- The total return for the first half of the year was 12% for the Class A shares and 8% for the Class C shares, compared with 9% for the SIXRX total return index. For the longer ten-year period, the Class C shares generated an excess return of +1 percentage point per year above the total return index.
- Net asset value on June 30, 2013, was SEK 135/share, an increase of SEK 6/share, or 8% including reinvested dividends of SEK 5/share. Earnings per share for the first half of the year were SEK 11.58 (13.08).
- The new investment in ICA Gruppen of SEK 2.4 billion had a market value of SEK 3.6 billion at mid-year.
- 12% of the Convertible loan 2015, amounting to EUR 500 M, was converted to new Class C shares.
CEO’s message
More positive climate
The global economy continues to improve, albeit at a slow pace. Increasingly the U.S. stands out to be a key future engine of growth for the global economy, not least through its access to cheap energy from the production of shale gas and oil. Europe is wrestling with continued problems and is being weighed down by negative growth in southern Europe. Development is strong in China, although there are concerns that the anticipated growth figures will not be met. This, together with uncertainty surrounding the Chinese central bank’s actions, has created anxiety in the Chinese capital market. Although several questions remain, the world economy is gradually improving. This is illustrated by the fact that the IMF adjusted its recent GDP forecast for 2013 downward while leaving the forecast for 2014 unchanged. Global growth is now expected to rise from 3.3% in 2013 to 4.0% in 2014.
Sweden is performing relatively well, although with continued high unemployment and a low level of industrial investment. The strong Swedish krona has had a negative impact on companies’ international competitiveness, especially companies with a large capital base in Sweden, such as SSAB.
The world’s financial markets are experiencing yet another period of turbulence and uncertainty. This time the worries are coming from indications from the U.S. Federal Reserve Bank that it is prepared to take actions to reduce the scope of its QE bond buying programs and to phase these out in 2014. This is rooted in positive development, since the Fed is now beginning to see that growth in the economy has attained such strength that it no longer needs to be stimulated through abnormally low long-term interest rates. Rising long-term rates also mean that the more than ten-year bond rally that the U.S. and world in general have experienced will come to an end.
A large share of global liquidity has migrated to the bond market, which is the world’s largest. This capital will now be reallocated and adapted to more normal levels of interest rates and risk in the world economy. Against this backdrop, all indications are that equities as an asset class will see a resurgence. This would benefit Industrivärden in our capacity as a long-term investor in well-positioned listed companies.
Stable performance for Industrivärden during first half of the year
Industrivärden’s stock has had stable performance during 2013 on par with the index. The total return for the Class A and C shares during the first half was 12% and 8%, respectively, compared with 9% for the total return index.
To balance the equities portfolio’s exposure to cyclical businesses, a number of transactions were carried out during the first half of the year. The entire holding in Höganäs was sold for SEK 1.4 billion, and a new investment of SEK 2.4 billion was made in ICA Gruppen, including a new issue of SEK 0.5 billion. As part of the reweightings above, we have also opted to reduce our holding in Indutrade by SEK 1.7 billion.
Continued conversion of convertible loans
During the spring Industrivärden’s Class C shares reached prices that make it attractive for holders of our convertible loans to convert to new Class C shares. Such was also the case, and during the first half of the year, 5,498,739 new Class C shares in Industrivärden were issued.
Anders Nyrén
www.industrivarden.net
The information provided in this interim report is such that AB Industrivärden (publ) is obligated to publish pursuant to the Securities Market Act. Submitted for publication at 10.00 a.m. on July 5, 2013.
