ODIN Norden. Fondskommentar oktober 2015

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1 ODIN Norden Fondskommentar oktober 2015

2 Fondets portefølje

3 ODIN Norden - oktober 2015 Avkastning siste måned og hittil i år Fondet leverte siste måned en avkastning på 6,2 prosent. Referanseindeksens avkastning var 4,2 prosent. Hittil i år er fondets avkastning 25,7 prosent. Referanseindeksens avkastning er 16,8 prosent hittil i år. Kjøp og salg siste måned og hittil i år Siste måned har vi solgt DSV og kjøpt Hexagon. Hittil i år er de største endringene kjøp av Hexagon, Marine Harvest og Sweco, samt salg av DSV, Subsea 7, Amer Sports og Telenor. Bidragsytere siste måned og hittil i år De beste bidragsyterne siste måned var Autoliv, Huhtamaki og Yara. De svakeste bidragsytere siste måned var Handelsbanken, DNB og Novo Nordisk. Hittil i år er de beste bidragsyterne Novo Nordisk, Huhtamaki og Protector Forsikring. De svakeste bidragsyterne hittil i år er Sparebank 1 SMN, Metso og DNB.

4 ODIN Norden - oktober 2015 Prising av fondet Fondet prises til 16,0 ganger neste 12 måneders resultater. Fondet gir en forventet direkteavkastning på 3,4 prosent. Målt mot bokført egenkapital prises fondet til 2,6 ganger. Selskapene i fondet har en gjennomsnittlig egenkapitalavkastning på 15,2 prosent. Prising av det nordiske aksjemarkedet - VINXBCAPNOKNI Markedet prises til 16,2 ganger neste 12 måneders resultater. Markedet gir en direkteavkastning på 3,6 prosent. Målt mot bokført egenkapital prises markedet til 2,3 ganger. Selskapene i referanseindeksen har en gjennomsnittlig egenkapitalavkastning på 13,3 prosent. Makroøkonomi OECDs ledende indikatorer viser nå en endringstakt på trend for økonomiene i området de seneste månedene.

5 Nøkkeltall og nyheter fra porteføljen - presentert på engelsk

6 Portfolio Return Last 5 years % (NOK) ODIN Norden Index Historical Return % (NOK)* Last Month YTD 1 Y 3 Y 5 Y 10 Y Since inception Portfolio 6,22 25,69 34,83 25,39 11,62 7,37 12,87 Benchmark 4,21 16,80 24,97 25,94 14,33 10,57 10,00 Exess Return 2,00 8,89 9,86-0,55-2,71-3,20 2,88 * Returns for periods exceeding 12 months are annualized

7 Annual returns last 10 years

8 Up or down In or out ODIN Norden Significant Portfolio changes year to date Number of changes in portfolio year to date Q1 Q2 Q3 Q Buy Sell Q1 Q2 Q3 Q Marine Harvest Subsea 7 Sweco Amer Sports Hexagon DSV Telenor DNB Marine Harvest Intrum Justitia Autoliv Nordea Amer Sports Metso Carlsberg Kongsberg Gruppen Marine Harvest ABB H&M Sparebank 1 SMN Novo Nordisk Protector Sweco Carlsberg Sparebank 1 SMN Kongsberg Gruppen Yara Huhtamaki Assa Abloy Indutrade Intrum Justitia Huhtamaki

9 Pricing of the fund Company Weight Country Industry P/E (LTM)* P/E (NTM)* DivYield (LTM) DivYield (NTM) P/B ROE Novo Nordisk A/S Class B 7,4% Denmark Pharmaceuticals 28,2 23,7 1,7 2,0 20,7 73,3 Autoliv Inc Shs Swedish DR 6,2% Sweden Auto Components 19,6 16,9 1,8 2,0 3,1 15,8 Hennes & Mauritz AB Class B 5,2% Sweden Specialty Retail 25,8 23,7 3,0 3,2 9,8 37,8 Atlas Copco AB Class B 4,3% Sweden Machinery 17,8 17,0 3,6 3,2 5,0 28,3 Marine Harvest ASA 4,2% Norway Food Products 20,1 13,8 5,0 5,6 2,9 14,3 Huhtamaki Oyj 4,1% Finland Containers & Packaging 20,4 17,8 2,2 2,5 3,6 17,4 Sampo Oyj Class A 4,1% Finland Insurance 15,3 15,4 4,7 5,1 2,2 14,1 Yara International ASA 4,0% Norway Chemicals 10,8 10,9 3,6 3,8 1,5 13,9 ABB Ltd. 3,7% Sweden Electrical Equipment 18,4 16,5 3,9 4,1 2,9 15,6 Intrum Justitia AB 3,6% Sweden Commercial Services & Supplies 19,5 18,6 2,6 2,9 7,0 35,9 Topp 10 46,8% 19,0 17,1 3,0 3,3 3,7 19,3 ODIN Norden 16,9 16,0 3,2 3,4 2,6 15,2 * NTM = Next 12 months LTM = Last 12 months Adjusted earnings and fully diltuted number of shares

