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Claranova — Building the foundations for profitable growth

Claranova (PAR: CLA)

Last close As at 20/12/2024

EUR1.17

▲ −0.10 (−8.03%)

Market capitalisation

EUR67m

More on this equity

Research: TMT

Claranova — Building the foundations for profitable growth

In FY24, Claranova had a relatively stable year from a revenue perspective but expects to report a significant increase in profitability due to its focus on optimising customer acquisition spend and reducing controllable costs. With management continuing to expect an adjusted EBITDA margin of c 10% for FY24, we have raised our adjusted EBITDA forecasts by 2.2% in FY24 and 0.4% in FY25. The company expects to report the outcome of its ongoing strategic review when it reports FY24 results on 30 October.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Claranova

Building the foundations for profitable growth

Q424 revenue update

Software and comp services

6 August 2024

Price

€1.47

Market cap

€83m

$1.08/€

Net debt (€m) at end FY24

102

Shares in issue

56.7m

Free float

84%

Code

CLA

Primary exchange

Euronext Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(24.0)

(38.7)

(14.9)

Rel (local)

(18.6)

(31.8)

(12.4)

52-week high/low

€2.91

€1.30

Business description

Claranova consists of three businesses focused on mobile and internet technologies: PlanetArt (digital photo printing; personalised gifts), Avanquest (consumer-focused software) and myDevices (internet of things/IoT). Its headquarters are in Paris, France, and it has operations in Europe, the United States and Canada.

Next events

FY24 results

30 October

Analyst

Katherine Thompson

+44 (0)20 3077 5700

Claranova is a research client of Edison Investment Research Limited

In FY24, Claranova had a relatively stable year from a revenue perspective but expects to report a significant increase in profitability due to its focus on optimising customer acquisition spend and reducing controllable costs. With management continuing to expect an adjusted EBITDA margin of c 10% for FY24, we have raised our adjusted EBITDA forecasts by 2.2% in FY24 and 0.4% in FY25. The company expects to report the outcome of its ongoing strategic review when it reports FY24 results on 30 October.

Year
end

Revenue
(€m)

EBITDA*
(€m)

PBT**
(€m)

Diluted EPS**
(€)

DPS
(€)

P/E
(x)

06/22

473.7

25.5

7.2

0.11

0

13.7

06/23

507.0

32.5

2.2

0.05

0

32.0

06/24e

495.5

44.3

18.3

0.23

0

6.5

06/25e

523.5

49.7

29.9

0.39

0

3.8

Note: *Pre IFRS 16. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

FY24 revenue essentially flat

Claranova reported FY24 revenue of €496m, down 2% on a reported basis and up 1% on a constant currency organic (like-for-like) basis. The PlanetArt business saw a 3% l-f-l decline as it continued to focus on profitability. Avanquest grew 14% l-f-l with a mixed performance by product area. myDevices grew 8% l-f-l, with a slowdown in Q424 revenue as some project roll-outs were delayed. Claranova finished the year with a net debt position of €102m, 3% below our forecast.

Margin target maintained

Management continues to target an adjusted EBITDA margin of approximately 10% in FY24. We have revised our forecasts to reflect lower revenue in FY24 and FY25 while increasing our adjusted EBITDA forecasts for both years. Our FY24 margin forecast is now 9.0%, rising to 9.5% in FY25. Both Avanquest and myDevices reported weaker-than-expected revenue performance in Q424 after previous quarters of strong growth; we have assumed that the issues experienced in Q424 were temporary and we forecast a recovery in revenue from Q125 for both.

Valuation: PlanetArt growth key to upside

Reflecting the different divisional business models, we use a sum-of-the-parts valuation approach. Using EV/sales multiples that reflect our views on divisional growth and profitability and are conservative compared to the peer group averages, we calculate a per-share value of €5.4 (down from €5.5), before applying any group holding discount. With the recent debt refinancing and the board refresh addressing major shareholder concerns, we view consistent growth in revenues and margins towards Claranova’s targets as fundamental to reducing the discount to peers, in particular evidence of sustained revenue growth in PlanetArt while balancing profitability.

Q424 revenue update

Claranova reported Q424/FY24 revenue as per Exhibit 1. On a group basis, the company reported a 2% decline in revenue for Q424 and the year. On a constant currency organic basis, it reported a 1% decline for Q424 but a 1% increase for the full year.

