Interim report, January 1-March 31, 2010

 Net asset value on March 31 amounted to SEK 123 per share, an increase of 11%
for the year to date.
 The value of the equities portfolio increased by SEK 4.4 billion to SEK 58.6
billion, or 8%, during the first quarter. The Stockholm Stock Exchange rose 8%.
 The total return for the Class A shares was 10% and 12% for the Class C
shares during the first quarter, compared with 9% for the return index.
 Net income during the first quarter amounted to SEK 4.1 billion (-0.8)
corresponding to SEK 10.50 earnings per share (-1.98).

CEOs comment

Continued favourable development in general

Recovery with regional differences

The recovery of the world economy continues. The World Trade Organization's
latest global trade figures point to the fastest recovery ever in global trade
- up 8% after a record decline of 12% in 2009. To achieve the level that was
reached in 2008 would require a gain of 14% in 2010, which with the expected
rate of growth would take two years. The recovery that is currently taking
place is however one with large regional differences. This is illustrated by
the very strong development we are seeing in Asia, compared to the weak
recovery in Europe. Southern Europe is a case in point, which is also showing
high unemployment figures.

The recovery that is now taking place primarily in the U.S. and Europe still
rests on a relatively weak foundation. In large part it is government deficits
pared with abnormally low short-term interest rates that is buoying demand and
investment activity. Scaling back these finance policies without hurting the
recovery will be a difficult balancing act for governments and central banks. A
hasty scale-back would risk disrupting the recovery, at the same time that
delayed action risks creating increased inflation. The balance in the global
economy is now shifting at an ever-faster pace as the three previously entirely
dominant areas - the U.S., Western Europe and Japan - are decreasing in
relative strength. This applies above all for the growth component, to the
benefit of the rest of Asia and rapidly growing regions in other parts of the
world. Even though this could give rise to shifts in political strength
positions, it is a healthy development that will lower dependence on a handful
of dominant economies.

During the quarter we witnessed the first true test of the European Monetary
Union and the euro. The fundamental problems of a currency union between
countries with varying economic conditions have been exposed by the situation
in Greece. Galloping deficits in government finances and downgraded credit
ratings have had major repercussions. Unfortunately, this is the situation in
several EMU countries primarily in southern Europe. A frail EMU cooperation,
together with further capital adequacy requirements in continental Europe's
already weak banking system, could delay or weaken the recovery in Europe. In
the longer perspective, this could lead to the euro zone losing in relative
strength against the other, major economic blocs. This points to a continued
weakening of the euro against the Swedish krona and other currencies. In the
U.S., the recession appears to have ebbed, but the country as well as the EMU
area is facing major challenges in the years ahead, with a massive government
budget deficit and high unemployment.

Adaptation work and strengthened market positions

As for large parts of industry in general, our portfolio companies have
addressed the sharp drop in demand that followed the financial crisis through
various forms of action programs. Even though the last 18 months have been
largely characterized by financing matters and cost-cutting, extensive work has
been dedicated on strengthening existing market positions. As owners, we put
great emphasis on ensuring that our portfolio companies continuously seek to
strengthen their relative competitiveness. Naturally, today it is still too
early to evaluate the recent work carried out, but indications are strong that
several of our portfolio companies further strengthened their market positions
during the financial crisis.

Handelsbanken, Ericsson and SCA are three prime examples. Thanks to a
consistently applied business model and high level of customer satisfaction,
Handelsbanken has further strengthened its positions. Through acquisitions,
Ericsson has become North America's leading supplier of mobile systems at the
same time that it has established a strong position in the fast-growing
services segment and consolidated its leadership in mobile infrastructure
through continued investment in R&D. SCA has with great success adapted its
product portfolio to areas with higher profitability.

Convertible loan of SEK 5 billion with favorable terms

In January Industrivärden issued a five-year convertible loan worth SEK 5
billion with favorable terms. The issue, which was directed at European
investors focused on convertible instruments, was oversubscribed, which is a
sign of Industrivärden's high credit rating, among other things. The issuance
is a source of favorable financing and gives us the opportunity to strengthen
our capital base in the future. Through this loan we have further increased our
flexibility and preparedness to capture attractive investment opportunities.
This type of directed convertible issue in the specialized European convertible
market is a relatively new form of financing in Sweden, so it is gratifying
that Industrivärden was able to use an alternative, cost-effective source of
financing.

Transactions during the quarter

During the first quarter we took advantage of opportunities to buy shares at
prices that we estimate to be interesting, primarily in Sandvik and SSAB. Our
short-term trading generated a profit of SEK 47 M.

Favorable performance for Industrivärden

Net asset value grew by SEK 4.7 billion during the quarter, an increase of 11%
compared with 9% for the total return index. The total return was 10% for the
Class A shares and 12% for the Class C shares. The long-term return is
favorable and measures up well to the market average. That many investors have
realized this is shown above all by the stream of new shareholders. During the
last five years we have attracted 11,600 new shareholders and Industrivärden
today has approximately 50,000 shareholders.

Troubling development in the area of accounting

There are advantages with the development that has taken place in the area of
accounting during the last 10-20 years, where IFRS has emerged as a global
accounting standard. The strength of IFRS is that its rules are
principle-based, compared with U.S. GAAP, which is considerably more extensive
and detail-regulated. The major breakthrough took place as a result of the EU's
requirement for IFRS accounting for listed companies in the member nations. We
are now facing an sweeping renewal of IFRS - much of it driven by the ambition
to come closer to the long-term goal of achieving harmonization with U.S. GAAP.
For many, the process comes across as being technocratic, and its development
differs in an alarming way from the accounting tradition that we are used to in
the Nordic region and Continental Europe.

It is certainly time for a renewed evaluation of the goals and pace of
development of IFRS. This can only be done in a cooperation between major
companies in Europe. Industrivärden will take its part of the common
responsiability in this process.

Anders Nyrén
President and CEO