Managing well in the recovery phase

Tyman 6 August 2020 Update
Download PDF

Tyman

Managing well in the recovery phase

H120 results

Construction & materials

6 August 2020

Price

182.0p

Market cap

£358m

US$1.30/£

Net debt (£m) at end June 2020
(ex IFRS 16 leases £61m)

161

Shares in issue

196.8m

Free float

91%

Code

TYMN

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(2.2)

9.6

(7.0)

Rel (local)

(1.8)

4.1

8.0

52-week high/low

291.0p

134.0p

Business description

Tyman’s product portfolio substantially addresses the residential RMI and building markets with increasing commercial sector exposure following acquisitions. It manufactures and sources window and door hardware and seals, reporting in three divisions: AmesburyTruth (North America; 63% of reported FY19 revenue), ERA (UK; 17%) and SchlegelGiesse (RoW; 20%).

Next events

FY20 ends

December 2020

Analyst

Toby Thorrington

+44 (0)20 3077 5721

Tyman is a research client of Edison Investment Research Limited

Market conditions have affected Tyman’s regional operations in different ways; with revenues recovering now and a settled funding outlook, the COVID-19 challenges appear to have been navigated well so far. The company typically has a seasonal H2 trading bias; the extent to which the recovery to date can be sustained in this important period will be a key determinant of the full year outturn. Other actions taken should also aid the recovery phase. Our estimates remain suspended at this time.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/18

591.5

72.7

27.5

12.0

6.6

6.6

12/19

613.7

71.0

27.4

3.9

6.6

2.1

Note: *PBT and EPS (fully diluted) are normalised, as defined by Tyman, excluding intangible amortisation and exceptional items. FY19 DPS is the interim dividend only as no final dividend payment was paid.

Management of costs and cash flows in H1

COVID-19 affected H120 results which showed like-for-like revenue and EBIT reductions of 17% and 26% respectively; good cost control through self-help and government support schemes helped to mitigate the profit impact from the exogenous sales volume shock. AmesburyTruth (Tyman’s largest division) dealt with market conditions relatively well and successfully flexed production across its facilities. Good cash generation was aided by lower seasonal stock build; despite adverse FX translation, core net debt ended H1 below the end-FY19 level. Tyman retains significant liquidity headroom with no major changes to banking facilities (save for a small increase in leverage covenant). No interim dividend was declared.

Actions taken to boost the recovery phase

Business resilience and agility facilitated enhanced customer engagement, new product introductions and further shaping/rebalancing of the regional manufacturing footprint, all creditable actions undertaken while facing real-time market challenges in H1. The benefits of these should increasingly feed through and support share gains in due course. All ongoing production facilities are now operational and are being aligned to current demand and order levels, with improving recent trends. Having come through the initial recovery phase, it will take time to establish true underlying market activity levels in our view; with potential pent-up demand bulges and scope for localised secondary outbreaks, we suggest that the next phase is unlikely to show a linear progression. In addition, the forthcoming US election may provide some distraction. For these reasons, our estimates remain suspended.

Appropriate funding levels and headroom in place

Net bank debt of c £161m was slightly below end-FY19 levels and some repayment of RCF funds drawn down in Q2 took place prior to the end of H1. We see a small upward flex to the next two leverage covenant tests as a prudent step to accommodate a potential slower recovery and seasonal requirements in H121. Given that there were no other changes to banking arrangements, indications are that management is comfortable with the group liquidity position (including headroom of c £159m under available committed facilities).

H120 results overview

Reductions in revenue and profitability in H120 reflect the varying impact of the COVID-19 outbreak across Tyman’s three divisions. The 17% reduction in group volumes was in line with the like-for-like sales performance. Actions taken to control costs and manage cash flows mitigated downward pressure on profit to some extent, contributing also to good net debt reduction, prior to adverse FX effects.

