ODIN Europa. Årskommentar 2017

Transkript

1 ODIN Europa Årskommentar 2017

2 Fondets portefølje

3 Avkastning ODIN Europa A - desember 2017 Avkastning siste måned og hittil i år Fondet leverte siste måned en avkastning på 0,1 prosent. Referanseindeksens avkastning var 0,4 prosent. Hittil i år er fondets avkastning 27,3 prosent. Referanseindeksens avkastning er 19,4 prosent hittil i år. Kjøp og salg siste måned og hittil i år Siste måned har vi tatt inn to nye selskaper i fondet. Franske Lectra og britiske Reckitt Benckiser. Hittil i år er de største endringene kjøp av ING Group, Close Brothers og Reckitt Benckiser, samt salget av Berendsen. Bidragsytere siste måned og hittil i år De beste bidragsyterne siste måned var Fresenius og Kerry Group. De svakeste bidragsytere siste måned var Ams og Wood Group. De beste bidragsyterne i 2017 var Unilever og Ams. De svakeste bidragsyterne i 2017 var Berendsen og Dignity. * Avkastning for fondsklassene B og C fremkommer av egen tabell.

4 Prising av ODIN Europa - desember 2017 Prising av fondet Fondet prises til 16,6 ganger neste 12 måneders resultater. Fondet gir en forventet direkteavkastning på 2,5 prosent. Målt mot bokført egenkapital prises fondet til 3,5 ganger. Selskapene i fondet har en gjennomsnittlig egenkapitalavkastning på 19,3 prosent. Prising av det europeiske aksjemarkedet - MSCI Europe net Index USD Markedet prises til 14,9 ganger neste 12 måneders resultater. Markedet gir en direkteavkastning på 3,6 prosent. Målt mot bokført egenkapital prises markedet til 1,9 ganger. Selskapene i MSCI Europe net Index USD har en gjennomsnittlig egenkapitalavkastning på 12,2 prosent. Makroøkonomi OECDs ledende indikatorer indikerer nå at den økonomiske aktiviteten i områdene vokser noe over trend, og at veksten er i en ekspansjonsfase.

5 ODIN Europa 2017 Året oppsummert ODIN Europa leverte sterk avkastning i 2017 absolutt og relativt til det europeiske aksjemarkedet. Fondet endte opp med 27,3 prosent, 7,9 prosent foran indeksen. Dette er godt i overkant av hva man kan forvente i avkastning over tid. Vi vet at avkastning kommer stykkevis og delt. Flere av selskapene som hadde sterkest kursutvikling i 2017 har opplevd motvind de siste årene. Tålmodighet har betalt seg. Vi har vært investert i få tapere og hatt godt bidrag til avkastning fra flere selskaper på tvers av sektorer. Avkastning drives av verdiskaping i fondets selskaper (resultatøkning + utbytte), reprising og valuta. Vårt fokus ligger på selskapenes verdiskaping. Denne har også i 2017 vært god. Gjennom 2017 steg selskapenes resultater med drøyt 10 prosent, målt i lokal valuta 1. Vi mottok rundt 2,5 prosent i utbytte. I tillegg har vi hatt positivt bidrag i form av reprising av selskapenes aksjer og valutabevegelser ble året hvor den økonomiske veksten i Europa fikk ordentlig fotfeste. Etter flere år med fallende eller svak vekst endte veksten for året på sterke 2,5 prosent, godt over trendveksten. Fremtidstroen er tilbake. Investeringsviljen blant selskapene og kjøpelysten blant konsumentene er blant de sterkeste driverne. I tillegg har eksportbedriftene fått god drahjelp av global vekst og handel som tok seg opp gjennom andre halvår. Arbeidsledigheten er fortsatt høy i mange land, men fallende. Fortsatt er det ledig kapasitet i økonomien. Sentralbanken vil etter hvert kutte i pengetrykkingen, men inflasjonen og rentene ventes å holde seg lave. Da vi gikk inn i året var mange forsiktige med å investere i europeiske aksjer. Den politiske usikkerheten var stor og populistene var på fremmarsj. Dette har endret seg betydelig. Ytre høyre har mistet moment og moderate politiske krefter har slått tilbake. Valget i Nederland gikk ikke den høyrepopulistiske Wilders sin vei. I Frankrike ble Marine Le Penn slått av den liberale og EU-vennlige Macron. Redusert politisk usikkerhet, god økonomisk vekst, lav inflasjon og ekspansiv pengepolitikk er en god cocktail for aksjemarkedet. Aksjer ble derfor priset opp i På tross av dette kan vi ikke påstå at euforien har inntatt det europeiske aksjemarkedet. Når vi går inn i 2018 er fortsatt de langsiktige vekst- og renteforventingene som ligger priset inn i aksjer edruelige etter vårt skjønn. 1. Factset Estimates

6 ODIN Europa 2017 Bidragsytere - fundamentalt Når vi skal vurdere utviklingene i selskapene vi eier, så er det ikke aksjekursutviklingen vi først og fremst er opptatt av. Vi vet at i det korte bilde er det ikke alltid samsvar mellom underliggende utvikling og aksjeavkastning. I det lange løp, derimot, vil selskaper som drives godt bli premiert med god aksjekursutvikling. De to selskapene som vi mener har utviklet seg best i 2017 er franske Teleperformance og britisk-hollandske Unilever. Teleperformance leverer kundeserviceløsninger, teknisk support, back-office og it-løsninger i over 160 markeder, over 70 land og på over 250 forskjellige språk. Selskapet har nå vokst med over 5 prosent (organisk eks. valutaeffekter) hvert kvartal de siste 24 kvartalene. Selskapet drar nytte av en sterk underliggende trend outsourcing av kundeserviceløsninger. I tillegg greier selskapet og opprettholde en lønnsomhet som ligger godt over konkurrentene. På toppen gjør selskapet verdiøkende oppkjøp. Vårt møte med ledelsen mot slutten av året forsterket vårt solide inntrykk av selskapet og dets utsikter. Krafts oppkjøpsforsøk av Unilever i mars, en av fondets store posisjoner, kom overraskende på både oss og resten av markedet. Unilever eier kjente merkevarer som Dove, Knorr, Lipton og Magnum iskrem. Budet ble kontant avslått av Unilevers ledelse, som mente verken strategisk eller finansielt rasjonale var på plass. Videre mente ledelsen at prisen på 50 dollar pr aksje undervurderer den fundamentale verdien av selskapet. Vi støttet dette synet. Prisen reflekterte ikke selskapets evne til å skape verdier over tid. Kraft valgte å trekke budet to dager etter offentliggjøringen. Unilever har i ettertid tatt grep for å akselerere verdiskapingen for sine aksjonærer. I tillegg til tilbakekjøpsprogram og kostnadskutt, har de har solgt unna sin virksomhet innen margarin- og smørprodukter og gjennomført en rekke mindre oppkjøp som posisjonerer selskapet for høyere vekst og lønnsomhet.

