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To the clients of Mittleman Value Partners

Peter Lynch on investing: "The person that turns over the most rocks wins the game." Recent market action compelled me to turn over more rocks than usual, which delayed my year-end 2025 letter into the Q1 2026 combo I present today. I hope the extra transparency provided makes it worth the wait.

2025: The rep account gained 19% net of fees in 2025, vs. 17.9% for S&P 500, 12.8% for Russell 2000, and 22.9% for MSCI ACWI; all total returns. Our low in 2025 was -15% on the 4/8/2025 market low of the tariff tantrum and our high for 2025 was over +25% in early September, with a weak USD assisting.

Mittleman Value Partners - 2025 performance for each holding in representative account (new holdings highlighted):

2026 Q1: The rep account dropped 4.59% net of fees in Q1 2026, vs. a loss of -4.35% for the S&P 500, a gain of 0.92% for the Russell 2000, and a decline of -3.10% for MSCI ACWI; all total returns. Simply put, the place to be in Q1 2026 was natural resources, with the Bloomberg Commodity Index +23.3%. Not having exposure to that segment of the market, along with a stronger USD, hindered our results in Q1.

Still, if the value-based investment discipline to which I adhere is valid and my ability as a practitioner sufficient, the idiosyncratic aspects of our portfolio should far outweigh the various macro headwinds or tailwinds over time. So, while this highly global (82% of portfolio is non-U.S.) approach lately seems dominated by the ups and downs of the USD currency, with the strong USD weakening our unhedged results in Q1 2026, I do not expect our returns to be perpetually pressured in the absence of USD weakness. Yet, I remain a bit wary of most USD assets, mainly on valuation, as the positioning implies.

Artificial Intelligence (A.I.) is top of mind in markets around the world in 2026, and it may well live up to the expectations supporting the unprecedented amounts of capital being invested in developing it and the high valuations awarded to the perceived leaders, companies both public and private.

Then again, I recall after the COVID crash of March 2020, the video-conferencing software company Zoom (ZM) (NASDAQ: ZM, $79) soared from $67 on 12/31/19 to $589 on 10/23/20 on rampant expectations that we'd all be using Zoom (and seemingly nothing else) instead of business travel going forward. And while Zoom did grow tremendously, at its $589 peak the valuation was $173B, more than triple the combined market caps of the big four major U.S. airlines (DAL, UAL, AAL, LUV) at about $50B around that time. Today the market cap. of Zoom is $25B while those four airlines combined are over $100B. People continue to fly for many business meetings, despite the ease of jumping on a Zoom call.

I think a similarly wrongful extrapolation is creating opportunities today in companies misperceived as being doomed by the competition that A.I. may enable. In most cases, I think these companies will be beneficiaries, not victims of the great things that A.I. can do for us all. A.I. should more likely enhance H.I. (Human Intelligence) rather than replace it. The overdone selling for fear of disruption from A.I. was exacerbated by another source of concern which is the war with Iran which began on 2/28/26. The mild market sell-off that ensued made some of the names on my watch list cheap enough to buy.

Mittelman Value Partners - 2026 YTD performance (as of 4/10/26) for each holding in representative account (new holdings highlighted):

As highlighted in the table above, six new names entered the portfolio during Q1 2026 and early Q2, totaling nearly 19% of the portfolio value at cost. That unusually concentrated cluster of new entrants is oddly very similar to what occurred in early 2025, when it was mainly the tariff-tantrum that triggered the bargains. On the next page a snapshot of the portfolio from a valuation perspective shows just how jaw-droppingly cheap the shares of those highlighted new holdings appear.

As shown below, the portfolio overall is extraordinarily inexpensive at a weighted average 6.0x EBITDA. It's not just our small cap holdings that are super cheap, and maybe as such more understandably so; even our large caps like Bayer AG (at $46B it's the largest market cap. in the portfolio after Alibaba (BABA) was sold in 2025 at $154 on average, a $368B mkt. cap.) is still only 7.7x EBITDA for 2026 (estimated USD 10.5B excluding $500M SBC), when peers trade at 10x. Getting to 10x EBITDA would increase Bayer's ADR (BAYRY) from $11.75 currently to $17.90, another 52% upside. We sold some BAYRY at $13.17 and $14.17 in the rep acct. in Q1 2026 to make room for some of the new holdings.

Mittleman Value Partners - Rep Account* Holdings Snapshot - April 10, 2026 (new holdings highlighted):

I plan to describe the investment thesis for each of the new holdings in my next letter, but feel free to inquire directly via phone or email if you would like to know more sooner. I expect they will become larger weightings in the portfolio as this year progresses.

The biggest contributor to our 19% gain in 2025, AMA Group Ltd., with nearly 4 percentage points of contribution from a 54.1% gain, was also the biggest detractor from performance YTD as of 4/10/26, with its 34.4% YTD loss costing 3.24 percentage points of performance, without which our -2.25% YTD loss through 4/10/2026 would have been a 1% gain.

