Information Services Corporation — A busy end to a record FY23

Industrials

Information Services Corporation

A busy end to a record FY23

FY23 results

Industrial support services

2 April 2024

Price	C$27.26
Market cap	C$491m
C$1.46/€
Net debt (C$m) at 31 December 2023 (excluding lease liabilities)		153.1

Shares in issue	18.0m
Free float	69.5%
Code	ISV

Primary exchange	Toronto Stock Exchange
Secondary exchange	N/A

Share price performance

%	1m	3m	12m
Abs	19.4	22.9	22.7
Rel (local)	16.0	16.1	12.1

52-week high/low

C$27.78

C$19.48

Business description

Information Services Corporation, headquartered in Canada, is a leading provider of registry and information management services for public data and records. It focuses on the development and management of secure government registries with significant experience in integrating and transforming government information into solutions for the people and businesses of the Province of Saskatchewan.

Next events

Q124 results

May 2024

Analysts

Natalya Davies	+44 (0)20 3077 5700
Andy Murphy	+44 (0)20 3077 5700

industrials@edisongroup.com

Edison profile page

In FY23, Information Services Corporation (ISC) enjoyed year-on-year top-line and adjusted operating profit growth, augmented by consistent organic expansion of its Services division and incremental earnings from fee uplifts linked to the Master Service Agreement (MSA) extension. Management’s encouraging FY24 guidance reflects organic growth potential from the Services division, alongside a full-year impact of earnings accretion from fee adjustments. We have raised our valuation modestly from C$37/share to C$40/share, which implies 48% upside.

Year end	Revenue (C$m)	EBITDA (C$m)	PBT* (C$m)	EPS* (C$)	DPS (C$)	P/E (x)	Yield (%)
12/22	189.9	64.4	46.5	1.95	0.92	14.0	3.4
12/23	214.5	72.9	39.2	1.65	0.92	16.5	3.4
12/24e	242.0	85.5	46.5	1.89	0.92	14.4	3.4
12/25e	258.1	90.4	51.7	2.10	0.92	13.0	3.4

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

FY23 results highlight strengthening prospects

ISC reported FY23 revenue and adjusted EBITDA of C$215m and C$73m, representing year-on-year increases of 13%, in line with August’s updated guidance. Registry Operations benefited from incremental earnings from Saskatchewan Land Registry fee uplifts alongside a full-year revenue contribution from the Ontario Property Tax Assessment (OPTA) acquisition (C$16m), achieving EBITDA of C$59m (FY22: C$52m). The Services division enjoyed heightened customer acquisition, boosted by an influx of customers continuing to focus on due diligence in a high interest rate environment, with EBITDA increasing 11% to C$21m. Net income (normalised) declined 14% to C$29m, largely due to a rise in finance expenses from the net debt increase to C$153m (excluding leases) (FY22: C$32m), driven by the C$150m upfront payment for the MSA extension, combined with an increase in amortisation of 48% to C$18m.

Encouraging outlook

The company maintains its FY24 revenue and adjusted EBITDA guidance of C$240–250m (Edison: C$242m) and C$83–91m (Edison: C$86m), with our projections signifying year-on-year increases of 13% and 17%, respectively. This anticipated growth is driven by robust organic expansion and ongoing customer acquisition efforts in the Services division. Furthermore, Registry Operations should benefit from a full-year contribution of introduced annual CPI fee adjustments from the MSA extension, which should somewhat offset the expected plateau in transaction volumes. The company has also set an ambitious target to double revenue and adjusted EBITDA by 2028 organically and through strategic M&A.

Valuation: Substantial upside potential

Information Services Corporation is a research client of Edison Investment Research Limited

We have rolled forward our DCF to an FY24 basis, which now returns a value of C$40/share (versus C$37/share previously). The stock trades at 13.0x FY25e P/E, representing a material discount, not only to its own history but also to a selection of peers, despite its long-term predictable cash flows bolstered by the MSA extension.

