SKAGEN Vekst Statusrapport november 2014

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1 SKAGEN Vekst Statusrapport november 2014

2 Hovedtrekk november 2014 SKAGEN Vekst er opp 11,8 prosent hittil i år, mens fondets referanseindeks er opp 18,5 prosent i samme periode. Fondet steg 3,4 prosent i november, noe som var lavere enn oppgangen på 4,6 prosent for den sammensatte nordiske/globale referanseindeksen. De største positive bidragsyterne i november var Norwegian Air Shuttle, Royal Caribbean Cruises og Norsk Hydro. De største negative bidragsyterne var Bonheur/Ganger Rolf, Sberbank og DOF. SKAGEN Vekst gjorde noen endringer i porteføljen og tok inn Carlsberg samt økte posisjonene i Lundin Petroleum og ABB. Fondet solgte seg ut av Avance Gas og REC Solar. Basert på forventet inntjening i 2014 prises SKAGEN Vekst sine 35 største posisjoner til en P/E på 12,4x mot 15,3x for referanseindeksen. Videre prises SKAGEN Vekst sin portefølje til en pris i forhold til bokført egenkapital, P/B, til 1,3x mot 2,1x for referanseindeksen. For 2015 og 2016 forventer vi at selskapene i porteføljen viser en årlig gjennomsnittlig inntjeningsvekst på ca. 20 prosent, noe som tilsier at det er rom for positiv kursutvikling uavhengig av om verdsettelsesmultiplene øker eller ei. * Om ikke annet er sagt er alle avkastningstall i rapporten for klasse A etter honorarer. 2

3 Verdiaksjer versus vekstaksjer venter på det økonomiske tidevannet 2014 har vært et vanskelig år for verdiinvestorer. Defensive aksjer med høy verdsettelse gjør det bedre enn sykliske aksjer og large cap aksjer gjør det bedre enn mid- og small-cap aksjer. Vekstaksjer vil typisk vokse raskere enn verdiaksjer. Men over de siste årene har lønnsomheten til verdiaksjer vokst i en raskere takt enn vekstaksjer. Siden finanskrisen har vekstaksjer hatt en inntektsvekst på 4 prosent per år og verdiaksjer på 1 prosent per år. Og EBITDA for vekstaksjer har vokst med 6 prosent per år og 4 prosent per år for verdiaksjer. Den enkle matematikken i en slik utvikling betyr at verdiaksjer tar bedre vare på sin lønnsomhet. Mange verdiaksjer er sykliske av natur, og dermed er det ikke sannsynlig at de vil begynne å gjøre det bedre før takten i den økonomiske aktiviteten øker. Den siste tidens fall i oljeprisen er som en lønnsøkning for forbrukerne i de fleste land og kan være den utløsende faktor som vil sende inn tidevannet i riktig retning for verdiaksjer. 3

4 Avkastning, november 2014 A November Hittil i kv. Hittil i år 1 år 3 år 5 år 10 år Siden start* SKAGEN Vekst A 3,4% 5,4% 11,8% 11,1% 15,9% 8,5% 10,1% 14,7% Benchmark index* 4,6% 9,4% 18,5% 19,5% 20,4% 13,9% 11,2% 10,2% Relativ avkastning -1,2% -4,0% -6,6% -8,4% -4,5% -5,4% -1,1% 4,6% 4 Note: Alle avkastningstall ut over 12 måneder er annualisert (geometrisk avkastning) * Startdato: 1 desember Referanseindeks før var OSEBX - Referanseindeks før var MSCI AC World/OSEBX

5 Årlig avkastning siden start* (%) SKAGEN Vekst* (NOK) Benchmark Index** (NOK) Hittil i år * Startdato: 1. desember Referanseindeks før var OSEBX - Referanseindeks før var MSCI AC World/OSEBX 5

6 Markedsutvikling i november 2014 i NOK (%) Kina (lokal) Tyrkia Tyskland USA (Nasdaq) Kina (Hong Kong) Nederland Frankrike Finland USA (S&P 500) Spania Sverige Verdensindeksen India Storbritannia Taiwan MSCI Nordic/MSCI AC ex. Nordic Italia Japan Indonesia Sør-Afrika Danmark Hong Kong Thailand Ungarn Canada SKAGEN Vekst A Vekstmarkedsindeksen Polen Sør-Korea Brasil Mexico Norge Russland

