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Claranova — Managing supply and demand

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 — Managing supply and demand

Claranova generated 17% constant currency organic revenue growth in H121, despite COVID-19 related supply challenges. Demand remains high in PlanetArt, which reported 23% constant currency organic growth in H121. Management expects H121 group EBITDA to nearly double y-o-y and we have upgraded our FY21 profitability forecasts to reflect this.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Claranova

Managing supply and demand

Q221 revenue update

Software & comp services

12 February 2021

Price

€6.77

Market cap

€267m

$1.21/€1

Net cash (€m) at end FY20

13.9

Shares in issue

39.5m

Free float

91%

Code

CLA

Primary exchange

Euronext Paris

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(5.0)

11.0

(9.3)

Rel (local)

(5.4)

6.0

(3.6)

52-week high/low

€7.67

€2.96

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 US and Canada.

Next events

H121 results

31 March 2021

Analyst

Katherine Thompson

+44 (0)20 3077 5730

Claranova is a research client of Edison Investment Research Limited

Claranova generated 17% constant currency organic revenue growth in H121, despite COVID-19 related supply challenges. Demand remains high in PlanetArt, which reported 23% constant currency organic growth in H121. Management expects H121 group EBITDA to nearly double y-o-y and we have upgraded our FY21 profitability forecasts to reflect this.

Year end

Revenue (€m)

EBITDA*
(€m)

PBT**
(€m)

Diluted EPS**
(€)

DPS
(€)

P/E
(x)

06/19

262.3

16.0

12.0

0.25

0.0

27.5

06/20

409.1

17.4

11.3

0.20

0.0

33.8

06/21e

479.3

31.0

24.5

0.36

0.0

18.8

06/22e

549.1

36.8

30.4

0.44

0.0

15.3

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

H121 revenue growth 19% y-o-y

Claranova reported 19% revenue growth in H121 (25% in constant currency); on an organic constant currency (cc) basis, revenue grew 17% y-o-y. PlanetArt revenue growth of 26% for H121 was made up of 42% growth in Q1, which moderated to 20% in Q2. While currency reduced the reported rate in Q2, the main reason for slower growth was reduced marketing spend in Q2, in response to pandemic-related shipping delays. Avanquest H121 revenue declined 4% y-o-y (cc) due to the shift to subscription licensing and the planned decline of non-strategic business, although profitability is still expected to improve in FY21 versus FY20. myDevices revenue was 4% higher y-o-y (cc), with customer roll-outs delayed by COVID-19 restrictions, particularly in the hospitality and catering industries.

Lower marketing spend supports higher EBITDA

The company noted that EBITDA for H121 was likely to nearly double compared to the €11.2m reported in H120 (pre-IFRS 16), helped by the lower marketing spend. We have revised our forecasts to reflect H1 revenue trends, currency and higher profitability, while noting that customer demand remains high. We reduce our revenue forecast by 1.8% in FY21e and 1.4% in FY22e; we increase our FY21e EBITDA (pre-IFRS 16) by 13% and normalised EPS by 22%.

Valuation: Sum of the parts suggests upside

Reflecting the different business models and minority interests for each division, we continue to use a sum-of-the-parts approach to valuation. Based purely on peer group averages per division, we calculate a fair value of €17.96 per share. However, once multiples are adjusted to reflect our views on the growth and profitability of each division, we calculate what we believe to be a more realistic valuation of €13.80 per share (up from €12.12 in our last note as peer multiples have increased). Factors that could provide upside to our estimates would be sustained high demand for photo printing, successful adoption of the FreePrints Gifts app in the US/Personal Creations in the UK and returning recent acquisitions to profitability.

Review of H121 revenue update

Claranova has reported H121 revenues as per Exhibit 1. Group revenue for H121 grew 19% y-o-y; due to the weakening of the dollar versus the euro, constant currency growth was significantly higher at 25% y-o-y. Stripping out the effects of currency and acquisitions, the group grew 17% year-on-year. We estimate that Q221 revenue grew 15% y-o-y (this was not explicitly reported so no constant currency/organic growth rates are available); this compares to reported revenue growth of 29% y-o-y for Q121.

