Jupiter European Opportunities SICAVCédric de FonclareJune 2013FOR PROFESSIONAL AUDIENCES ONLY. NOT FOR RETAIL INVESTORS.
Agenda The team Our philosophy and process Current positioning Stock examples Portfolio data Outlook1
The teamFund Manager:Cédric de Fonclare2Fund Manager:Gregory Herbert 14 years at Jupiter €1.4bn AUM, of which 59% in Europeex-UK mandates, 41% pan-European Winner, Morningstar European EquitiesFund Manager of the Year 2011Source: Jupiter, AUM as at 31.03.13. Past performance is no guide to the future.Note: Years at Jupiter as at 04.06.13. 8 years at Jupiter, of which 6 onEuropean equities team Assistant to Cédric since 2007 Manager, European portion ofJupiter Global Managed, JupiterEuropean Income and Jupiter GlobalEquity Income and Co-manager JupiterGlobal Equities (SICAV)
Jupiter’s investment team3 Equity-focused culture(€34bn AUM, 58.2% equities; 39.5% FI, mixed assets & cash; 2.3% alternatives) Common stock picking approach Experienced team, all based in one location High staff retention rate(average >8 years for fund management team)European team(7 members)UK team(8 members)Fixed income(8 members)Financials(3 members)US(1 member)EMs(9 members)Japan(2 members)SRI(3 members)Successful formula, tried and tested over many yearsSource: Jupiter, AUM as at 31.03.13. Past performance is no guide to the future.
Agenda The team Our philosophy and process Current positioning Stock examples Portfolio data Outlook4
Investment philosophy Bottom-up stock picking Majority of portfolio targeting quality companies withvisible growth Strict valuation discipline Pragmatic allocation of portfolio targeting mean reversion invaluation over the cycle Broad diversification, with rigorous risk controls5
Addressable universe of European stocks narrowed down by market cap Our addressable universe: c.1300 stocks > EUR1bn market cap Average market cap of portfolio: EUR 23bn*7*Source: Jupiter as of 31.01.13. Total Western European universe = c.9900 companies .
Stock selection – filtering our investment universe Investment universe Diversified exposure across European markets and sectors Focus on large and mid caps Quantitative screening for: Sustainable economic profit Low implied expectations Intra-sector value Qualitative Direct contact with senior company management Jupiter’s internal expertise across different specialities External input8
Stock selection – process Qualitative assessment Industry dynamics, barriers to entry Business model sustainability Strategy for growth Financial characteristics Organic growth development Margin stability: gross margin development, operating leverage Cash flow generation Valuation Historical valuation (Cyclically-adjusted P/E, Price/book, EV/EBITDA) Peer comparison Reverse DCF9No substitute for direct company contact!
Portfolio construction Structure: Typically 45-60 stocks held 1%-4% positions, all large active positions vs. benchmark Weighting defined by upside potential and risk diversification benefits Style Core of portfolio: visible defensive growth (exposure to structural growth,consistent historical returns, typically multi-year holdings) Tactical allocation: pragmatic approach through economic cycle; meanreversion in valuation10
Risk management Formal Jupiter risk management Trading: central dealing desk, managed via Charles River Independent risk analytical team: measure active risk ex ante analyticsthrough Barra, liquidity risk via FactSet Compliance guidelines: independent portfolio monitoring Independent risk committee: monthly and quarterly performance review Dynamic Understand what you are investing in! Business risk paramount – regularmeetings with companies and competitors Manage active risk by sector, growth drivers Focus on liquid stocks Selling discipline: No more upside; structural change in investment case;errors of judgment…12
Agenda The team Our philosophy and process Current positioning Portfolio data Outlook13
Portfolio informationTop 20 holdings Portfolio featuresSource: Jupiter as at 30.04.13. *Small: below €1bn, Mid: €1bn-5bn, Large: €5bn+. Excludes cash.Investable market cap split*Fund size €161mNumber of holdings 56Equities 98.5%Cash 1.5%%UBS 3.0Sanofi 2.8Adidas 2.7Linde 2.6SAP 2.6Bayer 2.5Inmarsat 2.4Ryanair 2.4Safran 2.4Prudential 2.4SES Global 2.3Syngenta 2.3The Swatch Group 2.2SCA-B 2.2Zodiac 2.2Givaudan 2.2GlaxoSmithKline 2.2Fresenius Medical Care 2.1Experian 2.0Neopost 2.014Diversified and liquid portfolioLarge, 81.9%Mid, 18.1%
Top 10 active positions15Diversified active exposureName Active weight (%)Ryanair IR Consumer Services 2.6Adidas AG DE Consumer Goods 2.5Safran FR Industrials 2.3Linde DE Basic Materials 2.2Inmarsat GB Telecommunications 2.2Zodiac Aerospace FR Consumer Services 2.2UBS CH Financials 2.1SES LU Consumer Services 2.1Givaudan GB Consumer Goods 2.1Swatch CH Consumer Goods 2.0Source: FactSet, average over 1 month period, as at 31.05.13.
