Tinexta — Guiding to mid double-digit profit growth to FY24

Tinexta (MIL: TNXT)

Currency in EUR

Last close As at 24/03/2023

EUR20.20

−0.40 (−1.94%)

Market capitalisation

EUR972m

Research: TMT

Tinexta — Guiding to mid double-digit profit growth to FY24

Tinexta’s FY21 headline results for revenue and adjusted EBITDA were in line with our expectations. The new three-year business plan is based on continued organic growth due to leadership in its reference markets (which are mainly experiencing structural growth), further domestic and international M&A and improved operating and cost efficiencies. Management is guiding for a mid-double-digit CAGR for adjusted EBITDA to FY24. Ahead of the publication of full financial results, our provisional new estimates reflect a modest increase to FY22 but a reduction in FY23. The latter reflects the new guidance, recent M&A (Evalue) and more conservative scheduling of the anticipated benefits from the Forvalue acquisition, completed in FY21. The recent share price weakness has seen near-term multiples return towards more attractive levels.

Russell Pointon

Written by

Russell Pointon

Director, Consumer

TMT

Tinexta

Guiding to mid double-digit profit growth to FY24

FY21 headline results

Professional services

7 March 2022

Price

€24.1

Market cap

€1,138m

Net debt (€m) at 31 December 2021

263.3

Shares in issue

47.2m

Free float

34%

Code

TNXT

Primary exchange

Euronext STAR Milan

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(20.7)

(34.5)

20.2

Rel (local)

(6.4)

(24.0)

23.0

52-week high/low

€43.26

€19.48

Business description

Tinexta has four divisions: Digital Trust, solutions to increase trust in digital transactions; Credit Information & Management, services to manage credit; Innovation & Marketing Services, services to help clients develop their businesses; and Cyber Security, services to help digital transformation.

Next events

FY21 results

17 March 2022

Q122 results

12 May 2022

H122 results

3 August 2022

Q322 results

10 November 2022

Analysts

Russell Pointon

+44 (0)20 3077 5700

Fiona Orford-Williams

+44 (0)20 3077 5739

Tinexta is a research client of Edison Investment Research Limited

Tinexta’s FY21 headline results for revenue and adjusted EBITDA were in line with our expectations. The new three-year business plan is based on continued organic growth due to leadership in its reference markets (which are mainly experiencing structural growth), further domestic and international M&A and improved operating and cost efficiencies. Management is guiding for a mid-double-digit CAGR for adjusted EBITDA to FY24. Ahead of the publication of full financial results, our provisional new estimates reflect a modest increase to FY22 but a reduction in FY23. The latter reflects the new guidance, recent M&A (Evalue) and more conservative scheduling of the anticipated benefits from the Forvalue acquisition, completed in FY21. The recent share price weakness has seen near-term multiples return towards more attractive levels.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/19

258.7

53.5

0.80

0.00

30.0

0.0

12/20

269.0

58.6

0.85

0.26

28.3

1.1

12/21e

**375.4

72.6

1.12

0.31

21.2

1.3

12/22e***

438.6

93.5

1.40

0.41

17.7

1.6

12/23e***

502.5

115.3

1.72

0.51

14.8

2.0

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Reported. ***To be adjusted on publication of FY21 results.

FY21: Successfully delivering on guidance

Tinexta achieved all of its planned operational and financial targets in FY21, with headline revenue of €375.4m (+39% y-o-y) and adjusted EBITDA of €98.7m (+22% y-o-y) both in line with management’s guidance and our expectations after adjusting for recent M&A.

Forecasts: Updating provisional FY23 estimates

Our new forecasts will be updated on the publication of full financial statements on 17 March 2022. Ahead of this, our provisional new estimates, using management’s new medium-term guidance and incorporating the recent (January 2022) acquisition of Evalue, indicate a 1% increase to FY22 adjusted EBITDA to c €120m and a c 5% reduction from prior estimates for FY23 to c €136m. The provisional FY24 estimate of €151m compares with management’s guided range (€146-154m).

