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Claranova — FY18 results confirm positive momentum

Claranova (PAR: CLA)

Last close As at 05/08/2026

EUR0.61

▲ −0.02 (−3.17%)

Market capitalisation

EUR35m

More on this equity

Research: TMT

Claranova — FY18 results confirm positive momentum

After a year of strong growth for PlanetArt and myDevices combined with further restructuring for Avanquest, Claranova reported EBITDA profitability on a group basis. With further growth expected in PlanetArt, acquisitions doubling the size of Avanquest, and operator contracts increasing their contribution to myDevices, we maintain our revenue and EBITDA margin growth forecasts for FY19 and FY20. PlanetArt’s launch in India and recent distribution agreements signed by myDevices both have scope to contribute materially to revenues in the longer term.

Written by

Katherine Thompson

Director

TMT

Claranova

FY18 results confirm positive momentum

FY18 results

Software & comp services

8 October 2018

Price

€0.96

Market cap

€376m

US$1.15:€1

Net cash (€m) at end FY18

37.5

Shares in issue

392.3m

Free float

91%

Code

CLA

Primary exchange

Euronext Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

18.7

11.3

84.9

Rel (local)

17.0

11.3

85.3

52-week high/low

€1.2

€0.4

Business description

Claranova consists of three businesses focused on mobile and internet technologies: PlanetArt (digital photo printing), Avanquest (consumer software) and myDevices (Internet of Things). It is headquartered in Paris with operations in Europe, the US and Canada.

Next events

Q1 revenue update

7 November

Analysts

Katherine Thompson

+44 (0)20 3077 5730

Claranova is a research client of Edison Investment Research Limited

After a year of strong growth for PlanetArt and myDevices combined with further restructuring for Avanquest, Claranova reported EBITDA profitability on a group basis. With further growth expected in PlanetArt, acquisitions doubling the size of Avanquest, and operator contracts increasing their contribution to myDevices, we maintain our revenue and EBITDA margin growth forecasts for FY19 and FY20. PlanetArt’s launch in India and recent distribution agreements signed by myDevices both have scope to contribute materially to revenues in the longer term.

Year end

Revenue (€m)

EBITDA (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

EV/EBITDA
(x)

06/17

130.2

(5.0)

(6.6)

(0.02)

0.0

N/A

N/A

06/18

161.5

3.9

3.1

0.01

0.0

151.9

93.7

06/19e

232.0

16.7

13.4

0.02

0.0

50.1

21.9

06/20e

271.9

28.2

25.0

0.04

0.0

26.2

12.9

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

Return to EBITDA profitability in FY18

Claranova had previously reported FY18 revenues of €161.6m (+24% y-o-y, +32% constant currency). FY18 EBITDA of €3.9m was ahead of our €3.4m forecast with all divisions slightly ahead; both PlanetArt and Avanquest reported positive EBITDA and myDevices reduced the loss compared to the prior year. Normalised operating profit of €3.4m was ahead of our €2.9m forecast, as a result of slightly lower costs in each division. After exceptional items totalling €2.4m and share-based payments of €7.1m the company reported operating profit of –€6.1m, compared to -€10.1m a year ago. Net cash of €37.5m at year-end was €5m higher than our forecast.

Maintaining forecasts; upside potential from India

We maintain our recently introduced forecasts for revenue and EBITDA in FY19 and FY20. PlanetArt recently launched the FreePrints service in India. We expect the business to fine-tune the service and customer acquisition process over the next quarter or so, with meaningful adoption of the service unlikely before FY20. However, considering the addressable market of more than 300m smartphone users and a relatively fragmented competitive environment, we see scope for India to add material revenues in the longer term.

Valuation: Upside based on growth outlook

Reflecting the different business models and minority interests for each division, we use a sum-of-the-parts approach to valuation. Based purely on peer group averages per division, we calculate a fair value of €0.95 per share. However, once multiples are adjusted to reflect our views on the growth and profitability of each division, this increases to €1.10 per share. Milestones that could provide upside to our forecasts include: successful adoption of FreePrints in India; growth of the acquired Adaware business; and recently signed distributors reselling the myDevices platform in the US and China.

