Industrivärden Interim Report January 1 – June 30, 2006

• Industrivärden’s net asset value on June 30, 2006, was SEK 49,390 M (38,401 on June 30, 2005), an increase of SEK 1,138 M since the start of the year. Net asset value on July 31, 2006, was SEK 47,703 M. • Net asset value per share on June 30, 2006, was SEK 256 (199 on June 30, 2005), an increase of SEK 6 per share or 2% since the start of the year. Earnings per share for the first six months of 2006 were SEK 12.94 (14.77). Net asset value per share on July 31, 2006, was SEK 247, a decrease of SEK 3 per share since the start of the year. Average annual growth in net asset value over the last ten-year period, including reinvested dividends, was 16%. • During the last twelve-month period, the total return for Industrivärden’s Class A stock was 15%, and the total return for the Class C stock was 18%, compared with 17% for the return index. The average annual total return over the last ten-year period was 5 percentage points higher than the return index. CEO’s Message The global economy continues to show favorable development. There is concern for American consumer purchasing power in light of falling house prices and higher interest rates. The economy, however, shows continued growth although there are signs of weakening. The central banks, headed by the U.S. Federal Reserve, have therefore, which is natural and expected, raised short-term interest rates from low levels to curb inflation tendencies. Long-term rates, on the other hand, have not moved appreciably, leading to flatter yield curves. The state of world affairs, however, gives cause for concern. This applies in particular to the situation in the Middle East which has resulted, among other things, in record-high oil prices. The world’s stock markets have shown a strong negative trend since mid-May. Contributory factors are market uncertainty about future growth and raised risk premiums. Concern that the global economy has peaked and increased instability in the business environment are definitely other contributory factors. Industrivärden’s portfolio companies, in common with most other major Swedish companies, have published very strong interim reports in line with expectations. Industrivärden has a portfolio of fine, and in many cases, industrially leading companies. This allows the companies to take advantage of the opportunities created by the strong global economy, through internal efficiency enhancement activities and active market measures. Despite this, our portfolio has been unable to withstand the recent turbulence on the stock markets. Our net asset value, which showed weak positive growth during the first half but then fell through July 31, has thus fallen 19% since the previous reporting date in May. However, our portfolio of high class companies, in which we exercise active ownership, is creating opportunities for a long-term favorable development. Our portfolio company Handelsbanken had a strong first half and reported its best-ever second quarter. Key factors for success were improved net commissions and positive effects of the acquisition of SPP. It is especially positive that SPP is now showing a surplus. Ericsson increased sales within all areas and the company’s operating margin strengthened during the quarter. It is gratifying that Ericsson has succeeded in raising its market shares within mobile systems and advanced its position within services. The company is well positioned for the changes now taking place within the industry. The half-year result of our short-term trading amounted to SEK 66 M (55) and well covered our management costs of SEK 39 M for the six month period. Management costs are unchanged for the fifth consecutive year and comprise 0.15% of assets under management. In conjunction with the redemption of stock options, we made complementary purchases of stock in a couple of our portfolio companies.