AVI GLOBAL TRUST PLC

('AGT' or the 'Company')

LEI: 213800QUODCLWWRVI968

Announcement of unaudited results for the half-year ended 31 March 2025

Half-Year Financial Report for the year ended 31 March 2025

A copy of the Company's Half-Year Report for the half year ended 31 March 2025 will shortly be available to view and download from the Company's website, https://www.aviglobal.co.uk. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

Dividend

The Directors have declared the payment of an interim dividend of 1.50 pence per Ordinary Share for the period ended 31 March 2025, which will be paid on 25 July 2025 to Ordinary shareholders on the register at the close of business on 27 June 2025 (ex-dividend 26 June 2025).

Interim results presentation

An investor presentation, open to all existing and potential shareholders, will take place via Microsoft Teams on 16 June 2025 at 11:30 GMT. It will be hosted by Joe Bauernfreund, Portfolio Manager and CEO/CIO at Asset Value Investors, alongside Tom Treanor, Head of Research. In this webinar, Joe and Tom will provide insights into AVI Global Trust's performance over the period and discuss key engagements with portfolio companies. There will be an opportunity for Q&A following the presentation.

Please register by clicking here or contacting info@assetvalueinvestors.com.

The following text is copied from the Half-Year Report and Accounts:

OBJECTIVE

The investment objective of the Company is to achieve capital growth through a focused portfolio of investments, particularly in companies whose shares stand at a discount to estimated underlying net asset value.

FINANCIAL HIGHLIGHTS

- Net asset value ('NAV') total return per share increased +1.0%

- Share price total return +0.8%

- Benchmark index^± increased on a total return basis +1.5%

- Interim dividend increased to 1.50p

PERFORMANCE SUMMARY

¹ As per guidelines issued by the Association of Investment Companies ('AIC'), performance is calculated using net asset values per share inclusive of accrued income and debt marked to fair value.

² As per guidelines issued by the AIC, the discount is calculated using the net asset value per share inclusive of accrued income and with the debt marked to fair value.

Buybacks

During the six months ended 31 March 2025 the Company purchased 12,700,000 Ordinary Shares for cancellation for an aggregate consideration of £30,390,000 adding +0.3% to AGT's NAV.

*Alternative Performance Measures

For all Alternative Performance Measures included in this Report, please see definitions in the Glossary in the Half-Year Report and Accounts.

^± MSCI All Country World Index, please refer to the Glossary in the Half-Year Report and Accounts for further information.

CHAIRMAN'S STATEMENT

The NAV return for the first half of our accounting year was +1.0%, whilst the share price total return was 0.8%, both compared with +1.5% for our comparator benchmark. As ever, these statistics, based on snapshots of data as at the end of September and March, do not tell the whole story. From the end of September to mid-February the share price and NAV followed a generally upward trend with relatively low volatility, as markets were unusually calm. This was then undone by growing concerns over moves by the United States to become more protectionist and isolationist in its dealings with the rest of the world. It all came to a head just after the end of our reporting period when President Trump announced a sweeping range of tariffs on imports to the United States. There has since followed a period of continuing uncertainty and high volatility in share prices.

While markets have been heavily affected by geopolitics and the potential effect on economic growth, our investment managers adhere resolutely to their focus on investing in companies whose assets and future potential are undervalued by their share price. There has been no shortage of interesting situations in the portfolio over the last few months, as set out in their report.

Revenue and dividend

Revenue earnings for the period were 2.75 pence per share. The Board has elected to pay an interim dividend of 1.50 pence per share, which is an increase of 0.30 pence per share compared with last year. While it is too early to predict revenue earnings for the full accounting year, the Board intends to at least maintain the final dividend, absent any unforeseen events, so that the total dividend with respect to the current accounting year will be at least 4.05 pence per share.

The Board recognises that a dividend which is steady and able to rise over time is attractive to many shareholders and, while we do aim to grow the dividend over the long term, I will repeat my previous statement that the portfolio is managed primarily for capital growth.

Share price rating and marketing

AGT has a substantial marketing budget and the Board works closely with AVI as it seeks to generate demand for AGT shares. Each month AVI produces an informative factsheet which is available on our website and I encourage you to register to receive these when they are published. AVI is also active in the media - both traditional and increasingly social media - as we seek to promote our investment proposition to a growing investor base.