7 Markedsutvikling hittil i 2014 i NOK (%) India Kina (lokal) Tyrkia Thailand Indonesia USA (Nasdaq) USA (S&P 500) Danmark Kina (Hong Kong) Hong Kong Verdensindeksen Sør-Afrika Taiwan Singapore MSCI Nordic/MSCI AC ex. Nordic Vekstmarkedsindeksen Spania Finland Nederland Mexico Sverige Storbritannia Italia Brasil SKAGEN Vekst A Japan Frankrike Tyskland Polen Sør-Korea Norge Østerrike Ungarn Russland

8 Største bidragsytere, november 2014 Største positive bidragsytere Største negative bidragsytere Selskap Norwegian Air Shuttle Royal Caribbean Cruises Norsk Hydro Continental Samsung Electronics Philips TeliaSonera Danske Bank Kia Motors Teva NOK (m) 70m 61m 47m 41m 38m 34m 22m 20m 18m 15m Selskap NOK (m) Sberbank -23m DOF -19m Ganger Rolf -16m GCL -11m Siem Offshore -10m Bonheur -10m Wilh Willhelmsen -10m Solstad -9m REC Silicon -8m Golar LNG -7m Total verdiskapning i november 2014: NOK 307 millioner Note: Bidrag til absoluttavkastning 8

9 Største bidragsytere så langt i 4. kvartal 2014 Største positive bidragsytere Største negative bidragsytere Selskap Samsung Electronics Royal Caribbean Cruises Continental Norsk Hydro Hurtigruten Norwegian Air Shuttle Teva Danske Bank Teliasonera Citigroup NOK (m) 108m 104m 73m 72m 64m 60m 44m 38m 36m 25m Selskap NOK (m) Ganger Rolf -39m DOF -38m Bonheur -31m Sberbank -29m Solstad Offshore -25m Kongsberg Gruppen -19m Siem Offshore -18m Sevan Drilling -17m GCL-Poly Energy -13m Fjord Line AS -13m Total verdiskapning så langt i 4. kvartal 2014: NOK 502 millioner Note: Bidrag til absoluttavkastning 9

10 Største bidragsytere så langt i 2014 Største positive bidragsytere Største negative bidragsytere Selskap Royal Caribbean Cruises Norsk Hydro Teva Pharmaceutical Norwegian Air Shuttle Danske Bank Statoil Hurtigruten Samsung Electronics Continental Orange NOK (m) 373m 207m 201m 114m 107m 81m 72m 70m 47m 44m Selskap NOK (m) Sberbank -92m DOF -88m Solstad Offshore -75m Ganger Rolf -59m Sevan Drilling -55m Bonheur -54m Siem Offshore -45m Stolt-Nielsen -40m Wilh. Wilhelmsen -28m Sodastream -27m Total verdiskapning så langt i 2014: NOK millioner Note: Bidrag til absoluttavkastning 10

11 Største poster i SKAGEN Vekst, ultimo november 2014 SKAGEN Vekst har 51,1 prosent investert i de nordiske landene Weight in Price P/E P/E P/E P/B Target portfolio 2014e 2015e 2016e trailing price Samsung Electronics 7,3 % ,8 7,5 6,7 1, Norsk Hydro 6,8 % 41 31,6 14,9 10,3 1,2 58 Royal Caribbean Cruises Ltd 6,7 % 74 21,1 15,5 12,3 1,9 85 Continental AG 5,1 % ,8 11,5 10,2 3,5 225 Norw egian Air Shuttle 4,6 % ,4 8,5 7,0 3,2 340 Teliasonera AB 4,0 % 53 13,3 12,7 11,8 2,0 70 Philips 3,8 % 24 20,2 15,2 12,7 2,0 34 Danske Bank A/S 3,5 % ,9 10,8 10,2 1,1 205 Kia Motors 3,3 % ,4 6,1 5,5 1, Teva Pharmaceutical 3,3 % 57 11,6 11,6 11,0 2,1 60 Weighted average 10 48,3 % 14,4 10,6 9,1 1,55 31% Weighted average 35 86,1 % 12,8 10,0 8,6 1,29 41% Reference index 15,3 14,7 13,3 2,06 11

