Industrivärden

Quarterly Report • Oct 17, 2024

Interim Report

January 1 – September 30, 2024

• Net asset value on September 30, 2024, was SEK 162.8 bn, or SEK 377 per share. During the first nine months of the year, net asset value increased by 8%, corresponding to SEK 29 per share.
• The total return for the period was 17% for the Class A shares and 16% for the Class C shares, compared with 15% for the Stockholm Stock Exchange's total return index (SIXRX).
• During the first nine months, shares were purchased for a total of SEK 3.8 bn, of which SEK 1.3 bn in Sandvik, SEK 1.2 bn in Volvo, SEK 0.8 bn in SCA, SEK 0.5 bn in Essity and SEK 0.1 bn in Alleima.

	2024	2023	2023
	Sept 30	Sept 30	Dec 31
Net asset value, SEK mn	162,766	134,663	150,252
Net asset value per share, SEK	377	312	348
Share price, Industrivärden C, SEK	373.30	288.60	328.30
Debt-equities ratio	4%	5%	5%
	2024	2023	2023
SEK mn	Jan – Sept	Jan – Sept	Jan – Dec
Earnings per share, SEK	36.68	26.10	62.15
Dividend income	8,467	6,418	6,418
Dividend paid	3,347	3,131	3,131
Equities portfolio:
Purchases	3,750	2,049	2,854
Sales	–	–	–

Financial overview

The report pertain to the period January 1 through September 30, 2024. For balance sheet items, figures in parentheses pertain to the value on December 31, 2023. For income statement and cash flow items, figures in parentheses pertain to the value for the corresponding period in the preceding year.

Net asset value

Net asset value consists of the market value of the equities portfolio less net debt. On September 30, 2024, net asset value was SEK 162,766 mn (150,252) or SEK 377 per share (348), an increase of SEK 29 per share during the first nine months.

	Sept 30, 2024
		Ownership stake, %		Market value		Share of value
Holdings	No. of shares	Capital	Votes	SEK mn	SEK/share	%
Volvo A	166,600,000		9.3 28.0	45,115	118	30
Volvo B	22,600,000			6,061
Sandvik	182,700,000	14.6	14.6	41,455	96	25
Handelsbanken A	228,200,000	11.5	11.7	23,790	55	14
Essity A	32,700,000			10,382	54	14
Essity B	40,600,000	10.4	29.5	12,866
SCA A	33,300,000			4,908	27
SCA B	45,400,000	11.2	29.6	6,717		7
Skanska A	12,667,500	7.7 24.5		2,683
Skanska B	19,500,000		4,130	16	4
Ericsson A	86,052,615	2.6		6,617	15	4
Ericsson B	1,000,000		15.1	77
Alleima	51,200,000	20.4	20.4	3,656	8	2
Other				480	1	0
Equities portfolio				168,938	391	100
Net debt				-6,172	-14
Net asset value				162,766	377
Debt-equities ratio				4%

During the last ten-year period, net asset value increased from SEK 65,820 mn on September 30, 2014, to SEK 162,766 mn on September 30, 2024. The average annual growth of net asset value for the last five- and ten-year periods was 10% and 9%, respectively.

The chart below illustrates net asset value for the respective year-ends as well as for the period ended on September 30, 2024.

Development over time

Performance of the equities portfolio

During the period, the market value of the equities portfolio, adjusted for purchases and sales, increased by SEK 7,640 mn, or 5%. Net purchases amounted to SEK 3,750 mn. On September 30, 2024, the market value of the equities portfolio was SEK 168,938 mn.

SEK mn	Sept 30, 2024	Jan – Sept 2024
	Market value	Change in value	Purchase (+) / sales (-)	Dividend
Volvo	51,177	727	1,152	3,352
Sandvik	41,455	1,600	1,272	989
Handelsbanken	23,790	-1,187	–	2,967
Essity	23,248	4,891	493	555
SCA	11,625	-220	770	207
Skanska	6,813	947	–	177
Ericsson	6,694	1,141	–	118
Alleima	3,656	-261	63	102
Other	480	1	–	–
Total	168,938	7,640	3,750	8,467

Change in value, net purchases, dividend income

Total return, shareholdings January 1 – September 30

Investment activities

During the first nine months, shares were purchased for a total of SEK 3,750 mn (2,049), of which SEK 1,272 mn in Sandvik, SEK 1,152 mn in Volvo B, SEK 770 mn in SCA B, SEK 493 mn in Essity B and SEK 63 mn in Alleima.