Portfolio informationSector weightings relative to FTSE World EuropeSource: Jupiter, FactSet 31.05.13.17International reach with reduced political risk-8%-6%-4%-2%0%2%4%6%8%10%Industrials BasicMaterialsTechnology ConsumerServicesHealth Care Telecoms Utilities Financials ConsumerGoodsOil & Gas
Portfolio informationCountry weightings relative to FTSE World Europe18Overweight Northern EuropeSource: Jupiter, FactSet 31.05.13. *Other = countries valued between 0.5 to -0.5 this includes: Austria, Czech Republic, France, Greece, Hungary,Kazakhstan, Mexico, Portugal and US.-5%-4%-3%-2%-1%0%1%2%3%4%GermanyIrelandNorwaySwitzerlandLuxembourgDenmarkFinlandUnitedKingdomPolandOther*TurkeySwedenBelgiumItalyNetherlandsSpain
Agenda The team Our philosophy and process Current positioning Stock examples Portfolio data Outlook19
Structural growth in air passenger traffic20Global financial crisisGulf war, economic slowdownPassenger traffic growth 4.9% per annumSource: Zodiac Aerospace, ID Aero, 2011.Asian crisis9/11, SARS, Iraq wareconomic slowdown
Zodiac Aerospace: Beneficiary of fleet growth and refurbishment21Note: Permission obtained for image rights from Zodiac Aerospace, 28.11.12.Old A320 interior Refurbished A320 interior
Dufry: Growth in airport retail22Note: Permission obtained for image rights from Dufry, 26.11.12.Mexico City 2006 Mexico City 2012
Agenda The team Our philosophy and process Current positioning Stock examples Portfolio data Outlook23
24Premium for quality remains lowPortfolio financial analysisJupiter European Opportunities SICAVSource: Credit Suisse HOLT May 2013. *CFROI = Cash flow return on investment. **Leverage = Debt / (Debt + Equity). ***Mean unweighted.Past performance is no guide to the future.Euro Opps SICAV FTSE World Europe DifferenceSales growth 5yr (%) 8.0 6.0 2.0CFROI* (5yr median) (%) 15.1 11.1 4.0EPS growth 5yr (%) 11.0 0 11.0CFROI* 2013E (%) 15.3 10.9 4.4CFROI* 2014E (%) 15.7 11.1 4.6Leverage** (%) 21.6 31.0 -9.4P/E 2013E 16.4 14.9 1.5P/B LFY 3.8 2.8 1.0
Jupiter European Opportunities SICAVSource: FE, bid to bid, net income reinvested as at 31.05.13. Index = FTSE World Europe.Past performance is no guide to the future.Risk data253 year 5 yearBeta 1.0 0.9Information ratio 0.3 0.4Sharpe ratio 0.9 0.2Tracking error 5.8% 5.8%Fund volatility 13.4% 17.0%Index volatility 12.4% 17.8%
Jupiter European Opportunities SICAVPerformance – cumulativeSource: FE, tax gross, fees net, bid – bid, EUR, Total Return to 17.08.01 to 31.05.13. Sector: FO Equity – Europe Inc. UK. On 10.10.05 the benchmark forthis Fund was changed from the FTSE Actuaries World (Euro) to FTSE World Europe Index (Euro), all benchmark figures are using the new benchmark.Past performance is no guide to the future.26YTD %1 year%3 years%5 years%Since inception(17.08.01) %European Opportunities SICAV 12.3 27.2 43.0 23.3 70.4FTSE World Europe 9.7 30.0 35.4 10.8 47.4Position in sector 35 / 208 120 / 206 48 / 178 35 / 159 8 / 73