Valuation: Multiples more attractive

Tinexta’s share price has been weak since its peak in September 2021, and more notably since the start of FY22. At €25.3 the share price remains at a significant discount to our last published DCF-based valuation of €41/share, which will be updated on the publication of the full FY21 financial statements. Using our provisional estimates for revenue and adjusted EBITDA, the EV/EBITDA multiples for FY22e and FY23e are 11.1x and 9.8x respectively, more in line with the low end of recent peak multiples (ie 10.3x in 2019) than the high end (ie 24.8x in FY21).

FY21 preliminary results: In line with expectations

Financially, FY21 was a strong year for Tinexta as it reported revenue of €375.4m and adjusted EBITDA of €98.7m, which represented year-on-year growth of c 39% and 22% respectively versus FY20, which was affected by the outbreak of the COVID-19 pandemic. It delivered on the guidance provided at the start of year for revenue of €370m and adjusted EBITDA of €96m.

The results were also above our prior expectations for revenue of €373.7m and adjusted EBITDA of €96.5m, however we had not included any contribution for the recent acquisitions of the majority stake in CertEurope (completed in November 2021), and Forvalue (completed in July 2021) where a limited contribution was expected for the latter. The acquisitions contributed revenue of €2.7m and €3.4m respectively (with no split of Forvalue’s revenue between the Credit Information & Management (CIM) or Innovation & Marketing Services (IMS) business units). Eliminating these ‘new’ revenues takes the comparable revenue to €369m. The acquisitions contributed adjusted EBITDA of €1.2m and €0.7m respectively, taking the comparable figure to €96.8m, which is more in line with our forecast.

Net profit of €40m for FY21 grew by c 6% and compares with our prior estimate of €42.8m. Management highlights that, excluding purchase price amortisation for business combinations completed in the year, net profit would have been about €45m.

At the end of the period, the net financial position was c €263m. This is higher than we anticipated as it excludes the previously announced €70m capital increase from Bregal Milestone for its acquisition of a minority stake in InfoCert (Digital Trust, DT). We had previously assumed the first tranche of €70m would be received in FY21, but it was paid in February 2022. The remaining €30m investment will be received by February 2023.

Free cash flow of €56.4m was down versus FY20’s €66.7m due to higher cash tax payments and a relatively lower positive contribution from working capital.

Beyond delivering good financial results, 2021 was a significant year given the acquisition and integration of the Cyber Security (CS) businesses and M&A across the other business units, which management expects will drive further growth domestically and internationally.

Business unit performance: Organic EBITDA growth for most

Please see Exhibit 3 for a comparison of the FY21 headline results delivered versus our expectations.

DT’s revenue grew by 13.3% to €131.3m. The organic revenue growth of 10.9% was ahead of our estimate of 10% and returns the business unit to the double-digit organic growth rate that was typical in the years prior to COVID-19. The full year result implies a growth rate of c 7.4% for Q421, and follows a strong performance through 9M21 of 12.3%, albeit comparing year-on-year growth rates for the individual quarters through the year is a little complicated due to the effects of COVID-19-related restrictions in different periods in both years. The-first time revenue contribution from the majority stake in CertEurope added €2.7m revenue. The strong growth in revenue fed through to a 17% increase in EBITDA to €36.4m, with an EBITDA margin of 27.7% versus FY20’s 26.8%, which was naturally hindered by economic weakness. The margin is back to its prior peak of 27.7% and management is guiding to further margin accretion (see below) in future years.

Whilst CS’s revenue of €73m was just shy of management’s guidance of €76m, adjusted EBITDA of €10.1m was in line, thus the margin of 13.8% was better than guided/expected. FY21 was the first year of ownership of CS so the focus was on coordinating the offerings and operations of the three acquired companies.

CIM’s performance was lower than guided, with a revenue decline of 2.4% y-o-y to €75.4m versus our expectations of 6% growth and a 7% decline in adjusted EBITDA to €22.0m. The decline is attributed to lower revenue from advisory services related to Central Guarantee Fund loans from the Italian government as demand partially normalised following the initial boost during the early stage of the COVID-19 pandemic.

