ODIN Norden Årskommentar 214
Fondens portfölj
ODIN Norden december 214 Avkastning senaste månaden och hittills i år Fonden levererade en avkastning på -,8 procent den senaste månaden. Avkastningen för fondens referensindex under samma tidsperiod var -1,5 procent. Fondens avkastning hittills i år är 5,5 procent. Referensindex avkastning hittills i år är 9,8 procent. Köp och försäljning i fonden, senaste månaden och hittills i år Denna månad har vi sålt aktier i Aker, Lifco och Wilh. Wilhelmsen och köpt aktier i Carlsberg, Kone, Kongsberg Gruppen och Nokian Renkaat. I år är de största förändringarna i portföljen köp av Telenor, Kone, DSV, Assa Abloy, Indutrade, Intrum Justitia och Svenska Handelsbanken, och försäljning av aktier i bolagen TeliaSonera, Caverion, YIT, G4S, Austevoll, Det norske oljeselskap, Infratek, Marine Harvest, SR-Bank, Boliden, Ncc, SKF, Sandvik och Wilh Wilhelmsen. Bidragsgivare, senaste månaden och hittills i år De bästa bidragsgivarna till denna månads avkastning var Autoliv, Huhtamaki och Yara. De bolag som bidrog minst denna månad var DNB, Carlsbarg och Nokian Tyres. I år har bolagen Novo Nordisk, Protector Forsikring och Autoliv bidragit mest. De svagaste bidragen till avkastningen i år är Nokian Renkaat, Stolt-Nielsen och Subsea 7.
ODIN Norden december 214 Prissättning av fonden Fonden prissätts till 14,6 gånger de kommande 12 månadernas resultat. Fonden ger en direktavkastning på 3,6 procent. Utöver detta tillkommer även återköp av aktier i bolagen. Mätt mot bokfört egenkapital prissätts fonden till 2,3 gånger. Innehaven i fonden har en genomsnittlig egenkapitalavkastning på 14,9 procent. Prissättning av den nordiska aktiemarknaden OMX VINX Benchmark Capped VINX Benchmark prissätts till 15,5 gånger de kommande 12 månadernas resultat. VINX Benchmark ger en direktavkastning på 3,7 procent. Mätt mot bokfört egenkapital prissätts VINX Benchmark till 2,2 gånger. Bolagen på det nordiska har en genomsnittlig egenkapitalavkastning på 12,6 procent.
ODIN Norden Förvaltarnas årskommentar 214 Förändringar av förvaltaransvaret Via de landsspecifika fonderna ODIN Sverige, ODIN Finland och ODIN Norge har ODIN som förvaltningsmiljö unika djupgående kunskaper om de nordiska aktiemarknaderna. För att säkerställa att denna kunskap kommer fonden ODIN Norden till del på bästa möjliga sätt valde vi under 214 att ändra lite på förvaltningsansvaret i fonden. Fonden förvaltas därför nu gemensamt av de tre förvaltarna för de respektive landsspecifika fonderna, Vegard Søraunet, Truls Haugen och Jarle Sjo. En känsla av ansvar och ägandeskap är viktig för varje bra produkt. Genom att kombinera förvaltaransvaret för de landsspecifika fonderna med ODIN Norden säkrar vi ägarskapskänslan för de positioner från de olika fonderna som läggs in i den nordiska fonden. Samtidigt ser vi till att de bästa idéerna appliceras på både de landsspecifika fonderna och den nordiska fonden samtidigt och att positionerna på så vis motsvarar varandra. Ökat fokus på värdeskapande ODIN:s investeringsfilosofi sätter fokus på bolagens långsiktiga förmåga att skapa värden. Graden av värdeskapande kan förenklat kategoriseras så här: 1. Hög Bolagens förmåga att generera lönsam tillväxt via unika produkter, marknadspositioner och innovationstakt som skapar prisledarskap är avgörande. 2. Varierande Om bolaget är verksamt inom branscher där värdeskapandet i stor grad styrs av stora svängningar över tid angående tillgång och efterfrågan får värdegenereringen en cyklisk karaktär. 3. Låg Detta handlar om bolag som har problem med lönsamheten och måste genomföra omstruktureringar för att över huvud taget täcka sina kapitalkostnader. Långsiktigt värdeskapande i denna typ av bolag är högst osäkert. ODIN Norden är en fond som huvudsakligen fokuserar på stabilt värdeskapande. Därför letar fonden efter bolag med historik och egenskaper som tyder på detta och exponerar sig endast i liten grad mot omstruktureringskandidater.
ODIN Norden Ändringar i portföljen För att säkerställa den långsiktiga värdegenereringsförmågan har fonden under året gjort ytterligare förändringar av bolagssammansättningen. Strategin har över tid varit att hitta högre och mer stabil kapitalavkastning, samtidigt som priset vi betalar måste stå i förhållande till vad bolagen levererar. Fonden har koncentrerats ytterligare till färre positioner och bestod vid årsskiftet av 28 positioner. Nya bolag i portföljen under 214 var Telenor, Kone, DSV, Assa Abloy, Indutrade, Intrum Justitia samt Svenska Handelsbanken. Vi deltog i börsnoteringen av svenska Lifco, men tilldelningen blev inte som väntat och efter en stark kursutveckling valde vi att sälja ut oss ur aktien. Norden är en bra investeringsregion Norden som investeringsregion har över tid kunnat visa till en mycket god avkastning, även i jämförelse med andra centrala investeringsregioner. Detta beror till stor del på det faktum att de nordiska bolagen har genererat en avkastning på egenkapitalet som ligger i paritet med både europeiska och amerikanska bolag. Sammantaget ger den nordiska investeringsregionen en bred branschexponering som möjliggör god spridning över sektorer och geografisk försäljningsbas. Vi har också sålt oss ut ur Aker ASA, Wilh.Wilhelmsen, Stolt- Nielsen,TeliaSonera, Caverion, YIT, Valmet, BWO, G4S, Austevoll, Det norske oljeselskap, Infratek, Marine Harvest, SR-Bank, Boliden, NCC, SKF och Sandvik.
ODIN Norden Utsikter för framtiden Vi anser att utsikterna för fondens bolag är goda. Med vårt fokus på värdeskapande är avkastningen på egenkapitalet i förhållande till vilket pris vi ska betala en central bedömningsparameter. Den förväntade egenkapitalavkastningen för 215 är nu högre i fonden än för marknaden som helhet, 15 % respektive 13 %. Priset i förhållande till bokförda värden på 2,1 är dock detsamma för fonden som för marknaden. De nordiska marknaderna har olika utmaningar framför sig. Utvecklingen av oljepriset kommer att ha betydelse för den norska marknaden och situationen i Ryssland kommer att ha störst betydelse för Finland. De nordiska länderna är alla beroende av export och därmed kommer utvecklingen av den globala ekonomiska tillväxten spela stor roll. Svensk industri har under de senaste decennierna haft stora framgångar med sina exportinriktade bolag. Den svaga svenska kronan mot euron och dollarn skapar attraktiva framtidsutsikter. Dessutom kommer bolagens solida balanser och de låga räntorna att bidra till fortsatt ökad uppköpsaktivitet. ODIN Norden är en diversifierad aktiefond som ger investerare exponering mot kvalitetsbolag i olika nordiska länder och inom olika branscher. Många av bolagen i portföljen har stora andelar av sin försäljning utanför Norden. ODIN Norden erbjuder därmed en global och diversifierad exponering, men med nordisk gedigen rapportering och ägarstyrning.
