Kinnevik — Interim / Quarterly Report 2011

Jul 21, 2011

B . Vinnevik Investment &

Skeppsbron 18 .
PO Prox 9094 . H. 103 13, Gockholm , Sweden www.binnevik se

(Publ) Reg no 556047-9742 Phone + 46 8.562.000.00 . Fax + 46 8 20 37 74

INTERIM REPORT 1 JANUARY-30 JUNE 2011

Financial results for the second quarter

• The net asset value increased during the second quarter to SEK 58.770 m. compared to SEK 57.746 m at the end of March. During the last 12 months, the net asset value has increased by 11.7%.
• Korsnäs' operating profit amounted to SEK 178 m $(243)$ and the operating margin was 8.7% $(12.1\%)$ .
• The Group's total revenue amounted to SEK 2,160 m (2,080).
• Net profit after tax, including changes in fair value of financial assets, amounted to SEK 2,490 m $(1,831)$ corresponding to SEK 8.98 $(6.59)$ per share.

Financial results for the first half year

• The net asset value increased during the the first half year with SEK 1.257 m from SEK 57.513 m at the end of December 2010.
• Korsnäs' operating profit amounted to SEK 442 m $(442)$ and the operating margin was 10.6% $(10.6\%)$ .
• The Group's total revenue amounted to SEK 4,442 m (4,363).
• Net profit after tax, including changes in fair value of financial assets, amounted to SEK 2,539 m (8,665) corresponding to SEK 9.15 (31.21) per share.

Kinnevik's net asset value 2006-2011

"Despite the turbulence in the global economy, Kinnevik's net asset value increased in the second quarter supported by the continued good results and cash-flows in our telecom and media companies and the significant dividends received. In Korsnäs, demand has leveled off somewhat following a period of strong growth. We committed to invest a total of SEK 901 million in the quarter within online, which we expect will contribute to the long-term growth in Kinnevik" says Mia Brunell Livfors, President and Chief Executive Officer of Kinnevik.

Kinnevik was founded in 1936 and thus embodies more than seventy years of entrepreneurship under the same group of principal owners. Kinnevik's holdings of growth companies are focused around seven business sectors; Paper & Packaging, Telecom & Services, Media, Online, Microfinancing, Agriculture and Renewable energy. Kinnevik has a long history of investing in emerging markets which has resulted in a considerable exposure to consumer sectors in these markets. Kinnevik plays an active role on the Boards of its holdings.

Total return

The Kinnevik share's average annual total return

Past 30 years 1)	20%
Past 5 years	12%
Past 12 months	15%

¹⁾ Based on the assumption that shareholders have retained their allotment of shares in Tele2, MTG, Metro, Transcom and CDON.

Events during the second quarter

• During the second quarter, Kinnevik signed agreements committing to invest a total of SEK 901 m within Online, of which SEK 839 m in Rocket Internet with portfolio companies and SEK 62 m in Avito. SEK 823 m of the consideration for Rocket Internet and its portfolio companies had yet to be paid at the end of the quarter. In the first quarter, SEK 430 m was invested within Online and

Microfinancing, whereby approximately SEK 1,330 m of the mandate given by the Board of SEK 2,000 m for new investments in 2011 within the Online, Microfinancing, Agriculture and Renewable energy business sectors was utilized in the first half year.

• In addition to investments in the above business sectors during the second quarter, Kinnevik invested SEK 143 m in G3 Good Governance Group, a company that offers emerging market strategic advisory services to multinational customers, a growth area in today's globalized markets. G3 has approximately 50 employees and is based in London. After the acquisition, Kinnevik is the company's majority shareholder.
• Kinnevik has in the second quarter received dividends from its listed holdings and paid dividends to the shareholders according to the following:

Received dividends from listed holdings

Dividend paid to Kinnevik's share- holders	SEK 4.50/share	1 247
Of which ordinary dividends		1 334
Total dividends received from listed holdings		4 1 8 0
MTG	SEK 7.50/share	101
Tele 2	SEK 6+21/share	3659
Millicom	USD 1.80/share	420
(SEK M)

The dividend payment to Kinnevik's shareholders corresponded to approximately 93% of the ordinary dividends received from Millicom, Tele2 and MTG.

Kinnevik's proportional part of revenue and operating result in its holdings

						Change compared to
			Reported	Proportional part of			Jan-June 2010
Jan-June 2011 (SEK m)	Equity interest	revenue	EBIT	revenue	EBIT	revenue	EBIT
Korsnäs	100%	4 1 7 9	442	4 1 7 9	442	0%	0%
Millicom	36.2%	14 0 36	3846	5 0 8 1	1 3 9 2	14%	13%
Tele 2	30.5%	19571	3 3 3 6	5969	1 0 1 7	0%	1%
Transcom	22.3%	2 4 8 9	$-1$	555	0	$-6%$	N/A
MTG	20.3%	6656	365	1 351	277	3%	15%
Metro	46.6%	918	76	428	35	20%	N/A
CDON	22.6%	1 2 6 1	39	285	9	36%	$-41%$
Black Earth Farming 1)	24.9%	154	$-193$	38	$-48$	$-45%$	N/A
Other unlisted holdings		2076	$-155$	340	$-1$	55%	N/A
Total sum of Kinnevik's proportional part of
revenue and operating result				18 226	3 1 2 4	5%	6%

¹⁾ Reported with one quarter's delay

The table above is a compilation of the holdings' revenues and operating result reported for the first half year 2011. Divested operations, assets held for sale and one-off items have been excluded.

Revenues and operating result reported by the companies have been multiplied by Kinnevik's ownership share at the end of the reporting period, thereby showing Kinnevik's proportional share of the companies' revenues and operating result. Constant exchange rates have been used when translating revenue and EBIT from each company's reporting currency into Swedish kronor.