10 Sector allocation

11 Sector performance*, year to date (Sorted by weight in portfolio)

12 Current holdings

13 Share price performance*, year to date (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.

14 Contribution, year to date

15 Risk Statistics (NOK) 3 Years Portfolio Index Active share 0,63 Sharpe ratio 1) 2,41 Standard Deviation 2) 9,93 2,64 9,28 Portfolio Alpha -0,59 Beta 1,01 Tracking error 3,37 Information ratio -0,16 1) Sharpe Ratio uses Norway - 3 MT Bills as risk free rate. 2) Standard Deviation is based upon monthly volatility.

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

18 The International Monetary Fund (IMF) Economic growth forecast

19 DSV - Sold due to valuation Friday Oct 9, DSV announced public tender offer for UTI Worldwide. This is still subject to regulatory approval and consent from UTI shareholders. The deal is expected to close in Q Performance - last 5 years DSV and UTI complement each other both in terms of business activities and geography. Currently, UTI operates with EBITDA close to zero and slightly negative EBIT. DSV s target is to bring the UTI EBIT margin to the current group level of 5.5% in 2-3 years time by realizing synergies. Although we like both DSV as a company and the acquisition of UTI, we sold our position in DSV in October. This was solely due to valuation. The share have given us a total return of almost 50% YTD, and most of this came as re-pricing. At the current price level we see limited upside potential in the share, even including the potential synergies from the UTI acquisition.. 50 DSV A/S 0 nov.10 nov.11 nov.12 nov.13 nov.14 nov.15 DSV A/S OMX VINX Benchmark Capped TR Trucking Market Value (mill.) 49,140 Price Price currency DKK Net debt (mill.) 5,859 Reporting currency DKK Enterprise Value (mill.) 54,999 FX rate (NOK) E 2016E Sales (mill.) 42,562 43,710 44,912 45,710 48,582 51,255 53,369 EBIT (Operating Income) (mill.) 2,164 2,410 2,508 2,496 2,626 3,050 3,258 Net Income (mill.) 1,184 1,440 1,427 1,577 1,490 2,047 2,219 Price/Earnings Price/Book Value EV/EBIT Return on Equity (%) Dividend Yield (%)

20 Hexagon - New portfolio holding Growth in a low growth environment is rare. Therefore, we have invested in Hexagon during the stock market correction this autumn. Hexagon has a proven business model with yearly organic growth of around 7 percent for measurement technology last 10 years. In addition to this they have done successful acquisitions and expanded their product mix to more software and recurring business. Since 2014 they have done 10 bigger acquisitions with the majority in the software segment. We think M&A could continue they have a stellar track record of paying reasonable multiples and extracting both cost and sales synergies. Due to increased software content the company margins have expanded over the years and we are now looking for 25 percent EBIT by the year What s intriguing with Hexagon is that they re constantly developing new technologies to expand their addressable market, and their core businesses still have some way to go in terms of penetration. Its hard to buy this quality company at screamingly low valuation. But after the recent downturn we found the price reasonable Performance - last 5 years 0 nov.10 nov.11 nov.12 nov.13 nov.14 nov.15 Hexagon AB Class B Hexagon AB Class B OMX VINX Benchmark Capped TR Information Technology Services Market Value (mill.) 106,815 Price Price currency SEK Net debt (mill.) 17,072 Reporting currency EUR Enterprise Value (mill.) 123,888 FX rate (NOK) E 2016E Sales (mill.) 1,478 2,169 2,380 2,430 2,622 3,050 3,204 EBIT (Operating Income) (mill.) Net Income (mill.) Price/Earnings Price/Book Value EV/EBIT Return on Equity (%) Dividend Yield (%)

