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The Market Place Lending (MPL) investment opportunity
Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY / T: +44 (0)20 3100 2000 www.liberum.com Liberum Capital Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No. 5912554
17 November 2014
Cormac Leech Research +44 (0) 20 3100 2264 [email protected]
Minh Tran Research +44 (0) 20 3100 2184 [email protected]
How big? How risky? How much alpha? Why is MPL sustainable? Key risks How to invest? Conclusions
The Market Place Lending (MPL) investment opportunity
2
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P rosper $m Lending C lub $m
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Z opa RateS etter
Funding C irc le LendInvest
Welles ley & C o. Assetz
Thincats
MPL yields offer attractive returns, with $40bn+ of deployment capacity by 2016e in US & UK
The Market Place Lending (MPL) investment opportunity
• $40bn of deployment by 2016: From 2014 to 2016, we estimate UK annual deployment will increase from $2bn to $7bn and US deployment will increase at from $6bn to $33bn
• US strong growth,120% CAGR, but
margin compression: yield margin compression likely as competition increases
• UK slightly slower growth, 90% CAGR, but yield expansion: yields likely to rise as platforms increase credit risk. Arrival of institutional capital supports higher credit risk appetite.
US: MPL 3y potential yield and annual volume 2014-16e change
UK: MPL 3y potential yield and annual volume 2014-16e change
Source: MPL companies, Liberum, Moneysupermarket, Bloomberg, IPD
5y Junk Bonds
Property
Equities
2yr Cash ISA
Non Investment Grade 2y Bonds
$bn annual volume
2016 total UK volume:
$7bn
2016 total US volume: $33bn
$bn annual volume
3
Consumer finance MPL – likely to be surprisingly resilient through the cycle in UK & US…
The Market Place Lending (MPL) investment opportunity
• Zopa performed well through financial crisis: net yield has averaged 7.0% since 2005 and remained above 4.5% even during 2008 global financial crisis
• UK overall : Overall UK consumer finance loans show similar consistent returns over time averaging 8.9%
• US overall: Likewise for US credit card data
Zopa Net Yield
Source: Zopa
All UK Consumer Loans Net Yield under £5,000
Source: Bank of England, Liberum
US Credit Card Net Yields
Source: Federal Reserve, Liberum
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Adj Net Y ield Adj Annualized Default
Average Net Y ield
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013
Net Y ield Writeoff Average Net Y ield
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Net Y ield C harge off Average Net Y ield
4
MPL SME finance/ property lending data set more limited…. but still encouraging for ‘Through The Cycle’ returns
The Market Place Lending (MPL) investment opportunity
• LendInvest: 7 year track record with annual avg returns of 10.0% with zero loan losses
• Funding Circle: 5 year average net yield of only 4.0% but with signs of improvement more recently. Funding Circle has yet to go through a recession- Credit model relatively unproven.
• For the UK overall, corporate lending has generated average returns of 4.6% but was more impacted by the aftermath of the financial crisis both in terms of lower gross yields and high writeoffs..
0.0%
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6.0%
7.0%
8.0%
9.0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012S BAC harge-‐Off R ate
Average
Source: LendInvest
Note: Projected loss basis Source: Funding Circle data, Liberum estimates
UK Non Financial Corporate Lending annual net yields US SME Annual Loan Writeoffs- SBA
Source: SBA, Liberum Source: Bank of England, Liberum
LendInvest Loans: Annual Gross, LLPs, Net Yields
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
2008 2009 2010 2011 2012 2013 2014
Net Y ield Loan Losses Average Net Y ields
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Net Y ield Write Off Average Net Y ield
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14
Net Y ield Loan los ses Average Net Y ield
Funding Circle Loans: Gross, LLPs, Net yields* by Cohort
5
MPL yields 2-5% ‘more than ‘expected’ based on wholesale ABS market data
The Market Place Lending (MPL) investment opportunity
• Low WACCS: We estimate SpringLeaf and Ondeck loans have average costs of capital of 4-5% -based on recent securitisations.
• High quality yields: The ratio of gross yield to chargeoffs is 5.2x for Springleaf and 4.1x for Ondeck.
