CEO comments

The year 2025 was one of significant contrasts. Initially, there was a degree of economic optimism, particularly in Europe. This turned into major concern, however, when the US administration announced a shift in US trade policy. With tariffs on US imports set to rise to levels not seen since the 1930s, the level of risk in the global economy increased significantly. This uncertainty came to a head on ‘Liberation Day’ at the beginning of April, when President Trump announced the planned tariff levels. Since then, there has been a gradual stabilization as conditions for global trade have slowly become clearer.

Despite trade policy challenges and continued geopolitical tensions, the global economy displayed remarkable resilience during the year. Global growth was stable, albeit at a moderate level. This trend was driven mainly by strong demand in Asia, despite more subdued development in China. There was a gradual recovery in the euro area. The United States, which has seen good economic growth in recent years, reported a slight slowdown.

At the beginning of the year, Sweden was still in the grips of a prolonged recession, with weak economic activity. Inflation has since stabilized and, together with successive interest rate cuts, this has established the conditions for recovery. There was also a gradual improvement in activity over the year. Household consumption has increased for several quarters in a row, which is an important economic driver. Investment also made a positive contribution. The labor market has remained weak, however, although a slight improvement was observed towards the end of the year.

The Swedish krona strengthened gradually during the year, which had a significant negative impact on Swedish exports. However, this strengthening is an expression of increased confidence in the Swedish economy. Sweden’s active, well-functioning capital market and its broad equity investments are also important.

‘Liberation Day’ triggered a sharp decline in global stock markets. Alongside this uncertainty for international trade, geopolitical conflicts continued around the world. The stock markets gradually recovered over the course of the year. The economy proved resilient, with monetary and fiscal stimuli driving positive stock market trends. Technological development, not least in the field of AI, and the resulting major investments have also been an important driving force. However, developments in technology have led to a concentration of value creation, with a small number of companies accounting for an increasing share of the world’s total market capitalization. More recently, an increasing number of observers have questioned the sustainability of this in the long term.

The stock market performance for the full year 2025 was good overall. The total return for the Swedish stock market was 13% despite the strengthening of the krona. Many parts of the world achieved even higher returns.

In early 2026, the positive stock market trend continued. However, after President Trump announced his plans for Greenland in mid-January, there was some uncertainty about both economic development and stock market performance. At the time of writing, it is too early to draw any definitive conclusions about this.

My belief, however, is that the underlying positive trend for the European and US economies in 2026 will continue.

Lundbergs is a holding company that has significant shareholdings in nine listed companies. It also includes our wholly owned real estate company, Lundbergs Fastigheter.

Through our principal ownership of Industrivärden, we indirectly have large interests in four additional companies, as well as those directly owned by Lundbergs. This means that, directly and indirectly, we are a major shareholder in twelve publicly traded companies, alongside our real estate company.

As a holding company, Lundbergs plays an important role in the corporate governance and strategic direction of its portfolio companies. We chair or actively participate in the nomination committees of each company and we work together with other major shareholders. Nominating board members is a priority issue for us. The responsibility of each board is to generate long-term shareholder value and otherwise safeguard the interests of shareholders. The most important task is to appoint the CEO. Experience shows a strong correlation between the development of a company and its quality. The boards of the portfolio companies contain several people with close links to Lundbergs. As well as being highly competent to perform their duties, they also have close communication with Lundbergs and exchange collective information and knowledge. Lundbergs’ established network of people is another major asset.

My two daughters, Louise Lindh and Katarina Martinson, have been heavily involved in Lundbergs for around 20 years. Louise has worked in the operations of Lundbergs Fastigheter for a long time and was CEO from 2016 to 2023 before becoming Chair of the Board in 2024. She is also a member of the boards of Lundbergs, Hufvudstaden, Holmen and Handelsbanken. Katarina is a Board member of Lundbergs, Industrivärden, Husqvarna, and Essity. She has also been Chair of the Board of Indutrade since 2018. Both Louise and Katarina are involved in Lundbergs Kapitalförvaltning and make a strong contribution to Lundbergs’ overall development. They are also very large shareholders in Lundbergs, which means that the principal ownership is anchored in two generations of the 
Lundberg family.