The investment trust industry came under a lot of pressure during the period under review, as many trusts experienced wide share price discounts to their underlying NAV, leaving them vulnerable to corporate action. We continue to use share buybacks when AGT's share price discount is unnaturally wide and when the Board believes that buying back shares is in the best interests of shareholders. This is also an approach that our Investment Manager encourages for many of our investee companies. There are periods when, working closely with our brokers, we buy back shares on most working days. During the six months under review, 12.7 million shares were bought back, representing 2.9% of the shares in issue as at the start of the period. Share buybacks benefit shareholders by limiting the discount at which they could sell shares if they so wish. Buying back shares at a discount also produced an uplift in value to the benefit of continuing shareholders, of approximately 0.3%.

Annual General Meeting

All resolutions at the Company's AGM on 19 December 2024 were passed by a large majority. I would like to thank shareholders for their continuing support. As usual, it was good to meet a number of shareholders in person at the meeting. We welcome the opportunity to engage with shareholders and if you have any questions or points that you would like to raise with the Board, please send an email to aviglobal_cosec@cm.mpms.mufg.com or write to: The Company Secretary, AVI Global Trust PLC, 19th Floor, 51 Lime Street, London, EC3M 7DQ.

Outlook

While predictions are often difficult to make, and equally often prove not to be very accurate, I wrote last November in our 2024 Annual Report "The level of geopolitical uncertainty could be exacerbated by the result of the US election". That certainly proved to be accurate but, looking forward, market movements are anything but easy to predict. We experienced an extreme negative reaction to the initial announcement of widespread tariffs imposed by President Trump, followed by a recovery which may in large part have been due to the President stepping back from more extreme measures due to the market reaction. The President has modified or put most of the proposed tariffs on hold but much uncertainty remains.

Against this unusually high level of background noise, our investment managers continue to focus their resources on what they do best, seeking undervalued assets with the potential to unlock that value.

Graham Kitchen

Chairman

12 June 2025

INVESTMENT MANAGER'S REPORT

Performance Review

Over the interim period, AGT's NAV returned +1.0%, which compares to a return of +1.5% for our comparator benchmark, the MSCI AC World Index (£).

The lag between the end of the interim period and the publication of the report often sails by with no major change of note. The same cannot be said for this year, as investors have grappled with an erratic, uncertain and quickly changing global trade environment, as instigated by President Trump. This has led to considerable volatility in equity, bond and currency markets, since the end of the interim period.

Moreover, recent events have served to undermine the supposedly impervious nature of "American exceptionalism", which had become accepted as a (supposed) unequivocal truth. Whether the end of 2024 marked the crescendo of US equity dominance remains to be seen. Certainly, the economic, geopolitical and financial market events of the last few months, have served to remind investors of the powers of diversification and the wider opportunities in equity markets.

In this context, we note that since the end of January 2025 relative performance has swung +420bps in AGT's favour. Of course, we do not optimise for such short time frames, and we do not believe "less bad" relative performance is anything to write home about. Over the five years to 31 March 2025, AGT has achieved a total NAV return of +122%, or some +28% ahead of the benchmark.

As we have explained in recent years the niche, overlooked and misunderstood areas of the market upon which we focus continue to be largely ignored by investors, resulting in wide discounts.

This has created a fertile and opportunity rich environment for us, and one where a focus on activism, catalysts and events to unlock value has become more important than ever. These traits are evident in your Company's largest holdings, D'Ieteren, News Corp and Chrysalis Investments.

One interesting feature of the current environment is that we are finding an abundance of ideas across all areas on which we focus - Holding Companies, Closed-end Funds and Japan. The latter - Japan - is worth elaborating on, with our exposure (excluding the hedged investment in Softbank Group) now accounting for 23% of NAV, compared to 16% a year ago.

Indeed, eight years into our Japan journey, we are as optimistic as we ever have been. There is a developing market for corporate control, management teams are increasingly proactive, and the governance reform agenda is permeating both small and large cap stocks. Combined with low valuations, we believe that Japan stacks up very attractively, and is a market where our constructive approach to active engagement can yield real results.

As well as new and existing names in Japan, we have also added new positions elsewhere. We have invested in Vivendi, the French holding company controlled by Vincent Bollore, which is now, in essence a mono-holding company for its stake in Universal Music Group, and Gerresheimer AG, a German conglomerate currently undergoing a strategic review. To fund these purchases, we have actively rotated capital and note that we exited two of the top five contributors (Apollo +178bps and Reckitt Benckiser +56bps) during the period, following significant re-ratings in their discounts.

Reflective of the broad opportunity set, our gearing currently stands at 9.5%. The macro path ahead remains uncertain (as it always is!), but it is fair to say that risks appear more elevated than when we last wrote to you.

