BLS Capital

Ringkjøbing Landbobank

In our opinion Ringkjøbing Landbobank is not just Denmark’s best run bank – it is also one of the very best banks in both a European and global context. It has been so for quite a few years, actually.

Bank services can be hard to differentiate – what one bank can provide, others might just as well. For this and other reasons, it is important to be highly cost-efficient, to minimise losses and to carry a strong financial buffer to survive through rough waters.

Extremely low, and for long periods even negative, interest rates have been a challenge in terms of ability to

Estée Lauder

Behind some of the world’s largest beauty brands, you will find a company with a robust business model that is based on low levels of tied-up capital, a solid level of demand and high profits. These attributes benefit us as co-owners. More than half of the billion dollar sales of the company’s most exclusive brand came from first-time buyers. So even though Estée Lauder Companies has proud traditions and strong historical roots, the company has a unique focus on the future consumers of beauty products.

In 1946, the fairy tale began when a woman called Estée Lauder launched her

Expeditors

Expeditors International of Washington – Expeditors – is quite a unique freight forwarder. The Seattle-based company stands apart from the crowd by having a deeply embedded customer-centric service culture, and not just anyone can become an employee either. The returns on invested capital are at levels that competitors must be envious of.

When clothes, electronics, cars or other products are manufactured in one country or region but sold to a consumer in another, the goods need to be moved from A to B. Expeditors helps its many customers with these logistics,

Coloplast

The Humlebæk, Denmark based company continues to gain ground on the complex and difficult North American market where there are great opportunities for growth. Management is driving this process by keeping a constant focus on doing things better each year. We view the somewhat surprising timing of a change in CEO as an undramatic event and consider it merely as a testimony to a successful succession.

In last year’s book we wrote about how the stock market was not rewarding Coloplast’s long-term values and strategic initiatives – but in 2018,

S&P Global

Few companies worldwide can boast a market position so strong that they can raise prices year after year without problems. This is the case for S&P Global, and it is a quality which we value dearly as co-owners.

Although we are sceptical of investing in companies with levered balance sheets we can rejoice in the fact that many companies have a different view on the matter. Many companies carry debt, and when that debt is to be raised or refinanced, they must go through S&P Global or Moody’s for a credit rating – benefitting us as co-owners.

S&P Global (and Moody�

Tryg

Since 2011, this Danish insurance market leader has benefitted from a highly capable management team that continually manages to improve the business – without taking unnecessary risks. Most recently, a large-scale acquisition of Alka has increased the business volume, and the company has more hands to play. One of the winning hands is a major shareholder who is extremely generous to customers which is something that can attract even more.

When entering 2018, Tryg was already the largest property and casualty insurance company in Denmark – and when the deal

SimCorp

This Danish software developer provides portfolio management systems to asset managers and owners and possesses several virtues that we appreciate as investors. The industry is evolving in a stable and predictable manner, the cash flows are high, the return on invested capital is impressive, and, on top of this, there is huge unexploited potential that is pursued by the highly competent management team day in and day out.

With a market share of 15 percent, SimCorp is a global market leader in the development and selling of portfolio management software. The systems allow asset managers

DSV

DSV is a piece of Danish commercial history that keeps adding new chapters year after year and the desire to keep moving forward is deeply embedded in DSV’s DNA. Recently the company has completed a successful integration of a company in the United States. Increasing profitability is the highest priority while at the same time increasing the volume of transported goods. DSV masters the art of acquiring and integrating competitors – something which most companies do not achieve.

DSV is a unique story about growth and scale. To understand that DSV

Novo Nordisk

Novo Nordisk continues to gain market share around the world under a relatively new management. The company is incredibly strong in research and development, costs have been cut, market share in the United States continues to strengthen, and several pockets of growth are looking quite attractive – both in terms of geography and products. Novo Nordisk is a winner, who is most definitely not stalling. Quite the contrary.

Historically, Novo Nordisk has been associated with insulin. This goes all the way back to Nordisk Insulinlaboratorium (the Danish word for “insulin

InterContinental Hotels Group

Within this company is a high-quality business model that has removed the need for tying up large amounts of capital while maintaining a large growth potential and generating high and stable cash flows. Changing the structure of an old, British conglomerate was the first step towards the creation of this beauty. In a few years InterContinental Hotels Group, IHG, is expected to have more than one million hotel rooms in its network.

IHG has a network of around 4,800 hotels and almost 830,000 rooms. The beauty of the concept lies in the fact that IHG only owns 12 of these hotels,

Mastercard

Mastercard has the exact characteristics that we as portfolio managers truly appreciate: there are almost no competitors, the underlying growth in the industry is high, the business is stable and there are several pockets of growth that the highly competent management can exploit. A return on invested capital of more than 100 percent and a growth rate in free cash flows of more than 15 percent almost says it all.

Mastercard owns and operates one of the world’s largest payment networks. It is a very stable industry that is extraordinary due to the growth rates being high while two

Carlsberg

The giant brewing company from Denmark has embarked upon a new chapter in it’s long history. The tough cost reduction has been implemented, but the cost discipline has been embraced by the company’s employees who will now need to focus on profitable organic growth, where there are many exciting opportunities in the beer industry’s new market segments.

Carlsberg Group is a story about expansion, where a brewer’s interest in and passion for beer launched a Danish export success. For breweries, it is primarily the largest breweries who are the most profitable – which Carlsberg