-- The total return for the first half of the year was 12% for the Class A
shares and 12% for the Class C shares, compared with 9% for the SIXRX total
return index. For longer periods of time, the shares have generated a
higher total return than the total return index.

-- Net asset value on June 30, 2014, was SEK 156/share, an increase of SEK
1/share, or 4% included reinvested dividend. Earnings per share for the
first half of the year were SEK 11.63 (11.58).

-- By the end of June, the whole convertible loan that matures in 2015 had
been converted, to 46.1 million new Class C shares, and SEK 5.8 billion
added to shareholder's equity.

-- An exchangeable bond of SEK 4.4 billion was issued in May as part of the
ongoing refinancing of the debt portfolio. The bond was issued at a premium
to the existing share price in ICA Gruppen of approximately 38% and carries
no interest.

CEO's message

Continued slow economic improvement

Slowly but surely the world economy is stabilizing, with a more positive growth
trend. But it is not a strong recovery. It is mainly the U.S. and Europe that
are showing signs of economic improvement, while several of the world's
emerging economies continue to slow. In the U.S., the underlying economy has
strengthened, with positive effects on the job market, among other areas.
Europe has turned from negative to positive GDP growth. However, due to the
lingering risk for deflation, the European Central Bank (ECB) continues to
pursue an expansive monetary policy. In the euro zone, the banking system has
not yet been fully strengthened, which inhibits the business lending and thus
growth in Europe.

We have repeatedly argued for the importance of adapting the Swedish interest
rate to the rate within the euro zone. The high Swedish interest rates and thus
the relatively strong Swedish krona has affected the Swedish export industry's
competitiveness negatively. In this context, we welcome the Riksbank's
(Sweden's central bank) repo rate adjustment even though it should have been
done earlier.

As the effects and fears from the major financial crisis have subsided, the
world's stock markets have generally experienced positive development. The
monetary stimulus measures in recent years have contributed to substantial
liquidity in the global economy. This, in turn, increases the risk for new
imbalances as this liquidity seeks returns.

We can only hope that confidence in the financial system and in a more positive
development increases. If so, this liquidity will be poured into the real
economy rather than be invested in seemingly safe but very low-yielding
financial assets. The Western world today is in great need of infrastructure
investments and investments in energy.

Portfolio companies well-positioned for the future

Our portfolio companies have overall performed well, although a few businesses
are struggling with challenging market conditions. As an active owner we are
involved in the work on strengthening the companies' strategic positions over
time. With a foundation in strong market positions and concerted efficiency
improvement work, the portfolio companies are well equipped to deliver
long-term, competitive shareholder value.

Stable performance for Industrivärden

During the first half of the year, Industrivärden performed in line with the
Stockholm Stock Exchange. Net asset value grew by SEK 6.7 billion, or 8%
including reinvested dividends and adjusted for conversions. Industrivärden's
total return was 12% for the Class A shares and 12% for the Class C shares,
compared with 9% for the Stockholm Stock Exchange's total return index.

New issue for slightly more than SEK 5 billion in Industrivärden

The convertible loan of EUR 500 million that we issued in January 2010 has now
been converted to new Class C shares in Industrivärden. We have thereby carried
out a kind of new issue in an investment company that is traded at a discount
to net asset value. This was possible because the loan could be issued at a
redemption price that was higher than the net asset value at the time of issue,
and since the proceeds were invested directly in the equities portfolio, there
was no economic dilution for the shareholders. The transaction was made
possible by Industrivärden's high credit rating and a certain measure of good
timing. Through the convertible loan, we created a low-cost form of financing
for the buildup of our ownership position in Volvo. As our equity has now
increased by SEK 5.8 billion, this strengthens our financial muscles to the
benefit of Industrivärden and its shareholders.

Creative financing at favourable terms

As part of the ongoing refinancing of our debt portfolio, in May we issued an
exchangeable bond based on 14.7 million underlying shares in ICA Gruppen, with
a redemption price of SEK 300 per share. In this way - as with our short-term
equity trading - we have managed to create an excess return based on our
long-term shareholdings. The SEK 4.4 billion issue was carried out at
favourable terms - including a 0% coupon during the bond's five-year term.

Short-term equity trading performed well

Despite difficult market conditions, with relatively low volatility, our
short-term equity trading generated a record profit of SEK 130 million for the
first half of the year.

Anders Nyrén


Delårsrapport_6M14_eng.pdf
distributed by