The proportional share of revenues and operating result has no connection with Kinnevik's accounting and is only additional information.

Financial overview

Consolidated earnings during the second quarter

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Consolidated earnings during the first half year

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The Group's cash flow and investments

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1 Jan-30 June 2011	Financial instrument	Amount (SEK m)
Subsidiaries
G3 Good Governance Group	shares	143
Other subsidiaries	shares	5
		148
Other securities
Paper & Packaging
Bomhus Energi	shares	50
Online
Avito	shares	62
CDON	shares	48
Rocket Internet with portfolio companies	shares/warrants	367
Other Online investments		24
Microfinancing		10
		561

1 Jan-30 June 2010

Black Earth Farming	shares	124
Agriculture
Microfinancing		8
Avito	capital contribution	79
Rocket Internet with portfolio companies	shares/warrants	373
Online
Bomhus Energi	shares	33
Paper & Packaging

Business combination

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The Group's liqudity and financing

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Book and fair value of assets

		30 June 2011
Mkr	Equity interest (%)	Voting interest (%)	Book value 2011 30 June	Fair value 2011 30 June	Fair value 2010 30 June	Fair value 2010 31 Dec	Total return 2011 6)
Paper & packaging
Korsnäs Industrial and Forestry	100	100	7 184	10 126 1)	9 671 1)	9 774 1)
Bergvik Skog 2)	5	5	577	577	519	556
Interest bearing net debt relating to Korsnäs			-4 910	-4 910	-5 423	-5 575
Total Paper & packaging			2 851	5 793	4 767	4 755
Telecom & services
Millicom	36.2	36.2	24 953	24 953	24 082	24 309	4%
Tele2	30.5	47.7	16 937	16 937	15 853	18 915	9%
Transcom	22.3	44.5	214	214	392	333	-36%
Total Telecom and services			42 104	42 104	40 327	43 557
Media
MTG	20.3	48.6	5 635	5 635	5 809	6 009	-4%
Metro shares	46.6	42.4	258	258	290	285	-10%
Metro warrants 3)			323	323	388	374	-14%
Metro subordinated debentures			243	298	244	268
Total Media			6 459	6 514	6 731	6 936
Online
Rocket Internet with portfolio companies			1 768	1 768	395	1 407
Avito (directly and through Vosvik)	52 4)	28	336	336	154	274
CDON	22.6	22.6	578	578	-	420	24%
Other Online investments			122	122	144	95
Total Online			2 804	2 804	693	2 196
Microfinancing
Bayport	37 5)	37 5)	308	308	153	332
Other Microfinancing investments			24	24	15	16
Total Microfinancing			332	332	168	348
Agriculture
Black Earth Farming	24.9	24.9	752	752	653	824	-9%
Rolnyvik	100	100	200	250	250	250
RawAgro	30	30	21	21	30	21
Total Agriculture			973	1 023	933	1 095
Renewable energy
Latgran	75	75	140	263	119	259
Vireo	75	75	18	18	-	8
Total renewable energy			158	281	119	267
Interest bearing net debt against listed holdings			-306	-306	-1 249	-1 706
Other assets and liabilities			225	225	124	65
Total equity/net asset value			55 600	58 770	52 613	57 513
Net asset value per share				212.03	189.83	207.51
Closing price, class B share				140.40	125.80	137.00	6%

1) Consensus among analysts covering Kinnevik.

2) Corresponding to 5% of the company's equity.

3) Warrants in Metro are valued at fair value and included in change in fair value of listed holdings.

4) After full dilution.

5) After warrants have been utilised.

6) Including dividends received.

Kinnevik's holdings

Paper & Packaging

Korsnäs

Korsnäs, a wholly owned subsidiary of Kinnevik, is the second largest producer in the world of liquid packaging board, the third largest when it comes to white top kraftliners (WTL) and one of the largest producers of cartonboard. The company has two fully integrated mills in Gävle and Frövi and produces CTMP pulp for internal use in Rockhammar. With its vast experience, solid competence and advanced technology, Korsnäs nurtures its ambition to constantly develop and improve its products and services to bring benefit to its customers. Korsnäs Forestry is responsible for purchases of wood and fiber for Korsnäs Industrial and also conducts external sales, primarily of saw logs. Korsnäs also owns 5% of the shares in Bergvik Skog AB.

	Jan-June		April-June
Key data (SEK m)	2011	2010	2011	2010
Korsnäs Industrial
Revenue	3612	3631	1 738	1 7 2 0
FBIT	422	422	168	234
Operating margin	11.7%	11.6%	9.7%	13.6%
Korsnäs Forestry
Revenue	567	531	306	283
EBIT	20	20	10	9
Korsnäs Group
Revenue	4 1 7 9	4 1 6 2	2 0 4 4	2 0 0 3
FBIT	442	442	178	243
Operating margin	10.6%	10.6%	8.7%	12.1%
Return on operational capital	11.0%	11.4%	8.8%	12.5%
Cash flow data
EBITDA	745	740	330	393
Change in working capital	$-282$	108	$-223$	$-17$
Cash flow from operations	323	636	44	336
Investments in tangible fixed assets	$-273$	$-273$	$-176$	$-144$
Production, thousand tons	534	498	256	237
Deliveries, thousand tons	509	521	250	252

Korsnäs Industrial's sales volume divided per product Jan-June 2011

Numbers in brackets refer to Jan-June 2010

Korsnäs' operating profit for the first six months of the year amounted to SEK 442 m, the same level as in the yearearlier period. Operating profit for the second quarter was weaker than in the year-earlier period amounting to SEK 178 m, compared with SEK 243 m in the second quarter of 2010. The results for 2010 include strike remuneration of SEK 84 m from the Confederation of Swedish Enterprise as compensation for direct costs resulting from an industrial conflict.

