offshore rig in twilight

Unique green hydrogen investment vehicle

Global Energy Ventures 19 November 2021 Update
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Global Energy Ventures

Unique green hydrogen investment vehicle

Company update

Industrial support services

19 November 2021

Price

A$0.13

Market cap

A$72m

A$1.36/US$

Estimated net cash (A$m) at 31 December 2021

17.0

Shares in issue

553m

Free float

100%

Code

GEV

Primary exchange

ASX

Secondary exchange

FRA

Share price performance

%

1m

3m

12m

Abs

8.7

62.3

33.0

Rel (local)

8.4

63.5

16.0

52-week high/low

A$0.16

A$0.06

Business description

Global Energy Ventures is becoming a vertically integrated green hydrogen producer and supplier, combining production and compressed hydrogen shipping solutions for transporting energy from Australia to regional markets in South-East Asia.

Next events

Quarterly update

January 2022

Analysts

Andy Murphy

+44 (0)20 3077 5700

James Magness

+44 (0)20 3077 5700

Global Energy Ventures is a research client of Edison Investment Research Limited

Global Energy Ventures’ (GEV’s) planned development of a 2.8GW green hydrogen export project in the Tiwi Islands gives credibility and gravity to its ambitious plans to become a vertically integrated producer and supplier of compressed green hydrogen. Internal and external feasibility studies could be realistically expected by early 2023, which could support our existing modelling assumptions that show attractive internal rates of return for a 430t pilot vessel fleet, and for the far more efficient 2,000t vessel design. The Tiwi Hydrogen Project is expected to come onstream in 2026, coinciding with the availability of the first compressed hydrogen ships.

Year end

Revenue (A$m)

PBT*
(A$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

06/20

1.5

(2.9)

(0.7)

0.0

N/A

N/A

06/21

0.2

(3.1)

(0.7)

0.0

N/A

N/A

06/22e

0.0

(6.4)

(1.3)

0.0

N/A

N/A

06/23e

0.0

(7.4)

(1.3)

0.0

N/A

N/A

Note: *PBT and EPS are on a reported basis.

Tiwi Hydrogen Project: The concept

The Tiwi Hydrogen Project consists of a 1,800 hectare solar PV farm connected by a 30km energy transmission line to a hydrogen production site (electrolyser facilities) located at an existing industrial port. Compression and loading facilities will be sited alongside, which will enable the green hydrogen to be loaded onto GEV’s own compressed hydrogen ships. The solar farm has been assessed to have the potential for 2.8GW of electricity generation, sufficient to produce up to 100,000 tonnes of green hydrogen a year.

GEV becomes producer and solution provider

Our original analysis of GEV’s C-H2 ship transportation solution assumed ready supplies of green hydrogen would be available from third parties in 2026 to coincide with delivery of the first C-H2 ships. The Tiwi Hydrogen Project de-risks GEV’s external reliance on the supply of green hydrogen as GEV is likely to become a vertically integrated producer and supplier of green hydrogen. This brings several advantages including proof of concept, security of supply, cost discovery and supply competition into the equation.

Falling costs underpin cost assumptions

Our original modelling assumed that a supply of green hydrogen would be available to purchase from third parties at a delivered price of US$4/kg. It is too early in the life of the project to model the costs with any certainty as almost all variables could sway in different directions depending on individual decisions. However, it would be fair to say that the Tiwi Hydrogen Project would allow GEV to capture the producer’s margin, while also helping manage the delivered cost of hydrogen to the customer. As technological advances are made in the future, the cost of green hydrogen production has the potential to fall further. It is worth noting that the cost of installed solar PV/kW fell c 82% between 2010 and 2020. According to IRENA, this trend is set to continue, as are the declining costs of associated plant.

Development of H2 project to prove concept

The chosen location of GEV’s first green hydrogen export project is geographically important, as is the support received from local stakeholders including the Tiwi Land Council and the Munupi Landowners. The project is located in one of the most northerly points of Australia; it has suitable climate conditions and is on previously cleared land. The project, if successful, is expected to prove the concept and the economics of green hydrogen production, compression and transportation from Australia to markets in South-East Asia.

