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Claranova — Gradual return to growth

Claranova (PAR: CLA)

Last close As at 01/11/2024

EUR1.43

▲ −0.03 (−1.79%)

Market capitalisation

EUR82m

More on this equity

Research: TMT

Claranova — Gradual return to growth

Claranova reported revenue growth of 3% y-o-y in Q222 and 1% y-o-y for H122, with growth in Avanquest and myDevices offsetting a decline in the PlanetArt business. Management expects to see a gradual return to growth for PlanetArt as it adapts its customer acquisition strategy and consumers revert to pre-COVID buying patterns, as well as continued positive momentum for Avanquest. We have made minor changes to our revenue forecasts and maintain our EBITDA and EPS forecasts for FY22 and FY23.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Claranova

Gradual return to growth

Q2 revenue update

Software & comp services

11 February 2022

Price

€5.14

Market cap

€235m

$1.14:€1

Net cash (€m) at end FY21

25.3

Shares in issue

45.7m

Free float

80%

Code

CLA

Primary exchange

Euronext Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(15.7)

(4.5)

(26.5)

Rel (local)

(15.3)

(4.5)

(39.8)

52-week high/low

€8.81

€4.44

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 and it has operations in Europe, the United States and Canada.

Next events

H122 results

30 March 2022

Analyst

Katherine Thompson

+44 (0)20 3077 5730

Claranova is a research client of Edison Investment Research Limited

Claranova reported revenue growth of 3% y-o-y in Q222 and 1% y-o-y for H122, with growth in Avanquest and myDevices offsetting a decline in the PlanetArt business. Management expects to see a gradual return to growth for PlanetArt as it adapts its customer acquisition strategy and consumers revert to pre-COVID buying patterns, as well as continued positive momentum for Avanquest. We have made minor changes to our revenue forecasts and maintain our EBITDA and EPS forecasts for FY22 and FY23.

Year end

Revenue (€m)

EBITDA*
(€m)

PBT**
(€m)

Diluted EPS**
(€)

DPS
(€)

P/E
(x)

06/20

409.1

17.4

11.3

0.20

0.0

25.6

06/21

471.9

34.2

25.5

0.40

0.0

12.9

06/22e

502.1

39.0

31.3

0.49

0.0

10.4

06/23e

566.6

46.4

37.6

0.63

0.0

8.2

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

Mixed performance in Q222

The group achieved reported revenue growth of 3% y-o-y in Q222; stripping out currency effects and acquisitions, revenue declined 3% y-o-y. Avanquest generated constant currency organic revenue growth of 20% in Q222 and myDevices grew 13% on the same basis. Offsetting this, PlanetArt reported a 1% revenue decline, or a 6% decline on a constant currency organic basis. PlanetArt experienced supply chain pressures over the Christmas period and continues to adapt its customer acquisition strategy in the wake of Apple’s new privacy settings; both factors suppressed revenue growth during Q2 but should abate in future quarters as COVID pressures recede and the business shifts to new marketing channels.

Minor estimate changes

We believe that Avanquest and myDevices are both on a path of sustained revenue growth, supported by increasing levels of recurring revenue from subscriptions. We expect that as consumer behaviour normalises post-COVID and the new customer acquisition strategy is finalised, PlanetArt should return to growth. We have made minor revenue forecast revisions to reflect Q222 performance, but we maintain our EBITDA and EPS forecasts for FY22 and FY23, pending H122 results on 30 March.

Valuation: Resumption of PlanetArt growth the trigger

Reflecting the different business models for each division, we continue to use a sum-of-the-parts approach to valuation. Using EV/sales multiples that reflect our views on divisional growth and profitability and are conservative compared to the peer group averages, we maintain our valuation of €10.46 per share. In our view, consistent growth in revenues and margins towards the company’s FY23 targets will be key to reducing the discount to peers. In the near term, resumption of growth in PlanetArt from Q322 will be the key trigger.

Q222 revenue update

Claranova reported the following divisional revenues for Q222 and H122. On a group basis, Q222 revenue was 3% higher y-o-y; on a constant currency, organic basis, revenue declined 3% y-o-y. For H122, revenue grew 1% y-o-y and declined 6% on a constant currency, organic basis.

