Interim Report January 1–June 30, 2005

• Industrivärden’s net asset value was SEK 41,171 M on August 2, 2005, compared with SEK 36,563 M at the start of the year, entailing an increase of SEK 4,608 M for the year to date. Net asset value on June 30, 2005, was SEK 38,401 M (34,443). • Net asset value per share on August 2, 2005, was SEK 213, compared with SEK 189 per share at the start of the year. Including reinvested dividends, net asset value per share was SEK 220. Net asset value per share on June 30, 2005, was SEK 199 (178). Average annual growth in net asset value over the last ten-year period, including reinvested dividends, was 17%. Earnings per share for the first six months of 2005 were SEK 14.77 (27.66). • The total return for Industrivärden’s stock as per August 2, 2005, was 14%, compared with 22% for the return index. The average annual total return over the last ten-year period was 5 percentage points higher than the return index. • During the first half of the year, Industrivärden’s ownership stake in SCA was increased to 10.0% of the capital and 29.5% of the votes through stock purchases totaling SEK 1.3 billion.

CEO’s Message The global economy continues to perform well, albeit with a slightly weaker rate of growth than previously. It is hard to discern any inflation tendencies in the world economy, and so it appears that long-term interest rates – even though they may rise slightly – have settled at a low level. As an effect of this, during the past quarter the required rate of return in stock markets began to be notched downward at the same time that companies on the whole are showing good earnings growth. This adaptation of risk premiums is entirely logical and entails that, in a relative sense, equities are beginning to catch up with assets like real estate and fixed income securities. The question can be asked whether it is right and proper that well managed companies with good development prospects are being traded at dividend yield levels that exceed long-term bond rates. Against this backdrop, among other things, there is reason for us shareholders in Industrivärden to view the future with some optimism. Industrivärden’s portfolio consists of well managed companies which on the whole have shown good performance during the year. It is gratifying to note that Ericsson has established a strong position both commercially and financially. The company continues to take market shares and is showing continued strong earnings. Sandvik’s performance continues to impress. The company’s growth involves greater market shares along with further improvement in its good profitability. SSAB’s earnings are also impressive and clearly demonstrate that the company is receiving a good payback from its consistent strategy of focusing on selected niche products. In addition to the strong earnings reported by several of our portfolio companies, a few have had more capital than necessary for their operations. Such was the case for Sandvik and SSAB, which have carried out redemption programs in order to optimize their respective capital structures. For Industrivärden, this entails that we were able to sell redemption shares in Sandvik for slightly more than SEK 400 M without reducing our ownership stake. Where SSAB is concerned, we did not participate in the redemption offer, but rather sold our redemption rights, generating slightly more than SEK 50 M. This increased our share of capital and votes in SSAB by approximately 2 percentage points, to 15.6% of the capital and 20.3% of the votes. During the second quarter of 2005 Industrivärden purchased additional shares in SCA. We have taken advantage of the market situation, and thus far in 2005 we have invested SEK 1.3 billion in a company with a strong position and favorable long-term potential. Following these purchases we own 10.0% of the capital and 29.5% of the votes in SCA. The shares were purchased at an average price that is below the current market price. Our net asset value rose by SEK 4.6 billion during the first seven months of the year. Earnings from derivative transactions and short-term equity trading during the first half of the year totaled SEK 55 M and amply covered our management costs, which were essentially unchanged compared with the same period a year ago. The work on preparing for the initial public offering of the wholly owned technology trading company Indutrade during the second half of 2005 is continuing according to plan. Anders Nyrén President and CEO