On track to meet FY20 expectations

Boku 22 July 2020 Update
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Boku

On track to meet FY20 expectations

H1 trading update

Software & comp services

22 July 2020

Price

88p

Market cap

£248m

$1.27:£1

Net cash ($m) at end FY19

32.6

Shares in issue

281.4m

Free float

89%

Code

BOKU

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(12.0)

4.1

(20.7)

Rel (local)

(11.6)

(6.7)

(6.3)

52-week high/low

127p

49p

Business description

Boku operates a billing and identity verification platform that connects merchants with mobile network operators in more than 50 countries. It has c 215 employees, with its main offices in the US, UK, Germany and India.

Next events

H120 results

September 2020

Analyst

Katherine Thompson

+44 (0)20 3077 5730

Boku is a research client of Edison Investment Research Limited

Boku expects to report H120 revenues of at least $24.7m. The Payments business has benefited from increased demand for digital content during lockdown, whereas the Identity business has seen weaker demand due to COVID-19 disruption. Management expects to at least meet consensus EBITDA estimates for FY20, with growth in adjusted EBITDA of at least 65% for the year. We have made minor changes to our forecasts to reflect the relative strengths of the two businesses.

Year
end

Revenue ($m)

EBITDA*
($m)

Diluted EPS*
($)

DPS
($)

P/E
(x)

EV/EBITDA
(x)

12/18

35.3

6.3

0.016

0.0

72.1

47.7

12/19

50.1

7.4**

0.012

0.0

93.0

40.8

12/20e

55.2

12.3

0.021

0.0

52.3

24.5

12/21e

66.4

17.7

0.032

0.0

35.2

17.1

12/22e

77.7

21.1

0.040

0.0

27.7

14.3

Note: *EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Excludes one-off revenue recognition.

COVID-19 has a mixed effect on H1 trading

Boku expects to report revenue of at least $24.7m for H120, with at least $22.0m for Payments and $2.7m for Identity. The Payments business generated total payment volume (TPV) of $3.1bn (+35% y-o-y), with 10.8 million new users during H1 (+19% y-o-y) and monthly active users up 33% y-o-y to 20.3 million. New carrier billing connections were launched with Google, Netflix, Sony, Spotify and Tencent and seven wallets were live including GrabPay, GoPay and DANA. Due to COVID-19 disruption, the Identity business saw weaker demand from existing customers, particularly in June, as well as lower levels of new business, although the impact at the EBITDA level is expected to be minimal. Gross cash at the end of H120 was $80.7m or $36.2m excluding the $44.5m used for the Fortumo acquisition, which completed on 1 July. Average daily cash in June 2020 was $25.7m, +16% y-o-y.

Outlook maintained for FY20

The company anticipates group adjusted EBITDA growth of at least 65% for FY20 (which implies EBITDA of at least $12.2m) and to at least meet consensus expectations (c $12.3m). We have revised our forecasts to reflect stronger Payment revenues on higher TPV offset by weaker Identity revenues, with a 2% increase in our FY20 EBITDA forecast to $12.3m.

Valuation: Sum-of-parts suggests upside

On EV/Sales and EV/EBITDA, Boku is trading at a discount to the average of payment processor peers and identity management peers. Reflecting the different growth and profitability dynamics of the Payments and Identity businesses, we use a sum-of-the-parts approach to assign value to each separately, generating a group equity value of 127p per share (123p previously). Excluding the Identity business entirely, Boku would be worth 120p per share (116p previously), still well ahead of the current share price. Key catalysts for the share price include continued revenue growth in the Boku Identity business, new major merchants being signed up and a growing contribution from wallets.

