ODIN Europa C. Årskommentar december 2018

Transkript

1 ODIN Europa C Årskommentar december 2018

2 Fondens portfölj

3 ODIN Europa C december 2018 Avkastning senaste månaden och hittills i år Fonden hade en avkastning på -8,5 procent under den senaste månaden Fondens referensindex avkastade -6,3 procent under samma period Fondens avkastning hittills i år är -16,0 procent Fondens referensindex avkastade 6,7 procent under samma period Köp och försäljning i fonden, senaste månaden och hittills i år Den senaste månaden har vi inte gjort några större ändringar i fonden Hittills i år är de största ändringarna köp av Burford Capital, Reckitt Benckiser och Subsea7, samt sälj av Diageo och Prysmian. Bidragsgivare, senaste månaden och hittills i år De bästa bidragsgivarna till denna månads avkastning var Burford Capital och Handelsbanken De bolag som bidrog minst till avkastningen denna månad var Fresenius och Wood Group De bästa bidragsgivarna hittills i år är Bunzl och Teleperformance De bolag som bidragit minst till avkastningen hittills i år är Arrow Global och Ams

4 ODIN Europa C december 2018 Prissättning av fonden Fonden prissätts till 13,1 gånger de kommande 12 månaderna Fonden ger en direktavkastning på 3,2 procent Mätt mot bokfört eget kapital prissätts fonden till 2,4 gånger Innehaven i fonden har en genomsnittlig avkastning på eget kapital på 17,0 procent Prissättning av den europeiska aktiemarknaden - MSCI Europe net Index USD MSCI Europe prissätts till 12,1 gånger de kommande 12 månadernas resultat MSCI Europe ger en direktavkastning på 4,3 procent Mätt mot bokfört eget kapital prissätts MSCI Europe till 1,6 gånger Bolagen på MSCI Europe har en genomsnittlig avkastning på eget kapital på 12,0 procent

5 ODIN Europa Året som gick 2018 var året då resultaten och aktiekurserna i Europa utvecklades i olika riktningar. Resultatet ökade medan den europeiska aktiemarknaden avslutade året som en av de svagaste i världen. Avkastningen för ODIN Europa blev därmed svag. Med tanke på fondens aktiva mandat ligger en stor avvikelse från indexet i fondens natur. Avkastningen kommer successivt och bör ses över längre tidshorisonter. Den europeiska aktiemarknaden har generellt varit utmanande och små och medelstora företag har varit under särskilt stark säljpress. Det har drabbat fondens avkastning. Vi är långsiktiga och tålmodiga. Vi ser att den underliggande utvecklingen i de företag vi äger är positiv och har utnyttjat en depressiv marknad för att öka vår position i flera av dessa företag. Avkastningen drivs av värdeskapande i fondens bolag (resultatökning + utdelning) och omvärdering. Vårt fokus ligger på bolagens värdeskapande. Det har varit tillfredsställande under 2018, om än något svagare än väntat i början av året. Företagens resultat ökade med 6 procent*, mätt i lokal valuta. Vi fick närmare 3 procent av fondens värde i utdelning. Tillväxten i den europeiska ekonomin har försvagats. Stor optimism och framtidstro vändes till pessimism och osäkerhet under året. Orsaken är en sällsynt stark cocktail av (geo)politisk oro. När detta skrivs finns det fortfarande inget besked om vilken relation Storbritannien ska ha till EU. I Frankrike demonstrerar de gula västarna mot ekonomisk ojämlikhet och svag köpkraft. EUs tillväxtmaskin Tyskland upplever också gnissel i maskineriet. En stark exportnedgång och produktionsstopp inom bilindustrin har under hösten dämpat tillväxten kraftigt. I Europas tredje största ekonomi, Italien, var många rädda för att skuldnivåerna, de stigande statsräntorna och den låsta budgetsituationen skulle skapa problem. Dessutom har vi det pyrande handelskriget mellan USA och Kina. Det är lätt att bli nedstämd av den här blandningen. Rädsla och oro påverkar aktiemarknaden just nu. Grundläggande förutsättningar får mindre uppmärksamhet. Globala investerare är nu kraftigt underviktade i europeiska aktier. Historiskt har det inte varit en dum idé att investera i Europa när stämningen har varit så svag som den nu är. Osäkerheten är stor när vi går in i 2019, men glöm inte att politiska resultat sällan leder till en bestående påverkan på den globala ekonomiska tillväxten.

6 ODIN Europa Starka kort När vi utvärderar utvecklingen i de bolag vi äger är det inte kursutvecklingen som vi i första hand tittar på. Vi vet att det på kort sikt inte alltid finns någon koppling mellan underliggande utveckling och aktieavkastning. På lång sikt däremot kommer välskötta bolag att belönas med en god aktiekursutveckling. De företag som utvecklats bäst under 2018 är de som är exponerade mot starka outsourcingtrender. Franska Teleperformance och nederländska IMCD är värda att lyfta fram i det här sammanhanget. Teleperformance, som är en av fondens största investeringar, är inne på sitt 25:e kvartal med en organisk tillväxt på 6 12 procent och aktien är det innehav som bidrar bäst till fonden i år. Företaget drar nytta av en stark underliggande trend, nämligen outsourcing av kundservicelösningar. Företaget klarar att upprätthålla en lönsamhet som ligger en bra bit över konkurrenternas. Dessutom kompletterar företaget tillväxten genom förvärv som ökar värdet. IMCD är en av världens största distributörer av specialkemikalier. Ökad outsourcing av distribution och försäljning från kemikalieproducenterna samt betydande förvärvsmöjligheter på en mycket fragmenterad marknad är viktiga drivkrafter för tillväxt. I år har företaget också ökat sin marknadsandel och sin omsättning med respektabla 25 procent. Vårt möte med finanschefen mot slutet av året stärkte det goda intrycket av bolaget och dess utsikter. IMCD är fondens fjärde största position. Dignity är Storbritanniens näst största begravnings- och kremeringsaktör och stod för den största besvikelsen under Bolaget var tvunget att sänka priserna på delar av sina tjänster i början av året för att behålla sin marknadsposition. Det kom som en överraskning för oss. Vi underskattade prispressen på marknaden och har uppenbart gjort en felbedömning. Försäljningen minskar svagt, men på grund av den stora andelen fasta kostnader minskar årets resultat med en tredjedel. Den brittiska konkurrensmyndigheten har inlett en översyn av prisnivån och prisutvecklingen i branschen. Vår investeringstes har förändrats, men vi anser att den negativa kursreaktionen är överdrivet stor. Vi har ökat vår position marginellt, men behåller den fortsatt som fondens minsta position. Om vi tittar på fondens kursutveckling jämfört med marknaden, så beror underavkastningen mer på bolagsval än sektorexponering. Det finns inga systematiska avvikelser som vi kan lägga skulden på, förutom att vi föredrar små och medelstora företag, som har varit särskilt svaga. Tre företag går inte att undvika i det här sammanhanget. Det tyska däck- och teknikföretaget Continental har påverkats av kortsiktiga utmaningar kopplade till den europeiska bilproduktionen och övergången till nya utsläppstester och framstår som irrationellt lågt värderat med tanke på företagets position och tillväxtmöjligheter. Vi har ökat vår position i företaget. Det brittiska finansbolaget Arrow Global utvecklas mycket bra vad gäller fundamenta, men aktiekursen är under stor press från shorters, som använder den bristfälliga transparensen i rapporteringen för att skapa oro kring affärsmodellens hållbarhet. Hela sektorn är drabbad. Brexitoron gör inte situationen bättre. Vi ser inga stora konsekvenser för Arrow. Vi tillbringade en hel dag hos företaget i november och vår investeringstes ligger kvar. Vi har ökat vår position i företaget. Aktiekursen i den österrikiska sensorledaren AMS har varit mycket volatil under de senaste åren. Vi har använt aktiekursens fluktuationer för att genomföra bra försäljningar under 2017 och vad vi anser är bra köp under Den underliggande utvecklingen är solid, med en fördubbling av årsresultatet för Aktien har fallit mot bakgrund av osäkerhet kring möjliga konsekvenser av ett handelskrig samt en svag försäljning för nya Apple-telefoner (Ams största kund). Företagets ledande position inom avancerade sensorer kombinerat med starka underliggande tillväxtdrivande faktorer gör att vi vill äga aktien, trots den stora cyklikaliteten och en koncentrerad kundportfölj.

