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Claranova — EBITDA improvement across all divisions

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 — EBITDA improvement across all divisions

On relatively flat H124 revenue, Claranova grew adjusted EBITDA more than 50% year-on-year as the focus on profitability over growth started to deliver. With Avanquest’s loss-making non-core business reducing, myDevices hitting break-even and customer acquisition costs back under control in PlanetArt, the company is better positioned to drive profitable growth. Management is targeting an adjusted EBITDA margin of c 10% in FY24. The company has refinanced its debt, providing funds to repay the OCEANE convertible debt that was due for repayment from August, with the maturity of the new debt extended to April 2028. A new CEO and chairman have been appointed and a strategic review is underway.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Claranova

EBITDA improvement across all divisions

H124 & Q324 results

Software and comp services

8 May 2024

Price

€2.50

Market cap

€142m

$1.08/€

Net debt (€m) at end H124

40.8

Shares in issue

56.8m

Free float

84%

Code

CLA

Primary exchange

Euronext Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

7.3

(0.8)

2

Rel (local)

6.9

(6.5)

11.2

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

Q424 revenue update

1 August 2024

Analyst

Katherine Thompson

+44 (0)20 3077 5700

Claranova is a research client of Edison Investment Research Limited

On relatively flat H124 revenue, Claranova grew adjusted EBITDA more than 50% year-on-year as the focus on profitability over growth started to deliver. With Avanquest’s loss-making non-core business reducing, myDevices hitting break-even and customer acquisition costs back under control in PlanetArt, the company is better positioned to drive profitable growth. Management is targeting an adjusted EBITDA margin of c 10% in FY24. The company has refinanced its debt, providing funds to repay the OCEANE convertible debt that was due for repayment from August, with the maturity of the new debt extended to April 2028. A new CEO and chairman have been appointed and a strategic review is underway.

Year
end

Revenue
(€m)

EBITDA*
(€m)

PBT**
(€m)

Diluted EPS**
(€)

DPS
(€)

P/E
(x)

06/22

473.7

25.5

7.2

0.11

0.0

23.4

06/23

507.0

32.5

2.2

0.05

0.0

54.4

06/24e

502.3

43.4

17.3

0.21

0.0

11.9

06/25e

535.6

49.5

29.8

0.38

0.0

6.5

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

H124 EBITDA growth of 58% y-o-y, margin 9.1%

Claranova reported H124 revenue of €301m (+1% y-o-y in constant currency (cc)) and adjusted EBITDA of €27.5m (margin 9.1%), up 58% y-o-y. Net income of €1.7m compared to a net loss of €3.9m in H123. The company closed H124 with net debt of €40.8m, down from €112.0m at the end of FY23, reflecting strong cash generation (boosted by seasonal working capital inflows) and the capital raise in July 2023. Q324 revenue grew 4% y-o-y (2% cc). On 2 April, Claranova confirmed that it had refinanced its debt, providing funds to repay OCEANEs worth €93m that are redeemable from August and extending the maturity to April 2028.

Targeting double-digit margins

Management continues to target an adjusted EBITDA margin of c 10% in FY24. We have revised our forecasts to reflect H124 results and the Q1 revenue update with minimal changes to revenue and EBITDA forecasts. Our FY24 margin forecast of 8.6% is below the company’s target – in our view, return to revenue growth in PlanetArt is the main lever for margin growth in H224 and beyond. We have also factored in the new debt.

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 €5.5, 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.

Review of H124 results

Claranova reported H124 results as per Exhibit 1. Revenue declined 4% (+1% in constant currency (cc)) while EBITDA increased 55% y-o-y (58% cc) reflecting the group’s focus on profitability over growth. Net finance costs included €9m amortisation of the OCEANE debt. The effective tax rate of 74% reflected the effect of finance charges that are not allowable for tax purposes. The company reported positive net income of €2.2m, or €1.7m after minority interest deduction. Net debt at end H124 reduced to €40.8m, down from €112.0m at the end of FY23, reflecting a €71.8m cash inflow from operating activities (which included a €49.3m working capital inflow) offset by investing outflow of €1.1m and financing outflow of €39.0m (which included the repayment of ORNANE debt for €29m).

Exhibit 1: H124 results highlights

€m

H124

H123

y-o-y

Revenues

300.9

314.6

-4.3%

EBITDA

30.1

19.5

54.5%

Lease payments (IFRS 16 adjustment)

(2.6)

(2.1)

Adjusted EBITDA

27.5

17.4

58.1%

D&A

(3.4)

(3.0)

Normalised EBIT

26.8

16.5

62.2%

Share-based payments

(0.3)

(0.5)

Exceptional items

(1.9)

(2.2)

Acquired amortisation

(2.6)

(2.2)

Reported EBIT

21.9

11.6

89.1%

Net finance cost

(13.5)

(12.4)

Reported PBT

8.4

(0.8)

N/A

Tax

(6.2)

(3.6)

Profit after tax

2.2

(4.5)

N/A

Minority interest (MI)

(0.5)

0.6

Net income after MI

1.7

(3.9)

N/A

Net debt/(cash)

40.8

64.8

-37.0%

Source: Claranova

Claranova reported divisional revenue in February. We discuss EBITDA performance below.

