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Claranova — Guiding to strong H124 EBITDA growth

Claranova (PAR: CLA)

Last close As at 20/11/2024

EUR1.32

— 0.00 (0.15%)

Market capitalisation

EUR76m

More on this equity

Research: TMT

Claranova — Guiding to strong H124 EBITDA growth

Claranova reported a small increase in H124 revenue on a constant currency (cc) basis, as good growth in Avanquest and myDevices offset lower revenue in the larger PlanetArt division. Management expects H124 EBITDA to be at least 50% higher year-on-year (with growth in all divisions), highlighting the focus on profitability over growth. We maintain our EBITDA and EPS forecasts pending H124 results on 20 March.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Claranova

Guiding to strong H124 EBITDA growth

Q224 revenue update

Software and comp services

12 February 2024

Price

€2.55

Market cap

€145m

$1.08:€1

Net debt (€m) at end FY23

112

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

19.4

76.3

6.3

Rel (local)

16.3

64.2

1.1

52-week high/low

€2.55

€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 event

H124 results

20 March

Analyst

Katherine Thompson

+44 (0)20 3077 5700

Claranova is a research client of Edison Investment Research Limited

Claranova reported a small increase in H124 revenue on a constant currency (cc) basis, as good growth in Avanquest and myDevices offset lower revenue in the larger PlanetArt division. Management expects H124 EBITDA to be at least 50% higher year-on-year (with growth in all divisions), highlighting the focus on profitability over growth. We maintain our EBITDA and EPS forecasts pending H124 results on 20 March.

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

23.8

06/23

507.0

32.5

2.2

0.05

0.0

56.2

06/24e

499.8

43.3

20.8

0.25

0.0

10.1

06/25e

529.7

49.1

26.2

0.32

0.0

8.1

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

Q224 and H124 revenue up 1% cc

Claranova reported Q224 revenue of €210m and H124 revenue of €301m, both down 4% on a reported basis but up 1% cc. PlanetArt continues to work on optimising new customer acquisition channels and slowed the pace of revenue decline from 7% cc in Q124 to 2% cc in Q224. Avanquest saw 14% cc growth in Q224 and H124, with a particularly strong performance from Adaware (+40%). myDevices revenue growth accelerated from 61% cc in Q124 to 95% cc in Q224.

50% EBITDA growth expected in H124 (9% margin)

The company expects to report H124 EBITDA growth of at least 50% y-o-y, with PlanetArt up c 30%, Avanquest up c 70% and myDevices breaking even. This would equate to a c 8.6% margin compared to 5.5% a year ago. We have increased our revenue forecasts to reflect higher growth in Avanquest and reweighted our divisional EBITDA forecasts on the basis of expected H124 performance, but we maintain our group EBITDA and EPS estimates.

Valuation: Debt refinancing the next 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 calculate a valuation of €5.4 per share, before any group holding discount is applied. If the undiscounted value of convertible debt is included, this reduces the valuation to €4.7 per share. In our view, consistent growth in revenues and margins towards Claranova’s targets will be fundamental to reducing the discount to peers. In the near term, key triggers for upside will be sustained growth in PlanetArt (while balancing profitability) and refinancing the OCEANE convertible bonds (fair value €71m at the end of FY23) in advance of potential redemption by the holder in August 2024.

Review of Q224 revenue update

The table below summarises the revenue performance for Q224 and H124. At a group level, Q224 and H124 revenue was 4% lower year-on-year but 1% higher at cc. Management noted the focus on profitability over growth, and expects H124 EBITDA to be at least 50% higher than in H123. With H123 EBITDA of €17.4m, this implies H124 EBITDA of at least €26.1m. We discuss the divisional performance below.

Exhibit 1: Q124 and H124 revenue performance

Revenues (€m)

Q224

Q223

y-o-y

y-o-y

Reported

Constant currency

PlanetArt

175

187

(7%)

(2%)

Avanquest

33

30

9%

14%

myDevices

3

1

85%

95%

Total

210

218

(4%)

1%

H124

H123

y-o-y

y-o-y

Reported

Constant currency

PlanetArt

235

255

(8%)

(3%)

Avanquest

61

57

7%

14%

myDevices

5

3

67%

78%

Total

301

315

(4%)

1%

Source: Claranove Note: All organic growth

PlanetArt: profitability up on lower revenue

In Q224, PlanetArt revenue declined 7% on a reported basis and 2% cc. This was an improvement on the 7% cc decline in Q124, resulting in H124 revenue down 3% cc (as a reminder, Q2 is seasonally the strongest quarter so has a larger influence on H1 growth rates). Management expects PlanetArt to report EBITDA growth of c 30% in H124 which implies H124 EBITDA of c €16.5m (c 7% margin vs 5% in H123), highlighting the focus on profitability over growth.

