investor capital markets day
TRANSCRIPT
Investor Capital Markets Day
Johan ForssellCEO
Purpose of the day
3
Present our strategic direction
Explain the value creation in our business areas
Present the wholly-owned subsidiaries within Patricia Industries
Agenda
09:00 Welcome – Pia Djupmark & Johan Forssell
09:10 Investor strategy – Johan Forssell
09:40 Financial strategy – Helena Saxon
10:00 Listed Core Investments – Daniel Nodhäll
10:45 Break
11:00 EQT – Thomas von Koch
11:20 Patricia Industries – Christian Cederholm & Noah Walley
11:45 Aleris – Alexander Wennergren Helm
12:05 Vectura – Susanne Ekblom
12:15 Lunch
13:00 Permobil – Jon Sintorn
13:20 BraunAbility – Nick Gutwein
13:50 Laborie – Brian Ellacott
14:15 Mölnlycke – Richard Twomey
14:45 Concluding remarks – Johan Forssell
4
Our genes – who we are
5
Long-term, active owner of great companies – buy-to-build strategy
We strive to support our companies to become and stay best-in-class
Our long-term perspective is no excuse for lack of short-term performance
We focus on what we believe is best for each individual company
Our model builds on clear roles of responsibility and great people
What has been the focus over the past two years?
6
Established a new organizational structure and
Management Team
Several key activities in our portfolio companies
Significant investments in attractive assets while
maintaining financial flexibility
1
2
3
What has been the focus over the past two years?
7
Established a new organizational structure and
Management Team
Several key activities in our portfolio companies
Significant investments in attractive assets while
maintaining financial flexibility
1
2
3
Strong business focus with common support functions
8
Common corporate support functions
LISTED CORE INVESTMENTS
EQT EQUITY
EQT INFRASTRUCTURE
EQT MIDMARKET
EQT CREDIT
EQT AB
EQT VENTURES
Financial Investments
248SEK bn.
78%of total assets
14SEK bn.
5%of total assets
55SEK bn.
17%of total assets
New Management Team established
9
Clear division of responsibilities, efficient decision-making process
Johan ForssellCEO
Helena SaxonCFO
Petra HedengranGeneral Counsel, Head of Corporate Governance, EQT investments
Daniel NodhällHead of Listed Core Investments
Stefan SternHead of Corporate Relations, Sustainabilityand Communications
Christian CederholmCo-head of Patricia Industries, Nordic
Noah WalleyCo-head of Patricia Industries, North America
~100 years at Investor AB
Valuation of unlisted holdings in Patricia Industries
10
Facilitating evaluation of Investor’s
net asset value
Increasing consistency between reporting of
Listed Core Investments and unlisted holdings
Continued effort to increase transparency
What has been the focus over the past two years?
11
Established a new organizational structure and
Management Team
Several key activities in our portfolio companies
Significant investments in attractive assets while
maintaining financial flexibility
1
2
3
Sobi
12
> Successful launches of Elocta and Alprolix
> Group sales SEK 2.6 bn. 2014, SEK 5.8-6.0 bn. expected 2017
Husqvarna
13
> Major operational improvement, significant margin expansion
> Three business areas focusing on growth
> Consumer brands focusing on improving profitability
Atlas Copco
> Vacuum grows into new business area
> Proposal to split into two focused market leaders
14
Ericsson
15
> Tough market environment
> New CEO in place
> Focused business strategy presented
Our subsidiaries within Patricia Industries
16
What has been the focus over the past two years?
17
Established a new organizational structure and
Management Team
Several key activities in our portfolio companies
Significant investments in attractive assets while
maintaining financial flexibility
1
2
3
Listed Core Investments – SEK 7 bn. invested
18
2015-2016
120
140
160
180
200
220
2015 2016 2017
SEK
Close price Average
40
60
80
100
120
2015 2016 2017
SEK
Close price Invested
30
35
40
45
50
55
2015 2016 2017
EUR
Close price Average share price
150
170
190
210
230
250
270
2015 2016 2017
SEK
Close price Average price
Share price Average price paid
Share price Average price paid Share price Average price paid
Share price Average price paid
Patricia IndustriesTwo new subsidiaries in North America
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Sources
SEK ~30 bn.
