The long-only equity fund that we manage, Tocqueville Value Europe, celebrated its 10th Anniversary on April 1st. Thanks to our approach to value investing we managed to comfortably outperform European equity markets and over 95% of comparable funds over the past decade with a lower than average volatility. In fact, over the last decade the fund is ranked 2nd out of 67 funds in the general European equities category marketed in France. We have always been transparent in our communications with investors. To this end, we have prepared the attached presentation to share with our clients. It deals with our approach to value investing, the sources of the fund\’s out-performance and how we are managing the fund in the current environment.

1. Value investing and a decade of
outperformance:
the case of Tocqueville Value Europe
Sebastien Lemonnier / Don Fitzgerald
May 2010

2. Table of content
The principles of Value Investing p3
Review of Value Investing p 14
Outperformance of Tocqueville Value Europe p 17
Outlook for Value Investing and TVE in this context (“TVE”) p 26
Conclusion p 32
Appendices p 35

3. The principles of Value Investing

4. The principles of Value Investing
“Value” investing: investing in a company that is trading at a substantial discount to
its intrinsic value
Independence of investment: no constraints in terms of sectors, geographical areas or
stock market capitalisation
Contrarian stance
Evaluation of company fundamentals at core of investment process
Margin of safety as necessary condition for investing
4

5. The principles of Value Investing
Independence of investment
“Don’t trust anyone over thirty. And don’t trust anyone thirty and under. Do your own work”
Joel Greenblatt from the book “How to be a stock market genius”
Be confident in your own judgement
An investment consists of buying a small part of a company, not its shares on the
stock market
Ignore market’s noise to capitalise on occasional inefficiencies
The composition of the index is not a factor in portfolio construction
5

6. The principles of Value Investing
Independence of investment
Investor perception:
• Distant Norwegian company with limited analyst coverage
• Competitive industry subject to discretionary consumption
• Uncommunicative management
• Conservative balance sheet
The company’s intrinsic quality:
• Market leader with strong brands and exclusive relations with retailers
• Market share gains and geographical expansion
• Strong profitability and return on capital
• Management team that concentrates on organic growth
• Stable and attractive dividend policy
6

7. The principles of Value Investing
Contrarian stance
“Be greedy when others are fearful, and be fearful when others are greedy”
Warren Buffett
• Beware of passing fads
• Be prepared to be counter-cyclical
Our hunting ground:
A series of profit warnings
Turnaround situations
Fallen angels
Limited coverage by financial analysts
Disappointing IPOs
Company break-ups
Optimisation of balance-sheet structures
7

8. The principles of Value Investing
Contrarian stance
Bought
Source : Bloomberg 8

9. The principles of Value Investing
Evaluate the fundamentals
“Don’t confuse growth with sustainable competitive advantage”
Warren Buffett
Is it a solid and sustainable business model in terms of the structural
environment, entry barriers and competitive advantages?
What are the operational and financial risks?
How credible and motivated is management?
What are the principal catalysts?
9

10. The principles of Value Investing
Evaluate the fundamentals
Why is it a solid and sustainable business model?
• Strong brands: Omega, Breguet, Blancpain, Rado, Longines, Swatch…
• High margins
• Vertical integration
• Near monopoly in the production of watch mechanisms
What are the operational and financial risks?
• Discretionary consumer spending
• High fixed costs
How credible and motivated is management?
• Family ownership structure: Hayek with a 38% stake
• Nicolas G Hayek restructured the Swiss watch industry in the 1980s
What are the principal catalysts and operating levers of the business?
• Market share gains
• Bringing profitability back in line with historical standards
• Possible optimisation of the group’s excess cash reserves
10

11. The principles of Value Investing
Margin of safety
“Confronted with the challenge to distil the secret of sound investment into three words,
we venture the motto, MARGIN OF SAFETY”
Ben Graham, Intelligent Investor
Why is margin of safety important?
Over time market price should converge to intrinsic value
Valuation is an imprecise art
The future is unpredictable
Protects against bad luck, poor investment timing and errors of judgement
11

12. The principles of Value Investing
Margin of safety
Replacement value of the group’s assets 65
8.7x 2009 EV/EBITDA, average private market transaction multiple €75
If shares traded in line with peers €70
7.0x EV/EBITDA on normalised earnings €72
Intrinsic value
Bought
Source : Bloomberg 12

13. The principles of Value Investing
Value investing: Applying common sense
Independent thought beats the consensus
The best ideas are the least appreciated
Dissociate fundamental investment from speculation
Protect capital using margin of safety
13

14. Review of Value Investing

15. Review of Value Investing
Value Investing has outperformed over the last decade
Source : Bloomberg 15

16. Review of Value Investing
Strengths Weaknesses
• Common sense approach • “Mr Market” is stronger in the short term
• Margin of safety • Short-term prospects are often
disappointing
• Investment independence allows one
to outperform indices • Risk of a “value trap”: cheap for good
reasons
• Takes account of company strengths
and weaknesses in valuation • At times invest in shares with limited
liquidity
• Valuation of company over the
economic cycle • A rigorous value approach can lead to
lost opportunities
An attractive risk/return ratio over time
16