FY23 results highlight robust, sustainable growth

ISC’s record FY23 results align with August’s updated guidance and highlight the sustained organic growth potential within the Services division, with growth further bolstered by incremental earnings derived from CPI fee adjustments associated with the MSA extension, alongside the full-year contribution from acquisitions completed in 2022. The company achieved FY23 revenue and adjusted EBITDA of C$214.5m and C$72.9m, representing year-on-year increases of 13.0% and 13.2%, respectively. Despite a substantial increase in amortisation from the extension to C$17.5m (FY22: C$11.8m), normalised EBIT stood at C$52.4m, an increase of 5.4%, yielding a margin of 24%. Year-end net debt (pre IFRS 16) increased from C$31.6m in FY22 to C$153.1m, attributable to the C$150m upfront payment for the MSA extension. A subsequent increase in net finance costs from C$3.2m to C$13.2m contributed to a 14.1% decrease in net income to C$29.4m, equating to a basic normalised EPS of C$1.65 (FY22: C$1.95).

Exhibit 1: FY23 results summary

C$m	FY20	FY21	FY22	FY23	% change FY23 vs FY22
Group revenue	136.7	169.4	189.9	214.5	13.0%
Gross profit	105.5	129.0	140.7	159.1	13.1%
Gross margin	77.1%	76.2%	74.1%	73.1%	-
Adjusted EBITDA	49.2	67.8	64.4	72.9	13.2%
Group EBITDA margin	36.0%	40.0%	33.9%	34.0%	-
EBIT	36.5	54.0	49.7	52.4	5.4%
EBIT margin	26.7%	31.9%	26.2%	24.4%	-
Profit before tax	34.4	51.4	46.5	39.2	(15.7%)
Net income	26.6	39.4	34.2	29.4	(14.1%)
Basic normalised EPS (C$)	1.52	2.25	1.95	1.65	(15.1%)
Net cash/(debt)	(51.2)	(9.9)	(40.4)	(162.9)	303.3%
Net cash/(debt) excluding lease liabilities	(42.4)	(0.9)	(31.6)	(153.1)	384.5%

Source: ISC. Note: EBIT, PBT, net income and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

The key divisional highlights of FY23 were:

■

Registry Operations: revenue and adjusted EBITDA increased 12.9% and 13.2% y-o-y to C$103.5m and C$58.9m, respectively, yielding an impressive margin of 57%, in line with the prior year. Growth was attributable to a full year’s contribution from the OPTA acquisition (made in 2022), generating revenue of C$15.5m (FY22: C$8.9m), alongside incremental revenue from CPI fee uplifts associated with the MSA extension and implemented in Q323. This more than offset a subdued Canadian property market from mortgage rate hikes and subsequent reduced Saskatchewan Land Registry transaction volume (5% reduction), notably in H123. Q423, in particular, saw a surge in Land Registry revenue, increasing by 42% to C$18.5m (29% of FY23 Land Registry revenue), benefiting significantly from the fee adjustments.

■

Services: revenue and adjusted EBITDA increased 10.2% and 11.1% y-o-y to C$101.7m and C$21.1m, respectively, presenting a margin of 20.7% (FY22: 20.5%). This was attributable to organic expansion with strong customer and transaction growth as ISC continues to implement technology that provides additional value-added product offerings. Regulatory Solutions enjoyed a surge in activity as ISC’s financial institution customers implemented stronger due diligence in a high interest rate environment, with its revenue rising 15.6% to C$76.2m. Recovery Solutions revenue was in line with the prior year at C$10.8m (FY22: C$10.9m), affected by a consecutive year of reduced used vehicle prices from COVID-19 pandemic peaks and subsequent decreased revenue per file in Asset Recovery. Corporate Solutions revenue decreased 3.4% to C$14.8m due to the anticipated decline in Ontario corporate filing transactions, which more than offset new customer acquisition.

■

Technology Solutions: the division experienced top-line growth of 58.5% y-o-y to C$9.3m with adjusted EBITDA of C$0.8m compared to a loss of C$1.2m in FY22, with a strong recovery witnessed in H223 from the recognition of revenue associated with the advancement of new contract delivery, as increases in procurement activity started to unravel. This more than offset the continued investment in people to deliver new and continuing implementation contracts.

