Investor AB (publ)

Good morning and warm welcome to the presentation of Investors Interim Report for the second quarter and the first half of 2024. I'm joined here today by our CFO Helena Saxon and for the first time by CEO Christian Sederholm. Welcome to the both of you. We'll hear the presentations from them in a minute. But first, a quick reminder of the opportunities to ask questions on this call. Either you go through the phone operator, Sonja, or online through the webcast. With that, over to you, Christian.

Thank you, Jakob. And welcome, everyone. Good morning. So, overall, performance in Q2 was strong. Our adjusted net asset value grew by 8%, and our total return was 9%, compared to 2% for 6RX. Listed companies had a total return of 11%, and several of our largest holdings performed well. Good sales growth and good profit growth. Investments in EQT decreased in value due to EQT AB's share price performance. Significant investments were made in Q2, almost 10 billion in total across all three business areas. Let me go through then each of the business areas. So in total net asset value amounted to 969 billion by the end of the quarter. And listed, which represents 70% of that. Here, total return was, as I said, strong with a broad outperformance, not the least driven by the strong Q1 results. Ericsson has a world-leading technology and a strong market position. Its core mobile network business is profitable and we believe the company is well positioned to find new growth avenues. Based on this, we invested 2.8 billion in the quarter. During this year's AGM season, we again continued to strengthen our boards with additional skills and competences. Moving over to Patricia Industries, which represents 20% of our portfolio. Total return was 2%, which was mainly driven by earnings growth. Our major subsidiaries grew organically by 7% and adjusted earnings grew by 10%. It's great to see that we've had strong contribution from new innovative products in a number of companies. In terms of investments, this was a busy quarter. As we flagged, there was a number of add-on acquisitions that closed. Sarnova and Brownability both made significant add-on investments, and I will come back to these in a minute. Let me highlight a few companies. Laboree continued to show good growth with significant contribution from OptiLume. Continued investments in the organization, including for Optilum Salesforce, impacted the margins. Permobil had a strong quarter with growth supported by several recently launched products. Margin expanded nicely as operating leverage compensated investments in the organization, as well as higher freight costs that we saw towards the end of the quarter. PIAB currently faces some headwinds in demand. not the least within vacuum conveying, which declined in the quarter. Margins here were impacted by costs for strategic projects and continuing investments in the organization. Atlas antibodies, their sales remain at a low but stable level, not the least impacted by the biopharma and market demand. Management has done a good job on the cost side to protect profit, and over time, returning to growth is of course key. 8% organic growth and encouraging to see all business areas and regions contributing. The margin was largely unchanged. Underlying profitability was supported by sales growth and product mix, partly offset then by increased logistics cost also here. Wundker grew 8% with good growth in all regions. Encouraging following a number of challenging quarters, gloves returned to growth, supported by slightly easing US market environment and light comps last year. The previously communicated closing and relocation of production in Malaysia was successfully completed during the quarter. After the end of the quarter, earlier this week, Manlycke announced a minority investment in a next-generation enzymatic debridement company called Mediwound. In total then, aggregated reported EBITDA run rate stands at 15.8 billion at the end of Q2. So Q2 this year is our best quarter ever, beating with a slight margin Q3 of last year in 2023, which also was a very strong quarter. So, on add-on acquisitions, a key priority for Patricia Industries is to strengthen the companies through continued add-on acquisitions. This is as a complement to organic growth, and when well executed, it's a great way to add people, products, technologies, customers, etc. to strengthen the long-term development. During the quarter, Sonova completed three significant add-on acquisitions. First, It increased its ownership in Digitech, a provider of software and services for revenue cycle management to emergency medical services or EMS providers, basically ambulances to a large extent. It also acquired OneBeat, which is a leading company for distribution and training in automated external defibrillator or AEDs. This will complement the current cardiac response business in a great way. Finally, it required QuadMed, which is a distributor of equipment and supplies for pre-hospital care. Basically, again, ambulances. And this business will be part of the emergency preparedness for the Cernova Bountry business. BraunAbility then acquired the remaining 49% of the wheelchair securement solution company QStrain. Braun made its first investment in this company in 2021, and the company has developed strongly under Braun's ownership. All of these add-ons have been funded by the company's cash on hand and debt, so no contribution from Patricia or investor. So other acquisitions were high this quarter and we had a little bit as we flagged in Q1 a lot of closings happening in one quarter here. It's important to note that the companies and the team work continuously and consistently with scouting and executing on add-on acquisitions. However, as you can also see from this graph, the size and the number of closed acquisitions is inherently lumpy and it will continue to be so over time. But the important thing again is we continue to work continuously with scouting and executing here. Investments in EQT, our third business area, make up about 10% of the portfolio. Here, the development was a negative 4%, which is driven entirely by negative return in the listed EQT AB share, while the fund performance was more or less flat in the quarter. And please remember here that the fund values are reported with a one-quarter lag. Investment activity remained on a good level and net cash flow to investor in the quarter was close to zero, again on a net basis. We believe that DQT continues to generate attractive investment opportunities and over time cash flow to investor. Finally then, our priorities remain the same. Focus continues to be on performance both here and now and investments to future-proof the businesses. We will continue using our financial strength to capture equity investment opportunities as they arise. But we are picky and we are in no stress. Let me now hand over to Elena, who will give you some more color on the business and the financials.

Thank you, Christian. Let's move over to the financials then. And as you have seen many times before, this graph shows the strong development of our net asset value over time. And we landed a quarter at an all-time high of 969 billion, as Christian mentioned. And this equals 20% average annual growth with dividend added back over the last five years. And this, of course, compares favorably to 6RX 13%. Looking at total return by business area, the three business areas developed quite differently in the quarter. Listed companies up 11%, Patricia up 2% and EQT minus 4%. But looking at the year-to-date development, we can see that all three business areas developed positively and contributed to a total return of 20%. Looking more closely at the listed companies, Christian already mentioned that there was strong development from a number of the companies, not the least based on Q1 reporting. And we can see that the 11% return significantly outperforms 6ERICs. And I want to highlight that Wärtsilä ABB and Ericsson had a very strong performance in this quarter. Looking at the absolute terms of NAV contribution, we can see that the larger companies in the portfolio, of course, contributed the most in the quarter, ABB, Atlas Copco and AstraZeneca. Moving over to Patricia Industries, 2% increase from 214 billion including cash to 219 billion including cash. We can see that there was a positive development on the earning side, but this was mitigated by a multiple contraction and negative FX effects. This is mainly translation effects. This graph shows the change in estimated market values in the quarter split by company. And we can see that many of the subsidiaries had a positive development despite the multiple contraction in the FX, which is very positive. And we can also see here that two of the companies made significant distributions to Patricia Industries. 200 million euros from Menlycke in the quarter and 600 million SEK from Permobil. We are, of course, always working on ensuring that we have the financial strength to maximize investment capacity. And the Treasury team has actively managed our balance sheet and made sure that we have very long tenure debt. The average maturity is more than 10 years and we have no maturities to take care of until the end of the decade. Our leverage is at the low end of the target range of 1.4% and our credit ratings from the main credit rating agencies remain very strong. And on this last slide, we see the performance over the short and long term. And we can see that the investor share has not only managed to beat our return requirement of eight to nine percent, which is the dotted line, but also managed to beat six Rx in both the short and the long term. And on that positive note, I hand back to you, Jacob. Welcome back.