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Tinexta — Strength across the board

Tinexta (MIL: TNXT)

Last close As at 27/12/2024

EUR7.81

▲ −0.01 (−0.06%)

Market capitalisation

EUR369m

More on this equity

Research: TMT

Tinexta — Strength across the board

Tinexta’s interim results were strong due to a combination of underlying growth and contributions from M&A. The completion of the disposal of its lowest-growth division, Credit Information and Management (CIM), leaves Tinexta with a significantly improved financial position, and therefore well placed to take account of recent weakness in equity markets to undertake further M&A. The reiteration of underlying guidance for FY22, despite the disposal of lower-growth CIM, indicates a little more caution by management for the rest of the year, likely due to the heightened macroeconomic risks. Our underlying forecasts for FY22 are unchanged. Our DCF-based valuation is €38/share, from €42/share previously.

Russell Pointon

Written by

Russell Pointon

Director of Content, Consumer and Media

TMT

Tinexta

Strength across the board

H122 results

Professional services

8 August 2022

Price

€23.7

Market cap

€1,119m

Net debt (€m) at 30 June 2022

267

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

9.8

4.5

(35.1)

Rel (local)

0.8

9.7

(25.9)

52-week high/low

€43.26

€20.88

Business description

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

Next events

Q322 results

10 November 2022

Analysts

Russell Pointon

+44 (0)20 3077 5700

Max Hayes

+44 (0)20 3077 5700

Tinexta is a research client of Edison Investment Research Limited

Tinexta’s interim results were strong due to a combination of underlying growth and contributions from M&A. The completion of the disposal of its lowest-growth division, Credit Information and Management (CIM), leaves Tinexta with a significantly improved financial position, and therefore well placed to take account of recent weakness in equity markets to undertake further M&A. The reiteration of underlying guidance for FY22, despite the disposal of lower-growth CIM, indicates a little more caution by management for the rest of the year, likely due to the heightened macroeconomic risks. Our underlying forecasts for FY22 are unchanged. Our DCF-based valuation is €38/share, from €42/share previously.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/20

269.0

58.4

0.85

0.26

27.9

1.1

12/21

**301.5

70.4

1.02

0.30

23.2

1.3

12/22e

365.3

67.4

0.90

0.30

26.4

1.3

12/23e

408.2

83.7

1.19

0.32

20.0

1.3

12/24e

455.8

98.9

1.42

0.39

16.7

1.7

Note: *PBT and EPS (fully diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Pro forma for disposal of CIM.

H122: Strong revenue and profit growth

Excluding CIM (treated as a discontinued activity following the completion of its disposal to Crif), Tinexta’s H122 revenue grew by c 20% y-o-y and adjusted EBITDA by c 21%, indicating an improving margin. The period end net financial position (€267m) was relatively unchanged versus end FY21 (€263m), as free cash flow (lower versus H121 due to one-off costs and higher tax) and the receipt from the investment by Bregal (€70m) was invested in further M&A (€61m).

FY22 estimates: Underlying guidance reiterated

Management has reiterated its underlying guidance for FY22 (10–12% revenue growth and 8–10% adjusted EBITDA growth), while increasing guidance for total growth (revenue 21–23% and adjusted EBITDA 25–27%). This requires a significant step up in growth for the Cyber Security business unit, of which management is confident. Our new estimates, which reflect the stripping out of CIM’s contribution, are in line with management’s guidance. The underlying estimates for the remaining business units are unchanged and we add a minor contribution for recent M&A (Plannet). By year-end, management expects to have a significantly improved financial profile (net financial indebtedness/adjusted EBITDA of 0.6x).

Valuation: Well supported by DCF

Following significant weakness in the early part of 2022, the share price has been trading in a range of low-mid €20s during the last few months. Our DCF-based valuation reduces to €38/share (€42/share previously) to reflect the changes in the group’s profile.

