Swedish Government Presentation

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Objective and Vision

Parliament objective

Professional management of state portfolio

Government’s vision

Valuable corporations create valuable jobs

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Implementation

Introducing private sector discipline— Shareholder value

Active ownership— Exit not an option

Commercial ownership tools— Transparency is the key to unlock “the black box”

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Changing the Government’s Role as Owner

Earlier Ownership responsibility

spread between several ministries

Closely related to political issues

Conflict of interest at all levels

Ownership concentrated to Ministry

Independent units with only one focus

Separation of sector political aspects and ownership

Competence, focus and resources

Now

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Value of Portfolio

Note:1 As of 30 June 2000

Estimated market value of managed portfolio (e billion)(1)

60

20

8

3.51.8 1.7 1.7 1.2 0.8 0.5

0

10

20

30

40

50

60

Gover

nmen

t

Inve

stor

Indu

strivä

rden

Kinnev

ikIn

vik

Lund

berg

s

Lato

ur

Ratos

Custo

s

Öresu

nd

0080791l.xls*Value of portfolio?Chart 1

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The Swedish Government’s Portfolio

Total value: e 60 billion

Note:1 As of 4 September 2000

Telia AB31%

Others23%

Vattenfall AB14%

V&S Vin & Sprit AB4% Nordic Baltic

Holding AB7%

Svenska Spel AB10%

Posten AB3%

Akademiska Hus AB3%

LKAB2%

Vasakronan AB2%

AssiDomän AB1%

0080791l.xls*Swedish state's portfolio (2)?Chart 2

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The Larger Companies—Total Sales

Total sales e37 billion0080791l.xls*The larger

companies estima (2)?Chart 1

0

1

2

3

4

5

6

7

Telia

AB

SAS

Vatte

nfall

AB

Poste

n AB

Apote

ket A

B

AssiD

omän

AB

Nordic

Balt

ic Hold

ing A

B

Syste

mbo

laget

AB SJ

Svens

ka S

pel A

B

Samha

ll AB

LKAB

V&S Vin

& Spr

it AB

Akade

misk

a Hus

AB

Civita

s AB

Svens

ka K

raftn

ät

0080791l.xls*The larger companies estima (2)?

Chart 1

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0

5

10

15

20

25

30

35

40

45

50

Volvo

Poste

n

Ericss

onTe

lia

Samha

llABB SJ

Sandv

ik

SEB Try

gg-H

ansa

Scani

a

Elect

rolu

x

Celsius

Skand

ia

Apote

ket

SASSHB

Vatte

nfal

lSCA

Astra

Nordic

Baltic

Hol

ding

AssiD

omän

Secur

itas

Number of Employees in Sweden, 1999

Source: Sweden’s largest companies

Wholly or partly Government owned

0080791l.xls*Number of employees in Sweden?

Chart 1

0080791l.xls*Number of employees in Sweden?

Chart 1

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Ministries Responsible for the Government Portfolio

Government owned companies by responsible Ministry (by number of employees)

0080791l.xls*government owned companies?Chart 20080791l.xls*government owned companies?Chart 3 Ministry of

Culture0.8%

Ministryof the

Environment0.1% Ministry for

Foreign Affairs0.1%

Ministry of Healthand Social Affairs

6.0%

Ministry ofFinance

9.0%

Ministry of Industry,

Employment andCommunications

84.0%

0080791l.xls*government owned companies?Chart 3

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Transformation

Transparency

Capital structure

Board nomination

e-enabling the Portfolio companies

Creating value

Survival

Phase 1Financial transformation

Phase 2e-Transformation

Year 1998–2000

Quarterly report the ultimate transparency

Year 2000–2002

No internet strategy

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Phase I: Financial Transformation

Enhance Operating Performance

Optimise Capital Structure

Focus and Earn Growth

Maximise Shareholder

Value

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Portfolio Management—Main Tools

Transparency— Consistent— Swift— Transparent

Capital structure— Optimise capital structure— Dividend policy— Profit sharing based on value based management system for all

Board nominations— Transparent and active— Based on company’s strategic situation