12 Kjøp og salg, november 2014 Kjøp Carlsberg SKAGEN Vekst økte posisjonen i det danske bryggeriet Carlsberg i november. Carlsberg er i gang med å restrukturere driften i Europa for å kunne redusere enhetskostnadene og optimalisere bryggeriinfrastrukturen. Vest Europa representerer halvparten av driftsinntektene til Carlsberg. Øst Europa/Russland representerte 36 prosent av driftsinntektene i 2013 og aksjen har falt som følge av svak russisk rubel. Presset på ledelsen i Carlsberg øker etter at aksjen har gjort det svakere enn konkurrentene og andre nordiske selskaper med stabile inntekter. Kjøp Avance Gas (ut) SKAGEN Vekst brukte det sterke LPG markedet i november til å gå ut av posisjonen i Avance Gas. De tidligere så gode etterspørselsutsiktene kan bli utfordret av nedsiderisiko utløst av lavere oljepris. VLGC flåten ventes å vokse med ca. 15 prosent i 2015 (over 15 prosent brutto) og total ordrebok for nye skip er 50% av eksisterende flåte som også gir mer risiko til utsiktene. 12

13 Viktigste endringer hittil i år pr. november 2014 Økte poster Reduserte poster 9M Casino (ny) Raiffeisen Bank Intl (ny) Toshiba (ny) Kinnevik (ny) SBI Holding (ny) Volvo (ny) GCL Poly (ny) Air Asia Teva Kia Motors Sberbank FLS Philips (ny) Sodastream (ny) Avance Gas Holding Ltd Nippon Seiki Co Ltd Nokian Tyres (ny) Carlsberg (ny) Oriflame (ny) Bang & Olufsen Teliasonera 9M Olav Thon Eiendom (ut) Baker Hughes (ut) Northern Offshore (ut) RSA Insurance (ut) Karolinska (ut) Proact IT Indosat (ut) Northern Offshore (ut) DO&CO (ut) PCI Biotech (ut) Fortum (ut) Norwegian Car Carriers (ut) Deoleo SA (ut) Orange (ut) Norwegian Bank Danske Bank Mahindra & Mahindra (ut) Akzo Nobel (ut) Kongsberg Gruppen Hexagon Composites (ut) Frontline 2012 (ut) Austevoll Seafood (ut) Statoil Q4 Lundin Petroleum Toshiba Citigroup TeliaSonera Q4 Statoil (ut) Royal Caribbean Hurtigruten Teva Pharmaceutical Avance 13

14 Sektor og geografisk fordeling mot indeks (%) 14 Energi Råvarer Kapitalvarer, service og transport Inntektsavhengige forbruksvarer Defensive konsumvarer Medisin Bank og finans Informasjonsteknologi Telekom Nyttetjenester Kontanter Sektorfordeling Asia ex Japan EMEA Japan Kjerne EU Nord Amerika Norden Andre Kontanter Geografisk fordeling Denmark Sweden Norway Finland 6% 7% 29% 12% 1% 8% 24% 13% Fond Indeks SKAGEN Vekst versus indeks indre sirkel er SKAGEN Vekst

15 Nyheter og annet om porteføljeselskaper - på engelsk

16 Key earnings releases and corporate news, November 2014 Samsung Electronics (7.3%) Announced share buyback The company announced it will buy back 1,650,000 ordinary shares and 250,000 preference shares. This equals 1.1% of shares issued and 1.3% of outstanding shares excluding treasury shares. Proceeds based on last share price amount to KRW 2.2tr or 4% of its net cash position which stood at KRW 53tr or USD 48bn at the end of 3Q14. The buyback will be executed from now until 25 February 2015 and will increase the treasury holding to 12.5% of share issues and is not expected to be cancelled. Apple goes back to the shop where you can get highest volume in quality semiconductors Despite the legal battles of the past, Apple and Samsung have agreed on a new collaboration as Samsung is now the primary supplier of application processors to Apple ipads and iphones. On a separate note, Samsung is close to launching a smartphone with a flexible display could be ready in time for the February/March 2015 launch of the upgraded Galaxy smartphone. Investment case update This is the first share buyback since 2007, when SEC bought back 2.8m ordinary shares and 0.4m preference shares (1.9% of shares issued) for KRW 1.8tr. This is a welcome, albeit very small, step. SEC is under pressure to implement a much more shareholder friendly distribution policy after the dismal 7% payout ratio for While Samsung s stock price developed nicely from 2010 to 2013 due to rapid expansion of their smartphone business, over the past year it has been down/flat. Samsung s market share in smartphones has declined and the contribution to group operating profit has plummeted. Based on estimated 2015 earnings, the components business is now the work horse with more than 50% contribution and a solid market position. Smartphone/mobile market players come and go, so it s not necessarily a bad thing that Samsung has had to refocus on its core strengths semiconductors. As mentioned earlier, the global semiconductor market is moving towards a duopoly on the production side (there are many design houses without production that use the large players facilities). Samsung is by no ordinary measure expensive, so we remain invested and see a 40-50% upside. 16

