Interim Report, January 1–June 30, 2009

Value development - Net asset value on July 31, 2009, was SEK 92 per share, an increase of 49% since the start of the year. Net asset value on June 30, 2009, was SEK 79 per share. - The value of the equities portfolio increased by SEK 11.6 billion to SEK 46.3 billion, or by 33%, during the first seven months of the year. - The total return for the Class A shares was 43% for the first seven months of the year, which was 6 percentage points better than the return index. - Earnings per share for the first half of the year were SEK 22.17 (-29.01) and SEK 35.05 as per July 31. Long-term return - During the last ten-year period, the annual total return for Industrivärden’s Class A shares has exceeded the return index by an average of one percentage point. Current status ”In turbulent times like these, it is important to keep an eye on the fundamentals. We have a portfolio of well managed companies that are well positioned in their respective markets – positions that in several cases have grown stronger during the past year. It is the portfolio companies’ relative positions of strength that have laid the foundation for the excess return that Industrivärden has historically delivered. All indications are that the same applies for the future,” comments Anders Nyrén, President and CEO of Industrivärden. CEO’s message During the spring it became increasingly clear that the financial markets are gradually working better after the collapse that came in the wake of the Lehman Brothers liquidation in September 2008. Credit spreads in the vital interbank market are back at the levels they were at before the collapse. The world’s major stock markets have gained footing, and a number of new issues have been carried out at record high amounts. There is therefore reason to believe that investors are beginning to regain their risk appetite. We are now seeing signs of greater economic activity, albeit with major differences between the major economic areas. We are also seeing a clear upswing in Asia, led by China, as well as some signs of a recovery in the U.S., while the EU region is lagging after. In early July the IMF adjusted its 2010 growth forecast upward by a half percentage point, to 2.5% – the first increase in a long time. At the same time, many of the structural imbalances remain, such as the enormous debt burden of American households. These imbalances will take time to restore. Moreover, it is feared that the global banking system, which has suffered losses in its market-valued assets, now have a substantial level of loan losses to deal with in the coming quarters as a result of the low level of economic activity. So even though we are seeing signs of stabilization, the risk for a backlash is still great. Handelsbanken is showing continued strength, with improved net interest income and limited loan losses. A consistently applied and well-proven business model has further strengthened the bank’s position in a tough market. Other portfolio companies, like SCA and Skanska, have shown stable development, even though they have felt the effects of the recession. The geographical range in Skanskas operation is a strength. As noted in the quarterly reports from our portfolio companies that produce capital goods, demand is still very low. This has resulted in low capacity utilization, with underabsorption of fixed costs. Against this background, I feel it is a sign of strength that SSAB, for example, did not report a greater loss than it did, considering that demand has fallen by roughly 50%. This is because SSAB, like several of our other portfolio companies, has been working with adjusting to the collapse in demand that followed in the wake of the recession. Actions were taken early by several of the companies to reduce tied-up capital and strengthen cash flow. The first half of 2009 was thus characterized by work on managing the drop in demand through cost-cutting and capital adaptation measures. Parallel with this, new opportunities are opening up for companies to significantly advance their market positions. Ericsson’s acquisition of Nortel’s wireless business in CDMA and LTE is a good example. The newly signed service contract with Sprint, together with the Nortel acquisition, considerably strengthens Ericsson’s position in the North American telecom market, which is the largest in the world. During the first seven months of the year, Industrivärden’s net asset value including reinvested dividends increased by SEK 13.5 billion, or 56%, compared with 37% for the return index. The total return was 43% for the Class A shares and 49% for the Class C shares, representing an excess return of 6 and 12 percentage points, respectively. Only small reallocations were made in the equities portfolio. The mid-term profit for Industrivärden’s short-term trading was SEK 62 M (2). In closing, I want to reiterate my comments from the half-year report a year ago – that in turbulent times like these, it is important to keep an eye on the fundamentals. We have a portfolio of well-managed companies that are well-positioned in their respective markets – positions that in several cases have grown stronger during the past year. It is the portfolio companies’ relative positions of strength that have laid the foundation for the excess return that Industrivärden has historically delivered. All indications are that the same applies for the future. ---