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Management confident of meeting FY21 guidance

Tinexta 15 November 2021 Update
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Tinexta

Management confident of meeting FY21 guidance

Q321 results

Professional services

15 November 2021

Price

€39.0

Market cap

1,841m

Net debt (€m) at 30 September 2021

191.6

Shares in issue

47.2m

Free float

34%

Code

TNXT

Primary exchange

Euronext STAR Milan

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

5.9

7.8

96.2

Rel (local)

(0.8)

3.2

46.0

52-week high/low

€43.3

€18.4

Business description

Tinexta has four divisions: Digital Trust, solutions to increase trust in digital transactions; Credit Information & Management, services to manage credit; Innovation & Marketing Services, services to help clients develop their businesses; and Cyber Security, services to help digital transformation.

Next events

FY21 results

February 2022

Analysts

Russell Pointon

+44 (0)20 3077 5700

Fiona Orford-Williams

+44 (0)20 3077 5700

Tinexta is a research client of Edison Investment Research Limited

Tinexta’s Q321 results indicated underlying improved momentum in FY21 when we account for the tough comparative provided by Q320 and the inherent seasonality of some of the businesses. Ahead of the financially important Q4 trading period, management is confident of meeting its FY21 guidance. Following the recent external investment in Tinexta’s Digital Trust (DT) business unit, we believe more M&A is likely in the near-term, which has historically been positive for growth prospects. Our underlying estimates for the business units are unchanged as is our DCF-based valuation of €41/share.

Year end

Revenue (€m)

PBT*
(£m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/19

258.7

53.5

0.80

0.00

48.6

0.0

12/20

269.0

58.6

0.85

0.26

45.8

0.7

12/21e

373.7

72.6

1.12

0.31

34.9

0.8

12/22e

438.6

93.5

1.40

0.41

27.9

1.0

12/23e

502.5

115.3

1.72

0.51

22.6

1.3

Note: *PBT and EPS (fully diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Q321 results: Underlying acceleration in growth

Tinexta’s Q321 revenue grew by c 29% y-o-y to €83.7m and adjusted EBITDA (before non-recurring items and stock options) declined by c 5% to €21.0m with a strong contribution from recent acquisitions. Tinexta faced a very tough comparative from Q320, in which it reported c 19% y-o-y organic revenue growth and EBITDA growth of c 46% due to a strong acceleration in demand as the economy emerged from national lockdown. Adjusting for this and the inherent seasonality of some of the business units, we identify an acceleration in underlying revenue growth from Q121 to Q321. The period end net debt position of €191.6m improved from €205.2m at the end of Q221 due to the company’s free cash flow generation.

FY21: Underlying business unit estimates unchanged

Our forecasts for group revenue of €373.7m and adjusted EBITDA of €96.5m are broadly in line with management’s reiterated guidance, €370m and €96m respectively. Our underlying estimates for the business units are unchanged, but we now incorporate the expected and imminent investment in InfoCert by Bregal, which improves Tinexta’s net financial position (€70m in FY21 and €30m in FY22) and leads to a higher minority charge in the P&L from FY22. The resulting improved financial firepower is likely to lead to further M&A for the DT business unit.

Valuation: DCF-based valuation €41 per share

Our DCF-based remains €41 per share as we update for the changes in the company’s financial position. On our new forecasts, Tinexta’s FY22e EV/sales multiple of 4.9x is a premium to the long-term average of 1.8x and the EV/EBIT multiple of 22.0x is a premium to the long-term average of 11.7x. We believe the higher multiples reflect Tinexta’s improved growth prospects and profitability.

