Looking to the long term

Wheaton Precious Metals 17 February 2021 Update
Download PDF

Wheaton Precious Metals

Looking to the long term

Production update and guidance

Metals & mining

17 February 2021

Price

C$51.03

Market cap

C$22,936m

C$1.2636/US$

Net debt (US$m) at 30 September 2020*

277.7

*Excluding US$3.7m lease liabilities

Shares in issue

449.5m

Free float

100%

Code

WPM

Primary exchange

TSX

Secondary exchange

LSE, NYSE

Share price performance

%

1m

3m

12m

Abs

(2.1)

(14.9)

25.1

Rel (local)

(5.1)

(22.3)

20.7

52-week high/low

C$75.14

C$33.47

Business description

Wheaton Precious Metals is the world’s pre-eminent ostensibly precious metals streaming company, with 30 high-quality precious metals streaming and early deposit agreements relating to assets in Mexico, Peru, Canada, Brazil, Chile, Argentina, Sweden, Greece, Portugal and the US.

Next events

Q320/FY20 results

11 March

Q121 results

6 May

Q221 results

12 August

Q321 results

4 November

Analyst

Charles Gibson

+44 (0)20 3077 5724

Wheaton Precious Metals is a research client of Edison Investment Research Limited

On 11 February, Wheaton Precious Metals (WPM) provided production and sales data for FY20. While production was in the top half of WPM’s prior guidance range, there was evidence that sales had not kept pace with output. Uncharacteristically for WPM, we estimate that ounces produced but not yet delivered to WPM probably increased by c 33.6koz gold equivalent in Q420 cf Q320. Both WPM and Edison had previously expected gold equivalent ounces produced but not yet delivered to increase by c 20koz in Q320. When that failed to materialise, we assumed any coronavirus-induced increase in Q4 would be approximately offset by the tendency for WPM’s mining partners to ‘flush though’ sales in the final quarter. We have now adjusted our forecasts for FY20 accordingly. However, we have left our FY21 and longer-term forecasts and valuation ostensibly unchanged, pending information about a material increase in production from WPM at the time of its results on 11 March 2021. In total, we believe the number of ounces produced but not yet delivered has reached a level that means it is more likely to decrease than increase.

Year end

Revenue (US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/18

794.0

203.1

48

36

84.1

0.9

12/19

861.3

242.7

56

36

72.1

0.9

12/20e

1,094.4

498.2

108

42

37.4

1.0

12/21e

1,493.9

810.4

180

69

22.4

1.7

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, and exceptional items.

Longer-term production increases pending

In addition to its production and sales results for FY20, WPM also provided guidance for FY21 and the periods FY21–25 and FY21–30. While its guidance for FY21 remains effectively unchanged, WPM has now provided guidance for FY21–25 that implies an increase in output of c 10% in FY22–25 relative to its prior estimates, from 750koz to 825koz gold equivalent per year, with further increases to come over FY26–30 (see page 4).

Valuation: Long-term forecasts, valuation unchanged

Pending further details on a longer-term increase in production at WPM in the period FY22–30, we have left our valuation unchanged, although we note the risk now lies to the upside. In our last note on WPM, we wrote that in normal circumstances and assuming no material purchases of additional streams in the foreseeable future (which we think unlikely given its business strategy), we would ordinarily forecast a value per share for WPM of US$53.37 (C$67.44 at current forex rates) in FY21. Given its peers’ valuations at the time, however, and the precious metals investing environment, we believed WPM was capable of supporting a premium valuation that could rise as high as US$75.98 (C$96.01 at current forex) per share and, for the time being, this outlook remains unchanged. In the meantime, WPM’s shares are trading on near-term financial ratios that are cheaper than the averages of its peers on 83% of six common valuation measures using our forecasts and 66% using consensus forecasts.

Summary and conclusions

FY20 production and sales result

On 11 February, WPM provided production and sales data for FY20, which are summarised in the table below relative to our prior forecasts. In addition, we have provided its estimates of the sales and production for Q420 implied from the full-year numbers.

