SKAGEN Vekst Statusrapport juli 2015

SKAGEN Vekst Statusrapport juli 2015

Hovedtrekk juli 2015 SKAGEN Vekst* leverte en avkastning referanseindeks var opp 4,8 prosent. i juli på 1,6 prosent, mens fondets sammensatte Målt i norske kroner var de største positive bidragsyterne Citigroup, Norwegian Air Shuttle og Danske Bank. De største negative bidragsyterne var Samsung, Norsk Hydro og Lundin Petroleum. I løpet av måneden kjøpte fondet seg inn i kulelagerprodusenten SKF. I tillegg ble beholdningen i Credit Suisse og Philips økt. Fondet solgte seg ut av sin posisjon i det danske bryggeriet Royal Unibrew så vel som det koreanske petrokjemi- og solenergiselskapet OCI. SKAGEN Vekst sine 10 største posisjoner har en beregnet kurspotensiale på i snitt 42 prosent. Vi ser et kurspotensiale på 47 prosent på fondets 35 største posisjoner over de neste 2-3 årene gjennom stigende aksjekurser og utbytter. For 2015 og 2016 forventer vi at selskapene i porteføljen viser en årlig gjennomsnittlig inntjeningsvekst på 20 prosent, noe som tilsier at det er rom for positiv kursutvikling, uavhengig av om verdsettelsesmultiplene øker eller ikke. * Om ikke annet er oppgitt, så er alle avkastningstall i rapporten for klasse A etter honorarer. 2

Avkastning, juli 2015 A Juli QTD Hittil i år 1 år 3 år 5 år 10 år Siden start SKAGEN Vekst A 1,6% 1,6% 4,6% 9,4% 15,3% 8,9% 8,0% 14,6% Referanseindeks** 4,8% 4,8% 14,7% 29,3% 22,9% 16,5% 10,3% 10,7% Meravkastning -3,2% -3,2% -10,0% -19,9% -7,6% -7,6% -2,3% 3,9% Note: Alle avkastningstall ut over 12 måneder er annualisert (geometrisk avkastning). Startdato: 1 desember 1993. **Fondets investeringsmandat ble endret med virkning fra 01.01.2014 fra at fondet investerte minst 50 % av sine midler i Norge til at fondet investerer minst 50 % av sine midler i Norden. Tilsvarende ble fondets referanseindeks endret fra en likt sammensatt referanseindeks av Oslo Børs Hovedindeks (OSEBX) og MSCI All Country World til en likt sammensatt referanseindeks av MSCI Nordic Countries IMI Index og MSCI All Country World Index ex Nordic Countries. Referanseindeks før 01.01.2010 var Oslo Børs Hovedindeks (OSEBX). 3

Årlig avkastning siden start (%) SKAGEN Vekst (NOK) 77 66 65 Benchmark Index* (NOK) 39 32 29 32 19 1512 7 46 48 48 38 40 32 32 32 10 11 48 15 16 29 25 23 15 15 1012 5-6 -27-2 -2-1 -17-22 -31-9 -20-44 -54 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Hittil i 2015 *Fondets investeringsmandat ble endret med virkning fra 01.01.2014 fra at fondet investerte minst 50 % av sine midler i Norge til at fondet investerer minst 50 % av sine midler i Norden. Tilsvarende ble fondets referanseindeks endret fra en likt sammensatt referanseindeks av Oslo Børs Hovedindeks (OSEBX) og MSCI All Country World til en likt sammensatt referanseindeks av MSCI Nordic Countries IMI Index og MSCI All Country World Index ex Nordic Countries. Referanseindeks før 01.01.2010 var Oslo Børs Hovedindeks (OSEBX). 4

Markedsutvikling juli 2015 i NOK (%) Danmark Frankrike USA (Nasdaq) Ungarn Sveits Belgia Nederland Italia Finland Spania Østerrike Storbritannia USA (S&P 500) Tyskland Sverige India MSCI Nordic/MSCI AC ex. Nordic Verdensindeksen Japan SKAGEN Vekst A Norge Mexico Indonesia Sør-Afrika Polen Singapore Canada Sør-Korea Tyrkia Hong Kong Russland Vekstmarkedsindeksen Thailand Taiwan Brasil Kina (lokal) Kina (Hong Kong) 2 1 1 2-1 0 0-1 -2-2-2-4 -4-2 -10-10 -4-11 5 5 4 4 5 6 6 6 7 77 7 9 9 8 8 8 8 10 5