Exhibit 1: Tyman interim and divisional splits

Year end 31 December, £m

H119*

H219

2019

H120

H120 % change y-o-y

Reported

L-f-l

Group Revenue

301.9

311.8

613.7

254.1

-15.8%

-17%

AmesburyTruth

187.0

199.0

386.0

168.2

-10.1%

-12%

SchlegelGiesse

60.9

59.6

120.5

46.8

-23.2%

-22%

ERA

54.0

53.2

107.2

39.1

-27.6%

-28%

Group Operating Profit**

41.9

43.5

85.4

31.3

-25.3%

-26%

AmesburyTruth

31.4

33.1

64.5

24.8

-21.0%

-22%

SchlegelGiesse

7.7

7.1

14.8

4.6

-40.3%

-39%

ERA

7.0

6.8

13.8

3.8

-45.7%

-46%

Central costs

(4.2)

(3.5)

(7.7)

(1.9)

Source: Tyman. Note: Revenues are shown net of inter-segment revenue (total £2.6m). *H119 minor adjustments to previously reported divisional splits (for inter-divisional sales and small cost reallocations) with no overall change at group level. **Reported, post share-based payments. Like-for-like figures rounded.

End-2019 momentum and timings of COVID-19 affected divisions in differing ways. North American manufacturing facilities largely remained open throughout the period (the primary exception being two in Mexico). Following local lockdown guidance, production sites in Italy halted in early March before restarting halfway through April, while those in the UK closed at the end of March and remained so until a partial restart in May. Disruptions to the Chinese supply chain – most relevant to ERA and, to a lesser extent SchlegelGiesse – are not thought to have had a material impact on sales given the volume reductions seen and carried inventory. All operations are being scaled with an appropriate level of staffing and cost for the prevailing levels of demand, and any redundancy requirements are likely to be at low levels according to management.

Having previously flagged that the first four months of its financial year were down 12% yoy, Tyman provided sequential monthly updates for FY20 to date. All three divisions have seen improvements in activity levels from earlier lows, with AmesburyTruth and ERA currently in positive year-on-year sales territory in July at the time of reporting. (SchlegelGiesse’s June/July trading pattern is influenced by lumpy orders in the prior year in particular and underlying sales are otherwise also trending better.)

Exhibit 2: Divisional like-for-like sales performance

% change y-o-y

Q120

April

May

June

H120

July*

Group

-2%

-41%

-38%

-8%

-17%

3%

AmesburyTruth

2%

-25%

-37%

-8%

-12%

4%

SchlegelGiesse

-17%

-50%

-28%

-2%

-22%

-8%

ERA

-1%

-93%

-58%

-15%

-28%

8%

Source: Tyman. Note: *Month to date average sales per day at the time of reporting on 28 July.

AmesburyTruth: Revenue £168.2m (US$212m) (-12% l-f-l), EBIT margin 14.7% (-210bp y-o-y)

Of Tyman’s three divisions, its North American operations had the best start to FY20 and experienced the shallowest monthly dip (though still material at 37% down in May) amid less stringent lockdown conditions than in the main European countries where the other main company manufacturing facilities are located. It also continued to earn the highest operating margin in the group at 14.7%. Nevertheless, the 12% headline revenue and 22% EBIT reductions portray a challenging six-month trading period. Sales volumes were down by c 10–11%, with a small negative year-on-year price impact and net customer churn (ie new business wins not quite offsetting previously flagged losses including FY19 annualising effects) together explaining the revenue performance. After COVID-19 was declared a pandemic in March, North American manufacturing facilities largely remained open, although the Mexican facilities at Juarez were an exception to this seeing strict lockdown conditions prior to reopening at the beginning of June. Collectively, they operated at below optimal volumes reflecting prevailing market demand and the relocation of some component lines (from Mexico into the US) was undertaken maintain customer service levels throughout.

Notwithstanding the above, management actions taken to improve manufacturing efficiency at the consolidated Statesville centre of excellence are said to have resulted in better operational performance. The previously announced exit from a production unit in Fremont was also successfully completed in the period, with retained lines relocated into several of the ongoing operational sites. While the benefits of these actions are not visible currently, they should feed into improved profitability in firmer market conditions. As shown in Exhibit 2, monthly sales moved into positive territory year-on-year in July, although management is taking a cautious view on the outlook for consumer confidence and the commercial sector as well as potential US election market distractions.