H122 results: Underlying growth and M&A

Income statement: Strong 20% growth in revenue and EBITDA

Tinexta’s H122 results were reported with the CIM business unit treated as a discontinued activity following the completion of its sale to Crif on 3 August 2022, the day before publication of the results. The transaction was completed quickly after the proposed disposal was announced on 31 May 2022.

Exhibit 1: Summary income statement

€m

Q121

Q221

H121

Q122

Q222

H122

Group revenue

64.1

75.6

139.7

78.1

89.9

168.0

Growth y-o-y

0.0%

0.0%

0.0%

21.8%

18.9%

20.2%

Organic y-o-y

N/A

N/A

N/A

N/A

N/A

8.0%

– Digital Trust

31.2

32.4

63.6

38.0

38.9

76.9

Organic y-o-y

19.4%

10.9%

14.9%

7.7%

8.5%

8.1%

– Cyber Security

16.8

17.8

34.6

18.0

18.8

36.8

Organic y-o-y

N/A

N/A

N/A

7.1%

5.4%

6.2%

– Innovation & Marketing Services

16.1

25.5

41.7

21.0

34.4

55.4

Organic y-o-y

23.5%

5.2%

11.7%

19.4%

5.8%

11.1%

Group adjusted EBITDA

11.6

19.1

30.7

14.5

22.6

37.1

Margin

18.1%

25.3%

22.0%

18.6%

25.1%

22.1%

Growth y-o-y

N/A

N/A

N/A

25.0%

18.2%

20.6%

Organic growth y-o-y

N/A

N/A

N/A

N/A

N/A

1.3%

– Digital Trust

7.2

8.4

15.6

10.4

10.7

21.1

Margin

23.0%

26.0%

24.5%

27.3%

27.6%

27.4%

Organic growth y-o-y

21.1%

4.9%

11.8%

19.4%

12.2%

15.5%

– Cyber Security

1.9

1.6

3.5

1.2

1.8

3.0

Margin

11.5%

8.7%

10.1%

6.5%

9.7%

8.2%

Organic growth y-o-y

N/A

N/A

N/A

(39.4%)

18.8%

(13.5%)

– Innovation & Marketing Services

5.0

12.1

17.1

6.3

13.7

20.0

Margin

30.9%

47.6%

41.1%

30.2%

39.7%

36.1%

Organic growth y-o-y

36.0%

(6.9%)

2.8%

14.2%

(5.8%)

0.0%

– Other

N/A

N/A

(5.5)

N/A

N/A

(7.1)

Stock options

N/A

N/A

(0.9)

N/A

N/A

(1.3)

Non-recurring costs

N/A

N/A

(0.6)

N/A

N/A

(3.2)

Reported EBITDA

11.1

18.1

29.2

11.6

21.0

32.6

Adjusted operating profit

8.1

15.7

23.8

10.5

18.3

28.8

Margin

12.6%

20.8%

17.0%

13.5%

20.4%

17.2%

Operating profit

5.0

12.1

17.1

4.9

14.1

19.0

Margin

7.8%

16.0%

12.2%

6.3%

15.7%

11.3%

Net finance

N/A

N/A

(1.7)

N/A

N/A

(2.6)

Reported PBT

N/A

N/A

15.2

N/A

N/A

16.5

Tax

N/A

N/A

(4.3)

N/A

N/A

(3.1)

Tax rate

N/A

N/A

28%

N/A

N/A

19%

Reported net profit (continuing operations)

3.6

7.3

10.9

2.4

10.9

13.3

Source: Tinexta, Edison Investment Research

Revenue grew by 20% y-o-y to €168.0m in H122 with a slight decline in the growth rate from Q1 to Q2. Comparatives in the last few years have been positively and negatively affected by COVID-19 related restrictions, which skews comparison between the quarters. With this as a backdrop, Digital Trust’s (DT’s) organic revenue growth rate improved to 8.5% in Q222 from 7.7% in Q122, helped by a much easier comparative. Conversely, organic growth rates for Cyber Security (CS) (7.1% in Q1 to 5.4% in Q2) and Innovation & Marketing Services (IMS) (19.4% in Q1 to 5.8% in Q2) both reduced through H122.