• Zopa WACC likely below 3%: avg ratio of gross yield to chargeoffs is 8.0x (much better than Spring leaf or OnDeck).
$m Amount Rate Class A Notes 500 2.4% Class B Notes 40 3.5% Class C Notes 19 4.5% Class D Notes 33 5.0% Sub total 592 2.7% Equity 52 20.0% Total implied cost capital 644 4.1%
SpringLeaf Funding Trust – estimated cost of capital
Source: Springleaf, Bloomberg, Liberum
$m Amount Rate Class A Notes 157 3.2% Class B Notes 18 6.9% Total 175 3.5% Equity 8 30% Total implied cost capital 183 4.7%
OnDeck – estimated cost of capital
Source: Ondeck, Bloomberg, Liberum
SpringLeaf asset net yields and ratio charge-offs to gross yields
Source: Springleaf, Liberum
OnDeck asset net yields and ratio charge-offs to gross yields
Source: Ondeck, Liberum
Zopa asset net yields and ratio charge-offs to gross yields
Source: Zopa, Liberum
-‐
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4.0
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16.0
0%
5%
10%
15%
20%
25%
30%
2010 2011 2012 2013
C harge Off
Net Y ield
R atio g ross yield to charge offs (RHS )
-‐
2.0
4.0
6.0
8.0
10.0
12.0
14.0
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0%
10%
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2009 2010 2011
Loan los ses
Net yield
R atio g ross yield to charge offs (RHS )
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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Adj Annualized Default
Adj Net Y ield
R atio g ross yield to charge offs (RHS )
MPL net yields should be c5% based on ABS
market
6
Market Place Lending (MPL) – bigger story than just P2P
The Market Place Lending (MPL) investment opportunity
7
How big? How risky? How much alpha? Why is MPL sustainable? Key risks How to invest? Conclusions
The Market Place Lending (MPL) investment opportunity
8
Traditional banking- 12th Century solution to ‘Market for Lemons’* problem!
The Market Place Lending (MPL) investment opportunity
*The Market for "Lemons": Quality Uncertainty and the Market Mechanism. http://www.iei.liu.se/nek/730g83/artiklar/1.328833/AkerlofMarketforLemons.pdf
Timeline: Banking 1100 to present
Banking: a pre-internet solution to i) network needs and ii) information requirements in financial services
1100
1397 1694
1695 1818
1880
1913
1930
1986
1989
1998
2005
2007 2008
2012
Knights Templar est. European wide/Mideast banking
until the 14th century.
The Medici Bank of Florence established
& operates until 1494.
Scottish parliament est. the Bank of
Scotland.
Scottish parliament est. the Bank of
Scotland.
The first savings bank of Paris was
est.
The Rothschild family establishes
European wide banking.
The Federal Reserve Act created the Federal Reserve
System.
Start of online commerce
Berners-Lee invents Internet.
Zopa was founded.
Paypal Founded
Financial crisis that led to the failure and bail-out of a number of the worlds biggest
banks.
Run on Northern Rock.
Washington Mutual collapses, at the
time the largest bank failure in history.
Banks start to close branches.
9
Traditional banking model…. increasingly anachronistic…
The Market Place Lending (MPL) investment opportunity
Timelines: Banking / AltFi/ Crowd sharing
*Market for Lemons: The Market for "Lemons": Quality Uncertainty and the Market Mechanism http://www.iei.liu.se/nek/730g83/artiklar/1.328833/AkerlofMarketforLemons.pdf
Crowd sharing in other industries
as ‘lemons’* problem solved.
Traditional Banking
Digital payments sector
Marketplace lending sector
Start of online commerce
1989 2005 2007 2014
Financial crisis that led to the failure and bail-out of a number of
the worlds biggest banks.
Washington Mutual collapses, at the time
the largest bank failure in history.
Banks start to close branches due to shifting customer
behavior
1998 – Paypal Founded
Berners-Lee invents Internet.