Dividends received

During the period, dividend income from the holdings amounted to SEK 8,467 mn (6,418).

Net income for the period

During the first nine months of the year, dividend income amounted to SEK 8,467 mn (6,418) and change in value of shares, etc. to SEK 7,632 mn (5,142). Management cost amounted to SEK –92 mn (–96), which on a yearly basis corresponds to 0.07% (0.09%) of the market value of the equities portfolio on September 30, 2024. Financial items and tax amounted to SEK –99 mn (–112) and SEK –67 mn (–79), respectively. Net income for the period was SEK 15,841 mn (11,273), or SEK 36.68 per share (26.10).

Financing

Net debt amounted to SEK 6,172 mn (7,295) on September 30, 2024, corresponding to a debt-equities ratio of 4% (5%).

The debt portfolio consists primarily of bonds issued within the framework of Industrivärden's Medium Term Note (MTN) program. The average maturity of the debt portfolio was 24 months (25) on September 30, 2024. During the third quarter of the year, a new bond of SEK 500 mn with a tenor of five years was issued. The loan pertains to refinancing and was issued within the framework of the MTN program.

Information about debt financing, such as framework amounts and term sheets, is available on Industrivärden's website. No part of Industrivärden's debt financing is dependent on certain criteria in relation to financial performance measures (covenants) being met.

Net debt

	2024	2023	2023
SEK mn	Sept 30	Sept 30	Dec 31
Non-current financial liabilities	5,005	6,500	6,509
Current financial liabilities	2,288	1,684	1,691
Provisions for pensions	0	0	0
Current financial receivables	-33	-152	-36
Cash and cash equivalents	-1,088	-1,666	-869
Total	6,172	6,366	7,295

Credit rating

S&P Global Ratings has assigned Industrivärden a credit rating of A+/Stable/A-1. This rating was confirmed on March 27, 2024.

Shareholders' equity

The Group's shareholders' equity at the end of the period was SEK 162,357 mn (149,880), corresponding to an equity ratio of 95% (95%).

Share structure

At the 2011 Annual General Meeting, a share conversion clause was added to the Articles of Association. Shareholders have the right at any time to request conversion of Class A shares to Class C shares. During the first nine months, 11,712,551 shares were converted.

Share structure on September 30, 2024

Share class	No. of shares	No. of votes	Capital, %	Votes, %
A (1 vote)	243,076,943	243,076,943.0	56.3	92.8
C (1/10 vote)	188,822,165	18,882,216.5	43.7	7.2
Total	431,899,108	261,959,159.5	100.0	100.0

Industrivärden's stock

Stock performance

Total return over time

On the last day of trading in the period, September 30, the price of Industrivärden's Class A and Class C shares was SEK 375.20 and SEK 373.30, respectively. Corresponding share prices on the last day of trading in 2023, December 29, were SEK 328.90 and SEK 328.30, respectively.

The total return during the period was 17% for the Class A shares and 16% for the Class C shares. During the last five-year period as well as the last ten-year period, the average annual total return for the Class C shares was 14%. The stock's total return, compared with the total return for the Stockholm Stock Exchange (SIXRX) and the total return for the OMXS30 (OMXS30GI), is shown in the table and charts below.

Average annual growth in value for respective period

		Sept 30, 2024 Total return
	Industrivärden C	Index (SIXRX)	Index (OMXS30GI)
9 months	16%	15%	12%
1 year	32%	31%	26%
3 years	14%	6%	9%
5 years	14%	13%	13%
7 years	11%	11%	10%
10 years	14%	12%	10%

Other report information

Events after the balance sheet date

No significant events have occurred after September 30, 2024.

This interim report has not been subject to review by the Company's auditors.