Nyckeltal och nyheter från portföljen presenteras på engelska
Portfolio Return Last 5 years % (EUR) ODIN Norden Historical Return % (EUR)* Index Portfolio Last Month -,75 YTD 5,47 1 Y 5,47 3 Y 12,36 5 Y 6,62 1 Y 6,68 Since inception 12,61 Benchmark -1,55 9,81 9,81 17,53 13,37 9,54 9,97 Exess Return,79-4,33-4,33-5,17-6,74-2,87 2,64 * Returns for periods exceeding 12 months are annualized
Annual returns last 1 years
Sector allocation ODIN Norden Benchmark 35 3 25 31,4 22, 24,8 23,6 2 17,4 15 1 5 1,4 3,9 6,8 6,6 1,4 5,7 5,1 8,8 12,5, 8,5 2,9 5,3, 1, 11
12 Sector contribution, year to date
13 Current holdings
14 Contribution, year to date
Risk Statistics (NOK) 3 Years Alpha Beta Tracking Error Information Ratio Portfolio -4,7,98 4, -1,36 Index Sharpe Ratio 1) 1,54 2,15 Standard Deviation 2) 1,83 1,28 1) Sharpe Ratio uses Norway - 3 MT Bills as risk free rate. 2) Standard Deviation is based upon monthly volatility. 15
Up or down In or out ODIN Norden Significant Portfolio changes year to date Number of changes in portfolio year to date 4 2 2 Q1 Q2 Q3 Q4-2 Buy Sell -5-7 -5 Q1 Q2 Q3 Q4 + - + - + - + - Marine Harvest Infratek G4S Austevoll Valmet DSV Indutrade Handelsbanken KONE DetNor YIT Caverion Sandvik Boliden SR-bank BWO Assa Abloy Intrum Justitia SKF NCC Telenor Lifco TeliaSonera Stolt-Nielsen Lifco Aker Wilh. Wilhelmsen Novo Nordisk SCA SR-bank Novo Nordisk Amer Nokian Tyres Atlas Copco Stolt-Nielsen Kone DSV Metso Carlsberg Intrum Justitia Atlas Copco Assa Abloy H&M Indutrade SCA Protector Forsikting Securitas 16
Pricing of the fund Company Weight Country Industry P/E (LTM)* P/E (NTM)* DivYield (LTM) DivYield (NTM) P/B ROE Novo Nordisk A/S Class B 8,9% Denmark Pharmaceuticals 26, 22,5 1,8 2,1 16,1 61,9 Autoliv Inc Shs Swedish DR 6,6% Sweden Auto Components 19,7 17,1 1,8 2, 2,8 14,2 Hennes & Mauritz AB Class B 5,3% Sweden Specialty Retail 26,8 23,8 3,1 3,4 1,8 4,3 Atlas Copco AB Class B 5,1% Sweden Machinery 19, 16,7 3, 3,2 5,4 28,3 Nordea Bank AB 4,6% Sweden Banks 11,3 1,4 5,7 6,9 1,3 11,2 Sampo Oyj Class A 4,4% Finland Insurance 14,2 13,8 4,9 5,4 1,9 13,6 Huhtamaki Oyj 3,8% Finland Containers & Packaging 17,7 15,1 2,7 3,2 2,6 15, Kone Oyj Class B 3,8% Finland Machinery 24,6 22,2 3, 3,2 9,8 4, DNB ASA 3,4% Norway Banks 8,8 8,8 3,3 4,5 1,1 12,9 ABB Ltd. 3,4% Sweden Electrical Equipment 18,6 15,9 3,3 3,5 2,7 14,7 Topp 1 49,3% 17,6 15,9 3,1 3,5 3, 17,1 ODIN Norden 15,6 14,6 3,3 3,6 2,3 14,9 * NTM = Next 12 months LTM = Last 12 months Adjusted earnings and fully diltuted number of shares 17
18 MSCI World Price, Earnings and P/E
19 MSCI World Price, Book Value and P/B
OECD Leading indicator Level above 1 indicates expanding activity in OECD area 2
21 The International Monetary Fund (IMF) Economic growth forecast 214 - updated October
Investments - ODIN Norden
ABB ABB was formed in 1988 through the merger of Swiss Brown Boveri and Swedish Asean. The companies were founded in 1883 and 1891, respectively. Today, ABB's portfolio covers electricals, automation, controls and instrumentation for power generation and processes, power transmission and distribution solutions, low voltage products, motors and drives, intelligent building systems and robot systems. ------------------------------------------------------- ABB is a global leader in power and automation technologies. With innovative employees in more than 1 countries ABB has leading market positions in many of its core markets. The long term business trends of increased energy efficiency and higher degree of automation are strong growth drivers for the business longer term. With their market leading products in automation and high end power they can enable a premium price strategy. We find the shares undervalued. We think they can continue to execute on their acquisition strategy with their strong balance sheet. In addition they have a solid cash flow and a strong return on capital. 2 18 16 14 12 1 8 6 4 2 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 ABB Ltd. ABB Ltd. OMX VINX Benchmark Capped TR Industrial Conglomerates Market Value (mill.) 386,457 Price 166. Price currency SEK Net debt (mill.) 9,878 Reporting currency USD Enterprise Value (mill.) 396,335 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 31,795 31,589 37,99 39,336 41,842 38,26 38,226 EBIT (Operating Income) (mill.) 3,797 4,1 5,125 4,348 4,795 4,38 4,492 Net Income (mill.) 2,884 2,551 3,159 2,7 2,824 2,528 2,887 Price/Earnings 15.7 19.8 15. 15.4 2.9 18.6 15.9 Price/Book Value 3.4 3.7 2.7 2.8 3.5 2.7 2.7 EV/EBIT 9.2 1.5 8.7 1.8 12.9 12.3 11. Return on Equity (%) 23.6 18.5 19.7 16.8 16. 14.7 16.8 Dividend Yield (%) 2.5 2.7 3.9 3.5 2.9 3.3 3.5 23
Amer Sports Amer Sports manufactures and sells sports equipment, footwear, apparel and accessories. It operates under three segments: Winter & Outdoor, Ball Sports and Fitness. Its major brands include Salomon, Atomic, Arc teryx, Bonfire, Mavic, Suunto, Wilson, and DeMarini. ------------------------------------------------------- With a portfolio of strong global sporting goods brands, Amer Sports is being transformed from a slowly growing sporting equipment company (hard goods) into a "hybrid" with leading market positions in both hard goods and soft goods (apparel and footwear). The organic top-line growth target of at least 5% is achievable as long as soft goods continues to grow at a double-digit. The share of soft goods has increased from 24% in 21 to 33% in 213 and is expected to be around 4% in 216. By the end of this decade, the split is likely to be 5/5. Amer Sports targets an operating margin of 1% in the mid-term. This target can be achieved in the best case already in 216, compared with 7-5- 8.% in 214e. 3 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Amer Sports Oyj Class A Amer Sports Oyj Class A OMX VINX Benchmark Capped TR Recreational Products Market Value (mill.) 1,92 Price 16.2 Price currency EUR Net debt (mill.) 432 Reporting currency EUR Enterprise Value (mill.) 2,352 FX rate (NOK) 9.8 29 21 211 212 213 214E 215E Sales (mill.) 1,533 1,74 1,881 2,64 2,137 2,212 2,352 EBIT (Operating Income) (mill.) 31 86 136 123 144 157 196 Net Income (mill.) 31 64 86 57 9 61 125 Price/Earnings 32.1 16.8 11.8 17.3 3.9 19.3 14.8 Price/Book Value 1.1 1.8 1.5 1.7 2.4 2.4 2.2 EV/EBIT 33.4 18.9 11.3 14.3 15.4 14.9 11.7 Return on Equity (%) 5.3 9.1 11.4 7.4 11.9 12.5 14.9 Dividend Yield (%) 2.2 2.5 3.6 3.1 2.6 2.6 3.3 24
Assa Abloy Assa Abloy is the largest global supplier of intelligent lock and security solutions. The company was formed in 1994 through the merger of Assa in Sweden and Abloy in Finland. Since then Assa Abloy has grown from a regional company to an international group with around 43, employees and annual sales of over SEK 48 billion. ------------------------------------------------------------ A good industry to be in, with high barriers to entry. Assa Abloy is the number one global market leader, and also twice the size of the next competitor. Increased wealth, urbanization and rapid shift to new technologies create underlying strong demand and good growth prospects for access controls. Assa Abloy is spending a lot of money on innovation and product launches within their portfolio of companies. In addition, ongoing efficiency programs are likely to reduce cost and increase profitability. The company aim to achieve 1% annual growth with an EBIT-margin between 16-17%. 35 3 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 ASSA ABLOY AB Class B ASSA ABLOY AB Class B OMX VINX Benchmark Capped TR Industrial Machinery Market Value (mill.) 144,858 Price 411.9 Price currency SEK Net debt (mill.) 17,499 Reporting currency SEK Enterprise Value (mill.) 162,357 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 34,963 36,823 41,786 46,619 48,481 56,564 61,695 EBIT (Operating Income) (mill.) 5,447 6,35 6,638 7,474 7,964 9,143 1,31 Net Income (mill.) 2,626 4,5 3,439 5,11 4,783 6,362 7,33 Price/Earnings 2.3 21.8 13.3 23.3 23.4 24.3 21.1 Price/Book Value 2.7 3.6 2.7 3.6 4.6 4.7 4.1 EV/EBIT 11.4 13.3 11.7 13.8 18. 18.9 16.4 Return on Equity (%) 13.9 2.3 15.6 2.4 17.3 19.3 19.2 Dividend Yield (%) 2.4 2.1 2.5 2. 1.6 1.5 1.7 25