Outline of the Tiwi Hydrogen Project

The Tiwi Hydrogen Project consists of a 1,800 hectare solar farm connected by a 30km energy transmission line to a hydrogen production site (electrolyser facilities) planned to be located at an existing industrial port. Compression and loading facilities will be sited alongside, which will enable the green hydrogen to be loaded onto GEV’s own compressed hydrogen ships. The solar farm has been assessed to have the potential for 2.8GW of solar generation, sufficient to produce up to 100,000 tonnes of green hydrogen a year.

Exhibit 1: Tiwi Islands Project’s proximity to Asia-Pacific export markets

Source: GEV

The Tiwi Islands are among the most northerly locations in Australia, which is strategically important for shipping green hydrogen to emerging markets across Asia-Pacific, including Singapore, Indonesia, South Korea and Japan; see Exhibit 1.

Central to the project is the support from key stakeholders, in particular with the Tiwi Land Council, the Munupi Landowners and the Northern Territory Government. Importantly, unlike a mining or resources project on the Australian mainland, there are no native title agreements required. This implies there is a clear and established process for GEV to negotiate a Section 19 Lease/Licence for the proposed solar site. Management expect the lease to have a duration of at least 20 years.

The proposed solar farm site covers 1,800 hectares of an existing commercial plantation, which means from an environmental approval perspective, the site has already been cleared of native vegetation. The proposed site covers only 6% of the existing plantation area and 0.3% of the total land area of Melville Island, one of the two islands that makes up the Tiwi Islands. It therefore has a low environmental impact. At the hydrogen production site adjacent to the Port Melville, GEV will install small-scale (the size of a shipping container) desalination facilities that will produce the demineralised water for the electrolysers. In the longer term, local water catchment has potential to supplement the project with fresh water.

Exhibit 2: Tiwi hydrogen project overview

Source: GEV

Port Melville is an existing port owned by AusGroup’s NT Port and Marine, and has an existing quay with a draft sufficient for GEV’s proposed 430t pilot vessels. Compression of the hydrogen will occur prior to loading, which avoids the complex and capital-intensive process to ‘pack and unpack’ pure hydrogen gas that is required by other forms of hydrogen transportation such as liquified hydrogen (LH2) ammonia (NH3) or liquid organic hydrogen carriers (LOHC). We believe this is a very important consideration for the end user in the supply chain.

Furthermore, GEV has secured Northern Territory Government support and will go on to seek federal infrastructure funding and support given the new, sustainable industry and economic opportunities for the indigenous communities on the Tiwi Island and Territorian people in general. There are approximately 2,500 people living in the island and the project will employ up to around 50 people at full production. There will be a solid focus on skills training and jobs as part of the project and to support the local communities.

The scalable nature of the project allows GEV to develop a phased approach, initially installing c 0.5GW of solar generation, rising to the full 2.8GW as demand dictates. The phased approach allows GEV and its customers to benefit from cost and efficiency improvements in photovoltaics, electrolysers and shipping. The Tiwi Hydrogen Project is perfectly located to take advantage of GEV’s compressed hydrogen shipping solution. The project will have no need for costly hydrogen storage and minimal requirements for battery storage as the production and loading of hydrogen will ‘load follow’ the daily and seasonal solar fluctuations.

Exhibit 3: Tiwi Hydrogen Project supply chain

Source: GEV

The next milestones to success

This is early days for this exciting project and in order to drive success over the next few years many elements will need to be secured by GEV. These include:

Working closely with the Tiwi Land Council and Munupi Landowners to ensure that the Tiwi Hydrogen Project delivers benefits to the Tiwi people in the form of leasehold payments, employment, and supporting power and water infrastructure.

Installing solar monitoring stations around the solar site to establish ‘bankable’ solar generation data.

