson A | 86 052 615 | 2.6 | 15.2 | 8 | 6 828 | 16 | -543 | -7 |
| ICA Gruppen | 21 125 000 | 10.5 | 10.5 | 8 | 6 494 | 15 | 236 | 4 |
| Skanska A | 12 667 500 | 7.1 | 24.1 | 6 | 2 088 | 11 | 100 | 2 |
| Skanska B | 17 343 995 | 2 858 | ||||||
| SSAB A | 58 105 972 | 10.7 | 17.7 | 2 | 1 314 | 3 | -1 353 | -50 |
| SSAB B | 754 985 | 14 | ||||||
| Other | 0 | 286 | 1 | 188 | ||||
| Equities portfolio | 100 | 81 835 | 189 | 3 438 | 4 | |||
| Interest-bearing net debt | -12 648 | -29 | Index: | 10 | ||||
| of which, convertible loan | -4 891 | -11 | ||||||
| Adjustment related to exchangeable | -131 | 0 | ||||||
| Net asset value | 69 056 | 160 | ||||||
| Net debt-equities ratio | 15% | |||||||
| Net asset value after full conversion | 160 | |||||||
Net debt-equities ratio after full conversion 9%
*Refers to value per Industrivärden share.
| SEK/share | 12/31/2015 | 09/30/2015 | 06/30/2015 | 03/31/2015 | 12/31/2014 |
|---|---|---|---|---|---|
| Equities portfolio | 189 | 187 | 203 | 217 | 192 |
| Interest-bearing net debt | -29 | -29 | -28 | -30 | -34 |
| of which, convertible loans | -11 | -12 | -11 | -11 | -11 |
| Adjustment related to exchangeable | 0 | – | – | – | 0 |
| Net asset value | 160 | 159 | 175 | 186 | 158 |
| Net debt-equities ratio | 15% | 15% | 14% | 14% | 18% |
| Net asset value after full conversion | 160 | 159 | 173 | 184 | 158 |
| Net debt-equities ratio after full conversion | 9% | 9% | 8% | 9% | 12% |
Net asset value increased by SEK 0.7 billion in 2015 to SEK 69.1 billion, corresponding to SEK 160 per share as per December 31, 2015. This means an increase of 1% for the year, and 5% including reinvested dividend. During the same period the total return index (SIXRX) increased by 10%. Net asset value per share on February 4, 2016, was SEK 155.
DEVELOPMENT OF EQUITIES PORTFOLIO INCL. REINVESTED DIVIDENDS, 12M:2015
During the year the value of the equities portfolio, adjusted for purchases and sales, increased by SEK 0.7 billion to 81.8 billion. The shareholding in SCA generated higher total returns than the total return index. The total return for the portfolio was 4%, compared with 10% for the total return index.
During 2015, sales of stocks net, were SEK 1.9 billion. The largest sale pertained to Kone, where the entire holding was divested for SEK 1.2 billion.
During 2015, dividends received from the portfolio companies totaled SEK 3.2 billion, and Industrivärden distributed SEK 2.7 billion in dividends to the shareholders. The dividend of SEK 6.25 corresponded to a dividend yield of 4.3% for the Class C shares per year-end 2015.
New dividend policy and new debt policy In order to increase Industrivärden's financial flexibility and capacity the Board of Directors has decided on a new dividend policy and a new debt policy.
Industrivärden's dividend policy is that the company shall generate a positive cash flow before changes in the portfolio and after dividends paid. This is in order to build investment capacity over time and be able to support portfolio companies if necessary. The dividends shall be well balanced with respect to the operation's targets, scale and risk.
The new debt policy is that Industrivärden's net debt-equities ratio shall be in the range of 0-10%, but may periodically exceed or be below this interval.
The Board of Directors proposes a dividend of SEK 5.00 per share (6.25) and May 11, 2016, as the record date. The total dividend payout will amount to SEK 2 162 M. A dividend of SEK 5.00 per share corresponds to a dividend yield of 3.4% for the Class C shares per year-end 2015.