7 ODIN Europa 2017 Bidragsytere - kursutvikling Ser vi på kursutviklingen relativt til markedet, så skyldes meravkastningen selskapsvalg i større grad en sektoreksponering. De selskapene som skiller seg ut er østerrikske Ams på den positive siden og britiske Dignity på den negative siden. Ams produserer sensorer og sensorløsninger til en rekke sluttprodukter og applikasjoner innen konsum, helse, bil og generell industri. Behovet for avanserte sensorer er stadig økende med sterke underliggende trender som for eksempel «Internet-of-things» og selvkjørende biler. AMS har gjennom oppkjøp og intern vekst tatt en ledende posisjon i markedet for sensorer gjennom de siste årene. I 2017 har etterspørselen fra kundene tatt seg opp. Selskapets nye 3D-sensorer blir etter alle solemerker å finne i flere smarttelefoner i tillegg til Iphone X. Vekstutsiktene har tatt seg betydelig opp og kursutviklingen har vært enorm. Vi har mer enn halvert vår posisjon i selskapet grunnet kursutviklingen. Aksjekursen i det britiske krematorie- og begravelsesbyrået Dignity har vært under press dette året. Underliggende resultatutvikling har vært god. Omsetningen er opp med 6 prosent og driftsmarginen har holdt seg på sterke 32 prosent 1. Investorer, derimot, har i økende grad bekymret seg for tiltagende konkurranse fra nettaktører. Trusselen er reel, da flere aktører på nett muligens vil gjøre kundene mer prisbevisste. Historisk har pris vært en faktor av mindre betydning når man har valgt begravelsesbyrå. Vi tror fortsatt at nærhet, omdømme og kunderelasjon vil være de viktigste faktorene. Her scorer Dignity svært godt. Selskapet vil trappe opp sin online-satsting, et område hvor de har hengt litt etter. Selskapet er relativt lite, med en markedsverdi på 850 millioner, og likviditeten i aksjen er derfor begrenset. Dette kan ha bidratt til store kursbevegelser i Vi merker oss at interessen fra fond som benytter «shorting» også har tiltatt. Vi velger å løfte blikket. Den langsiktige demografiske trenden er god. Muligheten for å fortsette og gjennomføre verdiøkende oppkjøp av konkurrenter er åpenbar. Selskapet var et av fondets minste posisjoner før kursfallet. Kursreaksjonen står ikke i samsvar med fundamentale forhold etter vår mening. Vi har derfor valgt å benytte muligheten til å øke posisjonen. 1. Factset Estimates

8 ODIN Europa 2017 Endringer i porteføljen Vi tror at en av nøklene til god langsiktig avkastning er tålmodighet og begrenset handel. For 2017 var omløpshastigheten for fondet 0,15. Det betyr at 15 prosent av fondet er endret gjennom året, justert for tegning- og innløsning. Den største endringen er at vi har begynt å kjøpe oss opp i noen utvalgte banker. Vi erkjenner at det er drivere i europeisk bank som det er fornuftig å ha en viss eksponering mot gjennom et diversifisert fond. Vi har fortsatt vesentlig mindre bankeksponering enn markedet for øvrig, og venter at dette også vil være tilfellet fremover. Vi mener solide inngangsbarrierer er nøkkelen til god og varig verdiskaping innen alle bransjer. Inngangsbarrierene innen tradisjonell banknæring er truet. Økt transparens rundt priser og digitalisering gjør det lettere å sette opp konkurrerende virksomhet. Prispresset og konkurransen vil øke med tiden. Vi har derfor vært opptatt av å finne banker som evner å bygge inngangsbarrierer i en bransje hvor de tradisjonelle barrierene står for fall. Vi har søkt selskapskulturer preget av innovasjon, et sterkt fokus på kunderelasjoner og et risikofokus som er sterkere enn vekstambisjonene. Nederlandske ING Group, britiske Close Brothers og svenske Handelsbanken er nye i fondet dette halvåret og utgjør samlet 6 prosent investerte midler. Mot slutten av året begynte vi å bygge en posisjon i det defensive britiske konsumselskapet Reckitt Benckiser, et selskap vi har hatt på vår kandidatliste i lengre tid. Selskapet eier merkevarer innen helseprodukter og vaskemidler Durex, Vanish, Scholl, Strepsils og Clearasil, for å nevne noen. Reckitt Benckiser er muligens det best drevne europeiske selskapet i industrien. Dette har historisk vært gjenspeilet i aksjekursen. Dette er, etter vårt skjønn ikke tilfellet nå har vært et utfordrende år for selskapet og de har opplevd motvind på flere fronter. De fleste utfordringene tror vi er av forbigående karakter. Vi ser derfor den svake kursutviklingen og markedets kortsiktige fokus som en mulighet til å kjøpe et svært solid selskap med gode langsiktige vekstmuligheter til en attraktiv pris.

9 ODIN Europa 2017 Endringer i porteføljen Vi har også kjøpt en mindre posisjon i det franske selskapet Lectra. Selskapet er relativt lite ( 800m), men er markedslederen i svært attraktive nisjer innenfor bilmøbel- og tekstilindustrien. Tjenestene omfatter designog produksjonsprogramvare, samt produksjonsutstyr og vedlikehold av disse. Vi ser svært gode vekstutsikter for selskapet. Automatisering av tekstilindustrien i Kina, økt bruk av lær (som krever systemer som optimerer råvarebruken), økt personalisering innen klesindustrien og oppgradering av systemer for produksjon av airbager vil sørge for salgsvekst på nærmere 10 prosent i årene som kommer. Selskapet er gjeldfritt og kontantstrømmen er sterk. Selskapet vil sysselsette kapital gjennom oppkjøp i årene som kommer. I tillegg vil overgangen til annen inntektsmodell for programvaren (Software-as-a-Service) gjøre selskapets inntekter mer forutsigbare og lønnsomme på sikt. Vi har etter møter med selskapet i høst fått et svært godt inntrykk av kulturen, entreprenørånden og lidenskapen som bor i selskapet.