Review of FY18 results

Claranova reported revenue growth of 24% y-o-y for FY18 (previously reported, along with divisional revenues, in August). EBITDA came in 15% ahead of our forecast, shifting from a loss of €5.0m in FY17 to positive €3.9m in FY18. This is the first time Claranova has reported positive EBITDA since FY12. The reported operating loss of €6.1m was €1.1m better than we had forecast. Share-based payments of €7.1m were €1.1m higher than we had forecast but this was offset by exceptional items that were €1.7m lower than expected and a €0.5m smaller operating loss. Net cash at year-end of €37.5m was €4.9m higher than we had forecast – the majority of the upside was from working capital and minority interest investments.

Exhibit 1: FY18 results highlights

Year end June (€m)

FY18e

FY18a

Diff (%)

% y-o-y

Revenues

161.5

161.5

0.0%

24.0%

EBITDA

3.4

3.9

14.7%

N/A

EBITDA margin (%)

2.1%

2.4%

14.7%

6.3%

Normalised operating profit

2.9

3.4

18.8%

N/A

Normalised operating profit margin (%)

1.8%

2.1%

0.3%

6.6%

Reported operating profit

-7.2

-6.1

-15.8%

-39.7%

Reported operating margin ()

-4.5%

-3.8%

0.7%

4.0%

Normalised PBT

2.1

3.1

51.1%

N/A

Reported PBT

-8.1

-6.4

-20.6%

58.4%

Normalised net income

2.2

2.6

18.4%

N/A

Reported net income

-7.9

-7.9

0.4%

-28.3%

Normalised basic EPS (€)

0.01

0.01

15.6%

N/A

Normalised diluted EPS (€)

0.01

0.01

9.2%

N/A

Reported basic EPS (€)

-0.02

-0.02

-2.0%

-31.6%

Net debt/(cash)

(32.6)

(37.5)

15.1%

134.9%

Source: Claranova, Edison Investment Research

Divisional performance

The divisions reported the following revenues and EBITDA for FY18:

Exhibit 2: Divisional results

Year end June (€m)

FY17a

FY18e

FY18a

Diff (%)

PlanetArt

Revenues

88.9

122.0

122.0

0.0%

y-o-y growth (%)

58%

37.2%

37.2%

EBITDA

(0.3)

6.2

6.4

2.9%

EBITDA margin (%)

-0.3%

5.1%

5.2%

Avanquest

Revenues

38.5

35.8

35.8

0.0%

y-o-y growth (%)

(3%)

(7.0%)

(7.0%)

EBITDA

0.0

0.5

0.7

40.0%

EBITDA margin (%)

0.0%

1.4%

2.0%

myDevices

Revenues

2.8

3.7

3.7

0.0%

y-o-y growth (%)

-24%

32.1%

32.1%

EBITDA

(4.7)

(3.3)

(3.1)

(4.8%)

EBITDA margin (%)

-167.9%

-89.2%

-8.8%

Source: Claranova, Edison Investment Research

On the back of strong revenue growth of 37% for FY18 (47% constant currency), PlanetArt returned to profitability, with positive EBITDA in both halves (H1 €3.7m, H2 €2.7m). This reflects the seasonality of the PlanetArt business (revenues €65.5m in H1 vs €50.1m in H2), as the web-to-print business sees a big uptick in Q2 (CQ4) each year. The customer base for FreePrints now stands at c 10m, up from c 5m at the end of December 2016. The recent introduction of the Photo Tiles product has proved popular and is being rolled out in more countries. With the US and UK business already very successful, PlanetArt is now focusing on ramping up sales in Continental Europe.

Avanquest revenues declined 7% in the year, partly as unprofitable lines were discontinued. As a result of restructuring, the division generated positive EBITDA of €0.5m, up from zero in FY17. We note the new Canadian businesses were integrated from the beginning of FY19, and are likely to double the size of the business while adding significantly to profitability.

myDevices saw revenue growth of 32% y-o-y, as it benefited from the contract with Sprint which contributed revenues of $2m/€1.7m. This helped reduce the EBITDA loss by €1.6m over the period.