Stable principal ownership has always been important, particularly in times of turbulence and major change. It makes it easier for the Board of Directors and management to maintain a consistent long-term approach and not get carried away by short-term trends or actions. Many financial market players, however, are encouraging companies to make major changes such as spin-offs and acquisitions. It’s easy to see why.

Of course, change can be a positive thing and create value. However, it must be based on real knowledge and a range of considerations that together offer a value-creating effect in the long run. Too many short-term decisions driven by the wrong assumptions have been made over the years in the business sector.

Mitigating the risks in a business is always important, whether these relate to operational or financial matters. 
A solid balance sheet is always a strength. It creates business opportunities and provides flexibility over time and it also enables durability and resilience. Discussions on the optimal capital structure become very theoretical. Experience shows that unexpected events occur regularly. It is important, then, that a company has the necessary safety margins and is not walking 
a tightrope.

A strong corporate culture is built up over many years. It involves all employees and also turns into a relationship that suppliers and customers, among others, encounter and must accept. It creates strength in the company and provides confidence to the business. Patience is also rewarded over time, and this applies to all of the company’s stakeholders. There is also research showing a clear link between long-term ownership and outperformance in terms of return on capital.

This is something my grandfather Elis Lundberg (1895–1937), an entrepreneur in Norrköping, has expressed before in his down-to-earth manner and his Östergötland dialect. He said: “There is tremendous power in money, if only you can sit still”. In other words, remain calm and take a long-term view.

I also believe it is very important to take time to reflect. Many issues and situations are complex and benefit from some human thought. Not lengthy studies, of course, particularly not by consultants, but your own considerations and maturity. Being able to recognize mistakes made is rather enriching and contributes to future knowledge and better decisions. Wholehearted commitment, which in terms of thinking means continuous processing of important issues, is what is required.

In our work, we focus strongly on leadership, decentralization and financial strength. Broad accountability is important and establishes strong decision-making power and consequently a good platform for success. It also counteracts bureaucracy and centralized resources and so slows the cost trend. It enables faster action as well, increasing competitiveness. It is important not just to remove one level when decentralizing decision-making, but to go further and give responsibility right down to the individual level within an organization. Middle managers should be avoided, as should collective decision-making.

Leadership is absolutely central and extremely vital to success. We prefer to recruit internally for a number of reasons. It motivates the organization and we usually have much greater knowledge of the person than in external recruitment. Corporate culture is also then passed on naturally. In some cases, however, particularly if the company has had negative development or is in a process of change, external recruitment of new leadership may be required.

As well as managing the ownership role in the portfolio companies in the best way possible, Lundbergs’ capital allocation is key. We aim to make investments that generate the highest possible shareholder value in the long term. We also want to spread the risks across a limited number of portfolio companies, as excessive diversification is more likely to lead to increased risks and less control over activities.

As a holding company, we should in principle have no debt at all. Each portfolio company carries its own debt and leveraging equity investments means borrowing twice. We also work to ensure that the various portfolio companies have a conservative debt level so that they can act from a position of strength. This is a cornerstone of our way of thinking. With operational risks, which are always present, financial risks must be strictly limited. We may miss out on the occasional investment, but this is compensated for by increased stability and freedom of action.

Lundbergs’ parent company finances itself through dividends from the portfolio companies and Lundbergs Fastigheter. In 2025, these exceeded our dividend paid to Lundbergs’ shareholders by SEK 2.6 bn. The cash flow was invested in full in additional shares in our portfolio companies, increasing our capital share. Over the past five years, shares have been acquired in the portfolio companies for just under SEK 10 bn. The annualized time-weighted return on these acquisitions is around 16%. This builds net asset value over time and therefore also shareholder value, as well as expected future cash flow. The key principle of compound interest is clear to see. As our port­folio companies span a very broad field and are large and of high quality, including global operations in many cases, we do not currently find any reason to invest in additional companies. We can see good opportunities for development in our companies and we are concentrating on these. When we make new investments in our portfolio companies, we spread them out over time. This is partly because insider situations prevent us from investing for long periods, and partly because we try to optimize the timing of investments as far as possible. We are growing gradually under good financial control.