ERA: Revenue £39.1m (-28% l-f-l), EBIT margin 9.7% (-330bp y-o-y)

As noted above, UK/Ireland sales are more reliant on proprietary products sourced in China (c 70% of the total) versus the other two divisions but our sense is that the initial lockdown there earlier in Q1 had a minimal effect on reported results. Management reports that pre-UK lockdown sales were running 8% ahead year-on-year and the wider Chinese supply chain had begun to normalise by the time UK lockdown occurred in March. Manufacturing sites were closed at this point until reopening from early May and ERA retained a reduced distribution capability during this time. Unsurprisingly, sales contracted sharply to very low levels in April followed by a strong rebound over the two remaining months of H1. Reported profitability was buffered by the receipt of £2m from the UK government employment support scheme (with 80% of UK employees furloughed at the peak) but also recognised £0.5m of bad debt from a small number of customers entering administration.

Hardware sales collectively account for c 70% of the total and as one might expect saw a very similar profile to the division as a whole. Variances around this pattern included a relatively stronger start with orders on hand aiding a good close to the half also from Commercial lines (internal/external hatch, access and panel products), while the developing smartware security offer gathered momentum during the period. The nature of COVID-19 severely restricted residential home access for the standalone Ventrolla business (sash window renovation).

The decision to relocate multi-point lock manufacturing from China to the i54 facility pre-dated COVID-19 considerations and other third-party supplied items are also being reviewed to further strengthen local supply. Businesses with strong transactional e-commerce platforms (such as Screwfix and Toolstation) have generally traded well throughout the COVID-19 lockdown period and ERA’s product sales through these trade distributor channels also benefited. This experience is likely to be relevant to the roll-out of an extended smartware range in H2 and beyond, with market share gains expected on the back of new customer agreements. While divisional sales have clearly started H2 in positive year-on-year territory, general UK economic uncertainty – chiefly regarding prospective rises in unemployment, which tend to dent consumer confidence – suggests that caution is warranted for prospects for the remainder of the year.

SchlegelGiesse (SG): Revenue £46.8m (-22% l-f-l), EBIT margin 9.8% (-280bp y-o-y)

With its main manufacturing base in northern Italy and some product sourcing and sales in China, SG had a challenging start to FY20 as the coronavirus pandemic developed, compounding weak trading momentum from the end of the prior year. While sales in both Q1 and Q2 were down by double-digit percentages year-on-year, the half ended on a firmer note.

As a regionally diverse division (with FY19 sales split broadly 65% Europe, 27% Asia/Australasia, 8% Americas/other) the timing, duration and extent of lockdown impacts varied across SG’s served markets. Management identified Italy, Spain and China – in that order – as SG’s largest country revenue generators and in simplistic terms they all endured relatively early and significant COVID-19 disruption. The latest two months sales performance (-2% y-o-y in June, -8% in July) appears slightly out of step with the recovery profile elsewhere, but this is attributed to timing effects with some lumpier commercial projects and a weaker June 2019 comparative.

This division has changed its business model in China and Australia by exiting direct manufacturing operations (mainly hardware and seals respectively) in these countries during H120 and switching to a distribution model. In addition, the Singapore distribution hub is to be vacated by the end of July, with ASEAN markets to be accessed as export markets going forward. Prevailing and expected volume levels in some areas, together with the need to otherwise replace or upgrade existing manufacturing equipment, appear to be the key drivers behind this shift. Margin implications are unclear at this stage, although the reduction of local fixed costs should feed into profitability from H2 onwards.

At the same time, divisional management has been focused on a more integrated sales approach including the Reguitti product range (business acquired in 2018) on a common ‘all in one’ platform. As well as streamlining the marketing function, the aim is to increase cross-selling to leverage individual channel strengths more widely across the portfolio and, in support of this, continue to introduce complementary ranges to build out channel presence.

At this stage, it is difficult to call ongoing sales momentum into H2 for SG. In addition to commercial project timing effects, with later but growing incidences of coronavirus infections in other countries (eg Brazil) and some localised secondary outbreaks (eg Spain), we would expect to continue to see variability in sales performance across SG’s sales territories. In reality, its markets tend not to move in step anyway, so flexibility in the supply chain with a focus on stronger demand areas is the norm for this business. European summer holidays may also have a bearing on near-term sales run rates.

Managing cash flow and liquidity

Tyman reported total debt of £219.8m at the end of June versus £222.8m at the start of the year (and £289.8m in mid-2019) and this was after £15.9m adverse FX translation effects, around a quarter of which related to leases. Adjusted core net debt – excluding amortising fees – reduced by £4m to £160.5m, while IFRS 16 lease liabilities were £60.8m, little changed from the year end.

