Formulafirst : Monats-News August 2021 Englisch

Monthly Report August 2021

Stock market Friendly

Performance Underperformance

Investments Slightly increased cash

Outlook Higher

Markets

The G-7 countries are embarking on a radical restructuring of the global tax system that will largely throttle competition between countries. The first big step was the announcement of a worldwide minimum tax on corporate profits of 15%. With their power politics (blacklists for deviants), the big players want to reorder the world. This in the manner of a global cartel, strengthened by the G-20 and with the OECD as an enforcement body. The grouping emerged as the G-5, then the G-7, in the 1970s, when German Chancellor Helmut Schmidt and French President Giscard d'Estaing thought the world's important people should settle the important issues among themselves. They added the UK, the US, Japan and Canada, as well as Italy. This club of financially unsound high-tax countries now wants to prevent taxpayers from moving to cheaper locations. Cartels are agreements among like-minded people to harm the others, but they usually also harbor internal conflicts because some benefit more than others. This is also the case with the G-7. In this tangle, Switzerland has the chance to make its opposition to the minimum tax effective. At the G-20 level, it is not yet involved in negotiating the deals, but afterwards, when the decision-making process reaches the OECD, which is designed for unanimity, Switzerland can say no.

Performance

In a friendly market environment, the Net Asset Value of Formulafirst Ltd. gained 0.40% in August. The MSCI Europe gained 1.72%. The resulting underperformance of Formulafirst Ltd. compared to the MSCI Europe is 1.32 percentage points for the month of August 2021. Since the beginning of 2021, an underperformance of 8.74 percentage points has resulted.

Investments

Price increases will be continued by Fuchs Petrolub SE in Q3 2021. A better product mix in car production (SUVs, EVs) could help the company in Q3. Sales volumes are currently above the record level of 2017/18. In 2021 the level of investments will return to the normal level of EUR 80m. However, there is still room for small and medium-sized projects despite higher maintenance costs. Capacity can also be expanded by increasing batches. The acquisition of Nye Lubricants Inc. is proving highly profitable. Fuchs Petrolub produces expensive materials there in small quantities. In Q2, the "Rise with SAP" program experienced even greater success than in Q1. SAP SE experienced strong demand from companies of all sizes in Q2 and closed deals with over 250 customers. Of these, approximately 50% were new customers. Companies are using it to drive digital transformation and become more agile. With SAP, they can choose their own hyperscaler and get everything delivered from a single source. The SAP Business Technology Platform enables customers to perform analyses, such as comparing their performance with that of the best in the industry, and to improve their processes accordingly. In addition, SAP customers have access to the entire SAP network, such as Ariba or Concur. These are significant advantages over the competition.

Outlook

On the technical side, a positive factor for the market is that the lack of price advances in many stocks in recent months has led to more caution, fund manager with somewhat higher cash reserves (internationally from 3.9% to 4.1%) and a more cautious investment strategy (defensive stocks more sought after). Rising share buybacks are also a positive factor. So far in 2021, with over USD 300 bn more buybacks (pro rata temporis) have been made than in the best year of 2018. Over the next 12 months, USD 875 bn of additional buybacks are expected. On top of that, there will be USD 575 bn in 2021 dividends. This means a lot of tailwind for the stock markets.

Performance as of August 31, 2021

Net Asset	August			Since
Value	2021	2021	3 years	inception
CHF 34.84	0.40%	8.88%	3.63%	5.33% p.a.

Share price development as of August 31, 2021 (indexed)

180

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90

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70

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50

40

35

Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16 Jan 17 Jan 18 Jan 19 Jan 20 Jan 21

Formulafirst (CHF) MSCI Europe Index (EUR) SO Index (EUR)

Breakdown by sectors

Materials		30.6%
Healthcare									25.9%
Industrials							13.1%
Consumer discretionaries							8.6%
IT						8.2%
Consumer staples			4.3%
FX		1.2%
Cash					8.1%

Country Breakdown

Germany 52.3%

Switzerland 47.7%

The largest positions

Wacker Chemie AG								9.0%
Forbo Holding AG							8.7%
Swatch Group AG						8.6%
SAP SE					8.2%
SGS SA				8.2%
Fuchs Petrolub SE		7.6%

This information is not an offer to purchase or subscribe to shares in Formulafirst and may not be circulated in any jurisdictions where it violates any applicable laws or regulations, including and without restriction in the United States of America. While the information given is considered reliable, Formulafirst, respectively 2trade group ltd. don't guarantee that it is complete or accurate. Opinions and estimates may be amended without notice. Past performance is not an indication of future performance.