IMS grew strongly by c 24% to €94.8m, including organic growth of 11.3% and the first-time contribution of Queryo. This robust growth was achieved despite a mixed economic picture, with increased demand for subsidised financing and digitisation services and an increase in funding available to clients from the EU. EBITDA increased by 13.8% to €41.4m.

To summarise, revenue was better than we expected for DT and IMS, but lower than expected for CS and CIM. Adjusted EBITDA was better than expected for DT, but lower than expected for CIM.

New business plan and financial guidance

As is now customary with the release of headline results for the prior year, management provided an update on its medium-term business plan and introduced its first guidance for FY22 and for the new three-year plan covering FY22–24. The key pillars for the medium-term plan are:

Further strengthening the company’s leadership in its markets through a combination of organic growth and targeted acquisitions, with a particular focus on vertical integration of its activities focused across digital trust, security, innovation and marketing.

Developing and increasing company integration to improve sales and generate cost efficiencies.

Investing in people to help them deliver results for customers and sharing best practice. Tinexta has outlined a sustainability roadmap that sets ambitious actions and specific ESG targets, which will be ever more integrated into the group’s overall strategy.

Continued financial prudency with a focus on operating cash generation and financial debt.

The financial guidance covers like-for-like growth and total growth, which includes the recent acquisitions of CertEurope and Forvalue, which both completed in FY21, and Evalue, which was announced in January 2022. The medium-term guidance for the business units and group is as follows:

Exhibit 1: FY22–24 guidance

Organic revenue CAGR

Total revenue CAGR

Organic adjusted EBITDA CAGR

Total adjusted EBITDA CAGR

Digital Trust

10%

14%

14%

18%

Cyber Security

19%

19%

31%

31%

Credit Information & Management

6%

N/A

5%

N/A

Innovation & Marketing Services

7%

11%

5%

10%

Group

High single-digit

Low double-digit

Low double-digit

Mid double-digit

Source: Tinexta

Management guides to total revenue growth of 18–20% in FY22 (ie a range of €443–450m), which includes like-for-like revenue growth of 10–12%. Guidance for adjusted EBITDA growth of 20–22% (ie a range of €118–120m), including like-for-like growth of 8–10%, implies some modest margin compression.

For FY22–24 management guides to a low double-digit CAGR for revenue, which equates to an FY24 revenue range of c €513–542m if we assume 11–13% growth pa, and a slightly higher mid double-digit CAGR for adjusted EBITDA (ie a range of €146–154m). Therefore, management anticipates a return to an improving margin at the group level in the medium term.

We note that the estimated growth rates for CIM and IMS exclude any contribution from Forvalue, but the group totals do include management’s estimate for Forvalue. In addition, management has not included any potential financial benefit in its guidance from the ‘Piano Nazionale di Ripresa e Resilenza’ (PNRR) or recovery and resilience plan. The PNRR is funding worth almost €200bn to Italy provided by the EU to help countries recover post the COVID-19 pandemic. The funding will be partially used to improve digitisation across the public and private sectors, where Italy lags most of the EU. Tinexta’s business units should be well placed to benefit from these money flows.

At the individual business unit level, the medium-term guidance suggests margin expansion for DT (operational leverage) and CS (as indicated by management on the acquisitions), offset by lower margins for CIM (the prior boost from Central Guarantee Fund revenue is reducing) and IMS (due to mix changes from the subsidiaries as lower-margin Co.Mark and Queryo are growing faster than Warrant).

DT’s estimated organic revenue CAGR of 10% is a notable increase on the prior three-year target (for FY21–23) of 7% made at the start of FY21, reflecting less relative uncertainty about the economic outlook. From a revenue perspective, management will continue to pursue M&A, which will be helped by the recent investment by Bregal, and will continue to strengthen its product offering. Improving operational and commercial effectiveness should support future margin growth.

CS’s estimated revenue CAGR of 19% is consistent with the prior three-year (FY21–23) target. In the second year of ownership the focus is strengthening its position in existing sectors and developing new services.