All businesses are operating in a world that is constantly evolving and changing. Companies have to be adaptable here, and it is important that we monitor this as active owners. Ensuring the innovative capacity of the companies and their ability to develop is a central issue for us. Given that we have been active in all the portfolio companies for such a long time, I dare say we have a very good understanding and knowledge of their businesses. This is another reason for us not to change our investee companies. Risk decreases as knowledge increases. Having a historical background in terms of performance and strategic decisions provides valuable information to us as investors, and it is important to emphasize that we are investors and not speculators. We strongly believe that sound investment principles deliver good results over time. A consistent and long-term approach is essential and this also reflects our character as investors.

There must also be room for gut feelings, however. Extensive knowledge of the stock market and the capital market is vital, as is sound judgment. Choosing the right company is also important.

Interest-bearing net debt in our wholly owned operations totaled SEK 6.3 bn. at year-end, corresponding to 4% of our gross assets (real estate and equities). We allocate this entirely to Lundbergs Fastigheter, which then has a debt/equity ratio of 21% of the value of the properties, a conservative level for the industry. This is well within the framework of our finance policy, which stipulates a maximum debt/equity ratio of 50%.

Share buy-backs may be appropriate in order to adjust a company’s capital situation in individual cases. However, great care should be taken when effectively converting equity into debt. It is therefore a prerequisite that the company in question has a strong financial position. The share price must also be clearly attractive. I will comment later on two cases where we implemented buy-backs in 2025.

Performance in 2025

In 2025, Lundbergs reported consolidated after-tax profit of SEK 14.4 bn. (8.4). After non-controlling interests, the figure was SEK 12.1 bn. (6.3). Excluding unrealized value changes, profit after financial items was SEK 14.3 bn. (9.5).

Net asset value after deferred tax increased by 6% during the year to SEK 587 per share (555). On February 16, 2026, the corresponding value was SEK 618. In 2025, Lundbergs’ shareholders received a total return of 3% (-8), compared with the corresponding stock exchange index of 13% (9).

Over the past 20 years, the Lundberg share has provided an average annual total return of 11%, compared with the corresponding stock exchange index of 10%. Inflation has averaged 2% per year, which means that Lundbergs’ annual total return has averaged 9% in real terms.

Over the past five years, our total annual return has been 4%, compared with the stock exchange index of 9% per year. Net asset value growth over the same period has been 6% per year. Given that we have experienced a pandemic, high inflation and several years of recession during this period, I am reasonably satisfied with this performance. The real estate sector has also changed significantly. Required yields have increased, the rental market has changed and real estate companies have been devalued. We have been restrained in making new investments in real estate, but despite this we have been affected, of course, by the changes that have taken place. I will discuss this further under the heading Lundbergs Fastigheter.

The proportion of our net asset value that comprises real estate exposure, including the portfolio company Hufvudstaden, has gradually fallen and now amounts to around 23%.

By gradually increasing our exposure to other sectors over a long period of time, we have changed the balance of our net asset value. At the same time, we have gradually increased the quality of our property portfolio on the real estate side. This applies to both Lundbergs Fastigheter and Hufvudstaden. We are therefore well equipped to meet future demand on the rental market. However, I foresee a continued reduction in our share of real estate in the future. Most of our available cash flow will continue to be invested in our other portfolio companies.

Lundbergs Fastigheter

Lundbergs’ consolidated financial statements include Lundbergs Fastigheter with operating profit of SEK 1.6 bn. (1.1). This includes unrealized changes in value of SEK 465 bn. (-51), which accounts for most of the improvement in profit. In addition, slightly higher net current assets under management also account for some of the increase in value. Required yields remain largely unchanged.

Our occupancy rate decreased during the year for both commercial and residential premises. This reflects the recession we experienced during the year, along with the effects of structural changes to the rental market.

We have continued to carry out extensive refurbishments on a number of older residential properties built in the 1960s and 1970s with good results. The initial return is relatively low, however, but we do expect to be able to increase this in the long term.

The remodeling of our properties in Norrköping City has been largely completed. Retail space has been converted to other uses such as offices, including coworking facilities, as well as restaurants and cafés. This has significantly improved the quality and increased the flexibility of our properties, which means we can now offer the rental market attractive new premises in a prime city location.