Q321 results: Improving underlying momentum

Tinexta’s Q321 revenue grew y-o-y by c 29% to €83.7m and adjusted EBITDA (before non-recurring items and stock options) declined by c 5% to €21.0m. Against the tough comparative of Q320, in which Tinexta reported 18.5% y-o-y organic revenue growth, Q321 organic revenue declined by 1.9%. The strong growth reported in the prior year was due to a surge in demand as the economy emerged from national lockdown, in particular for the Credit Information & Management (CIM) and Innovation & Marketing Services (IMS) business units. We would also highlight that Q3 is typically a smaller period from a financial perspective due to the effects of the summer holiday season, which are likely to have been more pronounced in 2021 given prior restrictions on travel and socialising. In order to overcome the phasing and seasonality issues, in the narrative for business unit performance we look at two-year average growth rates which indicates improving momentum for the group through FY21. Acquisitions contributed c 31% to revenue growth and c 14% to adjusted EBITDA growth in Q321.

The Q321 adjusted EBITDA margin of 25.1% versus Q320’s 33.9% reflects the effects of the different growth profiles of the individual business units and the mix effects of M&A (eg the first time contribution of Cyber Security (CS) which has a lower margin (13.8%) than the group average).

For 9M21, revenue grew by c 39% y-o-y to €261.7m (including organic growth of 7.6% and M&A of 30.9%), and adjusted EBITDA grew by c 11% to €63.3m (including an organic decline of 3.3% and M&A growth of 14.5%).

Business units

Due to the seasonality of some of the business units, and the sudden disruption and subsequent improvements to client demand caused by COVID-19 lockdowns from the end of Q120, we include the average two-year organic revenue growth rates across FY20 and FY21 in Exhibit 1 to provide a better picture of underlying trends, in addition to the y-o-y figures.

At the group level, the two-year average growth rate has increased in every quarter in FY21, from 3.9% in Q121 to 8.1% in Q321, indicating improving momentum. At the business unit level, the two-year growth rates have increased for CIM and IMS in every quarter through FY21, while DT’s slowed down marginally from 10.8% in Q221 to 8.7% in Q321.

Exhibit 1: Business unit financials

€m

Q120

Q220

H120

Q320

9M20

Q121

Q221

H121

Q321

9M21

Group revenue

54.9

68.8

123.7

65.1

188.8

82.7

95.1

177.8

83.7

261.6

Growth y-o-y

(8.1%)

3.0%

(2.3%)

19.2%

4.2%

50.5%

38.2%

43.7%

28.7%

38.5%

Organic y-o-y

(8.4%)

2.3%

(2.7%)

18.5%

3.7%

17.6%

8.8%

12.7%

(1.9%)

7.6%

Organic two-year average

3.9%

5.7%

4.8%

8.1%

5.8%

- Digital Trust

26.1

29.2

55.4

27.7

83.1

31.2

32.4

63.6

29.6

93.2

Organic y-o-y

2.9%

9.6%

6.3%

9.9%

7.5%

19.4%

10.9%

14.9%

6.9%

12.3%

Organic two-year average

11.4%

10.8%

11.1%

8.7%

10.4%

- Cyber Security

16.8

17.8

34.6

16.9

51.5

Organic y-o-y

Organic two-year average

- Credit Information & Management

17.1

18.2

35.3

20.6

55.8

18.9

19.8

38.7

18.2

57.0

Organic y-o-y

(12.3%)

(2.7%)

(7.6%)

38.7%

5.4%

10.7%

8.9%

9.7%

(18.2%)

(0.6%)

Organic two-year average

(1.5%)

3.0%

0.7%

6.7%

2.4%

- Innovation & Marketing Services

12.0

21.7

33.7

17.1

50.8

16.1

25.5

41.7

19.6

61.3

Organic y-o-y

(22.3%)

(2.2%)

(10.5%)

12.9%

(3.5%)

23.5%

5.2%

11.7%

2.9%

8.7%

Organic two-year average

(2.0%)

1.4%

(0.0%)

