Irons in the fire

Terranet 17 November 2017 Update
Download PDF

TerraNet Holding

Irons in the fire

Q317 results release

Software & comp services

17 November 2017

Price

SEK15.70

Market cap

SEK376m

Net cash (SEKm) at 30 September 2017

74.4

Shares in issue

24.0m

Free float

41%

Code

TERRNT

Primary exchange

Nasdaq First North

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(30.5)

(40.8)

N/A

Rel (local)

(30.1)

(43.0)

N/A

52-week high/low

SEK39.2

SEK15.5

Business description

TerraNet is an early commercialisation-stage firm with patented software technology enabling intelligent machine-to-machine comms and data streaming without external networks. Products include chip integration software, IoT, V2V, headsets comms, multimedia streaming and GriDD.

Next events

FY17 earnings

27 February 2018

Analysts

Anna Bossong

+44 (0)20 3077 5737

Richard Jeans

+44 (0)20 3077 5700

TerraNet Holding is a research client of Edison Investment Research Limited

TerraNet (TERRNT) is an early-stage software group with a range of products under development deriving principally from its industrial IoT, chip integration and peer-to-peer communications and transactions know-how. During Q317 the group reported external revenue of SEK1.6m, up 133% y-o-y, with a cash burn comprising operating and investing cash flow of SEK18.0m, in line with our full year forecasts. Significant events during the quarter included the securing of a SEK2.2m order to integrate TERRNT’s software into a multinational conglomerate’s hardware, the development of peer-to-peer payments software for offline transactions and an order for optimisation of LTE-V for V2V communications. We value TERRNT at SEK12.6-14.4 per share, but see significantly more upside to c SEK31/share if it is able to fully exploit its more prospective opportunities.

Year end

Revenue* (SEKm)

EBITDA
(SEKm)

EPS**
(SEK)

Net operating
cash flow (SEKm)

Net debt/(cash) (SEKm)

EV/revenue (x)

12/15

0.4

(17.2)

(2.4)

(13.3)

(5.2)

1155.2

12/16

2.7

(25.0)

(3.2)

(22.6)

(4.1)

168.8

12/17e

6.5

(58.3)

(3.5)

(54.7)

(54.3)

69.3

12/18e

39.7

(70.7)

(3.2)

(70.1)

22.0

11.4

12/19e

121.2

(24.4)

(1.2)

(29.5)

60.8

3.7

Note: *External revenues excluding own work capitalised. **Normalised.

Five new strategic development orders won in Q317

During Q317 TerraNet booked five new strategic commercial development orders in the areas of active vehicle safety, tactical radio, production and process monitoring and off-line data transfers, with customers including Alfa Laval, Saab Defense and Orange. Entirely customer funded, the projects have the potential for distribution and licensing in 2019. The group also launched a campaign in China and India to supply encrypted offline payments functions for secure off-grid transactions. For more information see Orders in industrial IoT/Qualcomm delays, 18 October 2017.

Cash flow burn reflecting multi-project activity

At end Q317 TerraNet had a consolidated net cash balance of SEK74.4m after cash burn of SEK18m in Q3, reflecting the scale and numbers of products under development and marketing. Our forecasts indicate free cash flow break-even in 2020 with a net funding requirement of SEK75m (gross SEK90m) to end-2020.

Valuation: A multi-play investment

TerraNet shares have fallen back in recent months which we believe reflects in part the delays to the Qualcomm chip integration project in China. While our base case scenario gives rise to a valuation range of SEK12.6-14.4 per share, it should be noted that with a large number of scalable projects already at the stage of having attracted partners willing to fund development, we see the potential for the group to achieve a SEK31.0 share value in the case of realisation of the full potential of only a handful of current projects. These include the V2V comms projects and targeted proximal connectivity and off-grid payment apps and SDK’s in China/India.

Q317 results review

During Q317 TerraNet generated external revenue of SEK1.6m, up 133% y-o-y, with EBITDA losses of SEK13.4m and negative PBT of SEK13.5m, up 89% y-o-y. Cash burn comprising operating and investing cash flow reached SEK18.0m, reflecting operating cash outflow of SEK17.4m and capitalised development costs of SEK0.6m.