Stockholm, October 17, 2024

Helena Stjernholm Chief Executive Officer

Financial statements

Group, condensed

Income statement

	2024	2023	2024	2023	2023
SEK mn	July – Sept	July – Sept	Jan – Sept	Jan – Sept	Jan – Dec
Dividend income	–	118	8,467	6,418	6,418
Change in value of shares, etc.	6,769	-2,153	7,632	5,142	20,851
Management cost	-28	-32	-92	-96	-126
Operating income	6,741	-2,067	16,007	11,464	27,143
Financial items	-32	-37	-99	-112	-156
Income after financial items	6,709	-2,104	15,908	11,352	26,987
Tax	-8	-5	-67	-79	-143
Net income for the period	6,701	-2,109	15,841	11,273	26,844
Earnings per share (no dilution effect exists), SEK	15.52	-4.88	36.68	26.10	62.15

Statement of comprehensive income

	2024	2023	2024	2023	2023
SEK mn	July – Sept	July – Sept	Jan – Sept	Jan – Sept	Jan – Dec
Net income for the period	6,701	-2,109	15,841	11,273	26,844
Other comprehensive income
Items that are not to be reclassified in the income statement
Actuarial gains and losses on pensions	-5	-6	-21	-18	-9
Comprehensive income for the period	6,696	-2,115	15,820	11,255	26,835

Balance sheet

	2024	2023	2023
SEK mn	Sept 30	Sept 30	Dec 31
Tangible fixed assets	21	10	25
Equities	168,938	141,029	157,547
Total non-current assets	168,959	141,039	157,572
Current financial receivables	33	152	36
Other current receivables	25	31	49
Cash and cash equivalents	1,088	1,666	869
Total current assets	1,146	1,849	954
Total assets	170,105	142,888	158,526
Shareholders' equity	162,357	134,308	149,880
Non-current financial liabilities	5,005	6,500	6,509
Provisions for pensions	0	0	0
Deferred tax liability	235	174	228
Other non-current liabilities	74	59	40
Total non-current liabilities	5,314	6,733	6,777
Current financial liabilities	2,288	1,684	1,691
Other current liabilities	146	163	178
Total current liabilities	2,434	1,847	1,869
Total shareholders' equity and liabilities	170,105	142,888	158,526

Group, condensed (continuation)

Change in shareholders' equity

	2024	2023	2023
SEK mn	Jan – Sept	Jan – Sept	Jan – Dec
Opening shareholders' equity as per balance sheet	149,880	126,180	126,180
Net income for the period	15,841	11,273	26,844
Other comprehensive income	-21	-18	-9
Comprehensive income for the period	15,820	11,255	26,835
Dividend to shareholders	-3,347	-3,131	-3,131
Share savings program	4	4	-4
Closing shareholders' equity as per balance sheet	162,357	134,308	149,880

Cash flow

	2024	2023	2023
SEK mn	Jan – Sept	Jan – Sept	Jan – Dec
Dividend received	8,467	6,300	6,418
Management cost paid	-91	-117	-159
Other	-156	-136	-202
Cash flow from operating activities	8,220	6,047	6,057
Purchases of shares	-3,750	-2,049	-2,854
Sales of shares	–	–	–
Cash flow from investing activities	-3,750	-2,049	-2,854
Loans raised	500	1,499	1,499
Amortization of debt	-1,404	-1,495	-1,497
Dividend paid	-3,347	-3,131	-3,131
Cash flow from financing activities	-4,251	-3,127	-3,129
Cash flow for the period	219	871	74
Cash and cash equivalents at end of period	1,088	1,666	869

Parent Company, condensed

Income statement

	2024	2023	2023
SEK mn	Jan – Sept	Jan – Sept	Jan – Dec
Operating income	8,645	11,700	23,429
Income after financial items	8,372	11,493	23,133
Income for the period	8,372	11,493	23,133
Comprehensive income for the period	8,351	11,475	23,124

Balance sheet

	2024	2023	2023
SEK mn	Sept 30	Sept 30	Dec 31
Non-current assets	108,298	90,642	103,032
Current assets	21	1,301	764
Total assets	108,319	91,943	103,796
Shareholders' equity	96,296	79,646	91,288
Non-current liabilities	5,079	6,559	6,549
Current liabilities	6,944	5,738	5,959
Total shareholders' equity and liabilities	108,319	91,943	103,796