Our experience shows that timing the market is largely a futile exercise, and as such we remain focused on the bottom-up opportunity set, the underlying fundamentals, and potential catalysts and events, which includes our own activism.

Discounts remain historically wide, as indicated by the 39% portfolio weighted average discount. Aside from a handful of days during the COVID-2020 sell-off, this is the widest level on record.

Whilst we do not expect this to provide protection in the event of near-term market weakness, it makes us optimistic for prospective returns over the medium term. We continue to believe that hard work, activism and events will be crucial to unlocking value. We are also cautiously optimistic that the weight of capital retreating from the US generally, and the so-called Magnificent 7 specifically, has the potential to be a tailwind for narrowing discounts in our universe. As such, whilst the near-term view is hazy, we are confident that we have the right ingredients to deliver strong returns into the future.

* Contribution is the percentage amount that a position has added to the Company's net asset value over the six-month period.

CONTRIBUTORS

Apollo Global Management

Classification: Holding Company

% of net assets: Nil

Discount: N/A

% of investee company: N/A

Total return on position HY25 (local): 42%

Total return on position HY25 (GBP): 49%

Contribution (GBP): +178bps

ROI since date of initial purchase: 165.4%

Apollo was our largest contributor over the interim period (+178bps), with a local currency total return of +42%. We exited the position in the first half of December 2024 for a +165% return and an IRR of +41% over our three-and a-half year holding period vs. +28%/+9% for the S&P 500 and +42%/+13% for the MSCI ACWI.

We bought Apollo in 2021, at a time when we believed that the alternative asset manager ("AAM") sector was misunderstood and undervalued; when valuations for balance sheet heavy companies like Apollo and KKR (note AGT also had a very successful investment in KKR which we sold in mid-2024) within the sector were overly penalised; and when Apollo's share price was suffering from the scandal surrounding former CEO Leon Black's links to Jeffrey Epstein. Our thesis was that the market viewed the companies as levered plays on financial markets when, in fact, the bulk of their value resides in their high-quality, visible, recurring and predictable streams of fee-related earnings derived from management fees charged on long duration capital.

In the specific case of Apollo, there were also concerns ahead of its merger with its sister life insurance company, Athene. Life insurance businesses are, understandably, often lowly rated by the market. However, the reasons why they are so - unpredictable liabilities with tail risks (e.g., long-term care) and hard-to-hedge liabilities such as variable annuities - simply do not apply to Athene which has a highly focused business model, predominantly centred on fixed annuities.

As such, Athene can be looked at as effectively a spread-lending business, earning a spread between the rates paid on annuities and the yields earned on its investments. Its fixed income portfolio (95% of total assets) is 96% investment-grade, with Athene seeking to earn a return premium from complexity and illiquidity rather than from taking duration or additional credit risk and targeting a mid-to-high teens return on equity. Life insurance businesses are also correctly perceived as being capital intensive, and this was a source of some disquiet when the Apollo/Athene merger was announced. But capital intensity is not a bad thing if one is earning high returns on that capital; and, as we understood at the time, a material proportion of Athene's growth was likely to be funded by third-party "sidecar" vehicles.

Over November 2024, Apollo's shares soared by +22%, buoyed first by stellar Q3 results and then - just a day later - by a US election result that poured rocket fuel on the US financials sector as a whole - and the AAMs in particular - on optimism around a revival of deal activity and the prospect of a more benign regulatory environment. We believe that Apollo's share price led the post-election charge amongst its peers for two specific reasons.

Firstly, there had been growing concerns that Athene (more accurately described as Retirement Services), may become subject to increased regulatory oversight given an increasing media focus on "private equity owned insurers". While even this label is highly misleading, suggesting as it does that insurers like Athene either sit within limited life funds - they do not - and/or that their balance sheets are loaded with private equity investments managed by their owner - in most cases, certainly in Athene's, they are not - the fact is that the election result reduces the probability of tightened regulation to close to zero.

Secondly, there is a heightened prospect of alternative investments being allowed into the $12trn US 401(k) pension market. While there are no legal restrictions on such pension plans investing in private assets, fears of litigation have prevented any such moves to date. Such fears are likely to be diminished under a more permissive regulatory regime.

We note Apollo CEO Marc Rowan's comment some time ago that "we are likely one administration away" from changes here. It is very possible that the US election result may mean that administration has arrived. With its experience in retirement services, via its ownership of Athene and having been first to identify what Rowan terms the Fixed Income Replacement Opportunity (replacing a portion of the ~$40trn public investment grade market with private investment grade credit), Apollo is the best placed of all its peers to capitalise on an opening up of the 401(k) market.