Industrivärden's interest-bearing net debt amounted to SEK 12.6 billion on December 31, 2015. The net debt-equities ratio was 15%, and the equity ratio was 82% (80%). Assuming full conversion of outstanding convertible loans, totaling SEK 4.9 billion, interest-bearing net debt amounted to SEK 7.8 billion, and the debt-equities ratio was 9%.
At the end of the year, interest-bearing liabilities had an average capital duration of slightly more than two years and carried an average interest rate of approximately 1.8%.
No part of the Group's borrowings is conditional on any covenants. Industrivärden's current credit rating is A-/Positive/A-2 (S&P).
The conversion price for Industrivärden's outstanding convertible loan 2011-2017 is SEK 157.57 (corresponding to EUR 17.74/share), whereby a maximum of 31.0 million Class C shares would be added upon full conversion. Conversion is done at a fixed exchange rate of SEK 8.8803/EUR 1, entailing that at an actual exchange rate of SEK 9.14/EUR 1, it is profitable to convert when the share price exceeds SEK 162/share. Upon conversion of the loan, the debt is converted to equity, and the number of shares outstanding increases.
In 2014 a SEK 4.4 billion exchangeable bond, based on ICA Gruppen's stock, was issued as part of the continuous refinancing of the equities portfolio. The bond matures in 2019 and was issued at a premium of approximately 38% to ICA Gruppen's, share price at the time and carries no interest. During 2015 the conversion price was adjusted from SEK 300 to SEK 298.52, to compensate the exchangeable bondholders for dividends exceeding a stated dividend level at issuance. In the event of a potential future conversion there is a possibility to pay either with shares or with cash equivalents.
As part of its professional asset management activities, Industrivärden has an equity trading function that contributes with market information, market contacts and execution of transactions. To capitalize on this resource and on Industrivärden's long-term shareholdings, trading is conducted by issuing derivative instruments and related risk management, etc.
During 2015 the trading operation generated a profit of SEK 167 million (178).
During the year the management cost amounted to SEK 229 million (146). The increase pertains mainly to one-off costs of approximately SEK 90 million for organizational changes, including a reduction in executives and certain other employees, and cancellation of consultancy/partner contracts.
Industrivärden's management cost excluding one-off costs was 0.17% of the value of the equities portfolio as per December 31, 2015.
At the 2011 Annual General Meeting a share conversion clause was added to Industrivärden's articles of association. Shareholders have the right at any time to convert Class A shares to Class C shares.
During 2015, 770 Class A shares were converted. Following the conversions, the number of votes in the company is 284,601,014. The total number of registered shares in the company is 432,341,271, of which 268,185,430 are Class A shares and 164,155,841 are Class C shares.
| 2015 | 2014 | 2015 | 2014 | |
|---|---|---|---|---|
| SEK M | Oct.-Dec. | Oct.-Dec. | Jan.-Dec. | Jan.-Dec. |
| INCOME STATEMENT | ||||
| Dividend income from stocks | 0 | 0 | 3 184 | 2 984 |
| Change in value of stocks, etc. | 519 | 2 274 | 239 | 2 627 |
| Short-term derivative transactions and equity trading | 9 | 3 | 167 | 178 |
| Management cost | -28 | -38 | -229 | -146 |
| Operating income | 500 | 2 239 | 3 361 | 5 643 |
| Financial items | -56 | -81 | -257 | -378 |
| Income after financial items | 444 | 2 158 | 3 104 | 5 265 |
| Tax | - | - | - | - |
| Net income for the period | 444 | 2 158 | 3 104 | 5 265 |
| Earnings per share, SEK | 1.03 | 4.99 | 7.18 | 12.62 |