17. Tocqueville Value Europe’s outperformance

18. Tocqueville Value Europe’s outperformance
Source: Europerformance, past performance is no indication as to future performance and is not constant over time 18

19. Tocqueville Value Europe’s outperformance per 30/04/2010
Volatility
Tocqueville Value
Volatility MSCI Europe
Europe
1 month 14.43 18.74
1 year 13.47 16.59
3 years 19.19 20.57
5 years 16.13 17.36
Since inception 14.98 17.07
Source: Europerformance at 30/04/10, past performance is no indication as to future performance and is not constant over time 19

20. Tocqueville Value Europe’s outperformance
Market sensitivity
5%
3,47%
2,93%
0%
-2,76% MSCIE Total return TOCQUEVILLE VALUE EUROPE
-4,14%
-5%
Bear market Bull market
Participation rate in a Participation rate in a
falling market: 66.73% raising market: 84.53%
Source: Tocqueville Finance Europe, past performance is no indication as to future performance and is not constant over time 20

21. Tocqueville Value Europe’s outperformance
Performance/Volatility since inception
80,00
60,00
40,00
20,00
0,00
-20,00 Moyenne
-40,00
-60,00
-80,00
0,00 5,00 10,00 15,00 20,00 25,00
Volatility
Source : Europerformance from 31/03/2000 to 31/03/2010 21

22. Tocqueville Value Europe’s outperformance
2000-2002: bursting of the TMT bubble
Tocqueville Value Europe -10.8%* versus MSCI Europe -48%*
Limited exposure to telecoms, media and technology
Small and mid caps out of favour
Invested in companies with resilient margins
Takeovers and structural changes in 2001: Britax, Isis, Européenne de Casino, Cristaleria, Rolo Banca…
Prudent management with a cash reserve up to 15% in 2002
*Source: Europerformance, past performance is no indication as to future performance and is not constant over time 22

23. Tocqueville Value Europe’s outperformance
2003-2006: stock market and economic recovery
Tocqueville Value Europe +93.8%* versus MSCI Europe +75.4%*
Restructuring and turnaround stories were important investment themes
Market recognition of the undervaluation of small and mid caps
Began to find more investment opportunities among large caps from 2005 onwards
Several takeovers: Mecatherm, Urbium, Beru, McCarthy & Stone, Société du Louvre…
Successful investments: Fielmann, Ekornes, Carillion, K+S, OPG, BASF…
*Source: Europerformance, past performance is no indication as to future performance and is not constant over time 23

24. Tocqueville Value Europe’s outperformance
2007: the start of a financial crisis
Tocqueville Value Europe -9.4%* versus MSCI Europe +0.1%*
Underperformance limited to the second half of the year (TVE -15.5% vs. MSCI Europe -7.2%)
Exposure to small caps was detrimental
Excessive exposure to UK consumer spending
Value Investing forsaken in favour of growth stories (emerging markets and commodities) and financial
leverage
Continued repositioning towards large caps
*Source: Europerformance, past performance is no indication as to future performance and is not constant over time 24

25. Tocqueville Value Europe’s outperformance
2008-2010: historical crisis followed by a market rally
Tocqueville Value Europe -15%* versus MSCI Europe -28.3%*
Prudent management with liquidity ranging between 10% and 20%
Portfolio diversification in terms of market capitalisation
Limited exposure to banks and insurers
Investments in companies with solid balance sheets were favourable
Preference for companies with sound fundamentals
Successful investments: Ansaldo, Parmalat, BASF, BHP Billiton, Ekornes, Michelin…
Takeover: Elf Aquitaine
*Source: Europerformance, from 31 December 2007 to 30 April 2010 25

26. Outlook for Value Investing and TVE in this context

27. Outlook for Value Investing and TVE in this context
The “Bears” point to:
Government stimulus as not sustainable
A move to a less favourable regulatory environment
Industrial overcapacity
Public deficits
Household deleveraging
Demographic problems
27

28. Outlook for Value Investing and TVE in this context
It is also easy to be a “Bull”
The risk of a “systemic crisis is behind us”
Company balance sheets are healthier
Revival of mergers and acquisitions
Attractive valuations in a low interest-rate, low inflation environment
Equities are the most profitable asset class in this context
Restructuring efforts and structural improvements in profitability
Global growth driven by emerging countries
28

29. Outlook for Value Investing and TVE in this context
Historical market valuations based on normalised earnings
Source: FactSet, Exane BNP Paribas estimates – Cyclically adjusted market P/E, based on current price and 10-year moving average EPS - MSCI Europe 29

