Global Equities. Vincent Houghton, Laure Négiar, Céline Piquemal-Prade Pavillon Cambon, Paris. For Professional Investors only

Transcription

1 Global Equities Vincent Houghton, Laure Négiar, Céline Piquemal-Prade Pavillon Cambon, Paris For Professional Investors only

2 2 AT COMGEST WE DON T HAVE A CRYSTAL BALL Source: Bill Proud

3 3 AT OUR 2009 JANUARY SEMINAR WE LOOKED AT HISTORY * +156% Data in USD for MSCI AC World and S&P 500. * Performance of the MSCI AC World between 27/02/2009 and 18/11/2014. Past performance is no guarantee of future results. Indices are used for comparison of past performance only.

4 4 WHERE ARE WE TODAY? Taking Shiller PE at face value implies 2.3% p.a. for the Dow Industrials Index over the next decade (+2% dividend yield) Source: Macquarie Research, Factset, September Past performance is no guarantee of future results. Indices are used for comparison of past performance only.

5 5 HISTORY ALSO TELLS US ABOUT THE IMPORTANCE OF EARNINGS Earnings vs. stock prices Price: x392 since 1872 EPS: x256 since 1872 Earnings growth explains 2/3 rd of price appreciation Source: BCA Research, August Past performance is no guarantee of future returns. Indices are used for comparison of past performance only.

6 6 WHAT ABOUT THE GLOBAL EARNINGS PICTURE TODAY? MSCI AC World: Price vs. EPS (in USD, Jan to Oct. 2014) Price EPS +32% % % Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 A low earnings growth environment 80 Source: Citigroup, MSCI, Data as of end October Past performance is no guarantee of future returns. Indices are used for comparison of past performance only.

7 7 IN SUCH AN ENVIRONMENT Investors need a robust portfolio Source: The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment.

8 8 A PORTFOLIO FOR ALL SEASONS Global Equities Composite: Performance* (gross, in EUR) Annualised performance in bull markets (since inception) Annualised performance in bear markets (since inception) Volatility 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Global Equities Composite M SCI All Country World 0% -2% -4% -6% -8% -10% -12% Global Equities Composite M SCI All Country World Number of bull market quarters: 57 Number of bear market quarters: 36 Gross performance in EUR as of 30/09/2014. Source: FactSet/Comgest *Data represents composite, gross-of-fees performance for all funds managed by Comgest in the relevant strategy. Performance is gross of management fees and performance fees (where applicable). The treatment of other fees may vary between collective investment schemes and discretionary accounts. The inclusion of management and other fees would have the effect of decreasing the composite performance results. Reference to the benchmark is for comparative purposes only and is not intended to indicate that the composite will contain the same investments as the benchmark. The volatility of the index may be materially different from that of the composite. The index used for comparative purposes changed from MSCI AC World price to MSCI AC World dividends reinvested from 01/01/2001. Prior to 2000, figures are converted using the relevant FRF exchange rates. Investors have the opportunity for losses as well as profits. Past performance is no guarantee of future results. 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Years Annualised Years Annualised Composite Years Annualised Index Since Inception Annualised

9 9 WITH A ROBUST LONG-TERM TRACK RECORD Global Equities Composite: Performance* (gross, in EUR) Cumulative performance chart % p.a.** % % p.a.** 0 Jun-91 Jul-93 Aug-95 Sep-97 Oct-99 Nov-01 Dec-03 Jan-06 Feb-08 Mar-10 Apr-12 May-14 Composite MSCI AC World - NR Gross performance in EUR as of 30/09/2014. Source: FactSet/Comgest *Data represents composite, gross-of-fees performance for all funds managed by Comgest in the relevant strategy. Performance is gross of management fees and performance fees (where applicable). The treatment of other fees may vary between collective investment schemes and discretionary accounts. The inclusion of management and other fees would have the effect of decreasing the composite performance results. Reference to the benchmark is for comparative purposes only and is not intended to indicate that the composite will contain the same investments as the benchmark. The volatility of the index may be materially different from that of the composite. The index used for comparative purposes changed from MSCI AC World price to MSCI AC World dividends reinvested from 01/01/2001. Prior to 2000, figures are converted using the relevant FRF exchange rates. Investors have the opportunity for losses as well as profits. Past performance is no guarantee of future results. **Gross annualised performance since inception of the composite as of 30/09/2014.