10 ODIN Europa 2017 Utsikter og strategi Vi går inn i 2018 med et positivt syn på den underliggende økonomiske utviklingen i Europa. Veksten som tok seg opp i 2017 er bredt fundert. Selv om den europeiske sentralbanken vil trappe ned pengetrykkingen så er det mye som tyder på at veksten vi nå ser er robust. OECDs ledende indikatorer indikerer at den økonomiske aktiviteten er i en ekspansjonsfase og at veksten vil bli noe over trend. Aksjemarkedet har kommet godt opp siden eurokrisen i Brorparten av oppgangen er drevet av at aksjer har blitt repriset. Vi går trolig inn i en periode hvor en videre oppgang vil drives av resultatøkning i selskapene. Europeiske aksjer er generelt edruelig priset gitt dagens rentenivå og sammenlignet med andre modne markeder. Største risikofaktorer vil være som i 2017 av politisk karakter. Resultat av Brexitforhandlingene, uavhengighetskampen i Catalonia, EU-samarbeidet og forholdet mellom USA og Nord-Korea er tema som kan påvirke markedene negativt i Slike utfall skaper gjerne kjøpsmuligheter i aksjemarkedet, som vi vil utnytte. Forventningene i markedet hva gjelder resultatvekst i fondets selskaper ligger på prosent for Usikkerhetene i slike estimater er høy. Vi venter at utbytte fra selskapene relativt til selskapenes størrelse vil ligge på samme nivå som i 2017, det vil si 2-3 prosent. Vi vet lite om hvordan økonomien og aksjemarkedet beveger seg på kort sikt. Vi forsøker ikke å time markedet, men vil opprettholde en portefølje som er bredt sammensatt med tanke på eksponering mot ulike produkter, tjenester, sluttmarkeder og kundegrupper. Vi har relativ høy eksponering mot sykliske konsumvarer, som trolig vil gjøre det godt i en høykonjunktur. Omtrent halvparten av fondet er investert i relativt defensive forretningsmodeller. Vi er investert i selskaper som er godt posisjonert i markeder som etter alle solemerker vil fortsette å vokse. En aldrende europeisk befolkning, krav til reduksjon av klimagasser, stadig økende datamengder, bankregulering, outsourcing, samt en fremvoksende middelklasse i Asia vil trolig være sterke og forutsigbare vekstdrivere i mange år fremover. Vi er også investert i flere selskaper med dominerende posisjoner i fragmenterte markeder, som kan supplere topplinjen med verdiøkende oppkjøp. ODIN Europa er investert i selskap av høy kvalitet, hva gjelder drift, balanse og ledelse. Selskaper som evner å sysselsette ny kapital til en avkastning som er betydelig høyere en avkastningskravet. Disse selskapenes verdiskaping mener vi vil gjenspeile seg i stigende aksjekurser over tid.

11 Nøkkeltall og nyheter fra porteføljen - presentert på engelsk

12 Return Last 5 years % (NOK) - ODIN Europa A ODIN Europa A Index Historical Return % (NOK)* Last Month YTD 1 Y 3 Y 5 Y 10 Y Since inception ODIN Europa A 0,09 27,28 27,64 11,45 17,82 7,21 5,23 Benchmark 0,36 19,38 19,63 9,82 15,91 5,56 4,34 * Returns for periods exceeding 12 months are annualized Excess Return -0,27 7,91 8,01 1,63 1,91 1,66 0,89 ** 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.

13 Annual returns last 10 years - ODIN Europa A

14 Up or down In or out ODIN Europa Significant Portfolio changes year to DATE 2 Number of changes in portfolio year to date Buy Sell Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q ING Group Handelsbanken Berendsen Close Brothers Lectra Reckitt B. Publicis Ams Arrow Global Dignity Close Brothers Howden J. Fresenius Unilever Ams Kerry Group Dignity SEB Prysmian Richemont Hugo Boss Diageo

15 Pricing of the fund Company Weight Country Industry P/E (LTM)* P/E (NTM)* DivYield (LTM) DivYield (NTM) P/B ROE Bureau Veritas SA 4,9% France Professional Services 24,9 23,2 2,4 2,6 8,0 32,0 SAP SE 4,9% Germany Software 22,3 21,1 1,4 1,6 4,2 18,9 Continental AG 4,6% Germany Auto Components 14,3 12,7 2,1 2,3 2,7 19,1 Henkel AG & Co. KGaA 4,6% Germany Household Products 17,1 16,2 1,8 1,9 2,6 15,3 Roche Holding Ltd Genusssch. 4,2% Switzerland Pharmaceuticals 15,9 15,2 3,5 3,6 7,6 47,5 Teleperformance SE 4,1% France Professional Services 20,2 18,3 1,3 1,5 3,3 16,2 Bunzl plc 4,0% United Kingdom Trading Companies & Distributors 18,3 17,4 2,2 2,3 4,7 25,8 SEB SA 3,8% France Household Durables 19,3 17,1 1,4 1,6 3,9 20,4 Fresenius SE & Co. KGaA 3,8% Germany Health Care Providers & Services 19,5 18,1 1,1 1,2 2,6 13,2 IMCD N.V. 3,6% Netherlands Trading Companies & Distributors 24,0 21,6 1,2 1,3 3,6 14,8 Topp 10 42,7% 19,0 17,6 1,9 2,0 3,8 19,7 ODIN Europa 18,4 16,6 2,3 2,5 3,5 19,3 * NTM = Next 12 months LTM = Last 12 months Adjusted earnings and fully diltuted number of shares

16 Sector allocation - GICS Sectors

17 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

18 Current holdings

19 Share price performance*, year to date (NOK) (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.

20 Contribution, year to date (NOK)

21 Risk Statistics (3 Years), NOK Portfolio Index Active share 0,90 Sharpe ratio 1) 0,69 Standard Deviation 2) 13,93 0,77 12,38 Portfolio Alpha 0,06 Beta 1,01 Tracking error 6,20 Information ratio 0,02 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

22 Macro and Market

23 Pricing - European Equities (MSCI Europe)

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

25 The International Monetary Fund (IMF) Economic growth forecast

26 Historical Return - All fund classes (NOK) Last Month YTD 1 Y 3 Y 5 Y 10 Y Since inception ODIN Europa A 0,09 27,28 27,64 11,45 17,82 7,21 5,23 ODIN Europa B 0,08 27,03 27,37 11,18 17,53 6,95 4,97 ODIN Europa C 0,00 25,74 26,08 10,08 16,38 5,89 3,93 Benchmark 0,36 19,38 19,63 9,82 15,91 5,56 4,34 * Returns for periods exceeding 12 months are annualized Annual returns last 10 years - All fund classes (NOK) ODIN Europa A , , , , , , , , , ,58 ODIN Europa B 27,03-8,90 19,48 15,14 40,98 23,93-14,85 14,42 24,12-41,73 ODIN Europa C 25,74-9,80 18,31 13,98 39,64 22,77-15,76 13,29 22,91-42,30 Benchmark 19,38-2,48 14,80 14,83 36,38 11,17-9,63 5,98 11,25-30,67