Avanquest: strong growth in Q224

Q224 revenue increased 9% y-o-y or 14% cc, and H124 cc growth was also 14%. Core revenue made up 88%/€54m of H124 revenue while non-core revenue declined 29% to €8m. The company noted that core SaaS revenue increased 26% cc in H124, with Adaware up 40%, Soda PDF up 9% and InPixio up 13%. The European non-core business was sold in Q423 and we assume there is no non-core contribution from Q324, which should improve profitability. The company expects Avanquest to report EBITDA growth of c 70% for H124, which implies EBITDA of c €10.7m (c 17% margin vs 11% in H123).

myDevices: break-even in sight

myDevices revenue increased 85% y-o-y (95% cc) in Q224 and 67% y-o-y (78% cc) in H124, as more partners rolled out its solutions to their end customers. There was also an acceleration in the sale of sensors as well as related installation and commissioning services. At the end of H124, myDevices had 217 partners (end Q124 213) and annual recurring revenue of €3.4m (+15% y-o-y, +24% cc). The company expects break-even at the EBITDA level in H124 versus a loss of €1.6m in H123.

Changes to forecasts

We increase our group revenue forecasts to reflect stronger revenue in Avanquest but we maintain our group EBITDA and EPS forecasts. We have reweighted our EBITDA forecasts on a divisional basis to reflect the expected performance in H124.

Exhibit 2: Changes to forecasts

€m

FY24e

FY25e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

492.3

499.8

1.5%

(1.4%)

523.8

529.7

1.1%

6.0%

EBITDA

47.5

47.5

0.0%

31.0%

53.4

53.4

0.0%

12.4%

EBITDA margin

9.7%

9.5%

(0.1%)

2.4%

10.2%

10.1%

(0.1%)

0.6%

EBITDA - pre IFRS 16

43.3

43.3

0.0%

33.2%

49.1

49.1

0.0%

13.4%

EBITDA margin - pre IFRS 16

8.8%

8.7%

(0.1%)

2.2%

9.4%

9.3%

(0.1%)

0.6%

Normalised operating profit

40.8

40.8

0.0%

34.8%

46.3

46.3

0.0%

13.4%

Normalised operating margin

8.3%

8.2%

(0.1%)

2.2%

8.8%

8.7%

(0.1%)

0.6%

Reported operating profit

33.2

33.2

0.0%

72.2%

40.7

40.7

0.0%

22.5%

Reported operating margin

6.8%

6.7%

(0.1%)

2.8%

7.8%

7.7%

(0.1%)

1.0%

Normalised PBT

20.8

20.8

0.0%

842.2%

26.2

26.2

0.0%

26.4%

Reported PBT

13.2

13.2

0.1%

(249.7%)

20.6

20.6

0.0%

56.8%

Normalised net income

15.3

15.2

(0.2%)

574.6%

19.2

19.2

0.0%

26.2%

Reported net income

9.4

9.4

(0.4%)

(188.3%)

14.9

14.9

0.0%

59.0%

Normalised basic EPS (€)

0.27

0.27

(0.2%)

448.1%

0.34

0.34

0.0%

24.8%

Normalised diluted EPS (€)

0.25

0.25

(0.2%)

457.0%

0.32

0.32

0.0%

24.9%

Reported basic EPS (€)

0.17

0.17

(0.4%)

(171.8%)

0.26

0.26

0.0%

57.2%

Net debt/(cash)

93.8

93.5

(0.3%)

(16.5%)

71.7

71.4

(0.4%)

(23.6%)

Net debt/EBITDA (x)

2.2

2.2

1.5

1.5

Divisional revenues

PlanetArt

367.5

367.1

(0.1%)

(4.0%)

390.8

390.1

(0.2%)

6.3%

Avanquest

114.7

121.5

6.0%

4.5%

121.8

127.8

4.9%

5.2%

myDevices

10.2

11.2

9.9%

36.6%

11.2

11.8

5.4%

5.5%

Total

492.3

499.8

1.5%

(1.4%)

523.8

529.7

1.1%

6.0%

Divisional EBITDA

PlanetArt

18.6

19.5

4.8%

29.1%

21.2

21.2

0.0%

8.7%

Avanquest

23.4

22.5

(3.8%)