Continued discussions with the Tiwi Plantation Corporation, the Tiwi Land Council and the Munupi Landowners to progress and secure a Section 19 Lease/Licence for the proposed solar site.

Continued work with NT Port and Marine to integrate Port Melville’s operations and facilities into the Tiwi Hydrogen Project.

Commencing planning for a full feasibility study including further information on the development schedule, technical partners, the project scale, solar monitoring activities and the appointment of consultants. The project is expected to run parallel to GEV’s ABS full class approval programme for its 430t pilot scale ship.

The full financial closure for the initial phase of the project in 2023, with the first hydrogen exports in 2026, subject to all commercial and regulatory approvals and customer offtake agreements being in place.

Falling costs lend weight to the Tiwi project’s feasibility

Assessing the capital and operating costs of the Tiwi Hydrogen Project is extremely difficult currently as there are multiple moving parts that could affect almost every input. We do know, however, that as of 2020, the International Renewable Energy Agency (IRENA) estimated that the average total installed cost of solar photovoltaics (PV) in Australia was US$1,061/kW, which could imply a total cost of installation of the 2.8GW solar farm of c US$3bn; see Exhibit 4. In addition, there would be the cost of the 30km transmission line, electrolyser plant, desalination plant and compression equipment.

Exhibit 4: Detailed breakdown of utility-scale solar PV total installed costs by country, 2020

Source: IRENA Renewable Cost Database

A further complicating factor is the perpetually falling cost of solar PV farms. According to IRENA, the global total installed PV system cost for utility-scale systems had fallen c 82% between 2010 and 2020, from US$4,731/kW, to US$883/kW. Put another way, the cost halved between 2010, and 2014, and halved again by 2018. By 2020, the cost had fallen by another third, and is arguably on track to halve again from 2018 levels by 2022 following the trend of halving every four years. Exhibit 5 shows some of the elements of cost reduction. The chart is based on wind energy, but some of the principles of falling costs and increased efficiency apply equally to solar power generation.

The key point is that by the time the Tiwi Hydrogen Project commences construction, the cost of the solar PV farm could be much different (ie much lower) than it is today, underpinning the economics of the project.

Exhibit 5: Step changes for achieving green hydrogen competitiveness

Source: Irena. Note: ‘Today’ captures best and average conditions, with an average investment of US$ 770/kW, efficiency of 65% (LHV), an electricity price of US$ 53/MWh, 3,200 full load hours (onshore wind), a WACC of 10% (relatively high risk). Best conditions are US$130/kW, efficiency at 76% (LHV), electricity price at US$20/MWh, 4,200 full load hours (onshore wind), and WACC of 6% (similar to renewable electricity today).

Key announcements on the road to reality

GEV has just raised A$10m via a placement at A$0.125/share. In addition, it has raised a further A$2m via a Share Purchase Plan. The total of A$12m is sufficient to fully fund the Tiwi Green Hydrogen Project feasibility study, to fund ongoing engineering and approvals for the pilot compressed hydrogen ship, for administration costs and for general working capital.

We believe it is likely that GEV will make further announcements periodically relating to key milestones as the project is worked up. These are likely to include the results of studies, permissions and potentially agreements with third parties such as joint venture partners or offtake customers. The main potential announcements could be:

1.

Internal pre-feasibility study – H122

2.

Full feasibility study – H222

3.

Environmental Protection Agency (EPA) approval, and financial investment decision – H123

4.

Solar PV farm construction commencement – H124

5.

Installation of electrolysers – 2025

6.

Commence electricity and green hydrogen production – 2026.