Exhibit 1: TerraNet Q317 quarterly consolidated results summary

IFRS, SEKm

Q317

Q316

Chg. %

9M17

9M16

Chg. %

Q217

Q117

FY17e

Earnings statement

 

 

 

 

 

 

 

 

 

Consumer IoT external revenue

0.1

N/A

N/A

0.3

N/A

N/A

N/A

N/A

N/A

Industrial IoT external revenue

1.5

N/A

N/A

4.0

N/A

N/A

N/A

N/A

N/A

External revenue

1.6

0.7

133.0

4.3

1.5

189.0

2.2

0.4

6.5

Total revenue

1.6

0.7

133.0

4.3

1.5

189.0

2.2

0.4

6.5

Staff

(5.0)

(1.8)

183.6

(18.8)

(5.5)

241.4

(8.3)

(5.6)

(28.4)

Other expenses

(10.4)

(7.7)

35.4

(33.1)

(17.1)

93.4

(12.4)

(10.3)

(46.2)

Total expenses

(15.4)

(9.4)

63.0

(51.9)

(22.6)

129.5

(20.7)

(15.9)

(74.6)

Own work capitalised

0.3

1.7

(80.3)

5.3

4.2

23.8

1.9

3.1

9.8

Consumer IoT external EBITDA

-6.7

N/A

N/A

-23.7

N/A

N/A

N/A

N/A

N/A

Industrial IoT external EBITDA

-6.3

N/A

N/A

-17.0

N/A

N/A

N/A

N/A

N/A

Group wide and eliminations

-0.4

N/A

N/A

-1.6

N/A

N/A

N/A

N/A

N/A

EBITDA

(13.4)

(7.1)

89.4

(42.4)

(16.9)

150.9

(16.6)

(12.4)

(58.3)

Amortisation and impairment of intangible assets

(0.1)

(0.1)

3.6

(0.2)

(0.2)

3.0

(0.1)

(0.1)

(7.1)

Operating income

(13.5)

(7.1)

88.8

(42.6)

(17.1)

149.4

(16.6)

(12.4)

(65.4)

Net finance costs

0.0

0.0

N/A

0.0

0.0

N/A

0.0

0.0

0.0

PBT

(13.5)

(7.1)

88.8

(42.6)

(17.1)

149.4

(16.6)

(12.4)

(65.4)

Profit after tax

(13.5)

(7.1)

88.8

(42.6)

(17.1)

149.4

(16.6)

(12.4)

(65.4)

EPS basic (SEK)

(0.6)

(0.6)

(6.7)

(2.2)

(1.6)

36.5

(0.9)

(0.8)

(3.5)

EPS diluted (SEK)

(0.6)

(0.6)

(6.7)

(2.2)

(1.6)

36.5

(0.9)

(0.8)

(3.5)

Adj EPS basic (SEK)

(0.6)

(0.6)

(6.7)

(2.2)

(1.6)

36.5

(0.9)

(0.8)

(3.5)

Adj EPS diluted (SEK)

(0.6)

(0.6)

(6.7)

(2.2)

(1.6)

36.5

(0.9)

(0.8)

(3.5)

Cash Flow

 

 

 

 

 

 

 

 

 

Operating income

(13.5)

(7.1)

88.8

(42.6)

(17.1)

149.4

(16.6)

(12.4)

(65.4)

Amortisation of other intangibles

0.1

0.1

3.6

0.2

0.2

3.0

0.1

0.1

7.1

Changes in working capital

(4.0)

1.4

(390.7)

(0.4)

(3.1)

(85.6)

(0.3)

3.8

3.5

Tax paid

0.0

0.0

N/A

0.0

0.0

N/A

0.0

0.0

0.0

Total operating cash flows

(17.4)

(5.7)

204.0

(42.8)

(20.0)

114.4

(16.9)

(8.5)

(54.7)

Purchase of property, plant and equipment

0.0

0.0

N/A

0.0

0.0

N/A

0.0

0.0

0.0

Capitalised development costs

(0.6)

(1.7)

(65.8)

(6.0)

(4.2)

40.5

(2.3)

(3.1)

(9.1)

Total Investing cash flows

(0.6)

(1.7)