Exhibit 1: Divisional revenues, H121

Revenues (€m)

H121

H120

y-o-y

y-o-y

y-o-y

y-o-y

Q221

Q220

y-o-y

Reported

Constant currency

Organic

Constant currency organic

Reported

PlanetArt

234

186

26%

32%

16%

23%

165

138

20%

Avanquest

42

46

(9%)

(4%)

(9%)

(4%)

22

25

(11%)

myDevices

2

2

(3%)

4%

(3%)

4%

1

2

(32%)

Total

278

234

19%

25%

11%

17%

188

165

15%

Source: Claranova, Edison Investment Research

The company noted that H121 EBITDA is likely to nearly double on a year-on-year basis (H120 EBITDA pre-IFRS 16 was €11.2m). While Claranova would not typically discuss profitability in its revenue updates, the effect of reduced marketing spend during Q221 (see below) has had a significant impact on profitability. The company reiterated its targets for group revenue of €700m and EBITDA margins above 10% by FY23.

PlanetArt – marketing spend moderated

PlanetArt grew 26% y-o-y in H121 (32% in constant currency), and on a constant currency, organic basis grew 23% (H120: 22%). Reported growth for Q221 of 20% y-o-y moderated from the prior quarter’s 42%. The company noted that lockdowns in its key markets have put significant pressure on delivery networks (both in terms of supply and demand), with couriers and postal services taking longer to deliver. As a result, management decided to reduce active marketing in order not to disappoint customers. This suppressed customer demand (which otherwise has been heightened during the pandemic) but at the same time, resulted in lower marketing spend. The division saw double-digit growth in Europe and the US for its web-based and mobile apps.

Personal Creations (acquired in August 2019) achieved double-digit growth on a like-for-like basis, ie comparing the period August-December 2020 to August-December 2019. In H121, FreePrints Gifts was launched in the US and Personal Creations was launched in the UK. Having started to roll out the mobile offering, the company sees wider geographical expansion of the personalised gifts business as a key growth driver for this division.

Avanquest – growing proportion of subscription revenues

Avanquest reported a revenue decline of 9% y-o-y in H121 (Q121 -6%, Q221 -11%) which, in constant currency, reduced to a decline of 4%. The business continues to shift key software lines from upfront to subscription licensing, which has supressed revenue growth over the last year or so. In the case of SodaPDF and InPixio, this transition is complete, and these products saw double-digit revenue growth in H121. This was offset by the planned decline of the lower-margin, non-strategic business, which includes third-party, physical software and sales through partner channels. Recurring revenue made up 56% of revenue in H121 compared to 54% in Q121 and 46% in H120.

Earlier this month, Avanquest announced a partnership with Dropbox, whereby SodaPDF would be available in the Dropbox app centre. This integration enables users to edit, merge, sign and protect pdf files directly from Dropbox. Dropbox has more than 600 million users across 180 countries and we view this partnership as a route for Avanquest to acquire customers for the SodaPDF freemium solution.

myDevices – on hold during the pandemic

myDevices H121 revenue was 3% lower y-o-y (4% higher in constant currency). As highlighted in November, the various lockdowns around the world have made it difficult for customers to install IoT systems, particularly in the hospitality and catering industries where myDevices has developed panic button and temperature monitoring solutions respectively. As pandemic restrictions are relaxed during the course of CY21, the company expects to grow the business via its channel partners as well as via the execution of contracts recently signed with companies such as Engie, Sodexo and Marriott.

Changes to forecasts

We have revised our forecasts to reflect trading and lower marketing spend in Q221.

Exhibit 2: Changes to forecasts

€m

FY21e

FY22e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

488.0

479.3

(1.8%)

17.2%

557.0

549.1

(1.4%)

14.6%

EBITDA

30.6

34.2

11.6%

65.8%

40.0

40.0

0.0%

17.1%

EBITDA margin

6.3%

7.1%

0.9%

2.1%

7.2%

7.3%

0.1%

0.2%

EBITDA - pre IFRS 16

27.4

31.0

13.0%

77.5%

36.8

36.8

0.0%

18.9%

EBITDA margin - pre IFRS 16

5.6%

6.5%

0.8%

2.2%

6.6%

6.7%

0.1%

0.2%

Normalised operating profit

25.7

29.3

13.8%

85.2%

35.1

35.1

0.0%

20.0%

Normalised operating margin

5.3%

6.1%

0.8%

2.2%

6.3%

6.4%

0.1%

0.3%

Reported operating profit

19.4

23.0

18.3%

194.3%

31.8

31.8

0.0%

38.5%

Reported operating margin

4.0%

4.8%

0.8%

2.9%

5.7%

5.8%

0.1%

1.0%

Normalised PBT

21.0

24.5

17.0%

117.0%

30.4

30.4

0.0%

23.8%

Reported PBT

14.7

18.2

24.2%

452.0%

27.1

27.1

0.0%

48.6%

Normalised net income

11.8

14.4

22.0%

79.9%

17.7

17.7

(0.2%)