7 ODIN Europa Förändringar i portföljen Vi tror att en av vägarna till god långsiktig avkastning är tålamod och begränsad handel. Så länge som den underliggande utvecklingen i de företag vi äger är god har vi ökat våra positioner. Exempel på detta är Fresenius, Continental, Lectra, Ams, Arrow och Reckitt Benckiser. Vi har sålt två företag det brittiska dryckesvaruföretaget Diageo och den italienska kabeltillverkaren Prysmian. Det förstnämnda såldes mot bakgrund av hög värdering och bättre investeringsmöjligheter inom andra delar av konsumtionssektorn. Det senare såldes när vi tappade tron på deras förmåga till lönsam tillväxt inom telekom, vilket var en viktig del av vår investeringstes. Vi har under året köpt två nya företag, brittiska Burford Capital och norska Subsea 7. Burford Capital är ett bolag som verkar i skärningspunkten mellan juridik och finans. Bolaget består av uppemot 50 juridiska experter som utvärderar och bistår med finansiering av utvalda rättstvister mot en andel av den eventuella ersättningen. Marknaden för extern finansiering av rättstvister är relativt omogen men på kraftig frammarsch. Advokatbyråerna och kunderna (kärandena) har starka ekonomiska incitament att nyttja extern finansiering. Burford har på senare år intagit en ledande position på marknaden och har ett starkt varumärke som är känt i branschen. Till skillnad från andra typer av investeringar hänger Burfords resultat inte ihop med ekonomiska cykler och bidrar därmed till god riskspridning i fonden. Subsea 7 är ett av världens ledande företag vad gäller prospektering, konstruktion och tjänster inom undervattensteknik. Företaget är främst en underleverantör till energisektorn, från olja och gas till förnybar energi och kraftförsörjning. Företaget är verksamt i en bransch som har drabbats hårt av fallande råvarupriser under de senaste åren. Företagets ledning har ändå visat sig mycket skickliga på att hantera en nedgång och har byggt upp en stor likviditet som de har använt för att göra en rad strategiska förvärv. Det har de klarat tack vare ett starkt fokus på kassaflöde och tidiga kostnadsminskningar. Förvärven har stärkt deras position inom olja och gas, men också avsevärt inom förnybar energi. Det har hjälpt företaget att växa. Företaget rapporterar kontinuerligt om nya kontrakt som hjälper till att bygga upp orderboken. I slutet av 2018 har företaget köpt tillbaka egna aktier till 40 procents rabatt av bokförda värden. Vi tror att detta visar på god kapitalallokering och att företaget är kraftigt undervärderat.

8 ODIN Europa Framtidutsikter och strategi Vi går in i 2019 med en rad osäkerhetsfaktorer av (geo)politisk typ hängande över oss. Antalet möjliga utfall är många. Det finns åtminstone ett tvåsiffrigt antal möjliga utfall av Brexitröran. Sämsta resultat är förmodligen att Storbritannien lämnar EU utan en uppgörelse. Handelskriget kan eskalera eller så inser Trump att han inte har råd med ett fullskaligt handelskrig som skadar den amerikanska ekonomin inför valet De här två faktorerna kommer utan tvekan att påverka aktiemarknaden i den ena eller andra riktningen. En stor del av osäkerheten verkar redan ha tagits ut och värderingen av europeiska aktier vittnar om att framtidsprognoserna är mycket pessimistiska. Den ekonomiska tillväxten i Europa ser ut att bli lägre under 2019 jämfört med Vi ser dock inga tendenser till bubblor i ekonomin. Skuldsättningen bland företag och privatpersoner är lägre än i jämförbara regioner. Det finns ledig kapacitet i ekonomin, vilket sannolikt kommer att hålla nere lönetillväxten, inflationen och räntorna. Ett lägre oljepris är också positivt för regionen. Det är viktigt att poängtera att vi lägger ned mycket små insatser för att förutspå aktiemarknadens eller ekonomins utveckling under det kommande året. Vårt fokus riktar sig på de drygt trettio bolag vi har i fonden. Vi har stor tro på att dessa bolag kan växa med god avkastning på investerat kapital över tid. Marknadens förväntningar på resultatökningen i fondens bolag ligger på 8 procent för Osäkerheten i sådana skattningar är hög. Vi räknar med att utdelning från bolagen mätt mot bolagens storlek kommer att ligga på samma nivåer som under 2018, dvs. 2 4 procent. Vi försöker inte imitera marknaden utan strävar efter att upprätthålla en brett sammansatt portfölj med avseende på produkter, tjänster, slutmarknader och kundgrupper. Vi har minskat vår exponering för cykliska konsumtionsvaror något, men har fortfarande en relativt stor andel mot denna typ av företag. Omkring hälften av fonden är investerad i relativt defensiva förväntningsmodeller. De kommer sannolikt att klara sig bra under en ekonomisk nedgång. Vi är investerade i bolag som är väl positionerade på marknader som uppvisar alla tecken på fortsatt tillväxt. En åldrande europeisk befolkning, krav på reducerade växthusgaser, ständigt ökande datamängder, bankreglering, outsourcing samt en växande medelklass i Asien, kommer sannolikt att vara starka och förutsägbara tillväxtfaktorer under många år framöver. Vi är också investerade i flera bolag med dominerande positioner på fragmenterade marknader, vilket kan stärka omsättningen genom värdeökande förvärv. Vi fokuserar på kvalitetsbolag med avseende på drift, balansräkning och ledning. Det här är bolag som kan sysselsätta nytt kapital med en avkastningsnivå betydligt över avkastningskravet. Vi tror att dessa bolags värdeskapande återspeglas i stigande aktiekurser över tid. Vi anser att blandningen av fortsatt värdeskapande i fondens bolag och fallande aktiekurser har gjort värderingen av fonden attraktiv. Vi menar att bolagen är värda betydligt mer än de värderas till på aktiemarknaden per idag. Fonden värderas till 14,5 gånger innevarande års resultat, genererar en avkastning på eget kapital på nästan 20 procent och är lågt belånad med en nettoskuld i förhållande till rörelseresultatet på under 1. Vi anser att detta är attraktivt med tanke på bolagens tillväxtprognoser.

9 Nyckeltal och nyheter från portföljen presenteras på engelska

10 Return Last 5 years % (SEK) - ODIN Europa C ODIN Europa C Index Historical Return % (SEK)* Last Month YTD 1 Y 3 Y 5 Y 10 Y Since inception ODIN Europa C -8,52-15,97-16,27 0,33 3,83 9,06 2,50 Benchmark -6,30-6,75-6,95 4,21 6,06 7,79 3,44 Excess Return -2,22-9,22-9,32-3,89-2,23 1,27-0,94 * Returns for periods exceeding 12 months are annualized ** Returns for Fund Classes B and C are shown in a separate table. Returns prior to the share class inception date are based on calculations from the fund's oldest share class, taking into account the management fee in each share class.

11 Annual returns last 10 years - ODIN Europa C

12 Up or down In or out ODIN Europa Significant Portfolio changes year to DATE Number of changes in portfolio year to date Buy Sell Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Burford Capital Diageo Subsea7 Prysmian Kerry Group Reckitt B. Arrow SAP Lectra Howden Dignity Handelsb. Arrow Burford Capital Smurfit Kappa Continental Arrow Ams Fresenius IMI Smurfit Kappa

13 Pricing of the fund Company Weight Country Industry P/E (LTM)* P/E (NTM)* DivYield (LTM) DivYield (NTM) P/B ROE Bunzl plc 5,8% United Kingdom Trading Companies & Distributors 18,8 17,9 2,1 2,2 5,0 26,8 SAP SE 5,8% Germany Software 19,9 18,1 1,6 1,8 3,7 18,6 Henkel AG & Co. KGaA 5,0% Germany Household Products 14,2 13,4 2,2 2,3 2,2 15,4 IMCD N.V. 4,9% Netherlands Trading Companies & Distributors 21,3 18,4 1,4 1,6 3,7 17,5 Roche Holding Ltd Genusssch. 4,5% Switzerland Pharmaceuticals 13,7 13,3 3,5 3,5 6,4 47,2 Teleperformance SE 4,4% France Professional Services 20,4 17,4 1,3 1,5 3,8 18,6 Bureau Veritas SA 4,3% France Professional Services 18,3 17,1 3,3 3,5 7,1 38,8 Reckitt Benckiser Group plc 4,2% United Kingdom Household Products 18,4 17,0 2,8 3,0 2,9 15,9 Kerry Group Plc Class A 4,0% Ireland Food Products 24,6 22,2 0,8 0,9 3,8 15,5 Spectris plc 3,9% United Kingdom Electronic Equipment Instruments 14,7 13,1 2,7 2,8 2,2 15,1 Topp 10 46,8% 17,9 16,4 2,1 2,3 3,6 20,1 ODIN Europa 14,2 13,1 3,0 3,2 2,4 17,0 * NTM = Next 12 months LTM = Last 12 months Adjusted earnings and fully diltuted number of shares

14 Sector allocation - GICS Sectors

15 Sector allocation - Morningstar Super Sectors Cyclical Sensitive Defensive Cash GICS sectors included in Morningstar Super Sectors: Cyclical: Materials, Consumer Discretionary, Financials, Real Estate Sensitive: Telecommunication Services, Energy, Industrials, Information Technology Defensive: Consumer Staples, Health Care, Utilities

16 Current holdings

17 Share price performance*, year to date (SEK) (Sorted by weight in portfolio) *) Share price performance for equities included in the benchmark. Equities not included in the benchmark are calculated from portfolio figures.

