MLN – April 2018 monthly update

1
Monthly Update
April 2018
MLN NAV
$
0.98
SHARE PRICE
$
0.84
DISCOUNT
14.1
%
as at 31 March 2018
A word from the Manager
March was another volatile month for equity markets, with President Trump’s tariff proposals sparking fears of a trade war and
doubts surfacing regarding the sustainability of the technology sector rally. During March the US S&P 500 Index and European
Stoxx 600 Index fell 2.7% and 2.3% respectively.
We are watching US tariff developments closely, and while Trump’s proposed tariffs on steel, aluminium and a $50bn list of
Chinese imports is still relatively small scale, any material escalation would be concerning. No one will benefit from a global
trade war and an escalation would be destabilising for equity markets. We hope that Trump’s tariff agenda is simply posturing by
a businessman seeking to achieve better terms with trading partners, rather than a longer term ideological shift.
The Marlin portfolio was flat in March, outperforming our global benchmark which fell 1.1%. While our exposure to technology
companies like Alphabet dragged on performance during the month, some strong financial results and developments elsewhere
in the portfolio (e.g. Adidas, Descartes and William Demant) helped offset the impact of our technology holdings. Our more
defensive healthcare holdings also provided support.
For the three months to 31 March 2018, the Marlin portfolio was up 5.2%,
7.0% ahead of our global benchmark which was down 1.8% over the period.
Portfolio Company Developments
Adidas gained 8% in March after reporting financial results for 2017 that
showed strong growth in China, the US and its ecommerce channel. On
top of strong revenue growth, less discounting and good cost control
drove significant margin expansion during the year. For the 2017 fiscal year
revenue grew 15% and operating profit jumped 31%. We believe Adidas is
well positioned to benefit from ongoing structural trends including healthier
lifestyles, the casualisation of the workplace, and a growing middle class in
emerging markets. We also believe Adidas has the potential to continue
taking market share in the US, where its market share is still below 15%.
CEO, Kasper Rorsted, has a reputation for cost discipline and we believe
Adidas will further reduce operating costs by streamlining support services,
automation and leveraging marketing expense.
Healthcare IT provider, Cerner, was down 10% in March due to concerns
surrounding the signing of an estimated $10bn contract with the US
Department of Veterans Affairs. While there had been some challenges
finalising the contract prior to March, this was compounded as President
Trump announced the departure of the Veterans Affairs secretary David
Shulkin (via Twitter of course). Our expectation is that this contract will still
go ahead, but that signing will be further delayed until the new secretary
is in place. Longer term we see technology playing a critical role in the
modernisation of the US healthcare system and management of escalating
healthcare costs. As the leading healthcare IT company, we believe Cerner
has a key role to play in this shift and should continue to take a larger share in
the $100bn global healthcare IT market.
Fisher Funds has historically charged
Marlin GST at the standard GST rate
on the provision of investment services.
Last year the IRD confirmed that the
lower GST fund manager rate could
be charged to Marlin (and this rate has
been applied since 1 August 2017). On
28 March 2018, Fisher Funds received
confirmation from the IRD that they
would receive a refund for overcharged
GST of $1.7m plus use of money
interest of $0.1m on the provision of
investment services to Marlin for the
eight year period from 1 August 2009
to 31 July 2017. On receipt in early
April, Fisher Funds passed the refund
and use of money interest to Marlin.
The refund and use of money interest
receivable from Fisher Funds has been
recognised in the Marlin NAV from
28 March 2018 onwards.
GST Update

2
Sector Split
as at 31 March 2018
Key Details
as at 31 March 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
$0.83
SHARES ON ISSUE
119m
MARKET CAPITALISATION
$100m
GEARING
None (maximum permitted 20%
of gross asset value)
28
%

TECHNOLOGY
9
%
INDUSTRIALS
24
%

HEALTHCARE
26
%

CONSUMER
Geographical Split
as at 31 March 2018
20
%
WEST EUROPE
75
%
NORTH AMERICA
The Marlin portfolio also holds cash.
9
%
FINANCIALS
4
%

ASIA
2
%

ENERGY
Ashley Gardyne
Senior Portfolio Manager
Fisher Funds Management Ltd
Other noteworthy news included eyewear and optical
lens manufacturer Essilor receiving approval from US
and European regulatory authorities for its proposed
merger with Luxottica, which will create the world’s largest
eyewear company. Subject to approval from Chinese
authorities, we expect the merger to close later this year
and believe there are significant synergies to be extracted
from the combined business.
The threat of regulation weighed over the technology sector
in March, on the back of news stories regarding a Facebook
data breach and President Trump’s tweets accusing Amazon
of not paying its share of taxes and hurting small businesses.
While we don’t currently own Facebook in the portfolio, any
regulation that impacts the use of user data by technology
companies could have implications for our portfolio company
Alphabet (Google’s parent company). Alphabet fell 6% in
March and was the biggest detractor from portfolio returns.
Portfolio Changes
The only material change to the portfolio in March was
the exit of hearing aid manufacturer William Demant. The
company has delivered strong results since we initiated the
position in March last year, with its new Oticon Opn range
of hearing aids driving market share gains and better than
expected organic growth (10% organic revenue growth and a
20% net income growth in 2017). With its share price up 55%
since we added it to the portfolio, William Demant is now
trading at an elevated valuation and we decided to exit our
position and reinvest the proceeds in other opportunities.
We used the market weakness in March to add
to our holdings in LKQ Corp and Cerner.

March’s Biggest Movers in local currency terms
Typically the Marlin portfolio will be invested 90% or more in equities.
DESCARTES SYSTEMS
+8
%
ADIDAS
+8
%
WILLIAM DEMANT
+7
%
EBAY
-6
%
CERNER
CORPORATION
-10
%
5 Largest Portfolio Positions as at 31 March 2018
ALPHABET
7
%
PAYPAL
5
%
MASTERCARD
5
%
LKQ
5
%
ESSILOR
5
%
The remaining portfolio is made up of another 20 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 31 March 2018
Performance to 31 March 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(0.0%) +1.2% +18.1% +9.9% +5.7%
Adjusted NAV Return+0.9% +5.1% +22.1% +10.3% +6.5%
Manager Performance
Gross Performance Return(0.0%)+5.2%+26.4%+14.3%+10.2%
Benchmark Index^(1.1%)(1.8%)+12.6%+12.5%+7.5%
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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
»On 16 April 2018, a new issue of warrants (MLNWC)
was announced
»Marlin shareholders will be allotted one warrant for
every four shares held at record date (1 May 2018)
»Each warrant gives shareholders the right, but not
the obligation, to subscribe for one ordinary share
in Marlin on the exercise date (12 April 2019)
»The exercise price will be $0.83 less any dividends
declared during the period up to the exercise date

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.