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Transparency

Consolidated balance sheet and income statement

Quarterly reporting

Value based management system foundation for profit sharing

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Capital Structure

Common understanding of cost of equity

Investments exceeding WACC

Focus on core business

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Board Nomination

Six to eight persons

Remuneration— Competitive

Cutting-edge corporate government guidelines — Clear responsibility and accountability— Committees— Evolution and feedback

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Active Ownership—Examples of Recent Events

Equity offerings

Sale of 30% of Telia in e9.1 billion IPO

Sale of remaining stake in Pharmacia & Upjohn for e1.8 billion

Trade sales

Sale of 25% stake in Celsius to Saab AB / Bae

Sale of SAQ Kontroll to Det Norske Veritas

Sale of 50% stake in VPC to a group of Swedish banks

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Active Ownership—Examples of Recent Events(continued)

Portfolio company restructurings

Sveaskog—the Government gained control over 1/3 of the forestry assets of AssiDomän

SJ—focus on passenger traffic, divestment of hotels, ferries, restaurants etc.

AssiDomän—restructuring and focus on industrial portfolio

Portfolio company acquisitions / divestitures

Telia acquisition of Netcom asa

Vattenfall acquisitions in Germany, Poland, Finland

Nordic Baltic Holding acquisition of Unibank and bid for CBK

Sweden Post sale of Postgirot to a group of Swedish banks

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Phase II: e-Transformation

Enhance Operating Performance

Optimise Capital Structure

Focus and Earn Growth

Maximise Shareholder

Value

Define and Implement Technology Strategies

Understand how technology changes business model

Develop new technology strategies

In the new economy, corporations will need to marry business and financial strategy with technology strategy

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Potential Impact Varies by Industry

Average

eBay

SchwabTransform

the industry

Cost reduction opportunity

Information intensity

Low spending

One buyer,one seller

Industry fragmentation

Many buyers,many sellers

Average

Boeing

High spending

40%

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Most Companies ...

Average

Information intensity

Low spending

One buyer,one seller

Industry fragmentation

Many buyers,many sellers

Average

High spending

LKABLuftfartsverketSamhallSveaskogSv. Skogsplantor

LerniaPostenSASSJTelia

SOS AlarmSv. BilprovningSv. Kraftnät RymdaktiebolagetVattenfall

… are facing a significant discontinuity

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The Greatest Benefits ...

Internal processes

Supplier /procurement management

Customer /distribution

management

Internal policies Company information Product information

On-line admin / HRProcesses / Transactions

Pricing and inventory visible to suppliers

Electronic ordering and payment possible

are also the most difficult to achieve

Intranet for primary processes

Electronic buying /auctions

Value added services online

Seamless data flow /knowledge sharing

Electronic-onlysupply chain

Unique onlineoffering

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Savings Achieved

0080791l.xls*savings?Chart 1 34

20

16

11 10

5

0

5

10

15

20

25

30

35

40

Electroniccomponents

Forestproducts

Computing Steel MRO Healthcare

(%)

0080791l.xls*savings?Chart 1

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Determination of Threat / Opportunity

Indu

stry

frag

men

tatio

n

Information intensity

Mining

Automotive

Oil and Gas

Construction

Chemicals

CapitalGoods

Metal Fabrication

Electronic

Transportation

Telecom

Utilities

Financial Services

Banks

SecuritiesInsurance

Aerospace

PublishingComputers

HealthConsumerProducts

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Dell Outperforms the Competition

0080791l.xls*Dell outperforms?Chart 7

100

814

88

31

60

0

20

40

60

80

100

Costposition

ROI % Inventoryturns

Percentage of total Times per year

0080791l.xls*Dell outperforms?Chart 4

DELL CPQ Nasdaq

1990 1994 19980

25

50

75

100

125

Sto

ck p

rice

index (

1-J

an-1

99

0)

= 1

00

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The Panel Sees Far Less Impact Today ...… than others

What is the impact of e-commerce on your business today?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mol panel Bain Swedish Bain RoW EU e-commerce

survey

% o

f C

EO

me

ntio

ns

(N=15) (N=14) (N=280) (N=410)