Notes

Note 1 Accounting policies

This interim report has been prepared in accordance with IAS 34 – Interim Financial Reporting. Disclosures in accordance with IAS 34.16A are provided – in addition to the financial statements and their accompanying notes – also in other parts of the interim report. 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 financial statements have been prepared in accordance with RFR 2 – Accounting for Legal Entities, and the Swedish Annual Accounts Act. New or revised IFRSs and interpretations from the IFRS Interpretations Committee (IFRIC) have not had any material effect on the Group's or Parent Company's reporting.

Note 2 Financial instruments

In accordance with IFRS 13, financial instruments are carried at fair value based on a 3-level hierarchy. The classification is based on the input data used in the valuation of the instruments. Instruments in Level 1 are valued at quoted prices for identical instruments in an active market. Instruments in Level 2 are valued in a valuation model which uses input data that is directly or indirectly observable in the market. Input data used in the valuation model in Level 2 includes interest rates, volatility, and dividend estimates. Instruments in Level 3 are valued using a valuation technique based on input data that is not observable in a market. The valuation technique that is used for the financial instruments in Level 3 is based on net assets in the respective subsidiaries measured at fair value. No changes between the levels occurred compared with the preceding year.

	Sept 30, 2024				Dec 31, 2023
SEK mn	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Assets
Equities	168,458	–	480	168,938	157,068	–	479	157,547
Derivatives, etc.	–	1	–	1	–	2	–	2
Total assets	168,458	1	480	168,939	157,068	2	479	157,549
Liabilities
Derivatives, etc.	–	54	–	54	–	21	–	21
Total liabilities	–	54	–	54	–	21	–	21

Financial instruments measured at fair value

Note 3 Risks and uncertainties

The most significant risk in Industrivärden's operations is share price risk, i.e., the risk of a change in value due to changes in share prices. A change of 1% in the prices of the holdings in the equities portfolio on September 30, 2024, would have affected the equities portfolio's market value by approximately +/- SEK 1,700 mn. Further information on risks and uncertainties is provided in the 2023 Annual Report.

Note 4 Related-party transactions

No significant transactions with related parties were made during the period.

Definitions and alternative performance measures

This report includes financial key ratios that are based on IFRS, such as earnings per share. In addition, other Alternative Performance Measures (APMs) are used by the Company and other stakeholders 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. Reconciliation of APMs is provided on Industrivärden's website under the menu Investors – Industrivärden in figures.

Market value of equities portfolio

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

Net debt

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

Earnings per share

Net income for the period divided by the weighted average 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.

Total return, shares

Change in the share price taking into account reinvested dividends. The total return is compared with the total return for the Stockholm Stock Exchange (SIXRX) and the total return for the OMXS30 (OMXS30GI).

Total return shareholdings

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

Change in value of shareholdings

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

Information

Financial calendar

Year-End Report 2024: February 10, 2025 Annual Report 2024: February 25, 2025 Interim Report Jan – March: April 8, 2025 Annual General Meeting: April 10, 2025 Interim Report Jan – June: July 8, 2025 Interim Report Jan – Sept: October 16, 2025

Contact persons

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

Karl Åberg Deputy Chief Executive Officer, Head of the Investment Organization and the Finance Function +46-8-666 64 06 kag@industrivarden.se

Contact information

AB Industrivärden (publ) Box 5403 SE-114 84 Stockholm

Registered office: Stockholm Reg. no.: 556043–4200 Switchboard: +46-8-666 64 00 info@industrivarden.se

Ticker codes, Class C shares

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

Additional information

Additional 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. In the event of any difference between the two versions, the Swedish version shall take precedence.

Publication

This information is such that AB Industrivärden is required to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the named Head of Corporate Communications and Sustainability, at 10:00 a.m. CEST on October 17, 2024.

Value creating active ownership

Industrivärden is a listed holding company that invests in and works long-term to develop and create value in its portfolio companies. Active ownership is exercised through sizable ownership stakes in a selection of listed companies with strong market positions, good cash flows, financial strength and clear development capacity.