Operating cash flow (before tax payments) actually rose by over £11m to almost £35m in H120 compared to its prior year comparator and was achieved despite the year-on-year earnings reduction. The primary features were:

EBITDA c £43m (IFRS 16 or c £39m on a frozen GAAP basis), c £11m down year-on-year.

Working capital £7m outflow, c £11m lower than H119. A typical seasonal trading period for Tyman in H1 is characterised by rising sales supported by increased inventory levels and net investment in trade debtors over trade creditors. The pattern of trading into and out of COVID-19 lockdown phases instead resulted in cash absorption into inventory and receivables at minor levels, while a payables outflow of c £5m was the largest line item here.

Non-underlying outflows were at modest levels. The company highlighted c £2m of net exceptional cash costs being the tail end of FY19 footprint and M&A activity (which incurred more significant spend in that year). Note that some of this would have been captured in the working capital movement with the remaining c £1m or so incurred during H120.

As a consequence of the above movements, management noted that cash conversion in the period was 106% versus 62% a year earlier.

The combination of reduced debt on hand and lower debt costs compared to H119 drove lower interest payments in H120 (just below £7m, including lease interest). We assume that the low cash tax payment (c £1m) was partly due to government COVID-19 support scheme deferrals; an increase in tax payable on the balance sheet supports this assertion. Understandably, capex (c £4m) was also at low levels in the period pending greater clarity on post-lockdown volume recovery levels. The company was able to manage US footprint pinch points by moving some lines between facilities (ie from Mexico – where operations lockdown restrictions were stricter – into the US). Taken together, Tyman generated free cash flow of c £23m in H120, a marked improvement on c £4m a year earlier. It should be noted that this included some items which were of a one-off nature, including government employment support of £3.3m and temporary salary reductions of £2.1m (both of which were included within EBITDA/EBIT) as well as the tax payment deferral (c £2.5m).

The absence of a final dividend payment for FY19 retained c £16m within the business. Final deferred consideration for Zoo Hardware (ERA company, acquired in 2018) of £1.5m, finance lease capital repayments of £3.3m and modest treasury share purchases made up the remaining cash flow movements, resulting in an overall group net cash inflow of c £18m in H120.

Liquidity: For the record, the group cash balance at the period end was c £80m. The company has previously flagged cash on hand in excess of £120m during April so, implicitly, a higher cash/gross debt position was run during the six-month period, in Q2 in particular. It is reasonable to assume then that improvements in trading noted in Exhibit 2 boosted management confidence in the outlook sufficient to trigger partial repayment of the RCF, which was substantially drawn at the end of Q1. Note that the scale of existing banking facilities remained unchanged at end H120 compared to the start of the year (which we covered in a FY19 results note), so available group liquidity remains healthy at c £159m, broadly double reported net debt levels. Save for U$55m of private placement notes due for repayment in FY21, the majority of banking facilities do not mature until 2024. Tyman did agree a tweak to its covenant ratios for the next two periods, however – rising to 3.5x net debt: EBITDA at the end of FY20 and 4x at the end of H121 – prior to reverting to 3x thereafter. As stated by management, this provides increased headroom in the event of a slower recovery. The provision for the H121 uplift is sensible in our view, acknowledging the normal seasonal working capital cycle in the business noted earlier. Lastly, in addition to the above, Tyman potentially has access to a further £170m of borrowing facilities from an existing accordion arrangement and the UK government-backed CCFF scheme, both of which are uncommitted at this stage.

Cash flow outlook comments: Tyman’s use of government employment support schemes will have stopped at the end of July, so this and the temporarily deferred tax payment should wash through in H2. Senior management salaries will also revert to previous levels from 1 August, following temporary reductions taken at the beginning of April. Our sense is that the management team is keen to carry out projects identified through business improvement programmes where returns still stack up. Therefore, an increase in capex is likely, albeit with full year spending below the originally flagged c £17m level, with some of this shifted into FY21.

