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Yield with growth

ADMIE Holding 11 December 2019 Update
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ADMIE Holding

Yield with growth

9M19 results

Utilities

11 December 2019

Price

€2.11

Market cap

€490m

Net cash (€m) at 30 September 2019

9.4

Shares in issue

232.0m

Free float

48.9%

Code

ADMIE

Primary exchange

ASE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

1.0

(3.3)

30.2

Rel (local)

2.2

(9.2)

5.8

52-week high/low

€2.19

€1.46

Business description

ADMIE Holding is a holding company that owns a 51% stake in IPTO, a Greek regulated utility. IPTO owns, manages and operates the Greek electricity transmission grid. The network includes 11,732km of high-voltage lines. The company plans c. €4.0bn in investments over 2020–29.

Next events

FY19 results

March 2020

Analyst

Dario Carradori

+44 (0)20 3077 5700

ADMIE Holding is a research client of Edison Investment Research Limited

ADMIE Holding reported 9M19 results, with net income up 12% y-o-y, and said that IPTO’s 2019 development capex plan is being implemented in a timely manner. We believe the stock continues to trade at an excessive discount to peers and to the implied regulated asset base (RAB) value. Such a discount would only be justified if allowed regulatory returns were significantly below the actual cost of capital, which we believe is not the case. Our valuation of ADMIE Holding is broadly unchanged at €2.89/share and is roughly in line with the RAB value implied by IPTO.

Year end

EBIT*
(€m)

Net income*
(€m)

EPS*
(c)

DPS**
(c)

P/E
(x)

Yield
(%)

12/17

25.1

25.1

10.84

0.00

19.6

N/A

12/18

36.0

36.1

15.57

5.96

13.7

2.8

12/19e

39.6

39.9

17.18

8.83

12.4

4.1

12/20e

39.4

39.6

17.09

8.18

12.5

3.8

Note: *EBIT, net income and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Related to fiscal year (not cash dividend).

9M results show earnings advance

ADMIE Holding’s 9M19 results showed net income up 12% y-o-y to €33m. IPTO’s EBITDA of €140m was broadly flat y-o-y. Adjusting EBITDA for exceptional items in both 9M18 and 9M19 (mainly the release of provisions and reversal of impairments), we calculate that adjusted EBITDA was up 8% y-o-y to €134.7m. PBT of €88m was up 5% y-o-y or 17% on an adjusted basis. Our adjusted net income forecasts for FY19–21 are down 1–5%, mostly reflecting revised capex assumptions.

Large capex plan drives earnings growth

IPTO has made progress on its development plans and at the 9M results said that the 2019 investment programme is on track. We believe IPTO’s underleveraged balance sheet (1.2x net debt/EBITDA at FY19e, the lowest among its peer group of EU regulated utilities) sustains its c. €4.0bn capex plan (2020–29). We estimate a RAB CAGR of 14% in 2019–23e, with an adjusted EBITDA and net income CAGR of 12% and 7%, respectively, for IPTO. We estimate a 7% EPS CAGR for ADMIE Holding (FY19–23) and a 4% DPS CAGR (FY19–24).

Valuation: Excessive discount persists

We believe the stock continues to trade at an excessive discount to peers and to the implied RAB value. Despite the positive share price performance, we estimate that ADMIE Holding is trading at a 30% discount to FY20 equity RAB. Such a discount would only be justified if allowed regulatory returns were significantly below the actual cost of capital for the company. However, we do not believe this is the case for IPTO and the pre-tax real return on assets of 6.9% in FY19e, reducing to 6.3% in FY21e, looks increasingly supportive considering the recent reduction in Greek country risk premium and the announced (but not yet approved) reduction in corporate tax rates. As a benchmark, Italy-regulated stocks Snam and Terna are trading at more than a 20% premium to equity RAB, despite Italian and Greek government bond yields now trading at similar levels. Our valuation of ADMIE Holding is broadly unchanged at €2.89/share and is roughly in line with the RAB value implied by IPTO.

