HEMA - taking position in the SSNs

All,cWe have taken a position in the HEMA SSNs at 75c/E for 4% of NAV. Please find our updated in-depth analysis here.

LfLs continue to turnaround - even if they continue to lag Dutch CPI - primary LfL cost driver.

We expect some of the ‘Other' costs to even out as management indicated and for CF from WC to remain almost flat through year-end (significant outflow in Q418 not to repeat).

Liquidity is limited - even with the orally committed Ramphastos line. But it should be sufficient to buy HEMA enough time to ramp-up its partnerships.

What is uncertain is how much inventory and factoring those partnerships will build up.

SSNs yield 20% here, and are trading not far from recovery value - provided Ramphastos don’t dividend up proceeds from the bakery sale.

Wolfgang