While consensus estimates of forward earnings increased over our holding period, the bulk of our returns came from multiple expansion, as the market favourably reassessed the company's earnings quality and the duration of its growth opportunity. That said, the shares have de-rated materially since we exited, and we continue to monitor for an opportunity to re-establish a position in what we believe is still a misunderstood high-quality business.

D'Ieteren

Classification: Holding Company

% of net assets: 7.0%

Discount: -51.0%

% of investee company: 1.1%

Total return on position HY25 (local): 19%

Total return on position HY25 (GBP): 19%

Contribution (GBP): +164bps

ROI since date of initial purchase: 30.3%

D'Ieteren added +164bps to NAV over the interim period, with the position returning +19% inclusive of £35m of dividends received.

In last year's annual report, we highlighted that in September 2024 the company announced an extraordinary €74 per share special dividend, equivalent to 39% of the company's market cap at the time. Selling pressure from tax-sensitive investors - who faced Belgian Withholding Tax rates of up to 30% vs. AGT's 10% net rate - pushed the shares down from €226 to a low of €188. During this period, we increased our position by more than 70% at an average price just shy of €200 per share.

This made D'Ieteren the largest position in the portfolio at a 9.3% weight on 9 December 2024, when the shares closed at €200 per share. On 10 December 2024, the company traded ex-dividend of the €74 per share special dividend, yet closed the day at €160 i.e. some +27% above the implied ex-dividend price of €126. Net of 10% tax, AGT received proceeds of £35m, equivalent to 3.1% of its NAV.

As we look ahead, we expect investors to retune their focus on D'Ieteren's fundamentals, and Belron specifically. 2024 was characterised by a more difficult operating environment, particularly in the US, where volumes in the insured market (on which Belron focuses) suffered from so-called "claims avoidance", whereby, following large increases in insurance premiums, consumers are eschewing making insurance claims and instead use the cash market (to which Belron is underexposed). Despite this headwind, operating profit grew by +11% in 2024, with strong margin expansion to 21%. As we look ahead, the big-picture dynamics of the last few years remain in place, with trends toward windshield complexity and advanced driver-assistance systems penetration driving significant value growth. Margins are expected to eclipse 23% in 2025, with a mid-teens level of growth in operating profit.

D'Ieteren shares currently trade at €159, which represents a 51% discount to our estimated NAV. In October 2024, we saw a transaction between Belron minority shareholders which valued the company at a €32.2bn enterprise value ("EV"). This pegs D'Ieteren's 50% equity stake at €221 per D'Ieteren share. This valuation was higher than we had modelled - having previously estimated Belron to be worth €24.5bn EV, or 17x our estimate for 2024 EBIT. It does, however, put a line in the sand for future, more meaningfully sized transactions in Belron's equity, such as an IPO or further private equity sales. As and when these occur, we expect this to be a positive catalyst for D'Ieteren's very wide discount to narrow.

To date, D'Ieteren has been a successful investment, generating an ROI/IRR of +33%/+25% (local), however, we are optimistic that there is much more still to come.

Aker ASA

Classification: Holding Company

% of net assets: 4.5%

Discount: -25.7%

% of investee company: 1.4%

Total return on position HY25 (local): 19%

Total return on position HY25 (GBP): 23%

Contribution (GBP): +88bps

ROI since date of initial purchase: 73.6%

Aker was the third largest contributor (+88bps), with a total return of +23%. This was the result of strong NAV growth, with the discount largely unchanged at 26%. The +380bps appreciation of the Norwegian Krone ("NOK") versus Sterling, was an additional tailwind.

NAV growth was led by Aker BP (54% of NAV), which returned +17%. Earlier in 2024, investors had grown cautious on the plateauing of production at the Johan Sverdrup oilfield, and the company's longer-term production profile. The performance of Johan Sverdrup has exceeded expectations, and in February 2025 the company issued encouraging new long-term guidance. Management expects production to increase from 439k barrels per day in 2024 to 525k in 2028 and then remain above 500k into the 2030s. Aker BP's assets remain some of the highest quality globally, as evidenced by production costs of $6 per barrel (down from $10 in 2017). This supports a targeted +5% annual growth in the company's dividend which, combined with the current starting yield of 11%, bodes well for further NAV growth.

Elsewhere in Aker's portfolio, it has also been a busy period, as the company has made a concerted effort to unlock value, realise capital and push dividends to the holding company level. In 2024, this saw Aker Biomarine sell its Feed Ingredients Business, as well as corporate transactions at Aker Carbon Capture, Aker Solutions and a number of other smaller assets. In total, this saw NOK 9.3bn/16% of NAV paid up to Aker as dividends in 2024 - more than twice that of the prior year. As well as this, Aker announced a revised capital allocation framework, which now targets an annual dividend of 4-6% of NAV. At current prices, this equates to a yield for shareholders of over 8%. We believe this to be good value.