10 10 WHAT S BEHIND IT? #1 An experienced and stable team Diversity Experience Average 20 years of experience in the industry Long-term Céline Piquemal-Prade, Global PM for 11 years and lead manager for 7 years

11 11 WHAT S BEHIND IT? #2 A global team USA Team European Team 7 Japan Team 5 = 38 5 Global Team Analysts/PMs Average 13 years industry experience Emerging Markets Team 19 ESG Team 2 More than 20 nationalities End October Some PMs/analysts are involved in the decision making process of other regional strategies. The ESG analysts supports each regional team.

12 12 WHAT S BEHIND IT? #3 An unconstrained approach 1 Qualitative and quantitative criteria Global Watchlist = Comgest Regional Funds Europe / US / Japan / EM (India, China, Latam & Asia ex-japan) stocks with > $1.0bn free float (25 50 / region) 2 Detailed analysis of candidates Global Investment Universe stocks Selection of global quality growth champions 3 Valuation Global Portfolio stocks Ongoing discussion between global team members No top-down allocation A pure bottom-up process

13 13 WHAT S BEHIND IT? #4 Long-term for real < 1 year in portfolio 1 year 3 years 5 years 19% 25% 21% 36% 57% held for more than 3 years Data as of 30/09/2014. The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment.

14 14 WHERE DO WE FIND GROWTH TODAY? Portfolio weight Market share gains 28% Digitalisation 27% Ageing population 18% Productivity enhancement 17% Globalisation of Western way of life 10% Source: Comgest, 30/09/2014. The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment.

15 15 A QUALITY GROWTH EXAMPLE #1 - HIKARI TSUSHIN A market leader Share of such services among SMEs With recurring profits (in JPY bn) #1 #1 # Mobile 20% market share FTTP 20% market share Virtual network operator 1.6 million subscribers #1 # Wifi router data card 20% market share Life insurance telemarketing 40% market share 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14e Mar-15e 60% of profits is recurring Source: Company data. The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment. Past performance is no guarantee of future results. Forward looking statements or data may not be realised.

16 16 A QUALITY GROWTH EXAMPLE #1 - HIKARI TSUSHIN Visibility of growth: cross-sell drives 15% profit growth And the company is selling to more clients epark Water Cooler MVNO, Wifi Router ISP Telephony, Copiers Market share of corporate mobile phones for SMEs % 20 % Source: Company data. The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment. Past performance is no guarantee of future results. Forward looking statements or data may not be realised.

17 17 A QUALITY GROWTH EXAMPLE #2 - COMCAST Industry best scale Top internet service provider state-by-state (after a Time Warner Cable buyout) Leading to superior gross margins Video gross margin 55% 52% 50% 49% 45% 45% 41% 40% 35% 30% Source: Businessinsider.com (left) / UBS (right). The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment.

18 Penetration of Homes Passed Business Services market share 18 A QUALITY GROWTH EXAMPLE #2 - COMCAST Growth driver #1: Comcast s penetration with high speed data in addressable market (25% of EBITDA) Growth driver #2: Business services (10% of EBITDA) 50% 20% 45% 18% 40% 16% 35% 14% 30% 12% 25% E 2015E 2016E 2017E 10% 3Q13 4Q13 1Q14 2Q14 + pricing = high single-digit EBITDA growth 20%+ top-line growth Source: UBS, Comgest (left) / Company data, Comgest (right). Past performance is no guarantee of future results. Forward looking statements or data may not be realised. The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment.

19 19 A QUALITY GROWTH EXAMPLE #3 - BAYER Competitive advantage #1: Increasingly high barriers to entry in crop science (31% of EBIT) Number of players accounting for 70% of crop science market Competitive advantage #2: A strong brand in consumer health 17 3 #2 global player in OTC Source: Company data. The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment.

20 20 A QUALITY GROWTH EXAMPLE #3 - BAYER Growth driver #1: Pharma (44% of EBITDA) Growth driver #2: Emerging Markets Pharma EBIT per franchise ( m) 6000 Base business xarelto cancer products Others Pharma Consumer health Crop science % 42% 43% % of sales Source: Reasearch By Natixis (left) / Company data (right). The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment. Past performance is no guarantee of future results. Forward looking statements or data may not be realised.