The results for the first six months were negatively impacted by higher costs for wood and chemicals, which were primarily offset by higher sales prices. Energy costs were lower, mainly due to energy investments in Gävle.

The profit decline experienced in the second quarter of 2011, compared with the year-earlier period, was due to lower production and delivery volumes (excluding effects of the strike in 2010), and higher energy costs due to a breakdown of a turbine in Gävle.

The explanatory items are presented in the table below.

Explanation items in changes in EBIT (SEK m)	Jan-June	April-June
EBIT 2010	442	243
Delivery and production volumes and changed product mix	68	35
Sales prices including currency effects	81	50
Cost changes for energy	40	$-28$
Cost changes for pulpwood and external pulp	$-70$	$-19$
Cost changes for chemicals	$-21$	-6
Strike compensation 2010	-84	$-84$
Change in fixed costs	$-22$	$-17$
Other	8	4
EBIT 2011	442	178

Market

On the whole, the market for the first six months was at a normal level. Demand leveled off during the first quarter at a relatively high level, to then decline during the second quarter. Compared with the first half of 2010, which was characterized by strong demand, demand was generally lower. Following production problems during the fourth quarter, Korsnäs' inventory levels were low at the beginning of the year, whereby deliveries for the early part of the year were negatively impacted by a shortage of material to deliver.

Deliveries of liquid packing board increased somewhat, while delivery volumes in other product areas were slightly lower compared with the first six months of 2010. The range in each product area continued to be developed toward high-margin prioritized products pursuant to the company's long-term strategy. Price increases were implemented from 1 January 2011, in line with agreements with major liquid-packing-board customers, and price increases were also implemented in other product areas during the first six months of the year.

Kinnevik's holdings

Droduction

During the first six months of the year, production at Korsnäs Gävle continued as planned, with no major operational problems. Following its annual maintenance shutdown during the second quarter, Korsnäs Frövi experienced some production disruptions, which are estimated to have caused a production loss of slightly more than 10,000 tons of paper and carton products. During the first half of 2010. production was negatively impacted by a production loss of approximately 38,000 tons due to unscheduled operational stoppages in the soda recovery boilers and an industrial conflict.

As a result of energy investments in Gäyle, energy costs have been reduced significantly compared with the corresponding period in 2010. The new evaporation facility in Gävle, which came online in May 2010, has decreased oil consumption, well in line with the anticipated savings of 19,000 cubic meters annually. In April, a turbine in Gävle broke down, resulting in an operational stoppage of the turbine, which led to additional costs of approximately SEK 30 m in the second quarter in the form of higher electricity purchases. The turbine is planned to come back on line in late July.

Following the increase in the price of pulpwood on 1 January 2011 by SEK 10-30/m3fub, depending on the range and catchment area, the price remained unchanged during the first six months of the year. Additional increases of SEK 10-25/m3fub have been announced in the market for the second half year, but not yet implemented. The price increases for pulpwood have a negative impact on Korsnäs' operating profit, subject to a lag of approximately three to six months.

Distribution of operating costs Jan-June 2011

Excluding depreciation, Korsnäs Industrial. Numbers in brackets refer to Jan-June 2010.

Investments and maintenance stoppages

The project pertaining to a new bioenergy facility in Korsnäs' industrial area is progressing in cooperation with Gävle Energi AB's jointly owned company, Bomhus Energi AB. The aim of the bioenergy facility is to assure delivery of

eco-friendly electricity and steam to Korsnäs' plant in Gävle from 2013, as well as district heating to Gävle Energi's customers. The work is proceeding as planned and all main components have been procured within the project's budget framework. For Korsnäs, the investment in 50% of the shares and debenture loans in Bomhus will amount to approximately SEK 320 m, of which SEK 115 m was paid during 2010 and SEK 50 m during the first six months of 2011. On top of the investment in Bomhus Energi, Korsnäs will make further energy investments of about SEK 145 m in in the existing plant for the delivery of waste heat to Gävle Energi AB, of which SEK 66 m was paid in 2010 and SEK 16 m in the first half of 2011.

During the fourth quarter of 2010, a decision was made to install a third sheet machine in Frövi at a cost of approximately SEK 30 m, of which SEK 18 m was paid during the first six months of 2011. Commissioning is scheduled for October 2011.

At the beginning of July, a judgment was handed down to Korsnäs Gävle from the Land and Environmental Court of the Östersund District Court. With the objective of improving the environment and additionally reducing emissions of TOC (Total Organic Carbon) from the plant in Gävle, Korsnäs will need to invest approximately SEK 200-300 m in 2014 in its external purification facility. Korsnäs is considering appealing the judgment of the Land and Environmental Court.

The annual maintenance shutdowns at the plants in Gävle and Frövi are described in the table below.

