MotorK — Taking a more cautious approach

MotorK (AMS: MTRK)

Last close As at 17/07/2024

EUR6.04

0.06 (1.00%)

Market capitalisation

272m

More on this equity

MotorK — Taking a more cautious approach

MotorK reported revenue growth of 20% y-o-y for the first nine months of FY22 (9M22) and closed Q322 with annualised recurring revenue (ARR) of €21.8m (+86% y-o-y). While demand for the SparK platform remains strong, the company has reduced guidance for FY22 to reflect delays in customer decision making and the slower transition of acquired customers onto the SparK platform. We have reduced our forecasts to the lower end of the new guidance range.

Katherine Thompson

Written by

Katherine Thompson

Director

MotorK

Taking a more cautious approach

Q322 trading update

Software and comp services

24 October 2022

Price

€2.35

Market cap

€95m

Net cash (€m) at end H122

20.8

Shares in issue

40.6

Free float

26.5%

Code

MTRK

Primary exchange

Euronext Amsterdam

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(5.2)

(25.2)

N/A

Rel (local)

(2.7)

(19.3)

N/A

52-week high/low

€7.00

€2.30

Business description

MotorK is a European SaaS provider operating in the automotive retail industry, selling mainly in the EU5 but with a global presence. Its cloud-based platform, SparK, offers OEMs and dealers a suite of digital tools to support the vehicle lifecycle end-to-end.

Next events

FY22 trading update

January 2023

Analysts

Katherine Thompson

+44 (0)20 3077 5730

Max Hayes

+44 (0)20 3077 5700

MotorK is a research client of Edison Investment Research Limited

MotorK reported revenue growth of 20% y-o-y for the first nine months of FY22 (9M22) and closed Q322 with annualised recurring revenue (ARR) of €21.8m (+86% y-o-y). While demand for the SparK platform remains strong, the company has reduced guidance for FY22 to reflect delays in customer decision making and the slower transition of acquired customers onto the SparK platform. We have reduced our forecasts to the lower end of the new guidance range.

Year end

Revenue
(€m)

ARR*
(€m)

PBT**
(€m)

Diluted
EPS** (€)

DPS
(€)

EV/sales
(x)

EV/EBITDA
(x)

12/20

19.3

10.0

(6.1)

(0.19)

0.00

3.9

N/A

12/21

27.6

15.1

(8.2)

(0.37)

0.00

2.7

89.4

12/22e

44.1

28.0

(0.2)

(0.00)

0.00

1.7

13.3

12/23e

60.9

38.3

3.8

0.07

0.00

1.2

6.8

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

Q322: First signs of longer sales cycles

MotorK reported revenue of €8.0m for Q322 (-1% y-o-y) and €24.9m for 9M22 (+20% y-o-y). Excluding acquisitions (which contributed €2.3m in Q322 and €4.6m in 9M22), organic revenue declined 29% in Q322 and 3% in 9M22. Excluding a large enterprise contract won in Q321, Q322 organic revenue would have declined by 12%. ARR at the end of Q322 of €21.8m was 86% higher y-o-y (28% higher on an organic basis) and 8% higher q-o-q. The company separately noted that it is in exclusive negotiations to sell its DriveK e-commerce business; this is already accounted for as an ‘asset held for sale’.

Revising forecasts based on new FY22 outlook

As some customers have started pushing decision-making into FY23 and the transition of customers from acquisitions onto the SparK platform was slower than expected in Q3, the company has revised guidance for FY22. The year-end ARR target range reduces by c €3m (now equivalent to 86–99% y-o-y growth), as does the FY22 target revenue range, reducing the expected EBITDA margin from c 20% to low- to mid-teen margins. The company is confident that demand is still strong for its technology and maintains its longer-term targets.

Valuation: Discount to peers

MotorK trades at a discount to European SaaS vendors on EV/Sales and EV/EBITDA multiples, despite higher-than-average forecast revenue growth. In our view, this reflects its limited track record as a public company. Were MotorK’s shares to trade in line with peers on a blend of EV/sales and EV/EBITDA across FY22e and FY23e, the implied share price would be €5.26, suggesting significant upside potential. We expect this discount to reduce as management delivers on its revised ARR and EBITDA margin targets.

Review of Q322 results

The table below summarises revenue by type for Q322 and 9M22. The company noted that SaaS recurring revenue benefited from a more than €1m German OEM contract in Q321, excluding which, SaaS recurring revenue increased 24% y-o-y in Q322. Acquisitions (Fidcar, Dapda, FranceProNet, Carflow and WebMobil24) contributed revenue of €2.3m in Q322 and €4.6m in 9M22, implying a decline in organic revenue of 29% and 3% respectively. End-Q322 ARR was 86% higher y-o-y and 28% higher on an organic basis.

