Sohn - EXOR for PDF - Sohn Conference Foundation Journey Fiat Punto Old Model Refreshing* Q1-2 2016...

LOLLAPALOOZA

IraSohn–May4,2016www.gwinvestors.com- @gwinvestors

DisclaimerThispresentationhasbeendistributedforinformationalpurposesonly. Neithertheinformationnoranyopinionsexpressedconstitutearecommendationtobuyorsellthesecuritiesmentioned,ortoinvestinanyinvestmentproductorstrategyrelatedtosuchsecurities. Itisnotintendedtoprovidepersonalinvestmentadvice,anditdoesnottakeintoaccountthespecificinvestmentobjectives,financialsituationorparticularneedsofanypersonorentitythatmayreceivethispresentation. Personsreadingthispresentationshouldseekprofessionalfinancialadviceregardingtheappropriatenessofinvestinginanysecuritiesdiscussedinthisintroduction. Theauthor’sopinionsaresubjecttochangewithoutnotice. Forecasts,estimates,andcertaininformationcontainedhereinarebaseduponproprietaryresearch,andtheinformationusedinsuchprocesswasobtainedfrompubliclyavailablesources. Informationcontainedhereinhasbeenobtainedfromsourcesbelievedtobereliable,butsuchreliabilityisnotguaranteed. InvestmentaccountsmanagedbyGreenWoodInvestorsLLCanditsaffiliateshavepositionsinthesecuritiesdiscussedinthisintroduction. GreenWoodInvestorsLLCmayre-evaluateitsholdingsinsuchpositionsandsellorcovercertainpositionswithoutnotice. Nopartofthispresentationmaybereproducedinanyform,orreferredtoinanyotherpublication,withoutexpresswrittenpermissionofGreenWoodInvestorsLLC.Pastperformanceisnoguaranteeoffutureresults.

www.gwinvestors.com- @gwinvestors

Ourportfolioconsistsofagreatteamofmanagersguidingunder-appreciatedcompaniesthroughtransformationalmomentsintheirhistory.



Lollapalooza

Whatifyoucouldgetthis…

www.gwinvestors.com- @gwinvestors3GCapital BerkshireHathaway Markel


AthispreferredValuation

BenGraham

Obviouslythisisn’tpossible.


ForwardPE32.8x

ForwardPE26.6x

Source:Factset

Price/Book1.41x/141%


CombingtheWorldForAnother…


0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

Year0 Year1 Year2 Year3 Year4 Year5 Year6 Year7

EarlyCareerAbsolutePerformance

0%

50%

100%

150%

200%

250%

Year0 Year1 Year2 Year3 Year4 Year5 Year6 Year7

EarlyCareerRelativePerformance

APriceBenGrahamWouldLove…


Price/NAV0.65x/65%


PowerfulValueDrivers


Value-AddedInvestor

Reinsurancecapital

ExceptionalManagementteamsROICFocus

LessInvestorCompetition

Concentrated,Contrarian

WhyDoesThisOpportunityExist?


WorstPerformingIndexintheWorldYTD


-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Italy

China

Japan

Finland

Switzerland

SriLanka

Belgium

Israel

Denm

ark

Portugal

Europe

Czech

Germany

Sweden

Austria

HongKong

Spain

Australia

France

Singapore

India

Malaysia UK

Netherla

nds

Norway

Poland

Taiwan

SouthKorea

Philippines

USA

Pakistan

SouthAfrica

Indonesia

New

Zealand

Canada

Mexico

Chile

Venezuela

Thailand

Egypt

Hungary

Argentina

Turkey

Russia

Brazil

YTDStockMarketIndexPerformance

ConsumerConfidence@RecordHighs


5.0%6.0%7.0%8.0%9.0%10.0%11.0%12.0%13.0%14.0%15.0%80

85

90

95

100

105

110

115

120

125

1/1/95

11/1/95

9/1/96

7/1/97

5/1/98

3/1/99

1/1/00

11/1/00

9/1/01

7/1/02

5/1/03

3/1/04

1/1/05

11/1/05

9/1/06

7/1/07

5/1/08

3/1/09

1/1/10

11/1/10

9/1/11

7/1/12

5/1/13

3/1/14

1/1/15

11/1/15

ItalianUnemployment&ConsumerConfidence

Confidence(LH) Unemployment(RH- Inverse)

Better


4.4% RevenuefromItaly

NowaSignificant DiscounttoNAV


15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

€ 20.00

€ 25.00

€ 30.00

€ 35.00

€ 40.00

€ 45.00

€ 50.00

€ 55.00

€ 60.00

€ 65.00

€ 70.00Discount(RH)

NAV(LH)

Stock(LH)