Atlas Copco B Atlas Copco is an industrial group with worldleading positions in compressors, expanders and air treatment systems, construction and mining equipment, power tools and assembly systems. With innovative products and services, Atlas Copco delivers solutions for sustainable productivity. --------------------------------------------------------- Atlas Copco is a strong value creator over time. The company has strong customer relationships which provides service-revenues of 4% of total revenues. With high-single digit organic top line growth in the coming years we think the share is undervalued. We believe the company is able to turn its construction technique division around and create better margins. The main risk is failure to protect its current returns on capital. Performance - last 5 years 25 2 15 1 5 des.9 des.1 des.11 des.12 des.13 des.14 Atlas Copco AB Class B OMX VINX Benchmark Capped TR Atlas Copco AB Class B Industrial Machinery Market Value (mill.) 26,261 Price 199.1 Price currency SEK Net debt (mill.) 7,789 Reporting currency SEK Enterprise Value (mill.) 268,5 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 63,762 69,875 81,23 9,533 83,888 93,35 1,68 EBIT (Operating Income) (mill.) 9,15 13,75 17,36 19,74 16,915 17,579 19,74 Net Income (mill.) 6,244 9,921 12,963 13,91 12,72 12,413 14,326 Price/Earnings 15.2 21.2 12.7 13.8 15.8 18.8 16.5 Price/Book Value 4.9 7.1 6. 6.1 5.5 5.3 4.6 EV/EBIT 13.9 13.9 1. 1.5 12.2 15.6 13.6 Return on Equity (%) 25.4 36.3 44.8 43.5 32.3 28.2 27.7 Dividend Yield (%) 3.2 2.5 3.6 3.4 3.4 3. 3.3 26
Autoliv Autoliv, Inc. develops and manufactures automotive safety systems for automotive manufacturers. The Company's products include seat belts, airbags, anti-whiplash seats, child restraints, and leg protection equipment. Autoliv tests cars and products at crash test tracks in several countries. ------------------------------------------------------------- Autoliv is a worldwide leader in automotive safety, a pioneer in both seatbelts and airbags, and a technology leader with the widest product offering for automotive safety. Main part of sales today come from airbags and seatbelts. Active safety will be an important driver going forward. More security content in cars and a huge market for Autoliv in China are the main drivers for fundamental development. Valuation is attractive and we expect the company to utilize their balance sheet going forward. A bigger acquisition could be on the agenda. 3 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Autoliv Inc. Autoliv Inc. OMX VINX Benchmark Capped TR Auto Parts: OEM Market Value (mill.) 75,681 Price 833. Price currency SEK Net debt (mill.) -3,21 Reporting currency USD Enterprise Value (mill.) 72,471 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 5,121 7,171 8,232 8,267 8,83 9,219 9,592 EBIT (Operating Income) (mill.) 22 869 889 75 797 826 89 Net Income (mill.) 1 591 623 483 486 535 58 Price/Earnings - 15.2 7.8 12.7 6.7 18.4 16. Price/Book Value 1.6 2.5 1.5 1.7 2.2 2.6 2.6 EV/EBIT 21.7 8.6 5.6 8.6 1.4 11.6 1.9 Return on Equity (%).4 22.2 19.9 13.6 12.6 14.1 16. Dividend Yield (%).5.4 3. 2.7 2.2 2. 2.1 27
Carlsberg Carlsberg is one of the world's largest brewers. It has more than 2 brands, but most of its revenues come from its key brands - Carlsberg, Tuborg, Baltika and Kronenbourg - and some very strong local brands including Holsten, Ringnes and Okocim. ------------------------------------------------------------ Carlsberg is a cheap, high quality consumer goods company. Perception due to the large share of company earnings in Russia, have put pressure on the share-price. Political incentives to reduce alcohol consumption in Russia, have made volumes drop by 3% and taxes/prices to increase. Carlsberg still has a 23% ebit-margin in the area. As beer consumption in mature western European markets declines, the company continue its Global Supply Chain program to increase profitability in north-western Europe. Carlsberg targets an average annual margin improvement of at least 5 basis points in the period 212-17. The company has publicly stated that it is looking to expand primarily in Asia through acquisitions. In addition, they continue to increase positions in companies with minority interests. 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Carlsberg A/S Class B Carlsberg A/S Class B OMX VINX Benchmark Capped TR Beverages: Alcoholic Market Value (mill.) 74,195 Price 476.8 Price currency DKK Net debt (mill.) 36,497 Reporting currency DKK Enterprise Value (mill.) 11,692 FX rate (NOK) 1.22 29 21 211 212 213 214E 215E Sales (mill.) 59,382 6,54 63,561 67,21 66,552 65,27 65,885 EBIT (Operating Income) (mill.) 8,885 9,344 9,21 9,169 9,968 9,469 9,619 Net Income (mill.) 3,62 5,351 5,149 5,67 5,471 5,27 5,534 Price/Earnings 17.5 15.7 13.6 13.3 2.1 13.2 12.6 Price/Book Value 1.1 1.4 1. 1.2 1.3 1..9 EV/EBIT 11.2 13.3 11.2 13.3 13.2 11.4 1.9 Return on Equity (%) 6.5 9. 7.9 8.2 7.9 7.6 7.5 Dividend Yield (%).9.8 1.3 1.1 1.3 1.9 2.1 28
DNB DNB is Norway's largest financial services group and one of the largest in the Nordic region. The company offers a full range of financial services, including loans, savings, advisory services, insurance and pension products for retail and corporate customers. ------------------------------------------------------------ Net interest margin has increased the last few years, and together with the bank s strong investment bank division (DnB Markets), earnings have grown substantially. Although the bank navigated well through the financial crisis, investors are concerned with Norwegian economy given the deteriorated outlook with oil-related industries. We believe the bank will manage to avoid large loan losses going forward and find the valuation attractive. Performance - last 5 years 25 2 15 1 5 des.9 des.1 des.11 des.12 des.13 des.14 DNB ASA OMX VINX Benchmark Capped TR DNB ASA Financial Conglomerates Market Value (mill.) 18,96 Price 111.1 Price currency NOK Net debt (mill.) 84,879 Reporting currency NOK Enterprise Value (mill.) 985,839 FX rate (NOK) 1. 29 21 211 212 213 214E 215E Sales (mill.) 93,15 93,376 9,515 98,989 98,124 49,739 5,378 EBIT (Operating Income) (mill.) - - - - - 28,946 29,387 Net Income (mill.) 8,55 14,739 12,984 13,561 17,522 2,843 2,427 Price/Earnings 1. 11.8 6.7 8.2 11.3 8.8 8.8 Price/Book Value 1.1 1.6.8.9 1.3 1.1 1. EV/EBIT - - - - - - - Return on Equity (%) 9.7 14. 11.3 11. 13. 12.9 11.9 Dividend Yield (%) 2.1 4.2 4.3 2.9 2.4 3.4 4.5 29