22.8%

Reported net income

6.9

9.5

37.4%

1806.8%

15.2

15.1

(0.2%)

58.7%

Normalised basic EPS (€)

0.30

0.37

21.6%

79.2%

0.45

0.45

(0.9%)

22.4%

Normalised diluted EPS (€)

0.30

0.36

22.0%

79.9%

0.44

0.44

(0.2%)

22.8%

Reported basic EPS (€)

0.18

0.24

36.9%

1799.9%

0.39

0.38

(1.0%)

58.1%

Net debt/(cash)

(22.6)

(24.0)

6.2%

72.8%

(49.5)

(51.5)

4.2%

114.6%

Divisional revenues

PlanetArt

386.4

383.8

(0.7%)

22.2%

442.9

441.4

(0.3%)

15.0%

Avanquest

96.0

90.3

(5.9%)

(0.0%)

107.8

101.5

(5.9%)

12.4%

myDevices

5.6

5.2

(8.0%)

7.3%

6.3

6.3

0.0%

22.3%

Total

488.0

479.3

(1.8%)

17.1%

557.0

549.1

(1.4%)

14.6%

Divisional EBITDA

PlanetArt

19.5

23.5

20.5%

66.4%

27.0

27.0

0.0%

14.9%

Avanquest

11.3

11.3

0.0%

57.8%

13.0

13.0

0.0%

15.0%

myDevices

(3.4)

(3.9)

13.2%

0.3%

(3.2)

(3.2)

0.0%

(16.9%)

Total EBITDA - pre IFRS 16

27.4

31.0

13.0%

77.5%

36.8

36.8

0.0%

18.9%

Source: Edison Investment Research

Valuation

We have revised our sum-of-parts valuation to reflect our new estimates. The main change is an increase in the multiple for PlanetArt, as the average for the peer group has increased from 1.1x when we last wrote to 1.3x.

Exhibit 3: Sum-of-the-parts valuation

FY21e

FY22e

EV based on FY21e sales multiple (€m)

Minority interest

Value to shareholders (€m)

EV/Sales multiple

1.5

1.3

700.2

538.0

PlanetArt

1.3

1.1

499.0

7.7%

460.4

Avanquest

2.0

1.8

180.6

64.1%

64.9

myDevices

4.0

3.3

20.6

38.1%

12.8

Implied EV/EBITDA multiple

PlanetArt

21.2

18.5

Avanquest

16.0

13.9

myDevices

N/A

N/A

€m

Upside/(downside)

Net cash at end FY20

13.9

Equity value (€m)

544.9

Cost of acquisitions

(7.0)

Per share value (€)

13.80

104%

Adjusted net cash

6.9

No. shares (m)

39.5

Source: Edison Investment Research note: based on FY21e EV/sales multiples

We note a new addition to the PlanetArt peer group: Moonpig listed on the London Stock Exchange earlier this month. It is not currently included in the average peer multiples as forecasts are not yet available. However, we believe it is a relevant peer as it is focused on the online card and gift market, directly competing with FreePrints Cards, and over time PlanetArt’s personalised gifts as they are developed in the UK. The stock has a market cap of £1.4bn and the table below shows historical financial and valuation metrics.

Exhibit 4: Moonpig financial and valuation metrics

£m (y/e 30 April)

FY18

FY19

FY20

H120

H121

Target range

Revenue

87.9

120.1

173.1

66.3

155.9

Growth y-o-y

37%

44%

135%

EBITDA

19.0

22.7

44.4

15.0

41.2

EBITDA margin

21.6%

18.9%

25.6%

22.6%

26.4%

24–25%

Operating profit

15.5

14.0

33.1

9.7

33.7

Operating margin

17.6%

11.7%

19.1%

14.6%

21.6%

EV/Sales

18.0

13.2

9.2

5.1*

EV/EBITDA

83.4

69.8

35.7

19.2*

Source: Moonpig, Edison Investment Research. Note: *Based on annualising H121.