Management’s estimated three-year revenue CAGR for CIM of 6% is consistent with that for FY21–23, although management anticipates greater growth in the earlier years of the new plan.

In Exhibit 2 we show that management’s three-year guidance implies a reduction in the estimated contribution by Forvalue in FY24 versus our prior expectations (with the caveat that rounding on percentage growth rates used may affect the calculation). Our prior published forecasts included estimated Forvalue revenue of c €24m in FY23. Our calculation below suggests that Forvalue will only reach c €8m in FY24, versus the €3.4m reported in FY21, if we assume the low double-digit revenue guidance for group revenue (including acquisitions) equates to 13% pa. This implies the contribution from the acquisition will be much more backend-weighted to FY25 than originally anticipated.

Exhibit 2: Estimated FY24 revenue split

€m

FY21e

FY24e

Tinexta's estimated 3-year CAGR

Digital Trust (excl.CertEurope)

128.5

171.0

10%

Cyber Security

73.0

123.0

19%

Credit Information & Management (excl. Forvalue)

74.9

89.2

6%

Innovation & Marketing Services (excl. Forvalue)

91.9

112.6

7%

Other

0.9

(3.0)

N/A

Sub-total

369.2

492.8

10%

Forvalue

3.4

CertEurope

2.7

Total revenue

375.4

FY24 revenue:

11% CAGR

13% CAGR

Implied total revenue from guidance

513.2

541.5

Underlying revenue from guidance (see above)

492.8

492.8

Estimated CertEurope revenue from guidance

23.5

23.5

Estimated Evalue revenue from guidance

17.0

17.0

Implied Forvalue revenue

(20.1)

8.1

Source: Tinexta, Edison Investment Research

In Exhibit 3 we show our provisional revised estimates for revenue and EBITDA for FY22 and FY23 and new estimates for FY24, based on management’s new guidance, and we incorporate our estimates for the acquisition of Evalue, which was completed in January 2022 for an estimated total investment of c €31m. Evalue offers consulting services in Spain, similar to Tinexta’s existing domestic business, Co.Mark. With an estimated pro forma revenue contribution of c €10m, Evalue enhances FY22 revenue estimates by c 2%.

We will publish updated full forecasts after the release of FY21’s financial statements and caution that there may be minor changes given roundings in headline numbers.

Exhibit 3: Provisional forecast changes

New

Old

Change

Edison's

Tinexta's

€m

FY21

FY22e

FY23e

FY24e

FY21e

FY22e

FY23e

FY21

FY22e

FY23e

3-year CAGR

FY22–24 guidance

Revenue

375.4

439.5

497.4

553.9

373.7

438.6

502.5

0%

0%

(1%)

Growth y-o-y

17.1%

13.2%

11.4%

17.4%

14.6%

13.8%

Low double-digit

- DT

131.3

157.3

174.4

193.0

127.4

153.4

164.7

3%

3%

6%

Growth y-o-y

19.8%

10.9%

10.6%

20.4%

7.3%

13.7%

14%

- CS

73.0

88.3

105.1

123.0

76.0

93.3

110.5

(4%)

(5%)

(5%)

Growth y-o-y

21.0%

19.0%

17.0%

22.7%

18.5%

19.0%

19%

- CIM

75.4

81.4

87.6

93.2

81.9

89.5

102.7

(8%)

(9%)

(15%)

Growth y-o-y

8.0%

7.5%

6.4%

9.3%

14.8%

7.3%

* 6%

- IMS

94.8

114.4

132.7

148.3

88.4

102.4

124.6

7%

12%

7%

Growth y-o-y

20.7%

16.0%

11.7%

15.9%

21.6%

16.1%

* 11%

Other

0.9

(2.0)

(2.5)

(3.5)

N/M

N/M

Adjusted EBITDA

98.7

120.4

136.3

150.5

96.5

119.6

143.6

2%

1%

(5%)