Exhibit 1: WPM FY20 production and sales cf prior Edison forecast and implied Q420 production and sales

Actual FY20

Prior Edison FY20 forecast

Actual/Edison

Implied Q420

Q420 sales shortfall cf production

Production

Sales

Production

Sales

Production (%)

Sales (%)

Production

Sales

(oz)

(%)

Gold (oz)

368,044

369,553

376,624

384,790

-2.3

-4.0

92,936

86,243

-6,693

-7.2

Silver (koz)

22,915

19,232

22,334

20,608

+2.6

-6.7

6,533

4,576

-1,957

-30.0

Palladium (oz)

22,187

20,051

22,453

21,374

-1.2

-6.2

5,672

4,591

-1,081

-19.1

Source: Wheaton Precious Metals, Edison Investment Research

In fact, the sales shortfall of 7.2% of gold ounces in Q420 is in line with the historical average since Q112. At 30% of production, the silver sales shortfall is larger than the historical average of 11.4%, although consistent with Q319–Q120, as shown in the graph below:

Exhibit 2: WPM gold and silver over/under sales relative to production, Q112–Q320

Source: Edison Investment Research

Self-evidently, FY20 has been an unusual year, given the tribulations of the coronavirus. Whereas historically, there has been a slight tendency for sales to be ‘flushed through’ by WPM’s mining partners in the fourth quarter of the year, in FY20 there was clear evidence of an acceleration of sales in the second quarter. Similarly, while ounces produced but not yet delivered has had a slight tendency to build up between the first and third quarters in prior years, in FY20 this pattern was evidently partially reversed, with most of the build up occurring in the fourth quarter.

Despite the unusual quarterly patterns of production and sales in FY20, WPM’s update allows us to hone our financial forecasts to reflect actual outcomes for the year, rather than being based entirely on our prior production estimates (note that, given the unpredictability in the trend of sales relative to production, in the absence of any other information, we typically forecast that sales will closely approximate production in individual quarters).

For FY20, we have therefore adjusted our sales forecasts (on which our financial forecasts are based) so they now match WPM’s actual reported sales levels for the year. The results of this process are provided in Exhibit 3 relative to our prior forecasts. In addition, small adjustments have been made to reflect the difference in actual versus forecast precious metals’ prices for the periods in question.

Exhibit 3: Wheaton Precious Metals FY20 forecast, by quarter*

US$000s
(unless otherwise stated)

FY19

Q120

Q220

Q320

Q420e

(previous)

Q420e

(current)

FY20e
(current)

FY20e
(previous)

Silver production (koz)

22,562

6,704

3,650

6,028

5,952

22,334

Gold production (oz)

406,675

94,707

88,631

91,770

101,516

376,624

Palladium production (koz)

21,993

5,312

5,759

5,444

5,938

22,453

Silver sales (koz)

17,703

4,928

4,729

4,999

5,952

4,576

19,232

20,608

Gold sales (oz)

389,086

100,405

92,804

90,101

101,480

86,243

369,553

384,790

Palladium sales (oz)

20,681

4,938

4,976

5,546

5,914

4,591

20,051

21,374

Avg realised Ag price (US$/oz)

16.29

17.03

16.73

24.69

24.22

24.44

20.71

20.90

Avg realised Au price (US$/oz)

1,391

1,589

1,716

1,906

1,887

1,875

1,765

1,773

Avg realised Pd price (US$/oz)

1,542

2,298

1,917

2,182

2,431

2,349

2,183

2,216

Avg Ag cash cost (US$/oz)

5.02

4.50

5.23

5.89

5.97

5.98

5.39

5.43

Avg Au cash cost (US$/oz)

421

436

418

428

426

426

424

424

Avg Pd cash cost (US$/oz)