(65.8)

(6.0)

(4.2)

40.5

(2.3)

(3.1)

(9.1)

Dividends

0.0

0.0

N/A

0.0

0.0

N/A

0.0

0.0

0.0

Share repurchase/issue

0.0

15.8

(100.0)

128.6

32.7

293.5

100.7

28.0

128.1

Increase/decrease in borrowing

0.0

0.0

N/A

0.0

0.0

N/A

0.0

0.0

(0.0)

Interest paid

0.0

0.0

N/A

0.0

0.0

N/A

0.0

0.0

0.0

Other

0.0

(1.6)

(102.8)

(9.3)

(1.6)

462.0

(7.3)

(2.0)

(14.0)

Total financing cash flow

0.0

14.1

(99.7)

119.4

31.0

284.6

93.3

26.0

114.0

Key data

 

 

 

 

 

 

 

 

 

Total cash burn (operating + investing CF)

(18.0)

(7.4)

143.5

(48.8)

(24.2)

101.4

(19.2)

(11.7)

(63.8)

Net change in cash

(17.9)

6.8

(365.2)

70.6

6.8

936.6

74.2

14.3

50.2

Closing cash

75.0

12.0

525.1

75.0

12.0

525.1

92.9

18.7

54.6

Closing net debt (cash)

(74.4)

(11.3)

556.5

(74.4)

(11.3)

556.5

(91.6)

(18.7)

(54.3)

Source: TerraNet, Edison Investment Research

During the third quarter the group established segment reporting with the creation of consumer and industrial IoT segments. The bulk of revenues during the first nine months of 2017 (see Exhibits 1 and 2) were generated by the industrial IoT segment (SEK4.0m of the SEK4.3m total in 9M17). This reflects the high number of project development agreements ongoing with major industrial partners as discussed in our report, Orders in industrial IoT/Qualcomm delays, 18 October 2017. In terms of EBITDA losses, however, the consumer IoT segment has been responsible for the greater part of EBITDA losses reflecting to a large degree TerraNet’s work in creating software for integration into the Qualcomm Snapdragon chip for proximal connectivity. In our view, this project was rightly given priority given the potential for it to generate substantial revenues for TerraNet from the sales of SDKs to Chinese app developers to enable them to utilise the proximal connectivity functions created by its on-chip software.

In recent months, however, progress in selling to app developers has been affected by third-party delays in the development of enabling software for the implementation of proximal connectivity applications. We do not believe that development of this software has yet been completed. Nevertheless, the group reported in its Q3 interim report that the project is now progressing according to plan. We await further development which could lead to the generation of a return on the group’s significant development and marketing outlays. We assume that the company will start to generate initial revenues from this product in 2018, principally from non-recurring engineering work for Chinese app developers.

Exhibit 2: Group breakdown external revenues 9M17

Exhibit 3: Group breakdown EBITDA losses 9M17

Source: TerraNet financial reports

Source: TerraNet financial reports

Exhibit 2: Group breakdown external revenues 9M17

Source: TerraNet financial reports

Exhibit 3: Group breakdown EBITDA losses 9M17

Source: TerraNet financial reports


Exhibit 4: Financial summary

SEK'm

2015

2016

2017e

2018e

2019e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

0.4

2.7

6.5

39.7

121.2

Employee and consultant expenses

(14.7)

(21.3)

(54.2)

(87.7)

(120.3)

Other operating expenses excl. D&A

(2.9)

(6.4)

(10.6)

(22.7)

(25.2)

EBITDA

 

 

(17.2)

(25.0)

(58.3)

(70.7)

(24.4)

Normalised operating profit

 

 

(18.0)

(37.6)

(65.4)

(75.7)

(26.7)

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

0.0

Share-based payments

0.0

0.0

0.0

0.0

0.0

Reported operating profit

(18.0)

(37.6)

(65.4)

(75.7)

(26.7)

Net Interest

0.0

0.0

0.0

0.1

(1.2)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(18.0)

(37.6)

(65.4)

(75.7)

(27.9)

Profit Before Tax (reported)

 

 

(18.0)

(37.6)

(65.4)

(75.7)

(27.9)

Reported tax

0.0

0.0

0.0

0.0

0.0

Profit After Tax (norm)