| Earnings per share after dilution, SEK | 1.03 | 4.81 | 7.18 | 11.39 |
| STATEMENT OF COMPREHENSIVE INCOME | ||||
| Income for the period | 444 | 2 158 | 3 104 | 5 265 |
| Items that are not to be reveresed in the inc. statement | ||||
| Actuarial gains and losses on pensions | 30 | -24 | 30 | -24 |
| Items that can be reversed in the inc. Statement | ||||
| Change in hedging reserv | 0 | 0 | 12 | -11 |
| Comprehensive income for the period | 474 | 2 134 | 3 146 | 5 230 |
| BALANCE SHEET as per end of period | ||||
| Equities | 81 835 | 83 062 | ||
| Non-current receivables | 466 | 375 | ||
| Total non-current assets | 82 301 | 83 437 | ||
| Cash and cash equivalents | 5 | 0 | ||
| Other current assets | 231 | 622 | ||
| Total current assets | 236 | 622 | ||
| Total assets | 82 537 | 84 059 | ||
| Shareholders' equity | 67 850 | 67 406 | ||
| Non-current interest-bearing liabilities | 11 163 | 11 666 | ||
| Non-current non interest-bearing liabilities* | 1 122 | 858 | ||
| Total non-current liabilities | 12 285 | 12 524 | ||
| Current interest-bearing liabilities | 2 149 | 3 905 | ||
| Other liabilities | 253 | 224 | ||
| Total current liabilities | 2 402 | 4 129 | ||
| Total shareholders' equity and liabilities | 82 537 | 84 059 | ||
| CASH FLOW | ||||
| Cash flow from operating activities | 2 775 | 2 458 | ||
| Cash flow from investing activities | 1 894 | -1 561 | ||
| Cash flow from financing activities** | -4 664 | -1 387 | ||
| Cash flow for the period | 5 | -490 | ||
| Cash and cash equivalents at end of period | 5 | 0 |
* Of which, the option portion of the convertible loan and exhangeable bond, totaling SEK 1 013 M (744), which at the times of issue amounted to a combined total of SEK 934 M.
** Of which, dividends of SEK 2,282 M were paid to shareholders in 2014 and SEK 2,702 M in 2015.
| 2015 | 2014 | |
|---|---|---|
| SEK M | Jan.-Dec. | Jan.-Dec. |
| CHANGES IN SHAREHOLDERS' EQUITY | ||
| Opening shareholders' equity as per balance sheet | 67 406 | 59 280 |
| Comprehensive income for the period | 3 146 | 5 230 |
| Conversion | 0 | 5 169 |
| Dividend | -2 702 | -2 282 |
| Other | 0 | 9 |
| Closing shareholders' equity as per balance sheet | 67 850 | 67 406 |
| KEY DATA as per end of period | ||
| Net asset value per share, SEK | 160 | 158 |
| Net asset value per share after full conversion, SEK | 160 | 158 |
| Share price (Class A), SEK | 159 | 143 |
| Share price (Class C), SEK | 145 | 136 |
| Number of shares (thousands)* | 432 341 | 432 341 |
| INTEREST-BEARING NET DEBT at end of period | ||
| Cash and cash equivalents | 5 | 0 |
| Interest-bearing assets | 659 | 939 |
| Non-current interest-bearing liabilities** | 11 163 | 11 666 |
| Current interest-bearing liabilities | 2 149 | 3 905 |
| Interest-bearing net debt | 12 648 | 14 632 |
* Number of shares upon full conversion (thousands), 463 338.
** Of which, convertible loans of SEK 4 891 M (4 971).
| 2015 | 2014 | |
|---|---|---|
| SEK M | Jan.-Dec. | Jan.-Dec. |
| INCOME STATEMENT | ||
| Operating income | -143 | 3 044 |
| Income after financial items | -261 | 2 816 |
| Income for the period | -261 | 2 816 |
| Comprehensive income for the period | -219 | 2 781 |
| BALANCE SHEET as per end of period | ||
| Non-current assets | 43 603 | 48 092 |
| Current assets | 3 039 | 2 813 |
| Total assets | 46 642 | 50 905 |
| Shareholders' equity | 34 243 | 37 164 |
| Non-current liabilities | 10 285 | 11 024 |
| Current liabilities | 2 114 | 2 717 |
| Total shareholders' equity and liabilities | 46 642 | 50 905 |
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU, and the Swedish Annual Accounts Act. The Parent Company's financial statements have been prepared in accordance with RFR 2 – Accounting for Legal Entities, and the Swedish Annual Accounts Act.