Exhibit 1: Revenue performance, Q222 and H122

Revenues (€m)

Q222

Q221

y-o-y

y-o-y

y-o-y

y-o-y

Reported

Constant currency

Organic

Constant currency organic

PlanetArt

163

164

(1%)

(4%)

(3%)

(6%)

Avanquest

28

22

26%

20%

26%

20%

myDevices

1

1

17%

13%

17%

13%

Total

193

188

3%

(1%)

0%

(3%)

H122

H120

PlanetArt

227

234

(3%)

(6%)

(7%)

(10%)

Avanquest

51

42

22%

17%

22%

17%

myDevices

2

2

5%

3%

5%

3%

Total

281

278

1%

(2%)

(3%)

(6%)

Source: Claranova

PlanetArt – revising marketing strategy

While benefiting from increased demand for photo printing during lockdown, which resulted in 18% organic, constant currency revenue growth in FY21, the business started to see a slowdown in demand from Q421 as lockdowns were lifted and consumers returned to socialising, resulting in a Q421 revenue decline of 7% on an organic, constant currency basis. In Q122, this weaker demand was compounded by changes to Apple’s privacy settings, which negatively impacted on PlanetArt’s customer acquisition process (see Post-lockdown hangover). This resulted in a Q122 revenue decline of 17% on an organic, constant currency basis.

The company had hoped to revise its customer acquisition strategy to use alternative ways of targeting customers and return to growth in Q222. Alternative channels for customer acquisition are currently being tested, and these helped the company to stabilise the business during its seasonally strongest quarter, reporting a 1% revenue decline for the quarter (a 6% decline on an organic, constant currency basis). We assume that as the optimal path for customer acquisition has not yet been decided, the company chose to moderate marketing spend in Q222, aiming to balance revenue growth and profitability. We expect that once trials confirm the best way forward, the company will increase marketing spend to accelerate revenue growth.

As we have written before, other companies active in the online photo printing and personalised gifting market are also experiencing weaker demand after a very strong period during COVID lockdowns. CEWE reported a 5% decline in Q421 and FY21 revenue (year ending 31 December), with a 13% decline in photobooks and 7% decline in photos printed in FY21. Moonpig continues to guide to an FY22 (year ending 30 April) revenue decline of 23–27% after reporting an 8.5% decline in revenue for H122, which implies an H222 revenue decline of 33–40%. Desenio reported a 21% organic revenue decline for Q321 (quarter ending 30 September) and did not provide full year guidance, noting that it had not yet seen a return to normal consumer behaviour.

We note that the company also had to contend with supply chain challenges during the quarter, with raw material price increases and elevated transport costs. These should be less of an issue for business in H222, as these are typically seasonally weaker quarters, and pressures relating to COVID should also reduce. Management is confident of a gradual improvement in growth in the coming quarters.

Avanquest – reaping rewards of recent restructuring

In recent years, the division has gone through the process of shifting the bulk of its software products from one-off licence sales to subscription sales. With this transition now complete, the division is reporting strong revenue growth. On a reported basis, Avanquest grew 26% y-o-y; stripping out the currency effect, organic growth was 20% y-o-y, up from 14% in Q122, resulting in H122 organic constant currency growth of 17%. The company noted that all three focus areas (pdf, photo and security) saw at least 20% growth in Q222 and recurring revenue is now more than 60% of total revenue (61% in Q122, 58% in FY21). The company expects revenue growth to support higher EBITDA margins in H122.

myDevices – revenue rebound as COVID issues recede

The myDevices business was affected by COVID as its partners were unable to access premises to install IoT products. Now that restrictions have lifted, myDevices is seeing an increase in subscription revenues. Q222 revenue increased 17% y-o-y (13% constant currency) compared to an 8% decline (7% constant currency) in Q122, resulting in H122 revenue growth of 5% (3% constant currency). Excluding one-off revenue reported in H121, H122 revenue grew 49% y-o-y (46% constant currency) and Q222 revenue grew 54% (47% constant currency). At the end of Q222, annual recurring revenue (ARR) stood at €1.8m, up 82% y-o-y in constant currency.

Changes to forecasts

We have made minor changes to forecasts to reflect H122 performance. We reduce our PlanetArt revenue forecast for FY22 and slightly increase our Avanquest and myDevices forecasts for FY22 and FY23. Overall, we maintain our EBITDA forecasts.

