- The total return for the first nine months 2016 amounted to 11 % for the Class A shares and 13 % for the Class C shares, compared with 6 % for the total return index (SIXRX).
- Net asset value on September 30, 2016, was SEK 76.3 billion, or SEK 177/share, an increase of 11 % since the end of 2015, and 14 % including reinvested dividend.
- Earnings per share during the first nine months 2016 amounted to SEK 23.00 per share.
- The debt-equities ratio as per September 30, 2016, was 13 %, a decrease since the year-end 2015 of 2 %-points.
- During the first nine months 2016, stocks were sold net for SEK 0.9 billion.
CEO’s message
Continued precarious business environment
Global growth has leveled out at roughly 3 % per year since the financial crisis. While the growth rates for developed and emerging markets have converged in recent years, distinct differences remain from region to region.
In several major economies, significant monetary policy interventions have resulted in considerable currency movements that affect the conditions for doing business. Commodity prices remain at low levels, although prices have risen in certain areas. Geopolitical uncertainty has grown during the year, with several international hot spots of concern and the forthcoming presidential election in the U.S.
To spur inflation, central banks continue to pursue supportive and expansive monetary policies with low – and even negative – interest rates. This is expected to continue, which is encouraging investors to put their capital into more high-risk assets in their search for returns. This in-flow of capital is significant, which is benefiting the stock market.
Favorable performance for Industrivärden’s stock
During the first nine months of the year net asset value developed well, buttressed by favorable growth in share prices above all for Sandvik, Volvo and Handelsbanken. Growth in net asset value was 14% including reinvested dividends, compared with 6% for the Stockholm Stock Exchange’s return index.
This favorable performance is also reflected in Industrivärden’s stock, which delivered total returns of 11% and 13%, respectively, for the Class A and C shares.
Clear engagement in portfolio companies
Our expressed ambition to strive for an accelerated pace of change in our portfolio companies facing considerable challenges is now an integral part of our business model. During the year we have sharpened our focus on central considerations for enhancing value creation, and I would go so far as to assert that we have strengthened our ownership model significantly in several respects. Being a long-term asset manager and active owner in a global economy and rapidly changing world demands responsiveness, flexibility and continuous improvements. Refining our ways of working and abilities is therefore an ongoing process. Two examples of strategic development steps in which we have exercised our ownership role are the participation in SSAB’s rights issue in May and our support for SCA’s recently initiated work on proposing a split of the Group into two separate operations – a hygiene company and a forest products company. A common denominator in these activities is that they increase the respective portfolio companies’ room to maneuver and enable further value creation over time.
During the third quarter, changes were carried out at the CEO level, in two of our portfolio companies. At Handelsbanken, Anders Bouvin has taken office as Group Chief Executive; he previously headed Handelsbanken’s successful business venture in the UK and knows the bank well. At Ericsson, CFO Jan Frykhammar has been named as acting CEO and the recruitment of a new CEO is ongoing.
Stockholm, October 6, 2016
Helena Stjernholm