New or amended IFRSs and IFRIC interpretations have not had any effect on the Group's or Parent Company's results of operations or financial position.
The dominant risk in Industrivärden's business is share price risk, i.e., the risk of a decrease in value caused by changes in share prices.
A 1% change in the share price of the holdings in the equities portfolio as per December 31, 2015, would have affected its market value by approximately +/– SEK 800 million.
During 2015, dividend income was received from associated companies.
In accordance with IFRS 13, financial instruments are measured at fair value according to a three level hierarchy. Classification is based on input data that is used in measuring the instruments. Instruments in Level 1 are valued according to quoted prices for identical instruments in an active market. Instruments in Level 2 are valued in a valuation model which uses input data that are directly or indirectly observable in the market. Instruments in Level 3 are valued using a valuation technique based on input data that are not observable in a market.
Responsibility for fair value measurement, which is based on documentation produced by the company's risk manager, rests with management. ISDA agreements exist with the pertinent counterparties.
| 12/31/2015 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Assets | ||||
| Equities | 81 574 | - | 261 | 81 835 |
| Derivatives | 0 | 10 | - | 10 |
| Total assets | 81 574 | 10 | 261 | 81 845 |
| Level 1 | Level 2 | Level 3 | Total | |
| Liabilities | ||||
| Non-current liabilities | ||||
| Option portion of convertible | ||||
| loan and exchangeable bond | - | 1 013 | - | 1 013 |
| Other derivatives | - | 110 | - | 110 |
| Current liabilities | ||||
| Derivatives | 51 | 3 | - | 54 |
| Total liabilities | 51 | 1 126 | - | 1 177 |
No changes have been made between levels compared with the preceding year.
At the AGM on May 6, 2015 Fredrik Lundberg was elected as new Chairman. Lundberg has been a director of Industrivärden since 2004. On September 1, 2015 Helena Stjernholm took office as new CEO of Industrivärden. She has worked in various positions in IK Investment Partners since 1998 and prior to that worked as a consultant at Bain & Company.
The Nominating Committee proposes the re-election of board members Pär Boman, Christian Caspar, Bengt Kjell, Nina Linander, Fredrik Lundberg, Annika Lundius and Lars Pettersson. Industrivärdens CEO, Helena Stjernholm, is proposed as a new board member. In addition, Fredrik Lundberg is proposed for re-election as Chairman of the Board. The Nominating Committee's other recommendations will be made public in the notice of the Annual General Meeting.
Interim report January–March: April 5, 2016 Annual General Meeting: May 9, 2016 Interim report January–June: July 6, 2016 Interim report January–September: October 6, 2016
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 12.30. (CET) on February 5, 2016.
Anders Gustavsson, Investor Relations Sverker Sivall, Head of Corporate Communication Martin Hamner, CFO Helena Stjernholm, CEO Phone +46 8 666 64 00
Industrivärden's complete contact information can be found on page 1. For further information, please visit Industrivärden's website: www.industrivarden.net.
Stockholm, February 5, 2016
Helena Stjernholm, CEO
Following is the auditors' review report of interim financial information prepared in accordance with IAS 34 and Ch. 9 of the Swedish Annual Accounts Act.
We have reviewed the interim report for AB Industrivärden (publ) for the period January 1 – December 31, 2015. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Stockholm, February 5, 2016 PricewaterhouseCoopers AB
Magnus Svensson Henryson Authorized Public Accountant
AB Industrivärden (publ) Reg. no. 556043-4200 Box 5403 SE-114 84 Stockholm, Sweden Phone +46-8-666 64 00 [email protected]
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