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TXT e-solutions — Cheleo acquisition drives upgrades

TXT e-solutions (Euronext STAR Milan: TXT)

Last close As at 04/11/2024

9.88

▲ −0.06 (−0.60%)

Market capitalisation

129m

More on this equity

Research: TMT

TXT e-solutions — Cheleo acquisition drives upgrades

TXT reported H118 revenue growth of 6% y-o-y; investments in R&D and sales and marketing ahead of this growth rate resulted in margin pressure in H118. TXT has completed the acquisition of a majority stake in Cheleo and we have factored this into our forecasts from 1 August. The combination of slightly lower growth forecasts for TXT Next, a one-off tax credit and the higher margin growth of Cheleo results in normalised EPS upgrades of 16% in FY18e and 24% in FY19e. After paying for Cheleo, we estimate the company has funds of more than €70m to invest in accretive acquisitions in the transportation and fintech markets.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

TXT e-solutions

Cheleo acquisition drives upgrades

Q218 results

Software & comp services

6 August 2018

Price

€9.64

Market cap

€115m

Net cash (€m) at end H118

74.0

Shares in issue*

*Includes 0.3m issued for Cheleo acquisition

12.0m

Free float

45.5

Code

TXT

Primary exchange

Borsa Italiana (STAR)

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(8.8)

(28.1)

(20.1)

Rel (local)

(8.9)

(19.3)

(19.6)

52-week high/low

€13.52

€9.20

Business description

TXT e-solutions operates through TXT Next, which provides IT, consulting and R&D services to aerospace, aviation, banking and finance customers.

Next events

Q318 results

6 November

Analysts

Katherine Thompson

+44 (0)20 3077 5730

Dan Ridsdale

+44 (0)20 3077 5729

TXT e-solutions is a research client of Edison Investment Research Limited

TXT reported H118 revenue growth of 6% y-o-y; investments in R&D and sales and marketing ahead of this growth rate resulted in margin pressure in H118. TXT has completed the acquisition of a majority stake in Cheleo and we have factored this into our forecasts from 1 August. The combination of slightly lower growth forecasts for TXT Next, a one-off tax credit and the higher margin growth of Cheleo results in normalised EPS upgrades of 16% in FY18e and 24% in FY19e. After paying for Cheleo, we estimate the company has funds of more than €70m to invest in accretive acquisitions in the transportation and fintech markets.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/16

33.1

4.0

0.27

0.30

35.6

3.1

12/17

35.9

3.0

0.19

1.00

51.9

10.4

12/18e

39.9

3.2

0.21

0.16

44.9

1.7

12/19e

44.9

4.4

0.27

0.17

36.1

1.8

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

H118 results show steady growth and investment

TXT reported 6.1% y-o-y revenue growth in H118 (+4.3% in Q118, +7.2% in Q218). Gross margins have improved on a year-on-year basis, resulting in gross profit growth of 8.2%. Growth in the operating cost base of 17% over the period resulted in a 2.5pp decline in the normalised operating margin to 7.5%. As well as investing in R&D and sales and marketing, TXT is now incurring the full cost of central functions that were previously split across TXT Next and TXT Retail (sold in Q417). Net cash at the end of H118 stood at €74.0m.

Earnings upgraded after incorporating Cheleo

The Cheleo acquisition completed on 31 July. We have factored in revenue growth for Cheleo of 25% for FY18 and 10% for FY19 with 34% EBITDA margins in both years. We estimate Cheleo will make up 8.5% of FY19 revenues. We trim our underlying TXT Next forecasts to reflect slower than expected growth in Q218. Overall, this results in revenue upgrades of 2.2% in FY18 and 7.4% in FY19. We upgrade normalised EPS by 16% in FY18 (also taking into account a one-off tax credit in H118), and 24% in FY19. We forecast net cash of €71.9m at the end of FY18, providing ample funds to make further earnings enhancing acquisitions.

Valuation: Factoring in accretive acquisitions

On price-based valuation metrics, TXT continues to trade at a premium to peers as even post the deal c 60% of its market cap is made up of the net cash balance. Until the bulk of TXT’s cash is put to use on value-accretive acquisitions, we would expect the stock to trade at a significant premium to peers on a P/E basis. On an EV basis, TXT trades more in line with peers, with forecast EBITDA and EBIT margins moving up to the peer group average by FY19. The company continues to evaluate targets in the transportation and fintech markets.