Markedsutvikling så langt i 2015 i NOK (%) Danmark Ungarn Japan Italia Kina (lokal) Russland Sveits Frankrike USA (Nasdaq) Nederland Østerrike Hong Kong MSCI Nordic/MSCI AC ex. Nordic Tyskland Finland Storbritannia Verdensindeksen USA (S&P 500) Sverige India Norge Spania Sør-Korea Sør-Afrika SKAGEN Vekst A Mexico Vekstmarkedsindeksen Kina (Hong Kong) Taiwan Singapore Thailand Polen Canada Indonesia Tyrkia Brasil -12-14 -6-3 0 1 2 5 5 4 4 4 4 10 1011 11 12 12 13 1414 19 18 17 16 14 15 21 21 38 38 25 26 25 23 6

Største bidragsytere i juli 2015 Største positive bidragsytere Største negative bidragsytere Selskap NOK Millioner Selskap NOK Millioner Citigroup Inc 42 4E+07 Samsung Electronics Co Ltd -44 Norwegian Air Shuttle AS 41 4E+07 Norsk Hydro ASA -38 Danske Bank A/S 39 4E+07 Lundin Petroleum AB -32 Koninklijke Philips NV 35 4E+07 Continental AG -11 Teliasonera AB 28 3E+07 Kia Motors Corporation -10 Credit Suisse Group AG 17 2E+07 Sodastream International Ltd -9 SAP SE 15 1E+07 AirAsia BHD -9 Kemira OYJ 13 1E+07 Rec Silicon ASA -7 Roche Holding AG 11 1E+07 GCL-Poly Energy Holdings Ltd -5 Frontline 2012 Ltd 10 1E+07 FLSmidth & Co A/S -4 Total verdiskapning i juli (NOK MM): 136 7 Note: Bidrag til absoluttavkastning

Største bidragsytere hittil i 2015 Største positive bidragsytere Største negative bidragsytere Selskap NOK Millioner Selskap NOK Millioner Norwegian Air Shuttle AS 117 # Norsk Hydro ASA -156 Danske Bank A/S 93 # Solstad Offshore ASA -84 Continental AG 73 # AirAsia BHD -76 Citigroup Inc 68 # Samsung Electronics Co Ltd -48 Carlsberg A/S 53 # DOF ASA -47 Volvo AB 45 # Toshiba Corp -47 Teliasonera AB 38 # Kia Motors Corporation -46 SBI Holdings Inc 34 # Casino Guichard Perrachon SA -23 SAP SE 32 # Siem Offshore Inc -18 Novo Nordisk A/S 32 # Electromagnetic GeoServices AS -13 Total verdiskapning hittil i år(nok MM): 438 8 Note: Bidrag til absoluttavkastning

Største beholdninger i SKAGEN Vekst, ultimo juli 2015 SKAGEN Vekst har 54,8% investert i de nordiske landene Vekt i Kurs P/E P/E P/E P/B Kursporteføljen 2015e 2016e 2017e siste mål Samsung Electronics 6,4 % 920 000 6,4 5,9 5,4 0,8 1 500 000 Norwegian Air Shuttle 6,2 % 352 15,3 9,3 7,0 5,8 500 Continental AG 5,8 % 204 12,0 10,8 9,8 3,8 298 Citigroup 5,6 % 58 9,7 8,0 7,2 0,9 77 Norsk Hydro 5,3 % 30 10,2 8,7 7,6 0,8 58 Teliasonera AB 4,8 % 52 13,1 13,1 13,4 2,0 60 Danske Bank A/S 4,6 % 212 11,5 12,0 11,7 1,4 255 Carlsberg 4,4 % 592 15,5 13,1 11,9 1,7 822 ABB 4,1 % 175 15,8 11,5 10,3 3,1 250 Philips 3,9 % 25 21,6 18,1 12,7 2,1 30 Vektet gjennomsnitt topp 10 51,2 % 11,4 9,7 8,6 1,49 42% Vektet gjennomsnitt topp 35 90,1 % 11,6 9,9 8,7 1,28 53% Referanseindeks 17,0 15,4 13,9 2,23 Merk: Inntjeningsestimater er basert på netto konstantstrøm når det er mer relevant. Multipler for topp 10 og topp 35 er kalkulert med samme metodebruk som for indeks. 9