PlanetArt launched in India

At the end of September, PlanetArt launched its FreePrints mobile app in India. The offer is for 25 free prints, with postage costing in the range INR45-99 (c €0.53-1.17). This compares to the European offering for 45 photos at a cost of up to €6, reflecting the lower cost of living and disposable income in India. To provide the service, Claranova has contracted with a courier company for all deliveries (at a fixed cost), rather than using India Post which has a poor reputation for delivery performance, as well as using a network of outsourced printing companies to reduce the distance that prints have to be shipped.

Once PlanetArt has established a customer base in the country, it plans to launch additional services such as Photobooks or customised products. With this launch PlanetArt is now active on three continents: Europe (UK, France, Germany, Ireland, Italy and Spain), North America (US) and Asia (India).

Outlook and changes to forecasts

At this point, we are not making any changes to our revenue or EBITDA forecasts (see our initiation note for further details Clear path to profitability). We have increased our forecasts for share-based payments in FY19 and slightly reduced our amortisation forecast in FY20; we have increased our forecast for interest income in both years. Our higher net cash forecasts reflect the higher than expected cash position at the end of FY18.

Exhibit 3: Changes to estimates

€m

FY19e

FY19e

%

%

FY20e

FY20e

%

%

Old

New

change

y-o-y

Old

New

change

y-o-y

Revenues

232.0

232.0

0.0%

43.7%

271.9

271.9

0.0%

17.2%

EBITDA

16.7

16.7

0.0%

328.3%

28.2

28.2

0.0%

69.1%

EBITDA margin (%)

7.2%

7.2%

0.0%

4.8%

10.4%

10.4%

0.0%

3.2%

Normalised operating profit

16.2

16.2

0.1%

376.2%

27.7

27.8

0.4%

71.9%

Normalised operating profit margin (%)

7.0%

7.0%

0.0%

4.9%

10.2%

10.2%

0.0%

3.3%

Reported operating profit

11.6

10.8

-6.9%

N/A

25.7

25.8

0.5%

139.9%

Reported operating margin (%)

5.0%

4.6%

-0.3%

8.4%

9.5%

9.5%

0.0%

4.9%

Normalised PBT

13.0

13.4

2.9%

331.9%

24.6

25.0

1.9%

86.9%

Reported PBT

8.4

8.0

-5.4%

N/A

22.6

23.0

2.1%

189.1%

Normalised net income

7.7

7.9

3.7%

202.1%

14.9

15.2

2.3%

91.7%

Reported net income

4.1

3.8

-8.6%

N/A

13.3

13.7

2.6%

263.7%

Normalised basic EPS (€)

0.02

0.02

3.7%

203.1%

0.04

0.04

2.3%

91.7%

Normalised diluted EPS (€)

0.02

0.02

-2.0%

203.0%

0.04

0.04

-3.3%

91.7%

Reported basic EPS (€)

0.01

0.01

-8.6%

N/A

0.03

0.03

2.6%

263.7%

Net debt/(cash)

(17.4)

(22.1)

26.6%

-41.2%

(39.6)

(45.1)

13.9%

104.4%

Source: Edison Investment Research

Potential sources of upside to our forecasts

We have not factored in material revenues from the Indian launch of FreePrints. As the launch only happened at the end of Q119, we would expect almost no impact on revenues in Q219. The company is currently fine-tuning the service and the methods of customer acquisition, and once it is confident that it can acquire customers at a reasonable cost, we expect it to increase investment in building out the customer base. We therefore do not expect a meaningful contribution to revenues in FY19. The business has a low level of fixed cost and this is already factored into our forecasts.