273

402

353

383

438

423

389

396

Sales

861,332

254,789

247,954

307,268

350,032

284,348

1,094,359

1,160,043

Cost of sales

Cost of sales, excluding depletion

258,559

66,908

65,211

70,119

81,361

66,035

268,273

283,598

Depletion

256,826

64,841

58,661

60,601

70,676

57,862

241,965

254,779

Total cost of sales

515,385

131,748

123,872

130,720

152,037

123,898

510,238

538,377

Earnings from operations

345,947

123,040

124,082

176,548

197,994

160,450

584,121

621,666

Expenses and other income

– General and administrative**

54,507

13,181

21,799

21,326

13,627

13,627

69,933

69,933

– Foreign exchange (gain)/loss

0

0

0

– Net interest paid/(received)

48,730

7,118

4,636

2,766

1,519

1,519

16,039

16,039

– Other (income)/expense

(217)

(1,861)

234

391

-1,236

-1,236

Total expenses and other income

103,020

18,438

26,669

24,483

15,145

15,145

84,735

84,735

Earnings before income taxes

242,927

104,602

97,413

152,065

182,849

145,305

499,386

536,930

Income tax expense/(recovery)

(9,066)

8,442

59

58

250

250

8,809

8,809

Marginal tax rate (%)

(3.7)

8.1

0.1

0.0

0.1

0.2

1.8

1.6

Net earnings

251,993

96,160

97,354

152,007

182,599

145,055

490,577

528,121

Ave. no. shares in issue (000s)

446,021

447,805

448,636

449,125

449,125

449,125

448,673

448,673

Basic EPS (US$)

0.56

0.215

0.217

0.338

0.407

0.323

1.093

1.177

Diluted EPS (US$)

0.56

0.214

0.216

0.336

0.404

0.321

1.091

1.175

DPS (US$)

0.36

0.10

0.10

0.10

0.12

0.12

0.42

0.42

Source: Wheaton Precious Metals, Edison Investment Research. Note: *Excluding impairments and exceptional items. **Forecasts now include stock-based compensation costs. Totals may not add up owing to rounding.

Our basic EPS forecast of US$1.093/share for FY20 (cf US$1.177/share previously) for FY20 is closely in line with the consensus forecast of US$1.12/share (source: Refinitiv, 15 February 2021) and within the range of analysts’ expectations of US$1.05–1.23 per share for the period:

Exhibit 4: WPM FY20 consensus EPS forecasts (US$/share)

Q120

Q220

Q320

Q420e

(previous)

Q420e

(current)

Sum Q1–Q420e

FY20e

Edison forecasts

0.215

0.217

0.338

0.407

0.323

1.093

1.093

Mean consensus

0.215

0.217

0.338

0.40

0.35

1.12

1.12

High consensus

0.215

0.217

0.338

0.44

0.40

1.17

1.23

Low consensus

0.215

0.217

0.338

0.35

0.29

1.06

1.05

Source: Refinitiv, Edison Investment Research. Note: At 15 February 2021.

Ounces produced but not yet delivered

At 30 September, payable ounces attributable to WPM produced but not yet delivered amounted to 3.4Moz silver and 77,000oz gold (cf 3.1Moz silver and a fractionally restated 79,632oz gold at end-June). As a result of WPM’s production update, we estimate this ‘inventory’ will have risen to c 5.4Moz silver and 83,693oz gold, equating to 2.8 and 2.7 months of FY20 silver and gold production, respectively (cf 1.85 and 2.45, as at end-Q320) and compares with WPM’s target level of two months of silver and two to three months of gold and palladium production. While these levels are relatively high by historical standards, they are not without precedent (as shown in Exhibit 5). Moreover, they provide a level from which sales can inevitably improve relative to production in coming quarters.

Exhibit 5: WPM ounces produced but not yet delivered, Q316–Q320 (months of production)

Source: Edison Investment Research, Wheaton Precious Metals. Note: Historical data as originally reported.