18 Contribution, year to date (SEK)

19 Risk Statistics (3 Years), SEK Portfolio Index Active share 0,91 Sharpe ratio 1) -0,04 Standard Deviation 2) 14,12 0,38 10,57 Portfolio Alpha -5,31 Beta 1,21 Tracking error 6,36 Information ratio -0,72 1) Sharpe Ratio uses Norway - 3 MT Bills as risk free rate. 2) Standard Deviation is based upon monthly volatility. Risk figures are based on the fund class C for funds with fund classes

20 Macro and Market

21 Pricing - European Equities (MSCI Europe)

22 OECD Leading indicator Level above 100 indicates expanding activity in OECD area

23 The International Monetary Fund (IMF) Economic growth forecast

24 Historical Return - All fund classes (SEK) Last Month YTD 1 Y 3 Y 5 Y 10 Y Since inception ODIN Europa A -8,43-14,92-15,21 1,59 5,14 10,42 3,78 ODIN Europa B -8,46-15,13-15,43 1,34 4,88 10,14 3,52 ODIN Europa C -8,52-15,97-16,27 0,33 3,83 9,06 2,50 ODIN Europa D -8,45-15,13-15,43 1,34 4,88 10,14 3,52 Benchmark -6,30-6,75-6,95 4,21 6,06 7,79 3,44 * Returns for periods exceeding 12 months are annualized Annual returns last 10 years - All fund classes (SEK) ODIN Europa A , , , , , , , , , ,63 ODIN Europa B -15,13 20,62 0,50 9,40 13,41 28,12 25,88-14,93 6,14 38,29 ODIN Europa C -15,97 19,39-0,49 8,33 12,27 26,91 24,70-15,85 5,10 36,94 Benchmark -6,75 13,34 7,59 5,12 13,11 23,92 12,93-9,72-1,69 23,95

25 Investments

26 Bunzl Company description Bunzl is a multinational distribution and outsourcing company. Primarily a distributor of a diverse range of non-food consumable products including food packaging, cleaning and hygiene supplies, personal protective equipment and carrier bags. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Why invested? Bunzl plc MSCI Europe Bunzl operates a resilient and compounding business model with underlying growth ahead of global GDP. M&A is an important part of the business model. Bunzl is the largest consolidator globally and there is considerable room for consolidation within the industry. Customers are able to outsource the purchasing, consolidation and delivery of a broad range of products to Bunzl, thereby enabling them to achieve efficiencies and savings. Investors are concerned with the potential disruption from Amazon. We think the one-stopshop, strength of customer relationships and ability to provide bespoke solutions all generate differentiation and resilience against Amazon s platform model. Bunzl plc Industrials /Trading Companies & Distributors Market Value (mill.) 7,788 Price Price currency GBP Net debt (mill.) 1,459 Reporting currency GBP Enterprise Value (mill.) 9,248 FX rate (NOK) Year end (December) E 2019E Sales (mill.) 6,098 6,157 6,490 7,429 8,581 9,022 9,474 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity ,016 1,313 1,449 1,613 1,784 Return on Equity (%) 22.0 % 21.4 % 22.9 % 20.3 % 21.4 % 20.7 % 20.3 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.2 % 2.0 % 2.0 % 2.0 % 2.2 % 2.2 % 2.3 %

27 SAP Company description SAP is the largest enterprise applications provider and one of the largest software companies worldwide. One primary aim of its software is to make different business functions work together such as financial systems, supply chain and production planning etc. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Why invested? SAP SE MSCI Europe Today, SAP is used by more than a million business users working for more than 100,000 customers across 120 countries. A large installed base of customers with very high retention rates of 98-99% creates a business model with sustainable high free cash flow generation. SAPs broad portfolio with S4HANA at the core enables it to benefit from disruptive digital transformation trends like Internet-of-things, machine learning, blockchain, big data and analytics. We see potential for higher profitability driven by the shift to cloud and sustainable strong growth driven by a strong product cycle and roll-out of new applications. SAP SE Information Technology /Software Market Value (mill.) 103,575 Price Price currency EUR Net debt (mill.) 3,418 Reporting currency EUR Enterprise Value (mill.) 106,993 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 16,815 17,560 20,793 22,062 23,461 24,523 26,602 EBIT (Operating Income - mill.) 5,085 4,783 4,873 5,165 5,059 7,163 7,905 Net Income (reported - mill.) 3,326 3,280 3,064 3,646 4,018 3,969 4,513 Equity 16,040 19,504 23,267 26,376 25,509 28,022 30,597 Return on Equity (%) 20.7 % 16.8 % 13.2 % 13.8 % 15.8 % 14.2 % 14.8 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.6 % 1.9 % 1.6 % 1.5 % 1.5 % 1.7 % 1.9 %

28 Henkel Company description Henkel is a German-listed consumer and adhesive company. Consumer products include laundry & home care products and beauty products like shampoo and body wash. The adhesive division serves a range of different endmarkets including construction, automobiles and electronics. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Why invested? Henkel AG & Co. KGaA MSCI Europe Henkel has strong innovation power with 30% of sales from products introduced the last 3 years. The company generates close to 50% of its sales in emerging markets. Henkel has a proven track record of margin expansion through internal efficiency measures, and has consistently delivered according to its financial plans. We believe there is potential for further margin expansion as well as organic top line growth. In total this should drive high single digit earnings growth. A strong balance sheet makes us believe in further M&A from Henkel as well. Henkel AG & Co. KGaA Consumer Staples /Household Products Market Value (mill.) 38,940 Price Price currency EUR Net debt (mill.) 3,482 Reporting currency EUR Enterprise Value (mill.) 42,422 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 16,355 16,428 18,089 18,714 20,029 20,049 20,709 EBIT (Operating Income - mill.) 2,432 2,558 2,871 2,916 3,074 3,552 3,728 Net Income (reported - mill.) 1,589 1,628 1,921 2,053 2,519 2,390 2,614 Equity 10,044 11,508 13,661 15,047 15,576 17,172 18,902 Return on Equity (%) 15.8 % 14.1 % 14.1 % 13.6 % 16.2 % 13.9 % 13.8 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.6 % 1.6 % 1.7 % 1.6 % 1.8 % 2.2 % 2.3 %

29 IMCD Company description IMCD is a leading international speciality-focused provider of fully integrated marketing, sales and distribution services. The company operates an asset-light business model, outsourcing most of its distribution and other ancillary services. The company distributes approximately 27,000 products, sourced from around 1,800 suppliers, to around 32,000 customers in over 40 countries. Why invested? IMCD is a highly efficient operator generating industry-leading profitability and return. The company is one of the leaders in a very fragmented industry. Hence, the inorganic growth opportunities are significant. The company is also benefiting from a strong outsourcing trend among chemical producers. The management is central in our investment thesis. The CEO and CFO lead the formation of the company and they have more than 20 years of industry experience. We like their significant ownership and their focus on running the business for the long run Performance - Since IPO 0 jun-14 jun-15 jun-16 jun-17 jun-18 IMCD N.V. IMCD N.V. MSCI Europe Industrials /Trading Companies & Distributors Market Value (mill.) 2,872 Price Price currency EUR Net debt (mill.) 504 Reporting currency EUR Enterprise Value (mill.) 3,376 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 1,233 1,358 1,530 1,715 1,907 2,386 2,729 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) 9.5 % 10.1 % 10.6 % 13.3 % 15.0 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.3 % 1.4 % 1.2 % 1.4 % 1.7 % 29