News Corporation

Classification: Holding Company

% of net assets: 7.1%

Discount: -41.0%

% of investee company: 1.0%

Total return on position HY25 (local): 3%

Total return on position HY25 (GBP): 8%

Contribution (GBP): +65bps

ROI since date of initial purchase: 17.8%

News Corp was a meaningful contributor over the period adding +65bps to NAV. This was largely a function of the position's large weight (8% average weight), and US dollar strength, which turned a +3% local return to a +8% return in GBP.

During the period, News Corp sold its unlisted, 65% stake in Foxtel, the Australian pay-tv business, to DAZN. The transaction occurred at an enterprise value of $2.1bn, or approximately 7x EBITDA, with News Corp debt and equity holding coming in at $1.1bn, or 4%/8% of then NAV/market cap.

We view this as a highly attractive valuation, for one of News Corp's less desirable assets and highlights the lunacy of the implied valuation of News Corp's other (more attractive) unlisted stub assets - trading at an implied 5.1x EBITDA. With that said, our enthusiasm is somewhat tempered, as the payment (for the equity) has been made in unlisted DAZN stock (with News Corp also seeing its inter-company loan repaid).

More importantly however, we believe that the Foxtel sale clears management's plate for more meaningful strategic and structural changes, with management commenting on a recent earnings call "our consideration of the appropriate structure does not end with that (Foxtel) significant decision". The elephant (or perhaps golden goose?) is REA Group, the 61% stake in which accounts for 72% of News Corp's market cap.

We believe that the market continues to overlook the possibility of structural simplification and value being unlocked. As and when this occurs, the prospects of a re-rating are considerable. In the meantime, we benefit from attractive NAV growth prospects, most notably from Dow Jones (34% of NAV). Indeed, this reinforces the importance and attraction of owning durable growing businesses in an event-focused strategy. Time is our friend, with intrinsic value/NAV compounding whilst we wait for the main event, which - as is invariably the case, takes longer to come to fruition than one would have originally hoped.

News Corp remains one your Company's largest positions at 7% of NAV.

Reckitt Benckiser

Classification: Holding Company

% of net assets: Nil

Discount: N/A

% of investee company: N/A

Total return on position HY25 (local): 14%

Total return on position HY25 (GBP): 14%

Contribution (GBP): +56bps

ROI since date of initial purchase: 16.6%

Reckitt Benckiser ("Reckitt") was a meaningful contributor over the period, as the discount narrowed significantly and we exited the position. Overall, it was a relatively short and successful investment, generating an ROI/IRR of +17% and +26%, which compares to an ROI of +14% and +7% for the MSCI AC World Index and FTSE 100 over the holding period.

By way of background, we built the position in the spring/summer of 2024, at a time of deep investor pessimism, when the shares traded at a c.40% discount to our estimated NAV, at a decade-low 11x price/earnings ratio and at a record wide discount to peers. Already trading at a discounted valuation, in March 2024 the company was hit by a litigation shock. The company's US infant nutrition business, Mead Johnson, was ordered to pay $60m compensation to the mother of a baby who died of Necrotising Enterocolitis ("NEC") - a bowel disease that mainly affects premature babies - who had been fed Enfamil pre-term baby formula. This led to a -15% one-day decline in Reckitt's share price as investors struggled to price the potential liability and capitulated. Whilst we were humble in our inability to assess potential legal liabilities with greater accuracy than the market, we felt that the market's implied c.$10bn gave a large margin of safety versus expert estimates.

It was our contention that the noise around the litigation allowed long-term orientated investors to buy a collection of trusted brands which exhibit meaningful barriers to entry, high margins, and attractive growth prospects at a much-reduced price. Moreover, we felt that management were under increased pressure to unlock value, with the business having explored splitting itself up some years earlier.

Indeed, shortly after we initiated our position, management launched a sweeping overhaul, with plans to exit the Essential Home business and Mead Johnson and to boost margins. Combined with positive news flow on the NEC litigation, this helped the shares to re-rate from a c.40% discount to one in the low 20s.

From the current discount level, we view the risks as more balanced, particularly regarding operational complexity and dyssynergies of asset sales, and a growing concern over the valuation at which Essential Home can be monetised.

As such, we took the opportunity to exit the position. We believe the investment demonstrates AVI's contrarian approach to investing in companies undergoing structural and strategic change to unlock discounted valuations.