In 2025, we invested a total of SEK 371 m. in real estate operations. No acquisitions were made. In the fall, a conditional agreement was reached on the acquisition of land and the construction of a residential block in Jönköping. The investment value is estimated at around SEK 550 m. Jönköping and Linköping are cities experiencing continued growth and where we would like to expand our presence.

The Swedish rental and real estate markets have altered significantly in recent years. On the one hand, the long downward interest rate trend has been broken and, on the other, demand has changed on the rental market. In my opinion, this is structural in nature. Population growth in Sweden has stagnated and many cities, mainly those that are small or medium-sized, are declining in population. Even many cities considered growth cities are not expanding in the same way as they were before.

The supply of offices produced in recent decades has increased sharply. At the same time, office work has been streamlined and now requires less space. Hybrid working has also affected demand. This has led to a clear concentration of office demand for high-quality properties in prime locations. Locations are prioritized based on transport links, availability of services and restaurants, proximity to business connections, and environmental factors, among other things. The safety and security of the local area are also important. This has led to a clear concentration of demand for office space, with non-prioritized properties being left behind.

With regard to retail, a significant portion of this now takes place via e-commerce and the interaction between the digital environment and physical stores is important. This leads to a concentration of retail space in the most attractive marketplaces. There has already been a considerable amount of exclusion and this will continue.

Demand for housing is naturally dependent on population growth. Rental units in less attractive areas are particularly affected, while the current high level of crime in some areas is also a major concern. The result is that households with strong finances are prioritizing ownership and high-quality rental housing in attractive areas.

The losers will be older properties of a poor technical standard in vulnerable areas. There is pent-up demand for new rental housing in the most attractive areas of major cities. However, the current system for setting rents places obstacles in the path of realizing this to a great extent. Free market rent setting would change the conditions for this.

The overall result for office, retail and residential units therefore is increased demand for and a focus on high-quality properties. This is a very clear trend that will continue to grow stronger. I also believe that the conditions for good future rental and value growth in this type of property are generally favorable.

Lundbergs’ real estate portfolio is of a very high quality. We have always been keen to invest in the right location and with an eye for design and quality. We have produced around 70% of our property stock ourselves. The remaining 30% has been acquired on the market.

As far as possible, we have always sought to use maintenance-free materials in both new construction and redevelopment. These provide a feeling of quality and also reduce the amount of maintenance required. This aligns well with the 
current thinking on sustainability. We have also continuously invested in maintenance and adaptations to the needs and wants of tenants. This method of working is reflected in a strong culture, with a decentralized service-oriented management organization.

Older properties in attractive locations can often be converted to other uses and brought up to modern standards. The problem, however, is that often the cost is too high. The way we report the value of a property capitalizes most of the costs and does not depreciate them through profit and loss.

The value is instead adjusted as a change in value where necessary. The cash flow is the same but the return on many investments is overestimated. There is therefore reason to be critical of the IFRS reporting system in this respect. With more traditional reporting, where depreciation is also included, many investments would certainly prove unprofitable.

The transaction volume on the real estate market increased in 2025. Interest focused mainly on centrally located properties in our major cities. Institutional capital and financially strong real estate companies were the principal buyers. Many weaker players chose to sell to improve their financial position.

Financing opportunities on the capital markets and in the banking system were good for strong players.

I would like to thank CEO Johan Ladenberg and his management team at Lundbergs Fastigheter for their excellent work over the past year.

Portfolio companies

In 2025, the Parent Company acquired publicly traded shares for SEK 2,720 m., of which SEK 1,728 m. in Industrivärden, SEK 543 m. in Sandvik, SEK 358 m. in Handelsbanken, SEK 42 m. in Indutrade and SEK 49 m. in Husqvarna. At the end of 2025, Lundbergs’ holdings in the nine publicly traded portfolio companies represented a market value of SEK 124 bn., compared with SEK 116 bn. a year earlier. Adjusted for acquisitions during the year, the value increased by 6%, which may be compared with a 10% rise in the SIX general index. Industrivärden, Sandvik, and Handelsbanken contributed positively, while Indutrade, Husqvarna, and Holmen did the opposite. Through its in-creased ownership of Industrivärden, Lundbergs has gained further important exposure to a number of Sweden’s strongest companies.