9M results show earnings advance

ADMIE Holding’s nine-month results showed strong profit growth, in line with expectations. Overall, ADMIE Holding reported net income up 12% y-o-y to €33m, including equity consolidation of its 51% stake in IPTO. The key aspects of IPTO Group’s nine-month results included:

EBITDA of €140m, broadly flat y-o-y. Adjusting EBITDA for exceptional items in both 9M18 and 9M19 (mainly the release of provisions and reversal of impairments), we calculate that adjusted EBITDA was up 8% y-o-y to €134.7m. EBITDA growth was driven by €13m higher revenues (+7% y-o-y), roughly split 50/50 between an increase in ‘transmission system rent’ (ie revenue recognized by the regulator) and ‘other revenues’ (non-regulated revenues), with a high level of the latter that may not be sustained over time.

Profit before tax of €88m, up 5% y-o-y, thanks to an improvement in net financial expenses (driven by a reduction in the cost of debt and also by higher positive income, including one-off items such as the return of a significant part of cash in a Bank of Greece special account and the inflow of a lump sum repayment from the Polypotamos project). Adjusting for exceptional items, adjusted profit before tax was up 17% y-o-y to €80m.

Net debt of €89m was at a similar level to 9M18 (€84m) and H119 (€94m). Capex was €117m, up 4x y-o-y. We expect an acceleration in investment in Q4, which appears possible considering a similarly strong pick-up in Q418 with capex of more than €150m (this is driven by seasonality as the majority of the works are carried out during the summer and mostly invoiced in Q4).

ADMIE Holding says IPTO’s 2019 capex plan is on track

The Greek government and IPTO have launched large projects for the interconnection of the Greek islands, with the objectives of reducing costs for consumers, improving security of supply and environmental sustainability. In most cases, the Greek islands currently rely on expensive and polluting fuel oil-fired plants (often close to tourist areas). The extra costs of running these plants is shared among all Greek consumers (this component represents 4–12% of a retail consumer’s bill). The construction of interconnections should allow for the replacement of these plants (which would be put in cold reserve) with renewables and imports from the mainland, lowering both costs for the consumers and carbon emissions.

IPTO has made progress on its development plans and at the 9M results said that the 2019 investment programme is on track. In terms of key upcoming projects, the construction of the Crete-Peloponnese interconnection (€364m investment) has started and the company expects it to be completed in 2020. The first part of the upgrade of the Cyclades interconnection is expected to be completed in early 2020. Requests for tenders for the Sporades interconnection (€54m budget) are also in progress. The €995m Crete-Attica interconnection (developed by 100%-owned subsidiary ARIADNE) is making progress, with the tender process ongoing and construction contracts expected to be signed in Q120 (project completion expected by Q422/Q123). Finally, the €1.5bn project for the interconnection of the Dodecanese has been included in the 2020–29 development plan and is expected to be completed in the second half of the next decade.

Our capex assumption for FY19 is unchanged at €251m, having been reduced in our previous update note (from €391m), reflecting the extension in the tendering process and delayed approval by the Regulatory Authority for Energy, RAE). We have revised our capex estimates for FY20–23, to broadly align them to the 2020–29 10-year network development plan published by IPTO (published for consultation and not yet approved by the regulator). The main change is for FY20, for which we assume a significant year-on-year pick-up in capex, to €587m, although this estimate has been revised down from €731m previously. This year-on-year growth reflects the timing of the large growth projects planned by the company.

Exhibit 1: RAB growth 2018–21 (enterprise value)

Exhibit 2: RAB growth 2018–27 (enterprise value)

Source: Edison Investment Research

Source: Edison Investment Research

Exhibit 1: RAB growth 2018–21 (enterprise value)

Source: Edison Investment Research

Exhibit 2: RAB growth 2018–27 (enterprise value)

Source: Edison Investment Research

Financials and forecasts changes

We believe IPTO’s underleveraged balance sheet (1.2x adjusted net debt/EBITDA at the end of FY19e, the lowest among European regulated utilities) sustains its c €4.0bn investment plan in the 10-year development plan period 2020–29.