Adjusted EBITDA grew by c 21% y-o-y to €37.1m in H122, including a slowing to 18% growth in Q2 from Q1’s 25%, and a slightly lower margin in Q222 versus the prior year due to changes in mix and the different margins of the three business units.

Net profit from continuing operations grew by c 22% to €13.3m in H122, with underlying growth in adjusted EBITDA helped by a lower tax rate of c 19% versus c 28% in H121.

The results of the individual business units are summarised below:

■

Digital Trust: Revenue grew by c 21% y-o-y in H122 to €76.9m, including organic revenue growth of c 8%. As highlighted above, there was improving momentum in organic revenue growth through the period with growth flagged in all of the main product areas. CertEurope’s revenue contribution in Q222 of €3.7m (Edison estimate) was below Q122’s €4.4m, reflecting its expected quarterly volatility according to management. The improvement in H122 EBITDA margin to 27.4% from 24.5% reflects operational leverage on the organic revenue growth, as well as the contribution of the higher-margin of CertEurope (c 38%) versus the underlying business unit’s (c 26%), albeit the former declined from c 41% in Q1 to 35% in Q2. At the H122 stage, 8% organic revenue growth is below management’s guided FY22–24 CAGR of 10%. However, it was against a tough comparative from H121 of c 15%; an easier comparative for H222 from H221 (c 7%) is supportive of a higher growth rate later in the year.

■

Cyber Security: Revenue grew by c 6% y-o-y to €36.8m with a modest reduction in the growth rate to c 5% in Q222 from c 7% in Q122. Management indicates continuous growth in Managed and Advisory Services as well as in Implementation Services, and good demand for LegalMail Security premium services, which is a collaboration with InfoCert (DT business unit). Management confirmed the build in CS’s revenue backlog will help to drive a step up in revenue growth in H222, which is required to meet its guidance for a CAGR of 19% for organic revenue growth in FY22–24. The guidance implies H222 revenue growth of c 30%+. Following the planned investment in the organisational and commercial structure of the business unit at the start of the year, which led to a decline in adjusted EBITDA in Q122 of c 39%, there was a notable improvement in Q222 with c 18% growth, which bodes well for future operational leverage. At the start of August 2022, CS completed the acquisitions of LAN & WAN Solutions, a systems integrator, and Teknesi, which offers complete solutions for managing risks and improving overall corporate security.

■

Innovation and Marketing Services: The greatest contributors to year-on-year revenue growth of c 33% in H122 to €55.4m were recent acquisitions, which added c 22% growth. Organic revenue growth of 11% included a slowing from Q1’s 19% growth rate to Q2’s 6%. We note that IMS’s revenue growth is quite volatile between the financial periods given the mix of businesses and their own seasonality. Management indicated underlying growth from an increase in new customers and access to new markets. The recently acquired companies, Evalues and Enhancers, represented all of the 17% growth in H122’s adjusted EBITDA, with a decline for the underlying businesses of c 6% in Q222. Management’s guided organic revenue CAGR for FY22–24 is 7%, so we believe the H122 performance is reassuring, while recognising the high seasonality of the business unit’s subsidiaries.

Cash flow and balance sheet: Net financial debt unchanged

Tinexta’s net financial indebtedness of €266.7m at the end of H122 was relatively unchanged from the position at the end of FY21 (€263.3m). Free cash flow from continuing operations of €16m declined from €21m in H121 due to higher tax payments. The other significant movements were the receipt of €70m from Bregal for its acquisition of a minority stake in DT, spend of €61m on acquisitions, €19m on dividends and €17m on leasing contracts.

The period end cash position improved to €82m from €68m at the end of FY21.

Guidance and new forecasts

The completion of the sale of CIM and further M&A activity since management issued its FY22 financial guidance in February 2022 has necessitated an update to the guidance for the year.

