Two Decades of Finding European Value Omaha May

Two Decades of Finding European Value Omaha, May 2012 Página 1

ABOUT US Página 2 Incorporated in 1987. Shareholder structure: 100%-owned by Acciona Group (Quoted and Ibex-35 member). Three fund managers and three analysts (one based in Shanghai). Fund managers: Profit sharing agreement and 100% of financial assets invested in the funds. Spain’s leading independent fund manager € 5, 7 Bn AUM and 37, 000 customers (95% equities). Focused on returns not volumes under management. No marketing or distribution agreements. Investment philosophy based on “Value Investing”. Long only. No leverage. No derivatives. No activism. Two portfolios: 20% AUM Iberian (Spain and Portugal) and 80% AUM Global (mainly Europe).

BESTINVER: OUR PERFORMANCE Página 3

COMPARATIVE PERFORMANCE BESTINVER SPANISH EQUITIES vs. BENCHMARK YEAR BENCHMARK Relative perf. 1993 43, 91% 46, 67% -2, 76% 1994 5, 28% -11, 70% 16, 98% 1995 10, 33% 12, 30% -1, 97% 1996 41, 01% 38, 96% 2, 05% 1997 41, 01% 42, 22% -1, 21% 1998 29, 03% 37, 19% -8, 16% 1999 -10, 98% 16, 22% -27, 20% 2000 13, 91% -12, 68% 26, 59% 2001 21, 22% -6, 39% 27, 61% 2002 8, 25% -23, 10% 31, 35% 2003 38, 31% 27, 44% 10, 87% 2004 29, 97% 18, 70% 11, 27% 2005 27, 07% 20, 56% 6, 51% 2006 37, 36% 34, 49% 2, 87% 2007 4, 84% 5, 60% -0, 76% 2008 -35, 16% -40, 56% 5, 40% 2009 34, 56% 31, 37% 7, 33% 2010 3, 68% -15, 24% 18, 93% 2011 -12, 66% -16, 23% 3, 57% 30/03/2012 1, 55% -3, 80% 5, 35% Return since 1993 1406, 51% 266, 93% 1139, 58% Average annual return Página 4 BESTINVER IBERIAN EQUITY 15, 16% 7, 00% 8, 16% * Returns for BESTINFOND to 31/12/1997 and B. BOLSA from 01/01/1998 * BENCHMARK is a weighted average of IGBM (70%) (Madrid Stock Exchange Index) and PSI (30%). * All Bestinver returns are expressed as net, after expenses and commissions.

COMPARATIVE PERFORMANCE BESTINVER INTERNATIONAL EQUITIES vs. MSCI YEAR B. GLOBAL EQUITY MSCI World Index Relative perf. 1998 -14, 13% 16, 51% -30, 64% 1999 47, 87% 44, 75% 3, 12% 2000 18, 39% -8, 24% 26, 63% 2001 16, 59% -13, 36% 29, 95% 2002 -26, 95% -33, 02% 6, 07% 2003 32, 70% 8, 83% 23, 87% 2004 19, 01% 4, 71% 14, 30% 2005 30, 47% 23, 95% 6, 52% 2006 24, 05% 5, 51% 17, 98% 2007 -4, 61% -3, 41% -1, 20% 2008 -44, 71% -39, 08% -5, 63% 2009 71, 85% 23, 02% 48, 83% 2010 25, 75% 17, 16% 8, 59% 2011 -10, 07% -4, 53% -5, 54% 30/03/2012 9, 36% 8, 15% 1, 21% Return since 1998 266, 83% 17, 21% 249, 62% Average annual return 9, 55% 1, 12% 8, 43% * Returns for BESTINVER INTERNACIONAL * MSCI = Morgan Stanley global stock market index * All Bestinver returns are expressed as net, after expenses and commissions. Página 5

PHILOSOPHY: FOUR KEY CORNERSTONES COMPANIES WITH: GOOD PRICE DUE TO: • Competitive advantage: • Shareholder structure (family owned) • High ROCE • Type of shares (preferred, non-voting, etc. ) • Sustainable • Geographical reasons: business and • Correct attitude with generated cash-flow shareholders in different zones • Long term projects (impatient market) • Small caps (unnoticed by the market) • Asset organization (Holdings. . ) AUSTRIAN SCHOOL OF ECONOMICS TIME • Economic general structure • Patience • Human behavior • Psychological preparation • Non-predictable consequences in stocks • Client education • Euphoria / Panic Página 6

THE AUSTRIAN SCHOOL Practical points from the school Página 7

ECONOMIC SCENARIO: WHAT SHOULD WE BE LOOKING AT? ü Estimated GDP growth for China in 2012 is 7 x higher than the potential combined contraction for the southern European countries $bn 2007 (1) 2011 est (2) 2012 est (2) 2015 est (3) Ch. 2012 est Italy 2, 116 2, 060 2, 014 2, 042 -45 Spain 1, 442 1, 417 1, 393 1, 417 -24 Portugal 232 224 217 223 Economics -7 Fuente: Capital Greece 305 283 275 Total China Página 8 4, 095 3, 984 3, 494 7, 301 (4) 8 -8 3, 899 3, 958 -85 7, 900 10, 025 599 (1) World Bank, current figures. (2) IMF growth estimate. (3) Bestinver growth estimate. (4) Current figure at close of 2011.

