MLN – June 2019 monthly update

1
Monthly Update
June 2019
MLN NAV
$
0.94
SHARE PRICE
$
0.87
DISCOUNT
1
7.8
%
as at 31 May 2019
A word from the Manager
Market Overview
Equity markets have climbed steadily for much of 2019,
supported by accommodative central banks and what
appeared to be progress on a US-China trade deal.
However, markets were jolted in May by a surprise
announcement that the US would move ahead and
increase tariffs from 10% to 25% on US$200 billion worth
of Chinese imports. While the impact so far has been felt
more in equity markets than in the economy, the risk is that
the uncertainty caused by the trade war impacts corporate
investment plans and ultimately results in job losses and
lower consumer confidence.
Against this backdrop, the US S&P 500 Index slumped 6.6%
in May, while the European Stoxx 600 index fell 5.7% and
the MSCI Emerging Market Index dropped 7.5%. While the
Shanghai Composite Index (-5.8%) only fell with its global
peers, it is now over 11% off its April highs. Investors will
now be watching how trade negotiations develop, with a
close eye on the G20 summit at the end of June.
Marlin’s gross portfolio performance fell 4.5% in May, 0.4%
ahead of our global benchmark, which fell 4.9%.
Adjusted NAV was down 4.3% for the month, and the total
shareholder return down 1.1%.
Portfolio Company Developments
All of our portfolio companies have now reported first
quarter results, which generally highlighted strong
underlying business momentum.
Adidas shares gained 15% in May following a forecast-
beating rise in quarterly profits, which were supported
by booming online sales. Adidas’s strategic growth
areas (North America, China & e-commerce) grew 18%
combined, despite growth in the US being temporarily
constrained by a shortage of Adidas apparel. E-commerce
growth of 40% also drove margin expansion in the quarter,
which converted 6% sales growth into a 17% jump in
operating profits.
Cerner, a leading hospital software provider, gained
8% in May. The company announced revenue growth
of 8% in the first quarter and elaborated on its plans
to improve its operating margin to 22.5% by the end
of 2020 from less than 19% currently. This increased
margin target was announced in April along with a $1.5
billion share repurchase plan and we welcome the new
CEO’s efforts to streamline the business and return
excess capital to shareholders. Cerner’s revenue growth
outlook in the coming years is supported by expected
market share gains and also by a large contract to
provide an electronic health record system to the US
Department of Veterans Affairs.
New portfolio addition and discount retailer, Dollar
General, reported strong first-quarter results, with
both same-store-sales and margins coming in ahead
of expectations. Despite a weak retail environment
generally, Dollar General’s value proposition continues
to draw in increasing foot traffic. Dollar General
announced sales growth of 8% and has opened 800 new
stores over the last year. We like Dollar General for both
its runway for new store openings, but also due to its
defensiveness (its revenue growth has accelerated in the
last two US recessions).
Chinese e-commerce giant, Alibaba, saw its share
price fall 18% in May as good quarterly results got
lost in the negative sentiment around the trade war,
which dragged down Chinese technology stocks.
Despite these macro concerns, Alibaba actually saw an
acceleration in revenue growth in its core ecommerce
platform, which grew 31% in the quarter driven by
increased transaction volumes and higher monetisation
rates as it rolls out more ad inventory. Alibaba is also
investing in new business segments like cloud and food
delivery that continue to deliver strong revenue growth.
We took the opportunity to add to our position in
Alibaba on recent share price weakness.
1
Share Price Discount to NAV (using NAV to four decimal places)

2
Ashley Gardyne
Senior Portfolio Manager
Fisher Funds Management Limited
Cognizant also had a tough first quarter, reporting revenue
growth of 5% and unexpectedly reducing its earnings
guidance for the year. The guidance reduction is being
driven by pockets of weakness in the IT services company’s
financial services and healthcare segments. While this was
disappointing, we believe a number of these headwinds
are temporary in nature given the continued need for
Sector Split
as at 31 May 2019
Key Details
as at 31 May 2019
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
$0.91
SHARES ON ISSUE
145m
MARKET CAPITALISATION
$126m
GEARING
None (maximum permitted 20%
of gross asset value)
26
%
CONSUMER
DISCRETIONARY
9
%
INDUSTRIALS
16
%
COMMUNICATION
SERVICES
21
%
INFORMATION
TECHNOLOGY
Geographical Split
as at 31 May 2019
16
%
WEST EUROPE
75
%
NORTH AMERICA
9
%
FINANCIALS
8
%

ASIA
1
%

ENERGY
The Marlin portfolio also holds cash.
17
%

HEALTHCARE
companies to digitize their businesses, which is driving
broad demand for IT and consulting services.

May’s Biggest Movers in local currency terms
Typically the Marlin portfolio will be invested 90% or more in equities.
CORE
LABORATORIES NV
-25
%
ALIBABA GROUP
-20
%
TENCENT HOLDINGS
-16
%
COGNIZANT
TECHNOLOGY
-15
%
5 Largest Portfolio Positions as at 31 May 2019
ALPHABET
7
%
PAYPAL
5
%
MASTERCARD
5
%
TJX COMPANIES INC
5
%
ALIBABA GROUP
5
%
The remaining portfolio is made up of another 22 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
$
0.50
$
0.00
$
1.50
Nov
2016
Nov
2017
$
2.50
$
2.00
Nov
2018
Total Shareholder Return to 31 May 2019
Performance to 31 May 2019
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return(1.1%)+4.1%+10.8%+12.5%+10.6%
Adjusted NAV Return(4.3%)+2.6%+5.4%+12.1%+9.4%
Portfolio Performance
Gross Performance Return (4.5%)+3.0%+8.2%+16.0%+13.1%
Benchmark Index^(4.9%)(0.3%)(0.8%)+9.6%+11.8%
3
^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, adjusted NAV return, 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 after fees and tax,
»adjusted NAV return – the net return to an investor after fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency hedging before fees and tax, 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, adjusted NAV return, 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/
LKQ CORPORATION
-15
%

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 2019
»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, 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.