Exhibit 3: FY1 net debt/EBITDA for listed European regulated utilities

Source: Refinitiv, Edison Investment Research

We estimate the development capex will result in a RAB CAGR of 14% in 2019–23e. We forecast FY19–23 adjusted EBITDA and net income CAGR of 12% and 7%, respectively, for IPTO, based on the assumption that the capex plan is implemented as planned. We estimate a 7% EPS CAGR for ADMIE Holding (FY19–23) and a 4% DPS CAGR (FY19–24).

Following the nine-month results, we have made some changes to our forecasts (adjusted net income in FY19–21 down 1–5%), incorporating higher D&A offset by higher financial income in FY19e and the impact of lower capex estimates for FY20–21.

Exhibit 4: Forecasts changes

ADMIE Holding

IPTO

€000s

2019e

2020e

2021e

€m

2019e

2020e

2021e

Adjusted EBIT

New

39,609

39,397

40,065

Revenues

New

258.8

267.7

271.0

Old

40,120

40,707

42,032

Old

258.8

271.8

279.0

% change

-1%

-3%

-5%

% change

0%

-2%

-3%

Adjusted net income

New

39,859

39,647

40,315

Adjusted EBITDA

New

180.8

180.7

183.0

Old

40,370

40,957

42,282

Old

180.8

184.8

191.0

% change

-1%

-3%

-5%

% change

0%

-2%

-4%

DPS (€)

New

0.088

0.082

0.080

Adjusted net income

New

78.3

77.9

79.3

Old

0.088

0.083

0.083

Old

79.3

80.5

83.1

% change

0%

-1%

-3%

% change

-1%

-3%

-5%

Adjusted net debt

New

216.5

557.9

849.1

Old

222.5

703.3

1004.6

% change

-3%

-21%

-15%

Source: Edison Investment Research

Our net income forecasts exclude any non-recurring impact from the periodic assessment of non-current assets, which is scheduled for Q419. While this may result in a one-off impact on the bottom line (if any), with no implication for future years’ earnings, there may be an impact on ADMIE Holding’s dividend, which currently yields c 4% in FY19. Finally, while we assume a gradual reduction in corporate tax rates, our forecasts do not fully incorporate the announced (but not yet approved) reduction in corporate tax rates (to 24% in 2020 from 28% currently), which represents upside potential to our forecasts. The government has also proposed a decrease in dividend tax from 10% to 5%.

Exhibit 5: IPTO key financials

€m

2017

2018

2019e

2020e

2021e

2022e

2023e

Revenues

256.5

249.2

258.8

267.7

271.0

258.3

376.2

% y-o-y change

-3%

4%

3%

1%

-5%

46%

Reported EBITDA

172.0

182.7

182.7

180.7

183.0

174.9

286.0

% y-o-y change

6%

0%

-1%

1%

-4%

63%

Adj. EBITDA

177.5

168.0

180.8

180.7

183.0

174.9

286.0

% y-o-y change

-5%

8%

0%

1%

-4%

63%

Reported EBIT

107.7

115.4

112.7

104.7

106.0

107.1

182.8

% y-o-y change

7%

-2%

-7%

1%

1%

71%

Adjusted EBIT

113.2

100.7

110.8

104.7

106.0

107.1

182.8

% y-o-y change

-11%

10%

-6%

1%

1%

71%

Reported net income

61.7

85.9

79.7

77.9

79.3

84.8

102.0

% y-o-y change

39%

-7%

-2%

2%

7%

20%

Adjusted net income

65.9

73.8

78.3

77.9

79.3

84.8

102.0

% y-o-y change

12%

6%

-1%

2%

7%

20%

Adjusted net debt

286

171

216

558

849

1,168

1,263

Capex (gross of subsidies) incl. ARIADNE

70

183

251

587

436

480

263

Source: Company data, Edison Investment Research

Valuation: Further upside despite share price pick-up

Our RAB-based valuation of ADMIE Holding is broadly unchanged at €2.89/share (from €2.87/share) and is broadly in line with the equity RAB implied by IPTO. Although we acknowledge the limited liquidity of the stock, higher country risk premium vs other European countries, control by the Greek government and the fact that the regulation of IPTO has a shorter track record than in other European countries, we believe the stock continues to trade at an excessive discount to peers and to the implied RAB value.