DETRACTORS

Rohto Pharmaceutical

Classification: Asset-backed Special Situation

% of net assets: 4.1%

Discount: -56.1%

% of investee company: 1.6%

Total return on position HY25 (local): -31%

Total return on position HY25 (GBP): -32%

Contribution (GBP): -185bps

ROI since date of initial purchase: -25.4%

Rohto Pharmaceutical ("Rohto") was the most significant detractor over the period, reducing performance by -185bps, as its shares returned -31% in local terms. Rohto is the number one player in Japan's domestic self-selection skincare and eye-drop markets. We first invested in Rohto in June 2024, and at the reporting period-end, the position represented 4.1% of the AGT portfolio.

Despite the underlying quality of the core businesses, skincare and eye drops, the company has seen its share price fall significantly due to management's persistent investment in the non-core, unprofitable regenerative medicine business, which exhibits no clear path to success, but which management views as one of several 'growth investment businesses'.

It has been a turbulent six months for Rohto.

At the start of the fiscal year, Rohto signalled a reluctance to increase product prices, which left the market with a negative impression. Alongside this, the company maintained high R&D expenditure in its unprofitable healthcare segment, despite investor pushback. The market had also expected an increase in shareholder returns, to which the company announced a large acquisition at a high valuation instead. And, on top of this, the company announced a likely dilutive convertible bond issue out of the blue, with management likely naive regarding the message that this issuance would send to the market.

Elsewhere, Rohto's share price was caught up in the broader cosmetic market sell-off, with investors concerned over the outlook for the Chinese market, despite Rohto's low exposure to this market.

We believe that a combination of clearer investor communication, combined with Rohto's superior operational performance to peers, can drive a re-rating and help to rectify the undervaluation.

Shortly after the period end, AVI launched a public campaign highlighting 17 constructive suggestions in a detailed 100-page presentation, which can be found here. AVI firmly believes that the keys to achieving sustainable business growth lie in refocusing management on the core business and conducting a strategic review of 'growth investment businesses,' while enhancing IR communications, capital efficiency and board independence. By taking these steps, Rohto can demonstrate 'that management is conscious of the cost of capital and share price,' in line with the Tokyo Stock Exchange's request. Specifically, AVI's engagement is focusing on reallocating R&D spending from unprofitable business areas such as the prescription drug business and regenerative medicine business, towards high-value, high market share product lines, such as Rohto's skin care products. AVI also highlights the need to improve IR communications, which contributes to Rohto's significant relative undervaluation.

Despite the company's 14% operating margin outperforming the peer average of 5%, Rohto trades at an EV/EBITA multiple of 11.6x vs the peer average 16.2x. EV/EBITA is used for comparability as it focuses on operational performance, excluding pharmaceutical companies' amortisation of intangible assets such as patents, licences and IP.

Rohto's fundamental performance remains strong, and combined with AVI's public campaign, our conviction remains steadfast in the opportunity to streamline the equity story. Whilst we have taken our engagement agenda public, AVI's private engagement with the company continues in earnest. We look forward to further discussing our suggestions with management as we seek to unlock sustainable value for all stakeholders.

Entain

Classification: Holding Company

% of net assets: 3.5%

Discount: -52.2%

% of investee company: 1.0%

Total return on position HY25 (local): -20%

Total return on position HY25 (GBP): -20%

Contribution (GBP): -93bps

ROI since date of initial purchase: -27.1%

Over the interim period Entain detracted -93bps from your Company's returns, as the shares fell by -20% on a total return basis. This decline can be attributed to discount widening, moving from -31% to -52%, with returns being cushioned marginally by NAV growth of +10%.

We believe that there are two main factors which have contributed to discount widening over the reporting period.

Firstly, in December 2024, it was announced that the Australian anti-money laundering regulator (AUSTRAC) had commenced civil proceedings against Entain's Australian subsidiary. The investigation began in 2022 and relates to 17 accounts (out of more than 1 million) alleging that Entain had inadequate systems in place. As our industry is fond of saying, "past performance is not indicative of future results", however, we note that AUSTRAC's largest ever fine equates to c.£225m, equivalent to c.4% of Entain's pre-announcement market cap. We don't claim any great insight beyond this, but that is the ballpark which we are in.