HOW CHINA GROWS: ü Average productivity growth of 4% from 1990 to 2008 (*) ü Growth is increasingly driven by internal development ü Exports net of imports now hardly contribute to economic growth: 1% in 2011 ü Outside the state-owned sector (30% of the economy) it is the world’s most flexible and dynamic market. ü Despite the surge in investment, the capital stock per capita is not even 15% of Korea’s. China’s rail network is smaller than America’s was in 1880 * Source: The Economist , 14 November 2009 Página 9

HOW CHINA GROWS (II) ü Very high savings rates of >50%; for families this is 20% ü Financial system has very little borrowings: • Loans to deposits ratio: 0. 66 (Spain 1. 40) • In the last Chinese banking crisis (2000), this figure was 0. 90 • Reasonable interest rates: Mortgages (6%), and account for a mere 13% of loans. Borrowing from banks to buy land is not allowed. ü Increase in property prices similar to that of available income: 10% a year. ü Little government debt; including local bodies, this is 75% of GDP. The value of state enterprises is estimated at over 100% of GDP. CEO of Coca-Cola: “It is easier to do business in China than in the USA” (FT 26/09/2011) Página 10

EUROPE VS. USA Página 11

PORTFOLIOS MAIN FEATURES Página 12

TWO EXAMPLES OF INVESTMENT Página 13

BMW PREFERRED SHARES 2013: - We use a normalized operating profit of 8. 2%. Company guidance is 8 -10%. Página 14 Operating profit in 2012 is expected to be 14%.

BMW PREFERRED SHARES Luxury Stocks: Preferreds: Drawbacks: Liquidity 75. 000 shares/day. No voting rights. Slightly higher dividend by company statutes. Employees incentive plans are done through preferreds. Average discount of 5 largest german stocks with dual shares: 4%. FORD Burberry Coach Richemont Hermes Luxottica LVMH PPR Prada Ferragamo Tiffany Tod's Average Source: Factset Market cap, bn€ Adj Net Cash EV 2013 e Free cash flow Price / Free cash flow Página 15 Why Price/Free cash flow 33, 5 1, 7 31, 7 2011 4, 1 2012 4, 3 2013 4, 9 8, 1 x 8, 2 x 6, 5 x 2012 2013 22, 8 x 21, 3 x 23, 6 x 63, 1 x 23, 4 x 22, 1 x 14, 7 x 30, 1 x 22, 4 x 38, 7 x 22, 5 x 27, 7 x 19, 9 x 19, 1 x 18, 9 x 42, 8 x 20, 8 x 18, 0 x 10, 9 x 21, 3 x 22, 1 x 22, 2 x 18, 1 x 21, 3 x

EXOR Holding controlled by the Agnelli family, founders of Fiat € mn Main investments Value at market price Bestinver Value Fiat Industrial Case New Holland (agricultural and construction equipment), Iveco (trucks and commercial vehicles), FPT Industrial (engines and transmission systems). 2. 948 4. 622 Fiat Auto Cars (Fiat, Chrysler, Alfa Romeo, Lancia, Ferrari, Maserati), Fiat brand commercial vehicles and components. 1. 593 3. 259 SGS Global leader in verification, inspection, control and certification activities 1. 662 1. 696 Cushman & Wakefield Largest privately held company for real estate services 417 * Alpitour Largest integrated Italian tourism group 240 Sequana Leading European group in the distribution of paper and packaging products 59 59 201 * Net debt and others Juventus, Banca Leonardo, etc. Total value 7. 119 10. 494 Value per share € 31, 3 € 46, 2 Exor preferred share price (Milan Stock Exchange) Upside € 15, 5 102% € 15, 5 198% * Book Value Página 16

APPENDIX Página 17

THE AUSTRIAN SCHOOL Essential differences between the Austrian and neoclassical schools Página 18

THE AUSTRIAN SCHOOL (continued) Source : Bestinver Página 19 Source: “The Austrian School”, Jesús Huerta de Soto Other sources: Mises Institute (www. mises. org)

BESTINVER Página 20 C/ Juan de Mena, 8 - 28014 Madrid (Spain) +34. 91. 595. 91. 00 bestinver@bestinver. es www. bestinver. com

• This document has been prepared by Bestinver Gestión, S. A. SGIIC for informational purposes only and can be in no way considered an offer to participate in its investment funds. The information contained herein was compiled by Bestinver Gestión, S. A. SGIIC from sources it believes are reliable. However, while appropriate measures have been taken to verify its accuracy, Bestinver Gestión, S. A. SGIIC in no way guarantees that it is accurate, complete or up to date. • All opinions and estimates included in this document reflect the best judgment of Bestinver Gestión, S. A. SGIIC as of the date they refer to and may be changed without prior notification. All opinions issued herein are general in nature and do not take into consideration individual specific investment objectives or financial circumstances. • Under no circumstances can Bestinver Gestión, S. A. SGIIC, its managers, employees or authorized personnel be held responsible for any damage resulting, directly or indirectly, from the use of the information contained within this document. Information regarding past returns does not in any way constitute a promise or guarantee as to future performance. • • • All Bestinver returns are expressed as net, after expenses and commissions. They are denominated in euros. Share redemptions and transfers of securities held for less than one year are penalised with a commission Source of Bestinver return and fees data: BESTINVER Source of sector return and fees data: INVERCO Source of national and international rankings: BESTINVER. Bestinver funds, third-party mutual funds and equity index returns (Madrid SE, IBEX, S&P 500 and MSCI) are calculated based on the closing level on the date appearing at the bottom of this page. Source of fund P/Es: BESTINVER Source of market P/Es and Argentina Charts: Bloomberg Source of Value Investors: “The Superinvestors of Graham-and-Doddsville” Sources of Performance of diferent assets since 1800: Jeremy Siegel "Stocks for the long run" Irwin Professional • • Página 21

May 3 - 4, 2012 Mammel Hall Omaha, Nebraska