Company profile - Brighter Actiste feature image - 16092019 - JPG

Waiting on the CE mark

Brighter 13 June 2019 Update
Download PDF

Brighter

Waiting on the CE mark

Financial update

Pharma & biotech

13 June 2019

Price

SEK10.16

Market cap

SEK807m

US$0.10/SEK

Net debt (SEKm) at 31 March 2019 plus recent equity raises (not including the Winance raise)

21.5

Shares in issue

79.4m

Free float

90.6%

Code

BRIG

Primary exchange

Nasdaq First North

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

7.1

4.7

38.3

Rel (local)

6.0

1.1

32.8

52-week high/low

SEK14.91

SEK7.1

Business description

Brighter is a Swedish healthtech company focused on the development and commercialisation of self-monitoring and self-treatment health solutions for diabetes. Its lead product, Actiste, combines three critical components of daily diabetes management including a blood glucose meter, a lancet and an injection apparatus into one device with mobile connectivity to Brighter’s cloud-based service called the Benefit Loop.

Next events

CE mark decision on Actiste

H119

Analysts

Maxim Jacobs

+1 646 653 7027

Nathaniel Calloway

+1 646 653 7036

Brighter is a research client of Edison Investment Research Limited

Back in December, Brighter announced that all the technical documentation had been submitted to the designated notified body for final approval of a CE mark for the Actiste device. We expect a decision around the end of H119. Initial commercialisation is expected to focus on Gulf Cooperation Council (GCC) countries, especially the United Arab Emirates (UAE). In the interim, management has been working on additional capital injections, including SEK17.5m in Q1 and an additional SEK19.6m after the end of the quarter.

Year end

Revenue (SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/17

1.4

(22.8)

(0.40)

0.0

N/A

N/A

12/18

1.1

(48.8)

(0.74)

0.0

N/A

N/A

12/19e

2.5

(63.5)

(0.78)

0.0

N/A

N/A

12/20e

24.5

(83.0)

(1.01)

0.0

N/A

N/A

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

Initial target market is the GCC

Based on International Diabetes Federation (IDF) calculations, the prevalence of adults (aged 20–79 years) with type 2 diabetes (T2D) in the countries of the GCC ranged from 9.9% to 17.6% in 2015. Also, there are a disproportionate number of disease-related complications in the region with an estimated 40–70% of worldwide disease-related foot amputations occurring in GCC countries. Beyond the GCC, Brighter plans to focus on South-East Asia (SEA) as well as Nordic countries.

Diabetes continues to be a significant problem

In 2017, costs attributed to diagnosed diabetes and associated complications, such as cardiovascular disease and nephropathy, totalled $327bn in the US according to the American Diabetes Association. Patient opinions of treatment burden are heavily correlated with adherence to self-care. Negligent self-management and monitoring significantly contributes to costs of healthcare resources as well as indirect costs related to lost productivity.

The Actiste solution

Brighter’s Actiste integrates three essential steps for daily diabetes management into one device: a blood glucose meter, a lancet and an insulin injection apparatus. By lessening the number of treatment steps by 67%, in comparison to traditional self-blood glucose meters, Brighter’s goal is to promote patient adherence and concordance to daily insulin-dependent diabetes management in an effort to reduce complications associated with poor self-care.

Valuation: SEK1,099m or SEK13.85 per basic share

We have adjusted our valuation from SEK1,065m or SEK14.28 per basic share to SEK1,099m or SEK13.85 per share. The total valuation increased primarily due to rolling forward our NPVs, as well as an increase in net cash attributed to the recent capital raises. The per share value fell due to a higher number of shares.

Getting ready to launch

The upcoming CE marking decision on the Actiste device is a key milestone for Brighter. In December 2018, the company announced that all the technical documentation had been submitted to the designated notified body for final approval. We expect a decision by the end of H119. As a reminder, through the Actiste device, measurement of glucose levels, injection of insulin and automatic logging and timing of all activity is done with the same unit. The company estimates that with Actiste the number of steps for daily treatment and measurement are reduced by up to 67%. The Actiste device is delivered as part of a subscription-based service that includes different levels of data sharing, continuous replenishment of everyday supplies directly to the home and digital services designed to facilitate, improve and streamline the treatment.