Exhibit 1: Q424 and FY24 divisional revenue

Revenues (€m)

Q424

Q423

y-o-y

y-o-y

y-o-y

y-o-y

Reported

Constant currency

Organic

Constant currency organic

PlanetArt

69

68

1%

(2%)

1%

(2%)

Avanquest

30

30

(2%)

(1%)

5%

5%

myDevices

2

3

(56%)

(57%)

(56%)

(57%)

Total

100

102

(2%)

(3%)

1%

(1%)

FY24

FY23

y-o-y

y-o-y

y-o-y

y-o-y

Reported

Constant currency

Organic

Constant currency organic

PlanetArt

365

383

(5%)

(3%)

(5%)

(3%)

Avanquest

122

116

5%

9%

10%

14%

myDevices

9

8

5%

8%

5%

8%

Total

496

507

(2%)

0%

(1%)

1%

Source: Claranova

PlanetArt: Stabilising revenue, improving profitability

PlanetArt revenue grew 1% y-o-y on a reported basis in Q424 and was 2% lower on a constant currency (cc) basis. For FY24, the division reported a 5% decline (3% cc decline). The trend of optimising customer acquisition costs and reducing the operating cost base continued through the quarter and the business focused on driving higher-margin product sales by optimising the Gifts.com platform.

Avanquest: Reducing non-core supports margin growth

Avanquest reported Q424 revenue decline of 2% y-o-y; on an organic constant currency basis the division grew 5%. For FY24, the division grew 5% y-o-y (9% cc) and on an organic constant currency basis grew 14%. The division sold its European non-core business in October 2023; the remaining non-core business generated revenue of €11m in FY24, down 41% y-o-y and now making up only 9% of divisional revenue. There was a mixed performance by product: Utilities (previously referred to as Security) grew 33% cc, PDF grew 3% cc whereas Photo declined 7% cc. Management noted that it frequently targets marketing at different audiences – for the Photo business it recently shifted its customer acquisition spend to the small business market resulting in a short-term decline in revenue.

myDevices: Q4 slowdown

Q424 revenue declined 56% y-o-y to €2m as the pace of roll-outs slowed due to the delays in certain partners’ projects. FY24 revenue increased 5% y-o-y (8% cc). The business had nearly 220 channel partners by the end of FY24 and annual recurring revenue was down 3% y-o-y (flat cc) at €3.4m.

Management changes; strategic review ongoing

In July, the company announced further changes to the management team. Xavier Rojo, who joined the company in May 2022 as deputy CEO, was appointed to the CFO role. Isabelle Frenette was appointed executive vice-president, talent and culture for the group, having undertaken a similar role for Avanquest since 2022. Beth Burkhart joined as adviser, strategy and innovation, which is a newly created position. The purpose of her role is to sharpen the group’s strategic focus and promote innovation to drive profitability. We note that she previously worked at Shutterfly/Snapfish, a key competitor of PlanetArt.

Management confirmed that the strategic review is ongoing and expects to report the outcome at FY24 results on 30 October.

The company noted that it had not yet concluded a financial agreement with the previous CEO, Pierre Cesarini. He has filed two lawsuits against the company, one in France and one in Luxembourg, for a total of €15m in damages. The company deemed that the eligibility requirements for Mr Cesarini to exercise his option to invest in the individual subsidiaries were not met by the date of his departure and therefore the company has the right to repurchase the preferred shares giving rise to the options at a price of €1 per instrument.

Outlook and changes to forecasts

Claranova continues to expect an adjusted EBITDA margin of approximately 10% for FY24. We have revised our forecasts to reflect Q424 revenues and end-FY24 net debt, which was slightly lower than we had forecast. We have slightly increased our adjusted EBITDA forecasts, resulting in an EBITDA margin of 9.0% for FY24 and 9.5% for FY25.

Exhibit 2: Changes to forecasts

€'m

FY24e

FY25e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

502.3

495.5

(1.4%)

(2.3%)

535.6

523.5

(2.3%)

5.7%

EBITDA

48.7

49.6

2.0%

36.7%

54.9

55.0

0.2%

10.7%

EBITDA margin

9.7%

10.0%

0.3%

2.9%

10.2%

10.5%

0.3%

0.5%

EBITDA – pre IFRS 16

43.4

44.3

2.2%

36.4%

49.5

49.7

0.4%

12.1%

EBITDA margin – pre IFRS 16

8.6%

9.0%

0.3%

2.5%

9.2%

9.5%

0.3%

0.5%

Normalised operating profit

42.0

42.9

2.3%

41.7%

47.8

47.9

0.2%

11.5%

Normalised operating margin

8.4%

8.7%

0.3%

2.7%

8.9%

9.1%

0.2%

0.5%

Reported operating profit

34.2

35.2

2.8%

82.3%

42.0

42.1

0.2%

19.5%

Reported operating margin

6.8%

7.1%

0.3%

3.3%

7.8%

8.0%

0.2%

0.9%

Normalised PBT

17.3

18.3

5.6%

728.4%

29.8

29.9

0.3%

63.7%

Reported PBT

2.4

3.4

39.8%

(138.9%)