Viktigste endringer 1. kvartal 2015 Økte posisjoner Reduserte posisjoner Q1 Teva Pharmaceutical Industries Kongsberg Gruppen AS Q1 Roche Holding AG Kemira OYJ Frontline 2012 Ltd Danieli & Officine Meccaniche SpA Carlsberg A/S SBI Holdings Inc FLSmidth & Co A/S Toshiba Corp Teliasonera AB Oriflame Cosmetics SA Citigroup Inc ABB Ltd Golar LNG Ltd Danske Bank A/S (Ny) (Ny) (Ny) (Ny) Getinge AB Q-Free ASA Odfjell SE Samsung Electronics Co Ltd Royal UNIBREW A/S Continental AG Novo Nordisk A/S Sparebanken Ost Stolt-Nielsen Ltd Korean Reinsurance Co Norwegian Finance Holding ASA Nokian Renkaat OYJ Avance Gas Holding Ltd Bang & Olufsen A/S Sodastream International Ltd Lundin Petroleum AB 10

Viktigste endringer 2. kvartal 2015 Økte posisjoner Reduserte posisjoner Q2 Credit Suisse Group AG Elekta AB Solar A/S H Lundbeck A/S Golden Ocean Group Ltd Investment AB Kinnevik Carlsberg A/S Kia Motors Corporation Kemira OYJ Norsk Hydro ASA AirAsia BHD Continental AG Danieli & Officine Meccaniche SpA Casino Guichard Perrachon SA Citigroup Inc Teliasonera AB Danske Bank A/S ABB Ltd YIT Oyj (Ny) (Ny) (Ny) (Ny) (Ny) Q2 Toshiba Corp Nokian Renkaat OYJ Toto Ltd Novo Nordisk A/S Norwegian Finance Holding ASA Stolt-Nielsen Ltd Sparebanken Øst Agrinos AS Royal UNIBREW A/S Koninklijke Philips NV SAP SE Korean Reinsurance Co Samsung Electronics Co Ltd Sberbank of Russia 11

Viktigste endringer 3. kvartal 2015 Økte posisjoner Reduserte posisjoner Q3 SKF AB Credit Suisse Group AG H Lundbeck A/S Oriflame Cosmetics AG Koninklijke Philips NV (Ny) Q3 OCI Co Ltd Royal UNIBREW A/S Danske Bank A/S Korean Reinsurance Co Teliasonera AB Norwegian Air Shuttle AS Wilh Wilhelmsen Holding ASA 12

Kjøp og salg, juli 2015 Kjøp SKF Verdens største kulelagerprodusent, og er i tillegg en stor aktør innen tetninger. Ved å skape mer verdier for kundene, bør selskapet være i stand til å øke marginene opp mot selskapets målsetning på 15%. På uttalte målsetninger handles aksjen til 8x P/E. Dersom man legger siste 10 år historisk gjennomsnitt til grunn, en på 13x P/E, så tilsvarer det et kursmål på SEK 290 per aksje (60% oppside). Salg Royal Unibrew Etter å ha solgt seg gradvis ned gjennom de siste kvartalene solgte SKAGEN Vekst seg helt ut av Royal Unibrew i juli. Investeringen har gitt en gevinst på NOK 121 millioner, tilsvarende mer enn 200 prosent siden den ble kjøpt i september 2011. 13

Sektor og geografisk fordeling mot indeks (%) Kapitalvarer, service og transport Inntektsavhengige forbruksvarer Defensive konsumvarer Medisin Bank og finans Informasjonsteknologi Telekom Nyttetjenester Sektorfordeling Energi 7 5 Råvarer 7 6 2 Kontanter 0 16 13 11 9 8 5 14 17 11 11 7 5 0 2 22 23 Geografisk fordeling Asia DM Asia EM Europa DM ekskl. Norden Europa EM Latin Amerika Midtøsten og Afrika Nord Amerika Norden Oceania Kontanter 2 5 1 0 0 1 0 0 0 1 3 2 0 7 12 11 21 28 Fond Indeks 55 50 Nordics in SKAGEN Vekst Finland 1% Norway 20% Sweden 20% Denmark 12% 14