1.0x

1.1x

1.2x

1.3x

1.4x

1.5x

1.6x

1.7x

1.8x

1.9x

2.0x

$400

$500

$600

$700

$800

$900

$1,0001/6/12

3/6/12

5/6/12

7/6/12

9/6/12

11/6/12

1/6/13

3/6/13

5/6/13

7/6/13

9/6/13

11/6/13

1/6/14

3/6/14

5/6/14

7/6/14

9/6/14

11/6/14

1/6/15

3/6/15

5/6/15

7/6/15

9/6/15

11/6/15

1/6/16

3/6/16


FlashbacktoMarkel’sAlterraDeal

Price/Book(RH)

StockPrice(LH)

WeDon’tWanttheDiscounttoNarrow


0%

10%

20%

30%

40%

50%

60%

€ 0.00

€ 5.00

€ 10.00

€ 15.00

€ 20.00

€ 25.00

€ 30.00

€ 35.00

€ 40.00

€ 45.00

1/1/13 2/1/13 3/1/13 4/1/13 5/1/13 6/1/13 7/1/13 8/1/13

StockPrice

RepurchaseVolume

DiscounttoNAV(RH)

NAVPer Share

ConcentratedPrivateEquityPortfolio


NAV:€50.41

€7.36

€14.98

(35%Discount)

€32.80€10.28

NetDebt€10.28

€26.05

Others €2.96 AllfiguresperEXOshare

Vs.

HistoryofValue-AddManagement


144.6%

53.8%

12.1%

0%

20%

40%

60%

80%

100%

120%

140%

160%March2007– May2015

Best-In-ClassUnderwriting


80.0%

90.0%

100.0%

110.0%

120.0%

130.0%

140.0%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Berkshire PartnerRe MunichRe

EverestRe SwissRe HannoverRe

Better


20-YearPre-InvestmentCombinedRatio

98.9% 99.0%


98.9% FreeCapital

ReasonablePricePaid


$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

CashPaid TangibleBookValue ReserveRedundancies

1.08x

0.86x

CapitalLeavingIndustry


Lowerinterestratesmakefundingfromreinsurancepolicieslessattractivetonon-coreplayers.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2008 2009 2010 2011 2012 2013 2014 2015 2016

EstimatedGlobalReinsuranceCapacity

ACapitalJunkieinaMadWorld


Marchionne Mulally Toyoda Zetsche Ghosn-Renault

Ghosn-Nissan

Winterkorn

Mueller Tavares Fields Barra Krueger

6/04 9/06 6/09 1/06 5/05 6/01 1/07 9/15 3/14 7/14 1/14 5/15

ROIC GlobalPlatform

CrisisMgmt

Restru-cturing

GlobalPlatform

CrisisMgmt

#1inWorld

CrisisMgmt

CrisisMgmt

“Mobility”

Product Electric

CEO’sFocusMatters184.1%

71.2% 57.8% 53.9%36.6% 32.2% 28.9% 22.7%

4.4%

-8.3% -17.8% -20.1%-50%

0%

50%

100%

150%

200%


AJunkieWhoNoOneBelieves…


3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2015 2016 2017 2018

FCA'sProjectedEBIT

Estimates Plan

WhoHasMissedAFewTargets…


CapitalRedirected


Investment:

$3,718Fiatcashoutlay

2015FCF:

$3,728(OurEstimates)

100%CashROIC

KeyDrivers

1.NewProduct2. ReducedIncentivesonOldVehicles3. CommoditiesSavings4. BalanceSheetSavings


1.NewProduct– Next12Months


€950-1600milliontailwind

ModelBaseCaseVolumes

BaseEBITContribution

%of2015EBIT

BearCaseVolumes

BearEBITContribution

%of2015EBIT

AlfaRomeoGiulia 76.6k €361.7 7.1% 54.8k €258.6 5.1%

MaseratiLevante 25.2k €362.1 7.1% 11.2k €161.5 3.2%

FiatToro(Brazilonly) 69.1k €290.7 5.7% 30.3k €127.7 2.5%

ChineseLocalJeeps(Cherokee&Renegade) 190.0k €323.3 6.3% 152.0k €258.7 5.1%

FiatTipo 71.7k €286.8 5.7% 43.5k €152.3 3.0%

2016NewSegments 432.6k €1,624.6 31.8% 291.8k €958.8 18.8%

2.ReducedIncentives


Model Town&Country JeepCompass/Patriot

DodgeJourney FiatPunto

OldModel

Refreshing* Q1-22016 2H2016 Mid2016 Q42016Avg.MSRP $35,471 $23,058 $26,828 £10,990CurrentIncentive