Exhibit 6: Regulated companies – peer comparison

Company

Country

Market cap (€m)

P/E (x)

EV/EBITDA (x)

Dividend yield (%)

FY0–FY2 EBITDA CAGR

FY0–FY2 EPS CAGR

FY0

FY1

FY2

FY0

FY1

FY2

FY0

FY1

FY2

Terna Rete Elettrica Nazionale

Italy

11,333

17.0

16.0

15.3

11.8

11.2

10.9

4.2

4.4

4.8

4.2%

3.8%

Snam

Italy

14,870

17.0

14.5

13.6

12.5

12.2

12.0

5.2

5.5

5.8

1.8%

4.3%

Italgas

Italy

4,452

22.4

14.0

13.3

9.8

9.6

8.9

4.3

4.5

4.8

5.0%

5.1%

Enagas

Spain

5,465

16.6

12.2

12.5

9.7

9.5

9.5

6.5

7.0

7.4

0.8%

1.3%

Red Electrica Corporacion

Spain

9,589

19.0

13.5

13.3

9.2

8.9

8.8

5.6

6.0

5.8

2.2%

-2.0%

National Grid

UK

37,028

10.5

14.8

15.2

N/A

N/A

N/A

7.2

5.5

5.6

4.1%

1.2%

Elia System Operator

Belgium

5,151

7.6

16.7

19.2

14.9

11.1

10.6

1.5

2.3

2.3

18.4%

-4.6%

Ren Redes Energeticas Nacionais

Portugal

1,829

7.5

16.0

15.1

8.9

9.2

9.4

4.5

6.2

6.2

-2.4%

1.3%

Severn Trent

UK

6,378

22.1

15.4

16.6

12.5

12.2

12.8

4.2

4.5

4.5

-1.2%

-12.5%

Pennon Group

UK

4,677

15.3

16.2

16.1

NA

12.3

12.4

4.4

4.7

4.9

2.7%

-1.9%

United Utilities Group

UK

7,013

9.6

15.5

15.4

12.8

12.2

13.7

4.8

4.8

4.7

-3.5%

-12.6%

Average

16.6

15.4

15.2

11.8

11.2

10.8

4.5

4.8

4.9

2.2%

1.2%

ADMIE Holding

Greece

494

13.7

12.4

12.5

7.2

7.0

8.9

2.8

4.1

3.8

3.7%

4.8%

Source: Refinitiv, Edison Investment Research. Note: Prices as at 9 December 2019.

Exhibit 7: RAB-based valuation for IPTO and ADMIE Holding

€m

IPTO RAB FY 2019 + work in progress

1,604

Value of financial outperformance/underperformance

(3)

- Net debt FY19

(216)

- Provisions FY19

(74)

+ Associates

0

- Minorities

0

Equity value IPTO

1,311

ADMIE Holding stake

51%

Value of ADMIE Holding's 51% stake in IPTO

669

ADMIE net cash FY19

6

DCF of ADMIE Holding corporate costs

(5)

Equity value ADMIE Holding

670

NOSH FY19 (thousands)

232

Equity value per share (€)

2.89

IPTO RAB FY 2019 + work in progress

Value of financial outperformance/underperformance

- Net debt FY19

- Provisions FY19

+ Associates

- Minorities

Equity value IPTO

ADMIE Holding stake

Value of ADMIE Holding's 51% stake in IPTO

ADMIE net cash FY19

DCF of ADMIE Holding corporate costs

Equity value ADMIE Holding

NOSH FY19 (thousands)

Equity value per share (€)

€m

1,604

(3)

(216)

(74)

0

0

1,311

51%

669

6

(5)

670

232

2.89

Source: Edison Investment Research.

