MLN – December 2017 monthly update

1
Monthly Update
December 2017
MLN NAV
$
0.99
SHARE PRICE
$
0.85
DISCOUNT
14.1
%
as at 30 November 2017
A word from the Manager
2017 has been great for Marlin so far with the net asset value
growing from $0.83 at the very start of the year to $0.99 as at
30 November. To top it off, November was another good month
with the Marlin portfolio up 1.5%.
Marlin’s performance has been set against a backdrop of strong
global markets. During November the MSCI World Index was
up 1.4% and US markets again hit fresh all-time highs. Economic
data continues to be supportive, with US GDP growth for the
third quarter revised up to 3.3% (the fastest growth rate in three
years) and the European Commission raising its 2017 growth
forecast to 2.2% from a 1.7% estimate in May. Strong economies
drive company earnings and improved company earnings are an
important driver of higher share prices.
Many of Marlin’s portfolio companies experienced share
price rises over the period with Zoetis and Edwards
Lifesciences being standout performers. Zoetis, which makes
pharmaceuticals for animals, saw share price gains of 13% for
November on the back of strong revenue and earnings growth
in the third quarter. The company’s recent pet dermatology
product launches were successful, driving revenue and
earnings per share higher by 9% and 27% respectively. With pet
ownership rising and owners spending an increasing amount on
pet healthcare we see good structural growth in this segment,
which is supported by Zoetis developing new lines to treat
further companion animal ailments. On top of this, we like
management’s cost discipline and that they continue to improve
margins by consolidating their manufacturing footprint and
carefully managing overheads.
Replacement heart valve producer, Edwards Lifesciences, saw
its share price rise 15% over the month with one of its largest
competitors Boston Scientific announcing that it was having
difficulties getting one of its heart valve replacement products
ready for the US market. Edwards is the market leader in this
particular segment, with only one other major competitor in
the US. With Boston Scientific no longer expected to enter
the US market in the immediate future, expectations for
Edwards’ earnings for the next few years are likely to rise. The
announcement also reinforces our view that barriers to entry
in this market are high and that developing new heart valve
replacement and repair products is a complex process at which
Edwards is the clear leader.
While the majority of the portfolio contributed positively
to Marlin’s performance over November, Cognizant, an
IT services provider detracted from performance despite
reporting third quarter results that were broadly in line with
our expectations. The share price weakness was likely caused
by gross margins and growth from their banking sector
clients being weaker than some investors had expected.
We believe 9% revenue growth was a solid result and that
gross margin declines are temporary and largely due to
timing of staff bonus payments. We believe the medium
term outlook is sound with Cognizant’s services in demand as
large companies need skilled IT teams to help transform their
existing enterprise IT systems in this new digital age.
During the month, we chose to exit premium auto braking
system supplier, Brembo. Brembo built its product edge in
supplying Formula One teams and then capitalised on their
technological lead by supplying manufacturers of high-end
sports cars (Ferrari, Lamborghini, Porsche), before then
moving down to mid-premium cars like the Audi S series and
BMW M series.
Brembo was added to the portfolio near the depths of the
GFC at €1.32 a share and it was a strong performer for the
portfolio with the recent exit at over €13.75 a share. While the
company has been a great performer, we believe the profit
margin and market share gains they have made over recent
years are becoming more difficult to sustain. We also think that
the auto cycle is a lot closer to the end than the beginning of
the cycle and despite the potential cyclicality of the business
the company is still priced on peak valuation multiples.
This is our last monthly update for 2017 and we look forward
to updating you again in February next year. We hope you
have a wonderful summer holiday break.
Ashley Gardyne
Senior Portfolio Manager, Marlin

Sector Split
as at 30 November 2017
Key Details
as at 30 November 2017
FUND TYPE
Listed Investment Company
INVESTS IN
Growing international companies
LISTING DATE
1 November 2007
FINANCIAL YEAR END
30 June
TYPICAL PORTFOLIO SIZE
25-35 stocks
INVESTMENT CRITERIA
Long-term growth
PERFORMANCE
OBJECTIVE
Long-term growth of capital and
dividends
TAX STATUS
Portfolio Investment Entity (PIE)
MANAGER
Fisher Funds Management
Limited
MANAGEMENT
FEE RATE
1.25% of gross asset value
(reduced by 0.10% for every 1% of
underperformance relative to the
change in the NZ 90 Day Bank Bill
Index with a floor of 0.75%)
PERFORMANCE
FEE HURDLE
Changes in the NZ 90 Day Bank
Bill Index + 5%
PERFORMANCE FEE
15% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$0.87
SHARES ON ISSUE
117m
MARKET CAPITALISATION
$100m
GEARING
None (maximum permitted 20%
of gross asset value)
Performance
to 30 November 2017
2
26
%