Changes to estimates

Exhibit 1: Changes to estimates

$m

FY20e

FY21e

FY22e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Payment revenues

49.2

50.0

1.6%

15.0%

59.3

59.5

0.4%

19.1%

65.6

65.7

0.1%

10.3%

Identity revenues

7.0

5.2

-25.7%

-22.1%

10.8

6.9

-36.1%

32.7%

14.5

12.0

-17.2%

73.9%

Total revenues

56.2

55.2

-1.8%

10.0%

70.1

66.4

-5.3%

20.4%

80.1

77.7

-3.0%

16.9%

Gross profit

49.5

49.6

0.0%

11.2%

60.7

59.3

-2.2%

19.6%

68.1

67.2

-1.3%

13.3%

Gross margin

88.1%

89.8%

1.7%

0.9%

86.5%

89.3%

2.8%

-0.5%

85.0%

86.5%

1.5%

-2.8%

Payment EBITDA

16.5

16.7

1.6%

4.9%

20.8

21.3

2.4%

27.6%

23.2

23.3

0.4%

9.3%

Identity EBITDA

(4.4)

(4.4)

0.5%

-16.4%

(3.2)

(3.6)

14.5%

-17.6%

(2.2)

(2.2)

0.0%

-39.6%

Total EBITDA

12.1

12.3

2.0%

15.4%*

17.7

17.7

0.2%

43.9%

21.0

21.1

0.4%

19.3%

Payment EBITDA margin

33.5%

33.4%

0.0%

-3.2%

35.1%

35.9%

0.7%

2.4%

35.4%

35.5%

0.1%

-0.3%

Identity EBITDA margin

-62.9%

-85.0%

-22.1%

-5.8%

-29.4%

-52.8%

-23.3%

32.2%

-15.2%

-18.3%

-3.2%

34.4%

EBITDA margin

21.5%

22.3%

3.8%

1.0%

25.2%

26.6%

5.8%

4.4%

26.3%

27.2%

3.5%

0.5%

Normalised operating profit

8.6

8.9

2.7%

96.6%

13.5

13.5

0.3%

52.2%

16.7

16.8

0.5%

23.9%

Normalised operating margin

15.4%

16.1%

0.7%

7.1%

19.2%

20.4%

1.1%

4.3%

20.8%

21.6%

0.8%

1.2%

Reported operating profit

(1.9)

(1.7)

-12.2%

91.5%

6.4

6.4

0.6%

-480.6%

10.4

10.5

0.8%

63.0%

Reported operating margin

-3.4%

-3.1%

0.4%

-1.3%

9.1%

9.7%

0.6%

12.8%

13.0%

13.5%

0.5%

3.8%

Normalised PBT

7.6

7.9

3.1%

91.4%

12.2

12.3

0.3%

55.9%

15.5

15.6

0.5%

27.1%

Reported PBT

(3.0)

(2.7)

-8.0%

N/A

5.1

5.2

0.8%

-290.5%

9.2

9.3

0.9%

80.0%

Normalised net income

6.1

6.3

3.1%

93.8%

9.8

9.8

0.3%

55.9%

12.4

12.5

0.5%

27.1%

Reported net income

(2.8)

(2.6)

-8.0%

N/A

4.6

4.7

0.8%

-280.5%

7.8

7.9

0.9%

70.0%

Normalised basic EPS

0.023

0.024

3.1%

79.2%

0.035

0.035

0.3%

47.8%

0.044

0.044

0.5%

27.1%

Normalised diluted EPS

0.021

0.021

3.1%

77.9%

0.032

0.032

0.3%

48.5%

0.040

0.040

0.5%

27.1%

Reported basic EPS

(0.011)

(0.010)

-8.0%

N/A

0.016

0.017

0.8%

-271.2%

0.028

0.028

0.9%

70.0%

Net debt/(cash)

(14.9)

(14.7)

-1.7%

-55.0%

(32.2)

(31.3)

-2.7%

113.3%

(51.8)

(51.4)

-0.8%

64.0%

TPV ($bn)

6.40

6.56

2.5%

30.0%

7.77

7.82

0.6%

17.4%

8.85

8.87

0.2%

13.5%

Take rate

0.77%

0.76%

0.0%

-0.05%

0.76%

0.76%

0.0%

0.00%

0.74%

0.74%

0.0%

-0.02%

Source: Edison Investment Research. Note: *Compared to reported EBITDA of $10.7m in FY19; +66% versus adjusted FY19 EBITDA of $7.4m.