The key driver of cash flow to the end of the current year will of course be the rate at which profitability recovers in the traditionally stronger H2 trading period. For Q3 at least, this might be partially offset by a supporting working capital requirement, which should then unwind again by year end. As company guidance and our estimates remain suspended for now, we are unable to provide net debt projections currently. However, the company has reiterated a medium-term target net debt:EBITDA ratio range of 1–1.5x, which could be attained in FY21.

Exhibit 3: Financial summary

£m

2011

2012

2013

2014

2015

2016

2017

2018

2019

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

 

 

Cont.

Cont.

 

 

 

 

 

 

 

Revenue

 

 

216.3

228.8

298.1

350.9

353.4

457.6

522.7

591.5

613.7

Cost of Sales

 

 

(145.2)

(154.0)

(198.8)

(236.1)

(234.0)

(290.4)

(331.8)

(383.3)

(408.1)

Gross Profit

 

 

71.1

74.7

99.3

114.8

119.4

167.3

190.9

208.3

205.6

EBITDA (pre-IFRS 16)*

 

 

27.7

28.5

39.4

54.6

60.9

82.5

91.7

98.5

100.8

Operating Profit (Edison)

 

 

22.4

23.4

33.0

46.9

52.9

70.9

78.8

84.7

86.2

Net Interest

 

 

(5.9)

(3.3)

(3.4)

(4.5)

(6.0)

(6.9)

(8.0)

(10.0)

(11.9)

Other Finance

 

 

(3.6)

(0.9)

0.2

(2.2)

(0.6)

(0.4)

(0.8)

(1.3)

(3.5)

Share Based Payments

 

 

(0.2)

(0.5)

(0.7)

(0.9)

(1.0)

(1.0)

(2.0)

(1.1)

(0.8)

Intangible Amortisation

 

 

(10.6)

(10.8)

(16.6)

(17.8)

(19.6)

(21.7)

(22.9)

(25.8)

(23.5)

Exceptionals

 

 

0.7

(33.4)

(11.4)

(9.3)

(9.4)

(10.9)

(10.0)

(7.3)

(21.4)

Other

 

 

(0.1)

(0.4)

(0.4)

(0.3)

(0.4)

(0.5)

(0.6)

(0.3)

(0.3)

Profit Before Tax (Edison norm)

 

12.7

18.7

29.2

39.3

45.4

62.5

68.0

72.3

70.0

Profit Before Tax (Company norm)

 

17.4

21.3

28.6

41.6

45.4

62.1

68.3

72.7

71.0

Profit Before Tax (statutory)

 

 

2.6

(25.8)

0.8

11.9

16.1

29.4

34.5

38.9

24.8

Tax

 

 

6.4

3.7

0.2

(2.6)

(8.0)

(8.6)

(3.3)

(12.5)

(7.1)

Profit After Tax (norm)

 

 

19.1

22.4

29.4

36.8

37.3

53.8

64.7

59.8

62.9

Profit After Tax (statutory)

 

 

9.1

(22.1)

1.0

9.3

8.1

20.7

31.2

26.3

17.7

 

 

 

 

 

 

 

 

 

 

 

 

Average number of shares outstanding (m)

 

129.7

129.7

152.8

167.8

168.2

173.0

177.2

191.4

194.9

EPS - Edison norm (p) FD

 

 

6.7

9.6

13.9

17.1

19.3

25.5

26.6

27.3

26.8

EPS - Company norm (p) FD

 

 

9.4

10.2

13.5

18.4

19.4

25.3

26.7

27.5

27.4

EPS - statutory (p)

 

 

6.8

(16.7)

0.6

5.6

4.8

12.0

17.6

13.8

9.1

Dividend per share (p)

 

 

3.4

4.5

6.0

8.0

8.8

10.5

11.3

12.0

3.9

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin (%)

 

 

32.9

32.7

33.3

32.7

33.8

36.5

36.5

35.2

33.5

EBITDA Margin (%)

 

 

12.8

12.5

13.2

15.6

17.2

18.0

17.5

16.7

16.4

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

10.4

10.2

11.1

13.4

15.0

15.5

15.1

14.3

14.1

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE SHEET

 

 

Cont.

Cont.