1994 - Amazon founded
1995 – EBAY founded
“Banking may be on the cusp of …the most radical reconfiguration in centuries”, Andrew Haldane- Chief Economist Bank of England, Aug 2013
2005 -ZOPA Founded
2006 – Lending Club Founded
2013- UK government lends via Funding Circle
2013- Xoom IPOs for $0.5bn
2009- Chicago Sun Times Files for bankruptcy
2011 - Borders declares Bankruptcy
2013 - HMV declares bankruptcy
2013 – Blockbuster goes into
administration
2014 AirBnB valued $10bn
2014 - UBER valued $18bn
2014 - Alibaba IPOs for $168bn
2014- P2PGI IPO
2014- Union Bank buys loans originated by LC
2014- Ondeck file IPO valuation e$1.5bn
2014- Lending Club file IPO valuation e$5bn
2014 - Square valued at $5bn
2014 - Apple Pay is launched
Dis-intermediated incumbents start
to fail…
10
Internet sourced credit information has become a robust way to underwrite loans effectively and cheaply
The Market Place Lending (MPL) investment opportunity
Web-enabled game changers in lending
Big Data, social media
Real time health check for companies
Bank A/C Scraping
Market cap
Credit Scoring
Can run credit check on any individual or company in UK for
£18 in seconds
Experian $16bn Equifax $9bn FICO $2bn
Use of big data to enhance credit scoring
Linkedin $24bn Facebook $190bn
Automated analysis of borrower’s bank a/c; cash flow health Market cap $0.3bn
Real time health check for companies. Intuit serve c1% of
Global small businesses
Intuit mkt Cap: $23bn Xero mkt cap: $2bn
11
The Market Place Lending (MPL) investment opportunity
No efficiency gains in banking since 1900
• Unit cost of financial intermediation relatively constant for the last 30 years at just under 2%
• No economies of scale suggests an oligopoly
Net US revenues of financial intermediaries as % intermediated assets (i.e. unit cost of intermediation)
Source: Has the U.S. Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation; Philippon Thomas, http://bit.ly/1gRuAEB
Source: Has the U.S. Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation; Philippon Thomas, http://bit.ly/1gRuAEB
Net US revenues of financial intermediaries as % US GDP
• Finance share of GDP is at a historical – high- surprising vs. similar intermediation sectors
12
The Market Place Lending (MPL) investment opportunity
Productivity gains in Wholesale & Retail trade but not Finance; inefficient banks cost UK est. £30bn annually
• Wholesale and Retail trade have become much more efficient due to IT investment. Opposite is true for the finance industry
• Internet enabled supply chain innovation has revolutionised retail and wholesale trade but not finance – so far…
• Financial sector currently at c8% of GDP, about 2% higher than it ‘should’ be (vs. other sectors and IT investment) =>lost annual income of $325bn in the US (UK £30bn)- £10 per person / week
US Wholesale Trade as % of GDP
Source: Finance vs. Wal-mart: Why are Financial Services so expensive, Thomas Philippon, 2012
Source: Finance vs. Wal-mart: Why are Financial Services so expensive, Thomas Philippon, 2012
Source: Finance vs. Wal-mart: Why are Financial Services so expensive, Thomas Philippon, 2012
US Retail Trade as % of GDP US Financial Intermediation as % GDP
13
MPL offers efficiency; lower systemic risk; better credit access
The Market Place Lending (MPL) investment opportunity
• MPL operating costs are 60% lower than banks: implies better rates for both savers and borrowers
• MPL enjoys considerable Government support: • Decentralised financial system
improves financial resilience for bank regulators by eliminating single ‘points of failure’
• UK Government sees MPL as additional credit access channel for SMEs
39 19 20 28 29135
270
0
100
200
300
400
500
600
700
Bran
ch
FDIC
CS/C
ollec
tion
Billin
g/Frau
d
Origi
natio
n
G&A
Othe
r IT
Marke
ting
Total
OPE
X
OPEX
/ Tota
l Bala
nce O
utstan
ding (
bps)
Peer 2 PeerGovernment endorsedAttractive RatesConvenient & flexible
425bps LowerOperating Expenses
Cost base comparison 2015e: Banks vs. Lending Club (costs as % loans outstanding)
Source: McKinsey / Lending Club