Our wholly owned operation in L E Lundberg Kapitalförvaltning engages in asset management in both the short and medium term, as well as analytical activities. The organization also serves as a support function for the Parent Company.

The balance sheet is limited to less than 1% of that of the Parent Company. In 2025, operating profit weakened to SEK 65 m. (155). The company does not invest in shares in our portfolio companies or related instruments.

I would like to thank the company’s CEO Claes Boustedt and his colleagues for their excellent work over the past year. Claes is also the Executive Vice President of the Group and has been my closest colleague and right-hand man for many years. He is also a member of the boards of Sandvik, Alleima, Hufvudstaden, and Husqvarna. In addition, he represents Lundbergs on 
several nomination committees.

Given the market conditions, Holmen’s earnings in 2025 were reasonably good, albeit slightly lower than the previous year. Cash flow remained strong. Forests are at the heart of the business and Holmen is one of the largest forest owners in Sweden. Forest growth is good and the supply of wood continues to increase. Unfortunately, the rights of forest owners to manage their forests are being called into question by politicians at both EU and Swedish national level. This represents a disappointing restriction on ownership rights. Swedish virgin fiber is highly valuable and forms the basis for the development of our forest industry. Harvesting forests and using forest industry products stores carbon dioxide in these. Fossil-based products are also being replaced with fiber products, which has a positive impact on our environment.

Hopefully, there will be a more level-headed attitude towards the right to manage one’s own forest in the future.

In terms of Holmen’s industries, demand for wood products, consumer paperboard and paper was weak. Surplus electricity in northern Sweden resulted in extremely low energy prices, which had a negative impact on Holmen Renewable Energy’s results.

Despite weak market conditions, Board and Paper performed well, largely thanks to the ability to adapt electricity-intensive production to a volatile electricity market. September saw the launch of Braviken Paper Mill’s new packaging product, Elevate, which Holmen has high hopes for.

Thanks to Holmen’s integrated business model and extensive forest holdings, the company performed well last year despite a challenging market situation. The company’s strong financial position also provides vital stability. During the year Holmen chose to buy back shares at favorable prices for a total of SEK 1.6 bn. in order to generate long-term shareholder value.

I feel very confident that with a more favorable economic climate, Holmen will continue to develop well with good financial returns. Its forest holdings are a unique asset and will remain at the heart of the business. Holmen also has a strong organization and management, headed by CEO Henrik Sjölund and Deputy CEO Anders Jernhall. I would like to express my sincere thanks to Henrik and Anders for their hard work over the past year.

The Board of Directors proposes to the Annual General Meeting an ordinary dividend of SEK 9.50 per share (9.00) and rejects the extra dividend of SEK 3.00 per share paid last year.

Hufvudstaden has a unique property portfolio of office and retail properties in central Stockholm and Gothenburg. These properties are of a high standard and are continuously maintained and adapted to the needs and wants of tenants.

Operating profit increased slightly in 2025. The unrealized change in value was slightly negative for the full year, but was unchanged during the second half of the year. The rental market showed some positive signs during the year, although the vacancy rate remained quite high. The clear trend of increased demand in central areas of Stockholm and Gothenburg was reinforced.

For the eighth year in a row, Hufvud­staden won the CSI reward, meaning it has the industry’s most satisfied office tenants in the large-cap category.

The Johanna project in central Gothenburg progressed according to plan and will be completed in 2026. The lettings process is under way, with good results. The redevelopment of a property on Kungsgatan in Stockholm will also be completed in 2026. An agreement has been signed with a new main tenant.

During the year, the company carried out share buy-backs for SEK 1.0 bn. at a price corresponding to a discount of approximately 25% on the properties. The financial position is still very strong after the buy-backs, corresponding to a debt/equity ratio of approximately 25%. My assessment is that Hufvudstaden’s properties are very well placed to increase in value over time through rental growth. The supply of similar properties on the real estate market is very limited, which makes increasing holdings in the existing portfolio an attractive proposition. A long-term perspective is needed, however.

Hufvudstaden’s CEO, Anders Nygren, is carrying out his work with a high level of competence and great energy and the management team is functioning very well. I would like to express my sincere thanks to Anders and his organization for their good work in 2025. The Board of Directors proposes a small increase in the dividend to SEK 2.90 per share (2.80).