Exhibit 2: ISC revenue and EBITDA by segment (FY22/23)

(C$m)	FY22	FY23	Year-on-year change
Revenue by segment
Registry Operations	91.7	103.5	12.9%
Services	92.3	101.7	10.2%
Technology Solutions	5.8	9.3	58.5%
Corporate & Other	0.0	0.0	26.3%
Group revenue	189.9	214.5	13.0%
Adjusted EBITDA by segment
Registry Operations	52.1	58.9	13.2%
Services	19.0	21.1	11.1%
Technology Solutions	(1.2)	0.8	N/A
Corporate & other	(5.4)	(6.5)	20.0%
Group adjusted EBITDA	64.4	72.9	13.2%
Adjusted EBITDA margin by segment
Registry Operations	56.8%	56.9%	-
Services	20.5%	20.7%	-
Technology Solutions	(21.1%)	8.9%	-
Group adjusted EBITDA margin	33.9%	34.0%	-

Source: ISC

ISC’s visible track record of strong positive operating cash flows continued into 2023, increasing 30.4% to C$56.8m, largely due to improved EBITDA and more favourable working capital movements (C$2.6m improvement). The large cash outflow from investing activities of C$154.9m (FY22: C$55.6m) was almost fully attributable to the C$150m upfront contract extension fee.

ISC maintains a strong balance sheet, despite the C$150m upfront payment for the MSA extension in July, with year-end net debt of C$153.1m (FY22: C$31.6m), implying a leverage ratio of 2.1x, well within the company’s target of 2.0–2.5x. The restated revolving credit facility (RCF) terms, with a subsequent aggregate of C$250m available, and additional flexibility through the C$100m accordion option, provides ISC with further debt flexibility for potential deals. The company also demonstrates a positive sustained net asset position with expected continued growth. Net assets in 2023 stood at C$168.8m, representing an 8.5% increase compared to 2022.

Outlook: Services division set to be a key organic driver

Management has reaffirmed FY24 revenue and adjusted EBITDA guidance of C$240–250m (Edison: C$242m) and C$83–91m (Edison: C$86m), with our projections signifying year-on-year increases of 13% and 17%, respectively. This anticipated growth is driven by robust organic expansion and ongoing customer acquisition efforts in the Services division. Furthermore, Registry Operations should benefit from a full-year contribution of introduced annual CPI fee adjustments from the MSA extension, which should somewhat offset the expected plateau in Land Registry transaction volumes.

The company has also set an ambitious target to double revenue and adjusted EBITDA over the next five years both organically and through execution of value accretive M&A opportunities, targeting one to two transactions per year. The majority of this anticipated organic growth should come from the Services division, which has seen revenue growth of c 650% from 2016 to 2023, following its inception in 2015 through the acquisition of ESC Corporate Services. Strong organic growth should continue to persist in the foreseeable future, as ISC capitalises on the growing trend towards business process outsourcing, with continued investment in Registry Complete and Recovery Complete technology platforms, improving its revenue potential for the existing customer base. Continued transaction and customer growth should further bolster this division’s expansion.

Regarding the FY28 target, we note that growth from M&A is a lot more unpredictable and bears the risk that an acquired company, or its development once acquired, may not perform to management’s expectations. This risk could be exacerbated if the organisation acquires a company to expand into an unfamiliar market or region.

Forecasts reflect value accretive growth

We have upwardly adjusted our FY24 revenue forecasts, which incorporate a higher organic growth assumption of 13% y-o-y to C$114.9m in the Services division (7% growth previously), contributing to an anticipated group revenue growth of 12.8% to C$242.0m (C$230.2m previously). Our FY24 Registry Operations growth forecast of 12% to C$115.9m is solely based on a full year of incremental earnings from CPI fee uplifts (anticipated incremental revenue of c C$10m) supported modestly by forecasted Saskatchewan GDP growth forecasts of 1.3% with an assumed plateau in transactions. A combination of increased COGs and operating expenses from a higher base year than anticipated and the higher revenue growth assumption for the lower-margin Services division has decreased our adjusted EBITDA assumption by 4.8% to C$85.5m.

Our FY24 forecasts for normalised PBT and EPS of C$46.5m and C$1.89 imply year-on-year growth of 18.6% and 14.7%. With a visible track record of deleveraging, we expect net debt to decrease by 8.7% to C$139.8m, implying a leverage ratio of 1.6x, underpinned by top-line growth and increased profitability.