Implemented and planned
maintenance stonnages

maintenance stoppages	20 I I	ZUIU
Korsnäs Gävle	Q4: 10 days	$Q2:2$ days Q4: 9 days
Korsnäs Frövi	$Q2: 8$ days	Q2: 11 days

Kinnevik's holdings

Telecom & services

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Millicom

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	Jan-June		April-June
Key data (USD m)	2011	2010 1)	2011	2010 1)
Revenue	2 202	1 931	1 120	977
EBITDA	1 022	915	513	464
Operating profit, EBIT	603	535	293	276
Net profit	405	290	175	134
Number of mobile subscribers (million)	41.3	36.7

1) Pro forma figures to reflect the full consolidation of Honduras

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Tele2

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Jan-June		April-June
2011	2010	2011	2010
19 571	20 066	9 998	10 539
5 168	5 045	2 711	2 687
3 378	3 840	1 719	2 294
2 334	2 898	1 108	1 649
32.3	28.8

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Kinnevik's holdings

Transcom

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	Jan-June April-June
Key data (EUR m)	2011	2010	2011	2010
Revenue	278.4	295.8	134.3	148.8
Operating profit, EBIT	-24.3	8.0	-26.8	3.7
Net profit	-26.0	5.7	-27.9	2.6
B Share Traded volume (Thousands) OMX Stockholm PI
100 80
60
40
20				10 000 8 000 6 000
				4 000 2 000
12 2006 2007 2008	2009	2010	2011	© NASDAQ OMX

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Media

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Modern Times Group MTG

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Kinnevik's holdings

Metro

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	Jan-June				April-June
Key data (EUR m)	2011	2010	2011	2010
Revenue	102.7	85.9	55.0	46.8
Operating profit, EBIT	8.5	0.0	6.7	2.6
Net result	1.6	-4.2	2.8	0.5

Information in table above refer to continuing operations.

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Online

Investment (SEK m)	Ownership	Invested amount	Estimated fair value
Rocket Internet with port folio companies	mixed	1 126	1 768
Avito (directly and through Vosvik)	52%	285	336
CDON	22.6%	416 1)	578
Other Online investments	mixed	405	122

1) The value of dividend received from MTG when shares distributed and share purchases made thereafter.

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CDON

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	Jan-June		April-June
Key data (SEK m)	2011	2010	2011	2010
Revenue	1 261	927	689	458
Operating profit, EBIT	39	66	19	28
Net profit	23	45	10	20

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Online – non-listed holdings

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Kinnevik's holdings

ments to make direct investments of a total of SEK 839 m in Rocket's portfolio companies, of which, SEK 16 m was disbursed in the second quarter. The investments comprise a number of new companies, including Wimdu, a consumer-to-consumer travel marketplace for mediating temporary accommodation, Airizu, a Chinese version of Wimdu, and Glossybox, a company that provides services for beauty products. At the marketplaces of Wimdu and its Chinese equivalent Airizu, private individuals can rent out their rooms, apartments or houses to other people needing temporary accommodation for work or leisure. Wimdu has 400 employees in 50 countries and offices in 15 countries spread over all the world's continents.

Investment agreements signed in the second quarter also included additional funds for the e-commerce retailer Zalando to finance continued expansion. Zalando started its operations in Germany in 2009 and over the past 12 months has launched online stores in the Netherlands, France, the United Kingdom, Austria and Italy. The company intends to continue its expansion geographically and through increasing its range of footwear, fashion and accessories.

Avito.ru is the leading online service for classified advertising in Russia. In the seasonally weak second quarter, the company had an average of 2.1 million new classifieds per month (0.9 million for corresponding period last year) and $11.6(6.1)$ million unique monthly visitors. The company has during the first half of the year continued to invest to strengthen its leading position. Operations have also been launched in the Ukraine. Revenues primarily derive from advertising sales on the website. In the second quarter, Kinnevik participated in a new issue directed to Avito's existing shareholders, whereby Kinnevik invested SEK 62 m to finance continued growth in Avito.

Microfinancing

Investment (SEK m)	Ownership	amount	Invested Estimated fair value
Bayport	37%	329	308
Other Microfinancing investments	mixed	31	24

Similar to the manner in which Kinnevik developed telecom services in emerging markets through innovative products and distribution networks, Kinnevik is now searching for investment opportunities in the microfinancing sector.

Bayport, a company offering micro credits and financial services in five African countries (Ghana, Uganda, Zambia. Tanzania and Botswana) as well as in Colombia, is Kinnevik's largest investment in the microfinancing sector. Bayport was founded in 2002 and has grown with profitability into a leading African micro credit company with total assets of around USD 250 m. The company has about 250,000 customers and the product portfolio is continuously expanding, primarily with loans with longer duration. Loans are used primarily for financing larger non-recurrent expenses, such as school fees, investment in farming or for starting smaller companies.

Ghana and Zambia are Bayport's largest markets, while also the other countries are displaying rapid growth. Bayport expanded its operations to Colombia in the first quarter of 2011 through the acquisition of a majority stake in the Colombian payroll deduction company FiMSA.

Microvest II is a fund focusing on equity investments in micro financing companies in emerging markets. The fund has currently four investments, of which two in India, one in Paraguay and one in Peru.

Kinnevik's holdings

Agriculture

Investment (SEK m)	Ownership	Invested amount	Estimated fair value
Black Earth Farming, Russia	24.9%	659	752
Rolnyvik, Poland	100%	174	250
RawAgro, Ukraine	30%	33	21

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Black Earth Farming

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Agriculture – non-listed holdings

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Renewable energy

Investment (SEK m)	Ownership	Invested amount	Estimated fair value
Latgran	75%	129	263
Vireo	75%	18	18

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Latgran	Jan-June		April-June
SEK m	2011	2010	2011	2010
Revenue	161	152	64	55
EBIT	23	28	9	8
Deliveries, thousand tons	145	117	57	43
Production, thousand tons	128	123	67	64

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Parent Company and other

The administration costs within the Parent Company and the Group's other companies amounted to a net expense of SEK 33 m (expense of 31) for the first half of the year after invoicing for services performed.

Risk Management

The Group's financing and management of financial risks is centralized within Kinnevik's finance function and is conducted on the basis of a finance policy established by the Board of Directors. The Group's operational risks are primarily evaluated and managed within the particular business area and then reported to the Kinnevik Board.