Husqvarna occupies fundamentally strong market positions and is one of the world’s leading companies in forest, park, and garden maintenance. It has a long history of innovative and successful product development and has several strong brands, principally Husqvarna and Gardena, that cover a range of product and market segments.

In recent years, the company has experienced weak performance and profitability. The business appears to be too complex and the organization centrally controlled and inefficient. A cultural change is needed at the company. In 2024, as in 2025, major initiatives have been implemented to restructure the business. The aim is to create reduced complexity, decentralization, long-term competitiveness, and profitability. To take on the competition, in particular from China, continued investment in product development is needed. There was promising development in the professional segment in 2025, while consumer products faced a challenging situation, particularly in North America.

At the 2025 AGM, Torbjörn Lööf took office as the new Chair of the Board and three new members were elected to the Board. Glen Instone took over as the new CEO in August. He has enjoyed a long and distinguished career at Husqvarna, most recently as head of the largest business area, Forest and Garden.

The hope is that the changes now being implemented in the company will get it back on track. I wish both the Board and the CEO every success.

The Board of Directors proposes a dividend of SEK 1.25 per share (1.00) to the upcoming Annual General Meeting.

For Industrivärden as a holding company, 2025 was a good year. The net asset value increased by 20% and the total return on the share was 22%. Dividends received from the portfolio companies last year exceeded dividends paid to Industri­värden’s shareholders by SEK 6 bn. This enabled continued investment in a number of portfolio companies without increasing debt. A total of SEK 4.6 bn. was invested. The business model of increasing the share of ownership in portfolio companies through the gradual acquisition of shares has now been applied for many years with great success. Over the past 10 years, SEK 31 bn. has been invested in shares in the portfolio companies. These have provided a satisfactory total return that has exceeded the total return index of the Stockholm Stock Exchange by a wide margin. Industrivärden has achieved 10% average annual growth in net asset value over the past five years.

The portfolio companies are mostly on a positive trend and I see continued value potential in them. These are fantastic companies that are among the leaders in their respective industries. The outstanding performer in terms of value creation in 2025 was Sandvik, with a total return of 53%. Active ownership has also become increasingly important. The portfolio companies generally have a strong financial position, as does Industri­värden, with a debt/equity ratio of 3%. This provides stability and creates future opportunities.

CEO Helena Stjernholm is doing an excellent job in her important role. Her work as Chair of the Board of SCA and as a Board member of Volvo and Sandvik is highly appreciated, as is her role as chair of the nomination committee at three of the other portfolio companies. Deputy CEO Karl Åberg is also doing a good job as a Board member of Ericsson, Alleima, and Essity. I would like to express my sincere thanks to Helena and Karl for their hard work over the past year.

The Board of Directors proposes to the Annual General Meeting that the dividend be increased to SEK 8.75 per share (8.25).

Indutrade’s net sales and order intake leveled off in 2025 at the previous year’s level. There was some growth in the second half of the year, however. The EBITA margin remained at a good level and cash flow was strong. There were 13 acquisitions made during the year, with combined annual net sales of SEK 1.3 bn. The financial position was strengthened further.

The new corporate structure with five business areas, which was introduced in 2024, has now been fully implemented. This resulted in a slight increase in costs, which was modified last year. The decentralized business model, with continued acquisitions and a degree of organic growth, remains in place. Geographically, the focus is on Europe. In recent years, northern Italy has been identified as an interesting market, home to several fine companies with a high level of technology.

Without doubt, there are many interesting companies in Europe that could be potential acquisitions for Indutrade. The competent organization, with its long experience, is well equipped to make further acquisitions.

CEO Bo Annvik has more than doubled net sales and almost tripled profits in just under nine years in the role. A strong performance that also demonstrates the sustainability of the business model over the long term. I would like to thank Bo for his good work in 2025 and wish him all the best for the future.

The Board of Directors proposes a dividend of SEK 3.10 per share (3.00) to the Annual General Meeting.

Alleima, with its core competence in materials technology, operates in several different sectors. Many of these experienced rather weak market development last year as the economic slowdown was in evidence. Profits and order intake weakened compared with the previous year, but cash flow remained strong. This led to a continued positive net financial debt at year-end.