Exhibit 3: Forecast revisions

	2023	2024e			2025e			2026e
C$m		Old	New	% chg	Old	New	% chg	New
Revenue	214.5	230.2	242.0	5.1%	240.5	258.1	7.3%	272.0
Y-o-y % change	-	7.3%	12.8%	-	4.5%	6.6%	-	5.4%
Adjusted EBITDA	72.9	89.8	85.5	-4.8%	92.8	90.4	-2.6%	93.8
Y-o-y % change	-	23.3%	17.4%	-	3.4%	5.7%	-	3.8%
Normalised operating profit	52.4	63.7	59.5	-6.6%	66.0	63.6	-3.6%	66.4
Y-o-y % change	-	21.7%	13.6%	-	3.6%	7.0%	-	4.3%
Normalised PBT	39.2	50.9	46.5	-8.8%	54.2	51.7	-4.7%	55.7
Y-o-y % change	-	30.0%	18.6%	-	6.5%	11.2%	-	7.8%
EPS - (C$) Continuing, Basic	1.65	2.12	1.89	-10.7%	2.26	2.10	-6.8%	2.26
Y-o-y % change	-	28.4%	14.7%	-	6.3%	11.0%	-	7.6%
DPS (C$)	0.92	0.92	0.92	0.0%	0.92	0.92	0.0%	0.92
Y-o-y % change	-	0.0%	0.0%	-	0.0%	0.0%	-	0.0
Net cash/(debt) (pre IFRS 16)	(153.1)	(136.0)	(139.8)	2.8%	(121.3)	(125.3)	3.3%	(107.3)
Y-o-y % change	-	-11.2%	-8.7%	-	-10.8%	-10.4%	-	-14.4%

Source: ISC, Edison Investment Research

Our revised FY25 forecasts consist of revenue, PBT and EPS growth of 6.6%, 11.2% and 11.0% yo-y to C$258.1m, C$51.7m and C$2.10, respectively, largely driven by an assumption of continuing organic expansion of 11% within the Services division through increased customer acquisition and transactions. We expect growth from this division to continue into FY26e with an anticipated 7.6% growth in EPS to C$2.26, largely attributable to the Services division (9% organic growth assumption), incorporating only a modest 1% revenue growth assumption in Registry Operations.

We have maintained the current annual dividend of C$0.92 for the next three forecast years. However, since this implies cover of 2.1x and 2.3x in FY25e and FY26e, respectively, and with FY20–23 average cover of 1.8x, management has room to grow the dividend if it chooses.

Exhibit 4: Revenue and adjusted EBITDA, FY20–26e	Exhibit 5: EPS, DPS and dividend cover, FY20–26e

Source: ISC, Edison Investment Research	Source: ISC, Edison Investment Research

Exhibit 4: Revenue and adjusted EBITDA, FY20–26e

Source: ISC, Edison Investment Research

Exhibit 5: EPS, DPS and dividend cover, FY20–26e

Source: ISC, Edison Investment Research

Valuation: C$40/share implies substantial upside

In terms of valuation, our DCF model has been rolled forward to FY24 and now returns a value of C$40.4/share (previously C$37.2/share), indicating 48% upside potential to the current share price of C$27.3/share. The model incorporates the following assumptions:

■

After the explicit forecast period (first three-year forecast period, post FY26e), revenue growth of 3% for years four to 10 (driven by strong organic growth, incremental revenue and EBITDA from the MSA extension, with increased customer acquisition, particularly in the Services division) followed by a conservative 0% terminal growth rate.

■

A weighted average cost of capital (WACC) of 8.0%; this incorporates a cost of equity of 8.7% and a cost of debt (after tax) of 5.8% with a risk-free rate of 3.7%

The current share price of C$27.3 implies a WACC of over 10%, which, in our view, looks unreasonably high considering the company’s sustainable growth prospects and secured long-term cash flows with the MSA extension.

The sensitivity of our assumptions is reflected in the table below, indicating differing terminal value (TV) growth rates and WACCs. For example, raising our TV growth from 0% to 2% gives a value of C$49.5/share, representing 82% upside to the current share price.