Exhibit 2: Financial summary

$m

2014

2015

2016

2017

2018

2019

2020e

2021e

2022e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

18.3

19.2

17.2

24.4

35.3

50.1

55.2

66.4

77.7

Cost of Sales

(4.1)

(4.0)

(3.2)

(2.3)

(2.5)

(5.6)

(5.6)

(7.1)

(10.5)

Gross Profit

14.2

15.2

14.0

22.1

32.8

44.6

49.6

59.3

67.2

EBITDA

 

 

(9.6)

(11.4)

(12.3)

(2.3)

6.3

7.4*

12.3

17.7

21.1

Normalised operating profit

 

 

(9.8)

(12.4)

(13.8)

(4.0)

4.8

4.5

8.9

13.5

16.8

Amortisation of acquired intangibles

(0.8)

(1.9)

(1.7)

(1.3)

(1.3)

(1.6)

(1.6)

(1.6)

(0.8)

Exceptionals

(2.1)

(0.1)

(2.4)

(2.2)

(1.4)

(0.3)

(2.0)

0.0

0.0

Share-based payments

(1.7)

(1.8)

(2.1)

(1.5)

(4.6)

(6.8)

(7.0)

(5.5)

(5.5)

Reported operating profit

(14.4)

(16.2)

(19.9)

(9.0)

(2.4)

(4.1)

(1.7)

6.4

10.5

Net Interest

(0.6)

(0.4)

(1.2)

(2.4)

(0.6)

(0.4)

(1.0)

(1.3)

(1.2)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

(17.1)

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(10.4)

(12.8)

(15.0)

(6.4)

4.3

4.1

7.9

12.3

15.6

Profit Before Tax (reported)

 

 

(15.0)

(16.6)

(21.1)

(28.5)

(3.0)

(1.3)

(2.7)

5.2

9.3

Reported tax

(0.4)

(0.4)

0.5

(0.1)

(1.3)

1.7

0.1

(0.5)

(1.4)

Profit After Tax (norm)

(7.8)

(9.6)

(11.2)

(4.8)

3.4

3.2

6.3

9.8

12.5

Profit After Tax (reported)

(15.4)

(17.0)

(20.6)

(28.7)

(4.3)

0.4

(2.6)

4.7

7.9

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(7.8)

(9.6)

(11.2)

(4.8)

3.4

3.2

6.3

9.8

12.5

Net income (reported)

(15.4)

(17.0)

(20.6)

(28.7)

(4.3)

0.4

(2.6)

4.7

7.9

Basic ave. number of shares outstanding (m)

21.3

27.4

140.1

150.3

217.1

246.8

266.9

281.4

281.4

EPS - basic normalised ($)

 

 

(0.36)

(0.35)

(0.08)

(0.03)

0.02

0.01

0.02

0.03

0.04

EPS - diluted normalised ($)

 

 

(0.36)

(0.35)

(0.08)

(0.03)

0.02

0.01

0.02

0.03

0.04

EPS - basic reported ($)

 

 

(0.72)

(0.62)

(0.15)

(0.19)

(0.02)

0.00

(0.01)

0.02

0.03

Dividend ($)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

N/A

4.7

(10.4)

42.0

44.5

42.2

10.0

20.4

16.9

Gross Margin (%)

77.6

79.1

81.4

90.7

92.9

88.9

89.8

89.3

86.5

EBITDA Margin (%)

(52.5)

(59.2)

(71.4)

(9.5)

17.9

15.8

22.3

26.6

27.2

Normalised Operating Margin

(53.2)

(64.4)

(80.0)

(16.5)

13.7

9.0

16.1

20.4

21.6

BALANCE SHEET

Fixed Assets

 

 

32.7

30.8

26.8

26.9

23.0

52.2

96.1

94.2

92.0

Intangible Assets

32.5

30.1

25.7

25.8

22.5

46.8

91.0

89.5

88.8

Tangible Assets

0.2

0.7

0.5

0.4

0.3

3.5

2.5

1.5

0.5

Investments & other

0.0

0.0

0.6

0.7

0.3

1.8

2.7

3.1

2.7

Current Assets

 