At roughly AUD 0.50 (USD 0.35) now, AMA's stock price is valuing Australia and New Zealand's largest collision repair firm by far, with over AUD 1B in sales, at a measly enterprise value of AUD $235M (excluding leases), which is only 3.1x the EBITDA (after lease expenses) of AUD $75M expected in calendar 2026. I think fair value is triple the current price, which would be an enterprise value of 9.5x EBITDA for c2026 (AUD $75M), and 8.4 EBITDA for c2027 (AUD $85M).

AMA's share price was declining well before the Iran conflict began, from an interim peak of AUD 1.10 (USD 0.72) in October 2025, despite producing steadily improving results in-line with their forecasts and analysts' expectations. The pre-war weakening of the share price might have been due to sellers taking profits from the huge issuance of new shares back in July 2024 at a split-adjusted AUD 0.42, which while dilutive did at least put the company in a nearly debt-free (excluding leases) position.

AMA dropped nearly 30% in AUD terms, -32% in USD, during the month of March as the war in Iran caused energy prices in Australia and New Zealand to surge, which the market correctly fears might lead to reduced miles driven (and thus fewer collisions to repair) if it continues for much longer. Australia is unusually vulnerable in this regard, given almost all of its fuel is imported, and they have very little in reserves. But even if gas lines form and rationing ensues, it should be months not years.

There were long gas lines near where I lived in Old Brookville, New York, in 1979 due to the Iranian revolution shutting down Iran's oil production back then, and the Iran vs. Iraq war that followed. I was 11 years old and waiting for an hour, sometimes more, in the back of my Mom's car for our turn to get gas. Cars with even-numbered license plates could get gas on even-numbered calendar days, and odd numbered only on odd dates. But like the initial gas crisis in 1973-1974, it only lasted a few months.

Insider buying at AMA Group, as with a few of our other holdings like Mattel, has been encouraging. AMA director Brian Austin most recently bought another 1.5M shares at AUD 0.614, more than 22% above the current price, on March 10 th & 12 th . He now owns just over 10M shares.

Mattel's Chairman and CEO, Ynon Kreiz, bought another 65,000 shares at $15.53 ($1.79M) on 2/12/26, given him 1,794,217 shares ($26M) in total now. Mattel Films' " Masters of the Universe " movie will be released on June 5, 2026, and hopefully He-man and Skeletor can create a merchandising boom like Mattel's " Barbie " movie did in 2023.

And shortly after we bought our new position in Italy's dominant payments firm Nexi Spa (NEXPF) (NEXI: IM) at €2.85 (USD 3.27) on 3/18 and 3/20, Nexi promoted from within a new CEO, Bernardo Mingrone, who bought 327,868 shares at €3.02 (just under €1M) on 3/26, the day he was appointed and spoke of a focus on capital returns, which is encouraging. At our cost Nexi's stock has a 10% dividend yield with a 20%+ free cash flow yield.

After briefly being surpassed by Canadian bus maker, NFI Group (NFYEF) (NFI:CA), as our largest holding, Aimia Inc. (AIM:CA) is back to our largest weighting as I sold some NFI Group in Q1 into its recent rally to fund new holdings. Aimia's stock price was flat (0% return) YTD through 4/10/26, and almost flat in 2025 save for a weakening USD which gave the CAD denominated shares a boost in USD terms.

Aimia had a bit of a setback in Q1 when it announced the sale of its largest asset, the Italian specialty chemical company Bozzetto, which Aimia agreed to sell for much less than the analysts who cover Aimia and I thought it was worth. I had estimated that Bozzetto was worth a minimum of 8x EBITDA but it was sold for what appears to be about 6.5x EBITDA, an enterprise value of C$411M with net proceeds to Aimia of C$265M. That reduces my NAV per share estimate for Aimia from C$5.00 to C$4.00, which while painful is still 47% higher than the C$2.73 closing price on this Friday, Apr. 10 th .

On the bright side, the sale of Bozzetto might not have happened at all had Aimia held out for a better price, as the war with Iran which broke out less than three weeks after the Bozzetto sale was announced has caused input costs to soar (crude oil, naptha, etc.) so the timing was fortuitous. Getting Aimia some cash to invest, potentially during a bear market cycle (the sale should close in May), might yield much more than what seems to have been left on the table in the Bozzetto sale. Sometimes it is necessary to take a step back before attempting a bigger leap forward.

After a rough start, 2025 turned out well for our investment performance. I think by again having been prepared to take advantage of opportunities as they present, usually quite inconveniently and sometimes all at once, we have set the stage for 2026 to be even better.

I look forward to sharing more details about the new holdings soon and again I welcome any inquiries in the interim.

Sincerely,

Christopher P. Mittleman, Chief Investment Officer

Mittleman Value Partners LLC

References

1. Brightstar Lottery (formerly IGT) positive return due to $3.82 per sh cash dividends paid in 2025
2. AZTECACP MM trading suspended as of 06-01-23, local price as of 05-31-23 with only FX as variable
3. MVP REP ACCT is actual account representing over 85% of firm AUM, performance net of fees
4. MVP REP ACCT is large institutional account which pays lower mgmt. fee than average client account
5. your results may differ substantially from MVP REP ACCT, refer to statements from broker/custodian
6. AZTECAP MM trading suspended 06-01-23, local price as of 05-31-23
7. MVP REP ACCT is actual account representing over 85% of firm AUM

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