Exhibit 6: Valuation sensitivity table (C$/share)

		Terminal growth rate (%)
		0.0%	1.0%	2.0%	3.0%
WACC (%)	10.0%	29.0	31.0	33.5	36.7
	9.0%	34.0	36.7	40.2	44.8
	8.0%	40.4	44.3	49.5	56.8
	7.0%	48.2	53.8	61.6	73.5
	6.0%	58.9	67.6	80.5	102.1

Source: Edison Investment Research

Substantial discount to own history and peers

We also note that our current P/E for FY25e of 13.0x represents a discount of 16% to the five-year average, despite secured cash flows up to 2053 and the large growth prospects within the Services division. We believe that this discount is not warranted and as macroeconomic conditions start to normalise with reductions in interest rates, investor sentiment may start to turn.

If we apply the 15.4x average forward P/E multiple to our FY25e EPS of C$2.10, we arrive at a value of C$32.3/share, implying 19% upside to the current share price.

Exhibit 7: ISC’s historical forward P/E ratios (x)

Source: LSEG, Edison Investment Research

ISC’s shares trade at discounts to peers of 13.3% and 37.9% on an FY25e P/E and EV/EBITDA basis, respectively, with a dividend yield of 3.4% at the upper end of its respective peer group values (average: 2.0%).

Exhibit 8: Financial summary

	C$m	2020	2021	2022	2023	2024e	2025e	2026e
Year end 31 December		IFRS	IFRS	IFRS	IFRS	IFRS	IFRS	IFRS
INCOME STATEMENT
Revenue		136.7	169.4	189.9	214.5	242.0	258.1	272.0
Cost of Sales		31.3	40.4	49.2	55.4	62.6	69.5	75.7
Gross Profit		105.5	129.0	140.7	159.1	179.4	188.6	196.3
EBITDA		49.2	67.8	64.4	72.9	85.5	90.4	93.8
Normalised operating profit		36.5	54.0	49.7	52.4	59.5	63.6	66.4
Amortisation of acquired intangibles		0.0	0.0	0.0	0.0	0.0	0.0	0.0
Exceptionals		(2.6)	(1.2)	(2.0)	(4.1)	(2.0)	(2.0)	(2.0)
Share-based payments		(3.0)	(6.0)	(1.5)	(0.3)	(0.3)	(0.3)	(0.3)
Impairment		0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other		(0.2)	(0.1)	0.0	0.0	0.0	0.0	0.0
Reported operating profit		30.7	46.8	46.2	48.0	57.2	61.4	64.1
Net Interest		(2.0)	(2.7)	(3.2)	(13.2)	(13.0)	(12.0)	(10.7)
Joint ventures & associates (post tax)		0.0	0.0	0.0	0.0	0.0	0.0	0.0
Exceptionals		0.0	0.0	0.0	0.0	0.0	0.0	0.0
Profit Before Tax (norm)		34.4	51.4	46.5	39.2	46.5	51.7	55.7
Profit Before Tax (reported)		28.6	44.1	43.0	34.8	44.2	49.4	53.4
Reported tax		(7.8)	(12.0)	(12.2)	(9.7)	(12.4)	(13.8)	(15.0)
Profit After Tax (norm)		26.6	39.4	34.2	29.4	34.1	37.8	40.7
Profit After Tax (reported)		20.8	32.1	30.8	25.0	31.8	35.6	38.5
Minority interests		0.0	0.0	0.0	0.0	0.0	0.0	0.0
Discontinued operations		0.7	(1.0)	(0.0)	0.2	0.2	0.2	0.2
Net income (normalised)		26.6	39.4	34.2	29.4	34.1	37.8	40.7
Net income (reported)		20.8	32.1	30.8	25.0	31.8	35.6	38.5
Average Number of Shares Outstanding (m)		18	18	18	18	18	18	18
EPS - basic normalised (C$)		1.52	2.25	1.95	1.65	1.89	2.10	2.26
EPS - normalised fully diluted (C$)		1.51	2.18	1.91	1.63	1.89	2.10	2.26
EPS - basic reported (C$)		1.19	1.83	1.75	1.41	1.77	1.98	2.14
DPS (C$)		0.80	0.83	0.92	0.92	0.92	0.92	0.92