Despite the positive share price performance year to date, we estimate that ADMIE Holding is trading at a 30% discount to equity RAB (FY20) and a 20% discount to EV RAB (these discounts are calculated on the basis of ADMIE Holding’s 51% stake in the RAB of IPTO, as shown below). Such a discount would only be justified if allowed regulatory returns were significantly below the actual cost of capital for the company. But the pre-tax real return on assets of 6.9% in FY19, reducing to 6.3% in FY21, looks increasingly supportive considering the recent reduction in Greek country risk premium (10-year Greek bond spreads vs German bonds have more than halved ytd) and the announced (but not yet approved) reduction in corporate tax rates (to 24% in 2020 from 28% currently).

Exhibit 8: Calculation of ADMIE Holding’s discount to equity/EV RAB

€m

2019e

2020e

2021e

EV RAB of IPTO + work in progress

1,604

2,008

2,298

- net debt

(216)

(558)

(849)

- provisions

(74)

(77)

(80)

Equity RAB of IPTO

1314

1373

1369

ADMIE Holding's stake in IPTO

51%

51%

51%

Value of ADMIE Holding's 51% stake in IPTO

670

700

698

ADMIE Holding adjustments (net cash position, DCF of corporate costs)

2

1

2

RAB-based equity value of ADMIE Holding

672

702

700

Market cap

494

494

494

Premium/(discount) to equity RAB

(26%)

(30%)

(29%)

Premium/(discount) to EV RAB

(22%)

(20%)

(18%)

Source: Edison Investment Research. Note: Prices as at 9 December 2019.

As a benchmark, Italy-regulated stocks Snam and Terna are trading at more than a 20% premium to equity RAB. The disconnection between the valuation of Italian and Greek regulated utilities is despite the convergence between Italian and Greek government bond yields, as shown in Exhibit 9 below.

Exhibit 9: Italy and Greece 10-year government bond yield

Source: Refinitiv

Key risks to our forecasts and valuation are any potential rise in interest rates and country risk premium, any regulatory changes (allowed returns in particular) and delays in implementing the capex plan.

Exhibit 10: Financial summary

Accounts: IFRS, year-end: December, €000s

 

 

2017

2018

2019e

2020e

2021e

2022e

2023e

INCOME STATEMENT

 

 

 

 

 

 

 

 

 

Total revenues

 

 

0

0

0

0

0

0

0

Cost of sales

 

 

0

0

0

0

0

0

0

Gross profit

 

 

0

0

0

0

0

0

0

SG&A (expenses)

 

 

(973)

(239)

(335)

(341)

(348)

(355)

(362)

Profit (loss) from JVs / associates (post tax)

 

 

24,024

42,353

40,641

39,746

40,424

43,268

52,003

Depreciation and amortisation

 

 

(2)

(4)

(6)

(8)

(10)

(12)

(14)

Reported EBIT

 

 

23,049

42,110

40,301

39,397

40,065

42,900

51,627

Finance income/(expense)

 

 

(8)

156

250

250

250

250

250

Reported PBT

 

 

23,041

42,265

40,551

39,647

40,315

43,150

51,877

Income tax expense (includes exceptionals)

 

 

3,778

4,256

0

0

0

0

0

Reported net income

 

 

26,819

46,521

40,551

39,647

40,315

43,150

51,877

Basic average number of shares, m

 

 

232

232

232

232

232

232

232

Basic EPS (c)

 

 

9.93

18.22

17.48

17.09

17.38

18.60

22.36

Adjusted EBITDA

 

 

25,149

35,969

39,615

39,405

40,075

42,913

51,641

Adjusted EBIT

 