220
10170
10030 30 35
100
695
0
100
200
300
400
500
600
700
Bran
ch
FDIC
CS/C
ollec
tion…
Origi
natio
n
G&A
Othe
r IT
Marke
ting
Total
OPE
X
OPEX
/ Tot
al Ba
lance
Out
stand
ing (b
ps)
BanksCost inefficienciesHigh marginsRestrictive lending
UK Govt lending via MPL platforms: £75m
Source: Liberum
Systemic Risk Comparison: Traditional Banking vs MPL
Source: Liberum
Traditional Banking Structure MPL market structure
0 10 20 30 40 50 60 70
MarketInvoice Zopa Funding Circle
14
UK retail investment in P2P could increase 35x once in ISAs- to c£50bn of outstanding balances
The Market Place Lending (MPL) investment opportunity
Current total NISA outstanding balances (£bn), potential P2P market size if NISA eligible, £bn
Source: www.gov.uk, Zopa, Funding Circle, RateSetter
• P2P lending likely to become ISA-able (tax-free retail wrapper) in UK in 2015
• Using ZOPA (3yr term) as an example: • After tax Zopa net yield for top
45% marginal tax rate payer is 2.2% currently vs. 2.4% in best available cash-ISA (equivalent weighted maturity)
• Once ISA-able the tax free ZOPA return increases to 4.0% which is 67% higher than the equivalent bank deposit
• If P2P was to take just 10% of the total
cash and equity ISA market, UK gross P2P balances would increase 35x to £47bn
• Influx of capital implies MPL net yields likely to fall…
Best cash NISA rate vs. i) 3yr Zopa yield net of tax and ii) Zopa yield if NISA- able
* 45% Tax rate Source: Zopa, moneysuperamrket.com, Liberum
£Bn
0 10 20 30 40 50
P2P Loans Outstanding
P2P Loans10% of Market
3,470%
-‐
100
200
300
400
500
Total IS A P2P LoansOuts tanding
P2P Loans10%of Market
S tock C ash
3,470%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
C ash IS A Z opa Net Y ield post tax* Z opa Net Y ield via IS A
15
Survey data suggest MPL still in early adopter phase implying 10-20x upside in terms of public participation rates
The Market Place Lending (MPL) investment opportunity
Number of obvious catalysts over the next 6-12 months: • Sector IPOs: Lending Club (Q4/Q1) / OnDeck (2015) – likely to increase public
trust / confidence in sector • UK ISA-ability: An implicit endorsement of sector by UK government- we expect
the first MPL ISA products to launch in mid/ late 2015; building on recent FCA regulation of the sector
P2P Survey of UK Population
Source: Liberum Consumer Survey
UK population penetration rates by investment type
Source: Liberum
MPL investments could easily reach c 30% penetration of population- c mid
point of equity and cash ISA takeup
0%
5%
10%
15%
20%
25%
30%
35%
40%
Aware of P2P Would cons ider inves ting inP2P
Have invested already inP2P
Have already invested in P2P
Equity Investors
Potential P2P take up
Cash ISA Holders
14% 50% 2%
• P2P will move from ‘early adopter phase’ to mass market phase over the next 5-10 years..
16
How big? How risky? How much alpha? Why is MPL sustainable? Key risks How to invest? Conclusions
The Market Place Lending (MPL) investment opportunity
17
Lack of transparency and misalignment of interests are two key risks for MPL
The Market Place Lending (MPL) investment opportunity
What key issues for MPL do critics flag Ways to address/ our view..
Alignment of incen=ves: Pla$orms should have capital at risk (Wellesley & Co already operate in this way). CEO compensa?on should be linked to net 3 year yields remaining above a minimum threshold ( e.g. 2%)
Insufficient ‘skin in game’: Many lenders rely heavily on pla$orms’ credit risk assessment; pla$orms incen?ves not aligned with lenders
Transparency & regula=on key to long term health of sector. Without ra?ng agencies, transparency is vital to avoid MPL becoming the next sub prime crisis. Retail lenders must have info to make informed decisions.
Mis-‐selling risks: i) Lack of disclosure around loan type on some pla$orms with returns to lenders inconsistent with credit risk. Simplicity should not mean opacity. ii) Some Retail investors apparently using rate offered as risk proxy heuris?c. iii) Risk that Provision funds are implicitly posi?oned as guaranteeing capital.