Growth y-o-y

22.0%

13.2%

10.4%

24.0%

20.0%

15.1%

Mid double-digit

- DT

36.4

45.9

52.6

59.9

34.5

44.1

48.5

5%

4%

8%

Growth y-o-y

26.1%

14.6%

13.8%

27.7%

10.0%

18.0%

18%

- CS

10.1

13.1

18.4

22.6

10.0

14.9

21.0

1%

(12%)

(12%)

Growth y-o-y

30.0%

40.0%

23.0%

49.2%

40.7%

30.8%

31%

- CIM

22.0

23.3

24.9

26.5

24.2

26.8

31.3

(9%)

(13%)

(20%)

Growth y-o-y

6.1%

6.6%

6.4%

11.1%

16.5%

6.4%

* 5%

- IMS

41.1

50.6

53.5

55.1

39.8

46.3

55.8

3%

9%

(4%)

Growth y-o-y

23.1%

5.6%

3.0%

16.4%

20.6%

10.2%

* 10%

Other

(10.9)

(12.5)

(13.0)

(13.5)

(12.0)

(12.5)

(13.0)

N/M

N/M

Source: Tinexta, Edison Investment Research. Note: *Guidance is pre Forvalue.

We modestly expect to increase our revenue estimate for FY22 (+1% to c €440m) and reduce FY23 (by c 1% to c €497m). The changes reflect increased estimates for DT (higher organic growth) and IMS (the acquisition of Evalue offset by a lower estimated contribution by Forvalue), and declines for CS (lower FY21 base revenue) and CIM (lower FY21 base revenue and lower estimated contribution from Forvalue). Our new revenue estimate for FY24 of c €554m is modestly ahead of management’s implied €542m, if the CAGR is 13%.

Similarly, we modesty increase our adjusted EBITDA estimate for FY22 (by 1% to c €120m) and reduce our FY23 estimate by 5% to c €136m. Our new FY24 estimate of €151m compares with management’s indicated range of €146–154m.

By the end of FY22, management expects its adjusted net financial position to be c 2x and it will then begin to further deleverage to less than 1x by the end of FY24.

Valuation

The share price has been weak since peaking at c €44 in September 2021 and more notably since the start of 2022 when Tinexta was subject to press speculation in relation to M&A involving its CIM business unit (subsequently Tinexta denied any interest) and more recently with general market weakness.

Using our new provisional estimates and Tinexta’s pro forma net financial position of €193.3m (post the Bregal investment), Tinexta’s EV/EBITDA multiples for FY22 and FY23 are 11.1x and 9.8x respectively, which is more in line with the low end of recent peak multiples (10.3x in 2019) than the high end (24.8x in FY21).

Our last updated DCF valuation from November 2021 was €41 per share. The above reduction to estimates for FY23 is likely to have negatively affected the valuation but will be somewhat compensated for by the time value of money since then. This will be updated on the publication of full FY21 results.

Exhibit 4: Financial summary

€m

2019

2020

2021e*

2022e*

2023e*

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

258.7

269.0

373.7

438.6

502.5

Operating costs

(181.9)

(187.8)

(277.3)

(319.0)

(358.9)

Adjusted EBITDA

 

 

76.8

81.2

96.5

119.6

143.6

EBITDA

 

 

71.3

77.9

91.8

117.6

141.6

Normalised operating profit

 

 

59.0

62.2

75.5

96.8

118.7

Amortisation of acquired intangibles

(5.9)

(6.0)

(6.0)

(6.0)

(6.0)

Exceptionals

(2.0)

(2.4)

(2.2)

0.0

0.0

Share-based payments

(3.6)

(0.9)

(2.5)

(2.0)

(2.0)

Reported operating profit

47.5

52.9

64.9

88.9

110.7

Net Interest

(4.1)

0.6

(2.6)

(3.0)

(3.0)

Joint ventures & associates (post tax)

(1.1)

(1.0)

(0.4)

(0.4)

(0.4)

Exceptionals

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

53.5

58.6

72.6

93.5

115.3

Profit Before Tax (reported)

 

 

42.2

52.5

61.9

85.5

107.3

Reported tax

(13.4)

(14.6)