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Key earnings releases and corporate news, July 2015 Samsung Electronics (6.4%) Mixed bag Q2 2015 report. Better semis offset weaker smartphones. Investment case update After the solid growth seen from 2011-13, driven by strong smartphone and tablet sales, the company has had to adjust to a new reality. There s no proof of better sales and profitability in smartphones, so medium term group improvement hangs on performance in semiconductor business as well as overall ability to adjust cost structures to revenues, including improving corporate governance. Target price KRW 1 500 000 for pref. Unpopular: No almost all large global value investors are in it already and 45/53 analysts have buy. Under analyzed: No but as in many cases, the focus is short term. Undervalued: Yes, the 25% CAGR return since late 1990 ies is fully explained by value build no valuation rerating credit for delivering over many years due to opaque governance practice. Net cash position of 51trl W or 29% of the market cap => underlying implied return requirement of 16% on the ordinary share. Above 20% for the prefs. Fact Mixed bag Q2 2015 report. Q2 sales 48.5trl W, down 7% or 4trl W and driven by Consumer Electronics 2trl W lower, smartphones 2trl W lower, other bits and pieces down 1.5trl W and semis up 1.5trl W. The sequential quarterly performance showed flat smartphone sales, and 10% growth in semis and consumer electronics. Operating profit fell 4% to 6.9trl W and driven by 1.7trl W contribution from smartphones, which was countered by a similar increase in semis. Consumer electronics had much lower OP and a margin of only 1.7% vs a historical level above 4%. Net cash was 50.5trl W by end Q2 2015, up from 46trl W during the quarter. 16

Key earnings releases and corporate news, July 2015 Norwegian Air Shuttle (6.2%) Strong figures as expected, long-haul showing its potential. Investment case update Positive, more passengers than ever are selecting NAS and the flights are filling up. Strong numbers gave the company an EBT of NOKm 456 up from -137 year before the best result for the company ever. Price target increased to NOK 500 as prudent increase due to the delivery of more aircrafts next year may impact yield going forward. In 2016 the company will receive an additional 4 Dreamliners and 10 737s. Unpopular: Mixed, analysts 50/50 buy/hold-sell. Under analyzed: No, market starting to realize the potential in long-haul/leasing of ordered planes. Undervalued: Yes, shares trade at +7x earnings for 2017. Near term triggers include leasing and US resolution. Fact Norwegian Air Shuttle (NAS) reported Q2 EBITDA of NOKm 765, 6% above consensus of NOKm 722. Adjusted for a oneoff cost of NOK 84m related to engine maintenance and hedge gains (non-cash) of NOKm 100, underlying EBITDA was NOKm 750, up from NOKm 66 in Q2 2014 12% above consensus of NOKm 667. No news on leasing company or contracts for Airbus planes being delivered in 2016. Strong load factor of 85% in Q2 and an even stronger 91% in longhaul. 17

Key earnings releases and corporate news, July 2015 Continental (5.8%) Very strong profitability improvement in 2Q and company lifts full year guidance. Investment case update Investment thesis is playing out better than estimated. When SKAGEN Vekst bought into it in 2011, Conti was seen as a risky indebted tyre company, despite more than half of sales coming from auto technology. Continental is global leader in automated driving and should be seen as a software company. Target price EUR 298/share indicates 35% upside. Unpopular: Yes, despite 250% price increase, 20 out of 34 analysts are sell/hold. Under analyzed: Mixed, most of the analysts cover tyre or car companies like Michelin and BMW, so the software stuff seems not to be appreciated at current prices Undervalued: : Yes, target is EUR 298 indicating 35% upside. Fact Group 2Q sales 10.0bn EUR, up 18%, EBITDA 1.633bn up 25% and EBIT 1.18bn up 30%. 18

Key earnings releases and corporate news, July 2015 Citigroup (5.6%) Our target for annual net income run-rate of 20bn $ intact and dividend machine getting more potent. Investment case update Our investment thesis of cost cutting potential and other optimization processes is playing out nicely. When we entered into the investment Citi was perceived as a poorly managed global bank with lots of hangovers from before the financial crisis in 2008. In 2015 the clean-up process is clearly showing its impact, so the next chapter in Citi stock life is higher dividends and share buy backs. There are still bad assets on the balance sheet and litigation cases to be settled, but the current operating performance should mitigate those concerns. Target price USD 77/share. Unpopular: Yes, sell side analysis and commentary has become more positive in recent months, however this is of little concern as the valuation does not show signs of Citi being popular. Under analyzed: Many analysts follow the company, however time-horizon and impact of management focus on profitability is not factored in. Most large banks are perceived negatively due to behavior before and after the financial crisis. However, in recent months the sentiment has started to improve. Undervalued: : Yes. Fair value of USD 77/ share versus current USD 58/share. Fact Citi reported Q2 2015 numbers. Revenues in core bank were up 2% to USDbn 17.8 and revenues in the garbage can bank (Citi Holdings) were down 16% to USDbn 1.7. Expenses declined 7% to USDbn 10.9 and credit losses declined 12% to USDbn 1.9 (29 basis points and in-line with previous quarters). Taxes were USDbn 2.0 despite Citi having an USDbn 48 tax-loss carry forward. Net income adjusted was up 18% to USDbn 4.7 or close to our estimated USDbn 20 annual run-rate. Net income in Citi Holdings was USDm163 vs a loss of USDbn 3.5 in Q2 2015. 19