17 Key earnings releases and corporate news, November 2014 (cont.) Continental (5.1%) Slight revenue acceleration, good profitability and on the way to being debt free in 2016/17 3Q14 performance showed slight acceleration versus previous quarters despite some headwind. Cash generation was good at EUR 366m and the guidance for 2014 appears pretty easy to beat. 3Q14 revenues grew 4% YoY to EUR 8.7bn (4.5% YoY growth in the auto tech unit and 3% YoY growth in the tyre business). OP margins in the auto tech and tyre divisions were 8% and 21% respectively. The auto tech margin is deflated as Conti has the power train unit and a number of pre-2008 contracts (Conti acquired VDO from Siemens in late 2007) which come with low profitability. The 3Q14 report included a EUR 334m write-down of which EUR 110m is cash. The power train unit is expected to move towards targeted full year 8% OP margin within the coming years. Group level guidance for 2014 was confirmed at EUR 34.5bn revenues and 11%+ OP margin. Investment case update The 2Q14 report showed modest growth and good cash generation, so it is a relief to see the 3Q14 performance showing higher revenue growth, although we would like to see even higher growth coming from advanced driver assistance, security and fuel efficiency. The tyre business generates the most cash and seems to be set to improve as the average tyre runs for 40-50,000 km (3-4 years). The base for 2015/16 therefore looks good as lots of old tyres need to be replaced - especially in Europe. 17

18 Key earnings releases and corporate news, November 2014 (cont.) Kia Motors (3.3%) Share buyback increases respect of financial discipline. The term facelift takes on a new meaning for the Korean car producer The term facelift has taken on a new meaning for the Korean car producer. Kia announced they will buy back 1% of their own shares a sign that they want to regain shareholders respect after losing face following the USD 10bn property/land purchase by the Hyundai/Kia system. Investment case update Prudent and clever use of surplus capital demonstrates respect for shareholders in any company; investing in low return assets does not. Hence the stock buyback, albeit moderate given the sizeable cash generation in Kia, will have a positive impact on perception. Particularly if more dividend and buybacks are communicated. Kia costs USD 20bn and for that you get other assets and net cash worth USD 7bn and a car factory that produces 3 million cars per year. The annual cash flow is close to USD 3bn in the USD 44bn revenue stream, so the financial value is very good. The implied risk picture from the stock market valuation of Kia (earnings yield of 15%) could be about to change if Kia continues to use its cash prudently. Our target price is KRW 85,000 target compared with the current price of KRW 55,

19 Key earnings releases and corporate news, November 2014 (cont.) Philips (3.8%) Rumours of a bid for lighting division The price mentioned in the Reuters article is very high; 2x EV/sales. We do not believe anyone will pay such a high price, nevertheless, it seems as though the lighting business is now in play. Total sales from this division are EUR 8.4bn and Automotive and Lumileds represent ca. 15% of group revenue. Investment case update Philips has faced some headwinds in 2014 from currency, and poor performance from the re-start of their Cleveland healthcare scanner factory. As a result, the margin trend has been broken and the stock has fallen back from EUR 28, where it was at the beginning of the year. The key uncertainty now is whether the positive trend can be re-established or whether market headwinds are too strong. Our base case is that the disturbances have been temporary, but this needs to be monitored going forward. We could see Philips trade up towards EUR 30 as the market again starts to price in the company hitting its target. This is essentially at the top end of its 10-year trading range. Presently we are in the middle of the trading range and the stock has just bounced off its 200 day moving average (see graph). With decent CF generation expected in 2015, a 3.5-4% dividend yield and further profit improvement initiatives from management, we think the downside is sufficiently protected to make a 30% upside potential in 1-2 years attractive. 19

20 Key earnings releases and corporate news, November 2014 (cont.) Volvo (1.9%) 5% lower truck deliveries in October, antitrust case in EU and provision in China. Volvo October deliveries were down 5% to 19,800 units. Europe was weak at 7,500 units, down 22%, South America was down 14% to 1,900 units and North America was up 21% to 5,900 units. For the first 10 months of 2014, unit deliveries are up 5% driven by 30% growth in North America, 14% growth in Asia, 6% decline in Europe and 18% decline in South America. Later in the week Volvo announced a SEK 650m provision in the Chinese construction equipment unit related to credit losses. Lower activity in China, especially in the mining industry, has caused Volvo to increase provision. The net cash impact is limited. The antitrust case in the EU relates to price fixing among market participants. If found guilty, Volvo could potentially face a 10% fine on the impacted European revenue stream. It is unclear which revenue stream is the subject of the investigation by the EU antitrust authority. Assuming it is Renault s, then based on the average EU antitrust fine of 2.7% of revenues, the fine would be less than 4% of Volvo market cap. Investment case update We own Volvo as the current value of the company does not reflect the cost saving potential and the mix effect of the new truck model program. This is a highly cyclical business which may take some time to play out. However, the Q3 report showed good progress on the cost side as well as improved pricing. 20