 

25,147

35,964

39,609

39,397

40,065

42,900

51,627

Adjusted PBT

 

 

25,139

36,120

39,859

39,647

40,315

43,150

51,877

Adjusted EPS (c)

 

 

10.84

15.57

17.18

17.09

17.38

18.60

22.36

Adjusted diluted EPS (c)

 

 

10.84

15.57

17.18

17.09

17.38

18.60

22.36

DPS (c) (declared for fiscal year)

 

 

0.00

5.96

8.83

8.18

8.00

8.13

8.71

DPS (c) (cash payment for the year)

 

 

0.00

3.16

8.80

8.83

8.18

8.00

8.13

BALANCE SHEET

 

 

Property, plant and equipment

 

 

5

5

9

11

10

8

4

Intangible assets

 

 

9

7

7

7

7

7

7

Other non-current assets

 

 

520,134

550,439

569,189

588,614

609,165

632,221

662,590

Total non-current assets

 

 

520,148

550,451

569,204

588,632

609,182

632,236

662,601

Cash and equivalents

 

 

2,181

4,843

6,224

5,964

6,749

8,297

10,945

Inventories

 

 

0

0

0

0

0

0

0

Trade and other receivables

 

 

79

9,907

9,907

9,907

9,907

9,907

9,907

Other current assets

 

 

0

0

0

0

0

0

0

Total current assets

 

 

2,260

14,750

16,131

15,871

16,656

18,204

20,852

Non-current loans and borrowings

 

 

0

0

0

0

0

0

0

Other non-current liabilities

 

 

0

0

0

0

0

0

0

Total non-current liabilities

 

 

0

0

0

0

0

0

0

Trade and other payables

 

 

18

20

20

20

20

20

20

Current loans and borrowings

 

 

0

0

0

0

0

0

0

Other current liabilities

 

 

3,731

0

0

0

0

0

0

Total current liabilities

 

 

3,749

20

20

20

20

20

20

Equity attributable to company

 

 

518,659

565,181

585,316

604,483

625,818

650,420

683,432

Non-controlling interest

 

 

0

0

0

0

0

0

0

CASH FLOW STATEMENT

 

 

Profit before tax

 

 

23,041

42,265

40,551

39,647

40,315

43,150

51,877

Net finance expenses

 

 

19

(156)

(250)

(250)

(250)

(250)

(250)

Depreciation and amortisation

 

 

2

4

6

8

10

12

14

Other adjustments

 

 

(24,024)

(42,353)

(40,641)

(39,746)

(40,424)

(43,268)

(52,003)

Movements in working capital

 

 

(622)

(1,053)

0

0

0

0

0

Cash from operations (CFO)

 

 

(1,584)

(1,293)

(335)

(341)

(348)

(355)

(362)

Capex

 

 

(16)

(2)

(10)

(10)

(10)

(10)

(10)

Cash used in investing activities (CFIA)

 

 

(16)

(2)

(10)

(10)

(10)

(10)

(10)

Net proceeds from issue of shares

 

 

70

0

0

0

0

0

0

Dividends paid

 

 

0

(6,300)

(20,416)

(20,479)

(18,980)

(18,549)

(18,864)

Other financing activities

 

 

3,711

10,256

22,142

20,571

20,123

20,462

21,884

Cash from financing activities (CFF)

 

 

3,781

3,956

1,726

91

1,143

1,913

3,020

Increase/(decrease) in cash and equivalents

 

 

2,181

2,662

1,381

(260)

784

1,548

2,648

Cash and equivalents at end of period

 

 

2,181

4,843

6,224

5,964

6,749

8,297

10,945

Net (debt) cash

 

 

2,181

4,843

6,224

5,964

6,749

8,297

10,945

Movement in net (debt) cash over period

 

 

2,181

2,662

1,381

(260)

784

1,548

2,648

Source: Company accounts, Edison Investment Research


General disclaimer and copyright

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

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United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

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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

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