27 ODIN Europa - 29/12/2017 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 , ,6 Dignity GBP London , ,6 Hugo Boss EUR Frankfurt , ,4 Publicis Groupe EUR Paris , ,5 Richemont CHF Zürich Six , ,2 SEB EUR Paris , ,8 Total Consumer Discretionary ,2 Diageo GBP London , ,3 Henkel EUR Frankfurt , ,6 Kerry Group EUR Dublin , ,9 Reckitt Benckiser Group GBP London , ,1 Unilever Nv Cert EUR Amsterdam , ,4 Total Consumer Staples ,3 Wood Group GBP London , ,8 Total Energy ,8 Arrow Global Group GBP London , ,0 Close Brothers Group GBP London , ,9 ING Groep EUR Amsterdam , ,2 Svenska Handelsbanken ser. A SEK Stockholm , ,4 Total Financials ,6 Fresenius EUR Frankfurt , ,8 Novo Nordisk B DKK København , ,4 Roche Holding CHF Zürich Six , ,2 Total Health Care ,4 Bunzl GBP London , ,0 Bureau Veritas EUR Paris , ,9 Howden Joinery Group GBP London , ,3 IMCD Group EUR Amsterdam , ,6 IMI GBP London , ,9 Prysmian EUR Milano , ,2 Teleperformance EUR Paris , ,1 Total Industrials ,0 Austriamicrosystems CHF Zürich Se , ,6 Lectra EUR Paris , ,5 SAP SE EUR Frankfurt , ,9 Spectris GBP London , ,4 Total Information Technology ,4

28 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 Smurfit Kappa EUR Dublin , ,2 Total Materials ,2 Total portfolio ,9

29 Investments

30 AB-InBev Company description Ams is the global leader in sensors and sensor solutions. It serves leading OEMs with in 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. We like that the company has refocused its strategy on market opportunities in which the company can achieve a leadership position. The customer cluster risk is significant with high exposure to Apple in 2018 (3D sensor in Iphone X). We think the exposure will become more balanced longer term. 0 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 ams AG ams AG MSCI Europe Information Technology emiconductors & Semiconductor Equipment Market Value (mill.) 7,847 Price Price currency CHF Net debt (mill.) 882 Reporting currency EUR Enterprise Value (mill.) 8,729 FX rate (NOK) 8.41 Year end (December) E 2018E Sales (mill.) ,053 1,521 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity ,227 Return on Equity (%) 20.0 % 13.7 % 17.6 % 21.8 % 10.9 % 7.7 % 20.7 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 0.4 % 0.2 % 1.0 % 1.7 % 1.1 % 0.4 % 0.7 %

31 Arrow Global 250 Performance - last 3 years Company description Arrow Global is one of the largest and fastest-growing collectors and purchasers of defaulted unsecured consumer debt portfolios in Europe Why invested? The investment thesis remains strong for European debt purchasers and -collectors given the size of the nonperforming-loan (NPL) market and the European regulators focus on resolving this issue. European banks will see additional capital requirements with Basel IV and the propensity to sell off NPL will likely increase. Arrow has evolved into a European player of scale through acquisitions, where we see continued growth due to a highly fragmented market. The increasing levels of servicing revenues will continue to improve the credit ratings and funding cost. This will improve the quality of the revenue stream and justify a higher valuation. Barriers to entry are strong and focused around data and analytics capability and increased level of regulation. We think return on equity close to 30% is sustainable in the medium term. 0 Sep-14 Sep-15 Sep-16 Sep-17 Arrow Global Group Plc Arrow Global Group Plc MSCI Europe Financials /Consumer Finance Market Value (mill.) 659 Price 3.76 Price currency GBP Net debt (mill.) 865 Reporting currency GBP Enterprise Value (mill.) 1,524 FX rate (NOK) Year end (December) E 2018E Sales (mill.) EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) 75.0 % 14.4 % 15.0 % 21.8 % 15.7 % 22.8 % 26.8 % EPS Book value per share DPS #N/A Price/Earnings #N/A Price/Book Value #N/A Dividend Yield (%) #N/A 0.0 % 2.2 % 2.7 % 3.1 % 3.0 % 3.7 %

32 Bunzl 300 Performance - last 5 years 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 Why invested? 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-stop-shop, strength of customer relationships and ability to provide bespoke solutions all generate differentiation and resilience against Amazon s platform model. Bunzl plc 0 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Bunzl plc MSCI Europe Industrials /Trading Companies & Distributors Market Value (mill.) 7,004 Price Price currency GBP Net debt (mill.) 1,396 Reporting currency GBP Enterprise Value (mill.) 8,400 FX rate (NOK) Year end (December) E 2018E Sales (mill.) 5,359 6,098 6,157 6,490 7,429 8,507 8,865 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity ,016 1,313 1,456 1,538 Return on Equity (%) 22.1 % 22.0 % 21.4 % 22.9 % 20.3 % 19.6 % 21.9 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.8 % 2.2 % 2.0 % 2.0 % 2.0 % 2.2 % 2.3 %

33 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Why invested? 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 (fragmented market). Bureau Veritas SA Bureau Veritas SA MSCI Europe Industrials /Professional Services Market Value (mill.) 10,033 Price Price currency EUR Net debt (mill.) 2,257 Reporting currency EUR Enterprise Value (mill.) 12,291 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 3,902 3,933 4,172 4,635 4,549 4,688 4,810 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 1, ,108 1,095 1,197 1,264 1,378 Return on Equity (%) 26.0 % 36.1 % 26.6 % 23.3 % 26.7 % 25.7 % 27.0 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.2 % 2.3 % 2.6 % 2.8 % 3.0 % 2.4 % 2.6 %

34 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 Performance - last 5 years 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Continental AG Continental AG MSCI Europe Consumer Discretionary /Auto Components Market Value (mill.) 44,851 Price Price currency EUR Net debt (mill.) 3,382 Reporting currency EUR Enterprise Value (mill.) 48,234 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 32,736 33,331 34,506 39,232 40,550 43,899 46,119 EBIT (Operating Income - mill.) 2,820 3,301 3,635 4,316 4,157 4,736 5,188 Net Income (reported - mill.) 1,884 1,923 2,375 2,727 2,803 3,134 3,489 Equity 7,779 9,011 10,672 12,786 14,270 16,931 19,416 Return on Equity (%) 24.2 % 21.3 % 22.3 % 21.3 % 19.6 % 18.5 % 18.0 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.6 % 1.6 % 1.9 % 1.7 % 2.3 % 2.1 % 2.3 %