DSV Performance - last 5 years DSV is a leading European freight forwarder and logistics company. DSV Road is one of the three leading logistics providers in Europe. DSV Air & Sea offers logistical services to and from all parts of the world. DSV Solutions is basically supply chain management and logistics solutions. ------------------------------------------------------------- DSV has an asset light strategy, controlling the cargo but outsourcing the actual transportation task rather than having trucks, container ships and aircraft on its own balance sheet. The company has very stable margins due to its flexible cost structure and asset light business model. DSV generates a high free cash flow. DSV s cash allocation and dividend policy is very straight forward; repay interest-bearing debt until it is below target NIBD/EVBITA of < 2.x, invest in value-added acquisitions, she rest goes to share buybacks and dividends. DSV will be able to improve operating profit and EPS growth thanks to a combination of a positive market outlook, a cost-efficient business model and the impact from cost initiatives in Road and Solutions, as well as Air & Sea further market share gains. 3 25 2 15 1 5 des.9 des.1 des.11 des.12 des.13 des.14 DSV A/S DSV A/S OMX VINX Benchmark Capped TR Trucking Market Value (mill.) 33,683 Price 19.3 Price currency DKK Net debt (mill.) 5,949 Reporting currency DKK Enterprise Value (mill.) 39,632 FX rate (NOK) 1.22 29 21 211 212 213 214E 215E Sales (mill.) 36,85 42,562 43,71 44,912 45,71 48,549 5,874 EBIT (Operating Income) (mill.) 1,689 2,164 2,41 2,58 2,496 2,673 2,94 Net Income (mill.) 185 1,184 1,44 1,427 1,577 1,535 1,951 Price/Earnings 522.2 26.6 14.9 2. 2.2 18.4 16.2 Price/Book Value 3.6 4. 3.5 4.9 5.3 5.2 4.8 EV/EBIT 15.4 14.6 11.2 13.3 15.1 14.9 13.5 Return on Equity (%) 4. 19.7 24.3 26.9 27.3 28.1 29.4 Dividend Yield (%).2.4.8.8.8.9 1.
H&M Hennes & Mauritz AB (H&M) designs and retails cheap fashions for women, men, teens, and children. H&M is together with their Spanish competitor Inditex, true global retailers. Inditex has 3 times more shops than H&M This makes H&M s expansion potential far greater. H&M opens one shop every single day, a fantastic opportunity to get further scale and reach. ------------------------------------------------------------ We are not fan of the rapidly changing fashion industry, but find H&M s expansion story attractive. The fashion risk is not what it used to be, as basics and collection turnover are higher. The new generation Persson have made substantial investments in a number of growth initiatives. The new online rollout, new store concepts and better logistics have negatively affected profit and loss accounts and investment budgets. We really like the combination of strong return on capital, a decent valuation, a very solid corporate culture, a true topline story, scale and the payoff to come from high investments over the last few years. All this will make material effect on the fundamental development of the company together with the ongoing cost culture. That s fashion for us! 2 18 16 14 12 1 8 6 4 2 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Hennes & Mauritz AB Class B Hennes & Mauritz AB Class B OMX VINX Benchmark Capped TR Apparel/Footwear Retail Market Value (mill.) 477,64 Price 327. Price currency SEK Net debt (mill.) -17,224 Reporting currency SEK Enterprise Value (mill.) 46,416 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 11,393 18,483 19,999 12,799 128,562 151,96 171,816 EBIT (Operating Income) (mill.) 21,644 24,659 2,379 21,754 22,168 25,824 29,31 Net Income (mill.) 16,384 18,681 15,821 16,867 17,152 19,896 22,622 Price/Earnings 22.3 2.3 22.2 21.1 27.3 27.2 24. Price/Book Value 9.9 1. 9.3 9.3 11.7 1.9 9.7 EV/EBIT 14.7 14.9 16.3 15.6 2. 2.3 17.8 Return on Equity (%) 42.2 44.1 35.8 38.4 38.5 4.2 4.6 Dividend Yield (%) 3.9 3.8 4.4 4.4 3.4 3.1 3.4 31
Huhtamäki Performance - last 5 years Huhtamaki is a global consumer packaging company, with sales to defensive sectors: food, foodservice and personal care. Group reporting is in five divisions: Flexibles, Films, North America, Molded Fiber and Foodservice. -------------------------------------------------------------- Huhtamäki s sales and earnings are broadly diversified in terms of regions, customers and product areas. North America is the largest market at around 3% of sales. Emerging Markets (EM) account for 29% of group revenues, with Asia being 18% of group. EM will likely grow to nearly 4% of group, if the Positive Packaging acquisition is closed and Films is divested. Demand for consumer packaging in developed countries is typically relatively stable, irrespective of macroeconomic cycles. In emerging markets demand is growing fast, creating the potential for organic growth. Profitability and cash generation imply a stable and competitive business model. Huhtamaki also has a good track record of growing by acquisitions. The company targets annual organic growth of at least 5% and an EBIT margin of at least 8% in 215. 32 25 2 15 1 5 des.9 des.1 des.11 des.12 des.13 des.14 Huhtamaki Oyj Huhtamaki Oyj OMX VINX Benchmark Capped TR Containers/Packaging Market Value (mill.) 2,376 Price 22.5 Price currency EUR Net debt (mill.) 452 Reporting currency EUR Enterprise Value (mill.) 2,828 FX rate (NOK) 9.8 29 21 211 212 213 214E 215E Sales (mill.) 2,38 1,952 2,44 2,335 2,342 2,431 2,594 EBIT (Operating Income) (mill.) 112 112 11 141 145 186 214 Net Income (mill.) 71 93 81 124 94 126 152 Price/Earnings - 12.5 9.5 1.6 18.1 17.8 15.2 Price/Book Value 1.5 1.5 1.2 1.5 2.5 2.7 2.4 EV/EBIT 13.1 13.1 12.5 12.2 16.5 15.9 13.1 Return on Equity (%) 11.4 13.4 1.6 15. 11.4 15. 16. Dividend Yield (%) 2.7 3.8 5. 4.4 3. 2.7 3.2
Indutrade Indutrade AB provides engineering and equipment, flow technology, industrial components, and special products. The Company sells its products to industrial companies primarily in Northern Europe. The group consists of some 18 independent subsidiaries in 26 countries over four continents. The foundation of their business model is to acquire many small companies with strong positions in a narrow niche at low prices. ------------------------------------------------------------Indut rade has an impressing track record when it comes to profitable growth. The last 1 years they have had a top-line CAGR of 1.7%, while the average return on equity has been 29% over the same period. We believe the company will continue its profitable growth through a combination of acquisitions and organic growth. We find value in the de-centralized model where benchmarking and best corporate examples are a strong internal driver in the business. 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Indutrade AB Indutrade AB OMX VINX Benchmark Capped TR Industrial Machinery Market Value (mill.) 12,7 Price 317.5 Price currency SEK Net debt (mill.) 2,154 Reporting currency SEK Enterprise Value (mill.) 14,854 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 6,271 6,745 7,994 8,384 8,831 9,773 1,424 EBIT (Operating Income) (mill.) 51 616 82 769 832 975 1,79 Net Income (mill.) 341 47 54 565 587 686 765 Price/Earnings 14.4 22.9 15.5 14.8 18. 15.3 14. Price/Book Value 3.5 5.5 3.8 3.8 4.5 4.2 3.7 EV/EBIT 12.4 17.1 1.6 13.1 15.5 15.5 13.5 Return on Equity (%) 21. 24. 28.4 26. 23.9 27.6 26.3 Dividend Yield (%) 3.6 2.1 3.5 3.5 2.6 2.6 2.9 33