Exhibit 2: Divisional performance

€m

Revenues

y-o-y

y-o-y

y-o-y

y-o-y

H124

H123

Reported

Constant currency

Organic

Constant currency organic

PlanetArt

235

255

(8%)

(3%)

(8%)

(3%)

Avanquest

61

57

7%

14%

7%

14%

myDevices

5

3

67%

78%

67%

78%

Total

301

315

(4%)

1%

(4%)

1%

EBITDA

EBITDA margin

  

H124

H123

H124

H123

PlanetArt

16.6

12.7

7.1%

5.0%

Avanquest

10.9

6.3

17.8%

11.0%

myDevices

(0.0)

(1.6)

-0.7%

-54.9%

Total

27.5

17.4

9.1%

5.5%

Source: Claranova

On 7 May, the company reported its Q324 revenue update as per Exhibit 3.

Exhibit 3: Q324 revenue update

Revenues (€m)

Q324

Q323

y-o-y

y-o-y

Reported

Constant currency

PlanetArt

61

60

2%

(2%)

Avanquest

31

29

7%

8%

myDevices

2

2

18%

18%

Total

94

91

4%

2%

9M24

9M23

PlanetArt

296

314

(6%)

(3%)

Avanquest

92

86

7%

12%

myDevices

7

5

48%

54%

Total

395

405

(2%)

1%

Source: Claranova

PlanetArt: H124 EBITDA growth of 31% y-o-y

The company saw a revenue decline of 8% y-o-y in H124 (3% decline cc) as the business continued to focus on optimising customer acquisition costs, which are now down to the level they were at prior to the introduction of Apple’s app tracking transparency (ATT) policy. Through a combination of optimising operating costs and stabilisation of raw material and shipping costs, the business was able to grow EBITDA 31% y-o-y (37% cc) and expand the margin by 2.1pp to 7.1%. In Q324, the division saw a 2% y-o-y revenue decline in cc and 2% growth on a reported basis. The challenge for the business now is to scale its customer acquisition channels’ profitability to drive revenue and profit growth, which includes evolving its pricing policies.

Avanquest: H124 EBITDA growth of 73% y-o-y

Avanquest H124 revenue increased 7% y-o-y (14% cc) helped by growth of the core business of 18% (26% cc). The core business made up 87% of divisional revenue in H124, up from 81% in H123. Security software saw 40% y-o-y growth, PDF 9% and Photo 13%. Divisional EBITDA increased 73% y-o-y, with core EBITDA of €12m (€14m less €2m in corporate costs), up from €7m in H123 (€9m less €2m in corporate costs). The EBITDA margin increased 6.8pp to 17.8%. Management expects the positive momentum to continue in H2 with a full year improvement in profitability. In Q324, the division grew 8% y-o-y on a cc basis and 7% on a reported basis. For 9M24, core business revenue made up 90% of divisional revenue with non-core revenue of €9m for the nine months, down 43% y-o-y post the disposal of a large proportion of non-core business in H124.

myDevices: Break-even EBITDA in H124

myDevices H124 revenue increased 66% y-o-y (78% cc) and in Q324 increased 18% y-o-y (18% cc). myDevices broke even at the EBITDA level in H124. Revenue has benefited from large-scale deployments by partners along with increased sales of sensors and the related installation and commissioning services. 210 partners were rolling out solutions by end-Q324 and annual recurring revenue (ARR) rose 5% y-o-y (10% cc) to €3.4m. To support business development in Europe and drive growth outside the US, the group created myDevices Europe, a wholly-owned subsidiary of myDevices.

Debt refinanced

On 2 April, Claranova confirmed it had successfully refinanced its debt. A new term loan of €108m has been taken out via an agreement with funds managed by Cheyne Capital Management (€60m) and Heights Capital Management (€48m; the holder of the OCEANE bonds). The debt is due for repayment in full on 4 April 2028. Interest is payable on a quarterly basis at an annual rate of three-month Euribor plus 6.5%. The debt holders are also entitled to an additional interest payment on a quarterly basis. This is either accrued and paid at the end of the term (rate: 3.75% per year) or paid in cash on a quarterly basis (rate 3.25% per year) at the company’s choice. We have conservatively assumed the interest is repaid at the end of the term. The OCEANE bonds, which were potentially redeemable by the holder from August (value €93m at that date, equivalent to €100m less interest paid to that date), will be repaid with the proceeds of the new debt. This results in a net repayment of €45m to Heights Capital Management (€93m owed less €48m in new debt).