Key earnings releases and corporate news, July 2015 Norsk Hydro (5.3%) Rough H1 due to decrease in aluminum prices in Q2, helped by weak NOK and alumina volumes. Investment case update Positive, though the impact of declining aluminum prices have been brutal on the share price. Clarity on tax case in Brazil gives less uncertainty, but at a cost. Strong balance sheet gives possibilities versus other competitors, improved cash position could surprise on the upside through increased dividend or share buy-back. Negative result in the Metal Trading should be watched carefully going forward. Price target NOK 57,5/share. Unpopular: No, 27 analysts follow the company with a 70% majority rating it a cheap and good investment. Under analyzed: No, though NHY has been able to show impressive cost discipline and improvement in realized prices, both in finished products and primary metal. Undervalued: : Yes, looks like one of the cheapest producers of alumna and their low cost production in the Middle-East. Current price is P/B at 0.86, price target maintained 58 NOK, which gives a reasonable P/E of 2016 of 8.4x. Fact The strong momentum continued into Q2 despite 8% lower realized aluminum prices. EBIT of NOK2,667m (-17% QoQ) and net income of NOK1,830m (-17% QoQ). Lower EBIT was mainly impacted by negative valuation effect on inventory, though at current levels the oversupply in the market and 20% of global smelter capacity is loss making. During 2008-2012 NHY closed down 26% capacity of the high cost smelters and today is a low-cost producer and don t plan to close any additional capacity. 20

Key earnings releases and corporate news, July 2015 TeliaSonera (4.8%) Q2 2015: Cash flow saved by the Turkcell dividend Telia is a stable 6% dividend stream with net cash flow equal to the dividend payout of 3.00 SEK / share. If cash flow is reduced then the dividend case falls apart. To increase net cash flow, Telia must improve profitability or load of assets. Denmark, Spain, Megafon and Turkcell are on that to-do list. Target price SEK 60/share. Facts Revenues rose 9% to 27bn SEK, EBITDA rose 4% to 9.2bn SEK, capex rose 31% to 4.6bn SEK and thanks to 4.7bn SEK dividend from Turkcell cash flow improved 155% to 6.3bn SEK. Sweden is the big cash cow and Telia is building out fiber to the home, mobile data networks and various content packages (we don t like their recent buying of a stake in Spotify). Danske Bank (4.6%) High quality earnings in Q2 2015 and guidance upgrade Revenue streams and costs structure are now where they should be, capital position satisfies regulatory requirements, so Danske Bank can now pay out 80-90% of earnings as banking in all due respect is not a growth industry, so capital requirements will only grow modestly. Target price DKK 255/share. Facts Danske Bank s 2Q 2015 report showed 5% lower revenues due to less trading income, 5% lower costs (cost ratio 46.4% down from 60% a few years ago) and reversal of loan loss provision of 200m DKK. ABB (4.1%) Q2 2015: Margins higher despite some headwinds. Negative sentiment slowly shifting Positive: ABB s order intake and ability to expand margins despite headwinds related to its oil/gas business (c. 12% of total) were impressive and resulted in one of the first beats in several quarters. Sentiment is slowly moving from oil price concerns towards what ABB actually could do to improve shareholder value through self- help (cost cutting, improved mix, cross selling between divisions and better capital allocation). Target price SEK 250/share. Facts ABB Q2 2015; Organic order growth -4% (better than expected) vs. difficult comps Q2 2014. Revenue grew 3% organically with service revenues growing 9%. Improved mix contributed to 100bps improvement in EBITA margin which came in at 11,7%. 21