Secondly, in February 2025 it was announced that Entain's CEO, Gavin Isaacs, would step down with immediate effect. Here we have more sympathy with the market's despondence. A CEO departing after only five months in the job announced via a vague press release is hardly confidence inspiring. That being said, with a competent and experienced (temporary) replacement waiting in the wings, in the form of Stella David (who had previously been interim CEO before Mr. Isaacs' appointment) there is no great disruption. Moreover, our investment case is (largely) centred on the potential to unlock value from the BetMGM JV, and we believe that a strong board and capital allocation committee is of central importance from a governance perspective.

On the NAV side of the equation, it has been a difficult couple of years, predominantly due to subpar navigation of a changing regulatory landscape in Entain's largest market, the UK. The Online Operations (76% of portfolio) returned to double-digit organic revenue growth in Q4, driven by a strong, and earlier than expected, reacceleration of growth in the UK. This helped contribute to an overall organic top-line growth of +6% over 2024, having previously guided to a decline at the start of the year.

The turnaround in financial results is very pleasing to see. However, what we believe to be more encouraging are the internal input drivers into these financials. The most important of these inputs is that player retention is back above the ~85% level which sits at the heart of the Entain's organic growth algorithm, having been below this level for a considerable period of time.

Looking ahead, Entain believe that they can sustain and build upon this player base, with early positive evidence within the UK as, for the first time since Q1 2021, spend-per-head increased. We expect that from here, growth should at least match that of the underlying markets (c.5% on a weighted average basis) with potential upside to this, as market share shifts back away from third-tier operators.

The other engine of growth for Entain is BetMGM (12% of its portfolio). It was around this time last year, that management outlined that 2024 was to be a "year of investment", after a difficult 2023. It was pleasing to see that these investments were not in vain, as BetMGM ended 2024 as a fundamentally stronger business. Almost every key performance indicator saw significant improvement, gaining momentum over the year and which has continued into 2025.

In 2025, management expects EBITDA to be positive, materially ahead of analyst consensus which was expecting another negative year. We believe that this earlier-than-expected inflection adds credence to management's medium-term aspiration of $500m in annual EBITDA.

However, in the current structure we believe that this value is being entirely discounted, with BetMGM trading at a negative implied valuation on our numbers. Alternatively, stripping out our (conservative) carrying value for BetMGM, the stub of Entain trades at 5x forward EBITDA, versus peers closer to 10x and historic M&A transactions above this level.

We believe this to be an unduly low valuation, for a company operating in a structurally growing industry and with significant barriers to entry.

Gerresheimer

Classification: Holding Company

% of net assets: 6.1%

Discount: -47.4%

% of investee company: 3.2%

Total return on position HY25 (local): -9%

Total return on position HY25 (GBP): -9%

Contribution (GBP): -59bps

ROI since date of initial purchase: -9.0%

During the period we built a new position in Gerresheimer AG ("Gerresheimer"), which detracted -59bps over the period.

Gerresheimer is a £2bn German conglomerate, that offers exposure to a leading player in the oligopolistic pharmaceutical primary packaging market with high barriers to entry and attractive growth prospects.

These merits are not currently reflected in the group's valuation, with the company trading at a 47% discount to our estimated NAV. We see multiple potential paths to improve the depressed valuation and unlock value, with the company currently undertaking a strategic review of its Moulded Glass division (22% of its NAV). In recent months, the company has been in discussions with a number of private equity houses regarding a potential take private transaction, with reported non-binding offers in the region of €90 per share. In March it was announced that KKR are no longer part of the consortium looking at a deal, and the shares have reacted negatively to this, now trading at ~€55, or just over 10x this coming year's earnings.

Whether or not a bid emerges from other parties remains to be seen, but we are encouraged by the numerous levers that the company has and with which it could enact change and create value for its shareholders, most notably the ongoing Moulded Glass strategic review. We own a little more than a 3% stake in the company and believe that there is significant value to be unlocked.

Subsequent to the interim period end, in early June, Gerresheimer issued a profit warning leading to a -23% one day decline in the share price.

Following this we published an open letter to the Supervisory Board setting out the steps required to secure and unlock value.

The full letter can be found here: Gerresheimer - a shot of new medicine is required

We continue to actively engage with management and the board in the pursuit of realising Gerresheimer's considerable value.

Dai Nippon Printing

Classification: Asset-backed Special Situation

% of net assets: 2.7%

Discount: -48.3%

% of investee company: 0.5%

Total return on position HY25 (local): -14%

Total return on position HY25 (GBP): -14%

Contribution (GBP): -54bps

ROI since date of initial purchase: 6.8%

Dai Nippon Printing ("DNP") - the Japanese conglomerate which owns a collection of competitively advantaged component businesses - was one of your Company's largest detractors in the interim period, with AGT's position returning -14% in GBP. This was driven by a -550bps widening in the discount and a -10% decline in the NAV.