Longer-term guidance

In addition to its FY20 production and sales update, WPM also provided detailed guidance for FY21 and longer-term guidance for the five years from FY21–25 and 10 years from FY21–30. These are summarised in Exhibit 6 relative to our forecasts over the same periods:

Exhibit 6: WPM’s FY21 and longer-term production guidance and outlook cf Edison

Metal

FY21 (WPM)

FY21 (Edison)

5-yr annual average (FY21-25)

10-yr annual average (FY21-30)

Gold (koz)

370-400

397

Silver (Moz)

22.5-24.0

20.8

Other (Pd & Co, GEOs)

40-45

55

GEOs

720-780

741

810

830

Edison

741

685

N/A

Source: Wheaton Precious Metals. Note: GEOs, gold equivalent ounces (based on US$1,800/oz Au, US$25/oz Ag, US$2,300/oz Pd and US$17.75/lb).

Our forecasts, as set out in Exhibit 6, remain unchanged relative to our last note (12 November 2020). By contrast, whereas WPM had previously been forecasting gold equivalent production of c 750koz for the four years FY21–24, this has now increased by a material c 8% to 810koz (albeit for the five-year period FY21–25). Within this context, readers should note the implication that, if production is 750koz in FY21 (the mid-point of WPM’s guidance), then it would have to average 825koz pa for FY22–25 for it to average 810koz for the full five-years FY21–25. In addition, WPM has provided production guidance of 830koz for FY21–30 for the first time. Within this context, we note the implication that, if production averages 810koz pa for FY21–25, then it would have to approximate 850koz pa in the discrete period FY26–30 to average 830koz pa for FY21–30.

In its update announcement, WPM undertook to ‘provide full production and financial details with the release of its 2020 fourth-quarter and full-year results on Thursday, 11 March 2021.’ Until that time, we are leaving our forecasts and valuation ostensibly unchanged. In the meantime, however, we note the potential for our longer-term financial forecasts to increase by 20–30% for FY22–30.

Exhibit 7: Financial summary

US$'000s

2016

2017

2018

2019

2020e

2021e

2022e

Dec

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

891,557

843,215

794,012

861,332

1,094,359

1,493,868

1,465,450

Cost of Sales

(254,434)

(243,801)

(245,794)

(258,559)

(268,273)

(307,772)

(304,858)

Gross Profit

637,123

599,414

548,218

602,773

826,086

1,186,096

1,160,592

EBITDA

 

 

602,684

564,741

496,568

548,266

756,154

1,116,163

1,090,659

Operating Profit (before amort. and except.)

 

293,982

302,361

244,281

291,440

514,189

817,347

790,531

Intangible Amortisation

0

0

0

0

0

0

0

Exceptionals

(71,000)

(228,680)

245,715

(165,855)

103

0

0

Other

(4,982)

8,129

(5,826)

217

1,236

0

0

Operating Profit

218,000

81,810

484,170

125,802

515,528

817,347

790,531

Net Interest

(24,193)

(24,993)

(41,187)

(48,730)

(16,039)

(6,925)

795

Profit Before Tax (norm)

 

 

269,789

277,368

203,094

242,710

498,150

810,422

791,326

Profit Before Tax (FRS 3)

 

 

193,807

56,817

442,983

77,072

499,489

810,422

791,326

Tax

1,330

886

(15,868)

9,066

(13,768)

(1,000)

(1,000)

Profit After Tax (norm)

266,137

286,383

181,400

251,993

485,618

809,422

790,326

Profit After Tax (FRS 3)

195,137

57,703

427,115

86,138

485,721

809,422

790,326

Average Number of Shares Outstanding (m)

430.5

442.0

443.4

446.0

448.7

449.5

449.5

EPS - normalised (c)

 

 

62

63

48

56

108

180

176

EPS - normalised and fully diluted (c)

 

 

62

63

48

56

108

180

175

EPS - (IFRS) (c)

 

 

45

13

96

19

108

180

176

Dividend per share (c)