30 Roche Company description Roche is a Swiss based pharmaceuticals and diagnostics company. The company is the global market leader in the area of oncology (cancer) drugs and has demonstrated its commitment to defending this position through innovation. Why invested? The long term growth dynamics are attractive given their strong pipeline of products and possible revolutionary treatment options for cancer. Roche has developed a strong set of new oncology drugs that will replace the current portfolio as patents expire. High exposure to biotechnology derived products makes the barriers to entry substantial. Despite very high spending on research and development the company enjoys sector leading profitability. The ongoing concentration of the drugs portfolio offers a margin leverage potential. Roche has increased its dividend for 30 consecutive years a track record only shared by a handful European companies Performance - last 5 years 0 jan-14 jan-15 jan-16 jan-17 jan-18 Roche Holding Ltd Genusssch. Roche Holding Ltd Genusssch. MSCI Europe Health Care /Pharmaceuticals Market Value (mill.) 214,570 Price Price currency CHF Net debt (mill.) 11,736 Reporting currency CHF Enterprise Value (mill.) 226,306 FX rate (NOK) 8.82 Year end (December) E 2019E Sales (mill.) 46,780 47,462 48,145 50,576 53,299 56,549 58,046 EBIT (Operating Income - mill.) 15,034 13,729 13,797 14,875 15,066 20,081 20,107 Net Income (reported - mill.) 11,164 9,332 8,863 9,576 8,633 13,380 13,782 Equity 19,294 19,586 20,979 23,911 26,441 32,840 39,008 Return on Equity (%) 57.9 % 47.6 % 42.2 % 40.0 % 32.7 % 40.7 % 35.3 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 3.1 % 3.0 % 2.9 % 3.5 % 3.4 % 3.4 % 3.5 %

31 Teleperformance Company description Teleperformance is the worldwide leader in multichannel customer experience. Founded in 1978 by Daniel Julien, the company is specialized in customer service, technical support, call center, debt collection and social media. The company operates about 100,000 computerized workstations, with more than 148,000 employees across 270 contact centers in 62 countries. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Teleperformance SE MSCI Europe Why invested? The outsourcing client contact center market remains largely underpenetrated and has thus a solid growth potential. Higher barriers to entry, as a result of higher technology and stronger client dependence, should limit the natural price pressure in the industry. Free cash flow yield is high and ROCE is expected to improve further. We believe the cash return to shareholders will increase. Teleperformance SE Industrials /Professional Services Market Value (mill.) 7,731 Price Price currency EUR Net debt (mill.) 1,299 Reporting currency EUR Enterprise Value (mill.) 9,030 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 2,433 2,758 3,398 3,649 4,180 4,426 5,079 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 1,392 1,595 1,758 1,911 1,910 2,120 2,370 Return on Equity (%) 9.3 % 9.4 % 11.4 % 11.2 % 16.3 % 14.6 % 15.1 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.8 % 1.6 % 1.5 % 1.4 % 1.5 % 1.4 % 1.6 %

32 Bureau Veritas Company description Bureau Veritas is the global number two player in the testing, inspection and certification industry. Its network covers more than 1300 offices and laboratories in 140 countries. The group is well diversified across sectors and industries. 180 years of history. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Why invested? Bureau Veritas SA MSCI Europe Our investment thesis is built on solid barriers to entry (brand and reputation, accreditation requirements, network size), strong growth drivers (increased safety and quality standards, regulation and outsourcing) and an impeccable track record. The share price has been weighed down by some weak end markets in the short term. We now see growth picking up in the more cyclical parts of the business. We expect additional value creation form acquisitions in very fragmented market, although the balance sheet has less capacity now than historically. Bureau Veritas SA Industrials /Professional Services Market Value (mill.) 7,514 Price Price currency EUR Net debt (mill.) 2,448 Reporting currency EUR Enterprise Value (mill.) 9,962 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 3,933 4,172 4,635 4,549 4,689 4,788 5,013 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 956 1,108 1,095 1, ,080 1,219 Return on Equity (%) 36.1 % 26.6 % 23.3 % 26.7 % 32.0 % 32.6 % 32.7 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.3 % 2.6 % 2.8 % 3.0 % 2.5 % 3.4 % 3.6 %

33 Kerry Group 250 Performance - last 5 years Company description Irish Kerry Group is a consumer staples company that generates 85% of profit from «Ingredients & Flavours» and 15% of profit from «Consumer foods». Customers of Kerry are large food- and beverage companies that operate globally. A «collaboration-model» with customers in order to modify tastes/textures, develop new products/solutions. More than 90% of sales outside of Ireland. Why invested? Growth is driven by diversity, as no single lab is the driver. Overall organic growth are mid single digits. Further margin expansion is expected due to implementation of SAP, rationalization of production and an even larger part of the group being driven by the high-margin Ingredients part of the group. Margin expansion and volume growth will lead to earnings growth of about 10 percent per annum going forward jan-14 jan-15 jan-16 jan-17 jan-18 Kerry Group Plc Class A Kerry Group Plc Class A MSCI Europe Consumer Staples /Food Products Market Value (mill.) 15,611 Price Price currency EUR Net debt (mill.) 1,474 Reporting currency EUR Enterprise Value (mill.) 17,085 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 5,837 5,757 6,105 6,131 6,408 6,604 7,027 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 1,968 2,236 2,790 3,094 3,573 4,010 4,513 Return on Equity (%) 4.3 % 21.5 % 18.8 % 17.2 % 16.5 % 14.4 % 14.7 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 0.8 % 0.8 % 0.7 % 0.8 % 0.7 % 0.8 % 0.9 %

34 Reckitt Benckiser Company description Reckitt Benckiser is a fast-moving consumer goods company with a strong market position in consumer health and home care products. The portfolio consists of strong brands like Durex, Vanish, Scholl, Strepsils and Clearasil. Why invested? Reckitt has a track record of high growth and margins resulting from a strategy of focusing on a limited number of power brands. The company has articulated a clear strategy to focus on faster-growing consumer health. There are multiple near-term issues concerning investors. The acquisition of the nutrition company Mead Johnson in 2017 was not well received by the market. Cost savings and a recovery of the top line is however starting contribute to the value creation. We see this as a standout opportunity to invest in one of the fastest growing companies in global staples, with superior return on capital and cash generation. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Reckitt Benckiser Group plc Reckitt Benckiser Group plc MSCI Europe Consumer Staples /Household Products Market Value (mill.) 42,202 Price Price currency GBP Net debt (mill.) 10,691 Reporting currency GBP Enterprise Value (mill.) 52,893 FX rate (NOK) Year end (December) E 2019E Sales (mill.) 10,043 8,836 8,874 9,891 11,512 12,554 13,010 EBIT (Operating Income - mill.) 2,611 2,171 2,366 2,772 2,937 3,342 3,544 Net Income (reported - mill.) 1,739 1,663 1,743 1,832 3,376 2,122 2,466 Equity 6,334 6,832 6,904 8,421 13,533 14,513 15,780 Return on Equity (%) 27.5 % 24.3 % 25.2 % 21.8 % 24.9 % 14.6 % 15.6 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.9 % 5.0 % 2.2 % 2.2 % 2.4 % 2.9 % 3.1 %

35 Fresenius 250 Performance - last 5 years Company description Fresenius engages in the provision of healthcare related products and services. The company has a diversified revenue base with operations in renal dialysis, German hospitals, infusion solutions, clinical nutrition, medical devices and health care infrastructure jan-14 jan-15 jan-16 jan-17 jan-18 Why invested? Fresenius SE & Co. KGaA MSCI Europe All the businesses are supported by underlying demand growth driven by an aging population, growing per capita healthcare consumption in emerging markets and continuing growth of generics. Our investment in Fresenius is based on its leadership positions in attractive markets, strong management team and outstanding track record of generating shareholder value. Increasing headwinds at Helios (private hospitals) and FMC (dialysis) will hurt the performance in the short term. We do however struggle to see a scenario that justifies the current valuation. Fresenius SE & Co. KGaA Health Care /Health Care Providers & Services Market Value (mill.) 22,916 Price Price currency EUR Net debt (mill.) 16,505 Reporting currency EUR Enterprise Value (mill.) 39,421 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 20,545 23,459 27,995 29,471 33,886 33,344 34,925 EBIT (Operating Income - mill.) 2,878 3,043 3,913 4,269 4,379 4,791 4,735 Net Income (reported - mill.) 988 1,070 1,386 1,560 1,814 1,980 1,926 Equity 8,383 9,523 11,153 12,664 13,661 16,191 16,964 Return on Equity (%) 11.8 % 11.2 % 12.4 % 12.3 % 13.3 % 12.2 % 11.4 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.1 % 1.0 % 0.8 % 0.8 % 1.2 % 1.9 % 1.9 %