Intrum Justitia Intrum Justitia AB provides credit management services and solutions. The Company offers commercial and consumer debt collection, debt surveillance, international debt collection, purchased debt services, sales ledger administration, and optimization services. Intrum Justitia serves customers worldwide. -------------------------------------------------------------- Intrum Justitia is one of Europe s leading providers of credit management services. The company is riding on the wave of European overdue debt. It has successfully capitalized on market opportunities in recent years. We expect this to continue as the long term market prospects look favorable. In addition, we find the management disciplined and appreciate the fact that they are conservative in bidding for purchase debt portfolios. Their business model differs somewhat to many competitors only focusing on purchased debt since they know clients and portfolios due to their credit management services. We think this is important long term and creates barriers to entry. 3 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Intrum Justitia AB Intrum Justitia AB OMX VINX Benchmark Capped TR Miscellaneous Commercial Services Market Value (mill.) 18,79 Price 233.7 Price currency SEK Net debt (mill.) 4,212 Reporting currency SEK Enterprise Value (mill.) 22,291 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 4,128 3,766 3,95 4,56 4,566 5,154 5,461 EBIT (Operating Income) (mill.) 783 754 91 896 1,22 1,444 1,53 Net Income (mill.) 441 452 551 584 817 998 1,15 Price/Earnings 18.1 17.6 16.8 13.5 19. 17.9 16.9 Price/Book Value 3. 3.3 3.2 2.8 4.7 5.9 5.9 EV/EBIT 11.6 13.7 12.4 12.1 15.4 16.3 15.7 Return on Equity (%) 17.8 17.6 2.5 2. 26.1 32.7 35.1 Dividend Yield (%) 3.2 3.6 4.1 5. 3.1 2.9 3.2 34
Investor AB Investor AB is a holding company, which owns significant interests in Atlas Copco, ABB, SEB and AstraZeenca. Through the Boards of Directors, Investor AB actively work for continuous improvement of the performance of the companies. engages in the investment activities. Its ownership horizon is long term and returns are mainly generated via value appreciation, share redemptions and dividends. The company was founded in 1916 and is headquartered in Stockholm, Sweden. ----------------------------------------------------------- Investor focus on high quality companies with good return on capital, potential to improve longterm profitability and efficiency, and ability to grow. It has proved to be successful in the past and we strongly believe this will be the case in the future as well. Two third of their holdings are listed and one third are unlisted. Through our investment in Investor we get exposure to more of the type of companies we like at a discount and we get access to the exciting unlisted assets, which mainly are, Mölnlycke and EQT. We also see further room for strong value generation from their smaller unlisted assets. 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Investor AB Class B Investor AB Class B OMX VINX Benchmark Capped TR Investment Trusts/Mutual Funds Market Value (mill.) 217,878 Price 285.3 Price currency SEK Net debt (mill.) 29,55 Reporting currency SEK Enterprise Value (mill.) 246,933 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 35,262 36,181 1,898 42,372 61,569 - - EBIT (Operating Income) (mill.) - - - - - - - Net Income (mill.) 31,379 3,713-9,229 24,226 45,165 - - Price/Earnings 9.6 6. - 5. 4. 2. 25.9 Price/Book Value.7.7.7.8.8 1. 1. EV/EBIT - - - - - - - Return on Equity (%) 24.3 19.6-5.7 14.6 23.2 4.8 3.7 Dividend Yield (%) 2.8 3.3 4.5 4. 3.5 3.2 3.5 35
Kone Kone is global no. 3 Elevator and Escalator company with a 19% mkt share in new equipment units and 13% overall mkt share in equipment and services. Services, consisting of maintenance and modernization, make up 5% of sales. New elevators and escalators stand for the remaining 5% of revenue. Kone's top-4 markets in terms of revenue are China, US, France and UK. ------------------------------------------------------- KONE is perfectly positioned to benefit from the megatrends driving the elevator and escalator industry: urbanization, safety, changing demographics and environment. The company runs a capital light business model, which generates strong cash flows. KONE has strong service growth potential after the long spree of elevator deliveries in past years. China Maintenance represents the single largest opportunity for Kone. Its main competitors are Otis, Schindler and ThyssenKrupp. KONE may become no.2 E&E company in 215 as the gap to Schindler has shrunk to basically zero. 3 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Kone Oyj Class B Kone Oyj Class B OMX VINX Benchmark Capped TR Engineering & Construction Market Value (mill.) 16,848 Price 37.59 Price currency EUR Net debt (mill.) -75 Reporting currency EUR Enterprise Value (mill.) 16,98 FX rate (NOK) 9.8 29 21 211 212 213 214E 215E Sales (mill.) 4,744 4,987 5,225 6,277 6,933 7,43 8,49 EBIT (Operating Income) (mill.) 578 651 688 786 898 1,44 1,168 Net Income (mill.) 466 535 644 61 72 792 879 Price/Earnings 16.9 2. 17.9 21.5 23.9 24.5 22.2 Price/Book Value 6.5 7.6 5.9 6.8 9. 9.8 8.4 EV/EBIT 12.3 15.3 13.8 17.3 18. 18. 15.9 Return on Equity (%) 39.2 36.4 35.5 3.7 39.2 4. 38.1 Dividend Yield (%) 3.6 2.4 3.2 3. 3. 3. 3.2 36
Kongsberg Gruppen Kongsberg Gruppen is a global company operating within the oil & gas,- maritime, - and defence sectors worldwide. The company supplies high-technology systems and solutions. The company is well-known for its strong R&D capabilities and has proven asset-light model with strong returns on capital. ------------------------------------------------------------ Kongsberg Gruppen operates in markets with high barriers to entry and has strong niche positions in different product groups. Consequently the company has an outstanding track record in value creation. We think the company will continue its top-line growth based on strong competitive positions built over the last few years. The risk to our investment case is austerity measures on the defence side which we have seen over the last couple of years, and falling capex among oil companies on the offshore/maritime side. Government of Norway is a majority owner. 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Kongsberg Gruppen ASA Kongsberg Gruppen ASA OMX VINX Benchmark Capped TR Aerospace & Defense Market Value (mill.) 14,88 Price 124. Price currency NOK Net debt (mill.) -2,18 Reporting currency NOK Enterprise Value (mill.) 12,772 FX rate (NOK) 1. 29 21 211 212 213 214E 215E Sales (mill.) 13,816 15,497 15,128 15,652 16,323 16,659 17,85 EBIT (Operating Income) (mill.) 1,263 2,113 2,35 1,866 1,659 1,555 1,728 Net Income (mill.) 82 1,495 1,431 1,325 1,228 1,134 1,24 Price/Earnings 15.2 12.6 8.7 1.8 13.2 13.1 11.9 Price/Book Value 3.1 3.7 2.6 2.4 2.4 2.1 1.9 EV/EBIT 7.3 6.3 5.6 7. 8. 7.6 6.6 Return on Equity (%) 29.4 34.9 27.7 22.6 19. 15.8 16. Dividend Yield (%) 3.3 2.5 3.2 3. 3.2 3.6 4. 37
