Investor AB (publ)

results presentation. As usual, we will start off with our CEO, Johan Fussell, presenting the results and also followed by our CFO, Helena Saxon. And then we will welcome you to a Q&A session. We will start as usual with questions over the phone and we will have our facilitator, Sharon, helping us out with that. And then we will take some questions over the web as well. And by that, welcome once again, Johan.

Thank you, Vivica. And also from me, warmly welcome to this presentation. If I start with a short summary, we had a very strong performance in the second quarter. Actually, we recorded the highest net asset value ever at 773 billion. We saw that the listed companies outperformed the Swedish stock market And the subsidiaries within Patricia Industries reported very strong performance with double-digit organic sales growth and also sharply rising profits. And gladly I have to say is that after a couple of weak quarters, we saw that cash flow conversion came back to more normal levels. However, the macro outlook remains uncertain. We see that even though inflation is coming back around the world, it's still on a high level, forcing central banks to increase interest rates, which of course continue to put pressure on the consumer. In addition to that, of course, we have a pretty tough geopolitical situation, not the least between China and the US. And there is also more and more debate when it comes to the strings of the recovery in China after the pandemic. So there is clearly a lot of uncertainties out there. On the other hand, we continue on a positive note. We continue to see that the supply chains are improving. And we are also seeing, for a number of industries, significant investments related to megatrends, climate change and digitalization. And due to the geopolitical situation, we are also seeing more investments regionally to increase the resilience in the companies. So there are pluses and minuses. In this environment, we continue, which is key for us, make sure we have high flexibility in our companies and that we can act swiftly to changes in the environment around us. If I then move over to the quarterly figures, you can see that our net asset value was up 9% in the quarter. Our TSR was up 6%, both outperforming the Swedish stock market that was up 2%. And if we look during the first half of the year, you can see that both our net asset value and TSR have grown some 60-70% compared to the stock market up 11%. A few words about the listed companies. Sharp outperformance in the quarter, 9% compared to the stock market being up 2%. The key reason here is that our two biggest companies, Atlas Copco and ABB, representing 45% of the listed portfolio, they were up 80-90% in the quarter. So that, of course, clearly helped the performance. We also divested nearly 30% of our holding in Acceleron for about 1 billion SEK. Moving over to Patricia Industries. Very strong performance, total return amounted to 11% in the quarter, and that actually means that the total return year-to-date is 25%. If we look on the operational development, strong development, sales growth of 22%, of which 13% organically in constant currency, and the profit growth was strong at 34%. Vektura divests its portfolio consisting of elderly care properties, which is almost half of the property value in Vektura. And that is in line with the company's new strategic focus on developing real estate for innovation clusters. It is clusters like Forskaren in Stockholm and GoCo in Gothenburg. And I think this is important because these innovation clusters are not only attractive opportunities in itself, it also creates synergies with other companies in our portfolio. For example, AstraZeneca, Mönlycke, and Atlas Antibodies. Here you can see the development in Patricia Industries. As you can see, we are now running on a 12-month ruling basis at the level of 60 billion in sales and an EBITDA of 14 billion. And you can see here that it was really... record quarter. If we look forward, one should remember that the third quarter last year, as you can see here, was a very strong quarter, while the fourth quarter last year was a weaker quarter due to the fact that Manly's profitability was below normal levels in the fourth quarter last year. So this will, of course, impact the year-over-year growth figures in the third quarter and the fourth quarter. If I then look on the operational performance in the companies, we saw strong and good organic growth in many companies. All companies grew organically except advanced instruments and ATAS antibodies. And these two companies continued to be affected by soft development from the biopharma sector. That is the key reason. But other than that, strong development and also, as you can see to the right in the picture, All the other six companies actually recorded very good operational performance in terms of profitability. A few words then on Mönlycke. A continued good quarter with organic sales of 6% in constant currency. And we also saw margin improving year over year. And that was driven by both the sales growth and also lower logistic costs. And this was partly offset by investment in R&D and the sales force, as well as that in the margin, there was actually a negative currency impact in the quarter. Also for Mönlycke, the cash conversion improved significantly compared to last year. It's great to see that wound care continues to perform strongly with an organic sales growth of 8%. It's actually a broad demand improvement, even though APEC showed the strongest growth. And to further support growth going forward, investments are being made in the key factory in Mikkeli in Finland. And investment will also be made in localized China manufacturing. So we are investing, continue to invest behind the strong growth we see. Operating room solutions also had a good performance with organic growth of 10%. It's driven by increased elective surgery activity, price increases and also improved mix. And from a product perspective, Trace is really driving it. Gloves actually saw a lower sales than last year, organically minus 6% in the quarter. And the key reason here is the U.S. market. where distributors are reducing excess inventory that has been built up during the second half of 2022. And we expect that we will probably see challenges also in the third quarter. But let's see how it plays out. Moving down to EQT, the total return was 3%, and we had a positive cash flow of half a billion in the quarter. If we look on the listed company, EQT AB, The total return was almost flat, while the fund investments were up 8%, of which about half is currency-related. So, in summary, strong performance during the second quarter, record net asset value, strong outperformance in the listed companies, double-digit organic sales growth in Patricia, combined with sharply rising profits. If we look forward, we will continue all the efforts we are doing to make sure that our companies come out stronger compared to competition. It's investment in R&D, investment in Salesforce, and we are clearly trying to drive improvements related to the megatrends we see out there. I think we are well prepared. We have a strong portfolio, companies with strong market positions, high profitability and cash flow. But I think also that we and our companies are ready both for upsides and potential downsides should they come. So with that, I will hand over to Helena.