30.1%

25.8

25.8

0.0%

14.7%

myDevices

1.3

1.3

0.8%

1180.0%

2.1

2.1

0.0%

64.1%

Total EBITDA - pre IFRS 16

43.3

43.3

0.0%

33.2%

49.1

49.1

0.0%

13.4%

Divisional EBITDA margin

PlanetArt

5.1%

5.3%

0.3%

1.4%

5.4%

5.4%

0.0%

0.1%

Avanquest

20.4%

18.5%

(1.9%)

3.6%

21.2%

20.2%

(1.0%)

1.7%

myDevices

12.5%

11.4%

(1.0%)

10.2%

18.8%

17.8%

(1.0%)

6.3%

Total EBITDA margin - pre IFRS 16

8.8%

8.7%

(0.1%)

2.2%

9.4%

9.3%

(0.1%)

0.6%

Source: Edison Investment Research


Exhibit 3: Financial summary

€m

2017

2018

2019

2020

2021

2022

2023

2024e

2025e

30-June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

130.2

161.5

262.3

409.1

470.6

473.7

507.0

499.8

529.7

EBITDA

 

 

(5.0)

3.9

16.0

20.6

36.5

28.3

36.3

47.5

53.4

Company adjusted EBITDA (pre IFRS 16)

 

 

(5.0)

3.9

16.0

17.4

32.9

25.5

32.5

43.3

49.1

Normalised operating profit

 

 

(5.8)

3.4

15.5

15.8

31.0

23.7

30.3

40.8

46.3

Amortisation of acquired intangibles

0.0

0.0

(1.5)

(2.4)

(3.1)

(3.8)

(4.8)

(4.8)

(4.8)

Exceptionals

0.4

(2.4)

(2.9)

(5.6)

(4.4)

(0.7)

(5.3)

(2.0)

0.0

Share-based payments

(4.8)

(7.1)

0.3

0.0

0.0

(1.2)

(0.9)

(0.8)

(0.8)

Reported operating profit

(10.1)

(6.1)

11.4

7.8

23.5

18.0

19.3

33.2

40.7

Net Interest

(0.9)

(0.3)

(3.5)

(4.5)

(6.8)

(16.5)

(28.1)

(20.1)

(20.1)

Joint ventures & associates (post tax)

0.0

0.0

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

(5.7)

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(6.6)

3.1

12.0

11.3

24.2

7.2

2.2

20.8

26.2

Profit Before Tax (reported)

 

 

(11.0)

(6.4)

(37.7)

3.3

16.7

(4.2)

(8.8)

13.2

20.6

Reported tax

(0.4)

(1.8)

(3.7)

(2.1)

(3.5)

(5.7)

(2.0)

(3.0)

(4.7)

Profit After Tax (norm)

(7.0)

2.4

9.2

8.7

18.6

5.5

2.1

16.0

20.2

Profit After Tax (reported)

(11.4)

(8.2)

(41.4)

1.2

13.2

(10.0)

(10.8)

10.1

15.9

Minority interests

0.3

0.2

0.6

(0.7)

(3.7)

(0.5)

0.2

(0.8)

(1.0)

Discontinued operations

0.0

0.0

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

14.9

5.0

2.3

15.2

19.2

Net income (reported)

(11.0)

(7.9)

(40.8)

0.5

9.5

(10.5)

(10.6)

9.4

14.9

Basic ave. number of shares outstanding (m)

38

39

39

39

39

43

46

56

57

EPS - basic normalised (€)

 

 

(0.18)

0.07

0.25

0.20

0.38

0.12

0.05

0.27

0.34

EPS - diluted normalised (€)

 

 

(0.18)

0.06

0.25

0.20

0.37

0.11

0.05

0.25

0.32

EPS - basic reported (€)

 

 

(0.29)

(0.20)

(1.04)

0.01

0.24

(0.25)

(0.23)

0.17

0.26

Dividend (€)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

10.9

24.0

62.4

56.0

15.0

0.7

7.0

(1.4)

6.0

EBITDA Margin (%)

-3.8

2.4

6.1

5.0

7.7

6.0

7.2

9.5

10.1

Company adjusted EBITDA margin (%)

-3.8

2.4

6.1

4.3

7.0

5.4

6.4

8.7

9.3

Normalised Operating Margin

-4.4

2.1

5.9

3.9

6.6

5.0

6.0

8.2

8.7

BALANCE SHEET

Fixed Assets

 

 