8.1%

2.4%

Group adjusted EBITDA

11.0

23.9

34.9

22.0

56.9

17.0

25.3

42.3

21.0

63.3

Margin

20.0%

34.7%

28.2%

33.9%

30.2%

20.6%

26.6%

23.8%

25.1%

24.2%

- Digital Trust

5.9

8.0

14.0

8.0

22.0

7.2

8.4

15.6

8.6

24.2

Margin

22.7%

27.5%

25.2%

29.0%

26.5%

23.0%

26.0%

24.5%

29.1%

26.0%

- Cyber Security

1.9

1.6

3.5

2.3

5.8

Margin

11.5%

8.7%

10.1%

13.8%

11.3%

- Credit Information & Management

3.6

6.6

10.2

7.4

17.6

5.3

6.1

11.4

4.9

16.3

Margin

21.0%

36.1%

28.8%

36.1%

31.5%

28.0%

31.0%

29.5%

26.9%

28.7%

- Innovation & Marketing Services

3.4

11.6

15.0

8.6

23.6

5.0

12.1

17.1

7.9

25.0

Margin

28.3%

53.2%

44.4%

50.7%

46.5%

30.9%

47.6%

41.1%

40.1%

40.8%

- Other

(1.9)

(2.3)

(4.2)

(2.1)

(6.2)

(2.4)

(3.0)

(5.4)

(2.7)

(8.0)

Source: Tinexta

DT’s organic revenue growth of 6.9% reflected good demand across the entire portfolio, which led to a modest improvement in the adjusted EBITDA margin to 29.1% (29.0% in Q320).

The CS business unit generated sequentially (ie q-o-q) lower revenue of €16.9m in Q321 versus €17.8m in Q221, which likely reflects the extended holiday season post the end of COVID-19. Management states that CS is trading in line with expectations and is developing and building on initiatives linked to projects and dedicated service. With respect to the individual companies, Corvallis is still the main contributor to the performance, while Yoroi and Swascan are beginning to contribute growth post the integration. Despite the lower revenue, profitability improved with an adjusted EBITDA margin of 13.8%.

CIM’s Q321 organic revenue decline of 18.2% reflects the very tough comparative of Q320 when there was very high demand for claims to access the Central Guarantee Fund, the Italian government’s financial support for companies affected by COVID-19 related lockdowns. Naturally, the outlook for demand for further financial support is uncertain, dependent on how the virus evolves. With respect to the other business, management stated there is good demand for real estate services and business information as the economy recovers post lockdowns. Management is very pleased with CIM’s profitability; for 9M21 the adjusted EBITDA margin of 28.7% is lower than 31.5% for 9M20, which included the aforementioned boost in volume.

IMS’s organic revenue growth of 2.9% was against a tough comparative of 12.9% in Q320, which benefitted from strong demand as the economy emerged from lockdown. We also highlight that Q3 is typically seasonally less important from a financial perspective than other periods due to summer holidays. Management points to strong demand for Co.Mark (export consultants) and the recently acquired digital marketing consulting services business, Queryo Advance.

Management’s FY21 guidance unchanged

Management reiterated its FY21 guidance for revenue of €370m (+38% y-o-y) and adjusted EBITDA of €96m (+18% y-o-y). To meet guidance, the company must therefore generate revenue of €108.4m (c 29% of FY21 total) and adjusted EBITDA of €32.7m (c 34% of FY21 total) in Q421. Prior to the start of the pandemic, from a financial perspective, Q4 has been a typically seasonally important period in Tinexta’s financial year given the phasing of client spend for some business units, notably IMS. For example, in FY19, Q4 represented c 30% of the total annual revenue and c 33% on annual EBITDA, therefore guidance appears consistent with prior year trends. The addition of CS to the group is likely to increase the importance of Q4 to the financial year’s results given the way IT budget spends are typically phased.

Below we compare the y-o-y organic growth rates at 9M21 versus management’s annual/ three-year (FY21–23) guidance from the start of FY21.

DT’s organic revenue growth rate for 9M21 of 12.3% compares favourably with management’s expectations for average growth of 7% for FY21–23 and our estimate of 10% for FY21, which we upgraded at the time of the interim results.

At the start of FY21, management guided to a first-time revenue contribution from CS of €76m, therefore with revenue of €51.5m in the first nine months to meet guidance it must generate a further €24.5m in Q421, making it by far the most important period in its financial year. Management is confident of meeting its earlier expectations given comments that it is trading in line with expectations and observations of IT spend across the industry.