Clearly, the company has seen strong revenue growth in recent years. Management highlighted that COVID-19 has caused a significant acceleration in growth, as consumers have been unable to buy greetings cards and gifts in bricks and mortar stores so easily during lockdown. For example, the volume of cards ordered in the 12-month period ending 31 October 2020 grew 75% y-o-y. However, the company has said that revenue growth for FY22 (year ending 30 April) could decline from FY21 as consumers revert to physical shopping. Longer term, it looks set to benefit from the continuing shift to online purchasing of cards and gifts. Moonpig currently only operates in the UK, Republic of Ireland and the Netherlands, although has expressed a desire to expand into the US and Australia. It only fairly recently introduced its app, with 33% of orders via the app in October 2020. Moonpig has grown faster than PlanetArt during the pandemic (although this could reverse) and consistently generates a higher level of profitability, although the costs of PlanetArt’s international expansion explain a large proportion of the difference in margins.

Exhibit 5: Financial summary

€m

2015

2016

2017

2018

2019

2020

2021e

2022e

30-June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

93.1

117.4

130.2

161.5

262.3

409.1

479.3

549.1

EBITDA

 

 

(6.8)

(9.2)

(5.0)

3.9

16.0

20.6

34.2

40.0

Normalised operating profit

 

 

(11.4)

(16.0)

(5.8)

3.4

15.5

15.8

29.3

35.1

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

(1.5)

(2.4)

(3.3)

(3.3)

Exceptionals

15.6

(10.0)

0.4

(2.4)

(2.9)

(5.6)

(3.0)

0.0

Share-based payments

(0.0)

(0.1)

(4.8)

(7.1)

0.3

0.0

0.0

0.0

Reported operating profit

4.2

(26.1)

(10.1)

(6.1)

11.4

7.8

23.0

31.8

Net Interest

1.1

(1.7)

(0.9)

(0.3)

(3.5)

(4.5)

(4.7)

(4.7)

Joint ventures & associates (post tax)

0.0

(0.0)

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

(45.6)

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(10.3)

(17.7)

(6.6)

3.1

12.0

11.3

24.5

30.4

Profit Before Tax (reported)

 

 

5.3

(27.8)

(11.0)

(6.4)

(37.7)

3.3

18.2

27.1

Reported tax

(0.6)

(0.8)

(0.4)

(1.8)

(3.7)

(2.1)

(4.2)

(6.2)

Profit After Tax (norm)

(10.9)

(18.5)

(7.0)

2.4

9.2

8.7

18.9

23.4

Profit After Tax (reported)

4.7

(28.6)

(11.4)

(8.2)

(41.4)

1.2

14.0

20.8

Minority interests

(8.1)

0.0

0.3

0.2

0.6

(0.7)

(4.5)

(5.7)

Discontinued operations

(3.2)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(18.9)

(18.5)

(6.7)

2.6

9.8

8.0

14.4

17.7

Net income (reported)

(6.5)

(28.6)

(11.0)

(7.9)

(40.8)

0.5

9.5

15.1

Basic ave. number of shares outstanding (m)

6

38

38

39

39

39

39

39

EPS - basic normalised (€)

 

 

(3.27)

(0.49)

(0.18)

0.07

0.25

0.20

0.37

0.45

EPS - diluted normalised (€)

 

 

(3.27)

(0.49)

(0.18)

0.06

0.25

0.20

0.36

0.44

EPS - basic reported (€)

 

 

(1.13)

(0.76)

(0.29)

(0.20)

(1.04)

0.01

0.24

0.38

Dividend (€)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

#DIV/0!