30. Outlook for Value Investing and TVE in this context
It is time to be pragmatic by favouring stock-picking
Beware of excessive optimism, as well as pessimism
• Market over-reaction to sovereign debt levels
• Sceptical of an infatuation with emerging market growth
Look out where:
• Economic recovery is fully priced into valuations: BASF, ArcelorMittal, Rheinmetall…
• Restructuring efforts are largely reflected in valuations: Assa Abloy, Saab…
30

31. Outlook for Value Investing and TVE in this context
It is time to be pragmatic by favouring stock-picking
The markets still contain some inefficiencies.
We currently favour:
• Structural winners: Publicis, Lufthansa, Marr…
• Quality companies that have been overlooked:
Nestlé, Vicat, Finmeccanica, DCC, Diageo, Adidas…
• Small caps that have been forgotten: Jungheinrich, Southern Cross Healthcare…
• Forced sellers: Irish Continental Group, HeidelbergCement…
• Disappointing IPOs: Gategroup…
31

32. Conclusion

33. Conclusion
Our approach to Value Investing has many advantages:
Solid historical performance
Below average volatility
An approach that makes particular sense in the current context of:
• Uncertainty...
• … but continued investment opportunities
Reasonable risk/reward ratio
33

34. Conclusion
Tocqueville Finance has proven expertise in managing equity funds in:
France: Ulysse ranked No.1 since its creation *
Europe: Tocqueville Value Europe ranked No.2 since its creation **
US: Tocqueville Value Amérique ranked No.1 since its creation ***
* from 07/10/93 to 30/04/2010, source Europerformance, general French equities category
* * from 31/03/2000 to 30/04/2010, source Europerformance, general European equities category
*** from 31/12/1998 to 30/04/2010, source Europerformance, general North American equities category
34

35. Appendices

36. Conclusion
Tocqueville Value Europe…
100% fundamental value fund
Flexible and independently-managed mutual fund
• No limitations in terms of geography, sector or market capitalisation
European expertise established over the last decade
Significant outperformance since inception
• The No.2 ranked fund out of 67 funds in its category since its inception (Source Europerformance, from
31/03/00)
Lower volatility than indices since inception
Common sense and transparent management Isin : FR0010547067 (Part C)
• No leverage or complex instruments (derivatives, etc.) Isin : FR0010600239 (Part I)
36

37. Fund structure per 30 April 2010
37

38. Evolution of weightings by region
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
France UK Allemagne
Germany Italie
Italy Resteof Europe
Rest Europe
38

39. Evolution of weightings by market capitalisation
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009
< € 1bn between 1 and € 5bn between 5 and € 10bn > € 10bn
39

40. Evolution of the portion invested in equities
94%
92%
90%
88%
86%
84%
82%
80%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
40

41. Portfolio liquidity
100% 95,3%
80%
60%
40%
20%
1,4% 3,3%
0,0%
0%
< 10 days between 10 et 50 between 50 and 100 > 100 days
days days
95.3% of portfolio lines can be fully liquidated in less than 10 days…
41

42. Tocqueville Value Europe’s managers
Sébastien Lemonnier (30)
Fund manager, TVE, since January 2006
Since 2003 dedicated financial analyst Tocqueville Value Europe
Master « Financial Management » from Université Paris I – Panthéon Sorbonne (2003)
Don Fitzgerald, CFA (35)
Financial analyst, TVE, since February 2007 and fund manager, TVE, since January 2008
7 years expertise in identifying, analyzing and investing in undervalued securities in both the
European equity & high yield / distressed debt markets
Prior to that 7 years experience in corporate & investment banking
Degree in Business Studies and German from Trinity College, Dublin
CFA charter-holder
Cross-cultural experience having worked in Dublin, London, Frankfurt & Paris
Irish national, fluent French & German speaker
42

43. Disclaimers
• This document is strictly confidential and intended solely for the recipients. It must not be reproduced,
distributed or published, in whole or in part, without the prior and written authorisation of Tocqueville Finance S.A.
• This marketing document should not be interpreted as a contractual or pre-contractual commitment by
Tocqueville Finance S.A. It is provided for purely indicative purposes and may be modified at any time without
notice.
• The information and analysis contained in this document, especially quantified information, is derived in part
from external sources considered to be reliable. However, Tocqueville Finance SA cannot guarantee the
complete, precise and up-to-date nature of this analysis and information.
• Tocqueville Finance S.A. draws investors’ attention to the fact that the past performance presented is based on
figures relating to past years and is not a guarantee of future performance.
•Tocqueville Finance S.A. does not guarantee in any manner the current or future performance of funds referred
to in this document.
• This is a reminder that any financial investment involves risks (market risks, capital risks and currency risks)
and may result in financial losses. Accordingly, Tocqueville Finance S.A. recommends that, prior to any
investment, the recipient of this document reads carefully the prospectuses of the funds referred to, which are
available free of charge at our head office at 8 rue Lamennais, Paris 75008 or on our internet site
www.tocquevillefinance.fr, and ensure that he or she has sufficient experience and expertise to make an
investment decision, particularly with regard to its legal and tax consequences.
43