The Group has established a model for risk management, the aims of which are to identify, control and reduce risks. The identified risks and how they are managed are reported to the Kinnevik Board on a quarterly basis.

Kinnevik's wholly owned subsidiary Korsnäs accounts for most of the operational risks and they are mainly related to market development, customers and suppliers and the risk for a major accident in the production plants.

Kinnevik is exposed to financial risks mainly in respect of changes in the value of the stock portfolio, changes in market interest rates, exchange rate risks and liquidity and refinancing risks.

The Group is also exposed to political risks since the companies Kinnevik has invested in have a substantial part of their operations in emerging markets such as Latin America, Sub-Saharan Africa and Russia.

For a more detailed description of the Company's risks and risk management, refer to the Board of Directors' report and Note 31 of the 2010 Annual Report.

Accounting principles

The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the EU. This report was prepared in accordance with the Annual Accounts Act and IAS 34, Interim Financial Reporting.

The accounting principles and calculation methods applied in this report are the same as those described in the 2010 Annual Report.

From 2011 the accounting segments consist of Paper & Packaging (Korsnäs), Other operating subsidiaries (former part of New Ventures) and Parent Company and other. The change is further described in Note 1 on page 18.

Financial reports

Reporting dates for 2011: 20 October Interim Report January-September February 2012 Year-end release 2011

This Interim Report has not been subject to specific review by the Company's auditors.

Kinnevik discloses the information in this interim report pursuant to the Swedish Securities Exchange and Clearing Operations Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication at 8.00 CET on 21 July 2011.

For further information, please visit www.kinnevik.se or contact:

Mia Brunell Livfors, President and Chief Executive Officer, tel +46 (0)8 562 000 00

Torun Litzén, Information and Investor Relations tel +46 (0)8 562 000 83, mobile +46 (0)70 762 00 83

Kinnevik was founded in 1936 and thus embodies more than seventy years of entrepreneurship under the same group of principal owners. Kinnevik's objective is to increase shareholder value, primarily through net asset value growth. The company's holdings of growth companies are focused around seven business sectors: Paper & Packaging, Telecom & Services, Media, Online, Microfinancing, Agriculture and Renewable energy.

Kinnevik has a long history of investing in emerging markets which has resulted in a considerable exposure to consumer sectors in these markets. Kinnevik plays an active role on the Boards of its holdings.

The Kinnevik class A and class B shares are listed on NASDAO OMX Stockholm's list for Large Cap companies within the financial and real estate sector. The ticker codes are KINV A and KINV B.

The Board of Directors and the CEO certify that this undersigned six month interim report provides a true and fair overview of the Parent Company and Group's operations, financial position and performance for the period, and describes the material risks and uncertainties facing the Parent Company and other companies in the Group.

Stockholm, 21 July 2011

Cristina Stenbeck Chairman of the Board

Tom Boardman Member of the Board

Vigo Carlund Member of the Board

Dame Amelia Fawcett Member of the Board

Geron Forsman Member of the Board Employee representative

Wilhelm Klingspor Member of the Board

Erik Mitteregger Member of the Board

Bo Myrberg Member of the Board Employee representative Allen Sangines-Krause Member of the Board

Mia Brunell Livfors CEO

CONDENSED CONSOLIDATED INCOME STATEMENT (SEK m)

		2011	2010	2011	2010
		1 Jan	1 Jan	1 April	1 April	2010
	Note	30 June	30 June	30 June	30 June	Full year
Revenue		4 442	4 363	2 160	2 080	8 593
Cost of goods sold and services		-3 773	-3 789	-1 858	-1 829	-7 315
Gross profit/loss		669	574	302	251	1 278
Selling, administration, research and development
costs		-295	-259	-166	-135	-538
Other operating income		61	203	36	144	326
Other operating expenses		-7	-81	-5	-27	-177
Operating profit/loss		428	437	167	233	889
Dividends received	2	4 184	2 689	4 184	2 689	3 105
Change in fair value of financial assets	2	-1 875	5 663	-1 774	-1 008	9 899
Interest income and other financial income		37	35	18	18	60
Interest expenses and other financial expenses		-165	-92	-81	-45	-216
Profit/loss after financial items		2 609	8 732	2 514	1 887	13 737
Taxes		-70	-67	-24	-56	-115
Net profit/loss for the period		2 539	8 665	2 490	1 831	13 622
Of which attributable to:
Equity holders of the Parent Company		2 537	8 650	2 490	1 827	13 602
Non-controlling interest		2	15	0	4	20
Earnings per share before dilution, SEK		9.15	31.21	8.98	6,59	49,08
Earnings per share after dilution, SEK		9.15	31.20	8.98	6,59	49,05
Average number of shares before dilution		277 166 552	277 158 190	277 170 733	277 158 190	277 158 190
Average number of shares after dilution		277 365 154	277 252 490	277 366 296	277 299 640	277 286 286

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (SEK m)

	2011 1 Jan 30 June	2010 1 Jan 30 June	2011 1 April 30 June	2010 1 April 30 June	2010 Full year
Net profit/loss for the period Other comprehensive income for the period	2 539	8 665	2 490	1 831	13 622
Translation differences	9	-28	17	-13	-50
Cash flow hedging	-74	32	-19	38	97
Actuarial profit/loss	-62	-	-62	-	6
Tax attributable to other comprehensive income	36	-9	22	-10	-27
Total other comprehensive income for the period	-91	-5	-42	15	26
Total comprehensive income for the period	2 448	8 660	2 448	1 846	13 648
Total comprehensive income for the period attribu table to:
Equity holders of the Parent Company	2 446	8 649	2 448	1 844	13 634
Non-controlling interest	2	11	0	2	14