35 Diageo Company description Diageo is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, beer and wine. These brands include Johnnie Walker, Smirnoff, Baileys, Captain Morgan, Tanqueray and Guinness among others. Performance - last 5 years Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Why invested? The beverage market is attractive. Quoted spirit companies represent 300m cases, 12 percent of the global spirit market. Annual volume growth is between 5-7 percent. Diageo has emerged from a lacklustre period with a more robust model. The organic sales growth has steadily recovered after the destocking and emerging-market led pressures of Looking forward, it is well-positioned to drive growth as it benefits from recovering economies in Europe and the rising middle class in emerging markets especially in Latin America and Africa. Diageo plc Diageo plc MSCI Europe Consumer Staples /Beverages Market Value (mill.) 65,005 Price Price currency GBP Net debt (mill.) 7,953 Reporting currency GBP Enterprise Value (mill.) 72,958 FX rate (NOK) Year end (June) E 2019E Sales (mill.) 11,433 10,258 10,813 10,485 12,050 12,401 12,953 EBIT (Operating Income - mill.) 3,511 3,111 3,033 2,927 3,559 3,866 4,141 Net Income (reported - mill.) 2,485 2,331 2,381 2,244 2,717 2,924 3,152 Equity 7,036 6,823 7,771 8,530 10,313 11,847 11,571 Return on Equity (%) 35.3 % 34.2 % 30.6 % 26.3 % 26.3 % 24.7 % 27.2 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.5 % 2.8 % 3.1 % 2.8 % 2.7 % 2.5 % 2.6 %

36 Dignity Company description Dignity is the second-largest provider of funeral services and the largest provider of cremations in the UK Performance - last 5 years 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. Going forward the key risk is compe-tition from cheaper online players. Rise of price comparison websites is a relevant concern. We think, however, the share price fall in 2017 was too harsh and increased out position. 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dignity plc Dignity plc MSCI Europe Consumer Discretionary /Diversified Consumer Services Market Value (mill.) 805 Price Price currency GBP Net debt (mill.) 496 Reporting currency GBP Enterprise Value (mill.) 1,301 FX rate (NOK) Year end (December) E 2018E Sales (mill.) EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) % 80.0 % 95.7 % n/a n/a % 75.8 % EPS Book value per share DPS Price/Earnings Price/Book Value , EV/EBIT Dividend Yield (%) 1.8 % 1.5 % 8.2 % 7.3 % 1.0 % 1.6 % 1.8 %

37 Close Brothers Company description Close Brothers is a UK merchant banking group, providing lending, deposit taking, wealth management services and securities trading Performance - last 5 years 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-ofsale, 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Close Brothers Group plc Close Brothers Group plc MSCI Europe Financials /Capital Markets Market Value (mill.) 2,083 Price Price currency GBP Net debt (mill.) 1,312 Reporting currency GBP Enterprise Value (mill.) 3,395 FX rate (NOK) Year end (July) E 2019E Total Income Net Interest Income Net Result Equity ,010 1,097 1,237 1,327 1,435 Return on Equity (%) 14.3 % 16.3 % 17.3 % 17.0 % 15.5 % 14.5 % 13.9 % EPS Book value per share DPS Price/Earnings Price/Book Value Dividend Yield (%) 4.3 % 3.9 % 3.7 % 4.5 % 3.9 % 4.6 % 4.8 %

38 Fresenius 350 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Why invested? 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. Overreaction to fears of injectable generics pricing pressure at one of their business units provides attractive valuation. Fresenius SE & Co. KGaA Fresenius SE & Co. KGaA MSCI Europe Health Care /Health Care Providers & Services Market Value (mill.) 35,278 Price Price currency EUR Net debt (mill.) 17,989 Reporting currency EUR Enterprise Value (mill.) 53,267 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 19,290 20,545 23,459 27,995 29,471 34,000 36,794 EBIT (Operating Income - mill.) 3,061 2,878 3,043 3,913 4,269 4,889 5,304 Net Income (reported - mill.) ,070 1,386 1,560 1,813 1,924 Equity 7,856 8,383 9,523 11,153 12,664 15,406 16,585 Return on Equity (%) 11.8 % 11.8 % 11.2 % 12.4 % 12.3 % 11.8 % 11.6 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.3 % 1.1 % 1.0 % 0.8 % 0.8 % 1.1 % 1.2 %

39 Groupe SEB Performance - last 5 years Company description 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Why invested? 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 SEB SA MSCI Europe Consumer Discretionary /Household Durables Market Value (mill.) 7,719 Price Price currency EUR Net debt (mill.) 2,015 Reporting currency EUR Enterprise Value (mill.) 9,733 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 4,060 4,161 4,253 4,770 5,000 6,525 6,863 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 1,332 1,390 1,551 1,708 1,671 2,059 2,417 Return on Equity (%) 14.6 % 14.4 % 11.0 % 12.1 % 15.5 % 18.2 % 18.0 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.4 % 2.1 % 2.3 % 1.6 % 1.3 % 1.3 % 1.6 %

40 Performance - last 5 years 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 end-markets including construction, automobiles and electronics Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Henkel AG & Co. KGaA MSCI Europe Why invested? 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 double 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.) 46,315 Price Price currency EUR Net debt (mill.) 3,582 Reporting currency EUR Enterprise Value (mill.) 49,897 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 16,510 16,355 16,428 18,089 18,714 20,109 20,669 EBIT (Operating Income - mill.) 2,279 2,432 2,558 2,871 3,193 3,455 3,632 Net Income (reported - mill.) 1,510 1,589 1,628 1,921 2,053 2,288 2,516 Equity 9,376 10,044 11,508 13,661 15,045 16,621 18,283 Return on Equity (%) 16.1 % 15.8 % 14.1 % 14.1 % 13.6 % 13.8 % 13.8 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.8 % 1.6 % 1.6 % 1.7 % 1.6 % 1.7 % 1.8 %

41 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 Performance - last 5 years 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 shares 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. 0 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Howden Joinery Group PLC Howden Joinery Group PLC MSCI Europe Industrials /Trading Companies & Distributors Market Value (mill.) 2,749 Price 4.43 Price currency GBP Net debt (mill.) -215 Reporting currency GBP Enterprise Value (mill.) 2,534 FX rate (NOK) Year end (December) E 2018E Sales (mill.) ,091 1,220 1,386 1,461 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) % 78.0 % 38.1 % 50.4 % 41.6 % 38.2 % 36.2 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 0.5 % 1.7 % 1.6 % 2.1 % 1.9 % 2.5 % 2.7 %