The company has also refinanced €17.5m of debt issued by the SaarLB banking syndicate. Tranche A worth €12.5m was repayable over the next four years and Tranche B worth €5m was due for repayment on 1 July 2028. Claranova will repay Tranche B immediately, leaving €12.5m to be repaid from 1 July 2024 to 1 July 2028. Interest will be payable half-yearly at a rate of six-month Euribor plus 3.5%.

The proceeds of €108m will be split as €93m repayment of OCEANEs, €5m repayment of SaarLB debt, €7.1m costs relating to the refinancing and €2.9m to strengthen the cash position.

The debt is subject to the following covenants, tested quarterly:

■

Net debt/EBITDA: end FY24 <3.6x, end Q125 <3.5x, from end Q225 to end Q126 <2.5x and thereafter <2.25x.

■

Interest cover: >2.0x.

■

Gross cash: at least €10m.

We estimate that by the end of FY24, Claranova will have gross debt totalling €147m (new loan €108m, other debt €39m) and net debt of €106m, equating to a net debt/EBITDA ratio of 2.4x.

Board changes – new CEO and chairman

Addressing shareholder concerns, the company recently refreshed the board and initiated a strategic review. On 15 April, the company announced that group CEO Pierre Cesarini had left the company and has been replaced by Eric Gareau, who has been the CEO of Avanquest since 2021 and will retain that role also.

On 2 April, Claranova announced that a new chairman, Marc Goldberg, had been appointed after Francis Meston resigned from the role. Marc Goldberg, currently a 16% shareholder via Lafayette Investments, was previously vice-chairman and has been appointed to the role effective immediately. Existing Non-executive Director Craig Forman has been appointed vice-chairman. Roger Bloxberg has resigned from the board but will continue in his role as CEO of PlanetArt.

Outlook and changes to forecasts

The company continues to target an adjusted EBITDA margin of c 10% for FY24. We have revised our forecasts to reflect H124 results and the Q324 revenue update and we have increased our net finance costs to reflect higher amortisation of the OCEANE debt to reach the repayment value. We have reduced the amortisation factored into FY25 to offset this. We have factored in the interest costs on the new debt and the €7.1m in costs to refinance the debt.

Exhibit 4: Changes to forecasts

€m

FY24e

FY25e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

499.8

502.3

0.5%

(0.9%)

529.7

535.6

1.1%

6.6%

EBITDA

47.5

48.7

2.4%

34.0%

53.4

54.9

2.7%

12.8%

EBITDA margin

9.5%

9.7%

0.2%

2.5%

10.1%

10.2%

0.2%

0.6%

EBITDA - pre IFRS 16

43.3

43.4

0.3%

33.6%

49.1

49.5

0.8%

14.0%

EBITDA margin - pre IFRS 16

8.7%

8.6%

(0.0%)

2.2%

9.3%

9.2%

(0.0%)

0.6%

Normalised operating profit

40.8

42.0

2.7%

38.5%

46.3

47.8

3.2%

13.9%

Normalised operating margin

8.2%

8.4%

0.2%

2.4%

8.7%

8.9%

0.2%

0.6%

Reported operating profit

33.2

34.2

2.9%

77.3%

40.7

42.0

3.1%

22.7%

Reported operating margin

6.7%

6.8%

0.2%

3.0%

7.7%

7.8%

0.2%

1.0%

Normalised PBT

20.8

17.3

(16.8%)

684.3%

26.2

29.8

13.5%

72.4%

Reported PBT

13.2

2.4

(81.4%)

(127.8%)

20.6

24.0

16.3%

881.5%

Normalised net income

15.2

12.7

(16.7%)

454.9%

19.2

22.0

14.2%

73.1%

Reported net income

9.4

-3.0

(131.9%)

(71.7%)

14.9

17.5

17.3%

(684.3%)

Normalised basic EPS (€)

0.27

0.23

(16.7%)

350.8%

0.34

0.39

14.2%

71.1%

Normalised diluted EPS (€)

0.25

0.21

(16.7%)

358.1%

0.32

0.38

21.9%

82.8%

Reported basic EPS (€)

0.17

-0.05

(131.9%)

(77.0%)

0.26

0.31

17.3%

(677.6%)

Net debt/(cash)

93.5

105.7

13.1%

(5.6%)

71.4

80.7

13.0%

(23.7%)

Net debt/EBITDA (x)

2.2

2.4

1.5

1.6

Divisional revenues

PlanetArt

367.1

367.6

0.1%

(3.9%)

390.1

391.2

0.3%

6.4%

Avanquest

121.5

124.2

2.2%

6.8%

127.8

132.7

3.8%

6.9%

myDevices

11.2

10.5

(6.2%)