Review of H118 results

Exhibit 1: TXT half-year results highlights

€m

H118

H117

% y-o-y

Revenues

19.0

17.9

6.1%

Licenses & maintenance

2.4

1.5

57.8%

Services

16.7

16.4

1.4%

Gross margin

44.4%

43.6%

0.9%

EBITDA

2.1

1.9

6.3%

EBITDA margin

10.9%

10.9%

0.0%

Normalised EBIT

1.4

1.8

-20.4%

Normalised EBIT margin

7.5%

9.9%

-2.5%

Net income from continuing operations

0.9

1.0

-10.6%

Discontinued operations

0.0

0.6

-100.0%

Reported net income

0.9

1.6

-44.5%

Net cash

74.0

5.5

1245.5%

Source: TXT e-solutions, Edison Investment Research

TXT reported H118 revenue growth of 6.1% y-o-y, which splits out as revenues of €9.4m in Q118 (+4.9% y-o-y) and €9.6m in Q218 (+7.2% y-o-y, lower than our 11% expectation). H1 software sales saw 57.8% y-o-y growth whereas services only grew 1.4%. Gross margin improved 90bp to 44.4%, partially offsetting lower revenue growth. H118 operating costs including depreciation totalled €7.0m, 2% ahead of our forecast. The company has been investing in R&D and sales and marketing ahead of the revenue growth rate, in part due to the end of social contribution grants that TXT was earning as a result of hiring in Italy and also reflecting investment in international expansion. G&A costs now incorporate the full charge for central costs, which previously were shared with TXT Retail (sold in Q417).

The company incurred an effective tax rate of 4% in H118, benefiting from a €0.2m one-off credit relating to the patent box regime.

After paying €11.7m for dividends in Q218, the company closed H118 with net cash of €74.0m, down from €87.3m at the end of FY17. During Q2, the company invested €70m of its cash in short-term investments. A portion of these investments is marked to market, resulting in a net finance charge of €0.3m for H118.

Acquisition of Cheleo

TXT has acquired a controlling stake in Cheleo, an Italian developer of lifecycle management software for financing. Cheleo’s portfolio includes software to manage the entire process (initial application, credit management and collection, disposal of loan books) for leasing, mortgages, personal loans, salary-based loans, factoring and non-performing loans. Customers are Italian specialist financial companies.

Terms of the deal

On 31 July, TXT acquired 51% of Cheleo; it has a put/call option in place to acquire the remaining 49% over the period 1 January to 31 January 2019. Cheleo was majority-owned by Laserline, the business owned by Enrico Magni, TXT’s largest shareholder and a TXT board director.

The price of the deal was set at a total consideration of €10m, based on an enterprise value of €7.6m plus c €2.5m of net cash. TXT is paying 60% in cash and 40% in treasury shares. It has issued 354,202 shares at an implied price of €11.293/share to the founders of the business (value €4.0m) and paid €1.1m in cash to Laserline. TXT will pay the remaining €4.9m in cash when it exercises its option to acquire the remaining 49% of the business. We understand that Cheleo will be fully consolidated with the amount due for the 49% stake treated as debt.

Highly profitable business

Cheleo reported 2017 revenues of €2.8m and EBITDA of €0.95m (34% margin). The acquisition price implies a trailing EV/EBITDA multiple of 8x versus TXT’s trailing multiple of 7.9x FY17.

While Cheleo will continue to operate on a standalone basis within the banking and finance division, we expect a focus on cross-selling opportunities across the combined Italian client base. The two founders, Bruno Roma and Flavio Minari, will remain on the Cheleo board and will be entitled to a future cash payment based on the 2019 performance of Cheleo.

We have included Cheleo from 1 August 2018. TXT expects Cheleo to grow revenues and EBITDA by 25% compared to 2017 ie revenues €3.5m and EBITDA €1.19m (34% margin) spread equally across the year. We assume that c 50% of revenues are licence-based and c 50% services-based. We note that the software is sold on a subscription basis. We assume the business continues to achieve EBITDA margins in the region of 34%. We have factored in a 10% revenue growth rate for FY19.

Outlook and changes to forecasts

Management expects organic revenue growth in Q318 and organic profitability in line with last year. We have reduced our underlying revenue forecasts for TXT Next by 1.5% in FY18 and 1.8% in FY19. We have reduced the effective tax rate in FY18 from 28% to 20% to reflect the one-off €0.2m tax credit received for R&D spending. Our net cash forecasts take into account the full cash cost of the Cheleo acquisition (€1.1m paid in Q318 and €4.9m due in Q119).