$4,500 $3,750 $2,875 £2,235

€600-700milliontailwind

3.CommoditiesSavings


>€700milliontailwindif25%PassThrough

Commoditiespervehicle 12/2014Value 12/2015Value Change

Steel $669 $432 -$237

IronCastings $34 $19 -$14

Aluminum $287 $236 -$51

Copper/Brass $168 $126 -$42

Platinum $128 $94 -$34

Rhodium $18 $9 -$8

Palladium $56 $40 -$17

Plastic $260 $168 -$92

Rubber $639 $457 -$182

Total(pervehicle) -$676

2015Volumes(millions) 4.16

TotalFleet-WideChange(millions) -€2,833

4.BalanceSheetSavings


-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

2015 2016 2017

FCAHarmonizedBalanceSheet

NetDebt Cash

2,346 Interest 1,699Interest 1,229

~75%of2015EBITIncremental


BalanceSheetStrengthening


NetLeverage

-0.20x0.00x0.20x0.40x0.60x0.80x1.00x1.20x1.40x1.60x

Historical Forecasted

Investment-GradeRatingComing

RelativeFairValue


€ 21.00 € 19.84

€ 35.58€ 33.23

€ 0.00

€ 5.00

€ 10.00

€ 15.00

€ 20.00

€ 25.00

€ 30.00

€ 35.00

€ 40.00

AverageFordValuation AverageGMValuation

2016 2017

CurrentPrice

AgriculturalCoiledSpring


Production<RetailDemand


CornStillBelowEconomicBreak-even


$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00 CornPrice

BreakevenPrice

Source:USDA

HeavyShortExposure


0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

-150,000

-100,000

-50,000

0

50,000

100,000

150,000

200,000

6/16/06 6/16/07 6/16/08 6/16/09 6/16/10 6/16/11 6/16/12 6/16/13 6/16/14 6/16/15

CornPriceCBOTOpenInterest

WindingUptheCoiledSpring


DaystoCoverShortInterest

10.6 27.7 11.6

SignificantOperatingLeverage


7.7%2015EBITMargin

31.2%IncrementalMargin

NormalizationDrivesSignificantUpside


$1,4322015IndustrialEBIT

+$1,294AgDemandNormalization

IsFerrariaLuxuryCompany?


LimitedEditionsOutperformtheS&P500


8.3%

19.4%

7.6%

11.9%

6.5% 6.1%4.0%

8.7%6.6%

15.9%

13.0%

18.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

250GTO 288GTO F40 F50 Enzo 599GTO

EvenLookingattheWorstPerformer…


Whatotherproductsappreciateinvalueaftersale?


DemandRecession-Proof


29%

18%

7%3% -6% -9%

-21%

-32%

-41%

-59%-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Burberry

Hermes

Ferrari

LVMH

Prada

BMW

Daimler

Porsche

Lambo

rghini*

Bentley

2008 2009 Cumulative

Incremental

EBITmargin

76%www.gwinvestors.com- @gwinvestors

2015

CarDeliveries

+6%

FCF>Double


€ 1.89 € 1.92 € 1.92€ 2.28

€ 3.65

€ 5.40 € 5.17 € 5.46

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

€ 0.00

€ 1.00

€ 2.00

€ 3.00

€ 4.00

€ 5.00

€ 6.00

€ 7.00

€ 8.00

12 13 14 15 16 17 18 19

FCFpershare(LH) FCFYield(RH)

CheapestInClass


27.6x

15.3x

11.0x8.8x 8.9x 8.6x 8.3x

5.3x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

Tesla Hermes ManU Burberry Prada Richemont LVMH Ferrari

15EBITDA 16EBITDA 17EBITDA

PuttingthePiecesTogether


ConcentratedPrivateEquityPortfolio


NAV:€50.41

€7.36

€14.98

(35%Discount)

€32.80€10.28

NetDebt€10.28

€26.05Vs.

Others €2.96 AllfiguresperEXOshare

NAVSettoTriple


NetDebt€10.28

€26.05

NAV:€151.03

€72.00

€45.50

€16.01Others €2.96

AllfiguresperEXOshare

Time


PriceStrategy

RightinEveryWay

Areallcoiledsprings

Lowerscostofcapital

3G-StyleFocus

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

€ 20.00€ 25.00€ 30.00€ 35.00€ 40.00€ 45.00€ 50.00€ 55.00€ 60.00€ 65.00€ 70.00

1/2/15

3/2/15

5/2/15

7/2/15

9/2/15

11/2/15

1/2/16

3/2/16

5/2/16

LearnfromOthers’Mistakes20kClassABRKSharesSoldat~$35


SetitandForgetIt.


Sohn - EXOR for PDF - Sohn Conference Foundation Journey Fiat Punto Old Model Refreshing* Q1-2 2016...

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