Alleima’s diversified exposure and very high level of metallurgical expertise is a great strength for the company. Tube, which accounts for around 70% of total net sales, has a strong position in sectors such as oil and gas, as well as nuclear power. Kanthal is a leader in industrial heating and is growing strongly in medical technology. Strip has a broad customer base in precision strip steel. A major strength of the company is the very high barriers to entry that exist for other players to join the market. Long-term, trusting partnerships and customer relationships have been built up over a long period of time. Similarly, successful research and development has been carried out over many years. A comprehensive cost program was launched during the year to improve competitiveness.

CEO Göran Björkman has extensive industrial experience and he leads the company exceptionally well. I would like to express my sincere thanks to Göran for his efforts in 2025.

The Board of Directors proposes a dividend of SEK 2.50 per share (2.30) to the Annual General Meeting.

Handelsbanken is one of the world’s most stable banks and has the highest combined credit rating from leading credit institutions. The bank’s core customers are private individuals and small and medium-sized enterprises, many of them in the real estate sector. It also counts large international corporations among its customers. The bank’s home markets are Sweden, Norway, the United Kingdom, and the Netherlands. Business is conducted in a decentralized manner through branch operations, which are the heart of the bank. The branches cover their respective home markets and enable a close, trusting customer relationship to be established. The bank has led the industry in customer satisfaction for many years.

In 2025, net interest income decreased due to lower interest rates and intense competition. Commission income continued to increase, however, largely due to savings business. Costs decreased due to a reduction in the number of employees and improved cost efficiency. The credit portfolio maintained a very high level of quality and there were no credit losses.

Overall, the bank reported a slightly lower profit than for the previous year. The capital position remains very strong. CEO Michael Green is a solid professional and an experienced banker who is doing an excellent job.

The management team is also highly professional and functions very well. It is also worth mentioning that the Chair of the Board, Pär Boman, plays a key role and provides great support to the CEO and the management. I would like to thank Michael, the management, and Pär for their successful work over the past year.

The Board of Directors proposes an ordinary dividend of SEK 8.00 per share (7.50) and an extra dividend of SEK 9.50 per share (7.50).

Sandvik performed strongly last year. This was particularly true in the mining segment. Both equipment and spare parts and services grew strongly. There was also great interest in Sandvik’s digital solutions. The market position of surface mining strengthened.

In Rock Processing, order intake also increased as a result of the strong performance within the mining segment. The final quarter also saw an improvement within infrastructure.

Order intake for Machining and Intelligent Manufacturing was also strong. Demand in the automotive 
sector remained weak, however, while sections of the engineering and aviation industries grew well, particularly during the latter part of the year.

Invoicing lags behind order intake and significant foreign exchange effects had an impact on profits. Despite this, Sandvik reported an overall margin of 19.3% compared with 19.2% the year before. Cash flow remained strong and net debt was reduced. Sandvik also did well in mitigating the impact of increased tariffs.

Sandvik’s decentralized organization is a great strength. Among other things, it generates drive and builds customer relationships. The Sandvik share performed very strongly in 2025 and was a winner on the stock market. After several years facing some headwinds, there was a clear reversal in trend for Sandvik in 2025. The long-term dedicated work of the Board, led by its Chair Johan Molin, and CEO Stefan Widing, has now really come to fruition. Many wise decisions, both strategic and operational, have been made over the years. I would like to express my sincere thanks to Stefan and Johan for their exceptional work.

The Board of Directors proposes an increase in the dividend to SEK 6.00 per share (5.75).

Skanska is one of the world’s leading construction and project development companies. The company’s home markets are Sweden, Norway, and Finland, as well as parts of Central Europe and the UK. The company has increased its presence in the USA in recent years, which now accounts for around half of net sales.

Alongside broad-based operations in building and construction, the company also carries out commercial real estate development and residential development. A portfolio of newly constructed office properties has also been built up for in-house management.