Exhibit 2: Changes to forecasts

FY18e old

FY18e new

%
change

%
y-o-y

FY19e old

FY19e new

%
change

%
y-o-y

Revenues (€m)

39.1

39.9

2.2%

11.4%

41.9

44.9

7.4%

12.6%

Gross margin

43.5%

44.3%

0.9%

0.8%

43.1%

44.4%

1.4%

0.1%

Gross profit

17.0

17.7

4.3%

13.3%

18.0

20.0

10.8%

12.8%

EBITDA (€m)

4.1

4.3

5.2%

22.7%

4.6

5.6

22.1%

29.9%

EBITDA margin

10.6%

10.9%

0.3%

1.0%

11.0%

12.5%

1.5%

1.7%

Normalised EBIT (€m)

2.9

3.0

5.4%

(5.2%)

3.4

4.3

28.0%

42.4%

Normalised EBIT margin

7.3%

7.6%

0.2%

(1.3%)

8.0%

9.6%

1.5%

2.0%

Normalised net income (€m)

2.2

2.5

16.8%

16.7%

2.5

3.2

26.8%

26.4%

Normalised EPS (€)

0.19

0.21

16.0%

15.5%

0.22

0.27

24.0%

24.5%

Reported basic EPS (€)

0.16

0.18

17.0%

(96.9%)

0.19

0.24

27.7%

30.3%

Net cash (€m)

76.8

71.9

(6.5%)

(17.7%)

78.0

73.3

(6.0%)

2.0%

Dividend per share (€)

0.16

0.16

0.0%

(84.0%)

0.17

0.17

0.0%

6.3%

Source: Edison Investment Research

Valuation

Taking into account the recent payment of the dividend and the full cost of the Cheleo acquisition, TXT is now trading at a small discount to peers on most EV multiples. We note that with the inclusion of Cheleo, by FY19 TXT’s margins are in line with peers.

TXT continues to trade at a premium to peers on a P/E basis, although with the upgrade in earnings arising from the Cheleo acquisition, this has reduced since we wrote in May, from 66.9x to 44.9x for FY18e and from 57.6x to 36.1x for FY19e. With net cash of €71.9m (after paying for 100% of Cheleo), the company still has ample funds to make further earnings enhancing acquisitions.

Exhibit 3: Peer valuation

Company

Share

Market

Rev growth

EBIT margin

EBITDA margin

EV/Sales

EV/EBITDA

P/E

price

cap (m)

CY

NY

CY

NY

CY

NY

CY

NY

CY

NY

CY

NY

TXT

€9.64

€115

11.4%

12.6%

7.6%

9.6%

10.9%

12.5%

1.2

1.1

10.9

8.4

44.9

36.1

European engineering & IT services companies

AKKA Technologies

€62.00

€1,258

9.8%

11.0%

7.1%

7.9%

9.1%

9.5%

1.0

0.9

11.2

9.6

21.7

16.6

Alten

€85.15

€2,880

11.2%

7.5%

9.9%

10.1%

10.6%

10.8%

1.3

1.2

12.2

11.2

18.7

16.9

Altran*

€8.19

€2,105

25.9%

10.6%

10.8%

12.1%

13.6%

14.6%

0.8

0.8

6.2

5.2

10.5

8.4

AtoS

€112.45

€12,019

-2.5%

4.8%

9.7%

10.4%

13.5%

14.2%

1.0

0.9

7.3

6.6

13.0

11.7

Cap Gemini

€108.80

€18,359

2.4%

6.0%

11.0%

11.7%

14.2%

14.4%

1.6

1.5

11.0

10.2

18.3

16.3

Devoteam

€105.20

€877

16.5%

9.6%

10.3%

10.6%

10.8%

11.0%

1.3

1.2

12.4

11.1

26.2

22.9

ESI Group

€42.20

€254

9.4%

7.3%

8.2%

10.0%

11.2%

12.9%

1.9

1.8

17.2

14.0

37.2

28.4

Exprivia

€1.21

€63

278.4%

2.3%

3.5%

4.4%

6.9%

7.7%

0.5

0.5

7.8

6.9

30.2

9.3

Reply

€58.00

€2,170

15.7%

10.3%

12.8%

13.1%

14.2%

14.5%

2.1

1.9

14.5

13.0

23.7

20.7

SciSys

£1.83

£54

-7.3%

5.2%

9.2%

9.9%

11.5%

11.8%

1.1

1.1

9.8

9.1

17.0

15.3

Sopra Steria

€150.10

€3,086

6.2%

4.9%

7.6%

8.5%

9.6%

10.1%

0.9

0.8

9.2

8.4

14.1

12.1

Average

33.2%

7.2%

9.1%

9.9%

11.4%

12.0%

1.2

1.2

10.8

9.6

21.0

16.2

Discount to peers

(4%)

(8%)

1%

(12%)

Source: Edison Investment Research, Bloomberg (as at 1 August). Note: *Trading on depressed multiples after notifying the market that it had discovered a fraud in a business it recently acquired. Prior to that, Altran was trading nearer to 8.4x FY18e EBITDA and 7.1x FY19e.