CONDENSED CONSOLIDATED CASH-FLOW STATEMENT (SEK m)

	2011	2010	2011	2010
	1 Jan	1 Jan	1 April	1 April	2010
	30 June	30 June	30 June	30 June	Full year
Operating profit	428	437	167	233	889
Adjustment for non-cash items	293	292	146	160	610
Taxes paid	-103	-214	-44	-56	-301
Cash flow from operations before change in working capital	618	515	269	337	1 198
Change in working capital	-256	94	-248	-52	112
Cash flow from operations	362	609	21	285	1 310
Acquisition of subsidiaries	-148	-	-143	-	-85
Investments in tangible and biological fixed assets	-315	-296	-200	-165	-688
Sales of tangible and biological fixed assets	-	-	-	-	7
Investments in intangible fixed assets	0	-13	0	-6	-29
Investments in shares and other securities	-561	-617	-131	-152	-1 478
Dividends received	4 184	3 029	4 184	2 689	3 029
Changes in loan receivables	9	-	0	-	-63
Interest received	6	14	0	5	23
Cash flow from investing activities	3 175	2 117	3 710	2 371	716
Change in interest-bearing liabilities	-2 054	-1 834	-2 387	-1 778	-1 079
Interest paid	-165	-83	-81	-45	-203
Dividend paid	-1 247	-831	-1 247	-831	-831
Cash flow from financing activities	-3 466	-2 748	-3 715	-2 654	-2 113
Cash flow for the period	71	-22	16	2	-87
Exchange rate differences in liquid funds	0	0	0	0	0
Cash and short-term investments, opening balance
	150	237	205	213	237
Cash and short-term investments, closing balance	221	215	221	215	150

.

CONDENSED CONSOLIDATED BALANCE SHEET (SEK m)

		2011	2010	2010
ASSETS Fixed assets	Note	30 June	30 June	31 Dec
Intangible fixed assets		959	849	828
Tangible and biological fixed assets		6 395	6 325	6 385
Financial assets accounted to fair value through
profit and loss	3	52 960	48 839	54 324
- whereof interest-bearing		176	206	188
Financial assets held to maturity		243	208	225
Investments in companies accounted for using the
equity method		176	44	126
		60 733	56 265	61 888
Current assets
Inventories		1 936	1 526	1 663
Trade receivables		922	843	829
Tax receivables		0	0	12
Other current assets		325	273	291
Short-term investments		18	6	5
Cash and cash equivalents		203	209	145
		3 404	2 857	2 945
TOTAL ASSETS		64 137	59 122	64 833
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Equity attributable to equity holders of the Parent
Company		55 600	49 458	54 398
Equity attributable to non-controlling interest		53	49	27
		55 653	49 507	54 425
Long-term liabilities
Interest-bearing loans		5 070	6 370	7 081
Provisions for pensions		573	581	542
Other provisions		16	29	26
Deferred tax liability		1 072	1 069	1 107
Other liabilities		4	4	4
		6 735	8 053	8 760
Short-term liabilities
Interest-bearing loans		21	9	63
Provisions		27	52	39
Trade payables		1 072	917	981
Income tax payable		0	77	24
Other payables		629	507	541
		1 749	1 562	1 648
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		64 137	59 122	64 833

CONDENSED REPORT OF CHANGES IN EQUITY FOR THE GROUP (SEK m)

	2011	2010	2011	2010
	1 Jan	1 Jan	1 April	1 April	2010
	30 June	30 June	30 June	30 June	Full year
Equity, opening balance	54 425	41 675	54 427	48 490	41 675
Total comprehensive income for the period	2 448	8 660	2 448	1 846	13 648
Acquisition from non-controlling interest	-	-	-	-	-71
Business combination, non-controlling interest	22	-	22	-	-
Contribution from non-controlling interest	2	-	2	-	-
Dividend paid	-1 247	-831	-1 247	-831	-831
Effect of employee share saving
programme	3	3	1	2	4
Equity, closing amount	55 653	49 507	55 653	49 507	54 425
Equity attributable to the shareholders of the Parent Company	55 600	49 458	55 600	49 458	54 398
Equity attributable to non-controlling interest	53	49	53	49	27

	2011	2010	2010
KEY RATIOS	30 June	30 June	31 Dec
Debt/equity ratio	0.10	0.14	0.14
Equity ratio	87%	84%	84%
Net debt	5 024	6 331	7 123

DEFINITIONS OF KEY RATIOS

Debt/equity ratio	Interest-bearing liabilities including interest-bearing provisions divided by sharehol ders' equity.
Equity ratio	Shareholders' equity including non-controlling interest as percentage of total assets.
Net debt	Interest-bearing liabilities including interest-bearing provisions less the sum of inte rest-bearing receivables, short-term investments and cash and bank.
Operating margin	Operating profit after depreciation divided by revenue.
Operational capital employed	Average of intangible and tangible fixed assets, investments in companies accounted for using the equity method, inventories and short-term non-interest bearing receiva bles less other provisions and short-term non interest bearing liabilities.
Return on operational capital employed	Operating profit after depreciation divided by average operational capital employed.

NOTES TO THE GROUP'S FINANCIAL STATEMENTS (SEK m)

Note 1 Condensed segment reporting

Kinnevik is a diversified company whose business consists of managing a portfolio of investments and to conduct operations through subsidiaries. The Kinnevik Group's accounting is, starting from 2011, distributed on the following three accounting segments:

Paper & Packaging - Korsnäs (former Major Unlisted Holdings).

Other operating subsidiaries - Latgran, Rolnyvik, Vireo Energy, Relevant Traffic, Guider Media and Duego Technologies (former subsidiaries within New Ventures) and G3 Good Governance Group.