Web enabled credit assessment technologies: new ways to solve ‘market for lemons’ problems: XERO / YODLEE/ Big Data/ Experian etc..
Lack of borrower rela=onships: adverse selec?on problems, leading to poor lending decisions.
Frequent external audit requirements; regulatory oversight by FCA/ SEC of lending; transparency clearly segregated clients accounts; investor scru=ny.
Fraud risk: Significant risk that a pla$orm engages in fraud nega?vely impac?ng the sector’s interna?onal reputa?on.
Banks likely to respond too slowly: Impeded by employment contracts; social contract ; Short term CEO incen?ves ; ‘Denial’ mind-‐set.
Pro-‐ac=ve digital response by banks: improved user experience; step change improvement in efficiency by closing branches inves?ng in digital offering
18
Transparency an emerging point of differentiation
The Market Place Lending (MPL) investment opportunity
• Simplicity of basic offering shouldn’t limit information availability
• Lack of transparency increases risk of high profile failure- adversely impacting MPL sector
• Transparency lower in the UK under
the mantra of simplicity
Transparency by platform
‘Transparency score’ by platform
Source: Liberum
Prosper Lending Club
Funding Circle Lendinvest Zopa RateSetter Wellesley
Expected Net Yields Yes Yes Yes Yes Yes Yes Yes Loan Losses Yes Yes Yes Yes Yes Yes Yes Historical Net Yield Yes Yes Yes No No Yes No Historical Loan Losses Yes Yes Yes Yes Yes Yes Yes Downloadable loan book Yes Yes Yes No No No No Use of Proceeds / Borrower Profiles Yes Yes Yes Yes Yes No No Max size of loan Yes Yes Yes Yes Yes Yes Yes How many intermediaries No No No No No No No How much £ spread rev to broker No No No*** No No No No Risk band of borrower Yes Yes Yes Yes No No No Size of Provision Fund if any? NA NA NA NA Yes Yes Yes
0
2
4
6
8
10
P rosper Lending C lub Funding C irc le Lendinvest Z opa RateS etter Welles ley
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Despite the risks, banks/ former bank executives betting on MPL sector
The Market Place Lending (MPL) investment opportunity
Equity Investment Equity Investment & Buying Loans
Banks investing in / through platforms
Former bank executives etc joining/ investing in market place lending
Equity Investment Buying Loans Buying Loans Loan Referrals
Board Members
John Mack (CEO Morgan Stanley)
Larry Summers (US treasury secretary)
Mary Meeker (Kleiner Perkins)
Investor
John Mack (former CEO Morgan Stanley)
Investor
Dick Kovacevich (former CEO Wells
Fargo)
Investor
Nigel Morris (founder Capital One)
Investor
Lachlan Murdoch
20
How big? How risky? How much alpha? Why is MPL sustainable? Key risks How to invest? Conclusions
The Market Place Lending (MPL) investment opportunity
21
$250bn equity market cap for US & UK MPL sector by 2025e
The Market Place Lending (MPL) investment opportunity
Avg Balances
MPL Balances
MPL Revenue
Equity Market Cap
Mortgages Consumer SME Total
17,829 4,847 1,264 23,940
1,729 1,212 379 3,320
18 24 10 52
106 109 36 250 Assumptions: MPL market share: Mortgages 10.0%, Consumer 25.0%, SME 30.0%, Revenue as % of Balances : Mortgages 1.0%, Consumer 2.0%, SME 2.5%, Net Income / Rev % : Mortgages 40.0%, Consumer 30.0%, SME 25.0%, Net Income: Mortgages $7bn, Consumer $7bn, SME $2bn PEx assumption: Mortgages 15.0x, Consumer 15.0x, SME 15.0x, Source: Liberum
$bn
22
Some listed MPL equity opportunities…
The Market Place Lending (MPL) investment opportunity
Funds Market Cap2 $m P/NAV Yield1
P2PGI 348 1.1x 8.4%
GLI Finance 133 1.2x 8.6%
Invoice Finance Market Cap2 $m P/Revenue 2015e 2015e P/E
Basware 674 3.5x 30.3x
Tungsten 540 10.4x NA
Listed / IPOing Market Cap2 $m P/Revenue 2014e P/Revenue 2015e
TrustBuddy 60 4.7x 2.5x Lending Club (exp. valn) 5,000 22.7x 13.4x
Valuation metrics for listed MPL securities
1. 2015e for P2PGI, 2014e for GLIF; 2. as of 15th Oct Source: Bloomberg, Liberum estimates
23
• UK listed MPL funds offering yield and capital appreciation
• Significant revenue potential from
combination of e-invoicing and MPL
• Listed/ IPOing P2P platforms
Case study: Basware – Arrowgrass JV unlocking value via innovation
The Market Place Lending (MPL) investment opportunity
Source: Preliminary Liberum Estimates