36 Spectris Company description Spectris develops and markets precision instrumentation and controls with a focus on providing niche applications which have a direct impact on process performance for end users. Why invested? Automation and productivity markets are attractive growth markets and we believe Spectris is the best player in the industry. Due to its leadership in niche businesses, Spectris enjoys very high margins. With a debtfree balance sheet Spectris remains well positioned to take advantage of further acquistions, which have historically provided an average 4 percent growth contribution. We have started to see improving capex spending globally. This will clearly benefit Spectris in the short term. The automation trend is the key driver longer term. This is a highly cash generative and asset light model run by excellent top managers Performance - last 5 years 0 jan-14 jan-15 jan-16 jan-17 jan-18 Spectris plc Spectris plc MSCI Europe Information Technology ronic Equipment Instruments & Components Market Value (mill.) 2,528 Price Price currency GBP Net debt (mill.) 232 Reporting currency GBP Enterprise Value (mill.) 2,760 FX rate (NOK) Year end (December) E 2019E Sales (mill.) 1,202 1,174 1,190 1,346 1,526 1,586 1,654 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity ,067 1,204 1,217 1,301 Return on Equity (%) 23.7 % 14.7 % 11.8 % 1.0 % 19.5 % 11.7 % 12.8 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.7 % 2.2 % 2.7 % 2.2 % 2.3 % 2.8 % 2.9 %

37 Continental Company description Continental is the largest automotive supplier in the world with over 140 years of history. 3 out of 4 cars globally have Continental content. Why invested? We view Continental as one of the highest quality and best-positioned car suppliers, exposed to some of the most attractive segments of the component industry. It is also the most efficient mid-size tyre maker with a great non-tyre rubber business. This good balance between different types of businesses provides Continental with a more stable backdrop than most pure plays among suppliers. Continental will continue to outperform global car production due to the shift to more autonomous vehicles and increased content related to emission reduction and safety. Both supported by mandatory targets/laws set by authorities worldwide. Confidence has been shaken in the short term amid a challenging environment for automotive stocks. We have increased our position. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Continental AG Continental AG MSCI Europe Consumer Discretionary /Auto Components Market Value (mill.) 24,281 Price Price currency EUR Net debt (mill.) 3,034 Reporting currency EUR Enterprise Value (mill.) 27,314 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 33,331 34,506 39,232 40,550 44,010 44,604 46,551 EBIT (Operating Income - mill.) 3,301 3,635 4,316 4,157 4,323 4,039 4,363 Net Income (reported - mill.) 1,923 2,375 2,727 2,803 2,985 2,791 2,823 Equity 9,011 10,672 12,786 14,270 15,828 17,760 19,696 Return on Equity (%) 21.3 % 22.3 % 21.3 % 19.6 % 18.9 % 15.7 % 14.3 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.6 % 1.9 % 1.7 % 2.3 % 2.0 % 3.7 % 3.7 %

38 Groupe SEB Company description Performance - last 5 years SEB is the world leader in small household appliances with a 10 percent market share in small electrical appliances and 15 percent in cookware. The group owns 20 brands and covers a large part of the market from the lowend to the high-end jan-14 jan-15 jan-16 jan-17 jan-18 Why invested? SEB SA MSCI Europe SEB enjoys leadership position in emerging markets, where growth is solid, demand exceeds supply and penetration rate is still low. SEB is highly focused on innovation, which is key to success in mature markets. The product portfolio is very diversified with well-known brands and the track-record of integrating acquired companies is good. The margins are relatively resilient due to smaller products than peers. We see big opportunities with in the professionals market after the company s acquisition of the professional coffee machine maker WMF. SEB SA Consumer Discretionary /Household Durables Market Value (mill.) 5,423 Price Price currency EUR Net debt (mill.) 1,958 Reporting currency EUR Enterprise Value (mill.) 7,382 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 4,161 4,253 4,770 5,000 6,485 6,795 7,178 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 1,390 1,551 1,708 1,671 1,790 2,112 2,463 Return on Equity (%) 14.4 % 11.0 % 12.1 % 15.5 % 21.0 % 19.0 % 18.2 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.1 % 2.3 % 1.6 % 1.3 % 1.3 % 2.0 % 2.2 %

39 Novo Nordisk 250 Performance - last 5 years Company description: Novo Nordisk is the world leader in diabetes care with the broadest diabetes product portfolio in the industry, including the most advanced products within the area of insulin delivery systems. In addition, Novo has a leading position within areas such as coagulation disorders, growth disorders and hormone replacement therapy. Why invested? The strong growth in earnings reflects the strong growing markets driven by sustainable structural factors; the position as a global leader; scale effects coupled with capital and technological barriers to entry. High profitability is leading to considerable free cash flow generation. Obesity is the main growth driver for diabetes prevalence and thereby a very important long-term growth driver for Novo Nordisk. Following three years of volatility and pricing pressure, we think Novo will enter a new period of growth. Key growth drivers going forward will be the new launches in GLP-1 franchise Ozempic and oral semaglutide. Pricing pressure should be lessening as well jan-14 jan-15 jan-16 jan-17 jan-18 Novo Nordisk A/S Class B Novo Nordisk A/S Class B MSCI Europe Health Care /Pharmaceuticals Market Value (mill.) 759,500 Price Price currency DKK Net debt (mill.) -16,308 Reporting currency DKK Enterprise Value (mill.) 743,192 FX rate (NOK) 1.33 Year end (December) E 2019E Sales (mill.) 83,572 88, , , , , ,855 EBIT (Operating Income - mill.) 30,840 34,235 46,268 48,224 48,238 47,771 51,008 Net Income (reported - mill.) 25,184 26,481 34,860 37,925 38,130 38,974 40,134 Equity 42,569 40,294 46,969 45,269 49,815 54,716 58,920 Return on Equity (%) 59.2 % 65.7 % 74.2 % 83.8 % 76.5 % 71.2 % 68.1 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.3 % 1.9 % 1.6 % 3.0 % 2.3 % 2.6 % 2.7 %

40 Unilever Company description Unilever is the world's third-largest consumer goods company measured by revenue, after Procter & Gamble and Nestlé. Unilever remains the largest Emerging market FMCG company Performance - last 5 years Why invested? Unilever has built some extremely strong brands (Dove, OMO, Knorr, Ben & Jerries etc.) and today their products are number 1 or 2 in 80 percent of their markets. Management is slowly building a solid track record with focus on accelerating the growth rate and improving profitability. Investing in the global food, home and personal care sector is a good way to play the theme of rising disposable income in the developing world. Unilever generates 60 % of sales in this part of the world. High value generation and defensive nature of the company makes Unilever a core holding. 0 jan-14 jan-15 jan-16 jan-17 jan-18 Unilever NV Cert. of shs Unilever NV Cert. of shs MSCI Europe Consumer Staples /Personal Products Market Value (mill.) 133,468 Price Price currency EUR Net debt (mill.) 25,630 Reporting currency EUR Enterprise Value (mill.) 159,098 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 49,797 48,436 53,272 52,713 53,715 51,053 51,471 EBIT (Operating Income - mill.) 7,629 7,020 7,729 8,028 9,400 9,258 9,728 Net Income (reported - mill.) 4,842 5,171 4,909 5,184 6,053 5,487 5,712 Equity 14,344 13,651 15,439 16,354 13,629 12,346 12,264 Return on Equity (%) 33.8 % 37.9 % 31.8 % 31.7 % 44.4 % 44.4 % 46.6 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 3.7 % 3.5 % 3.0 % 3.3 % 3.1 % 3.3 % 3.5 % 40