 

 

 

 

 

 

 

Fixed Assets

 

 

352.8

298.1

404.2

410.6

398.4

564.7

509.9

612.5

618.8

Intangible Assets

 

 

312.7

258.7

354.4

355.7

340.5

480.0

427.2

516.9

475.3

Tangible Assets

 

 

30.5

29.8

39.9

42.9

42.8

71.7

68.4

77.0

125.2

Investments

 

 

9.6

9.5

9.8

12.1

15.0

12.9

14.2

18.6

18.3

Current Assets

 

 

96.4

90.7

118.9

124.0

111.0

180.6

188.1

244.8

213.9

Stocks

 

 

26.6

27.6

40.7

47.6

46.0

70.7

75.3

105.3

88.6

Debtors

 

 

49.3

27.3

34.7

37.1

35.0

69.0

70.2

87.7

76.3

Cash

 

 

20.4

35.9

43.6

39.3

30.0

40.9

42.6

51.9

49.0

Current Liabilities

 

 

(55.1)

(44.2)

(60.8)

(52.3)

(44.4)

(86.4)

(82.0)

(102.9)

(100.9)

Creditors

 

 

(42.2)

(36.7)

(54.0)

(52.3)

(44.4)

(86.4)

(80.9)

(101.4)

(100.6)

Short term borrowings

 

 

(12.9)

(7.5)

(6.8)

0.0

0.0

0.0

(1.1)

(1.5)

(0.3)

Long Term Liabilities

 

 

(144.8)

(96.9)

(161.7)

(176.2)

(156.7)

(285.3)

(251.4)

(320.5)

(315.5)

Long term borrowings

 

 

(100.2)

(63.6)

(115.5)

(128.0)

(111.6)

(216.5)

(204.3)

(259.2)

(211.5)

Other long term liabilities

 

 

(44.6)

(33.3)

(46.2)

(48.2)

(45.1)

(68.8)

(47.0)

(61.3)

(104.0)

Net Assets

 

 

249.2

247.7

300.6

306.1

308.3

373.6

364.5

433.8

416.3

 

 

 

0.000

 

 

 

 

 

 

 

 

CASH FLOW

 

 

Cont.

Cont.

 

 

 

 

 

 

 

Operating Cash Flow

 

 

32.6

23.6

38.9

40.1

49.4

79.9

67.0

85.0

111.3

Net Interest

 

 

(6.7)

(4.2)

(2.6)

(4.6)

(6.2)

(7.0)

(7.6)

(9.1)

(15.0)

Tax

 

 

(1.9)

(4.9)

(6.2)

(6.3)

(8.9)

(12.7)

(15.1)

(12.3)

(14.2)

Capex

 

 

(4.9)

(6.8)

(8.1)

(10.2)

(10.9)

(15.3)

(12.6)

(12.0)

(10.7)

Acquisitions/disposals

 

 

(10.3)

51.2

(131.2)

(6.5)

6.8

(96.1)

(6.3)

(106.4)

(0.9)

Financing

 

 

(0.3)

(1.1)

68.1

(4.3)

(2.6)

16.7

(0.8)

47.2

(2.0)

Dividends

 

 

(2.6)

(5.8)

(7.0)

(10.9)

(14.6)

(15.6)

(19.5)

(22.4)

(23.6)

Net Cash Flow

 

 

6.0

51.9

(48.2)

(2.8)

13.0

(50.0)

5.1

(30.1)

44.9

Opening net debt/(cash)

 

 

91.7

92.7

35.2

78.7

88.7

81.6

175.6

162.9

208.8

Finance leases initiated

 

 

(2.7)

0.0

0.0

0.0

0.0

0.0

0.0

(2.0)

(0.3)

Other

 

 

(4.4)

5.6

4.7

(7.2)

(5.9)

(44.0)

7.6

(13.9)

1.4

Closing net debt/(cash)*

 

 

92.7

35.2

78.7

88.7

81.6

175.6

162.9

208.8

162.8

Lease finance (under IFRS 16)

 

 

 

 

 

 

 

 

 

 

60.0

Source: Company accounts, Edison Investment Research. Note: *EBITDA and net debt both shown on a pre-IFRS 16 basis.

General disclaimer and copyright

This report has been commissioned by Tyman and prepared and issued by Edison, in consideration of a fee payable by Tyman. 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 2020 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

1,185 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 Tyman and prepared and issued by Edison, in consideration of a fee payable by Tyman. 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 2020 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

1,185 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