21 The largest companies in SKAGEN Vekst Samsung Electronics, the Korean electronics group, has enjoyed very solid growth in consumer electronics, especially smartphones. Pole position in global semiconductor market. Cash generation is very strong and the company has historically wisely invested in new business areas solar power and healthcare are on the roadmap for the future. Norsk Hydro ASA is a Norwegian aluminium and renewable energy company headquartered in Oslo. Norsk Hydro is one of the largest aluminium companies worldwide. It has operations in some 50 countries around the world and is active on all continents. The Norwegian state holds a 34.3% ownership interest in the company, which employs approximately 13,000 people. RCL is the second largest cruise company globally with a 25% market share. It sailed 5m passengers in After a decade of lower returns on invested capital the cruise industry is coming to its senses and should be further supported by increased consumer demand in the coming years. Continental AG produces tyres for cars and trucks and makes auto technology such as power trains, safety systems and automated drive systems. The replacement cycle for tyres is becoming stretched in some markets, so near-term earnings look promising. In the longer-term Continental s pole position in global auto technology provides a good backdrop for substantial growth. Norwegian Air Shuttle is the leading Nordic-based low cost airline, which in 2013 flew 21m passengers. The fleet of airliners and the route network are growing rapidly proving the concept of Norwegian local low cost airline, to Nordic, to European and to Global reach. 21

22 The largest companies in SKAGEN Vekst continued Swedish/Finnish incumbent telecom operator offering services primarily in the Nordic region. History goes back to 1853 as the Royal Swedish Electrical Telegraph. The company is Europe s fifth largest telecom operator and offers services across Eurasia, including stakes in mobile phone operators in Turkey and Russia. Philips NV is a global leader in medical systems (scanners), consumer appliances and lightning. Philips historic focus has been on long-lasting light bulbs, but over the years the group has divested of light bulbs and introduced many other activities in its portfolio. Philips also has a clear set of financial priorities as to how to manage the group. Danske Bank is the second largest bank in the Nordic region and is also active in Ireland. After an unsustainable acquisition binge and loan growth before 2008, the bank has struggled with high loan losses and a sub-optimal cost structure. In 2012 a new management group began to clean up and prepare customers and the organisation for an automated banking future. Kia Motors is part of the Hyundai system, which is the third largest automotive group worldwide. Kia will produce and sell approximately 3.0m cars in 2014 and has very good quality cars with a nice design and an advanced driver experience at reasonable prices. Continued gain of market share including expanding the factory footprint outside Korea as well as a very attractive valuation are the key drivers for the stock. Teva is the largest generic (off patent) pharmaceutical company worldwide, however more than half its revenues come from patented drugs most well known is Teva s multiple sclerosis drug: Copaxone. Teva has expanded considerably in the past decade and since 2012 management focus has been to clean up the organisation, optimise the drug portfolio and production units, sell channels and cut costs. 22

23 For mer informasjon, vennligst se: Siste Markedsrapport Informasjon om SKAGEN Vekst på våre nettsider Historisk avkastning er ingen garanti for framtidig avkastning. Framtidig avkastning vil blant annet avhenge av markedsutviklingen, forvalters dyktighet, fondets risiko, samt kostnader ved kjøp og forvaltning. Avkastningen kan bli negativ som følge av kurstap. SKAGEN søker etter beste evne å sikre at all informasjon gitt i denne rapporten er korrekt, men tar forbehold for eventuelle feil og utelatelser. Uttalelsene i rapporten reflekterer porteføljeforvalternes syn på gitt tidspunkt, og dette synet kan bli endret uten varsel. Rapporten skal ikke forstås som et tilbud eller en anbefaling om kjøp eller salg av finansielle instrumenter. SKAGEN påtar seg intet ansvar for direkte eller indirekte tap eller utgifter som skyldes bruk eller forståelse av rapporten. Ansatte i SKAGEN AS kan være eiere av verdipapirer utstedt av selskaper som er omtalt enten i denne rapporten eller inngår i fondets portefølje.