Brighter’s cloud-based platform called the Benefit Loop and associated companion applications for IOS and Android are already CE-marked. Together, the Benefit Loop and its applications collect, manage and analyse data for the purpose of sharing critical treatment information with friends, relatives, caregivers and healthcare providers to improve self-management outcomes.

The initial focus will be the GCC region, which is a substantial opportunity for Brighter’s Actiste. In 2015, the estimated prevalence of adults (aged 20–79 years) with T2D in the countries of the GCC, which includes Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and United Arab Emirates, ranged from 9.9% to 17.6% (Exhibit 1). Increased disease prevalence in these countries has been fuelled by rapid economic development, increased urbanisation and transition to a sedentary lifestyle. Notably, T2D self-management is considerably poor with a disproportionate number of disease-related complications in the region, with an estimated 40–70% of worldwide disease-related foot amputations occurring in GCC countries. The offering of diabetes management as a service can support diabetes self-management education (DSME) and encourage good practices of glycaemic control throughout the region to potentially have a positive impact on health outcomes.

Exhibit 1: Adults with diabetes aged 20–79 in countries of the GCC

Source: IDF Diabetes Atlas, Seventh Edition

An additional focus on South-East Asia

In addition to the GCC, the company intends to focus on South-East Asia, particularly Thailand and Indonesia. According to the 2017 IDF Diabetes Atlas, an estimated 9.6% of the SEA population (on an age-adjusted basis) is living with the disease, while 45.8% of those have not been diagnosed and are at risk for developing complications related to hyperglycaemia. The rising trend in diabetes prevalence in the SEA region is associated with genetic and acquired risk factors that heighten predisposition to diabetes and other metabolic disorders including a low threshold for conventional risk factors (ie age and BMI), environmental factors such as ongoing urbanisation and modernisation, rural to urban migration, as well as inadequate healthcare facilities and low awareness about the disease.1 High levels of tobacco use, increasing alcohol consumption especially among the middle class, and exposure to high fat diets, carbohydrates (eg rice), and readily available fast foods are compounded by low levels of activity, which trigger gene-environmental interactions and enhance predisposition to T2D.2

  Ramachandran, A., Snehalatha, C., & Ma, R. C. (2014). Diabetes in South-East Asia: An update. Diabetes Research and Clinical Practice, 103(2), 231-237.

  Ramachandran, A. (2012). Trends in prevalence of diabetes in Asian countries. World Journal of Diabetes, 3(6), 110.

Despite significant disease burden, the region lacks structured care management. Delayed diagnosis, poor glycaemic and hypertension control as well as inadequate medical facilities contribute to the development of disease-related complications. Approximately 55% of those with the disease in this region die before the age of 60.3 According to one study conducted in SEA, 22% and 36% of patients with T1D and T2D, respectively, have never had HbA1c diagnostic tests.4 Furthermore, optimal control is only achieved by a small portion of people with diabetes in the region, whereas an estimated 40% T2D patients perform self-monitoring of blood glucose (SMBG). Brighter is currently in negotiations with pharmaceutical manufacturers in SEA. Additionally, the company is engaged in discussions with a number of partners in Thailand regarding the right to sell Actiste as well as with additional sales partners in Indonesia.

  Ramachandran, A. (2012).

  Pathan, F., et al. (2018). Hypoglycaemia among Insulin-Treated Patients with Diabetes: Southeast Asia Cohort of IO HAT Study. Journal of the ASEAN Federation of Endocrine Societies, 33(1), 28-36

The opportunity in Europe

Once the CE mark is obtained the company also plans to launch in select Nordic countries, primarily Sweden. According to the WHO, the prevalence of adults (aged 25 years and older) with diabetes in Europe is an estimated 10% (see Exhibit 2). Lifestyle factors including weight, diet and physical activity contribute to the epidemic in this region. An estimated one in five Europeans are obese while 25–70% are overweight.5 In one study, physical activity demonstrated a 13% relative reduction in risk of diabetes, whereas another study illustrated that 34% of Europeans reported being either never physically active or only rarely active. Surveys also suggest that citizens of Nordic countries and the Netherlands report the most physical activity.6 Interestingly, diabetes prevalence is reportedly lower in select Nordic countries, specifically Sweden Denmark and Norway.7 There is considerable variation of diabetes prevalence across Europe; however, diabetes is among the leading causes of death in Europe whereas disease-related complications result in increased disability and significant healthcare costs. Management of diabetes and other chronic diseases (cardiovascular disease, cancer and respiratory disease), which contribute to 86% of deaths,8 is a major challenge across Europe. Efforts to identify and treat diabetes, associated complications early, increase availability of DSME, and monitor, evaluate and communicate outcomes nationally and regionally, has been made a priority for the EU.