21

33

36

36

42

69

73

Gross Margin (%)

71.5

71.1

69.0

70.0

75.5

79.4

79.2

EBITDA Margin (%)

67.6

67.0

62.5

63.7

69.1

74.7

74.4

Operating Margin (before GW and except.) (%)

33.0

35.9

30.8

33.8

47.0

54.7

53.9

BALANCE SHEET

Fixed Assets

 

 

6,025,227

5,579,898

6,390,342

6,123,255

5,882,384

5,771,568

5,509,440

Intangible Assets

5,948,443

5,454,106

6,196,187

5,768,883

5,528,012

5,417,196

5,155,068

Tangible Assets

12,163

30,060

29,402

44,615

44,615

44,615

44,615

Investments

64,621

95,732

164,753

309,757

309,757

309,757

309,757

Current Assets

 

 

128,092

103,415

79,704

154,752

712,414

1,327,250

2,050,826

Stocks

1,481

1,700

1,541

43,628

1,965

2,682

2,631

Debtors

2,316

3,194

2,396

7,138

2,998

4,093

4,015

Cash

124,295

98,521

75,767

103,986

707,451

1,320,475

2,044,180

Other

0

0

0

0

0

0

0

Current Liabilities

 

 

(19,057)

(12,143)

(28,841)

(64,700)

(79,366)

(83,262)

(82,974)

Creditors

(19,057)

(12,143)

(28,841)

(63,976)

(78,642)

(82,538)

(82,250)

Short term borrowings

0

0

0

(724)

(724)

(724)

(724)

Long Term Liabilities

 

 

(1,194,274)

(771,506)

(1,269,289)

(887,387)

(887,387)

(887,387)

(887,387)

Long term borrowings

(1,193,000)

(770,000)

(1,264,000)

(878,028)

(878,028)

(878,028)

(878,028)

Other long term liabilities

(1,274)

(1,506)

(5,289)

(9,359)

(9,359)

(9,359)

(9,359)

Net Assets

 

 

4,939,988

4,899,664

5,171,916

5,325,920

5,628,046

6,128,170

6,589,905

CASH FLOW

Operating Cash Flow

 

 

608,503

564,187

518,680

548,301

817,858

1,118,247

1,090,501

Net Interest

(24,193)

(24,993)

(41,187)

(41,242)

(16,039)

(6,925)

795

Tax

28

(326)

0

(5,380)

(8,809)

(1,000)

(1,000)

Capex

(805,472)

(19,633)

(861,406)

10,571

(1,094)

(188,000)

(38,000)

Acquisitions/disposals

0

0

0

0

0

0

0

Financing

595,140

1,236

1,279

37,198

0

0

0

Dividends

(78,708)

(121,934)

(132,915)

(129,986)

(188,452)

(309,298)

(328,591)

Net Cash Flow

295,298

398,537

(515,549)

419,462

603,465

613,024

723,705

Opening net debt/(cash)

 

 

1,362,703

1,068,705

671,479

1,188,233

774,766

171,301

(441,723)

HP finance leases initiated

0

0

0

0

0

0

0

Other

(1,300)

(1,311)

(1,205)

(5,995)

0

0

0

Closing net debt/(cash)

 

 

1,068,705

671,479

1,188,233

774,766

171,301

(441,723)

(1,165,428)

Source: Company data, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Wheaton Precious Metals and prepared and issued by Edison, in consideration of a fee payable by Wheaton Precious Metals. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: 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 and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. 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.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, 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 securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. 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, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

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. 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 (i.e. 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.

United Kingdom

This document is prepared and provided by Edison 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.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison 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. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Wheaton Precious Metals and prepared and issued by Edison, in consideration of a fee payable by Wheaton Precious Metals. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: 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 and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. 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.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, 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 securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. 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, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

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. 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 (i.e. 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.

United Kingdom

This document is prepared and provided by Edison 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.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison 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. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Share this with friends and colleagues