CIM’s y-o-y organic revenue growth rate of negative 0.6% for 9M21 is below management’s guidance for FY21 of 6%, with highly volatile y-o-y growth rates through the year. Again, we highlight the cumulative two-year average growth rate of c 5% which demonstrates the underlying growth. In addition, the acquisition of Forvalue from the start of July 2021 will be supportive of estimates for the business unit.

IMS’s y-o-y organic revenue growth rate of 8.7% for 9M21 is in line with management’s annual guidance of 9% growth for FY21–23, pre any benefit from recent acquisitions. Management is confident of meeting expectations for the year given a relatively easy comparative (Q420 negative 4.8%), and the underlying growth of the businesses in the first nine months of FY21.

To conclude, Tinexta looks well placed to meet its FY21 guidance at the group level with DT’s and IMS’s strength through the first nine months of 2021 compensating for CIM’s relative weakness, whilst noting the importance of Q4 for CS and IMS.

Cash flow and balance sheet

Q321 free cash flow of €14.6m was c 38% lower than the €23.6m generated during Q320 due to the lower absolute level of net profit in the period, and lower benefit from working capital efficiency than in the prior year. For 9M21, free cash flow of €44.3m compares with €52.6m in Q221 with the positive contribution from working capital offset by higher cash tax payments.

The period end net debt position of €191.6m improved from €205.2m at the end of Q221 due to the free cash flow generation above to give a net debt to EBITDA ratio of 2.2x.

Post the period end Tinexta has announced the investment of €100m by Bregal Milestone for a minority stake of c 16% in InfoCert (main subsidiary of the DT business unit), €70m of which is expected to complete before the end of FY21 and the remaining €30m is expected in FY22. Tinexta also completed the acquisition of a 60% stake in CertEurope for €43.8m.

FY21: underlying business unit estimates unchanged

Our FY21 business unit estimates are unchanged giving group revenue of €374m and adjusted EBITDA of €96.5m, broadly in line with management’s guidance.

We have taken the opportunity to include the expected imminent completion of the minority investment by Bregal in InfoCert, recognising the cash inflow (€70m in FY21 and €30m in FY22) and additional minority charge for FY22 onwards, and we modestly increased the FY21 one-off restructuring charges.

Valuation

Our DCF-based valuation remains at €41 as we update for the changes in the company’s financial position. We assume a WACC of 7% and terminal growth rate of 2%.

On our new forecasts, Tinexta’s FY22e EV/sales multiple of 4.9x is a premium to the long-term average of 1.8x, the EV/EBITDA multiple of 17.8x is a premium to the long-term average of 8.6x, and the EV/EBIT multiple of 22.0x is a premium to the long-term average of 11.7x. We believe the higher multiples reflect Tinexta’s improved growth prospects and profitability following M&A.

Exhibit 2: Financial summary

€m

2019

2020

2021e

2022e

2023e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

258.7

269.0

373.7

438.6

502.5

Operating costs

(181.9)

(187.8)

(277.3)

(319.0)

(358.9)

Adjusted EBITDA

 

 

76.8

81.2

96.5

119.6

143.6

EBITDA

 

 

71.3

77.9

91.8

117.6

141.6

Normalised operating profit

 

 

59.0

62.2

75.5

96.8

118.7

Amortisation of acquired intangibles

(5.9)

(6.0)

(6.0)

(6.0)

(6.0)

Exceptionals

(2.0)

(2.4)

(2.2)

0.0

0.0

Share-based payments

(3.6)

(0.9)

(2.5)

(2.0)

(2.0)

Reported operating profit

47.5

52.9

64.9

88.9

110.7

Net Interest

(4.1)

0.6

(2.6)

(3.0)

(3.0)

Joint ventures & associates (post tax)

(1.1)

(1.0)

(0.4)

(0.4)

(0.4)

Exceptionals

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

53.5

58.6

72.6

93.5

115.3

Profit Before Tax (reported)

 

 

42.2

52.5

61.9

85.5

107.3

Reported tax

(13.4)