 

72.5

53.0

48.9

79.3

84.0

89.2

103.5

145.6

178.7

Stocks

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Debtors

59.7

43.3

37.1

59.1

51.7

53.6

65.8

92.6

106.9

Cash & cash equivalents

12.0

9.0

11.3

18.7

31.1

34.7

36.8

52.2

71.0

Other

0.7

0.6

0.5

1.4

1.3

0.9

0.9

0.9

0.9

Current Liabilities

 

 

(69.6)

(65.5)

(61.0)

(78.0)

(79.6)

(81.8)

(93.5)

(124.7)

(143.6)

Creditors

(64.6)

(60.4)

(54.9)

(75.5)

(77.4)

(78.0)

(88.2)

(120.8)

(139.6)

Tax and social security

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Short term borrowings

(5.0)

(5.1)

(6.1)

(2.5)

(2.2)

(2.1)

(3.3)

(3.3)

(3.3)

Other

0.0

0.0

0.0

(0.0)

0.0

(1.7)

(1.9)

(0.5)

(0.6)

Long Term Liabilities

 

 

0.0

(0.3)

(15.2)

(0.2)

(0.8)

(2.6)

(20.0)

(18.7)

(17.5)

Long term borrowings

0.0

(0.2)

(15.1)

(0.0)

0.0

0.0

(18.8)

(17.5)

(16.3)

Other long-term liabilities

0.0

(0.1)

(0.1)

(0.1)

(0.8)

(2.6)

(1.2)

(1.2)

(1.2)

Net Assets

 

 

35.5

18.0

(0.4)

28.0

26.6

57.0

86.2

96.3

109.7

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

35.5

18.0

(0.4)

28.0

26.6

57.0

86.2

96.3

109.7

CASH FLOW

Op Cash Flow before WC and tax

(9.6)

(11.4)

(12.3)

(2.3)

6.3

7.4

12.3

17.7

21.1

Working capital

9.3

11.6

(3.4)

1.0

7.2

3.0

(2.1)

5.9

4.4

Exceptional & other

(1.6)

1.1

4.2

(5.5)

0.2

(1.3)

(2.4)

0.0

0.0

Tax

(0.0)

(0.0)

(0.0)

0.0

(0.2)

(0.1)

(0.7)

(1.0)

(1.0)

Net operating cash flow

 

 

(1.9)

1.3

(11.5)

(6.8)

13.5

9.0

7.2

22.6

24.6

Capex

(1.1)

(3.6)

(1.5)

(0.3)

(0.3)

(2.1)

(2.5)

(2.7)

(2.8)

Acquisitions/disposals

5.9

0.3

0.0

0.0

(0.2)

(0.7)

(43.0)

0.0

0.0

Net interest

(0.3)

(0.3)

(0.3)

(0.9)

(0.6)

(0.4)

(0.9)

(1.2)

(1.1)

Equity financing

0.2

0.1

0.1

19.8

0.5

0.6

23.1

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

0.6

(0.0)

0.1

(1.1)

0.2

(1.5)

(1.9)

(2.1)

(0.6)

Net Cash Flow

3.3

(2.2)

(13.1)

10.6

13.1

4.857

(18.0)

16.6

20.1

Opening net debt/(cash)

 

 

(4.9)

(7.0)

(3.6)

9.9

(16.2)

(28.9)

(32.6)

(14.7)

(31.3)

FX

(1.2)

(0.8)

(0.4)

0.4

(0.5)

(1.1)

0.0

0.0

0.0

Other non-cash movements

0.0

(0.4)

(0.0)

15.1

(0.0)

(0.0)

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(7.0)

(3.6)

9.9

(16.2)

(28.9)

(32.6)

(14.7)

(31.3)

(51.4)

Source: Boku, Edison Investment Research *Excludes one-off revenue of $3.3m.

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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

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 Boku and prepared and issued by Edison, in consideration of a fee payable by Boku. 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

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

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