Nordiske børser – best i klassen siste 50 år

Vegard Søraunet Senior Porteføljeforvalter ODIN Norden, ODIN Sverige og ODIN Emerging Markets

Nordiske børser – best i klassen siste 50 år

Vegard Søraunet

Senior Porteføljeforvalter ODIN Norden, ODIN Sverige og ODIN Emerging Markets

3

Long-term return – “The Nordics on top”Annualized real returns 1965-2014

Source: Credit Suisse, Global Investment Returns Yearbook 2015, Dimson, Marsh, Staunton, London Business School.

Value creation versus Price- PB vs. ROE (16E)

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%0

0.5

1

1.5

2

2.5

3

3.5

4

Sweden

Norway

Denmark

Finland

USA

UKFrance

VINX

Japan Germany

Belgium

Austria

Switzerland

SpainNetherlands Portugal

Return On Equity (2016e)

Price to book value (2016e)

Source: Factset, per 24.02.2016

Value creation

Our funds even better value creation- PB vs. ROE (16E)

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%0

0.5

1

1.5

2

2.5

3

3.5

4

ODIN Sverige

ODIN Norge

ODIN Finland

ODIN Norden

Sweden

Norway

Denmark

Finland

USA

UKFrance

VINX

Japan Germany

Belgium

Austria

Switzerland

SpainNetherlands Portugal

Return On Equity (2016e)

Price to book value (2016e)

Source: Factset, per 24.02.2016

«Why world leading quality companies»

Long term owners (mainly Sweden)High dividend yieldShareholder return focusProfitable growthNiches with «pricing power»Global export companies

Small home marketSome big sectors - exposure

7

Why focus on value creation?Returns of the highest value creation against the lowest value creation companies

Period 31.03.2000 - 03.02.2016

Source: Factset, ODIN

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150

100

200

300

400

500

600

700

800

900

1000

Best Bucket ROE Worst Bucket ROE MSCI Sweden

900

157

201

Why Nordics?Attractive sector exposure

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Energi

Bank og finans

Konsum - inntekt

Konsum - defensiv

Helse

Industri

Teknologi

RåvarerTelecomForsyning

Pr. 12.10.2015. målt ved all cap indekser (SAX, OSEAX, KAX, HEX)

Why Nordics?Corporate Governance

Styret

General-forsamling

CEO

Ledelsen

ValgkomitéRevisor

Styreleder/ CEO

General-forsamling

Ledelsen

Valgkomité

Revisor

?

Source: Factset and annual reports; per 07.10.2015 (LTM)

ODIN Norden – selling products globally Important growth driver

North America 15%

Central & South America 4%

Nordic 27%

Rest of Europe 28%

China 6%

Rest of Asia/Pacific 13%

Africa & Middle East 4%

Russia 3%

The NordicsThe business proposition

• High historical total return

• High quality companies

• Sectorial diversification

• Global «exposure»• Nordic corporate governance

The Nordic equity investment

universe facilitates

12

Investment ObjectiveLong term value creation

We try to find companies with proven track records,

with strong competitive advantage, trading at attractive prices

13

Industry laggards, relative return 3yrs laterPrice

Quality - Value creation1

Verdiselskaper

1

1 Investment Universe

ODIN Modelin theory

Quality (Value creation)

Price

ODIN Model, in practiceDifferent Value Investments

14

«Transformation»

«Supply/demand»

«Competitive advantage»

ODIN Norge, ODIN Sverige, ODIN Finland

ODIN Norden

Quality (Value creation)

Price

ODIN Model, in practiceDifferent Value Investments

15

«Transformation»

«Supply/demand»

«Competitive advantage»

Active fund manager: Nordic UniverseThe fight for quality

The Nordic universe721

M.Cap > EUR 600m235

5 YR avg ROE > 8%158

Dividend Yield > 2%118

Net Debt to EBITDA <

3,5x85FCF Yield >2% (LT

interest rate)65

16The fund is currently EUR 1,0bn under management, if you want a 3% position and not own more than 5% of the oustanding shares in the company, the the implied market cap is approx EUR 600 mill.

Source: Bloomberg

Criterias # comp.

The Nordic Market 721Fund size EUR 1,0bn

M.Cap size > EUR xx 600 2355 years average ROE > 8 % 158Dividend yield > 2% 118Net debt / EBITDA < 3,5x 85Free cash yield > 10 year bond (2%) 65End result # companies 65

Total return

Earnings growth

Dividend Yield P/E

Fundamentals Change in price

Contributor to total return?

22.1%

16.5% 2.9% 2.6%

Fundamentals Change in price12%88%

Annual total return last 10 years

Sweden the growth locomotiveNordic GDP

GDP (Real)

%

-10,0

-7,5

-5,0

-2,5

0,0

2,5

5,0

7,5

10,0

2008 2009 2010 2011 2012 2013 2014 2015

Sweden, SEKFinland, EURDenmark, DKKNorway (Mainland), NOK

Source: Odin, Macrobond

Nordic GDP (Real), IMF WEO

IMF est.

-5

-4

-3

-2

-1

0

1

2

3

4

5

1980 1985 1990 1995 2000 2005 2010 2015 2020

NorwaySwedenDenmarkFinlandNorden GDP

Source: Odin, Macrobond

Government Benchmarks, 10 Year Yield

Per

cent

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

1985 1990 1995 2000 2005 2010 2015

Denmark Finland Sweden Norway

Source: ODIN, Macrobond

Interest rates down

Renter, 10-år

Better environment for export driven companies

Handelsvektet valutakurs

Kilde: ODIN og Macrobond

Pricing of the Market- VINX

Source: Bloomberg

*Per 27.11.2015

Jun-06Jun-07

Jun-08Jun-09

Jun-10Jun-11

Jun-12Jun-13

Jun-14Jun-15

0

20

40

60

80

100

120

140

160

180

VINX Benchmark = 1.99

Index level Price book=1.5 Price book=2.5

2015 – Fund performance

ODIN Norden ODIN Sverige ODIN Finland ODIN Norge0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

10.7% 22.2% 4.4%

2.1%

33.2%

38.2%

27.9%

8.8%

Meravkastning mot referanseindeks

NOK 2 milliarder in outperformance for customers

ODINs recommended products

ODIN Rente ODIN Konservativ ODIN Flex ODIN Horisont ODIN Aksje

0 % 25 % 50 % 75 % 100 %

Linjen viser aksjeandelen.

ODIN Aksje invest in five different funds12.5 %

12.5 %

25 %25 %

25 %

ODIN Emerging Markets ODIN Norge ODIN GlobalODIN Europa ODIN Norden

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ConclusionsDont cross the street for hunting performancePut your money to fund managers which you believe in.Choose an «active manager» Size mattersBe patient and long termUse corrections to increase your savings

Corrections Average performance -11% Average time 5,5 months

AuM

Active Share