The company reported a strong performance overall for 2025. It is very pleasing to see the chronically low construction margin in the industry now being challenged. Skanska reported its highest-ever margin of 4.1%. Commercial project development activity in the USA was weak, while activity in other geographic regions increased during the latter part of the year. The extensive portfolio of projects under construction is gradually being completed and letting is under way. The level of activity in residential development was high in Central Europe, while the Nordic business remains characterized by weak consumer confidence. The company’s investment properties continued to perform well. Skanska’s financial position remains strong, with substantial net cash position.

Having skilled and experienced project managers is a key issue for successfully running construction projects. This is absolutely essential and explains why Skanska is so successful, in the United States in particular. The company’s corporate culture has been strong for a very long time and is securely embedded. There is a high level of knowledge and a prominent winning instinct.

CEO Anders Danielsson has now been in his role for almost eight years and is doing a great job. He is a product of the company and a true professional. The Chair of Skanska’s Board for the past 10 years, Hans Biörck, carries out his important duties in a highly committed and professional manner, providing strong support to the CEO and the management. I would like to thank Anders, Hans, and the management for their excellent work in 2025.

Given the company’s strong position, the Board of Directors proposes an ordinary dividend of SEK 8.50 per share (8.00) and an extra dividend of SEK 5.50 per share.

Outlook

Lundbergs’ business model works well and has been in place for many years. Over a long period, the net asset value and the share’s total return have developed satisfactorily and outperformed the stock exchange index. Over the past five years, however, we have lagged behind the stock exchange index as well as some other comparable holding companies.

The main reason for this is our exposure to real estate. As I have described in this Letter from the CEO, there has been a radical change in the real estate and rental markets. We have responded by taking a cautious approach to new investments in real estate and increasing our holdings in companies in other sectors. As a result of this capital allocation, our share of real estate is now around 23% of net asset value, compared with 27% five years ago. I would like to stress, however, that I do not lack confidence in the right kind of real estate investment. Following the value adjustment that has taken place in recent years, there are good opportunities for profitable new investments.

I foresee a trend where more traditional property management will be essential for value creation rather than building up value through financial leverage and extremely favorable financing. Lundbergs Fastigheter has a long history of professional, efficient management. We have excellent local knowledge and have always strived to maintain high-quality properties and continuously invest to meet tenants’ needs and requirements. We have also placed great emphasis on our properties being attractively located in the local market, which we see becoming increasingly important.

Our portfolio companies are well established and have experienced employees, strong product ranges, a high level of innovation, and good customer relations. Some of the companies also have a global presence. This has been built up over several decades and is extremely valuable. Many of the companies also have unique real assets such as forests, hydropower and real estate of the highest quality.

The weak economy in recent years has affected different companies to different extents. This is the reality and will remain so. The important thing is to manage this in the best possible way. We contribute to this through the way we exercise active ownership. Not running away from problems but helping to solve them. This creates value over time. History provides many examples of this. The ongoing development of AI technology also opens up new opportunities for rationalization, resulting in increased competitiveness.

The future is always uncertain, but I have a strong feeling that we will see increased economic growth in the next few years. There are threats, of course, but we will never escape them, and we have to live with them.

I believe we are well positioned to benefit from future growth. We have fantastic portfolio companies with skilled management teams and competent boards. Quality has increased considerably over the past 10 years.

Our principal ownership in Industrivärden is very important, giving us exposure to a number of leading large Swedish companies with a global presence.

These include Volvo, Sandvik, and Essity.

We continue to invest our cash flow in the shares of our portfolio companies, gradually increasing our shareholding. I see our capital allocation as a key issue, together with our work on the corporate governance and strategic issues of the portfolio companies.

Our own knowledge base is growing over time and with it, our ability to exercise active ownership in the best way possible. Our financial position ensures we are highly resilient, even in difficult times.

The investment principles I touched on earlier in this Letter from the CEO guide our actions. Another lesson learned from experience is that patience and waiting can reap great rewards. Working hard usually produces good results, but sometimes it takes longer than we would like.

Dear shareholders, Lundbergs is well equipped for the future. I look forward to the coming years with great confidence and I hope and believe that we can continue to provide our shareholders with a competitive return in the future.

Finally, I would like to extend my sincere thanks to all the Boards of Directors, management teams and employees who work at our portfolio companies and at Lundbergs for their good work in 2025.

Stockholm, February 2026

Fredrik Lundberg