Parent Company & other - all other companies and financial assets (including change in fair value of financial assets earlier reported within Major Listed Holdings and New Ventures).

This distribution coincides with management's internal structure for controlling and monitoring the Group's operations. The comparative figures have been recalculated.

		Other	Parent
	Paper &	operating	company &		Total
1 Jan-30 June 2011	packaging	subsidiaries	other	Eliminations	Group
Revenue	4 179	313	12	-62	4 442
Operating costs	-3 476	-290	-51	64	-3 753
Depreciation	-303	-12	0		-315
Other operating income and expenses	42	8	6	-2	54
Operating profit/loss	442	19	-33	0	428
Dividends received	4		4 180		4 184
Change in fair value of financial assets	20		-1 895		-1 875
Financial net	-73	-1	-54		-128
Profit/loss after financial items	393	18	2 198	0	2 609
Investments in subsidiaries and financial fixed
assets	50	143	516		709
Investments in tangible fixed assets	273	41	1		315

		Other	Parent
	Paper &	operating	company &		Total
1 Jan-30 June 2010	packaging	subsidiaries	other	Eliminations	Group
Revenue	4 162	253	12	-64	4 363
Operating costs	-3 537	-224	-44	67	-3 738
Depreciation	-298	-10	-2		-310
Other operating income and expenses	115	7	3	-3	122
Operating profit/loss	442	26	-31	0	437
Dividends received	4		2 685		2 689
Change in fair value of financial assets	27		5 636		5 663
Financial net	-38	7	-26		-57
Profit/loss after financial items	435	33	8 264	0	8 732
Investments in financial fixed assets	33		584		617
Investments in intangible fixed assets		13			13
Investments in tangible fixed assets	273	22	1		296

		Other	Parent
	Paper &	operating	company &		Total
1 Apr-30 June 2011	packaging	subsidiaries	other	Eliminations	Group
Revenue	2 044	144	6	-34	2 160
Operating costs	-1 735	-140	-27	36	-1 866
Depreciation	-152	-6	0	0	-158
Other operating income and expenses	21	4	8	-2	31
Operating profit/loss	178	2	-13	0	167
Dividends received	4		4 180		4 184
Change in fair value of financial assets	7		-1 781		-1 774
Financial net	-33	0	-30		-63
Profit/loss after financial items	156	2	2 356	0	2 514
Investments in subsidiaries and financial fixed
assets	50	143	81		274
Investments in tangible fixed assets	176	23	1		200

		Other	Parent
	Paper &	operating	company &		Total
1 Apr-30 June 2010	packaging	subsidiaries	other	Eliminations	Group
Revenue	2 003	103	9	-35	2 080
Operating costs	-1 725	-96	-25	38	-1 808
Depreciation	-150	-5	-1		-156
Other operating income and expenses	115	3	2	-3	117
Operating profit/loss	243	5	-15	0	233
Dividends received	4		2 685		2 689
Change in fair value of financial assets	13		-1 021		-1 008
Financial net	-18	4	-13		-27
Profit/loss after financial items	242	9	1 636	0	1 887
Investments in financial fixed assets			152		152
Investments in intangible fixed assets		6			6
Investments in tangible fixed assets	144	20	1		165

		Other	Parent
	Paper &	operating	company &
1 Jan-31 Dec 2010	packaging	subsidiaries	other	Eliminations	Total Group
Revenue	8 178	508	25	-118	8 593
Operating costs	-6 803	-459	-91	125	-7 228
Depreciation	-602	-22	-1		-625
Other operating income and expenses	153	-17	20	-7	149
Operating profit/loss	926	10	-47	0	889
Dividend received	4		3 101		3 105
Change in fair value of financial assets	64		9 835		9 899
Financial net	-116	-1	-39		-156
Profit/loss after financial items	878	9	12 850	0	13 737
Investments in subsidiaries and financial fixed
assets	115		1 448		1 563
Investments in intangible fixed assets		29			29
Investments in tangible fixed assets	604	82	2		688
Impairment of goodwill		-34			-34

Note 2 Change in fair value of financial assets and dividends received

	2011	2010	2011	2010
	1 Jan	1 Jan	1 April	1 April	2010
	30 June	30 June	30 June	30 June	Full year
Listed holdings
Millicom	1 063	5 734	2 539	1 610	5 961
Tele2	1 680	1 714	840	318	4 776
Transcom	-119	-245	-93	-132	-304
MTG	-273	1 079	-743	212	1 695
Metro shares	-27	47	-25	-27	42
Metro warrants	-50	42	-64	-144	28
CDON	110	0	65	0	4
Black Earth Farming	-72	-66	-134	-173	105
Total listed holdings	2 312	8 305	2 385	1 664	12 307
Unlisted holdings
Paper & packaging	24	31	11	17	68
Online	-2	0	14	0	636
Microfinancing	-25	16	0	0	1
Agriculture	0	0	0	0	-8
Total unlisted holdings	-3	47	25	17	697
Total	2 309	8 352	2 410	1 681	13 004

Note 3 Financial assets accounted at fair value through profit and loss

30 June 2011
	Class	Class	2011	2010	2010
	A shares	B shares	30 June	30 June	31 Dec
Listed holdings
Millicom	37 835 438		24 953	24 082	24 309
Tele2	18 507 492	116 988 645	16 937	15 853	18 915
Transcom	16 339 448		214	392	333
MTG	5 199 491	8 304 365	5 635	5 809	6 009
Metro shares	112 122 875	133 798 591	258	290	285
Metro warrants, 717 715 821			323	388	374
CDON	15 003 856		578	-	420
Black Earth Farming	31 087 097		752	653	824
Total listed holdings			49 650	47 467	51 469
Unlisted holdings
Paper & packaging			581	524	561
Online			2 156	609	1 708
Microfinancing			332	170	348
Agriculture			24	33	24
Parent Company & other			217	36	214
Total unlisted holdings			3 310	1 372	2 855
Total			52 960	48 839	54 324