Exhibit 2: Changes to forecasts

€m

FY22e

FY23e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

506.1

502.1

(0.8%)

6.4%

561.1

566.6

1.0%

12.8%

EBITDA

42.62

42.62

(0.0%)

12.7%

50.0

50.0

(0.0%)

17.3%

EBITDA margin

8.4%

8.5%

0.1%

0.5%

8.9%

8.8%

(0.1%)

0.3%

EBITDA - pre IFRS 16

39.0

39.0

0.0%

14.1%

46.4

46.4

0.0%

18.9%

EBITDA margin - pre IFRS 16

7.7%

7.8%

0.1%

0.5%

8.3%

8.2%

(0.1%)

0.4%

Normalised operating profit

37.1

37.1

(0.0%)

14.9%

44.6

44.6

(0.0%)

20.1%

Normalised operating profit margin

7.3%

7.4%

0.1%

0.5%

7.9%

7.9%

(0.1%)

0.5%

Reported operating profit

34.0

34.0

(0.0%)

37.1%

41.5

41.5

(0.0%)

22.0%

Reported operating margin

6.7%

6.8%

0.1%

1.5%

7.4%

7.3%

(0.1%)

0.5%

Normalised PBT

31.3

31.3

(0.0%)

22.9%

37.6

37.6

(0.0%)

20.0%

Reported PBT

28.2

28.2

(0.0%)

56.8%

34.5

34.5

(0.0%)

22.2%

Normalised net income

22.5

22.5

0.0%

41.8%

29.0

29.0

0.0%

29.1%

Reported net income

20.1

20.1

0.0%

92.8%

26.6

26.6

0.0%

32.5%

Normalised basic EPS (€)

0.50

0.50

0.0%

24.1%

0.63

0.63

0.0%

26.9%

Normalised diluted EPS (€)

0.49

0.49

0.0%

24.3%

0.63

0.63

0.0%

26.9%

Reported basic EPS (€)

0.45

0.45

0.0%

68.7%

0.58

0.58

0.0%

30.3%

Net debt/(cash)

12.0

12.4

3.2%

(148.8%)

(13.9)

(14.5)

3.8%

(217.2%)

Divisional revenues

PlanetArt

401.4

393.7

(1.9%)

3.5%

441.9

441.9

0.0%

12.2%

Avanquest

100.8

103.3

2.5%

17.7%

115.2

118.2

2.5%

14.4%

myDevices

3.9

5.2

31.6%

34.0%

4.0

6.5

62.5%

26.0%

Total

506.1

502.1

(0.8%)

6.4%

561.1

566.6

1.0%

12.8%

Divisional EBITDA

PlanetArt

27.2

27.0

(0.7%)

3.8%

31.1

31.1

0.0%

15.2%

Avanquest

15.1

15.4

1.7%

40.9%

18.5

18.5

0.0%

20.4%

myDevices

(3.3)

(3.3)

1.8%

23.7%

(3.2)

(3.2)

0.0%

(4.2%)

Total EBITDA - pre IFRS 16

39.0

39.0

0.0%

14.1%

46.4

46.4

0.0%

18.9%

Source: Edison Investment Research

Exhibit 3: Financial summary

€m

2017

2018

2019

2020

2021

2022e

2023e

30-June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

130.2

161.5

262.3

409.1

471.9

502.1

566.6

EBITDA

 

 

(5.0)

3.9

16.0

20.6

37.8

42.6

50.0

Company adjusted EBITDA

 

 

(5.0)

3.9

16.0

17.4

34.2

39.0

46.4

Normalised operating profit

 

 

(5.8)

3.4

15.5

15.8

32.3

37.1

44.6

Amortisation of acquired intangibles

0.0

0.0

(1.5)

(2.4)

(3.1)

(3.1)

(3.1)

Exceptionals

0.4

(2.4)

(2.9)

(5.6)

(4.4)

0.0

0.0

Share-based payments

(4.8)

(7.1)

0.3

0.0

0.0

0.0

0.0

Reported operating profit

(10.1)

(6.1)

11.4

7.8

24.8

34.0

41.5

Net Interest

(0.9)

(0.3)

(3.5)

(4.5)

(6.8)

(5.8)

(7.0)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

(45.6)

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(6.6)

3.1

12.0

11.3

25.5

31.3

37.6

Profit Before Tax (reported)

 

 

(11.0)

(6.4)

(37.7)

3.3

18.0

28.2

34.5

Reported tax

(0.4)

(1.8)

(3.7)

(2.1)

(3.8)

(6.5)

(7.9)

Profit After Tax (norm)

(7.0)

2.4

9.2

8.7

19.6

24.1

29.0

Profit After Tax (reported)

(11.4)

(8.2)

(41.4)

1.2

14.2

21.7

26.6

Minority interests

0.3

0.2

0.6

(0.7)

(3.8)

(1.7)

0.0

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(6.7)

2.6

9.8

8.0

15.8

22.5

29.0

Net income (reported)

(11.0)

(7.9)

(40.8)

0.5

10.4

20.1

26.6

Basic ave. number of shares outstanding (m)

38

39

39

39

39

45

45

EPS - basic normalised (€)

 

 

(0.18)