26.1

10.9

24.0

62.4

56.0

17.2

14.6

EBITDA Margin (%)

-7.3

-7.9

-3.8

2.4

6.1

5.0

7.1

7.3

Normalised Operating Margin

-12.3

-13.7

-4.4

2.1

5.9

3.9

6.1

6.4

BALANCE SHEET

Fixed Assets

 

 

15.7

3.0

2.0

1.3

75.1

93.7

96.7

92.7

Intangible Assets

12.0

1.5

0.9

0.5

69.9

70.5

74.1

70.7

Tangible Assets

0.6

0.5

0.3

0.2

1.4

15.7

15.1

14.5

Investments & other

3.1

1.1

0.7

0.6

3.8

7.5

7.5

7.5

Current Assets

 

 

48.0

25.5

28.1

79.1

100.9

116.3

130.6

162.3

Stocks

5.9

5.0

3.7

3.7

4.8

14.4

16.9

19.3

Debtors

4.8

4.7

4.3

4.9

11.6

9.9

11.6

13.3

Cash & cash equivalents

30.5

11.1

17.1

65.7

75.4

82.8

92.9

120.4

Other

6.9

4.7

2.9

4.8

9.1

9.2

9.2

9.2

Current Liabilities

 

 

(32.0)

(25.3)

(28.1)

(37.2)

(60.5)

(74.6)

(77.9)

(84.7)

Creditors

(26.9)

(24.5)

(26.6)

(35.4)

(54.8)

(64.3)

(67.6)

(74.4)

Tax and social security

(0.3)

(0.0)

(0.3)

(1.7)

(3.0)

(1.2)

(1.2)

(1.2)

Short term borrowings

(4.8)

(0.7)

(1.1)

(0.1)

(2.7)

(6.1)

(6.1)

(6.1)

Other

0.0

0.0

0.0

0.0

0.0

(3.0)

(3.0)

(3.0)

Long Term Liabilities

 

 

(2.4)

(1.1)

(0.7)

(29.0)

(52.0)

(73.1)

(73.1)

(73.1)

Long term borrowings

(1.8)

(0.6)

0.0

(28.1)

(49.1)

(62.8)

(62.8)

(62.8)

Other long-term liabilities

(0.7)

(0.5)

(0.7)

(0.9)

(2.9)

(10.3)

(10.3)

(10.3)

Net Assets

 

 

29.3

2.1

1.3

14.2

63.6

62.3

76.3

97.2

Minority interests

0.0

0.0

(0.1)

(1.8)

(11.0)

(11.7)

(16.2)

(21.9)

Shareholders' equity

 

 

29.3

2.1

1.2

12.5

52.6

50.6

60.1

75.3

CASH FLOW

Op Cash Flow before WC and tax

(6.8)

(9.2)

(5.0)

3.9

16.0

20.6

34.2

40.0

Working capital

0.4

2.5

6.8

7.9

(4.1)

22.5

(0.9)

2.7

Exceptional & other

(3.8)

(4.3)

(2.2)

(5.7)

(5.2)

(6.3)

(3.0)

0.0

Tax

0.3

(0.3)

(0.0)

(1.2)

(3.8)

(6.8)

(4.2)

(6.2)

Net operating cash flow

 

 

(9.8)

(11.3)

(0.4)

5.0

3.0

30.0

26.1

36.5

Capex

(4.4)

(0.9)

(0.2)

(0.1)

(2.5)

(1.2)

(1.0)

(1.0)

Acquisitions/disposals

10.8

(0.4)

3.6

14.2

(13.3)

(31.9)

(7.0)

0.0

Net interest

(0.9)

(0.1)

(0.0)

(0.3)

0.0

(0.5)

(4.7)

(4.7)

Equity financing

33.2

(5.1)

1.9

2.0

(1.4)

0.0

0.0

0.0

Dividends

0.0

2.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

0.1

0.1

0.1

(0.6)

0.0

0.4

(3.2)

(3.2)

Net Cash Flow

29.0

(15.7)

5.0

20.1

(14.2)

(3.2)

10.1

27.5

Opening net debt/(cash)

 

 

18.0

(23.9)

(9.8)

(16.0)

(37.5)

(23.6)

(13.9)

(24.0)

FX

0.1

(0.1)

(0.6)

0.4

0.3

(0.8)

0.0

0.0

Other non-cash movements

12.6

1.7

1.8

1.1

0.0

(5.7)

0.0

0.0

Closing net debt/(cash)

 

 

(23.9)

(9.8)

(16.0)

(37.5)

(23.6)

(13.9)

(24.0)

(51.5)

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 £49,500 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.

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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 2021 Edison Investment Research Limited (Edison).

Australia

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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

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London +44 (0)20 3077 5700

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United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

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United States of America

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Level 4, Office 1205

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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

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 £49,500 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 2021 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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