Exhibit 2: Tinexta’s FY22 guidance

FY22 like-for-like growth (%)

FY22 total growth (%)

FY21 base
(€m)

FY22 at low end (€m)

FY22 at high end (€m)

February 2022 guidance:

Revenue

10–12%

18–20%

375.4

442.9

450.4

Adjusted EBITDA

8–10%

20–22%

98.7

118.5

120.4

Net financial position/adjusted EBITDA

c 2x

236.9

240.9

August 2022 guidance:

Revenue

10–12%

21–23%

301.5

364.8

370.8

Adjusted EBITDA

8–10%

25–27%

76.5

95.6

97.2

Net financial position/adjusted EBITDA

N/M

c 0.6x

57.4

58.3

Source: Tinexta, Edison Investment Research

On an underlying basis, expected growth rates for FY22 revenue (10–12%) and adjusted EBITDA (8–10%) versus FY21 have been reiterated. The reiterated guidance for underlying growth despite the disposal of CIM, expected to generate the lowest growth of the prior four business units, implies some softening in growth expectations, likely due to the changing macroeconomic conditions.

On the restated (lower) FY21 base after stripping out CIM’s prior contribution, the new guidance implies a range for FY22 revenue of c €365–371m and adjusted EBITDA of €95.6–97.2m.

Our new estimates for FY22 revenue of €365m and EBITDA of €97m are in line with guidance. We have made no change to our prior estimates for the remaining business units, but have eliminated the contribution of CIM and added new estimates for the acquisition of Plannet in IMS.

Management’s estimated net financial position/EBITDA of 0.6x implies a net financial position of c €58m by year-end, which provides significant financial firepower for further M&A. The guidance includes the assumption that Intesa Sanpaolo will reinvest its proceeds (c €57m) from the (joint) transaction with Crif into Warrant Hub (in IMS business unit). For now, we do not include an estimate for the minority charge in our forecasts as we do not know the size of the stake Intesa Sanpaolo will take.

Valuation

Our DCF-based valuation for Tinexta reduces to €38 per share from €42 previously, which reflects the lower absolute EBITDA estimates, the lower pro forma net debt, an increase in the corporate tax rate in FY22 to 32% from 30%, and other changes to working capital and capex investment as a result of the recent M&A. We use a weighted average cost of capital of 7%, which includes a risk-free rate of 3%, market risk premium of 6% and beta (source: Refinitiv) of 0.7x.

Exhibit 3 shows Tinexta’s valuation relative to its peers in a number of competing industries.

Exhibit 3: Peer valuations

Company

Share price (local)

Currency

Market cap (€m)

Sales growth '22 (%)

Sales growth '23 (%)

EBITDA growth '22 (%)

EBITDA growth '23 (%)

EBITDA margin '22 (%)

EBITDA margin '23 (%)

EV/ sales '22 (x)

EV/ sales '23 (x)

EV/ EBITDA '22 (x)

EV/ EBITDA '23 (x)

P/E '22 (x)

P/E '23 (x)

Adobe Inc

431

US$

196,736

12

14

12.8

14.6

49.1

49.4

11.2

9.8

22.8

19.9

31.4

26.7

DocuSign Inc

71

US$

13,896

19

12

7.9

9.6

20.0

19.6

5.7

5.1

28.6

26.1

40.9

37.1

DT median

16

13

10.3

12.1

34.5

34.5

8.5

7.5

25.7

23.0

36.1

31.9

Alkemy SpA

14

€

76

13

9

35.5

15.3

11.5

12.1

0.9

0.8

7.8

6.8

12.2

10.1

Be Shaping the Future SpA

3

€

428

8

7

15.3

12.4

16.8

17.6

1.9

1.7

11.1

9.9

29.8

25.4

IMS median

11

8

25.4

13.9

14.2

14.9

1.4

1.3

9.5

8.3

21.0

17.7

Reply SpA

130

€

4,839

22

10

15.4

9.0

16.8

16.7

2.6

2.3

15.4

14.1

27.5

24.8

secunet Security Networks AG

307

€

1,968

7

26

-5.2

28.0

19.4

19.7

5.2

4.2

27.0

21.1

47.8

37.3

CS median

14

18

5.1

18.5

18.1

18.2

3.9

3.3

21.2

17.6

37.7

31.1

Tinexta

24.6

€

1,161

21

12

27.2

16.3

26.6

27.7

3.9

3.5

14.8

12.7

27.4

20.7

Source: Refinitiv, Edison Investment Research. Note: Priced at 4 August 2022.