24.0

24.1

0.3%

604.6%

Normalised net income

12.7

13.7

8.1%

499.7%

22.0

22.3

1.7%

62.8%

Reported net income

(3.0)

(2.0)

(34.3%)

(81.4%)

17.5

17.9

2.1%

N/A

Normalised basic EPS (€)

0.23

0.24

8.1%

387.3%

0.39

0.39

1.7%

61.0%

Normalised diluted EPS (€)

0.21

0.23

8.1%

395.2%

0.38

0.39

1.7%

71.9%

Reported basic EPS (€)

(0.05)

(0.04)

(34.3%)

(84.9%)

0.31

0.32

2.1%

(997.6%)

Net debt/(cash)

105.7

102.4

(3.2%)

(8.6%)

80.7

78.3

(3.0%)

(23.5%)

Net debt/EBITDA (x)

2.4

2.3

1.6

1.6

Divisional revenues

PlanetArt

367.6

364.9

(0.7%)

(4.6%)

391.2

387.5

(0.9%)

6.2%

Avanquest

124.2

122.0

(1.7%)

4.9%

132.7

125.8

(5.2%)

3.1%

myDevices

10.5

8.6

(18.2%)

4.8%

11.8

10.3

(12.7%)

20.0%

Total

502.3

495.5

(1.4%)

(2.3%)

535.6

523.5

(2.3%)

5.7%

Divisional EBITDA

PlanetArt

19.9

22.0

10.5%

45.9%

21.6

22.8

5.6%

3.5%

Avanquest

22.9

22.9

0.0%

32.4%

25.8

25.9

0.4%

13.1%

myDevices

0.6

(0.6)

(204.2%)

(692.0%)

2.1

1.0

(52.4%)

(268.9%)

Total EBITDA – pre IFRS 16

43.4

44.3

2.2%

36.4%

49.5

49.7

0.4%

12.1%

Divisional EBITDA margin

PlanetArt

5.4%

6.0%

0.6%

2.1%

5.5%

5.9%

0.4%

(0.2%)

Avanquest

18.4%

18.8%

0.3%

3.9%

19.4%

20.6%

1.1%

1.8%

myDevices

5.4%

(6.9%)

(12.3%)

(8.1%)

17.8%

9.7%

(8.1%)

16.6%

Total EBITDA margin – pre IFRS 16

8.6%

9.0%

0.3%

2.5%

9.2%

9.5%

0.3%

0.5%

Source: Edison Investment Research

Exhibit 3: Financial summary

€'m

2019

2020

2021

2022

2023

2024e

2025e

30-June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

262.3

409.1

470.6

473.7

507.0

495.5

523.5

EBITDA

 

 

16.0

20.6

36.5

28.3

36.3

49.6

55.0

Company adjusted EBITDA

 

 

16.0

17.4

32.9

25.5

32.5

44.3

49.7

Normalised operating profit

 

 

15.5

15.8

31.0

23.7

30.3

42.9

47.9

Amortisation of acquired intangibles

(1.5)

(2.4)

(3.1)

(3.8)

(4.8)

(5.2)

(5.2)

Exceptionals

(2.9)

(5.6)

(4.4)

(0.7)

(5.3)

(1.9)

0.0

Share-based payments

0.3

0.0

0.0

(1.2)

(0.9)

(0.6)

(0.6)

Reported operating profit

11.4

7.8

23.5

18.0

19.3

35.2

42.1

Net Interest

(3.5)

(4.5)

(6.8)

(16.5)

(28.1)

(24.7)

(18.0)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

(45.6)

0.0

0.0

(5.7)

0.0

(7.1)

0.0

Profit Before Tax (norm)

 

 

12.0

11.3

24.2

7.2

2.2

18.3

29.9

Profit Before Tax (reported)

 

 

(37.7)

3.3

16.7

(4.2)

(8.8)

3.4

24.1

Reported tax

(3.7)

(2.1)

(3.5)

(5.7)

(2.0)

(5.1)

(5.5)

Profit After Tax (norm)

9.2

8.7

18.6

5.5

2.1

14.1

23.0

Profit After Tax (reported)

(41.4)

1.2

13.2

(10.0)

(10.8)

(1.6)

18.5

Minority interests

0.6

(0.7)

(3.7)

(0.5)

0.2

(0.3)

(0.7)

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

9.8

8.0

14.9

5.0

2.3

13.7

22.3

Net income (reported)

(40.8)

0.5

9.5

(10.5)

(10.6)

(2.0)

17.9

Basic ave. number of shares outstanding (m)

39

39

39

43

46

56

57

EPS - basic normalised (€)

 

 