41 Hugo Boss Company description Hugo Boss is a leading supplier of premium fashion. Its brand portfolio covers all key fashion segments for both men (90% of sales) and women, ranging from classic/business tailored fashions, evening and casual fashion to shoes and leather accessories. Why invested? Hugo Boss has experienced headwind over the past few years, but the brand or business is far from broken! This is a brand turnaround story. We believe that the new brand strategy focused on BOSS and HUGO brands with a premium positioning is sensible. We see significant self-help potential with potential to increase the retail productivity by 20 % over the next four years. This will in addition to the distribution clean-up in the US and more normalized investments in woman, improve profitability. The price adjustments necessary to realign the pricing globally is done. The company offers one of the highest pay-out ratio in the industry with a high and safe dividend yield Performance - last 5 years 0 jan-14 jan-15 jan-16 jan-17 jan-18 HUGO BOSS AG HUGO BOSS AG MSCI Europe Consumer Discretionary /Textiles Apparel & Luxury Goods Market Value (mill.) 3,792 Price Price currency EUR Net debt (mill.) 192 Reporting currency EUR Enterprise Value (mill.) 3,984 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 2,432 2,572 2,809 2,693 2,733 2,782 2,920 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity ,062 Return on Equity (%) 46.1 % 39.5 % 33.4 % 21.8 % 25.3 % 24.9 % 25.7 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 3.2 % 3.6 % 4.7 % 4.5 % 3.7 % 5.1 % 5.5 %

42 Howden Joinery Company description Howden Joinery is UK's leading supplier of kitchens and joinery. It addresses the 'done for you' market, selling kitchens (mid-price-point range) and joinery from local depots exclusively to trade professionals. Why invested? It s a fabulous franchise with a very strong and unique entrepreneurial culture. The operating performance has been outstanding despite a difficult market environment the past years. Howden has been taking market share over time and has showed strong pricing power. It operates a flexible model with low operational gearing. The balance sheet is sound and a high level of cash flow going forward will increase the shareholder returns (dividend/share buybacks). There are multiple growth drivers in addition to GDP new depots opens every year (2% p.a.). Structural trend from «DoItYourself» to «DoItForMe». 3% price increase annually. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Howden Joinery Group PLC Howden Joinery Group PLC MSCI Europe Industrials /Trading Companies & Distributors Market Value (mill.) 2,684 Price 4.41 Price currency GBP Net debt (mill.) -213 Reporting currency GBP Enterprise Value (mill.) 2,471 FX rate (NOK) Year end (December) E 2019E Sales (mill.) ,091 1,220 1,404 1,524 1,610 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) 78.0 % 38.1 % 50.4 % 41.6 % 40.7 % 35.4 % 32.8 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.7 % 1.6 % 2.1 % 1.9 % 2.4 % 2.7 % 2.8 %

43 John Wood Group Company description Wood is one of the world s leading engineering, project management and consultancy companies for the oil and gas, mining, clean energy, environment and infrastructure markets Why invested? We like the diversified, asset light and high focus on reimbursable prizing model which gives a less risky and more stable earnings stream than most peers. We believe this is key in a cyclical market such as the oil and gas market which account of more than half of the company s revenue. Wood is a merger between John Wood Group and Amec FW which is set to materialize considerable synergies that are margin accretive. Continuing management from John Wood has a good track record in company integration. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 John Wood Group PLC John Wood Group PLC MSCI World Index Energy /Energy Equipment & Services Market Value (mill.) 3,511 Price 5.15 Price currency GBP Net debt (mill.) 1,183 Reporting currency USD Enterprise Value (mill.) 4,695 FX rate (NOK) Year end (December) E 2019E Sales (mill.) 6,380 6,574 5,001 4,121 5,394 10,960 11,424 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 2,407 2,546 2,398 2,195 4,960 4,868 4,850 Return on Equity (%) 10.4 % 14.0 % 2.6 % 1.2 % -0.9 % 1.4 % 5.2 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.9 % 3.2 % 3.5 % 3.3 % 3.7 % 5.4 % 5.5 %

44 Publicis Company description Publicis is the world's third largest advertising and public relations agency. It has three core global ad agency networks, Leo Burnett, Publicis and Saatchi & Saatchi, and two multi-hub networks, Fallon and Bartle Bogle Hegarty. The group has operations in over 200 cities in 105 countries. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Why invested? Publicis Groupe SA MSCI Europe We like Publicis focus on the shift to digital and think it is better positioned than competitors to navigate industry challenges. Publicis has been through a restructuring phase (centralizing) over the past few years. In addition the largest client group (Consumer Staples) has cut A&P spending as a reaction to slower growth. We think the reorganization is about to bear fruits. The company has an under-leveraged and extremely robust balance sheet as well as a strong free cash flow generation. We find the valuation very attractive. Publicis Groupe SA Communication Services /Media Market Value (mill.) 11,457 Price Price currency EUR Net debt (mill.) 3,088 Reporting currency EUR Enterprise Value (mill.) 14,545 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) 6,953 7,255 9,601 9,733 9,690 9,065 9,371 EBIT (Operating Income - mill.) 1,175 1,207 1,516 1,510 1,552 1,471 1,541 Net Income (reported - mill.) ,064 Equity 5,095 6,086 6,556 6,055 5,956 6,426 6,940 Return on Equity (%) 15.5 % 11.8 % 13.7 % -8.7 % 14.5 % 14.8 % 15.3 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.7 % 2.0 % 2.6 % 2.8 % 3.5 % 4.2 % 4.5 %

45 Arrow Global Company description Arrow Global is one of the largest and fastestgrowing collectors and purchasers of defaulted unsecured consumer debt portfolios in Europe Performance - last 3 years Why invested? The investment thesis remains strong for European debt purchasers and -collectors given the size of the non-performing-loan (NPL) market and the European regulators focus on resolving this issue. Arrow has evolved into a European player of scale through acquisitions, where we see continued growth due to a highly fragmented market. Having invested heavily in building its Asset Management & Servicing capabilities, the company is aiming to double the revenue contribution from this capital light business over the next years. Arrow retains a strong balance sheet with one of the lowest cost of funds in the industry at 3.9% and no debt refinancing requirements until Arrow is clearly undervalued and misunderstood in our view jan-14 jan-15 jan-16 jan-17 jan-18 Arrow Global Group Plc Arrow Global Group Plc MSCI Europe Financials /Consumer Finance Market Value (mill.) 308 Price 1.75 Price currency GBP Net debt (mill.) 1,055 Reporting currency GBP Enterprise Value (mill.) 1,363 FX rate (NOK) Year end (December) E 2019E Sales (mill.) EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) 14.4 % 15.0 % 21.8 % 15.7 % 20.4 % 20.0 % 27.5 % EPS Book value per share DPS Price/Earnings Price/Book Value Dividend Yield (%) 0.0 % 2.2 % 2.7 % 3.1 % 2.8 % 7.1 % 9.4 %

46 Close Brothers Company description Close Brothers is a UK merchant banking group, providing lending, deposit taking, wealth management services and securities trading Why invested? Close Brothers is a specialist bank that is focused on niche lending markets where mainstream banks are less prevalent (e.g. asset finance, commercial property, specialist mortgages, buy-to-let, point-of-sale, used car finance) Unlike the challenger banks they are not competing head-on with mainstream UK banks in highly commoditized markets. We see Close Brothers as a very well run niche bank with great management and a simple and straight forward business model. Pricing does not imply growth in line with historical CAGR Performance - last 5 years 0 jan-14 jan-15 jan-16 jan-17 jan-18 Close Brothers Group plc Close Brothers Group plc MSCI Europe Financials /Capital Markets Market Value (mill.) 2,188 Price Price currency GBP Net debt (mill.) 1,438 Reporting currency GBP Enterprise Value (mill.) 3,626 FX rate (NOK) Year end (July) E 2020E Total Income Net Interest Income Net Result Equity 917 1,010 1,097 1,237 1,350 1,417 1,532 Return on Equity (%) 16.3 % 17.3 % 17.0 % 15.5 % 15.2 % 14.6 % 14.3 % EPS Book value per share DPS Price/Earnings Price/Book Value Dividend Yield (%) 3.9 % 3.7 % 4.5 % 3.9 % 4.0 % 4.6 % 4.8 %