21 Securitas - Strenghtens its technology offering 250 Performance - last 5 years In October, Securitas announced that it agrees to acquire Diebold s North American Electronic Security business. This business, based in Green, Ohio, USA, is the third largest commercial electronic security provider in North America. For more than 70 years, Diebold s North American Electronic Security business has brought together technology innovations, security expertise and quality services to become a leading provider of comprehensive electronic security solutions and services to business customers. Today the operation delivers a full spectrum of capabilities including design, build, integration, installation, monitoring and service. The acquisition supports Securitas long-term strategy to increase their technology content. The acquired business has approximately 1100 employees. The operation includes more than monitored customer locations and sites serviced. The 12-month sales, from June 30, 2014 through June 30, 2015, amounted to MSEK The purchase price is approximately MSEK (which according to Securitas' calculations equates to approximately 11x estimated EBITDA for 2015). Furthermore, Securitas delivered strong Q3 numbers, where technology grew significantly nov.10 Securitas nov.11 AB Class Bnov.12 OMX nov.13 VINX Benchmark nov.14 Capped TR nov.15 Securitas AB Class B Miscellaneous Commercial Services Market Value (mill.) 42,237 Price Price currency SEK Net debt (mill.) 10,856 Reporting currency SEK Enterprise Value (mill.) 53,093 FX rate (NOK) E 2016E Sales (mill.) 61,340 64,057 66,458 65,700 70,217 80,681 86,488 EBIT (Operating Income) (mill.) 3,548 3,095 2,798 3,037 3,230 3,830 4,173 Net Income (mill.) 2,083 1,736 1,201 1,853 2,068 2,475 2,685 Price/Earnings Price/Book Value EV/EBIT Return on Equity (%) Dividend Yield (%)

22 SCA - Strengthens its position in North America Performance - last 5 years In October, SCA announced that it is acquiring Wausau Paper Corp, a North American Away-from-Home tissue company. Wausau Paper s product portfolio complements SCA s offerings in North America and gives it access to premium tissue in the region. The acquisition is subject to shareholder and regulatory approval, and is expected to close during Q If approved, SCA will increase its market share on the North American Away-from- Home Tissue market from 19 to 26 percent. Thereby, becoming the second largest player on this market. Wausau Paper s reported sales for the first half year 2015 amounted to USD 175 million (SEK 1.5 billion), EBITDA of USD 32 million (SEK 268 million) and operating profit of USD 11 million (SEK 94 million). SCA will acquire Wausau Paper for total consideration of USD 513 million (approximately SEK 4.2 billion) in cash. The acquisition is expected to generate annual synergies amounting to approximately USD 40 million with full effect three years after closing. And the restructuring cost is estimated to amount to approximately USD 50 million. We are in favor of this acquisition as it complements SCA both business wise and geographically nov.10 nov.11 nov.12 nov.13 nov.14 nov.15 SCA Class B Svenska Cellulosa Aktiebolaget Class B OMX VINX Benchmark Capped TR Household/Personal Care Market Value (mill.) 181,072 Price Price currency SEK Net debt (mill.) 34,095 Reporting currency SEK Enterprise Value (mill.) 215,167 FX rate (NOK) E 2016E Sales (mill.) 109,142 81,337 85,408 89, , , ,347 EBIT (Operating Income) (mill.) 8,747 7,655 8,487 9,663 11,516 13,084 14,117 - Net Income (mill.) 5, ,453 5,547 6,599 6,515 9,059 Price/Earnings Price/Book Value EV/EBIT Return on Equity (%) Dividend Yield (%)

23 Investment Objective Long term value creation

24 Investment Philosophy Performance - prospects - price

25 Om ODIN Norden På vegne av våre kunder, er ODIN en aktiv og ansvarsfull forvalter med fokus på langsiktig verdiskaping. I Norden skjer verdiskapingen i stor grad av selskaper som er verdensledende i sine bransjer. Norden er ODINs hjemmemarked, noe som gjør at vi har kunnskap, historikk og erfaring på vår side. Gjennom aksjefondet ODIN Norden kan også du ta del i verdiskapingen som skjer i det nordiske næringslivet. Fakta om fondet Etableringsdato 01/06/1990 Referanseindeks VINXBCAPNOKNI Basisvaluta NOK Forvaltningshonorar 2,00% Tegn./innløsningsgebyr 0,00% Minste tegningsbeløp NOK

26 Om forvalter

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28 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

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