28.1%

11.8

11.8

0.0%

12.5%

Total

499.8

502.3

0.5%

(0.9%)

529.7

535.6

1.1%

6.6%

Divisional EBITDA

PlanetArt

19.5

19.9

2.2%

32.0%

21.2

21.6

1.9%

8.3%

Avanquest

22.5

22.9

1.8%

32.4%

25.8

25.8

0.0%

12.7%

myDevices

1.3

0.6

(55.6%)

468.0%

2.1

2.1

0.0%

269.7%

Total EBITDA - pre IFRS 16

43.3

43.4

0.3%

33.6%

49.1

49.5

0.8%

14.0%

Divisional EBITDA margin

PlanetArt

5.3%

5.4%

0.1%

1.5%

5.4%

5.5%

0.1%

0.1%

Avanquest

18.5%

18.4%

(0.1%)

3.6%

20.2%

19.4%

(0.7%)

1.0%

myDevices

11.4%

5.4%

(6.0%)

4.2%

17.8%

17.8%

0.0%

12.4%

Total EBITDA margin - pre IFRS 16

8.7%

8.6%

(0.0%)

2.2%

9.3%

9.2%

(0.0%)

0.6%

Source: Edison Investment Research

Exhibit 5: 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

502.3

535.6

EBITDA

 

 

16.0

20.6

36.5

28.3

36.3

48.7

54.9

Company adjusted EBITDA

 

 

16.0

17.4

32.9

25.5

32.5

43.4

49.5

Normalised operating profit

 

 

15.5

15.8

31.0

23.7

30.3

42.0

47.8

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

34.2

42.0

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

17.3

29.8

Profit Before Tax (reported)

 

 

(37.7)

3.3

16.7

(4.2)

(8.8)

2.4

24.0

Reported tax

(3.7)

(2.1)

(3.5)

(5.7)

(2.0)

(4.8)

(5.5)

Profit After Tax (norm)

9.2

8.7

18.6

5.5

2.1

13.3

22.9

Profit After Tax (reported)

(41.4)

1.2

13.2

(10.0)

(10.8)

(2.4)

18.5

Minority interests

0.6

(0.7)

(3.7)

(0.5)

0.2

(0.6)

(1.0)

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

12.7

22.0

Net income (reported)

(40.8)

0.5

9.5

(10.5)

(10.6)

(3.0)

17.5

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

0.23

0.39

EPS - diluted normalised (€)

 

 

0.25

0.20

0.37

0.11

0.05

0.21

0.38

EPS - basic reported (€)

 

 

(1.04)

0.01

0.24

(0.25)

(0.23)

(0.05)

0.31

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

(0.9)

6.6

EBITDA Margin (%)

6.1

5.0

7.7

6.0

7.2

9.7

10.2

Company adjusted EBITDA margin (%)

6.1

4.3

7.0

5.4

6.4

8.6

9.2

Normalised Operating Margin

5.9

3.9

6.6

5.0

6.0

8.4

8.9

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

85.4

106.6

Stocks

4.8

14.4

16.1

22.0

20.4

20.2

21.6

Debtors

11.6

9.9

9.2

8.3

9.8

9.7

10.4

Cash & cash equivalents

75.4

82.8

90.4

100.3

66.8

41.4

60.6

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)

(93.4)

(97.6)

Creditors

(54.8)

(64.3)

(63.8)

(78.1)

(74.1)

(71.7)

(75.9)

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)

(15.0)

(15.0)

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)

(151.7)

(145.8)

Long term borrowings

(49.1)

(62.8)

(57.4)

(148.9)

(85.0)

(132.1)

(126.2)

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)

(6.6)

11.5

Minority interests

(11.0)

(11.7)

(16.2)

(3.3)

(2.9)

2.2

2.2

Shareholders' equity

 

 

52.6

50.6

66.0

(1.4)

(19.3)

(4.4)

13.7

CASH FLOW

Op Cash Flow before WC and tax

16.0

20.6

36.5

28.3

36.3

48.7

54.9

Working capital

(4.1)

22.5

(3.1)

3.2

(12.9)

(2.2)

2.3

Exceptional & other

(5.2)

(6.3)

(8.9)

(4.2)

(8.1)

(9.0)

0.0

Tax

(3.8)

(6.8)

(5.1)

(9.4)

(6.0)

(4.8)

(5.5)

Net operating cash flow

 

 

3.0

30.0

19.4

17.9

9.3

32.6

51.6

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)

(1.0)

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)

28.6

29.2

Opening net debt/(cash)

 

 

(37.5)

(23.6)

(13.9)

(25.3)

71.2

112.0

105.7

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)

(22.3)

(4.1)

Closing net debt/(cash)

 

 

(23.6)

(13.9)

(25.3)

71.2

112.0

105.7

80.7

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.

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 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

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.

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 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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