47 Burford Capital Company description Burford Capital is a litigation finance company that was founded in Burford finance the client s litigation and the company receives a portion of successful settlements. Why invested? We have invested in Burford as it is the market leader in a nascent industry with solid growth prospects and high barriers to entry. There is a growing trend of acceptance and recognition of third party capital as an effective way of funding and Burford benefits from this trend. Burford has a legal team of specialists and a diversified portfolio of cases spanning from antitrust, securities, fraud, patents and intellectual property and trade secrets. Burford is also well diversified across hundreds of individual cases and litigation is less correlated with overall economic activity. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Burford Capital Limited Burford Capital Limited MSCI Europe Financials /Capital Markets Market Value (mill.) 3,437 Price Price currency GBP Net debt (mill.) 274 Reporting currency USD Enterprise Value (mill.) 3,712 FX rate (NOK) Year end (December) E 2019E Total Income Net Result Equity ,264 1,499 Return on Equity (%) 0.8 % 12.2 % 15.1 % 18.3 % 31.2 % 17.1 % 18.4 % EPS Book value per share DPS Price/Earnings Price/Book Value Dividend Yield (%) 2.6 % 3.7 % 2.8 % 1.3 % 0.7 % 0.6 % 0.7 %

48 Richemont Company description Richemont is the global leader in the «hard luxury» space - watches and jewelry. The diverse portfolio consists of prestige brands like Cartier, Piaget, IWC, Jaeger-LeCoultre, Montblanc, Vacheron Constantin and Panerai. Why invested? The barriers to entry are high as many of these brands have been in existence since the 1700 s, giving heritage and pricing power that are very hard to emulate. Richemont is in our view the best run company in the most attractive part of the high growth luxury industry. The combination of strong brands and excellent retailing drives industry leading profitability. Richemont has an underleveraged balance sheet with room for returning more cash to shareholders Performance - last 5 years 0 jan-14 jan-15 jan-16 jan-17 jan-18 Compagnie Financiere Richemont SA Compagnie Financiere Richemont SA MSCI Europe Consumer Discretionary /Textiles Apparel & Luxury Goods Market Value (mill.) 35,175 Price Price currency CHF Net debt (mill.) -1,844 Reporting currency EUR Enterprise Value (mill.) 33,332 FX rate (NOK) 8.82 Year end (March) E 2020E Sales (mill.) 10,649 10,410 11,076 10,647 10,979 13,850 15,033 EBIT (Operating Income - mill.) 2,410 2,426 2,101 1,624 1,892 2,208 2,484 Net Income (reported - mill.) 2,072 1,336 1,688 1,210 1,221 1,646 1,900 Equity 11,964 14,421 15,047 15,529 14,631 16,481 17,270 Return on Equity (%) 17.3 % 9.3 % 11.2 % 7.8 % 8.3 % 10.0 % 11.0 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.7 % 2.0 % 2.7 % 2.3 % 2.2 % 3.4 % 3.6 %

49 IMI Company description IMI is a global engineering group focused on the precise control and movement of fluids in critical applications. The company is split into 3 divisions Critical Engineering, Precision Engineering and Hydronic Engineering. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Why invested? IMI plc MSCI Europe IMI s solutions are addressing global trends such as clean energy, energy efficiency, healthcare and increasing automation. IMI s margins and capital returns are best-inclass. Growth has been lagging peers. In the medium term, we think there are opportunities to improve the growth profile of the group, led by the new CEO Mark Selway (strong background in operational excellence). Near-term investment needs to fuel future growth will weigh on near-term margins, but these will be self-funded from efficiency savings. Self-help potential. IMI plc Industrials /Machinery Market Value (mill.) 2,446 Price 8.99 Price currency GBP Net debt (mill.) 448 Reporting currency GBP Enterprise Value (mill.) 2,894 FX rate (NOK) Year end (December) E 2019E Sales (mill.) 1,744 1,686 1,557 1,649 1,751 1,876 1,945 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) 31.7 % 37.3 % 22.1 % 24.1 % 23.9 % 25.4 % 26.0 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.1 % 21.1 % 4.5 % 3.7 % 3.0 % 4.5 % 4.7 %

50 Svenska Handelsbanken Company description: Svenska Handelsbanken attracts deposits and offers commercial banking services. The Bank offers corporate finance, securities brokerage, commodity trading, structured products, custody services, and institutional asset management services. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Why invested? Svenska Handelsbanken AB Class A MSCI Europe No European bank can show the same history of low loan losses, solidity and profitability as Handelsbanken. We are impressed by the decentralized banking model and the growth in UK shows that it works also outside of Sweden. The company will continue to execute on their low cost banking model and will probably outgrow the sector in the coming years. All employees are major shareholders due to the pension system «Oktogonen». We think this gives the bank an edge on culture and incentives. Digitalization trends is a big question mark. Low short term rates are negative for net interest margins. Svenska Handelsbanken AB Class A Financials /Banks Market Value (mill.) 192,237 Price Price currency SEK Net debt (mill.) 1,290,106 Reporting currency SEK Enterprise Value (mill.) 1,482,343 FX rate (NOK) Year end (December) E 2019E Total Income 36,327 38,314 40,336 40,763 41,674 43,565 44,794 Net Interest Income 26,669 27,244 27,740 27,943 29,766 31,394 32,750 Net Result 14,173 15,142 16,197 16,231 16,099 17,288 16,951 Equity 111, , , , , , ,384 Return on Equity (%) 12.7 % 11.9 % 12.6 % 11.9 % 11.4 % 11.9 % 11.3 % EPS Book value per share DPS Price/Earnings Price/Book Value Dividend Yield (%) 5.2 % 4.8 % 5.3 % 3.9 % 6.7 % 6.6 % 6.8 %

51 Subsea 7 Company description: Subsea 7 is one of the world s leading global contractors in seabed-to-surface engineering, construction and services to the offshore industry. The company provides technical solutions to enable the delivery of complex projects in all water depths and challenging environments. Why invested? Subsea7 have shown excellent track record in deliverance of projects and as more integrated solutions are requested, the cooperation with Schlumberger has proven very successful. Great management have proven good at navigating through the through and as we se more projects come on stream, we believe Subsea7 will be an industry winner going forward. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 Subsea 7 S.A. Subsea 7 S.A. MSCI World Index Energy /Energy Equipment & Services Market Value (mill.) 28,167 Price Price currency NOK Net debt (mill.) -3,956 Reporting currency USD Enterprise Value (mill.) 24,211 FX rate (NOK) 1.00 Year end (December) E 2019E Sales (mill.) 6,297 6,870 4,758 3,567 3,986 4,036 3,817 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 6,552 5,587 5,377 5,583 5,893 5,855 5,762 Return on Equity (%) 5.3 % -5.6 % -0.3 % 8.0 % 7.9 % 3.0 % 1.4 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 3.2 % 0.0 % 0.0 % 4.7 % 4.0 % 6.1 % 6.1 %

52 Lectra Company description Lectra is the world leader in hardware and software offering for flexible fabric cutting in the fashion, furniture and automotive industry. Why invested? Lectra has very strong market positions in niches where we expect to see strong growth going forward. Automation of the textile industry in China, increased leather usage, increasing number of airbags in autos and personalization of apparel products being the most important growth drivers. The business model is safe and balanced, with sound diversification of endmarkets and with recurring revenues accounting for nearly 60% of sales and increasing by more than 5% per annum. Cash flow generation is strong and financial gearing is low. The company has an ambition to take an active role in the upcoming consolidation of the industry. We are impressed by the passion and the entrepreneurial culture in the company Performance - last 5 years 0 jan-14 jan-15 jan-16 jan-17 jan-18 Lectra SA Lectra SA MSCI Europe Information Technology /Software Market Value (mill.) 569 Price Price currency EUR Net debt (mill.) -89 Reporting currency EUR Enterprise Value (mill.) 480 FX rate (NOK) 9.94 Year end (December) E 2019E Sales (mill.) EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) 26.0 % 15.2 % 20.7 % 20.1 % 19.4 % 17.4 % 17.8 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.7 % 2.7 % 2.5 % 1.9 % 1.5 % 2.1 % 2.5 %