(18.0)

(37.6)

(65.4)

(75.7)

(27.9)

Profit After Tax (reported)

(18.0)

(37.6)

(65.4)

(75.7)

(27.9)

Minority interests

0.0

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(18.0)

(37.6)

(65.4)

(75.7)

(27.9)

Net income (reported)

(18.0)

(37.6)

(65.4)

(75.7)

(27.9)

Basic average number of shares outstanding (m)

7.5

11.7

18.9

24.0

24.0

EPS - basic normalised (SEK)

 

 

(2.40)

(3.22)

(3.46)

(3.16)

(1.16)

EPS - diluted normalised (SEK)

 

 

(2.40)

(3.22)

(3.46)

(3.16)

(1.16)

EPS - basic reported (SEK)

 

 

(2.40)

(3.22)

(3.46)

(3.16)

(1.16)

Dividend (SEK)

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

N/A

584.4

143.5

510.5

205.4

Gross Margin (%)

N/A

N/A

N/A

N/A

N/A

EBITDA Margin (%)

-4399.4

-937.8

-896.4

-178.2

-20.1

Normalised Operating Margin

-4608.4

-1407.9

-1005.6

-190.9

-22.0

BALANCE SHEET

Fixed Assets

 

 

30.3

23.3

26.0

27.1

31.9

Intangible Assets

30.2

23.3

26.0

27.1

31.9

Tangible Assets

0.0

0.0

0.0

0.0

0.0

Investments & other

0.0

0.0

0.0

0.0

0.0

Current Assets

 

 

6.8

7.3

56.0

10.7

32.8

Stocks

0.0

0.0

0.0

0.0

0.0

Debtors

1.6

2.3

0.8

4.3

13.3

Cash & cash equivalents

5.2

4.4

54.6

3.0

9.1

Other

0.0

0.6

0.6

3.4

10.4

Current Liabilities

 

 

(9.3)

(7.8)

(10.4)

(40.3)

(90.2)

Creditors

(3.4)

(5.9)

(8.0)

(12.1)

(15.9)

Tax and social security

(5.5)

0.0

0.0

0.0

0.0

Short term borrowings

0.0

(0.3)

(0.3)

(25.0)

(70.0)

Other

(0.4)

(1.6)

(2.1)

(3.2)

(4.2)

Long Term Liabilities

 

 

(3.1)

(2.7)

(2.7)

(2.7)

(2.7)

Long term borrowings

0.0

0.0

0.0

0.0

0.0

Other long term liabilities

(3.1)

(2.7)

(2.7)

(2.7)

(2.7)

Net Assets

 

 

24.6

20.0

68.9

(5.2)

(28.2)

Minority interests

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

24.6

20.0

68.9

(5.2)

(28.2)

CASH FLOW

Op Cash Flow before WC and tax

(17.2)

(25.0)

(58.3)

(70.7)

(24.4)

Working capital

3.9

2.4

3.5

0.6

(5.1)

Exceptional & other

0.0

0.0

0.0

0.0

0.0

Tax

0.0

0.0

0.0

0.0

0.0

Net operating cash flow

 

 

(13.3)

(22.6)

(54.7)

(70.1)

(29.5)

Capex

(6.8)

(5.6)

(9.1)

(6.3)

(8.2)

Acquisitions/disposals

0.0

0.0

0.0

0.0

0.0

Net interest

0.0

0.0

0.0

0.1

(1.2)

Equity financing

21.3

29.4

128.1

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

Other

0.0

(2.3)

(14.0)

0.0

0.0

Net Cash Flow

1.3

(1.1)

50.2

(76.3)

(38.8)

Opening net debt/(cash)

 

 

(3.9)

(5.2)

(4.1)

(54.3)

22.0

FX

0.0

0.0

0.0

0.0

0.0

Other non-cash movements

0.0

0.0

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(5.2)

(4.1)

(54.3)

22.0

60.8

Source: TerraNet accounts, Edison Investment Group forecasts. Note: For illustrative purposes future funding requirement modelled as debt.

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by TerraNet Holding and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by TerraNet Holding and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Share this with friends and colleagues

You may be interested in

1Spatial