(18.3)

(25.2)

(31.7)

Profit After Tax (norm)

38.3

40.8

52.4

67.5

83.2

Profit After Tax (reported)

28.8

37.9

43.6

60.3

75.7

Minority interests

(0.6)

(0.6)

(0.8)

(3.3)

(4.4)

Discontinued operations

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

37.7

40.1

51.6

64.1

78.8

Net income (reported)

28.2

37.3

42.8

56.9

71.3

Average Number of Shares Outstanding (m)

47.0

47.1

46.2

46.0

45.8

EPS - normalised (c)

 

 

80.3

85.9

111.7

139.5

172.3

EPS - normalised fully diluted (c)

 

 

80.3

85.2

111.7

139.5

172.3

EPS - basic reported (€)

 

 

0.60

0.80

0.93

1.24

1.56

Dividend (€)

0.00

0.26

0.31

0.41

0.51

Revenue growth (%)

8.4

4.0

38.9

17.4

14.6

EBITDA Margin before non-recurring costs (%)

29.7

30.2

25.8

27.3

28.6

Normalised Operating Margin

22.8

23.1

20.2

22.1

23.6

BALANCE SHEET

Fixed Assets

 

 

316.7

325.8

541.1

529.0

515.7

Intangible Assets

269.9

285.1

503.3

493.2

481.1

Tangible Assets

21.2

19.0

16.0

14.1

12.9

Investments & other

25.6

21.7

21.7

21.7

21.7

Current Assets

 

 

139.4

196.1

297.9

342.3

358.9

Stocks

1.1

1.2

1.2

1.2

1.2

Debtors

89.8

84.1

116.8

137.1

157.1

Cash & cash equivalents

33.6

92.8

161.9

186.0

182.5

Other financial assets

6.6

7.3

7.3

7.3

7.3

Other

8.2

10.7

10.7

10.7

10.7

Current Liabilities

 

 

(160.4)

(154.9)

(192.6)

(207.1)

(221.4)

Creditors

(92.7)

(106.7)

(130.1)

(144.6)

(158.9)

Tax and social security

(2.9)

(5.1)

(5.1)

(5.1)

(5.1)

Short term borrowings

(62.0)

(40.4)

(54.6)

(54.6)

(54.6)

Other

(2.9)

(2.7)

(2.7)

(2.7)

(2.7)

Long Term Liabilities

 

 

(146.2)

(193.2)

(338.9)

(288.9)

(228.9)

Long term borrowings

(107.0)

(150.5)

(296.3)

(246.3)

(186.3)

Other long term liabilities

(15.8)

(14.3)

(14.3)

(14.3)

(14.3)

Net Assets

 

 

149.4

173.9

307.5

375.2

424.2

Minority interests

(3.9)

(4.0)

(117.0)

(150.4)

(154.8)

Shareholders' equity

 

 

145.6

169.8

190.5

224.9

269.4

CASH FLOW

Operating cash flow

 

 

55.2

81.6

63.8

86.3

103.9

Capex and intangibles

(13.5)

(14.9)

(14.9)

(16.7)

(17.6)

Acquisitions/disposals

(47.5)

(36.1)

(185.0)

0.0

0.0

Net interest

(2.5)

(1.9)

(2.6)

(3.0)

(3.0)

Equity financing

1.1

(10.0)

(10.0)

(8.0)

(8.0)

Dividends

(16.4)

(2.2)

(12.2)

(14.5)

(18.7)

Borrowings

23.7

35.4

160.0

(50.0)

(60.0)

Other

(1.7)

7.3

70.0

30.0

0.0

Net Cash Flow

(1.5)

59.2

69.1

24.1

(3.4)

Opening net debt/(cash)

 

 

124.9

129.1

91.9

181.6

107.5

Closing net debt/(cash)

 

 

129.1

91.9

181.6

107.5

50.9

Source: Tinexta, Edison Investment Research. Note: *Unchanged ahead of publication of full financial statements.


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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Tinexta and prepared and issued by Edison, in consideration of a fee payable by Tinexta. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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