Preliminary analysis Basware not under Liberum coverage
“Basware and Arrowgrass Capital Partners LLP to jointly develop a new e-invoicing based factoring service”, September 2014
total spend across the Basware Commerce Network
‘Basware 2013 annual report’ Estimated valuation impact for Basware of Arrowgrass JV
EURm
Basware E-processing annual volume 600,000 Financed by JV % 10.0%
JV Financed volume 60,000
Processing balances 7,500
Margin 2.0%
JV revenue EURm 150
Cost income ratio 20%
PBT 120
Net Income 96
Basware share of JV 50%
Attributable net income 48
PEx 20.0x
Equity value of JV to Basware 960
Basware current market cap 550 Implied min upside 75%
24
How big? How risky? How much alpha? Why is MPL sustainable? Key risks How to invest? Conclusions
The Market Place Lending (MPL) investment opportunity
25
The Market Place Lending (MPL) investment opportunity
Key conclusions
1. Banking faces disruptive change: on the cusp of the most radical reconfiguration in centuries – should help save UK economy £30bn pa (2% of GDP) as banking gets more efficient
2. Risk management: Alignment of incentives and transparency essential
3. MPL listed equities still good value given the sector outlook; currently much more diverse range of unlisted opportunities.
26
Disclaimer
The Market Place Lending (MPL) investment opportunity
This material is the commercial property of Liberum and may not be disclosed or distributed to any third party without the express permission of Liberum. You shall not remove or modify any disclaimer or copyright or trademark notice contained in any Material. If you have received this material in error, please immediately notify the sender and destroy the material. This Material is for information only and it should not be regarded as an offer to sell or a solicitation of an offer to buy. It is based on current public information and/or from sources which Liberum believes to be reliable, but the accuracy, completeness, timeliness or correct sequencing of the information included herein cannot be guaranteed. Neither Liberum nor any source will be liable for the accuracy of, or availability of, such information or will have any duty to verify, correct, complete or update any material. Neither Liberum nor any source will be liable for any loss, cost, claim or damage (including direct, indirect or consequential damages or lost profits) arising out of or otherwise relating to any material or the use or access to or unavailability of any material. Any information or opinions contained herein are subject to change without notice. Unless stated otherwise, this material is not investment research or a research recommendation for the purposes of FCA rules or a research report under U.S. securities laws. It is provided on the understanding that Liberum is not acting in a fiduciary capacity and it is not a personal recommendation to you. The securities referred to may not be suitable for you and this material should not be relied upon in substitution for the exercise of independent judgement. Liberum and/or its officers, directors and employees may have or take positions in securities of companies mentioned in this communication (or in any related investment) and may from time to time dispose of any such positions. Liberum may act as a market maker in the securities of companies discussed in this communication (or in any related investments), may sell them or buy them from customers on a principal basis, and may also provide corporate finance or underwriting services for or relating to those companies, for which it is remunerated. United Kingdom and the rest of Europe: This material has been prepared and issued by Liberum. Liberum is a trading name of Liberum Capital Limited, who are authorised and regulated by the Financial Conduct Authority (FCA) and a member of the London Stock Exchange. Ropemaker Place, Level 12, 25 Ropemaker Street, London EC2Y 9LY.Tel +44 (0)20 3100 2000 Fax +44 (0)20 3100 2299 United States: This communication is distributed to US institutional investors by Liberum Inc, which is a member of FINRA & SIPC. 441 Lexington Avenue (15th Floor), New York, NY 10017, Tel +1 212 596 4800 Fax +1 212 596 4898.
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