42 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 HUGO BOSS AG HUGO BOSS AG Performance - last 5 years MSCI Europe Consumer Discretionary /Textiles Apparel & Luxury Goods Market Value (mill.) 4,934 Price Price currency EUR Net debt (mill.) 173 Reporting currency EUR Enterprise Value (mill.) 5,107 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 2,346 2,432 2,572 2,809 2,693 2,725 2,803 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity ,023 Return on Equity (%) 50.6 % 46.1 % 39.5 % 33.4 % 21.8 % 25.9 % 25.2 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 3.9 % 3.2 % 3.6 % 4.7 % 4.5 % 3.9 % 4.1 %

43 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 Jun-15 Jun-16 Jun-17 IMCD N.V. IMCD N.V. Performance - Since IPO MSCI Europe Industrials /Trading Companies & Distributors Market Value (mill.) 2,793 Price Price currency EUR Net debt (mill.) 320 Reporting currency EUR Enterprise Value (mill.) 3,113 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 1,117 1,233 1,358 1,530 1,715 1,896 2,155 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) 3.8 % 9.5 % 10.1 % 11.3 % 12.0 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 0.7 % 1.3 % 1.4 % 1.2 % 1.3 % 43

44 ING Group 250 Performance - last 5 years 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. 0 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 ING Groep NV ING Groep NV MSCI Europe Financials /Banks Market Value (mill.) 58,947 Price Price currency EUR Net debt (mill.) 126,460 Reporting currency EUR Enterprise Value (mill.) 185,407 FX rate (NOK) Year end (December) E 2018E Total Income 26,688 15,305 15,296 16,552 17,458 17,714 18,009 Net Interest Income 11,712 11,804 12,376 12,590 13,241 13,600 13,884 Net Result 2,346 2,361 1,673 4,466 4,210 5,135 5,231 Equity 54,027 43,775 51,344 47,832 49,793 51,163 52,886 Return on Equity (%) 4.3 % 5.4 % 3.3 % 9.3 % 8.5 % 10.0 % 9.9 % EPS Book value per share DPS Price/Earnings Price/Book Value

45 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Why invested? 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 IMI plc MSCI Europe Industrials /Machinery Market Value (mill.) 3,376 Price Price currency GBP Net debt (mill.) 293 Reporting currency GBP Enterprise Value (mill.) 3,669 FX rate (NOK) Year end (December) E 2018E Sales (mill.) 2,192 1,744 1,686 1,557 1,649 1,749 1,796 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) 36.3 % 31.7 % 37.3 % 22.1 % 24.1 % 23.5 % 26.4 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 3.0 % 2.1 % 21.1 % 4.5 % 3.7 % 3.2 % 3.3 %

46 John Wood Group Company description Wood Group 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 about half of the company s revenue. The new Wood Group 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 des.12 des.13 des.14 des.15 des.16 John Wood Group PLC Performance - last 5 years John Wood Group PLC MSCI Europe Energy /Energy Equipment & Services Market Value (mill.) 4,208 Price 6.21 Price currency GBP Net debt (mill.) 391 Reporting currency USD Enterprise Value (mill.) 4,599 FX rate (NOK) E 2018E Year end (December) E 2018E Sales (mill.) 6,821 6,380 6,574 5,001 4,121 6,116 10,018 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 2,227 2,407 2,546 2,398 2,195 3,503 3,493 Return on Equity (%) 10.6 % 10.4 % 13.7 % 2.7 % 1.3 % 4.4 % 6.1 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.5 % 2.0 % 3.0 % 3.4 % 3.0 % 4.1 % 4.2 %

47 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 end-markets 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.we do only have a small stake in the company for the time being Performance - last 5 years 0 des.12 des.13 des.14 des.15 des.16 Lectra SA Lectra SA MSCI Europe Information Technology /Software Market Value (mill.) 775 Price Price currency EUR Net debt (mill.) -84 Reporting currency EUR Enterprise Value (mill.) 691 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity Return on Equity (%) 20.9 % 26.0 % 15.2 % 20.7 % 20.1 % 18.9 % 18.9 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 4.7 % 2.7 % 2.7 % 2.5 % 1.9 % 1.5 % 1.7 %

48 Kerry Group 250 Performance - last 5 years Company description 200 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Kerry Group Plc Class A MSCI Europe Kerry Group Plc Class A Consumer Staples /Food Products Why invested? Marginwise we believe a significant change is about to happen at Kerry Group which will continue to expand margins, 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. Market Value (mill.) 15,962 Price Price currency EUR Net debt (mill.) 1,277 Reporting currency EUR Enterprise Value (mill.) 17,239 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 5,848 5,837 5,757 6,105 6,131 6,386 6,721 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 2,014 1,968 2,236 2,790 3,094 3,542 4,055 Return on Equity (%) 13.3 % 4.3 % 21.5 % 18.8 % 17.2 % 15.2 % 15.4 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 0.9 % 0.8 % 0.8 % 0.7 % 0.8 % 0.7 % 0.7 %

49 Novo Nordisk Company description: Performance - last 5 years 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Novo Nordisk A/S Class B MSCI Europe 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. In 2017 Novo Nordisk s once-a-week semaglutide, (under the name Ozempic) was approved by FDA. Ozempic should significantly strengthen Novo's position in the early stages of the diabetes treatment as well as in a future multi-billion USD obesity franchise. Novo Nordisk A/S Class B Health Care /Pharmaceuticals Market Value (mill.) 794,861 Price Price currency DKK Net debt (mill.) -21,451 Reporting currency DKK Enterprise Value (mill.) 773,410 FX rate (NOK) 1.32 Year end (December) E 2018E Sales (mill.) 78,026 83,572 88, , , , ,782 EBIT (Operating Income - mill.) 28,837 30,840 33,596 46,268 48,224 49,405 50,321 Net Income (reported - mill.) 21,432 25,184 26,481 34,860 37,925 38,592 39,689 Equity 40,632 42,569 40,294 46,969 45,269 49,095 53,038 Return on Equity (%) 52.7 % 59.2 % 65.7 % 74.2 % 83.8 % 78.6 % 74.8 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.0 % 2.3 % 1.9 % 1.6 % 3.0 % 2.5 % 2.6 %