As the initial offering is for the basic photo printing service, we estimate that gaining one million customers at the minimum delivery charge of INR49/€0.53 would generate revenues of €0.53m (conservatively assuming only one delivery per annum). At a gross margin of 20% (very conservative assumption), this would add gross profit of €0.11m. The missing variable would then be customer acquisition cost which is still a work in progress. According to market researcher NewZoo, the number of smartphone users in India currently stands at 375m versus 252m in the US and 55m in the UK, clearly representing a large opportunity for PlanetArt. We would expect successful adoption of the photo printing service to lead to higher value products being offered and the average basket size and hence gross margin increasing.

We have also not changed our forecasts in relation to the recent distribution deals signed with Ingram Micro and Alibaba. As both companies will need to train their resellers, we are not likely to see evidence of adoption by end customers for some time. However, the scale of these distributors means that they could add materially to myDevices revenues in the longer term.

Valuation

As Claranova is a combination of the three distinct businesses and there are material minority investors in each, we use a sum-of-the-parts approach to fully capture the value of the group. This applies EV/Sales multiples to our FY19 forecasts (see bold multiples) and takes into account the minority interest stakes in each division. As we have not changed our revenue or EBITDA forecasts, our sum-of-the-parts valuation is substantially unchanged, bar from a slightly higher cash position.

Exhibit 4: Sum-of-the-parts valuation

FY19e

FY20e

EV based on FY19e sales multiple (€m)

MI

Value to shareholders (€m)

EV/Sales multiple (x)

2.2

1.9

521.2

81%

419.7

PlanetArt

2.3

1.9

359.2

7.1%

333.7

Avanquest

2.0

1.9

136.2

49.9%

68.2

myDevices

6.0

2.9

25.8

31.4%

17.7

EV/EBITDA multiple (implied)

PlanetArt

27.6

18.7

Avanquest

21.3

19.5

myDevices

(9.6)

12.6

€m

Upside/(downside)

Net cash at end FY18e

(37.5)

Equity value (€m)

430.3

Cost of acquisition

26.9

Per share value (€)

1.10

14%

Adjusted net cash

(10.6)

No of shares (m)

392.292

Source: Edison Investment Research

Exhibit 5: Financial summary

€'m

2015

2016

2017

2018

2019e

2020e

30-June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

93.1

117.4

130.2

161.5

232.0

271.9

EBITDA*

 

 

(11.4)

(11.2)

(5.0)

3.9

16.7

28.2

Normalised operating profit

 

 

(11.4)

(16.0)

(5.8)

3.4

16.2

27.8

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

15.6

(10.0)

0.4

(2.4)

0.0

0.0

Share-based payments

(0.0)

(0.1)

(4.8)

(7.1)

(5.4)

(2.0)

Reported operating profit

4.2

(26.1)

(10.1)

(6.1)

10.8

25.8

Net Interest

1.1

(1.7)

(0.9)

(0.3)

(2.8)

(2.8)

Joint ventures & associates (post tax)

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

Profit Before Tax (norm)

 

 

(10.3)

(17.7)

(6.6)

3.1

13.4

25.0

Profit Before Tax (reported)

 

 

5.3

(27.8)

(11.0)

(6.4)

8.0

23.0

Reported tax

(0.6)

(0.8)

(0.4)

(1.8)

(1.8)

(5.3)

Profit After Tax (norm)

(10.9)

(18.5)

(7.0)

2.4

10.3

19.3

Profit After Tax (reported)

4.7

(28.6)

(11.4)

(8.2)

6.1

17.7

Minority interests

(8.1)

0.0

0.3

0.2

(2.4)

(4.1)

Discontinued operations

(3.2)

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(18.9)

(18.5)

(6.7)

2.6

7.9

15.2

Net income (reported)

(6.5)

(28.6)

(11.0)

(7.9)

3.8

13.7

Basic average number of shares outstanding (m)

58

375

375

394

392

392

EPS - basic normalised (€)

 

 

(0.33)

(0.05)

(0.02)

0.01

0.02

0.04

EPS - diluted normalised (€)

 

 

(0.33)

(0.05)

(0.02)

0.01

0.02

0.04

EPS - basic reported (€)

 

 

(0.11)

(0.08)

(0.03)