FINANCIAL KEY RATIOS MAJOR UNLISTED HOLDINGS (SEK m)

	2011 Q2	2011 Q1	2010 Full year	2010 Q4	2010 Q3	2010 Q2	2010 Q1	2009 Full year	2009 Q4	2009 Q3	2009 Q2	2009 Q1
Revenue
Korsnäs Industrial	1 738	1 874	7 148	1 751	1 766	1 720	1 911	7 098	1 757	1 730	1 823	1 788
Korsnäs Forestry	306	261	1 030	247	252	283	248	941	264	185	317	175
Total Korsnäs	2 044	2 135	8 178	1 998	2 018	2 003	2 159	8 039	2 021	1 915	2 140	1 963
Operating profit before depreciation (EBITDA)
Korsnäs Industrial	317	404	1 476	257	502	383	334	1 430	381	464	318	267
Korsnäs Forestry	13	11	52	12	17	10	13	32	13	8	4	7
Total Korsnäs	330	415	1 528	269	519	393	347	1 462	394	472	322	274
Operating profit after depreciation (EBIT)
Korsnäs Industrial	168	254	879	105	352	234	188	826	231	315	165	115
Korsnäs Forestry	10	10	47	11	16	9	11	25	11	7	2	5
Total Korsnäs	178	264	926	116	368	243	199	851	242	322	167	120
Operating margin
Korsnäs Industrial	9.7%	13.6%	12.3%	6.0%	19.9%	13.6%	9.8%	11.6%	13.1%	18.2%	9.1%	6.4%
Korsnäs Forestry	3.3%	3.8%	4.6%	4.5%	6.3%	3.2%	4.4%	2.7%	4.2%	3.8%	0.6%	2.9%
Korsnäs	8.7%	12.4%	11.3%	5.8%	18.2%	12.1%	9.2%	10.6%	12.0%	16.8%	7.8%	6.1%
Operational capital em ployed
Korsnäs Industrial	7 653	7 678	7 457	7 545	7 423	7 392	7 402	7 411	7 332	7 345	7 443	7 476
Korsnäs Forestry	422	306	352	337	343	369	353	438	389	449	449	471
Total Korsnäs	8 075	7 984	7 809	7 882	7 766	7 761	7 755	7 849	7 721	7 794	7 892	7 947
Return on operational capital employed
Korsnäs Industrial	8.8%	13.2%	11.8%	5.6%	19.0%	12.7%	10.2%	11.1%	12.6%	17.2%	8.9%	6.2%
Korsnäs Forestry	9.5%	13.1%	13.4%	13.1%	18.7%	9.8%	12.5%	5.7%	11.3%	6.2%	1.8%	4.2%
Korsnäs	8.8%	13.2%	11.9%	5.9%	19.0%	12.5%	10.3%	10.8%	12.5%	16.5%	8.5%	6.0%
Production, thousand tons	256	278	1 019	243	278	237	261	1 025	261	268	253	243
Deliveries, thousand tons	250	259	1 021	241	259	252	269	1 034	253	255	271	255

CONDENSED PARENT COMPANY INCOME STATEMENT (SEK m)

	2011 1 Jan 30 June	2010 1 jan 30 June	2011 1 April 30 June	2010 1 April 30 June	2010 Full year
Revenue	9	10	5	5	19
Administration costs	-46	-39	-27	-21	-83
Other operating income	1	3	0	2	4
Operating loss	-36	-26	-22	-14	-60
Dividends received	3 483	1 140	3 483	1 140	1 445
Result from financial assets	0	12	0	12	531
Net interest income/expense	165	210	85	118	405
Profit/loss after financial items	3 612	1 336	3 546	1 256	2 321
Taxes	-34	-20	-17	-27	-57
Net profit/loss for the period	3 578	1 316	3 529	1 229	2 264

CONDENSED PARENT COMPANY BALANCE SHEET (SEK m)

	2011	2010	2010
	30 June	30 June	31 Dec
ASSETS
Tangible fixed assets	2	2	2
Financial fixed assets	43 211	41 841	42 545
Short-term receivables	22	136	551
Cash and cash equivalents	1	16	1
TOTAL ASSETS	43 236	41 995	43 099
SHAREHOLDERS' EQUITY AND LIABILITIES
Equity	39 304	36 226	36 972
Provisions	32	41	36
Long-term liabilities	3 795	5 641	5 216
Short-term liabilities	105	87	875
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	43 236	41 995	43 099

The Parent Company's liquidity, including short-term investments and unutilized credit facilities, totalled SEK 6,068 m at 30 June 2011 and SEK 4,051 m at 31 December 2010. The Parent Company's interest bearing external liabilities amounted to SEK 542 m (2,551) on the same dates.

Investments in tangible fixed assets amounted to SEK 1 m (1) during the period.

As of 30 June 2011 the number of shares in Investment AB Kinnevik amounted to 277,583,190 shares of which 48,665,324 are class A shares with ten votes each, 228,517,952 are class B shares with one vote each and 399,914 are class C treasury shares with one vote each. During May, 25,086 class C shares were converted to class B shares and delivered to the participants in the Long Term Incentive Plan for 2008. The total number of votes in the Company amounted at 30 June to 715,571,106 (715,171,192 excluding 399,914 class C treasury shares). The Board has authorization to repurchase a maximum of 10% of all shares in the Company. The Board has not used the authorization during the first half year 2011. There are no convertibles or warrants in issue.