Exhibit 1: Quarterly revenue by type

€m

Q322

Q321

y-o-y

9M22

9M21

y-o-y

Revenue

SaaS

5.5

5.7

(5%)

16.9

12.3

38%

Recurring revenue

5.4

5.9

(9%)

16.2

11.5

41%

Non-recurring revenue

0.1

-0.2

N/A

0.7

0.8

(13%)

Digital Marketing

1.8

1.8

(1%)

5.4

5.8

(7%)

Other

0.8

0.6

40%

2.6

2.7

(5%)

Total revenue

8.0

8.1

(1%)

24.9

20.9

20%

Period-end ARR

21.8

11.7

86%

Period end organic ARR

15.0

11.7

28%

Source: MotorK

The company reported churn of 3.9% (H122 churn was 3.1%) and net revenue retention (NRR) of 118% (H122: 113%). Average annual contract value (ACV) for retail contracts of €16.6k was 14% higher y-o-y and flat q-o-q. While the company is still seeing demand for the SparK platform, it has seen the first signs of customers postponing investment decisions until 2023. It has a strong pipeline of potential enterprise contracts, at the highest level ever, which could convert from Q422.

The five acquisitions completed over the last year have added 2,300 customers, with the vast majority spending well below MotorK’s ACV of €16.6k. The company expects the migration of customers in these businesses onto the SparK platform to take around three years, with an NRR of 140% for those contracts expected by the end of FY22. It estimates that if all customers migrated across, this would add €40m revenue in the medium term, although we would expect some of these customers to churn.

Disposal of DriveK

The company has reported its DriveK e-commerce business in ‘assets/liabilities held for sale’ since FY20. It has entered into exclusive negotiations with GEDI Gruppo Editoriale to create an entity that combines DriveK and GEDI’s AutoXY consumer automotive portal. The aim is to create the largest European new car marketplace where consumers can select, compare and configure their next new car, with a focus on Southern Europe. MotorK will receive a 20% stake in the new entity as well as cash. The deal is targeted to complete by end FY22.

Outlook and changes to forecasts

Due to the longer sales cycles, the company has revised its guidance for FY22. The table below shows the changes to guidance: a €3m reduction in expected year-end ARR on an organic basis, with a c €3m expected contribution to ARR from acquisitions made in FY22. Organic revenue is also expected to be €3m lower for the year. On a pro forma basis, FY22 acquisitions are likely to contribute revenue of c €4m; based on the timing of acquisitions, we would expect a reported revenue contribution of c €2m. At this point in the year, we would expect the cost base to be relatively fixed, so any shortfall in revenue would drop straight through to EBITDA.

Exhibit 2: Revisions to guidance

€m

FY22 old

FY22 new

ARR - excluding FY22 acquisitions

28–30

25–27

ARR - including FY22 acquisitions

N/A

28–30

Revenue - excluding FY22 acquisitions

45–47

42–44

Pro-forma revenue - FY22 acquisitions for 12 months

46–48

Adjusted EBITDA margin

c 20%

low to mid-teens

Source: MotorK

Our revised revenue forecast for FY22 of €44.1m implies Q422 revenue of €16.8m, significantly higher than prior quarters. Several factors should support this strong uptick in revenue:

Conversion of acquired customers onto the SparK platform (delayed from Q322).

Completion of several enterprise contracts.

Q4 is typically a strong quarter for new business and renewals.

The company did not provide details on cash at the end of Q322 but noted that it has a solid cash position, with a fully-funded growth plan until it achieves positive operating cash generation. As a reminder, net cash at the end of H122 was €20.8m. As the amount of cash to be received from the disposal of DriveK was not disclosed, it is not currently included in our forecasts.