Our sum-of the-parts valuation when applying the above peer group multiples to our forecasts for Tinexta is c €34 per share, versus €38/share previously.

Exhibit 4: Sum-of-the-parts valuation

EBITDA

EBITDA multiple

Valuation

FY22e

FY23e

FY22e

FY23e

FY22e

FY23e

FY22e

FY23e

€m

€m

x

x

€m

€m

€/share

€/share

Comments

Digital Trust

46.1

52.1

25.7

23.0

1,185.7

1,198.0

25.1

25.4

Innovation & Marketing Services

51.1

57.4

9.5

8.3

483.2

477.4

10.2

10.1

Cyber Security

13.1

18.4

21.2

17.6

278.1

322.8

5.9

6.8

Total/ (average)

110.3

127.8

18.8

16.3

1,947.0

1,998.3

41.2

42.3

Central costs

(13.0)

(14.6)

16.9

14.7

(219.8)

(213.7)

(4.7)

(4.5)

10% discount to average multiple

97.3

113.2

17.7

15.8

1,727.1

1,784.6

36.6

37.8

Associate

7.2

7.2

0.2

0.2

Minorities

(91.6)

(94.4)

(1.9)

(2.0)

Proforma for Bregal

Net cash/ (debt)

(36.8)

(36.8)

(0.8)

(0.8)

Proforma for Crif and Intesa Sanpaolo

Market value

1,605.9

1,660.5

34.0

35.2

Shares (m)

47.2

47.2

Implied share price (€)

34.0

35.2

Source: Refinitv, Edison Investment Research. Note: Priced at 4 August 2022.

Exhibit 5: Financial summary

€m

2019

2020

2021

2022e

2023e

2024e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

258.7

269.0

375.4

365.3

408.2

455.8

Operating costs

(181.9)

(187.8)

(276.6)

(267.9)

(295.0)

(327.2)

EBITDA

 

 

76.8

81.2

98.7

97.3

113.2

128.6

EBITDA (not adjusted)

 

 

71.3

77.9

93.0

90.5

110.4

125.8

Operating profit (before amort. and excepts.)

 

 

59.0

62.2

74.3

71.9

87.6

101.8

Amortisation of acquired intangibles

(5.9)

(6.0)

(11.7)

(11.7)

(11.7)

(11.7)

Exceptionals

(2.0)

(2.4)

(2.9)

(4.0)

0.0

0.0

Share-based payments

(3.6)

(0.9)

(2.8)

(2.8)

(2.8)

(2.8)

Reported operating profit

47.5

52.9

56.9

53.4

73.1

87.4

Net Interest

(4.1)

0.6

(3.3)

(4.2)

(3.7)

(2.7)

Joint ventures & associates (post tax)

(1.1)

(1.0)

(0.2)

(0.2)

(0.2)

(0.2)

Exceptionals

0.0

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

55.0

58.4

70.4

67.4

83.7

98.9

Profit Before Tax (reported)

 

 

42.2

52.5

53.4

49.0

69.2

84.4

Reported tax

(13.4)

(14.6)

(13.8)

(15.7)

(20.1)

(24.5)

Profit After Tax (norm)

38.3

40.6

49.5

45.9

59.4

70.2

Profit After Tax (reported)

28.8

37.9

39.6

33.3

49.1

60.0

Minority interests

(0.6)

(0.6)

(1.3)

(4.6)

(5.2)

(6.0)

Discontinued operations

0.0

0.0

0.0

90.0

0.0

0.0

Net income (normalised)

37.7

40.0

48.2

41.2

54.1

64.3

Net income (reported)