Jupiter European Opportunities SICAVPerformance over five yearsSource: FE, bid to bid, gross income reinvested, net of fees in Euros 31.05.08 to 31.05.13.Past performance is no guide to the future.27-60-50-40-30-20-10010203040May 08 May 09 May 10 May 11 May 12 May 13%GrowthJupiter - European Opportunities L Acc EUR in EU 23.30 FTSE World Europe Index TR in EU 10.75FO Equity - Europe inc UK TR in EU 7.97
Jupiter European Opportunities SICAVPerformance over ten yearsSource: FE, bid to bid, gross income reinvested, net of fees in Euros 31.05.03 to 31.05.13.Past performance is no guide to the future.28-20020406080100120140160180200May 03 May 04 May 05 May 06 May 07 May 08 May 09 May 10 May 11 May 12 May 13%GrowthJupiter - European Opportunities L Acc EUR in EU 167.08 FTSE World Europe Index TR in EU 111.98FO Equity - Europe inc UK TR in EU 93.66
Jupiter European Opportunities SICAVPerformance – discrete yearsSource: FE, in EUR, bid to bid, net income reinvested as at 31.05.13.Past performance is no guide to the future.29YTD % 2012 % 2011 % 2010 % 2009 % 2008 % 2007 % 2006 % 2005 % 2004 %Jupiter European Opps 12.3 22.9 -10.3 16.4 27.7 -38.7 1.3 32.2 29.7 18.4FTSE World Europe Index 9.7 18.8 -8.5 11.7 33.1 -43.2 3.6 20.7 26.8 12.6Position in sector 35 / 208 44 / 202 107 / 189 55 / 173 116 / 168 33 / 154 74 / 138 3 / 121 28 / 114 9 / 102Fund ranked 35 / 159 in sector over past 5 years
30Jupiter European Opportunities SICAV vs. benchmarkSource: FE, tax gross, fees net, bid – bid, EUR, Total Return to 31.05.13. Sector: FO Equity – Europe Inc. UK. On 10.10.05 the benchmark for this Fund waschanged from the FTSE Actuaries World (Euro) to FTSE World Europe Index (Euro), all benchmark figures are using the new benchmark.Past performance is no guide to the future.Relative returns5.82.911.5-2.34.5-5.54.7-22.214.171.124-8%-6%-4%-2%0%2%4%6%8%10%12%14%2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD
Stock attribution to return – 1 year to 31.05.1331Company Contribution to return %Skandinaviska Enskilda Banken 0.88DNB 0.47Prudential 0.46Nestle 0.43Ryanair 0.41Bayer 0.38SAFRAN 0.38UBS 0.37Vodafone 0.36Royal Dutch Shell 0.35Top 10 Total 4.47Source: Jupiter / FactSet, 31.05.12 to 31.05.13. Highlighted stocks no longer held. Italic stocks were not held.Buy and hold basis and excluding cash. Past performance is no guide to the future.Top 10 contributors to returnTop 10 companiesBottom 10 contributors to returnCompany Contribution to return %Fresenius Medical Care -0.79Aggreko -0.57AZ Electronic Materials -0.50Roche Holding -0.40AMEC -0.38Nokian Tyres -0.38Pearson -0.33Fugro -0.33Dufry -0.32Croda International -0.28Bottom 10 Total -4.28
Contribution by sectorJupiter European Opportunities FTSE World EuropeIndustryAverageWeightTotalReturnContributionTo ReturnAverageWeightTotalReturnContributionTo ReturnTotalEffectTelecommunications 3.73 41.72 1.64 5.24 11.26 0.72 1.45Oil & Gas 3.62 0.11 0.02 10.54 11.38 1.46 0.70Utilities -- -- -- 4.40 16.57 0.83 0.56Consumer Goods 10.15 30.17 2.96 18.19 27.42 5.01 0.50Technology 6.47 39.91 2.42 2.70 37.91 0.97 0.39Basic Materials 14.45 23.19 3.36 9.33 16.69 1.73 0.13Consumer Services 8.56 29.27 2.60 6.46 34.59 2.17 -0.20Industrials 21.47 30.86 6.44 11.62 33.46 3.73 -0.44Cash 1.91 20.30 0.12 -- -- -- -0.46Financials 15.57 49.52 7.18 20.45 52.76 9.68 -1.28Health Care 14.08 21.74 3.16 11.05 34.08 3.64 -1.42Total 100.00 29.89 29.89 100.00 29.94 29.94 -0.05Source: Jupiter / FactSet, 31.05.12 to 31.05.13. Past performance is no guide to the future.32Jupiter European Opportunities SICAV
