Management process application - Stage 1

VALUE SELECTION / MONTSEGUR OPPORTUNITES

• Search area: Europe
• Capitalisation: minimum €100 M
• Number of lines in the portfolio: maximum 35

No selection criterion based on fundamental data

Search opportunities associated with:

• Break-up valuation: value
• A speculative approach (financial operations): special situation
• Return to better profitability: recovery

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Examples : Scor, Alès Groupe, Dynaction, Peugeot, Alcatel

GARP SELECTION / MONTSEGUR PERSPECTIVES

• Search area: Europe
• Capitalisation: minimum €750 M
• Number of lines in the portfolio: maximum 35

3 selection criteria based on growth in past and future results

• Turnover: Average annual growth > 5%
• Operating results: Average annual growth > 8
• Earnings per share: Average annual growth > 10

2 selection criteria based on profitability and solvency

• Profitability of own capital (ROE): > 10%
• Ratio of net debt / own funds: < 70 %

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Examples : Air Liquide / Linde, Axa, Dassault Systems, Roche

YIELD SELECTION / MONTSEGUR RENDEMENT & MONTSEGUR TRESORERIE +

• Search area: Euro-zone Europe
• Capitalisation: minimum €500 M
• Number of lines in the portfolio: maximum 30

6 selection criteria to find “dividend champions”

• Net yield > 3.5%*
• Distribution rate <100%
• Dividend between 1999 and 2006 >0 (positive)
• Ratio of net debt / own funds < 60%
• Enterprise value / turnover < 2.5
• Price / Cash flow < 10.

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Examples : Deutsche Tel, SES Global, Intesa San Paolo, OPAP, Wessanen

Sector comparables and transaction history

Using a tool created in-house and fed with market data, we constantly compare each security with its direct competition. The choice of comparable securities is made by managers.

We also compare them with the valuations made at the time of the financial operations in each sector.