Metso Metso is a global provider of minerals processing solutions for mining and aggregates industries and flow control solutions for oil and gas, mining and pulp & Paper industries. 51% of total sales is service offerings ranging from wear and spare parts, maintenance and repairs to performance services. In 213, Emerging Markets accounted for 56% of orders received. -------------------------------------------------------------- Perception about to change. Metso is still valued as a low quality and volatile company. The de-merger of Valmet and the exit from risky mining projects/big size projects, have changed the risk profile. If the 215 margins continues to improve the market will increasingly start to price Metso on reaching the mid 217 EBITA margin target of >15%. On the negative side are the fact that Mining capex is unlikely to recover any time soon and that quarterly performance fluctuations still are too high. However, high margin Automation (Flow Control) accounting for some 25% of the earnings and high margin stable Service sales more than 5% of total. 38 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Metso Oyj Metso Oyj OMX VINX Benchmark Capped TR Industrial Machinery Market Value (mill.) 3,711 Price 24.68 Price currency EUR Net debt (mill.) 582 Reporting currency EUR Enterprise Value (mill.) 4,293 FX rate (NOK) 9.8 29 21 211 212 213 214E 215E Sales (mill.) 5,16 5,552 6,646 7,54 3,858 3,617 3,57 EBIT (Operating Income) (mill.) 35 385 571 628 439 426 434 Net Income (mill.) 15 257 356 373 238 213 262 Price/Earnings 14.7 3.1 13.8 11.4 18.2 14.5 13.9 Price/Book Value 2.2 3.2 2.2 2.2 2.3 3. 2.8 EV/EBIT 12.2 17.6 8. 8.6 11.9 9.9 9.3 Return on Equity (%) 9.3 13.4 17.1 17.3 14.1 2.7 2. Dividend Yield (%) 2.8 3.2 5.8 5.7 3.9 4.1 4.5
Nokian Nokian manufactures tires in areas with special challenges for tire performance, snow, forest and harsh driving conditions in different seasons. NT is the leading winter tire brand in the world. The tire chain Vianor, operates as a wholesaler and a retailer. ------------------------------------------------------------- With 1/3 of sales and 75% of number of tires produced in Russia, the turmoil in Ukraine/Russia and the weak Russian economy has impacted the company negatively. The company still has an excellent profitability as it is both the price leader in its core markets and the cost leader in the industry thanks to its highly automated production in Russia. The large growth upside in Russia is behind, so now significant focus is on growing central European presence. With top-rated products the brand awareness in central Europe continues to improve, enabling the company to gain shares from its key rivals Continental and Michelin. With a strong balance sheet and production expansion in Russia completed, the company generates a very strong cash flow from operations 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Nokian Renkaat Oyj Nokian Renkaat Oyj OMX VINX Benchmark Capped TR Automotive Aftermarket Market Value (mill.) 2,712 Price 2.32 Price currency EUR Net debt (mill.) -56 Reporting currency EUR Enterprise Value (mill.) 2,656 FX rate (NOK) 9.8 29 21 211 212 213 214E 215E Sales (mill.) 799 1,58 1,457 1,612 1,521 1,384 1,378 EBIT (Operating Income) (mill.) 1 218 379 412 38 39 299 Net Income (mill.) 58 17 39 331 184 214 228 Price/Earnings 113.3 25.4 11.6 11.7 15. 12.6 11.9 Price/Book Value 2.9 4.1 3. 2.9 3.2 1.9 1.9 EV/EBIT 24.7 16.7 8.9 9.9 12.5 8.5 8.6 Return on Equity (%) 7.6 2. 29.1 25.2 13. 15.3 16.1 Dividend Yield (%) 1.9 2. 4.3 4.6 4.2 7.1 7.4 39
Nordea Nordea is a commercial bank created through the merger of Sweden's Nordbanken and Finland's Merita bank in 1997, and the acquisitions of Denmark's Unidanmark in 1999 and Norway's Christiania Bank in 2. Nordea is no.1, no.2 or no.4 in all four Nordic markets, making it the largest bank in the Nordic region. Retail Banking comprises 5% of revenues, Wholesale Banking 25% and Wealth Management 15%. -------------------------------------------------------------- Nordea is the most diversified Nordic Bank. Loan losses are down to the lowest level in over six years, and they are starting to deliver on their ambitious cost savings plan. As capital has reached the target level CET1 15%, dividend will increase with an increasing dividend payout ratio. The payout ratio might increase from 56% in 213 to 67% in 214 and 75% in 216. This translates to a 5.5-7.5%dividend yield. Sampo is the main shareholder with approximately 21,2% of the outstanding shares. 2 18 16 14 12 1 8 6 4 2 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Nordea Bank AB Nordea Bank AB OMX VINX Benchmark Capped TR Regional Banks Market Value (mill.) 368,951 Price 91.1 Price currency SEK Net debt (mill.) 1,841,96 Reporting currency EUR Enterprise Value (mill.) 2,21,47 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 15,472 14,386 16,844 17,279 18,485 1,247 1,228 EBIT (Operating Income) (mill.) - - - - - 4,913 5,473 Net Income (mill.) 2,314 2,657 2,627 3,119 3,17 3,344 3,738 Price/Earnings 1. 12.9 9.2 9.4 12.8 11.3 1.3 Price/Book Value 1.3 1.4.9 1.1 1.4 1.3 1.2 EV/EBIT - - - - - - - Return on Equity (%) 11.6 11.3 1.5 11.5 1.7 11.2 11.8 Dividend Yield (%) 3.2 3.5 4.5 4.4 4.1 5.8 7. 4
Novo Nordisk 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. -------------------------------------------------------------- This strong and sustainable growth in earnings reflects the characteristics of the group s businesses: Strong growth of its markets buoyed by sustainable structural factors, positions as a global leader, strong capital and technological barriers to entry, which have resulted in an oligopolistic market structure, high profitability leading to considerable free cash flow generation. This enables steady returns of cash to shareholders. Obesity is the main growth driver for diabetes prevalence and thereby a very important long-term growth driver for Novo Nordisk. The news flow over the next 12 months should convince the market that Novo Nordisk is strengthening its competitive position in all segments of the diabetes/obesity market. 45 4 35 3 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Novo Nordisk A/S Class B Novo Nordisk A/S Class B OMX VINX Benchmark Capped TR Pharmaceuticals: Major Market Value (mill.) 556,449 Price 263.4 Price currency DKK Net debt (mill.) -15,775 Reporting currency DKK Enterprise Value (mill.) 54,674 FX rate (NOK) 1.22 29 21 211 212 213 214E 215E Sales (mill.) 51,78 6,776 66,346 78,26 83,572 88,54 98,439 EBIT (Operating Income) (mill.) 14,839 18,32 22,56 28,837 3,84 33,952 38,855 Net Income (mill.) 1,768 14,43 17,97 21,432 25,184 26,154 29,769 Price/Earnings 18.6 28.7 23. 24.9 21.6 26.5 22.9 Price/Book Value 5.6 11. 1.8 14.4 14. 16.4 15.3 EV/EBIT 12.7 19.3 16.4 17. 16.9 2.3 17.8 Return on Equity (%) 31.3 39.6 46. 54.9 6.5 61.9 66.8 Dividend Yield (%) 2.1 1.5 2. 1.9 2.2 1.8 2. 41