Key earnings releases and corporate news, July 2015 Philips (3.9%) SAP (3.5%) Q2 2015: Health care division showing signs of recovery after weak trend Philips is set to separate into one med-tech and one lighting business over the course of next two years. The aim of this is to focus more on core competencies within health care. However, after weak trend in the health care division, there were concerns over the competitiveness of the offering (lost market share to GE and Siemens among others). It was thus encouraging to see that health care appears to be in recovery mode. We believe that the health care market is long term attractive and that Philips position within medical imaging is an advantage which is not yet reflected in the share price. Target price EUR 30/share. Facts 2Q 2015: Sales EUR 5,974m (+3% organic) as health care division (driven especially by US operations) recovered and showed 8% organic growth after posting sluggish growth last 6 quarters. Adj EBITA EUR 501m (8.4% margin vs 7.9% Q214).Health care reversed weak margin trend and expanded despite currency headwinds. Q2 2015: 9% underlying growth and rapid transition towards Cloud based software In order to get more popular and hit our EUR 90-100 price target, SAP needs to: 1) continue their expansion, 2) improve profitability a notch or two and 3) stop spraying cash at odd software companies as if we are still in the early 2000 ITbubble. Facts Q2 2015 report showed underlying growth of 9%, but strong $ made revenues grow 20% to 5.0bn and operating income of 1.4bn, up 13%. New cloud based software is initially with lower margin due to more set-up costs on SAP side, but eventually the gross margin will be 90% as for on premises based software. KIA Motors (3.4%) Q2 2015: Hurt by Chinese competition Weak Q2 2015 as competition in China increased and currencies remained unfavorable. Chinese domestic cars are considerably cheaper than KIA s. With 23% of total volumes in China, this is a concern going forward. To tackle this, KIA will launch new SUV models and the K5 as well as expand their dealerships in Western China. KIA is growing in line with the market in the US and EU, which is good. Short term sales in the EU and US should benefit from launch of new SUV Sportage and the K5. Trading on 6x 2015 eps shares are cheap, especially compared to global peers which trade above 10x. Target price KRW 60 000/share. Facts Revenue KRW 12,4trl +1,5% Y/Y from KRW 12,1trl. 1H15 sales trend: Korea 11% growth vs Market growth 6%, US growing in line with market 4.5%, EU growing inline with market 8%.China declining 2% on market which grows 8%. EBIT KRW 651bn (in line with consensus) down 15,5%Y/Y from KRW 770bn. 22

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. Norwegian Air Shuttle is the leading Nordic-based low cost airline, which in 2014 flew 24m 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. 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. Citigroup Inc. or Citi is an American multinational banking and financial services corporation headquartered in Manhattan, New York City. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate Travelers Group in October 1998. 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. 23

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. 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. Carlsberg A/S is an international brewing company. The Company produces branded beers and regional brands. Carlsberg makes most of its beer outside of Denmark and it is sold in markets around the world. The Company also markets and produces soft drinks, water and wine. ABB is a multinational corporation headquartered in Zurich, Switzerland, operating mainly in robotics and the power and automation technology areas. ABB is one of the largest engineering companies as well as one of the largest conglomerates in the world. ABB has operations in around 100 countries, with approximately 150,000 employees. 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. 24

SKF (SKFb SS) 170SEK Mean reversion Special situation Long term value builder 100% ESG History, and description of business:. Sweden HQ based SKF was founded in 1907 on Sven Wingquist patent on ball bearings. Today, SKF is the largest bearing manufacturer in the world and employs approximately 44,000 people in approximately 100 manufacturing sites that span 70 countries. Sales distribution 44% EU, 31% Am, 25% Asia. Main competitors; Timken, NSK and Schaeffler. Business model and rationale for investment: By migrating from offering single products towards complete solutions, the company has been able to capture more value per customer. As a result, the company has achieved good pricing power and should gradually be able to increase margins towards the 15% long term goal through continuous improvement. Topline driven by 1: recovery in demand, 2: increased market share and 3: increased offering. On the back of this, company s topline should be able to reach SEKbn 90 (6% CAGR) by 2018 (Co targets 8% CAGR). Triggers: Short term: Improving demand driven by wind, cars and trucks Medium term: Continued improvement in demand and margin improvement Long term: Reaching SEKbn 100 with EBIT margin 15% (SEKbn 15) Risks: No major recovery in industrial production, Strong SEK, slowdown in Asia. Target price: SEKbn 90 topline as explained above, 15% ebit margin generates FCF 22/share. 10 years historical average multiple of 13x give SEK 290/share 60% upside. Key figures: Market cap USD 9bn SEK 78bn Net debt (cash) SEK 18,5bn No. of shares 455M No. of pref 0 P/E 2015 (CY) 13x P/E 2016 (CY) 10x P/BV trailing 3x ROE 2014-15 20% Yield 3% Altman Z score 5 Daily turnover SEK 400m No of analysts 29 with sell/hold 72% Owners Wallenberg 10%, Skandia 7%, Alecta 6% www.skf.com 25

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.