(0.02)

0.01

0.03

Dividend (€)

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

26.1

10.9

24.0

43.7

17.2

EBITDA Margin (%)

-7.3

-7.9

-3.8

2.4

7.2

10.4

Normalised Operating Margin

-12.3

-13.7

-4.4

2.1

7.0

10.2

BALANCE SHEET

Fixed Assets

 

 

15.7

3.0

2.0

1.3

27.8

27.6

Intangible Assets

12.0

1.5

0.9

0.5

27.1

26.9

Tangible Assets

0.6

0.5

0.3

0.2

0.1

0.1

Investments & other

3.1

1.1

0.7

0.6

0.6

0.6

Current Assets

 

 

48.0

25.5

28.1

79.1

86.0

111.5

Stocks

5.9

5.0

3.7

3.7

6.4

7.4

Debtors

4.8

4.7

4.3

4.9

7.6

8.9

Cash & cash equivalents

30.5

11.1

17.1

65.7

67.3

90.3

Other

6.9

4.7

2.9

4.8

4.8

4.8

Current Liabilities

 

 

(32.0)

(25.3)

(28.1)

(37.2)

(43.1)

(48.5)

Creditors

(26.9)

(24.5)

(26.6)

(35.4)

(41.3)

(46.7)

Tax and social security

(0.3)

(0.0)

(0.3)

(1.7)

(1.7)

(1.7)

Short term borrowings

(4.8)

(0.7)

(1.1)

(0.1)

(0.1)

(0.1)

Other

0.0

0.0

0.0

0.0

0.0

0.0

Long Term Liabilities

 

 

(2.4)

(1.1)

(0.7)

(29.0)

(46.0)

(46.0)

Long term borrowings

(1.8)

(0.6)

0.0

(28.1)

(45.1)

(45.1)

Other long term liabilities

(0.7)

(0.5)

(0.7)

(0.9)

(0.9)

(0.9)

Net Assets

 

 

29.3

2.1

1.3

14.2

24.8

44.5

Minority interests

0.0

0.0

(0.1)

(1.8)

(4.1)

(8.2)

Shareholders' equity

 

 

29.3

2.1

1.2

12.5

20.7

36.3

CASH FLOW

Op Cash Flow before WC and tax

(6.8)

(9.2)

(5.0)

3.9

16.7

28.2

Working capital

0.4

2.5

6.8

7.9

0.5

3.0

Exceptional & other

(3.8)

(4.3)

(2.2)

(5.2)

0.0

0.0

Tax

0.3

(0.3)

(0.0)

(1.2)

(1.8)

(5.3)

Net operating cash flow

 

 

(9.8)

(11.3)

(0.4)

5.5

15.4

26.0

Capex

(4.4)

(0.9)

(0.2)

(0.1)

(0.2)

(0.2)

Acquisitions/disposals

10.8

(0.4)

3.6

14.2

(9.9)

0.0

Net interest

(0.9)

(0.1)

(0.0)

(0.3)

(2.8)

(2.8)

Equity financing

33.2

(5.1)

1.9

2.0

(1.0)

0.0

Dividends

0.0

2.0

0.0

0.0

0.0

0.0

Other

0.1

0.1

0.1

(1.1)

0.0

0.0

Net Cash Flow

29.0

(15.7)

5.0

20.1

1.6

23.0

Opening net debt/(cash)

 

 

18.0

(23.9)

(9.8)

(16.0)

(37.5)

(22.0)

FX

0.1

(0.1)

(0.6)

0.3

0.0

0.0

Other non-cash movements

12.6

1.7

1.8

1.1

(17.0)

0.0

Closing net debt/(cash)

 

 

(23.9)

(9.8)

(16.0)

(37.5)

(22.0)

(45.1)

Source: Claranova, Edison Investment Research. oNte: *Claranova definition.

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Claranova and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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. Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “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.

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

295 Madison Avenue, 18th Floor

10017, New York

US

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Claranova and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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. Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “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.

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

295 Madison Avenue, 18th Floor

10017, New York

US

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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