Protector Protector Forsikring provides land-based insurance for companies and public entities, and distributes products through selected insurance brokers. In the Norwegian market, Protector Forsikring also sell ownership insurance via estate agents and lawyers who have an agreement with Protector. With a significant market share in Norwegian brokered non-life, the company entered into Sweden in 211 and Denmark in 212. ------------------------------------------------------------ Protector Forsikring has experience strong Gross Written Premium (GWP) growth over the last years (5Y CAGR of 23%) and we expect to see significant growth potential in Scandinavia. There is a potential for the company to further export its business concept from the Norwegian market, with low costs and utilization of its broker network and municipal procurement standards. Management has a long term Combined Ratio (CR) target of 91%, which is lower than most of its competitors. We find the valuation of Protector Forsikring attractive with strong top-line growth over the next 3 years and dividend yields of around 5%. 5 45 4 35 3 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Protector Forsikring ASA Protector Forsikring ASA OMX VINX Benchmark Capped TR Multi-Line Insurance Market Value (mill.) 3,43 Price 39.5 Price currency NOK Net debt (mill.) -5 Reporting currency NOK Enterprise Value (mill.) 3,398 FX rate (NOK) 1. 29 21 211 212 213 214E 215E Sales (mill.) 888 879 987 1,315 1,541 2,381 2,774 EBIT (Operating Income) (mill.) - - - - - 445 481 Net Income (mill.) 193 142-8 199 287 293 323 Price/Earnings 11.3 6.6-4. 9.1 11.2 9.9 Price/Book Value 1.7 1.8 2.2 1.8 2.3 3.6 2.9 EV/EBIT - - - - - 8.2 7.4 Return on Equity (%) 42.1 24.6-1.6 41.1 42.2 32. 29.7 Dividend Yield (%) 1.8 12.2 3.5 6.7 8.4 4.4 5. 42
Sampo Sampo is the leading pan-nordic non-life insurance company through its subsidiary, If P&C, and a leading life insurer in Finland through Mandatum Life. After selling its banking operations to Danske Bank in early 27, Sampo has been using the proceeds to acquire stakes in Nordea and Topdanmark. As Sampo now holds approx. 21,2% of Nordea and 27% of Topdanmark, their results are included in Sampo's P&L as associated companies. -----------------------------------------------------------Samp o is geographically and operationally the most diversified financial institution in the Nordics The management have full ownership to the company structure as they have established it. The shares still have long-term attractions as Sampo s operations are stable with strong cash flows, visibility is good and the dividend story looks stronger than ever in light of the group s strong capital position. Earnings momentum might become negative in non-life insurance as combined ratios are no longer decreasing and investment income falling due to lower reinvestment yields. 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Sampo Oyj Class A Sampo Oyj Class A OMX VINX Benchmark Capped TR Property/Casualty Insurance Market Value (mill.) 21,883 Price 39.16 Price currency EUR Net debt (mill.) 1,43 Reporting currency EUR Enterprise Value (mill.) 23,313 FX rate (NOK) 9.8 29 21 211 212 213 214E 215E Sales (mill.) 5,371 6,316 5,534 6,475 6,522 4,497 4,57 EBIT (Operating Income) (mill.) - - - - - 1,76 1,64 Net Income (mill.) 641 1,14 1,38 1,44 1,452 1,531 1,571 Price/Earnings 14.8 11.9 1.1 1.6 13.7 14.4 14. Price/Book Value 1.2 1.3 1.3 1.4 1.9 2. 1.9 EV/EBIT - - - - - 13.8 14.8 Return on Equity (%) 1.5 13.4 11.7 14.8 14. 13.6 13.3 Dividend Yield (%).6 4.4 6.2 5.4 4.4 4.8 5.3 43
Securitas Securitas AB provides a wide range of security services, from mobile patrols, access control, fire prevention, receptionist and concierge, monitoring and call-out services to specialized, site specific duties. The company was founded by Erik Philip-Sörensen in 1934 and is headquartered in Stockholm, Sweden. ------------------------------------------------------------ Securitas is the European and the North American leader in guarding services. The company has a good track record when it comes to return on equity. We believe Securitas will start to grow organically going forward as they are the market leader in a security market with favourable growth prospects. Technology based security is the main reason for this and is also a focus area for Securitas. Margins are likely to improve as technology share of revenue is increasing. Securitas has over time showed a stable business and top line development. Together with a low valuation they also offer a solid dividend yield. 2 18 16 14 12 1 8 6 4 2 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Securitas AB Class B Securitas AB Class B OMX VINX Benchmark Capped TR Miscellaneous Commercial Services Market Value (mill.) 32,6 Price 93.7 Price currency SEK Net debt (mill.) 9,72 Reporting currency SEK Enterprise Value (mill.) 42,32 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 62,667 61,34 64,57 66,458 65,7 69,572 75,173 EBIT (Operating Income) (mill.) 3,611 3,548 3,95 2,798 3,37 3,198 3,529 Net Income (mill.) 2,116 2,83 1,736 1,21 1,853 1,999 2,25 Price/Earnings 12. 13.6 11.8 12.9 17.4 15.5 14.3 Price/Book Value 3.2 3.5 2.4 2.5 2.9 3.3 3. EV/EBIT 9.5 1.5 1.4 11. 11.4 13.7 12.3 Return on Equity (%) 24.4 23.5 19.1 13.5 2.6 21.5 21.1 Dividend Yield (%) 4.2 3.8 5.1 5.3 4.4 3.2 3.4 44
SpareBank 1 SMN SpareBank 1 SMN is the leading financial institution in the Mid-Norway region, and one of six members of SpareBank 1 Alliansen. 25 2 Performance - last 5 years As the leading savings bank in the region, the company offers all services, including investment banking. ----------------------------------------------------------- The bank has historically shown a healthy growth and solid return on equity based on good operations and limited loan losses. The last years, interest margin has widened from low levels after the financial crisis, enabling the bank to show a rapid earnings growth. Pricing of the bank is low despite a solid core capital position and decent prospects. 15 1 5 des.9 des.1 des.11 des.12 des.13 des.14 SpareBank 1 SMN OMX VINX Benchmark Capped TR SpareBank 1 SMN Regional Banks Market Value (mill.) 7,693 Price 59.25 Price currency NOK Net debt (mill.) 38,652 Reporting currency NOK Enterprise Value (mill.) 46,345 FX rate (NOK) 1. 29 21 211 212 213 214E 215E Sales (mill.) 4,32 4,329 4,875 5,191 5,817 4,21 3,855 EBIT (Operating Income) (mill.) - - - - - 2,185 2,57 Net Income (mill.) 931 1,17 1,16 1,52 1,36 1,758 1,543 Price/Earnings 3.7 4.8 3.5 3.6 6.8 7.2 7.5 Price/Book Value.6.7.5.5.7.9.9 EV/EBIT - - - - - - - Return on Equity (%) 16. 14.6 12.7 11.6 12.9 12.8 11.3 Dividend Yield (%) 4.7 5.3 5.7 4.5 3.1 4. 3.9 45
Subsea 7 Subsea 7 is one of the world s leading global contractors in seabed-to-surface engineering, construction and services to the oil industry. The company provides technical solutions to enable the delivery of complex projects in all water depths and challenging environments. ------------------------------------------------------------ The subsea construction market is characterized by few players and a high number of complex projects. Order intake is therefor lumpy and the industry is typically late cyclical. Current order backlog is strong for execution the next couple of years. Oil companies are reducing E&P spending by postponing projects and there are currently few tenders in the market. Historically, earnings and return on capital have been decent, but is dependent on good project execution. Recent sharp price drop has made valuation attractive. Subsea 7 is paying dividends and is buying back own shares. 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Subsea 7 S.A. Subsea 7 S.A. OMX VINX Benchmark Capped TR Oilfield Services/Equipment Market Value (mill.) 25,66 Price 77.25 Price currency NOK Net debt (mill.) 1,216 Reporting currency USD Enterprise Value (mill.) 26,876 FX rate (NOK) 1. 29 21 211 212 213 214E 215E Sales (mill.) 2,29 2,369 5,55 6,297 6,297 7,91 5,972 EBIT (Operating Income) (mill.) 38 392 559 756 572 1,13 735 Net Income (mill.) 238 221 391 83 348 742 519 Price/Earnings 3.9 16.8 12.2 9.5 16.3 4.9 6.9 Price/Book Value 2.6 3.5 1.1 1.3 1..5.5 EV/EBIT 7.3 1.8 13.1 11.6 13.3 3.6 5.2 Return on Equity (%) 26.3 19.7 1.4 13.9 5.4 1. 6.7 Dividend Yield (%) 1.9.3... 5.9 5.9 46