Contribution by countryJupiter European Opportunities FTSE World EuropeTotal EffectCountry of DomicileAverageWeightTotalReturnContributionto ReturnAverageWeightTotalReturnContributionto ReturnSweden 3.20 86.23 2.15 4.82 36.93 1.71 1.01Norway 2.98 60.48 1.63 1.50 24.66 0.40 0.82Ireland 0.83 24.75 0.57 0.45 23.75 0.10 0.46France 12.64 40.16 4.88 14.21 35.70 4.96 0.41Luxembourg 2.58 30.89 0.82 0.49 11.29 0.08 0.14Netherlands 1.93 47.22 0.59 4.05 35.48 1.39 -0.22United Kingdom 34.29 20.01 7.51 33.37 21.21 7.52 -0.24Italy 1.22 12.24 0.16 3.41 33.28 1.14 -0.30Finland 3.19 17.15 0.70 1.13 35.36 0.38 -0.31Spain -- -- -- 4.32 42.94 1.79 -0.5433Top and Bottom 5Source: Jupiter / FactSet, 31.05.12 to 31.05.13. Past performance is no guide to the future.Jupiter European Opportunities SICAV
Agenda The team Our philosophy and process Current positioning Portfolio data Outlook34
Outlook I Debt deleveraging is a headwind that will take years to subside Have margins peaked? Are companies underinvesting in their businesses? European companies continue to grow internationally Valuations in Europe are at historical lows35Represents the views of the fund manager at the time of the presentation and may change in the future.
36Ongoing deleveraging will continue to affect growth*Source: Eurostat, March 2013.**Source: Eurostat, OECD, European Commission, IMF, SG Cross Asset Research / Economics. 1) Ireland: 2002 vs. 2011.Fund manager views at the time of writing and will change in the future.GDP forecasts *Deleveraging is a long-term process-6-4-2024605 06 07 08 09 10 11 12 13 14Euro area Germany Spain France Italy It took 30 years to reach currentdebt levels How long will it take to unwind? Eurozone in recession in 2012 Forecasts keep being revised lower1980 debt vs. 2011**
Outlook II Debt deleveraging is a headwind that will take years to subside Have margins peaked? Are companies underinvesting in their businesses? European companies continue to grow internationally Valuations in Europe are at historical lows37Represents the views of the fund manager at the time of the presentation and may change in the future.
Is mean reversion in margins inevitable? Have companies beenunderinvesting? Is pricing pressure inevitable?BUT… Operating costs as % of sales hassteadily decreased Capital intensity has decreased Globalisation impact38024681012141618051015202530354045Dec 93 Dec 96 Dec 99 Dec 02 Dec 05 Dec 08 Dec 11Gross Margin SG&A margin EBIT margin (RHS)Source: FactSet, 28.02.13. Index used is MSCI Europe.Breakdown of EBIT margins MSCI Europe
Outlook III Debt deleveraging is a headwind that will take years to subside Have margins peaked? Are companies underinvesting in their businesses? European companies continue to grow internationally Valuations in Europe are at historical lows39Represents the views of the fund manager at the time of the presentation and may change in the future.