50 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 multihub networks, Fallon and Bartle Bogle Hegarty. The group has operations in over 200 cities in 105 countries. Performance - last 5 years Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Publicis Groupe SA MSCI Europe Why invested? We like Publicis focus on the shift to digital and think it is better positioned than competitors to navigate industry challenges. The intension of the company is to grow digital services from 38 percent to 75 percent of sales by 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 believe 2018 will be the year where the growth will pick up. The company has an under-leveraged and extremely robust balance sheet. We find the valuation very attractive. Publicis Groupe SA Consumer Discretionary /Media Market Value (mill.) 12,886 Price Price currency EUR Net debt (mill.) 1,993 Reporting currency EUR Enterprise Value (mill.) 14,879 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 6,610 6,953 7,255 9,601 9,733 9,715 9,812 EBIT (Operating Income - mill.) 1,019 1,096 1,207 1,516 1,510 1,522 1,601 Net Income (reported - mill.) ,043 Equity 4,614 5,095 6,086 6,556 6,055 6,622 7,249 Return on Equity (%) 16.0 % 15.5 % 11.8 % 13.7 % -8.7 % 14.8 % 14.4 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.0 % 1.7 % 2.0 % 2.6 % 2.8 % 3.5 % 3.8 %

51 Performance - last 5 years Prysmian Company description Prysmian is the world leader in the industry of cables and systems for energy and telecommunications. With over 130 years experience and a presence in more than 50 countries around the world the Group is strongly positioned at the high-tech end of the energy and telecom cable sectors Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Prysmian S.p.A. MSCI Europe Why invested? Prysmian is a quality player with the highest margins in the cable industry. We like its exposure to high-end products in segments like submarine cables and telecom, where we expect strong structural growth in the coming years. Prysmian is increasing its exposure to Emerging Markets through selective growth in high value added business in order to protect ROCE. The acquisition of General Cable was not well received by the market, because of the price paid. The managements track record of integrating companies is impeccable. We believe the value accretion will exceed the premium paid. Prysmian S.p.A. Industrials /Electrical Equipment Market Value (mill.) 5,848 Price Price currency EUR Net debt (mill.) 986 Reporting currency EUR Enterprise Value (mill.) 6,834 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 7,848 7,273 6,840 7,361 7,567 7,823 8,134 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 1,112 1,147 1,150 1,278 1,448 1,724 1,884 Return on Equity (%) 15.1 % 13.0 % 10.0 % 16.7 % 17.0 % 15.9 % 18.0 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.8 % 2.2 % 2.8 % 2.1 % 1.8 % 1.7 % 1.9 %

52 Reckitt Benckiser 250 Performance - last 5 years Company description 200 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 has not been well received by the market. 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 des.12 des.13 des.14 des.15 des.16 Reckitt Benckiser Group plc Reckitt Benckiser Group plc MSCI Europe Consumer Staples /Household Products Market Value (mill.) 47,145 Price Price currency GBP Net debt (mill.) 14,712 Reporting currency GBP Enterprise Value (mill.) 61,857 FX rate (NOK) Year end (December) E 2018E Sales (mill.) 9,567 10,043 8,836 8,874 9,891 11,569 13,140 EBIT (Operating Income - mill.) 2,557 2,611 2,171 2,366 2,772 3,152 3,572 Net Income (reported - mill.) 1,829 1,739 1,663 1,743 1,832 2,090 2,337 Equity 5,921 6,334 6,832 6,904 8,421 9,615 11,810 Return on Equity (%) 30.9 % 27.5 % 24.3 % 25.2 % 21.8 % 21.7 % 19.8 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 3.5 % 2.9 % 5.0 % 2.2 % 2.2 % 2.4 % 2.6 %

53 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 a an underleveraged balance sheet with room for returning more cash to shareholders Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Compagnie Financiere Richemont SA Performance - last 5 years Compagnie Financiere Richemont SA MSCI Europe Consumer Discretionary /Textiles Apparel & Luxury Goods Market Value (mill.) 49,381 Price Price currency CHF Net debt (mill.) -5,302 Reporting currency EUR Enterprise Value (mill.) 44,079 FX rate (NOK) 8.41 Year end (March) E 2019E Sales (mill.) 10,150 10,649 10,410 11,076 10,647 11,171 11,823 EBIT (Operating Income - mill.) 2,398 2,410 2,426 2,101 1,624 2,095 2,388 Net Income (reported - mill.) 2,013 2,072 1,336 1,688 1,210 1,723 1,940 Equity 10,216 11,964 14,421 15,047 15,529 16,268 17,107 Return on Equity (%) 19.7 % 17.3 % 9.3 % 11.2 % 7.8 % 10.6 % 11.3 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.3 % 1.7 % 2.0 % 2.7 % 2.3 % 2.4 % 2.7 %

54 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 29 consecutive years a track record only shared by a handful European companies Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Roche Holding Ltd Genusssch. Performance - last 5 years Roche Holding Ltd Genusssch. MSCI Europe Health Care /Pharmaceuticals Market Value (mill.) 211,702 Price Price currency CHF Net debt (mill.) 14,180 Reporting currency CHF Enterprise Value (mill.) 225,882 FX rate (NOK) 8.41 Year end (December) E 2018E Sales (mill.) 45,499 46,780 47,462 48,145 50,576 53,111 55,506 EBIT (Operating Income - mill.) 14,967 15,034 14,644 13,797 14,859 19,218 19,820 Net Income (reported - mill.) 9,539 11,164 9,332 8,863 9,576 10,646 12,174 Equity 14,514 19,294 19,586 20,979 23,911 28,638 33,223 Return on Equity (%) 65.7 % 57.9 % 47.6 % 42.2 % 40.0 % 37.2 % 36.6 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 4.0 % 3.1 % 3.0 % 2.9 % 3.5 % 3.5 % 3.6 %

55 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Why invested? 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 SAP SE MSCI Europe Information Technology /Software Market Value (mill.) 116,167 Price Price currency EUR Net debt (mill.) 2,880 Reporting currency EUR Enterprise Value (mill.) 119,047 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 10,672 12,464 14,233 16,223 16,815 23,520 24,900 EBIT (Operating Income - mill.) 2,757 3,555 4,139 4,048 5,085 6,808 7,298 Net Income (reported - mill.) 1,748 1,811 3,438 2,823 3,326 3,713 4,245 Equity 8,477 9,807 12,699 14,163 16,040 28,030 30,673 Return on Equity (%) 20.6 % 18.5 % 27.1 % 19.9 % 20.7 % 13.2 % 13.8 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.5 % 1.6 % 2.7 % 1.4 % 1.6 % 1.4 % 1.5 %

56 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 debt-free 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Spectris plc Spectris plc Performance - last 5 years MSCI Europe Information Technology ronic Equipment Instruments & Components Market Value (mill.) 2,889 Price Price currency GBP Net debt (mill.) 155 Reporting currency GBP Enterprise Value (mill.) 3,044 FX rate (NOK) Year end (December) E 2018E Sales (mill.) 1,231 1,202 1,174 1,190 1,346 1,511 1,528 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity ,067 1,103 1,174 Return on Equity (%) 20.4 % 23.7 % 14.7 % 11.8 % 1.0 % 11.2 % 12.0 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 1.9 % 1.7 % 2.2 % 2.7 % 2.2 % 2.3 % 2.4 %