Formulafirst - investing in "smart owners"

Formulafirst: the concept

Investment idea

Experience shows that owners generally invest more successfully than em- ployees. The Investment company Formulafirst focuses on Smart Owners as they are known. The investment universe consists of owner-managed companies in Central Europe (D-A-CH).

Owner-managed companies and those that are controlled by owner-oriented groups of investors are generally distinguished by their consistent strategy of long-term and sustainable growth. Since owner-managers have a substantial share of their wealth and, in most cases, of their working time invested in the company, their strategic business orientation includes goals such as maintaining the company's independence, a smooth transfer to the next generation as well as safeguarding and growing the company's assets. The long-term perspective, in some cases spanning several generations, is a major reason why these companies are more focused on their long-term strategic positioning rather than on the short-term maximization of returns.

Investment criteria

For owner-managed companies to be included in the investment universe of Formulafirst, the following conditions must be met: a) headquarters in Central Europe (Switzerland, Austria and Germany), b) listed on an regular stock exchange, c) minimum market capitalization of EUR 100 million, d) managed by owner-managers holding at least 15% but no more than 75% of voting rights. The universe of owner-managed companies from which the best stocks are picked by Formulafirst for investment includes the 50 such companies with the highest market capitalization.

The companies selected form the basis for Formulafirst's investments.

Investment strategy

Made up of the 50 owner-managed companies the investment universe is screened by a thorough fundamental analysis in a primarily "bottom-up" approach and the most promising stocks are identified.

Formulafirst invests in equities convertible instruments, options (manag- ing existing positions), futures (to hedge currency and market risks) and shares of holding companies and funds. Investment exposure is 100% of company assets. The investment horizon is long-term and the selection of portfolio positions is limited to a reasonable number. The size of individual investments may not ­exceed 10% of the portfolio when purchased (cost). The investment style is primarily based on the "value" approach and investments are made in an anti-cyclical manner. The maximum sector weighting in the portfolio should not exceed 30%.

NAV and performance calculation

The Net Asset Value (NAV) of the Company is equal to the total assets less total liabilities of the Company (determined on the basis of International Financial Reporting Standards, consistently applied). The NAV per share is calculated by dividing the NAV by the amount of outstanding shares of the Company on the calculation day of the NAV. The monthly, year-to-date as well as the 3 year performance are calculated by dividing the actual NAV per share by the NAV per share a month ago (CHF 34.70), at the previous year end (CHF 32.00) respectively 3 years ago (CHF 33.62). The performance since inception (18 December 2002) reflects the annualized yield since 18 December 2002 till today, using a start NAV of CHF 13.-.

Smart Owners consistently outperform the market (indexed)

31.8.2021

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50 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2017 2018 2019 2020 2021

Smart Owners Index (EUR) MSCI Europe Index (EUR)

Company details
Company:	Formulafirst Ltd., British Virgin Islands
Board of Directors:	Derek P. Baudains, Paul Broxup,
	Markus Gresch
Investment manager:	2trade group ltd., Zug
Management team:	Sammy Matter, Martin Treffer,
	Daniel Biedermann
Auditors:	PricewaterhouseCoopers, Zürich
Corporate structure:	Public limited company
Inception:	18.12.02
Type of stock:	bearer shares
Shares outstanding:	395,753
Market capitalization:	CHF 14 mn
Listing:	Swiss Exchange SIX
Fees:	Management fee of 1.5% p.a.,
	Performance fee 20%
	current hurdle at CHF 34.24
Security number:	146 29 83
Reuters:	FFI.S
Bloomberg:	FFI SW Equity, FFI SW Equity NAV
Net asset value:	Website daily, Wednesday/Saturday in FuW
	(Finanz und Wirtschaft)
Address:	2trade group ltd.
	Baarerstrasse 2, CH-6300 Zug
Investor relations:	Dynamics Group Ltd.
	Alexandre Müller
	Tel.: [phone]
Internet:	www.formulafirst.vg
E-mail:	[e-mail]