TECHNOLOGY
10
%
INDUSTRIALS
21
%

CONSUMER
25
%

HEALTHCARE
Geographical Split
as at 30 November 2017
16
%
WEST EUROPE
71
%
NORTH AMERICA
The Marlin portfolio also holds cash.
8
%
FINANCIALS
^Benchmark index: World Small Cap Gross Index until 30 September 2015 & S&P Large Mid Cap/S&P Small Cap Index (50% hedged to NZD) from 1 October 2015
Non-GAAP Financial Information
Marlin uses non-GAAP measures, including adjusted net asset value, gross performance return and total shareholder return. The rationale for using such non-GAAP measures is as follows:
»adjusted net asset value – the underlying value of the investment portfolio adjusted for capital allocation decisions,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and hedging of currency movements, and
»total shareholder return – the return to an investor who reinvests their dividends, and if in the money, exercises their warrants at warrant maturity date for additional shares.
All references to adjusted net asset value, gross performance return and total shareholder return in this monthly update are to such non-GAAP measures. The calculations applied to non-GAAP measures are
described in the Marlin Non-GAAP Financial Information Policy. A copy of the policy is available at http://marlin.co.nz/about-marlin/marlin-policies/
5
%

ASIA
1 Month3 Months1 Year3 Years
(annualised)
Since Inception
(annualised)
Corporate Performance
Total Shareholder Return+3.7% +10.2% +16.2% +10.7% +5.6%
Adjusted NAV Return+1.3% +6.8% +29.0% +10.9% +6.4%
Manager Performance
Gross Performance Return +1.5%+8.0%+35.2%+15.2%+10.2%
Benchmark Index^+1.7%+9.3%+25.8%+17.0%+8.0%
3
%

ENERGY

November’s Biggest Movers in local currency terms
Typically the Marlin portfolio will be invested 90% or more in equities.
The remaining portfolio is made up of another 21 stocks and cash.
EDWARDS
LIFESCIENCES
+15
%
ZOETIS
+13
%
BLACKHAWK
NETWORK
+8
%
EBAY
-8
%
ADIDAS
-8
%
5 Largest Portfolio Positions
as at 30 November 2017
ALPHABET
7
%
PAYPAL
6
%
MASTERCARD
5
%
EDWARDS
LIFESCIENCES
4
%
COGNIZANT
TECHNOLOGY
SOLUTIONS
4
%
Total Shareholder Return
to 30 November 2017
3
Nov
2007
Nov
2008
Nov
2009
Nov
2010
Nov
2011
Nov
2012
Nov
2014
Nov
2013
Share Price/Total Shareholder Return
Share PriceTotal Shareholder Return
Nov
2015
$
1.00
$
1.20
$
0.8 0
$
0.60
$
0.40
$
1.80
$
0.20
$
0.00
$
1.40
Nov
2016
$
1.60
Nov
2017

Disclaimer: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by
necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Marlin Global Limited and its officers and directors make no representation as to its accuracy
or completeness. The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from an
authorised financial adviser should be taken before making an investment. To the extent that the update contains data relating to the historical performance of Marlin Global Limited or its portfolio
companies, please note that fund performance can and will vary and that future results may have no correlation with results historically achieved.
Marlin Global Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 484 0365 | Fax: +64 9 489 7139
Email: enquire@marlin.co.nz | www.marlin.co.nz
4
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777 | Fax: +64 9 488 8787
Email: enquiry@computershare.co.nz | www.computershare.com/nz
About
Marlin Global
Marlin is an investment company
listed on the New Zealand Stock
Exchange. The company gives
shareholders an opportunity to
invest in a diversified portfolio of
between 25 and 35 quality growing
international companies (excluding
New Zealand and Australia)
through a single, professionally
managed investment. The aim
of Marlin is to offer investors
competitive returns through capital
growth and dividends.
Capital Management Strategies
Regular Dividends
»Quarterly distribution policy introduced in
August 2010
»Under this policy, 2% of average NAV is targeted
to be paid to shareholders quarterly
»Dividends paid by Marlin may include dividends
received, interest income, investment gains
and/or return of capital
»Shareholders who prefer to have increased
capital rather than a regular income stream have
the opportunity to participate in the company’s
dividend reinvestment plan (DRP)
»Shares issued to DRP participants are at a 3%
discount to market price
»Marlin became a portfolio investment entity on
1 October 2007. As a result, dividends paid to
New Zealand tax resident shareholders have not
been subject to further tax
Share Buyback Programme
»Marlin has a buyback programme in place allowing
it (if it elects to do so) to acquire up to 5.9m of its
shares on market in the year to 31 October 2018
»Shares bought back by the company are held as
treasury stock
» Shares held as treasury stock are available to be
re-issued for the dividend reinvestment plan
Warrants
»Warrants put Marlin in a better position to grow
further, improve liquidity, operate efficiently
and pursue other capital structure initiatives as
appropriate
»A warrant is the right, not the obligation, to
purchase an ordinary share in Marlin at a fixed price
on a fixed date
»There are currently no warrants on issue

Management
Marlin’s portfolio is managed
by Fisher Funds Management
Limited. Ashley Gardyne (Senior
Portfolio Manager), Chris
Waters and Harry Smith (Senior
Investment Analysts) have prime
responsibility for managing
the Marlin portfolio. Together
they have significant combined
experience and are very capable
of researching and investing in
the quality global companies that
Marlin targets. Fisher Funds is
based in Takapuna, Auckland.

Board
The Manager has authority
delegated to it from the
Board to invest according to
the Management Agreement
and other written policies.
The Board of Marlin
comprises independent
directors Alistair Ryan (Chair),
Carol Campbell and Andy
Coupe; and non-independent
director Carmel Fisher.