Thank you, Johan. Let's have a look at our net asset value development over a little longer period. We can see that we landed the quarter at a record level of 773 billion. And this means a 16% average annual growth with dividend added back for the last five years. And of course, that compares favorably to 6RX 11%. And as Johan already described, there was a little bit of a mix in the portfolio. The three business areas developed differently, but all in all, 9% enlisted, 11% in Patricia, 3% in IKT, and that is a total then of 9% of the quarter. Looking at listed companies, almost 70% of the portfolio, 546 billion. Johan explained that a couple of companies contributed the most, and this slide shows in absolute terms that Atlas Copco and ABB had stellar performance, and in absolute terms, they contributed almost 20 and 18 billion in the quarter, respectively. and the TSR of 9% is then outperforming 6RX 2%. Moving over to Patricia, 22% of the portfolio and as much as 173 billion krona at the end of the quarter. The main drivers in the quarter were earnings, currency multiple and cash flow so tailwind from all of these this quarter and excluding cash the development or including cash development was 10 percent compared to the 11 percent mentioned and looking at the sequential development of estimated market values during the quarter we can see here by a company that five of the companies contributed significantly in the quarter which is, of course, very positive. Manlyke, as the largest company in the portfolio, of course, in absolute terms, contributed the most. And here we see all four factors that I mentioned on the last page contributing positively, but earnings and currency being the main drivers of the value there. Moving over to Vektura... In this graph, maybe not so interesting from a value perspective. We know that there were a couple of contradicting factors in the quarter, resulting in a net development of roughly flat from a value perspective. But here I want to flag that we're planning a capital contribution of 3.5 billion Swedish kronor in the quarter to come, i.e. Q3. And this is, as Johan mentioned before, the company is going through a strategic change and divesting its community services properties and now focusing more on developing innovation clusters, building properties for innovation clusters. And therefore, in this transition, we're contributing capital. Some of the larger projects in that new strategic portfolio is entering an intensive phase But it's also true that a couple of the larger ones, Forskaren, for example, in Solna, in GOKO, in Möndal, are both expected to generate cash flow already next year as they are close to completion and almost fully rented. When the community services transaction closes in Q1 next year, we expect to be repaid a majority of the capital contribution. And from an investor and practitioner point of view, with the strong balance sheet we have, we believe this is the most efficient financial solution to support Vectura in this strategic transition. Talking about our strong balance sheet and the financial position, we can see that our leverage ended the quarter at 1.7%. And here at my final slide and also the final slide of this presentation, we can see that the performance of the investor share has been strong, not only in the long term, short term and medium term, but we have also managed to achieve our internal return requirement for all these periods. So with that, I will hand over to Vivica for the Q&A session.