53 ING Group Company description ING Group as a is a Dutch multinational banking and financial services corporation headquartered in Amsterdam. Why invested? ING is a pure play, low risk bank, with 55% of earnings coming from retail banking. The majority of earnings is derived from the Northern European countries. ING s ability to generate deposits outside the Netherlands and a relatively low loan to deposits ratio gives it a strategic advantage over its domestic Dutch competitors. We like it s customer-centric focus, innovative culture and front-runner status in digital solutions in Europe. This gives ING more sustainable competitive advantage than other banks. The cost and risk focus of the group alongside its capital position should enable ING to deliver on its progressive dividend policy. ING is relatively dependent on the dutch economy and housing market. Performance - last 5 years jan-14 jan-15 jan-16 jan-17 jan-18 ING Groep NV ING Groep NV MSCI Europe Financials /Banks Market Value (mill.) 36,481 Price 9.37 Price currency EUR Net debt (mill.) 132,633 Reporting currency EUR Enterprise Value (mill.) 169,114 FX rate (NOK) Year end (December) E 2019E Total Income 15,305 15,296 16,552 17,458 17,704 18,084 18,380 Net Interest Income 11,804 12,376 12,590 13,241 13,714 13,838 14,118 Net Result 2,361 1,673 4,466 4,210 4,905 4,601 5,213 Equity 43,775 51,344 47,832 49,793 50,406 50,189 52,819 Return on Equity (%) 5.4 % 3.3 % 9.3 % 8.5 % 9.7 % 9.2 % 9.9 % EPS Book value per share DPS Price/Earnings Price/Book Value Dividend Yield (%) 0.0 % 1.1 % 5.2 % 4.9 % 4.4 % 7.3 % 7.5 % 53

54 AMS AG Company description Ams is the global leader in sensors and sensor solutions. It serves leading OEMs within consumer and communication, automotive, industrial and medical end markets Performance - last 5 years Why invested? We see very high growth potential in optical sensors, with growing sensor content in autos, consumer products, medical equipment and industrial applications. As the market leader with strong R&D competence and unique capabilities (source, package and sensor) we think Ams is very well positioned. The technological risk is limited by the strong barriers to entry that are present in analog semiconductor industry. The customer cluster risk is significant with high exposure to Apple. The stock price has been very weak recently, due to negative data points out of the Apple supply chain. We still believe growth should be strong in the coming years. This will be driven by 3D sensor implementation at some Android players (Huawei, Xiaomi and Oppo), ramp up of spectral sensing and power management. 0 jan-14 jan-15 jan-16 jan-17 jan-18 ams AG ams AG MSCI Europe Information Technology emiconductors & Semiconductor Equipment Market Value (mill.) 1,528 Price Price currency CHF Net debt (mill.) 1,567 Reporting currency EUR Enterprise Value (mill.) 3,095 FX rate (NOK) 8.82 Year end (December) E 2019E Sales (mill.) ,064 1,456 1,784 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity ,158 Return on Equity (%) 13.7 % 17.6 % 21.8 % 10.9 % 10.7 % 13.0 % 11.2 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.2 % 1.0 % 1.7 % 1.1 % 0.4 % 2.2 % 2.3 %

55 Dignity Company description Dignity is the second-largest provider of funeral services and the largest provider of cremations in the UK. Why invested? UK mortality rate, which has been falling in recent years, is now expected to stabilize and then begin to increase in the medium term driving an increased demand for funeral services. The typical client chooses a funeral provider based on reputation, as opposed to price. Dignity has historically been able to increase prices in excess of inflation. However, increased price awareness from online competitors and regulations on profitability for funeral companies and crematories have forced Dignity to reduce its price on standard services. We believe most of the negative adjustments have passed. The funeral services industry remains largely fragmented, with 70 percent of the market consisting of companies with less than one percent market share, and therefore still presents significant scope for Dignity to further consolidate the market. Strong and stable cash flow and returns at a very attractive price Performance - last 5 years 0 jan-14 jan-15 jan-16 jan-17 jan-18 Dignity plc Dignity plc MSCI Europe Consumer Discretionary /Diversified Consumer Services Market Value (mill.) 338 Price 6.75 Price currency GBP Net debt (mill.) 497 Reporting currency GBP Enterprise Value (mill.) 835 FX rate (NOK) Year end (December) E 2019E Sales (mill.) EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) 80.0 % 95.7 % 59.5 % n/a n/a 53% 36% EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.5 % 8.2 % 7.3 % 1.0 % 1.3 % 3.6 % 3.6 %

56 ODIN Europa - 28/12/2018 Security (Company) Currency Market Number of shares Market price Cost price Market value Unrealised gain (loss) % of assets under management Local currency NOK 1000 NOK 1000 NOK 1000 Continental EUR Frankfurt , ,5 Dignity GBP London , ,4 Hugo Boss EUR Frankfurt , ,1 Richemont CHF Zürich Six , ,4 SEB EUR Paris , ,5 Total Consumer Discretionary ,9 Henkel EUR Frankfurt , ,1 Kerry Group EUR Dublin , ,0 Reckitt Benckiser Group GBP London , ,2 Unilever Nv Cert EUR Amsterdam , ,2 Total Consumer Staples ,4 Subsea 7 NOK Oslo , ,9 Wood Group GBP London , ,8 Total Energy ,7 Arrow Global Group GBP London , ,4 Burford Capital GBP London , ,6 Close Brothers Group GBP London , ,5 ING Groep EUR Amsterdam , ,8 Svenska Handelsbanken ser. A SEK Stockholm , ,1 Total Financials ,3 Fresenius EUR Frankfurt , ,9 Novo Nordisk B DKK København , ,3 Roche Holding CHF Zürich Six , ,5 Total Health Care ,8 Bunzl GBP London , ,8 Bureau Veritas EUR Paris , ,3 Howden Joinery Group GBP London , ,8 IMCD Group EUR Amsterdam , ,9 IMI GBP London , ,2 Teleperformance EUR Paris , ,4 Total Industrials ,4 Austriamicrosystems CHF Zürich Se , ,8 Lectra EUR Paris , ,9 SAP SE EUR Frankfurt , ,8 Spectris GBP London , ,9 Total Information Technology ,4 Publicis Groupe EUR Paris , ,9 Total Telecommunication Services ,9 Total portfolio ,7

57 About ODIN

58 Investment Objective Long term value creation

59 Investment Philosophy Performance - prospects - price Performance Operating excellence «Doing good business with bad people simply doesn t work» - Warren E. Buffet Prospects Strong competitive position «We don t focus at beating the market short term. We want our holdings to beat their competitors long term» - Börje Ekholm Price Favourable valuation «The bitterness of poor quality remains long after the sweetness of a nice price is forgotten» - Benjamin Franklin

60 Om ODIN Europa C ODIN Europa är en aktivt förvaltad aktiefond som investerar i aktiebolag som är börsnoterade i Europa eller har sitt huvudkontor eller sitt ursprung där. Fondens långsiktiga mål är att ge högre avkastning än den europeiska aktiemarknaden, mätt med fondens referensindex. Fonden har andelsklasser. Fakta om fonden Ansvarig förvaltare Förvaltare sedan Referensindex Basvaluta Håvard Opland respektive MSCI Europe Net Index USD NOK Förvaltningsavgift 2 % Tecknings-/inlösenavgift 0 % Minsta teckningsbelopp NOK 60

61 Om förvaltaren Förvaltare Håvard Opland började arbeta på ODIN Han är utbildad civilekonom med specialisering i finans från Universitetet i Agder. Han är dessutom auktoriserad finansanalytiker (AFA) från Handelshögskolan I Bergen (NHH) och har erfarenhet som controller och analytiker. Håvard har under sina år på ODIN skaffat sig en betydande insikt i aktiemarknaderna internationellt och de senaste åren har han fokuserat särskilt på Europa.

62 Välkommen att använda våra tjänster Kontrollera innehav, avkastning m.m. Logga in på dina fondsidor hos ODIN Online Sätt dina pengar i arbete Teckna andelar i våra fonder på nätet med BankID Håll dig uppdaterad Anmäl dig till vårt nyhetsbrev Prata med oss kontakt@odinfonder.se

63 Värt att tänka på Historisk avkastning är ingen garanti för framtida avkastning, som bland annat beror på marknadsutvecklingen, förvaltarens skicklighet, fondens risk samt kostnader för förvaltning. Avkastningen kan bli negativ om aktiekurserna faller. Uttalandena i denna rapport speglar ODINs syn på marknaden vid den tidpunkt då rapporten utarbetats. Vi har använt källor som bedöms vara pålitliga, men vi kan inte garantera att uppgifterna från dessa källor är korrekta eller fullständiga. Anställda hos ODIN Forvaltning AS får handla för egen räkning med flera slags finansiella instrument. Det innebär att anställda hos ODIN Forvaltning AS kan äga värdepapper i företag som omnämns i den här rapporten, liksom andelar i ODINs fonder. Anställdas egenhandel ska följa ODIN Forvaltning AS interna riktlinjer för anställdas egenhandel, som har utarbetats i enlighet med den norska lagen om handel med värdepapper ("verdipapirhandelloven") och Verdipapirfondenes forenings branschstandard. Faktablad och informationsbroschyr för fonden finns på

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