0.25

0.20

0.38

0.12

0.05

0.24

0.39

EPS - diluted normalised (€)

 

 

0.25

0.20

0.37

0.11

0.05

0.23

0.39

EPS - basic reported (€)

 

 

(1.04)

0.01

0.24

(0.25)

(0.23)

(0.04)

0.32

Dividend (€)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

62.4

56.0

15.0

0.7

7.0

(2.3)

5.7

EBITDA Margin (%)

6.1

5.0

7.7

6.0

7.2

10.0

10.5

Company adjusted EBITDA margin (%)

6.1

4.3

7.0

5.4

6.4

9.0

9.5

Normalised Operating Margin

5.9

3.9

6.6

5.0

6.0

8.7

9.1

BALANCE SHEET

Fixed Assets

 

 

75.1

93.7

96.6

123.3

151.8

153.1

148.4

Intangible Assets

69.9

70.5

77.5

96.6

120.1

121.3

116.5

Tangible Assets

1.4

15.7

12.2

18.2

18.2

18.3

18.4

Investments & other

3.8

7.5

6.9

8.5

13.5

13.5

13.5

Current Assets

 

 

100.9

116.3

128.4

146.8

112.6

80.3

100.2

Stocks

4.8

14.4

16.1

22.0

20.4

19.9

21.1

Debtors

11.6

9.9

9.2

8.3

9.8

9.6

10.1

Cash & cash equivalents

75.4

82.8

90.4

100.3

66.8

36.7

54.9

Other

9.1

9.2

12.7

16.2

15.6

14.1

14.1

Current Liabilities

 

 

(60.5)

(74.6)

(76.7)

(106.0)

(176.2)

(97.1)

(100.7)

Creditors

(54.8)

(64.3)

(63.8)

(78.1)

(74.1)

(70.4)

(74.0)

Tax and social security

(3.0)

(1.2)

(2.0)

(1.9)

(2.1)

(2.1)

(2.1)

Short term borrowings

(2.7)

(6.1)

(7.7)

(22.6)

(93.8)

(20.0)

(20.0)

Other

0.0

(3.0)

(3.2)

(3.4)

(6.2)

(4.6)

(4.6)

Long Term Liabilities

 

 

(52.0)

(73.1)

(66.1)

(162.2)

(104.6)

(138.7)

(132.8)

Long term borrowings

(49.1)

(62.8)

(57.4)

(148.9)

(85.0)

(119.1)

(113.2)

Other long term liabilities

(2.9)

(10.3)

(8.7)

(13.3)

(19.6)

(19.6)

(19.6)

Net Assets

 

 

63.6

62.3

82.2

1.9

(16.4)

(2.4)

15.1

Minority interests

(11.0)

(11.7)

(16.2)

(3.3)

(2.9)

2.5

3.4

Shareholders' equity

 

 

52.6

50.6

66.0

(1.4)

(19.3)

0.0

18.5

CASH FLOW

Op Cash Flow before WC and tax

16.0

20.6

36.5

28.3

36.3

49.6

55.0

Working capital

(4.1)

22.5

(3.1)

3.2

(12.9)

(3.0)

1.9

Exceptional & other

(5.2)

(6.3)

(8.9)

(4.2)

(8.1)

(8.6)

0.0

Tax

(3.8)

(6.8)

(5.1)

(9.4)

(6.0)

(5.1)

(5.5)

Net operating cash flow

 

 

3.0

30.0

19.4

17.9

9.3

33.0

51.3

Capex

(2.5)

(1.2)

(3.8)

(2.2)

(10.9)

(4.0)

(4.0)

Acquisitions/disposals

(13.3)

(31.9)

(3.8)

(73.3)

(21.2)

(11.2)

(1.6)

Net interest

0.0

(0.5)

(0.7)

(1.7)

0.0

(2.6)

(13.8)

Equity financing

(1.4)

0.0

2.4

13.3

(0.3)

17.3

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

0.0

0.4

(2.6)

1.9

(3.4)

(3.6)

(3.6)

Net Cash Flow

(14.2)

(3.2)

11.0

(44.1)

(26.5)

28.9

28.2

Opening net debt/(cash)

 

 

(37.5)

(23.6)

(13.9)

(25.3)

71.2

112.0

102.4

FX

0.3

(0.8)

1.8

2.1

(0.5)

0.0

0.0

Other non-cash movements

0.0

(5.7)

(1.3)

(54.5)

(13.8)

(19.3)

(4.1)

Closing net debt/(cash)

 

 

(23.6)

(13.9)

(25.3)

71.2

112.0

102.4

78.3

Source: Claranova, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Claranova and prepared and issued by Edison, in consideration of a fee payable by Claranova. 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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Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

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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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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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 2024 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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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