0.07

0.25

0.20

0.40

0.50

0.63

EPS - diluted normalised (€)

 

 

(0.18)

0.06

0.25

0.20

0.40

0.49

0.63

EPS - basic reported (€)

 

 

(0.29)

(0.20)

(1.04)

0.01

0.26

0.45

0.58

Dividend (€)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

10.9

24.0

62.4

56.0

15.4

6.4

12.8

EBITDA Margin (%)

-3.8

2.4

6.1

5.0

8.0

8.5

8.8

Company adjusted EBITDA margin (%)

-3.8

2.4

6.1

4.3

7.2

7.8

8.2

Normalised Operating Margin

-4.4

2.1

5.9

3.9

6.8

7.4

7.9

BALANCE SHEET

Fixed Assets

 

 

2.0

1.3

75.1

93.7

96.4

191.0

187.1

Intangible Assets

0.9

0.5

69.9

70.5

77.5

172.9

169.8

Tangible Assets

0.3

0.2

1.4

15.7

12.2

11.4

10.6

Investments & other

0.7

0.6

3.8

7.5

6.7

6.7

6.7

Current Assets

 

 

28.1

79.1

100.9

116.3

128.4

166.0

196.2

Stocks

3.7

3.7

4.8

14.4

16.1

17.1

19.3

Debtors

4.3

4.9

11.6

9.9

9.2

9.8

11.0

Cash & cash equivalents

17.1

65.7

75.4

82.8

90.4

126.3

153.2

Other

2.9

4.8

9.1

9.2

12.7

12.7

12.7

Current Liabilities

 

 

(28.1)

(37.2)

(60.5)

(74.6)

(75.4)

(82.7)

(91.3)

Creditors

(26.6)

(35.4)

(54.8)

(64.3)

(62.5)

(69.8)

(78.4)

Tax and social security

(0.3)

(1.7)

(3.0)

(1.2)

(2.0)

(2.0)

(2.0)

Short term borrowings

(1.1)

(0.1)

(2.7)

(6.1)

(7.7)

(7.7)

(7.7)

Other

0.0

0.0

0.0

(3.0)

(3.2)

(3.2)

(3.2)

Long Term Liabilities

 

 

(0.7)

(29.0)

(52.0)

(73.1)

(66.3)

(139.9)

(139.9)

Long term borrowings

0.0

(28.1)

(49.1)

(62.8)

(57.4)

(131.0)

(131.0)

Other long-term liabilities

(0.7)

(0.9)

(2.9)

(10.3)

(8.9)

(8.9)

(8.9)

Net Assets

 

 

1.3

14.2

63.6

62.3

83.1

134.4

152.2

Minority interests

(0.1)

(1.8)

(11.0)

(11.7)

(16.2)

(3.8)

5.0

Shareholders' equity

 

 

1.2

12.5

52.6

50.6

66.9

130.6

157.2

CASH FLOW

Op Cash Flow before WC and tax

(5.0)

3.9

16.0

20.6

37.8

42.6

50.0

Working capital

6.8

7.9

(4.1)

22.5

(4.4)

5.7

5.1

Exceptional & other

(2.2)

(5.7)

(5.2)

(6.3)

(8.9)

0.0

0.0

Tax

(0.0)

(1.2)

(3.8)

(6.8)

(5.1)

(6.5)

(7.9)

Net operating cash flow

 

 

(0.4)

5.0

3.0

30.0

19.4

41.8

47.2

Capex

(0.2)

(0.1)

(2.5)

(1.2)

(3.8)

(1.0)

(1.0)

Acquisitions/disposals

3.6

14.2

(13.3)

(31.9)

(3.8)

(60.5)

(8.8)

Net interest

(0.0)

(0.3)

0.0

(0.5)

(0.7)

(5.8)

(7.0)

Equity financing

1.9

2.0

(1.4)

0.0

2.4

15.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

0.1

(0.6)

0.0

0.4

(2.6)

(3.6)

(3.6)

Net Cash Flow

5.0

20.1

(14.2)

(3.2)

11.1

(14.1)

26.8

Opening net debt/(cash)

 

 

(9.8)

(16.0)

(37.5)

(23.6)

(13.9)

(25.3)

12.4

FX

(0.6)

0.4

0.3

(0.8)

1.8

0.0

0.0

Other non-cash movements

1.8

1.1

0.0

(5.7)

(1.4)

(23.6)

0.0

Closing net debt/(cash)

 

 

(16.0)

(37.5)

(23.6)

(13.9)

(25.3)

12.4

(14.5)

Source: Claranova, Edison Investment Research

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The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by 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 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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