Svenska Cellulosa (SCA) Svenska Cellulosa AB (SCA) is a global hygiene and forest company that develops and produces personal care products, tissue and forest products. The Company sells its branded products globally. Libero, Lotus, Tena, Libresse and Tork are the most known brands. ------------------------------------------------------- SCA has one of the most stable business model in our portfolio. The main part of their products generating recurring revenues and have a less cyclical nature. SCA has been a transformation story over the last years. We think it has much further to run. Structural improvements in tissue combined with SCA s leading positions in personal care will support cost savings retention. A never ending discussion about disposals of forest and forest products could turn differently with a new chairman of the board in the future. A different structure of the group could visualize the high return on capital in the rest of the business (8%). SCA is Europe s largest private forest owner and we think the real value of the assets is much higher than the book value. 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 SCA Class B Svenska Cellulosa Aktiebolaget Class B OMX VINX Benchmark Capped TR Household/Personal Care Market Value (mill.) 118,556 Price 168.2 Price currency SEK Net debt (mill.) 34,413 Reporting currency SEK Enterprise Value (mill.) 152,969 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 11,857 19,142 81,337 85,48 89,19 13,318 17,9 EBIT (Operating Income) (mill.) 8,755 8,747 7,655 8,487 9,48 11,649 12,591 Net Income (mill.) 4,765 5,552-352 4,453 5,547 7,126 8,146 Price/Earnings 13.5 14.7 12.7 18.8 24. 15.8 14.3 Price/Book Value 1. 1.2 1.1 1.7 2.3 1.8 1.6 EV/EBIT 12.2 12.5 13.9 15.4 18.6 12.9 11.6 Return on Equity (%) 7.1 8.3 -.5 7.4 9. 11.1 11.5 Dividend Yield (%) 3.5 3.7 4.1 3.1 2.4 3. 3.3 47
Svenska Handelsbanken Svenska Handelsbanken AB 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. Svenska Handelsbanken operates in Europe, Asia, and the United States. ------------------------------------------------------- No other Nordic bank can show the same history of low loan losses as Handelsbanken. We are impressed by the de-centralized 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 the bank will outgrow the rest of the banks in the coming years. All employees are major shareholders due to the pension system «Oktogonen». We think this gives the bank much better culture and incentives than other banks. 2 18 16 14 12 1 8 6 4 2 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Svenska Handelsbanken AB Class A Svenska Handelsbanken AB Class A OMX VINX Benchmark Capped TR Regional Banks Market Value (mill.) 233,9 Price 366.9 Price currency SEK Net debt (mill.) 1,11,4 Reporting currency SEK Enterprise Value (mill.) 1,244,13 FX rate (NOK).96 29 21 211 212 213 214E 215E Sales (mill.) 69,414 61,91 69,541 73,55 66,42 38,468 4,182 EBIT (Operating Income) (mill.) - - - - - 2,992 22,13 Net Income (mill.) 1,28 1,88 12,164 14,525 14,173 15,542 16,196 Price/Earnings 1.4 12.6 9.3 11.2 13.1 15.1 14.4 Price/Book Value 1.6 1.6 1.2 1.5 1.9 1.9 1.9 EV/EBIT - - - - - - - Return on Equity (%) 12.9 12.6 13.3 14.4 13. 12.9 13. Dividend Yield (%) 3.8 4.1 5.3 4.5 3.6 4.6 4.7 48
Telenor Telenor is a global leading telecom operator, with operations in 13 countries in Europe and Asia. 25 Performance - last 5 years The company is mainly focused on mobile operations, but also offers fixed line telephony in Norway, Sweden and Denmark as well as owning a broadcasting business in Norway. ---------------------------------------------------- Telecom operators face challenges in mature markets through price competition and pressure on networks. Telenor does however have substantial part of its operations in emerging markets such as India, Bangladesh and Pakistan, which still offers great potential through increased penetration and data usage. Telenor, with top 3 positions in all markets (except India), should therefore be able to grow earnings going forward. 2 15 1 5 des.9 des.1 des.11 des.12 des.13 des.14 Telenor ASA OMX VINX Benchmark Capped TR Telenor ASA Major Telecommunications Market Value (mill.) 228,522 Price 152.2 Price currency NOK Net debt (mill.) 45,287 Reporting currency NOK Enterprise Value (mill.) 273,89 FX rate (NOK) 1. 29 21 211 212 213 214E 215E Sales (mill.) 97,65 94,843 98,516 11,718 14,27 19,84 114,853 EBIT (Operating Income) (mill.) 16,372 13,86 15,217 17,662 21,537 25,32 25,642 Net Income (mill.) 9,63 14,749 7,165 1,67 8,748 12,2 15,916 Price/Earnings 15.9 1.7 13.3 47.9 15.3 19. 14.7 Price/Book Value 1.8 1.8 1.8 2.4 2.9 3. 2.9 EV/EBIT 1.4 14.1 11.8 12.4 12.5 1.7 1.6 Return on Equity (%) 11.6 18. 8.3 12.7 11.9 16. 19.7 Dividend Yield (%) 2.3 3.7 4.8 5.1 4.7 5.2 5.6 49
Yara Yara is a leading global fertilizer company. The company has operations in more than 5 countries and offers the most comprehensive range of fertilizers in the industry, including ammonia, nitrates, NPK and specialty fertilizers. ------------------------------------------------------- Fertilizers are important for optimizing agricultural production. Demand for fertilizers is increasing annually by approximately 2%, twice the worlds population growth. Yara s earnings will increase as a result lower gas prices in most parts of the world, enabling lower costs. There are many moving parts determining Yara s earnings, such as weather, gas prices, fertilizer prices, Chinese tax regime, nitrate premiums etc. However, historically the company has navigated impressively in this market. Valuation is considered to be attractive. 25 2 15 1 5 Performance - last 5 years des.9 des.1 des.11 des.12 des.13 des.14 Yara International ASA Yara International ASA OMX VINX Benchmark Capped TR Chemicals: Agricultural Market Value (mill.) 93,337 Price 337.9 Price currency NOK Net debt (mill.) 3,379 Reporting currency NOK Enterprise Value (mill.) 96,716 FX rate (NOK) 1. 29 21 211 212 213 214E 215E Sales (mill.) 6,867 64,6 77,726 83,997 84,668 92,29 96,56 EBIT (Operating Income) (mill.) 1,122 5,989 1,714 1,945 8,126 1,581 1,444 Net Income (mill.) 3,782 8,729 12,66 1,62 5,748 7,679 7,578 Price/Earnings 299.7 11.3 6.7 6.6 9.3 12. 12.5 Price/Book Value 2.7 2.9 1.7 1.6 1.4 1.6 1.5 EV/EBIT 82.6 17.9 7. 7.3 9.6 9.6 9.6 Return on Equity (%) 12.9 27.3 3.2 22.9 11.2 13.3 11.8 Dividend Yield (%) 1.7 1.6 2.8 4.2 4.1 3.2 3.2 5
Investment Objective Long term value creation We prefer performing companies, with strong long term prospects, available at favourable prices
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» Unknown
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