  Tamayo, T., et al. (2014). Diabetes in Europe: An update. Diabetes Research and Clinical Practice, 103(2), 206-217.

  TNS Opinion & Social. Special Eurobarometer 334 (Wave 72.3): sport and physical activity. Brussles: European Commission; 2010.

  Andersson, T., et al. (2015). Diabetes Prevalence in Sweden at Present and Projections for Year 2050. Plos One, 10(11).

  OECD.

Exhibit 2: Persons reporting chronic diabetes in the EU and Nordic countries in 2014

Country

Population aged 15 and older (000s)

Share reporting chronic diabetes (%)

No. with diabetes (000s)

European Union

428,244

6.90

29,549

Sweden

8,149

4.80

391

Denmark

4,746

4.60

218

Norway

4,316

4.20

181

Source: Eurostat, Statista

Valuation

We have adjusted our valuation from SEK1,065m or SEK14.28 per basic share to SEK1,099m or SEK13.85 per share. The total valuation increased primarily due to rolling forward our NPVs, as well as an increase in net cash attributed to the recent capital raises. The per share value fell due to a higher number of shares due to capital raises, including SEK17.5m in Q1 and an additional SEK19.6m after the end of the quarter. We do not include the cash from the Winance raise (described below) in our valuation as, while the cash has been received, the shares associated with that cash have not been issued yet and will be based on a yet to be determined value.

Exhibit 3: Valuation of Brighter

Program

Market

Prob. of success

Launch year

Upper tier launch pricing
($ per month)

Lower tier launch pricing
($ per month)

Peak revenue ($m)

Valuation (SEKm)

Actiste

Nordic region

30%

2019

131.3

71.6

5.5

17.0

Gulf Cooperation Council countries

30%

2019

112.5

61.4

45.7

161.8

South East Asia

30%

2019

93.8

51.1

54.7

220.1

EU

25%

2019

133.9

73.0

243.1

641.1

US

20%

2021

143.1

78.0

193.1

408.8

Unallocated costs

(149.2)

Total EV

1,120.8

Net debt (at 31 March 2019 including April capital raises) (SEKm)

(21.5)

Total equity value (SEKm)

1,099.2

Total shares (m)

79.4

Value per basic share (SEK)

13.85

Source: Edison Investment Research

Financials

Brighter recently reported its Q119 results. Its reported post-tax loss for the quarter was SEK15.8m, which was an increase compared to Q118 when the loss was SEK11.0m, primarily due to costs associated with finalising the development of Actiste and the Benefit Loop. We have increased our R&D estimates by SEK22.4m for 2019 and by SEK22.2m for 2020. We have also increased our SG&A estimates by SEK7.2m for 2019 and SEK8.9m for 2020. Both changes were due to higher than expected spending rates in the first quarter.

At 31 March 2019, the company had SEK8.2m in cash and equivalents and SEK49.3m in debt. Following the quarter, the company raised SEK10m from a directed share issue to Knight Capital and another SEK9.6m from new board members. Additionally, in late May, the company announced a financing with Winance, a single family office that has offices in Dubai and New York. Per the agreement, Winance has agreed to invest €15m (approximately SEK160m) in three main transactions over a maximum of 36 months. The shares are not issued immediately but will be issued at a later date as a ‘repayment’ for the investment with the value of the shares determined by the lowest volume-weighted average price over the preceding five business days prior to the repayment request with a 10% discount. The first transaction was worth €3m (around SEK32m), with the funds provided on the signing date. The second transaction of €3m will be available after either full repayment, three months of the signing date or based on a cooling-off period formula. The remaining €9m (around SEK96m) will then be available in €500,000 increments with the length of time depending on the cooling-off period calculation. Additionally, as part of this transaction, warrants that could potentially bring in an additional €19.5m in financing will be issued with an exercise price of SEK10.56. Up to €7.5m will be issued to Winance (amounting to 50% warrant coverage for its investment), while existing shareholders would receive up to €12m worth of warrants.