21 21 A QUALITY GROWTH EXAMPLE #4 - GAIL INDIA Gail s pipeline network and other facilities A unique positioning: Gail India operates more than 70% of India s natural gas network ( km of pipeline) LNG terminals Source: Jefferies, Industry note 17/09/2014. The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment.

22 22 A QUALITY GROWTH EXAMPLE #4 - GAIL INDIA Gas to expand as a % of energy consumed (in Asia) Gas imports (imported LNG) to increase LNG share may rise from ~30% in FY13-14 to 50% by F % targeted by government by 2025 Demand to expand: Superior efficiencies versus other sources of fuels Increased supply visibility Supply bottlenecks to disappear thanks to expansion of LNG Source: Citi Research Aug (left) Nomura Research June 2014 (right). The material presented in this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment. Past performance is no guarantee of future results. Forward looking statements or data may not be realised.

23 23 A UNIQUE POSITIONING TODAY Portfolio characteristics vs. MSCI AC World Quality 21% 48% Comgest Monde 11% MSCI AC World 3%* Operating margin 2014e Net debt / Equity* Growth At a reasonable price EPS Growth 8% 12% 12% 7% 9% 11% 6% 17.9x 15.8x 1% e e P/E Next 12 months Data as of 31/10/2014 / Source: FactSet/Citigroup/Comgest *2/3rd of companies net cash Investors should be aware that these figures are provided for information purposes only and Comgest does not take any responsibility for discrepancies which may occur between estimated forward figures and factual market data published over the coming months. Past performance is no guarantee of future results. Forward looking statements or data may not be realised.

24 AND FOR ALL S E ASONS 24

25 25 IMPORTANT INFORMATION This document has been prepared for professional investors only and may only be used by these investors. This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The contents of this document should not be treated as advice in relation to any potential investment. The securities discussed herein may not be held in the portfolio at the time you receive this presentation. Performance figures are provided net of all fees unless otherwise stated and are calculated on a time-weighted, total return basis. Funds which specialise in a particular region or market sector may entail higher risks than those which hold a very broad spread of investments. Past investment results are not necessarily indicative of future investment results. The value of all investments and the income derived therefrom can decrease as well as increase. This may be partly due to exchange rate fluctuations in investments that have an exposure to currencies other than the base currency of the Fund. Reference to market indices or other measures of relative market performance over a specified period of time are provided for your information only. Reference to an index does not imply that the portfolio will achieve returns, volatility or other results similar to the index. The composition of the index will not reflect the manner in which a portfolio is constructed. The information and any opinions have been obtained from or are based on information from sources believed to be reliable, but accuracy can not be guaranteed. No liability is accepted by Comgest in relation to the accuracy or completeness of the information contained in this document. The information in this document is not comprehensive and is presented for informational purposes only. All opinions and estimates constitute our judgment as of the date of this presentation and are subject to change without notice. Comgest does not provide tax or legal advice to its clients and all investors are strongly urged to consult their own tax or legal advisors concerning any potential investment. Before making any investment decision, investors are advised to check the investment horizon and category of the Fund in relation to any objectives or constraints they may have. Investors must read the latest Fund prospectus and the Key Investor Information Document ( KIID ), available at our offices and on our website Investors shall undertake to respect the legal, regulatory and deontological measures relative to the fight against money laundering, as well as the texts that govern their application, and if modified investors shall ensure compliance with the applicable texts. This material is in no case an offer for people living in a specific jurisdiction which does not authorize the distribution of the Funds mentioned herein. The investment professionals listed in this document are employed either by Comgest S.A., Comgest Asset Management International Limited, Comgest Far East Limited, Nippon Comgest Inc, Comgest Singapore Pte. Ltd. Comgest S.A. is regulated by the Autorité des Marchés Financiers (AMF). Comgest Far East Limited is regulated by the Hong Kong Securities and Futures Commission. Comgest Asset Management International Limited is regulated by the Central Bank of Ireland. Nippon Comgest Inc. is regulated by the Financial Service Agency of Japan (registered with Kanto Local Finance Bureau (No. Kinsho 1696)). Comgest Singapore Pte Ltd, created 18 August 2010, is a Licensed Fund Management Company & Exempt Financial Advisor (for Institutional and Accredited Investors) regulated by the Monetary Authority of Singapore.