2.0

1.3

75.1

93.7

96.6

123.3

151.8

153.5

149.2

Intangible Assets

0.9

0.5

69.9

70.5

77.5

96.6

120.1

121.7

117.3

Tangible Assets

0.3

0.2

1.4

15.7

12.2

18.2

18.2

18.3

18.4

Investments & other

0.7

0.6

3.8

7.5

6.9

8.5

13.5

13.5

13.5

Current Assets

 

 

28.1

79.1

100.9

116.3

128.4

146.8

112.6

80.9

118.7

Stocks

3.7

3.7

4.8

14.4

16.1

22.0

20.4

20.1

21.3

Debtors

4.3

4.9

11.6

9.9

9.2

8.3

9.8

9.7

10.2

Cash & cash equivalents

17.1

65.7

75.4

82.8

90.4

100.3

66.8

35.5

71.6

Other

2.9

4.8

9.1

9.2

12.7

16.2

15.6

15.6

15.6

Current Liabilities

 

 

(28.1)

(37.2)

(60.5)

(74.6)

(76.7)

(106.0)

(176.2)

(109.6)

(113.3)

Creditors

(26.6)

(35.4)

(54.8)

(64.3)

(63.8)

(78.1)

(74.1)

(71.3)

(75.0)

Tax and social security

(0.3)

(1.7)

(3.0)

(1.2)

(2.0)

(1.9)

(2.1)

(2.1)

(2.1)

Short term borrowings

(1.1)

(0.1)

(2.7)

(6.1)

(7.7)

(22.6)

(93.8)

(30.0)

(30.0)

Other

0.0

0.0

0.0

(3.0)

(3.2)

(3.4)

(6.2)

(6.2)

(6.2)

Long Term Liabilities

 

 

(0.7)

(29.0)

(52.0)

(73.1)

(66.1)

(162.2)

(104.6)

(118.6)

(132.6)

Long term borrowings

0.0

(28.1)

(49.1)

(62.8)

(57.4)

(148.9)

(85.0)

(99.0)

(113.0)

Other long term liabilities

(0.7)

(0.9)

(2.9)

(10.3)

(8.7)

(13.3)

(19.6)

(19.6)

(19.6)

Net Assets

 

 

1.3

14.2

63.6

62.3

82.2

1.9

(16.4)

6.2

22.0

Minority interests

(0.1)

(1.8)

(11.0)

(11.7)

(16.2)

(3.3)

(2.9)

2.0

1.9

Shareholders' equity

 

 

1.2

12.5

52.6

50.6

66.0

(1.4)

(19.3)

8.2

23.9

CASH FLOW

Op Cash Flow before WC and tax

(5.0)

3.9

16.0

20.6

36.5

28.3

36.3

47.5

53.4

Working capital

6.8

7.9

(4.1)

22.5

(3.1)

3.2

(12.9)

(2.4)

2.0

Exceptional & other

(2.2)

(5.7)

(5.2)

(6.3)

(8.9)

(4.2)

(8.1)

(1.9)

0.0

Tax

(0.0)

(1.2)

(3.8)

(6.8)

(5.1)

(9.4)

(6.0)

(3.0)

(4.7)

Net operating cash flow

 

 

(0.4)

5.0

3.0

30.0

19.4

17.9

9.3

40.2

50.7

Capex

(0.2)

(0.1)

(2.5)

(1.2)

(3.8)

(2.2)

(10.9)

(4.0)

(4.0)

Acquisitions/disposals

3.6

14.2

(13.3)

(31.9)

(3.8)

(73.3)

(21.2)

(11.2)

(0.9)

Net interest

(0.0)

(0.3)

0.0

(0.5)

(0.7)

(1.7)

0.0

(6.1)

(6.1)

Equity financing

1.9

2.0

(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

0.0

0.0

Other

0.1

(0.6)

0.0

0.4

(2.6)

1.9

(3.4)

(3.6)

(3.6)

Net Cash Flow

5.0

20.1

(14.2)

(3.2)

11.0

(44.1)

(26.5)

32.7

36.1

Opening net debt/(cash)

 

 

(9.8)

(16.0)

(37.5)

(23.6)

(13.9)

(25.3)

71.2

112.0

93.5

FX

(0.6)

0.4

0.3

(0.8)

1.8

2.1

(0.5)

0.0

0.0

Other non-cash movements

1.8

1.1

0.0

(5.7)

(1.3)

(54.5)

(13.8)

(14.2)

(14.0)

Closing net debt/(cash)

 

 

(16.0)

(37.5)

(23.6)

(13.9)

(25.3)

71.2

112.0

93.5

71.4

Source: Claranova, Edison Investment Research

General disclaimer and copyright

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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.

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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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