Revenue growth (%)		2.8	23.9	12.1	13.0	12.8	6.6	5.4
Gross Margin (%)		77.1	76.2	74.1	74.2	74.1	73.1	72.2
EBITDA Margin (%)		36.0	40.0	33.9	34.0	35.3	35.0	34.5

BALANCE SHEET
Fixed Assets		186.0	176.1	226.2	488.0	464.4	440.2	415.3
Intangible Assets		70.0	61.1	89.0	351.8	328.5	304.6	280.0
Tangible Assets		2.2	1.4	1.8	2.1	1.8	1.5	1.2
Investments & other		113.9	113.6	135.4	134.1	134.1	134.1	134.1
Current Assets		55.4	56.4	57.2	48.3	52.0	53.3	54.4
Stocks		0.0	0.0	0.0	0.0	0.0	0.0	0.0
Debtors		17.0	12.8	14.9	15.7	19.4	20.6	21.8
Cash & cash equivalents		33.9	40.1	34.5	24.2	24.2	24.2	24.2
Other		4.4	3.6	7.8	8.5	8.5	8.5	8.5
Current Liabilities		27.3	36.9	39.6	63.5	70.9	73.8	76.3
Creditors		21.9	26.5	33.9	36.1	43.6	46.5	49.0
Tax and social security		1.2	7.0	0.7	1.0	1.0	1.0	1.0
Short term borrowings		0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other		4.2	3.4	5.0	26.4	26.3	26.3	26.3
Long Term Liabilities		93.0	57.9	88.2	304.0	261.3	216.3	167.8
Long term borrowings		76.3	41.0	66.0	177.3	164.0	149.5	131.5
Other long term liabilities		16.6	16.9	22.2	126.7	97.3	66.8	36.3
Net Assets		121.1	137.7	155.6	168.8	184.3	203.4	225.6
Minority interests		0.0	0.0	0.0	0.0	0.0	0.0	0.0
Shareholders' equity		121.1	137.7	155.6	168.8	184.3	203.4	225.6

CASH FLOW
Op Cash Flow before WC and tax		49.2	67.8	64.4	72.9	85.5	90.4	93.8
Working capital		3.5	14.2	(3.8)	(1.2)	3.7	1.6	1.4
Exceptional & other		(5.6)	(7.2)	(3.5)	(4.4)	(2.3)	(2.3)	(2.3)
Tax		(7.8)	(12.0)	(12.2)	(9.7)	(12.4)	(13.8)	(15.0)
Other		1.6	(1.6)	(1.3)	(0.7)	(0.6)	(0.6)	(0.6)
Net operating cash flow		41.0	61.2	43.5	56.8	74.0	75.3	77.4
Capex		(1.2)	(2.2)	(1.5)	(155.8)	(30.9)	(30.9)	(30.9)
Acquisitions/disposals		(70.2)	1.7	(54.7)	(0.2)	0.0	0.0	0.0
Net interest		(1.6)	(2.8)	(2.8)	(7.4)	(11.0)	(11.2)	(9.8)
Equity financing		(1.9)	(2.0)	(2.1)	(2.4)	(2.4)	(2.4)	(2.4)
Dividends		(14.0)	(14.0)	(16.2)	(16.4)	(16.4)	(16.4)	(16.4)
Other		0.0	(0.4)	3.4	5.0	0.0	0.0	0.0
Net Cash Flow		(47.9)	41.6	(30.3)	(120.4)	13.3	14.5	18.0
Opening net debt/(cash)		(5.7)	42.4	0.9	31.6	153.1	139.8	125.3
FX		(0.2)	(0.4)	0.2	0.0	0.0	0.0	0.0
Other non-cash movements		0.0	0.3	(0.6)	(1.1)	(0.1)	0.0	0.1
Closing net debt/(cash)		42.4	0.9	31.6	153.1	139.8	125.3	107.3

Source: Information Services Corporation accounts, Edison Investment Research

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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.

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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.

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.

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London │ New York │ Frankfurt

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London, WC1R 4PS

United Kingdom

General disclaimer and copyright

Australia

New Zealand

United Kingdom

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

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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