Exhibit 6: Financial summary

A$m

2019

2020

2021

2022e

2023e

Year end 30 June

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

1.1

1.5

0.2

0.0

0.0

Profit Before Tax (reported)

 

 

(8.9)

(2.9)

(3.1)

(6.4)

(7.4)

Reported tax

0.0

0.0

0.0

0.0

0.0

Profit After Tax (reported)

(8.9)

(2.9)

(3.1)

(6.4)

(7.4)

Net income (reported)

(8.9)

(2.9)

(3.1)

(6.4)

(7.4)

Basic average number of shares outstanding (m)

339.2

393.5

417.3

500.1

566.0

EPS – reported (c)

(2.6)

(0.7)

(0.7)

(1.3)

(1.3)

BALANCE SHEET

Fixed Assets

 

 

6.3

6.3

5.8

5.4

5.0

Intangible Assets

6.2

6.2

5.8

5.4

5.0

Tangible Assets

0.0

0.1

0.0

0.0

0.0

Investments & other

0.0

0.0

0.0

0.0

0.0

Current Assets

 

 

2.4

3.2

6.7

12.8

11.2

Stocks

0.0

0.0

0.0

0.0

0.0

Debtors

0.0

0.1

0.1

0.1

0.1

Cash & cash equivalents

2.4

3.1

6.6

12.7

11.0

Other

0.0

0.0

0.0

0.0

0.0

Current Liabilities

 

 

(0.1)

(0.3)

(0.2)

(0.2)

(0.2)

Creditors

(0.1)

(0.2)

(0.2)

(0.2)

(0.2)

Tax and social security

0.0

0.0

0.0

0.0

0.0

Short term borrowings

0.0

0.0

0.0

0.0

0.0

Other

(0.0)

(0.1)

(0.0)

(0.0)

(0.0)

Long Term Liabilities

 

 

0.0

0.0

0.0

0.0

0.0

Long term borrowings

0.0

0.0

0.0

0.0

0.0

Other long term liabilities

0.0

0.0

0.0

0.0

0.0

Net Assets

 

 

8.6

9.2

12.3

18.0

15.9

Minority interests

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

8.6

9.2

12.3

18.0

15.9

CASH FLOW

Op Cash Flow before WC and tax

0.0

0.0

0.0

0.0

0.0

Receipts from the ATO (Covid-19 cash boost)

-

0.1

0.1

0.0

0.0

Payments to suppliers and employees

(2.9)

(2.9)

(2.3)

(2.5)

(2.5)

Research and development

(3.2)

(0.1)

(0.0)

(2.0)

(3.0)

Project development

(2.3)

(1.0)

(0.5)

(1.0)

(1.0)

Interest received

0.0

0.0

0.0

0.0

0.0

Interest paid for lease liabilities

-

(0.0)

(0.0)

(0.0)

(0.0)

Research and development tax concession rebate

1.0

1.4

0.2

0.0

0.0

Working capital

0.0

0.0

0.0

0.0

0.0

Exceptional & other

0.0

0.0

0.0

0.0

0.0

Tax

0.0

0.0

0.0

0.0

0.0

Net operating cash flow

 

 

(7.4)

(2.5)

(2.6)

(5.5)

(6.5)

Capex

0.0

0.0

0.0

0.0

0.0

Acquisitions/disposals

0.0

0.0

0.0

0.0

0.0

Net interest

0.0

0.0

0.0

0.0

0.0

Equity financing

4.8

3.5

6.3

12.0

5.0

Dividends

0.0

0.0

0.0

0.0

0.0

Other

(0.4)

(0.3)

(0.3)

(0.4)

(0.2)

Net Cash Flow

(3.0)

0.7

3.4

6.1

(1.7)

Opening net debt/(cash)

 

 

(5.4)

(2.4)

(3.1)

(6.6)

(12.7)

FX

0.0

0.0

0.0

0.0

0.0

Other non-cash movements

0.0

0.0

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(2.4)

(3.1)

(6.6)

(12.7)

(11.0)

Source: GEV and Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Global Energy Ventures and prepared and issued by Edison, in consideration of a fee payable by Global Energy Ventures. 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

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New York +1 646 653 7026

1185 Avenue of the Americas

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United States of America

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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 Global Energy Ventures and prepared and issued by Edison, in consideration of a fee payable by Global Energy Ventures. 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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