MLN – March 2018 monthly update

1
Monthly Update
March 2018
MLN NAV
$
0.99
SHARE PRICE
$
0.86
DISCOUNT
13.0
%
as at 28 February 2018
1
S&P Large Mid Cap/S&P Small Cap Index (50% hedged to NZD)
A word from the Manager
February started with a lot of excitement in equity markets.
It was a good reminder that low volatility does not persist
forever and is regularly punctuated with periods of stress.
After a strong 2017 for global markets, where the S&P 500
Index was up every single month, February saw the US
index fall 3.9%. This final result masks an even bumpier
ride, with the US market down by 10% at one point during
the month. Share market investing will always be two steps
forward and one step back. The recent volatility no doubt
spurred a lot of investors around the globe to think about
their portfolio and whether they are comfortable with their
positioning.
Marlin was down 1.2% (gross) in February, compared with
our global benchmark
1
which fell 2.6%. One benefit of
owning international equities from New Zealand is that in
periods of market stress the New Zealand Dollar can often
fall and cushion the impact to domestic investors. We saw
this in February and portfolio returns were supported by a
2.4% decline in the New Zealand Dollar during the month.
Recent Results
Reporting season was in full swing in February, with fourth-
quarter or full year results announced for the majority of
Marlin’s portfolio companies.
Hearing aid manufacturer William Demant was a standout
performer, returning 16%. The company reported stronger
than expected organic growth, with hearing aid sales
growing by 10% on the back of market share gains from its
new Oticon Opn range of hearing aids.
The second-best performer was recent addition and
jewellery brand, Pandora, which gained 13% during the
month. We added Pandora to the portfolio in January
and after its recent investor day the market now seems to
be warming to its refined growth strategy, which will see
the continued rollout of concept stores and the gradual
acquisition of existing stores from franchisees.
IT services provider, Cognizant, delivered revenue growth of
11% on the back of strong demand for consulting expertise
to help corporate clients execute on new digital initiatives.
Clients across a range of sectors are increasingly looking to
move IT infrastructure to the cloud, develop better customer
facing technology (eg. mobile banking apps), and automate
internal processes that have historically been labour intensive
(like payroll and accounts payable processing). In our opinion
this digital transformation has many years to run, which
should provide a good tailwind for Cognizant.
Expedia, the online travel agent, reported results that
were weaker than expected and growth guidance for 2018
that disappointed the market. It was the largest drag on
portfolio performance, with the stock down 18% in February.
While both room nights at its core properties and revenue
continued to grow strongly, earnings were depressed by
investments that Expedia’s new CEO is making in sales
staff to expand its hotel inventory in Europe and Asia. The
company is also spending money upfront to move its entire
IT infrastructure onto Amazon’s cloud platform, which should
significantly reduce ongoing server and IT related capex.
While we certainly don’t want to gloss over Expedia’s recent
poor performance, we believe these are important long-term
investments that should position the business better for
future growth. We met Expedia’s new CEO in San Francisco
to discuss these investments and we continue to monitor
progress closely.
United Parcel Service results reflected both the benefit of
strong ecommerce growth, and the difficulties UPS is having
meeting this demand profitably. Revenue grew 11% year-
on-year in the fourth-quarter on the back of a strengthening
US economy and a solid holiday season for ecommerce
deliveries. On the other hand, UPS’s profit before interest and
tax grew only 3% as it found managing peak holiday season
volumes challenging. The higher proportion of ecommerce
packages depressed margins, as delivering packages to
residential addresses is far less efficient than delivering to
businesses, with longer driving distances between stops and

2
Sector Split
as at 28 February 2018
Key Details
as at 28 February 2018
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
$0.85
SHARES ON ISSUE
117m
MARKET CAPITALISATION
$101m
GEARING
None (maximum permitted 20%
of gross asset value)
28
%

HEALTHCARE
9
%
FINANCIALS
25
%

CONSUMER
26
%

TECHNOLOGY
Geographical Split
as at 28 February 2018
23
%
WEST EUROPE
72
%
NORTH AMERICA
The Marlin portfolio also holds cash.
9
%
INDUSTRIALS
4
%

ASIA
2
%

ENERGY
Ashley Gardyne
Senior Portfolio Manager,
Marlin
fewer packages per drop. UPS has announced a significant
investment programme (an extra $7bn over three years) to
add more aircraft, automate more of its sorting facilities and
introduce more Saturday delivery options. While this step up
in investments disappointed the market, they are aimed at
ultimately allowing UPS to handle more volume at peak times
and improve margins. UPS was down 17% for the month.
Portfolio Changes
During February, we added TJX Companies (TJX) to the
portfolio. TJX is an off-price retailer in the US, which also has
stores in Canada, Europe and Australia. The company sells
branded clothing, such as Nike and Ralph Lauren, as well as
some homeware at a 20%-60% discount to a full-price retailer
(think Briscoe’s, but predominantly for apparel). TJX can sell
inventory cheaper than other retailers as it sources stock
from store closures, order cancellations and manufacturer
overruns. The company has a longstanding management
team with a strong track record, and have grown earnings
per share consistently (in 19 of the last 20 years) at an
average rate of 16% per annum over the last 20 years.
We bought TJX as we believe the company still has a
good growth runway for new store openings and in our
opinion can also continue to consistently grow sales at
existing stores. If we are correct, TJX should grow its
earnings at close to 10% per annum, while paying a steady
and increasing dividend. Despite having solid growth
prospects, TJX’s valuation has been depressed given
market concerns about the broader retail sector, combined
with a couple of company specific headwinds that we
believe are transitory.

February’s Biggest Movers in local currency terms
Typically the Marlin portfolio will be invested 90% or more in equities.
WILLIAM DEMANT
+16
%
PANDORA
+13
%
ALIBABA
-9
%
UNITED PARCEL
SERVICE
-17
%
EXPEDIA
-18
%
5 Largest Portfolio Positions as at 28 February 2018
ALPHABET
7
%
PAYPAL
5
%
MASTERCARD
5
%
ESSILOR
4
%
EDWARDS
LIFESCIENCES
4
%
The remaining portfolio is made up of another 21 stocks and cash.
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
Total Shareholder Return to 28 February 2018
Performance to 28 February 2018
^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/
1 Month3 Months1 Year3 Years
(annualised)
Since Inception
(annualised)
Corporate Performance
Total Shareholder Return+1.2% +3.5% +19.2% +9.9% +5.8%
Adjusted NAV Return(1.0%) +2.0% +26.0% +10.0% +6.5%
Manager Performance
Gross Performance Return (1.2%)+3.3%+32.3%+14.4%+10.3%
Benchmark Index^(2.6%)(1.0%)+17.1%+13.5%+7.7%
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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
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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.