Exhibit 4: Financial summary

€'000s

2014

2015

2016

2017

2018e

2019e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

54,410

61,540

33,060

35,852

39,927

44,942

Cost of sales

(26,455)

(29,189)

(18,954)

(20,224)

(22,221)

(24,973)

Gross profit

27,955

32,351

14,106

15,628

17,707

19,969

EBITDA

 

 

5,324

6,659

4,260

3,536

4,340

5,639

Operating Profit (before amort and except)

 

 

4,284

5,820

3,954

3,180

3,016

4,295

Amortisation of acquired intangibles

(285)

(285)

(264)

(439)

(439)

(439)

Exceptionals and other income

1,468

0

(557)

0

0

0

Other income

0

(740)

0

(69)

0

0

Operating Profit

5,467

4,795

3,133

2,672

2,577

3,856

Net Interest

(249)

(151)

48

(208)

150

150

Profit Before Tax (norm)

 

 

4,035

5,669

4,002

2,972

3,166

4,445

Profit Before Tax (FRS 3)

 

 

5,218

4,644

3,181

2,464

2,727

4,006

Tax

(1,046)

(762)

(661)

(710)

(545)

(1,122)

Profit After Tax (norm)

3,226

4,739

3,170

2,170

2,532

3,200

Profit After Tax (FRS 3)

4,172

3,882

2,520

1,754

2,181

2,884

Average Number of Shares Outstanding (m)

11.5

11.7

11.7

11.7

11.8

12.0

EPS - normalised (€)

 

 

0.281

0.406

0.271

0.186

0.215

0.267

EPS - normalised fully diluted (€)

 

 

0.276

0.403

0.271

0.186

0.215

0.267

EPS - (IFRS) (€)

 

 

0.364

0.333

0.475

5.874

0.185

0.241

Dividend per share (c)

0.23

0.25

0.30

1.00

0.16

0.17

Gross margin (%)

51.4

52.6

42.7

43.6

44.3

44.4

EBITDA Margin (%)

9.8

10.8

12.9

9.9

10.9

12.5

Operating Margin (before GW and except) (%)

7.9

9.5

12.0

8.9

7.6

9.6

BALANCE SHEET

Fixed Assets

 

 

18,019

18,132

25,428

8,860

18,426

17,083

Intangible Assets

15,078

14,692

21,296

7,332

14,388

13,945

Tangible Assets

1,249

1,361

1,598

793

3,303

2,403

Other

1,692

2,079

2,534

735

735

735

Current Assets

 

 

34,892

38,946

37,085

109,426

102,850

102,036

Stocks

1,820

2,075

3,146

2,528

2,828

3,128

Debtors

20,768

27,791

26,369

17,215

18,596

20,932

Cash

12,304

9,080

7,570

89,683

81,426

77,976

Other

0

0

0

0

0

0

Current Liabilities

 

 

(17,451)

(18,349)

(21,051)

(13,612)

(19,920)

(16,753)

Creditors

(15,297)

(17,528)

(20,243)

(12,937)

(14,345)

(16,078)

Short term borrowings

(2,154)

(821)

(808)

(675)

(5,575)

(675)

Long Term Liabilities

 

 

(6,491)

(5,105)

(7,180)

(4,781)

(7,093)

(7,093)

Long term borrowings

(1,685)

0

(1,391)

(1,688)

(4,000)

(4,000)

Other long term liabilities

(4,806)

(5,105)

(5,789)

(3,093)

(3,093)

(3,093)

Net Assets

 

 

28,969

33,624

34,282

99,893

94,263

95,273

CASH FLOW

Operating Cash Flow

 

 

5,404

2,412

10,676

119

4,066

4,736

Net Interest

(249)

(151)

105

(208)

150

150

Tax

(1,344)

(1,461)

(2,022)

379

(545)

(1,122)

Capex

(615)

(763)

(738)

(661)

(430)

(440)

Acquisitions/disposals

0

0

(5,403)

82,250

1,400

(4,900)

Financing

(597)

2,215

(828)

(6)

(1,200)

0

Dividends

(2,615)

(2,678)

(2,931)

(3,496)

(11,710)

(1,874)

Net Cash Flow

(16)

(426)

(1,141)

78,377

(8,269)

(3,449)

Opening net debt/(cash)

 

 

(8,575)

(8,465)

(8,259)

(5,371)

(87,320)

(71,851)

HP finance leases initiated

0

0

0

0

0

0

Other

(94)

220

(1,747)

3,572

(7,200)

4,900

Closing net debt/(cash)

 

 

(8,465)

(8,259)

(5,371)

(87,320)

(71,851)

(73,301)

Source: TXT e-solutions, Edison Investment Research

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

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by TXT e-solutions and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). 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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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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