Exhibit 3: Changes to forecasts

€m

FY22e

FY23e

FY24e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

46.4

44.1

-5.0%

60.1%

69.6

60.9

-12.5%

37.9%

80.6

73.4

-9.0%

20.5%

Adjusted EBITDA

7.9

5.6

-29.2%

571.5%

18.9

11.0

-41.9%

95.8%

24.1

17.2

-28.5%

56.8%

Adjusted EBITDA margin

17.1%

12.7%

-25.5%

9.7%

27.2%

18.0%

-33.6%

-9.1%

29.9%

23.5%

-21.4%

-6.4%

Normalised operating profit

2.6

0.3

-87.6%

N/A

12.1

4.4

-63.3%

N/A

15.3

9.0

-40.9%

104.1%

Normalised operating margin

5.5%

0.7%

-4.8%

N/A

17.3%

7.3%

-10.1%

-10.1%

19.0%

12.3%

-6.6%

-6.6%

Reported operating profit

(1.5)

(3.7)

151.0%

N/A

8.2

0.6

-92.8%

-115.8%

13.6

7.4

-45.8%

N/A

Reported operating margin

-3.2%

-8.5%

-5.3%

N/A

11.8%

1.0%

-10.8%

-111.4%

16.9%

10.1%

-6.8%

933.9%

Normalised PBT

2.1

(0.2)

-108.8%

N/A

11.5

3.8

-66.5%

N/A

14.7

8.4

-42.5%

119.9%

Reported PBT

(2.0)

(4.3)

113.0%

N/A

7.6

0.0

-99.9%

-100.1%

13.0

6.8

-47.9%

N/A

Normalised net income

1.8

(0.2)

-108.8%

N/A

9.2

3.1

-66.5%

N/A

11.2

6.4

-42.5%

108.9%

Reported net income

(2.0)

(3.9)

97.8%

N/A

6.1

0.0

-99.9%

-100.1%

9.9

5.2

-47.9%

N/A

Normalised basic EPS (€)

0.04

0.00

-108.8%

N/A

0.23

0.08

-66.5%

N/A

0.27

0.16

-42.4%

108.9%

Normalised diluted EPS (€)

0.04

0.00

-109.2%

N/A

0.22

0.07

-66.5%

N/A

0.26

0.15

-42.4%

108.9%

Reported basic EPS (€)

(0.05)

(0.10)

97.9%

N/A

0.15

0.00

-99.9%

-100.1%

0.24

0.13

-47.8%

N/A

Dividend per share (€)

0.00

0.00

N/A

N/A

0.00

0.00

N/A

N/A

0.00

0.00

N/A

N/A

Net debt/(cash)

(13.7)

(12.9)

-6.1%

(5.3)

(2.4)

-54.8%

-81.4%

5.2

11.3

117.4%

N/A

ARR

32.0

28.0

-12.5%

86%

42.9

38.3

-10.7%

36.8%

57.9

51.7

-10.7%

35.0%

Source: Edison Investment Research


Exhibit 4: Financial summary

€m

2018

2019

2020

2021

2022e

2023e

2024e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

12.2

27.9

19.3

27.6

44.1

60.9

73.4

Annualised recurring revenue

 

 

4.3

7.5

10.0

15.1

28.0

38.3

51.7

Operating costs excl. D&A

(22.5)

(26.5)

(20.5)

(26.7)

(38.5)

(49.9)

(56.2)

EBITDA

 

 

(10.3)

1.5

(1.1)

0.8

5.6

11.0

17.2

Normalised operating profit

 

 

(11.3)

(0.8)

(4.3)

(3.4)

0.3

4.4

9.0

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

(0.1)

(0.0)

(0.1)

(3.2)

(2.5)

(2.2)

0.0

Share-based payments

(0.3)

(0.2)

(0.1)

(9.7)

(1.6)

(1.6)

(1.7)

Reported operating profit

(11.7)

(1.1)

(4.5)

(16.4)

(3.7)

0.6

7.4

Net Interest

(0.3)

(1.4)

(1.8)

(4.8)

(0.5)

(0.6)

(0.6)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(11.6)

(2.3)

(6.1)

(8.2)

(0.2)

3.8

8.4

Profit Before Tax (reported)

 

 

(12.1)

(2.5)

(6.3)

(21.2)

(4.3)

0.0

6.8

Reported tax

1.4

1.1

0.9

(2.8)

0.6

(0.0)

(1.6)

Profit After Tax (norm)

(10.3)

(1.1)

(5.2)

(11.0)

(0.2)

3.1

6.4

Profit After Tax (reported)

(10.7)

(1.4)

(5.4)

(23.9)

(3.6)

0.0

5.2

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Discontinued operations

3.9

1.6

0.0

0.4

(0.3)

0.0

0.0

Exceptionals

(0.2)

(0.0)

(0.2)

(0.0)

0.0

0.0

0.0

Net income (normalised)

(10.3)

(1.1)

(5.2)

(11.0)

(0.2)

3.1

6.4

Net income (reported)

(7.0)

0.2

(5.5)

(23.5)

(3.9)