Significant investments in attractive assets
Uses
SEK ~30 bn.
LISTED CORE INVESTMENTS
20
Strong financial flexibility for more investments
Strong performance
0
2
4
6
8
10
12
14
2015 2016 YTD
%Inve B SIXRX
21
YTD as of March 24, 2017
22
Going forward
Clear strategy to build on going forward
Grow Net
Asset Value
Operate efficiently
Pay a steadily
rising dividend
Generate an attractive
total shareholder return
Strong owner
Capital allocation
23
Our model builds on clear roles of responsibility and great people
24
Management
> Board recruitment
> Value creation plans
> Benchmarking
> Appoints the CEO
> Strategy and goals
> Financial development/reporting
> Capital structure
> Executes strategic decisions
> Manages day-to-day operations
> Reports back to the Board
The Board
Structured approach to value creation
25
Currentvalue
Full valuepotential
Operational excellence
Value-creatinggrowth
Capital structure
Industrial structure
Value
Time
We are long-term in vision, but relentlessly impatient in follow-up
Be efficient, agile, and invest for the future
26
Both are necessary to ensure long-term competitiveness
Efficiency
Cost efficiency
Agility
Long-term growth
Geographic expansion
Innovation
Service
Sustainability
Technology change
Clear strategy to build on going forward
Grow Net
Asset Value
Operate efficiently
Pay a steadily
rising dividend
Generate an attractive
total shareholder return
Strong owner
Capital allocation
27
Well-positioned to find attractive investments
28
Strong balance sheet and cash flow
Focused business areasListed Core Investments
Patricia Industries
EQT
Broad network
Listed Core Investments – Nordics
Patricia Industries – Nordics and North America
Attractive industry niches
Growth opportunities
Market-leading positions
Strong cash flow generation
What we look for in Listed Core Investments and Patricia Industries
29
Geography
Industry
Company Flexible business models
Strong service offering
Listed Core Investments – investment priorities
> Continue to gradually increase our ownership in selected listed core investments
> Ready to support companies in rights issues
> New investments not ruled out should the right opportunities arise
30
LISTED CORE INVESTMENTS
Attractive to invest in EQT funds
> Strong team and track record
> Major part of the returns generated from
investments as a Limited Partner
> Returns have been boosted by our part of
carry and surplus from management fees
> Our part of carry and surplus from
management fees have declined over time
> Today Investor owns 19 percent of EQT AB
31
0
5
10
15
20
25
30
35
Since inception Last 10 years
Return, %
EQT – SEK 1.5 bn. in average annual net cash flow
32
2007-2016
-4 000
-3 000
-2 000
-1 000
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Distributions
Drawdowns
Net cash flow
SEK m.
Patricia Industries – investment priorities
33
New
platforms in
the Nordics
and North
America
Add-on
investments
in existing
companies
Tough competition for assets
The stock market development Tough competition for assets
34
What is our edge?
35
Focused
organization
Deep knowledge
in focused areas
Financial
strength
Heritage
and network
Preferred buyer and ability to generate synergies
It’s far better to buy a wonderful
company at a fair price than a fair
company at a wonderful price.”
Warren Buffett
36
Clear strategy to build on going forward
Grow Net
Asset Value
Operate efficiently
Pay a steadily
rising dividend
Generate an attractive
total shareholder return
37
As always, getting the balance right is important
38
Clear strategy to build on going forward
Grow Net
Asset Value
Operate efficiently
Pay a steadily
rising dividend
Generate an attractive
total shareholder return
39
Pay a steadily rising dividend
0
2
4
6
8
10
12
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016p
40
DPS, SEK
Strategic priorities going forward
> More companies to become best-in-class
> Gradually strengthen ownership in selected holdings
> New platforms in the Nordics and North America
> Continued profitable growth in the existing companies
> Continue to invest in EQT funds
> High quality
> Cost-efficient
> Pay a steadily rising
dividend
> Generate an attractive
total shareholder
return
LISTED CORE
INVESTMENTS
SUPPORT
FUNCTIONS
41
Performance
42
0
5
10
15
20
25
30
1 year 5 years 10 years 20 years
% INVE B SIXRX Return requirement
Thank you