57 Smurfit Kappa Company description Smurfit Kappa manufactures paper-based packaging, supported by a network of paper, recycling and forestry operations. Sales in the Americas (25%) and Europe (75%) Performance - last 5 years Why invested? Smurfit Kappa provides compelling exposure to the fast growing Latin American corrugated markets and offers leverage to a cyclical recovery in Europe. The business model is cash generative and we see potential for M&A and associated synergies to supplement growth and returns on capital. In the absence of M&A we see potential for excess capital to be returned to shareholders through higher dividends. 0 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Smurfit Kappa Group Plc Smurfit Kappa Group Plc MSCI Europe Materials /Containers & Packaging Market Value (mill.) 6,276 Price Price currency EUR Net debt (mill.) 2,821 Reporting currency EUR Enterprise Value (mill.) 9,097 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 7,335 7,957 8,083 8,109 8,159 8,539 8,929 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 2,257 2,308 2,222 2,177 2,329 2,609 2,950 Return on Equity (%) 11.0 % 8.1 % 10.8 % 18.4 % 19.1 % 16.7 % 18.0 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 3.1 % 2.3 % 3.0 % 2.9 % 3.7 % 3.1 % 3.3 %

58 Performance - last 5 years 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Svenska Handelsbanken AB Class A MSCI Europe Why invested? No European bank can show the same history of 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 questionmark. Low short term rates are negative for net interest margins. Svenska Handelsbanken AB Class A Financials /Banks Market Value (mill.) 216,220 Price Price currency SEK Net debt (mill.) 1,139,663 Reporting currency SEK Enterprise Value (mill.) 1,355,883 FX rate (NOK) Year end (December) E 2018E Total Income 35,062 36,327 38,314 40,336 40,763 41,042 42,649 Net Interest Income 26,081 26,669 27,244 27,740 27,943 29,552 30,817 Net Result 14,525 14,173 15,142 16,197 16,231 16,400 16,730 Equity 106, , , , , , ,448 Return on Equity (%) 13.6 % 12.7 % 11.9 % 12.6 % 11.9 % 11.5 % 11.3 % EPS Book value per share DPS Price/Earnings Price/Book Value Dividend Yield (%) 4.6 % 5.2 % 4.8 % 5.3 % 3.9 % 5.8 % 5.5 %

59 Teleperformance 600 Performance - last 5 years 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. 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Teleperformance SE Teleperformance SE MSCI Europe Industrials /Professional Services Market Value (mill.) 7,032 Price Price currency EUR Net debt (mill.) 1,407 Reporting currency EUR Enterprise Value (mill.) 8,439 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 2,347 2,433 2,758 3,398 3,649 4,200 4,436 EBIT (Operating Income - mill.) Net Income (reported - mill.) Equity 1,376 1,392 1,595 1,758 1,912 2,112 2,340 Return on Equity (%) 9.3 % 9.3 % 9.4 % 11.4 % 11.2 % 12.9 % 13.3 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 2.5 % 1.8 % 1.6 % 1.5 % 1.4 % 1.3 % 1.5 %

60 Unilever 250 Performance - last 5 years 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 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 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Unilever NV Cert. of shs Unilever NV Cert. of shs MSCI Europe Consumer Staples /Personal Products Market Value (mill.) 141,543 Price Price currency EUR Net debt (mill.) 13,792 Reporting currency EUR Enterprise Value (mill.) 155,335 FX rate (NOK) 9.82 Year end (December) E 2018E Sales (mill.) 51,324 49,797 48,436 53,272 52,713 53,812 54,477 EBIT (Operating Income - mill.) 6,989 7,629 7,020 7,729 8,028 9,411 9,910 Net Income (reported - mill.) 4,480 4,842 5,171 4,909 5,184 5,785 5,958 Equity 15,392 14,344 13,651 15,439 16,354 13,575 14,755 Return on Equity (%) 29.1 % 33.8 % 37.9 % 31.8 % 31.7 % 42.6 % 40.4 % EPS Book value per share DPS Price/Earnings Price/Book Value EV/EBIT Dividend Yield (%) 3.4 % 3.7 % 3.5 % 3.0 % 3.3 % 2.9 % 3.2 % 60

61 About ODIN

62 Investment Objective Long term value creation

63 Investment Philosophy Performance - prospects - price

64 Om ODIN Europa På vegne av våre kunder, er ODIN en aktiv og ansvarsfull forvalter med fokus på langsiktig verdiskaping. I Europa finner vi mange av verdens beste virksomheter og europeiske bedrifter er kjent for å være både innovative og konkurransedyktige. Eksportrettet virksomhet er et viktig element i europeisk næringsliv. Samtidig har de europeiske selskapene en kultur og tradisjon som vi er godt kjent med her i Norden. Gjennom aksjefondet ODIN Europa kan også du ta del i verdiskapingen som skjer i det europeiske næringslivet. Fondet har andelsklasser. Klasse A B C Etableringsdato 27/11/ /11/ /11/1999 Basisvaluta Forvaltningshonorar Tegn./innløsningsgebyr Minste tegningsbeløp NOK 0.75% 0.00% 10,000,000 NOK NOK 1.00% 0.00% 1,000,000 NOK NOK 2.00% 0.00% 3,000 NOK Referanseindeks MSCI Europe net Index USD

65 Om forvalter

66

67 Vi minner om... Historisk avkastning er ingen garanti for framtidig avkastning, som blant annet vil avhenge av markedsutviklingen, forvalters dyktighet, fondets risiko, samt kostnader ved forvaltning. Avkastningen kan bli negativ som følge av kurstap. Uttalelser i denne rapporten reflekterer ODINs markedssyn på det tidspunktet den ble utarbeidet. Vi har gjengitt kilder som vurderes som pålitelige, men vi kan imidlertid ikke garantere at informasjonen fra kildene hverken er presis eller komplett. Ansatte i ODIN Forvaltning AS kan handle for egen regning i flere typer finansielle instrumenter. Dette innebærer at ansatte i ODIN Forvaltning AS kan eie verdipapirer i selskaper som er omtalt i denne rapporten, samt andeler i ODINs verdipapirfond. Ansattes egenhandel skal skje i henhold til ODIN Forvaltning AS interne retningslinjer for ansattes egenhandel, som er utarbeidet i henhold til verdipapirhandelloven og Verdipapirfondenes forenings bransjestandard. Du finner mer informasjon på

68