0.0

5.2

Basic average number of shares outstanding (m)

26

26

27

30

40

41

41

EPS - basic normalised (€)

 

 

(0.39)

(0.04)

(0.19)

(0.37)

(0.00)

0.08

0.16

EPS - diluted normalised (€)

 

 

(0.39)

(0.04)

(0.19)

(0.37)

(0.00)

0.07

0.15

EPS - basic reported (€)

 

 

(0.27)

0.01

(0.20)

(0.79)

(0.10)

0.00

0.13

Dividend (€)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

-

128.8

(-30.8)

42.6

60.1

37.9

20.5

EBITDA Margin (%)

-

5.3

-

3.0

12.7

18.0

23.5

Normalised Operating Margin

-

-

-

-

0.7

7.3

12.3

BALANCE SHEET

Fixed Assets

 

 

9.2

22.8

16.8

26.2

46.1

54.7

63.3

Intangible Assets

6.6

11.2

9.9

18.0

33.1

35.1

37.2

Tangible Assets

0.4

1.6

1.7

3.1

3.0

2.9

2.8

Investments & other

2.1

10.1

5.2

5.2

10.0

16.7

23.2

Current Assets

 

 

22.4

25.4

28.3

63.4

51.8

51.6

45.8

Stocks

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Debtors

15.6

16.0

11.5

16.0

24.8

35.1

44.4

Cash & cash equivalents

6.8

9.4

11.8

43.3

23.1

12.6

(2.5)

Other

0.0

0.0

4.9

4.2

3.9

3.9

3.9

Current Liabilities

 

 

(16.8)

(13.6)

(14.5)

(15.2)

(17.2)

(23.2)

(26.7)

Creditors

(10.5)

(11.1)

(6.1)

(8.3)

(12.1)

(16.7)

(20.1)

Tax and social security

0.0

0.0

0.0

(2.9)

(2.9)

(2.9)

(2.9)

Short term borrowings

(6.3)

(2.5)

(7.1)

(2.7)

(0.9)

(2.4)

(2.4)

Other

0.0

0.0

(1.3)

(1.3)

(1.3)

(1.3)

(1.3)

Long Term Liabilities

 

 

(10.9)

(27.1)

(28.5)

(10.0)

(16.5)

(17.2)

(9.7)

Long term borrowings

(9.1)

(23.5)

(25.6)

(6.2)

(9.3)

(7.8)

(6.4)

Other long term liabilities

(1.8)

(3.7)

(2.9)

(3.8)

(7.2)

(9.4)

(3.3)

Net Assets

 

 

4.0

7.5

2.1

64.4

64.2

65.9

72.7

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

4.0

7.5

2.1

64.4

64.2

65.9

72.7

CASH FLOW

Net income

(6.9)

0.2

(5.4)

(23.5)

(3.9)

0.0

5.2

Depreciation & amortisation

1.3

2.7

3.8

4.2

5.3

6.5

8.2

Working capital

0.7

(7.4)

2.5

(2.0)

(6.4)

(10.2)

(18.5)

Exceptional & other

0.7

1.6

1.9

15.0

1.5

2.2

2.3

Tax

(0.2)

(0.1)

(1.2)

2.6

0.0

0.0

0.0

Net operating cash flow

 

 

(4.4)

(3.0)

1.7

(3.6)

(3.5)

(1.4)

(2.9)

Capex

(3.9)

(3.6)

(3.2)

(3.9)

(7.0)

(7.6)

(9.3)

Acquisitions/disposals

0.0

(0.6)

0.0

(5.4)

(9.3)

0.0

0.0

Net interest

(0.3)

(0.5)

(0.5)

(6.9)

(0.4)

(0.5)

(0.5)

Equity financing

0.0

0.0

0.0

70.1

(0.2)

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

(0.2)

(0.1)

0.1

0.2

0.0

0.0

0.0

Net Cash Flow

(8.7)

(7.8)

(1.9)

50.5

(20.4)

(9.5)

(12.7)

Opening net debt/(cash)

 

 

(0.3)

8.5

16.6

20.9

(34.3)

(12.9)

(2.4)

FX

0.0

(0.2)

0.0

0.0

0.0

0.0

0.0

Other non-cash movements

(0.1)

0.0

(2.4)

4.7

(1.0)

(1.0)

(1.0)

Closing net debt/(cash)

 

 

8.5

16.6

20.9

(34.3)

(12.9)

(2.4)

11.3

Source: MotorK, Edison Investment Research

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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

General disclaimer and copyright

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

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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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