Formulafirst : Monats-News April 2022 Englisch

Monthly Report April 2022

Stock market Weaker Performance Underperformance Investments Slightly increased cash position Outlook Better

Markets

The world's foreign exchange reserves amount to about USD 13 trillion, of which 25% belong to the Central Bank of China. The economic and financial sanctions imposed on Russia must be of great concern to Chinese decision-makers. The bilateral sanctions in the trade war between the U.S. and China have so far been limited mainly to trade and export controls. This trade war could easily escalate into a financial war. The West still has great economic and financial leverage over China. Not only are some of its national assets held in Western currencies, but the U.S. and Europe remain the most important markets for Chinese exports. As a result, China has an interest in globalization and no incentive to push the West too hard. However, the Chinese central bank is reluctant to invest current account surpluses in U.S. dollar assets. Some of the surpluses earned abroad will have to be invested domestically to limit the risk of confiscation. The government can do this, for example, by further encouraging consumer spending, because the larger China's current account surplus becomes, the higher the risk of confiscation. By increasing the use of external surpluses domestically, interest rates will continue to trend downward and the renminbi will appreciate more than it would otherwise.

Performance

In a weaker market environment, Formulafirst Ltd.'s April 2022 Net Asset Value slid by 4.03% from the previous month. The MSCI Europe lost 1.08%. The resulting underperformance of Formulafirst Ltd. compared to the MSCI Europe is 2.95 percentage points for the month of April 2022. Since the beginning of 2022, an underperformance of 4.32 percentage points has resulted.

Investments

The current order backlog at Rational AG is currently 4.5 times the normal level! To absorb input prices, the company increased equipment prices by 6% in November 2021 and again by the same percentage in March 2022. Despite uncertainties, Rational plans to continue growing. Sales are forecasted to grow by 10-15% in 2022. Gross margin is estimated at a similar level as in 2021. The EBIT margin is expected to increase slightly, as operating costs should grow marginally slower than sales. Any increase in the price of cooking inputs (including food) will help Rational because its equipment is producing efficiently and at low-cost, which means it will pay off quickly. Sartorius AG's Group outlook for 2022 includes sales growth of 14-18% with an EBITDA margin of 34% (previous year 34.1%). In terms of sales revenue, the pandemic-related business is estimated at approx. EUR 500 million (previous year's level), i.e., approx. 13% of this year's sales revenue. Capital expenditures are expected to be even higher in 2022, representing a ratio of approximately 14% (previous year 11.8%) of sales. Expansion will be accelerated as all product segments show good growth. The cell culture business is identified as an interesting area. The focus continues to be on expanding production capacities in Germany, the USA, China and South Korea. At year-end 2022, the net debt/EBITDA ratio is targeted at 1.1.

Outlook

The outlook for world stock markets in the next few months is probably better than can be expected on the basis of the double whammy (war, FED slowdown). The most important reason is the good stock market technicals and possible stabilization of the bond markets in April. The technical indicators show that there was extreme pessimism in March, accompanied by sell-off sentiment with position liquidations. After such a market shakeout, reinforced by the sharpest global bond price decline since 1980, it is hard to imagine that the stresses will become much more severe for the time being.

Performance as of April 30, 2022

Net Asset	April	Since
Value	2022	2022	3 years	inception
CHF 30.02	-4.03%	-11.24%	-0.20%	4.35% p.a.

Share price development as of April 30, 2022 (indexed)

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 Jan 22

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

Breakdown by sectors

Materials28.6%

Consumer discretionaries20.6%

Healthcare16.1%

Industrials8.7%

IT7.2%

Consumer staples5.3%

FX0.4%

Cash13.1%

Country Breakdown

Germany34.6%

Switzerland65.4%

The largest positions

Holcim Ltd.10.6%

Swatch Group AG10.2%

SGS SA8.7%

Wacker Chemie AG7.7%

Forbo Hold. AG7.6%

SAP SE7.2%

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 restric-tion 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

Smart Owners consistently outperform the market (indexed)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-ori-ented 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.

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

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 invest-ments 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 31.28), at the previous year end (CHF 33.82) respectively 3 years ago (CHF 30.08). The perfor-mance since inception (18 December 2002) reflects the annualized yield since 18 December 2002 till today, using a start NAV of CHF 13.-.

Company detailsCompany:

Board of Directors:Investment manager:

Management team:Auditors: Corporate structure: Inception:

Type of stock: Shares outstanding: Market capitalization: Listing:

Fees:

Security number: Reuters: Bloomberg: Net asset value:Address:Investor relations:

Formulafirst Ltd., British Virgin Islands

Derek P. Baudains, Paul Broxup, Markus Gresch

2trade group ltd., Zug

Sammy Matter, Martin Treffer, Daniel Biedermann

PricewaterhouseCoopers, Zürich Public limited company 18.12.02 bearer shares 367,487 CHF 11 mn

Swiss Exchange SIX Management fee of 1.5% p.a., Performance fee 20% current hurdle at CHF 34.24

146 29 83 FFI.S

FFI SW Equity, FFI SW Equity NAV

Website daily, Wednesday/Saturday in FuW (Finanz und Wirtschaft)

2trade group ltd. Baarerstrasse 2, CH-6300 Zug

Dynamics Group Ltd. Alexandre Müller

Internet: E-mail:

Tel.: [phone]www.formulafirst.vginfo@formulafirst.vg