Following the first tranche of investment from Winance, we now estimate SEK23m worth of additional capital requirements in 2019 (previously SEK55m) and the need for SEK60m in 2020 (note that these future financings are recorded as illustrative debt), although these requirements are more than covered by the Winance financings if fully realized.

Exhibit 4: Financial summary

SEK'000s

2017

2018

2019e

2020e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

 

1,377

1,052

2,462

24,532

Cost of Sales

0

0

(497)

(4,906)

Gross Profit

1,377

1,052

1,965

19,626

Sales, General and Administrative Expenses

(9,153)

(13,014)

(20,179)

(20,986)

EBITDA

 

 

 

(19,744)

(44,163)

(50,945)

(69,626)

Operating Profit (before amort. and except.)

 

(19,946)

(44,326)

(51,051)

(69,732)

Intangible Amortisation

0

0

0

0

Other

31,416

24,455

34,858

0

Exceptionals

0

0

0

0

Operating Profit

(19,946)

(44,326)

(51,051)

(69,732)

Net Interest

(2,897)

(4,476)

(12,495)

(13,245)

Other

(4,449)

(4,278)

0

0

Profit Before Tax (norm)

 

 

 

(22,843)

(48,802)

(63,546)

(82,977)

Profit Before Tax (FRS 3)

 

 

 

(27,292)

(53,080)

(63,546)

(82,977)

Tax

0

0

0

0

Deferred tax

(0)

(0)

(0)

(0)

Profit After Tax (norm)

(22,843)

(48,802)

(63,546)

(82,977)

Profit After Tax (FRS 3)

(27,292)

(53,080)

(63,546)

(82,977)

Average Number of Shares Outstanding (m)

68.2

71.7

81.2

82.0

EPS - normalised (ore)

 

 

 

(40.00)

(74.00)

(78.25)

(101.17)

EPS - FRS 3 (SEK)

 

 

 

(0.40)

(0.74)

(0.78)

(1.01)

Dividend per share (ore)

0.00

0.00

0.00

0.00

BALANCE SHEET

Fixed Assets

 

 

 

84,961

112,430

122,552

122,645

Intangible Assets

76,794

102,929

112,247

112,247

Tangible Assets

4,738

8,537

9,340

9,433

Other

3,429

965

965

965

Current Assets

 

 

 

26,393

58,186

66,377

16,138

Stocks

0

7,070

8,681

8,681

Debtors

15,931

34,308

29,218

4,033

Cash

10,017

9,031

27,126

2,072

Other

445

7,777

1,352

1,352

Current Liabilities

 

 

 

(23,965)

(63,698)

(63,315)

(63,315)

Creditors

(15,528)

(11,805)

(13,968)

(13,968)

Short term borrowings

(8,437)

(51,893)

(49,347)

(49,347)

Long Term Liabilities

 

 

 

0

0

(23,000)

(83,000)

Long term borrowings

0

0

(23,000)

(83,000)

Other long term liabilities

0

0

0

0

Net Assets

 

 

 

87,389

106,918

102,613

(7,532)

CASH FLOW

Operating Cash Flow

 

 

 

(24,582)

(68,249)

(46,840)

(57,792)

Net Interest

0

0

0

0

Tax

(99)

0

0

0

Capex

(34,852)

(29,986)

(27,172)

(27,262)

Acquisitions/disposals

0

0

0

0

Financing

7,913

34,655

64,195

0

Conversion of convertible debt instruments

43,065

43,065

0

0

Dividends

0

0

(87)

0

Other

(195)

(14,406)

0

0

Net Cash Flow

(8,750)

(34,921)

(9,904)

(85,054)

Opening net debt/(cash)

 

 

 

(1,733)

(1,580)

42,862

45,221

HP finance leases initiated

0

0

0

0

Exchange rate movements

0

0

0

0

Other

8597

-9521

7546

0

Closing net debt/(cash)

 

 

 

(1,580)

42,862

45,221

130,275

Source: Brighter reports, Edison Investment Research.

General disclaimer and copyright

This report has been commissioned by Brighter and prepared and issued by Edison, in consideration of a fee payable by Brighter. 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 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). 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

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. 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 Brighter and prepared and issued by Edison, in consideration of a fee payable by Brighter. 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 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). 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

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. 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

Share this with friends and colleagues