DNP faced multiple headwinds in the period. First, on 11 November 2024 the company filed its shareholder register alongside its quarterly results. This showed that a large activist investor, with over a 3% position, had exited the company. This investor had been a key driving force behind DNP's large step forwards in governance and capital allocation. Investors were clearly pessimistic that the company's management would maintain their stance on shareholder returns and capital allocation in the absence of a large activist, and the shares fell by some -17% in the subsequent two weeks. Compounding matters, the company then announced a buyback and secondary offering on 29 November 2024, with the JPY20bn buyback significantly smaller than the one announced in previous periods. This saw DNP's stub multiple decline from 8.0x forward EBIT to a lowly 5.6x.

AVI has had subsequent conversations with DNP, who explained that their capital allocation policy is unchanged and that the timeline for the secondary transaction had been planned since August 2024, with the timing of the press release due to regulatory reasons.

Despite the market's pessimism, our underlying thesis remains unchanged.

As a reminder, DNP is a 150-year-old Japanese printing company whose conglomerate structure, and overexposure to the declining traditional printing industry, obscures the quality of its Electronics segment, which has compounded operating profits at +16% year-over-year ("YoY") for ten years, generates a 25%+ margin, and accounts for over 70% of consolidated operating profit.

AVI's attraction is to the "crown jewel" fine metal mask business, which we estimate accounts for c. 75% of the Electronics segment's profits. A fine metal mask ("FMM") is a critical component used to manufacture the smaller OLED panels in smartphones, tablets and laptops. While critical to the production process, each FMM only represents about 10% of the total manufacturing cost. DNP's patented technology and operational expertise means that the company boasts effectively 100% market share in FMMs and generates operating margins of around 35-40% on each metal mask. The market for FMMs is predominantly smart phone OLED panels, which are estimated to have around 50% market penetration.

The opportunity for DNP over the next five years, however, is in larger FMMs for tablets and laptops, which have under 5% market penetration, and the demand of which is expected to grow +32% YoY to 2030. Given the higher level of technical expertise required to produce a larger FMM, DNP charges a higher price per square inch, generating an estimated operating margin of between 40-50% on each larger FMM. As such, we are anticipating a combination of significant earnings growth and margin expansion at DNP over the next five years, with DNP one of the key beneficiaries of the switch to OLED from LCD.

Elsewhere, DNP has a further JPY130bn (15% of current market cap) of its shares to buy back over the next two years, a portfolio of listed securities worth a further 33% of market cap after tax, and trades at an undemanding multiple of less than 6x EBIT (versus electronic component manufacturing peers at c.14x).

We continue to engage with DNP's management in private and remain excited by prospective future returns.

Christian Dior

Classification: Holding Company

% of net assets: 2.1%

Discount: -20.5%

% of investee company: 0.0%

Total return on position HY25 (local): -18%

Total return on position HY25 (GBP): -17%

Contribution (GBP): -51bps

ROI since date of initial purchase: 71.6%

Christian Dior ("CDI") - the mono-holding company through which the Arnault family controls LVMH - endured a difficult six months, with the shares declining by -18%. This was a function of a -17% decline in NAV and -170bps widening of the discount, to 20%.

This was a volatile period for LVMH and the wider luxury goods industry, as investors have digested an evolving economic and demand backdrop. From mid-November 2024 to late January 2025, shares in LVMH rose by some +30%, as there were signs of an improvement in the performance of the US and stabilisation in China. Since then, the shares have given this all back and more and are down -24% from the peak. The threat of tariffs by the US, slowing consumer demand and the negative effect on wealth from stock market declines have all contributed to reduced expectations for growth and margins. For example, analysts' consensus now projects LVMH's 2025 operating profits some -7% lower than had been expected at the start of the year.

Whilst we remain cautious on the near-term demand outlook, we are enthusiastic about long-term prospects for LVMH. The company benefits from significant scale advantage as the owner of multiple mega-brands with irreplaceable brand equity in an industry with healthy long-term growth prospects. Past crises have often given rise to new opportunities and LVMH's modestly levered balance sheet and strong management team add credence to the idea that this will be the same again. The shares have de-rated and now trade at c.15x 2025 estimated EV/EBIT - although we concede that there are some risks to these estimates. Alternatively, we estimate that LVMH trades at a ~30% conglomerate discount.

Over time it remains our expectation that the Arnault family will look to collapse the CDI structure at NAV, providing an additional boost to returns.

Joe Bauernfreund

Asset Value Investors Limited

12 June 2025