Are companies underinvesting in their businesses?40European sales, capex and nominal GDP (1980 = 100)Source: UBS European Equity Strategy, Worldscope, DataStream; UBS European Market Map 13.02.13.Fund manager views at the time of writing and will change in the future. Europe (ex financials) net debt / EBITDA Capex has not kept pace with recordsales and profitability Weak demand? Sweating assets?Lack of finance? Change inindustrial mix? Will this allow competitorsto gain ground? Balance sheets are thus strong Strong get stronger; cashgives optionality: M&A Dividend growth
Outlook IV Debt deleveraging is a headwind that will take years to subside Have margins peaked? Are companies underinvesting in their businesses? European companies continue to grow internationally Valuations in Europe are at historical lows41Represents the views of the fund manager at the time of the presentation and may change in the future.
Average international sales exposure by region (2011)Europe is one of the most export-focused regionsSource: Goldman Sachs Research October 2011.42
Outlook V Debt deleveraging is a headwind that will take years to subside Have margins peaked? Are companies underinvesting in their businesses? European companies continue to grow internationally Valuations in Europe are at historical lows43Represents the views of the fund manager at the time of the presentation and may change in the future.
Price/book ratios for selected marketsSource: Bloomberg in EUR, 31.05.03 - 31.05.13.4400.511.522.533.5Jun 03 Sep 04 Dec 05 Mar 07 Jun 08 Sep 09 Dec 10 Feb 12 May 13DJ Eurostoxx 600 S&P 500 FTSE 100 Nikkei 225 Hang Seng
45Cyclically adjusted P/ESource: Citigroup 18.01.13.Valuations are at long-term lows51015202530354045505583 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13European CAPE European average US CAPE US average
Outlook46What we know…What we are focusing on…What we believe… …Eurozone crisis is not going to beresolved quickly …Debt deleveraging will take a long timeand has already increased risks in anumber of sectors …Capturing international growth …Avoiding politically sensitive industries In a low growth environment strongcompanies will get stronger That growth is often available at asurprisingly small premiumFund manager views at the time of writing and will change in the future –October 2012.They may be subject to change and should not be interpreted as investment advice.
DisclosureJupiter Asset Management Limited (‘JAM’) is registered in England and Wales (nos. 2036243). The registered office is 1 Grosvenor Place,London SW1X 7JJ. JAM is authorised and regulated by the Financial Conducts Authority whose address is 25 The North Colonnade,Canary Wharf, London E14 5HS.This presentation is intended for investment professionals and not for the benefit of private retail investors. However any one attending thepresentation or who has the opportunity to view the accompanying slides should bear in mind that the value of an investment in a unit trustand the income from it can go down as well as up. It may be affected by exchange rate variations and you may not get back the amountinvested. Initial charges are likely to have a greater proportionate effect on returns if investments are liquidated in the shorter term. Quotedyields are not guaranteed. Past performance should not be seen as a guide to future performance.The investment returns are denominated in EUR. Non-Euro investors will be exposed to exchange rate fluctuations. This Fund can investmore than 35% of its value in securities issued or guaranteed by an EEA state. the KIID and Fund Prospectus are available from Jupiter onrequest. The KIID is available from Jupiter in the following languages: English, Dutch, Finnish, Swedish, Portuguese, French and GermanThis document contains information based on the FTSE World Europe Index and FTSE 100. ‘FTSE®’ is a trade mark owned by the LondonStock Exchange Plc. and is used by FTSE International Limited (‘FTSE’) under license. The FTSE the FTSE World Europe Index andFTSE 100 are calculated by FTSE. FTSE does not sponsor, endorse or promote the product referred to in this document and is not in anyway connected to it and does not accept any liability in relation to its issue, operation and trading. All copyright and database rights in theindex values and constituent list vest in FTSE.For your security we may record or randomly monitor all telephone calls. If you are unsure of the suitability of an investment please contactyour financial advisor. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracyof the information but no assurance or warranties are given.This document contains information based on the MSCI Europe Index. Neither MSCI nor any other party involved in or related to compiling,computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the resultsto be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness,merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shallMSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for anydirect, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of suchdamages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.472511_SCV_EUR OPPS_CDF.