Formulafirst : Monats-News September 2021 Englisch

Monthly Report September 2021

Stock markets Mostly weak

Performance Underperformance

Investments Slightly increased cash

Outlook Higher

Markets

Entrepreneurs dare to do new things, develop new products, and are successful in doing so. The key is: they take risks by making bets. Today, the entrepreneur finances the production of a good that may yield a profit in the future. Whether it's worth it is a question of entrepreneurial evaluation of the opportunities. Between idea generation and implementation, everything can change several times. Entrepreneurs must be able to react to this. Sustainability is an opportunity, albeit a particularly challenging one. Such a business model combines the social, the ecological, and the economic to create added value. It is always about all three aspects and also about the added value of their combination. A company that forgoes profit in order to train apprentices is not sustainable because it does not pursue all three aspects. But the entrepreneur who specifically recruits employees with "career breaks" and produces and sells electricity from volatile gases in landfills is. If the state were to step in and transfer money to these companies or set up regulations, this would not be sustainable. Because if the state pushes sustainability, it is no longer entrepreneurship. If it injects money, someone else has to pay, which would be a violation of the social aspect. The reason why Swiss companies are much more sustainable than others is their freedom to make calculated bets in the market, including bets on sustainability.

Performance

In a weak market environment, the Net Asset Value of Formulafirst Ltd. slid by 4.59% in September. The MSCI Europe lost 3.08%. The resulting underperformance of Formulafirst Ltd. compared to the MSCI Europe is 1.51 percentage points for the month of September 2021. Since the beginning of 2021, an underperformance of 10.11 percentage points has resulted.

Investments

As part of optimizing the production network, Fresenius SE will create more capacity through efficiency and synergies by adding lines and automation. Complexity will also be reduced in the product portfolio by evaluating, among other things, whether each product should continue to be offered. Kabi offers a large, broad portfolio. Of the ten new products planned in 2021, 7 have been launched to date. In China, Kabi expects continued high growth and volume as its drugs figure on nationwide and provincial purchase lists through national tenders. Participation in the tenders will also allow Kabi to reduce its own sales force, thereby reducing costs. In Q2 2021, Wacker Chemie AG generated sales of EUR 1,501 million (+40% vs. prior-year quarter). The reason for the strong increase was strong customer demand. Volumes grew significantly in almost all product segments. Positive product mix effects and better prices, especially for solar silicon and many chemical products, also boosted sales. Currency effects slowed sales development somewhat. Wacker Chemie achieved an EBITDA of EUR 326.6 million in Q2 (+210% vs. prior-year quarter). This strong growth was mainly due to significantly higher sales volumes and prices for solar silicon compared to the previous year. Increased sales volumes and better prices in the chemicals business as well as the very high capacity utilization of the production facilities, also had a positive impact on EBITDA.

Outlook

U.S. consumption could pick up more strongly, as indicated by higher wages and hours worked with a combined increase of about 10% in payrolls. With over 70% of the economy, consumption is the driving force in the U.S. The new record deficit in the U.S. trade balance makes it clear that there is a continuing import pull, which means economic strength. Low interest rates are likely to be one of the reasons for the record levels of share buybacks. Here, a record demand of over USD 800 billion is expected in 2021. There will also be records in corporate takeovers. Both will lead to more demand for shares and support the liquidity that is already being increased by USD 120 billion a month by the central bank.

Performance as of September 30, 2021

Net Asset	September			Since
Value	2021	2021	3 years	inception
CHF 33.24	-4.59%	3.88%	2.97%	5.05% p.a.

Share price development as of September 30, 2021 (indexed)

180

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90

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70

60

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		30.9%
Healthcare									25.4%
Industrials							12.8%
Consumer discretionaries						8.6%
IT					7.9%
Consumer staples			4.4%
FX		0.4%
Cash							9.6%

Country Breakdown

Germany 52.7%

Switzerland 47.3%

The largest positions

Wacker Chemie AG								10.1%
Swatch Group AG							8.6%
Forbo Holding AG						8.5%
SGS SA					8.2%
SAP SE				7.9%
Fuchs Petrolub SE		7.5%

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 34.84), at the previous year end (CHF 32.00) respectively 3 years ago (CHF 32.28). 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)

30.9.2021

700

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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 13 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]