None

Little impact

Major impact

Very high impact /

transform

0080791l.xls*The Panel?Chart 1

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Anxiety About Competitors ...… is much higher elsewhere

How much do your competitors spend on e-business?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mol panel The conference board panel

(N=15) (N=80)

do not know/none

less

same

more

do not know/none

less

same

more

0080791l.xls*Anxiety?Chart 1

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There is a Clearly Recognised Gap … … especially in procurement

0

10

20

30

40

50

60

70

80

90

100

Customers Suppliers Internal

% o

f re

spo

nse

s

Is e-enabled

Should be e-enabled

87%80%

94%0080791l.xls*Responses?

Chart 1

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Procurement is a Gap for all Companies

What percentage of companies are e-enabled?

0%

20%

40%

60%

80%

100%

Group low Group medium Group high

Customers Suppliers Internal

0% 0%

40% 40%

20%

60%

100%

40% 40%

20%

30%

50% 50%

80%

60%

0080791l.xls*Procurement?Chart 2

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Procurement Savings can be Substantial

Efficiency improvement Procurement cost savings

9

5

21

25

0

5

10

15

20

25

30

CaterpillarPilot

GE Lighting

Da

ys o

f pro

cess

tim

e

Before After

0080791l.xls*Procurement savings?Chart 1

30%

15% 14%

0

10

20

30

40

50

GE FreemarketsAverage Savings

UnitedTechnology

Per

cent

of

tota

l

0080791l.xls*Procurement savings?Chart 2

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Government-owned Companies

25% of domestic business community

Total sales e39 billion

Indirect material 60% of total costs

Cost reductions through e-procurement 5–10%

Total savings e1.5–2.5 billion

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Assets Liabilities

Authorities 78.9 45.2

Government debt 0 163.5

Central Bank 27.3 13.5

AP-fund 74.1 0.2

Elimination (17.3) 0

Government-

owned

companies 16.7 0

Net wealth (42.7)

Transparency Shows the Real ValueGovernment balance sheet 1999, e billion

Companies valued at book value Companies valued at market value

Sources: The Swedish National Financial Management Authority and Ministry of Industry

Assets Liabilities

Authorities 78.9 45.2

Government debt 0 163.5

Central Bank 27.3 13.5

AP-fund 74.1 0.2

Elimination (17.3) 0

Government-

owned

companies 59.7 0

Net wealth 0.2

With government owned companies valued at market price the government position is positive.

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Listed Companies—Relative PerformanceShare price performance 2000 to 30 August 2000

Notes: Government shareholding 1 NBH 18.1%2 SAS 21.4%3 AssiDomän 35.3%4 OM Gruppen AB 7.7% 5 Telia 70.6% since listing (13 June)

0080791l.xls*relative performance?Chart 10080791l.xls*relative performance?Chart 10080791l.xls*relative performance?Chart 10080791l.xls*relative performance?Chart 1

(0.4)

8

(20)

143

29

(3)

(30) (10) 10 30 50 70 90

SX Gen. index

Telia

OM Gruppen AB

AssiDomän

SAS

Nordic Baltic Holding

(%)

4

3

2

1

5

150

0080791l.xls*relative performance?Chart 1

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1.0 1.015.0 19.8 27.0

39.9 46.5

65.3

171.0

(31.9) (40)

(20)

0

20

40

60

80

100

120

140

160

180A

ssiD

om

än

¹

LK

AB

Vä

gve

rke

tP

rod

ukt

ion

&

Ko

nsu

lt

Va

tten

fall

Sve

nsk

a

Kra

ftnä

t SJ

Lu

ftfa

rtsv

erk

et

Po

ste

n

SA

S²

Telia

Value creation can also be measured using… … the EVA methodology

1998 EVA (economic value added) (e million)

Notes:1 35.3% of AssiDomän2 21.4% of SAS

Total EVA: e267.9m

0080791l.xls*Value creation using EVA?Chart 1

0080791l.xls*Value creation using EVA?Chart 1

0080791l.xls*Value creation using EVA?Chart 1