(14.6)

(18.3)

(25.2)

(31.7)

Profit After Tax (norm)

38.3

40.8

52.4

67.5

83.2

Profit After Tax (reported)

28.8

37.9

43.6

60.3

75.7

Minority interests

(0.6)

(0.6)

(0.8)

(3.3)

(4.4)

Discontinued operations

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

37.7

40.1

51.6

64.1

78.8

Net income (reported)

28.2

37.3

42.8

56.9

71.3

WASC (m)

47.0

47.1

46.2

46.0

45.8

EPS - normalised (c)

 

 

80.3

85.9

111.7

139.5

172.3

EPS - normalised fully diluted (c)

 

 

80.3

85.2

111.7

139.5

172.3

EPS - basic reported (€)

 

 

0.60

0.80

0.93

1.24

1.56

Dividend (€)

0.00

0.26

0.31

0.41

0.51

Revenue growth (%)

8.4

4.0

38.9

17.4

14.6

EBITDA Margin before non-recurring costs (%)

29.7

30.2

25.8

27.3

28.6

Normalised Operating Margin

22.8

23.1

20.2

22.1

23.6

BALANCE SHEET

Fixed Assets

 

 

316.7

325.8

541.1

529.0

515.7

Intangible Assets

269.9

285.1

503.3

493.2

481.1

Tangible Assets

21.2

19.0

16.0

14.1

12.9

Investments & other

25.6

21.7

21.7

21.7

21.7

Current Assets

 

 

139.4

196.1

297.9

342.3

358.9

Stocks

1.1

1.2

1.2

1.2

1.2

Debtors

89.8

84.1

116.8

137.1

157.1

Cash & cash equivalents

33.6

92.8

161.9

186.0

182.5

Other financial assets

6.6

7.3

7.3

7.3

7.3

Other

8.2

10.7

10.7

10.7

10.7

Current Liabilities

 

 

(160.4)

(154.9)

(192.6)

(207.1)

(221.4)

Creditors

(92.7)

(106.7)

(130.1)

(144.6)

(158.9)

Tax and social security

(2.9)

(5.1)

(5.1)

(5.1)

(5.1)

Short term borrowings

(62.0)

(40.4)

(54.6)

(54.6)

(54.6)

Other

(2.9)

(2.7)

(2.7)

(2.7)

(2.7)

Long Term Liabilities

 

 

(146.2)

(193.2)

(338.9)

(288.9)

(228.9)

Long term borrowings

(107.0)

(150.5)

(296.3)

(246.3)

(186.3)

Other long term liabilities

(15.8)

(14.3)

(14.3)

(14.3)

(14.3)

Net Assets

 

 

149.4

173.9

307.5

375.2

424.2

Minority interests

(3.9)

(4.0)

(117.0)

(150.4)

(154.8)

Shareholders' equity

 

 

145.6

169.8

190.5

224.9

269.4

CASH FLOW

Operating cash flow

 

 

55.2

81.6

63.8

86.3

103.9

Capex and intangibles

(13.5)

(14.9)

(14.9)

(16.7)

(17.6)

Acquisitions/disposals

(47.5)

(36.1)

(185.0)

0.0

0.0

Net interest

(2.5)

(1.9)

(2.6)

(3.0)

(3.0)

Equity financing

1.1

(10.0)

(10.0)

(8.0)

(8.0)

Dividends

(16.4)

(2.2)

(12.2)

(14.5)

(18.7)

Borrowings

23.7

35.4

160.0

(50.0)

(60.0)

Other

(1.7)

7.3

70.0

30.0

0.0

Net Cash Flow

(1.5)

59.2

69.1

24.1

(3.4)

Opening net debt/(cash)

 

 

124.9

129.1

91.9

181.6

107.5

Closing net debt/(cash)

 

 

129.1

91.9

181.6

107.5

50.9

Source: Tinexta, Edison Investment Research


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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

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 Tinexta and prepared and issued by Edison, in consideration of a fee payable by Tinexta. Edison Investment Research standard fees are £60,000 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

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

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