28.2

37.3

38.3

118.7

43.9

54.0

Average Number of Shares Outstanding (m)

47.0

47.1

47.2

45.9

45.6

45.4

EPS - normalised (c)

 

 

80.3

85.5

104.4

89.8

118.7

141.6

EPS - normalised fully diluted (c)

 

 

80.3

84.9

102.0

89.8

118.7

141.6

EPS - basic reported (€)

 

 

0.60

0.80

0.83

2.59

0.96

1.19

Dividend (€)

0.00

0.26

0.30

0.30

0.32

0.39

Revenue growth (%)

8.4

4.0

39.5

(-2.7)

11.7

11.7

EBITDA Margin before non-recurring costs (%)

29.7

30.2

26.3

26.6

27.7

28.2

Normalised Operating Margin

22.8

23.1

19.8

19.7

21.5

22.3

BALANCE SHEET

Fixed Assets

 

 

316.7

325.8

591.0

655.0

635.3

616.6

Intangible Assets

269.9

285.1

538.5

607.5

590.7

573.4

Tangible Assets

21.2

19.0

25.2

20.2

17.3

15.8

Investments & other

25.6

21.7

27.4

27.4

27.4

27.4

Current Assets

 

 

139.4

196.1

213.2

425.8

495.1

556.1

Stocks

1.1

1.2

1.3

1.3

1.3

1.3

Debtors

89.8

84.1

119.5

125.1

139.8

156.1

Cash & cash equivalents

33.6

92.8

68.3

275.2

329.9

374.5

Other financial assets

6.6

7.3

4.1

4.1

4.1

4.1

Other

8.2

10.7

20.0

20.0

20.0

20.0

Current Liabilities

 

 

(160.4)

(154.9)

(207.5)

(205.1)

(215.4)

(226.8)

Creditors

(92.7)

(106.7)

(146.8)

(144.4)

(154.6)

(166.0)

Tax and social security

(2.9)

(5.1)

(3.6)

(3.6)

(3.6)

(3.6)

Short term borrowings

(62.0)

(40.4)

(54.1)

(54.1)

(54.1)

(54.1)

Other

(2.9)

(2.7)

(3.1)

(3.1)

(3.1)

(3.1)

Long Term Liabilities

 

 

(146.2)

(193.2)

(353.1)

(353.1)

(353.1)

(353.1)

Long term borrowings

(107.0)

(150.5)

(281.5)

(281.5)

(281.5)

(281.5)

Other long term liabilities

(15.8)

(14.3)

(30.2)

(30.2)

(30.2)

(30.2)

Net Assets

 

 

149.4

173.9

243.7

522.6

562.0

592.8

Minority interests

(3.9)

(4.0)

(47.0)

(91.6)

(94.4)

(92.8)

Shareholders' equity

 

 

145.6

169.8

196.7

431.0

467.6

500.0

CASH FLOW

Operating Cash Flow

 

 

55.2

81.6

72.5

69.4

88.5

98.9

Capex and intangibles

(13.5)

(14.9)

(16.2)

(20.2)

(17.6)

(19.7)

Acquisitions/disposals

0.0

(3.3)

(92.8)

146.1

0.0

0.0

Net interest

(2.5)

(1.9)

(2.3)

(4.2)

(3.7)

(2.7)

Equity financing

1.1

(10.0)

(9.3)

(10.0)

(10.0)

(10.0)

Dividends

(16.4)

(2.2)

(12.5)

(19.2)

(7.5)

(22.0)

Borrowings

23.7

35.4

42.9

0.0

0.0

0.0

Other

1.7

11.2

6.6

45.0

5.0

0.0

Net Cash Flow

(1.5)

59.2

(24.6)

206.9

54.7

44.6

Opening net debt/(cash)

 

 

124.9

129.1

91.9

263.3

56.4

1.7

Closing net debt/(cash)

 

 

129.1

91.9

263.3

56.4

1.7

(42.9)

Source: Tinexta, Edison Investment Research


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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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