Leadership Capital Insights Report June Copyright DRAX All rights reserved

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1 Leadership Capital Insights Report 2018 June 2018 Copyright DRAX All rights reserved 1

2 Foreword by Samuel Robberts, Head of drxdata I am delighted to share with you our annual drxdata Leadership Capital Insight Report, in which we analyse the companies under Private Equity ownership that achieved an exit during the financial year The Private Equity industry is facing an extraordinary challenge right now. Buy-in money multiples continue to increase and deal cycles are accelerating whilst often providing less access to management, yet investment cycles and expected returns remain largely the same. In this Private Equity cocktail, the value creation process is more critical than ever before. Our Leadership Capital Insight Report looks at how talent, acquisitions, internationalisation, and technology-enablement had an impact on the exits. The findings help answer some key questions, namely; As an industry do current actions still deliver the returns or is change required? What works and what doesn t? What is worth focussing on and what is not? Is there a simple solution to getting it right? The analysis we have undertaken illustrates clear patterns as well as showing how potential aspects can have a surprisingly negligible impact on the exit value. We hope you find this year s Leadership Capital Insight Report informative and beneficial, and that it stimulates thinking about some of the key ideas in how to drive shareholder value from the investments you make, chair and or manage. Copyright DRAX All rights reserved 2

3 Aims, Methodologies and Definitions This drxdata Leadership Capital Insights Report seeks to understand the effectiveness of value creation strategies pursued by Private Equity. We took as our sample the 318 exits completed in the financial year with an equity cheque above 5 million and their management teams. We applied a number of proprietary analysis methodologies to this in order to understand the patterns within these exits. This enabled us to gain an insight into the nuances and variations amongst management teams, and the trends amongst the most successful in terms of domain, situational, functional and behavioural experience. Throughout the rest of our analysis, we applied a standard methodology of benchmarking Upper Quartile Performance against the market average, enabling us to understand the trends and habits within the value creation strategies, and the actions that differentiate a successful exit from its peers. Given this analysis methodology, we refer throughout to Upper Quartile (UQ) and Average (AVG). In each case, we have isolated the Upper Quartile using a company s EBITDA Growth and Valuation/ EBITDA multiple at exit, while the Average represents the equivalent for the overall exit community. Copyright DRAX All rights reserved 3

4 Contents Foreword by Samuel Robberts, Head of drxdata 2 Aims, Methodologies & Definitions 3 Market Overview 5 Funds 5 Exit Returns: vs Value Creation Strategies 7 Talent 9 Acquisition 21 Internationalisation 26 Technology - Enablement 29 Summary Remarks from Graham Roadnight 31 Copyright DRAX All rights reserved 4

5 Market Overview Funds A total of 38 Private Equity funds were raised in the UK in the financial year , four fewer than were closed in The average size of the funds increased by 56% to 1,185 million. Cumulatively, an additional 43.8 billion of capital is therefore available for deployment in the newly raised funds. Average Fund Size ( m) 1,400 1,200 Average Fund Size ( m) 1, More capital is therefore coming into the marketplace for deployment, and as an asset class there is a requirement for Private Equity to drive value creation through the deployment of this capital. Copyright DRAX All rights reserved 5

6 500 Exit Returns: vs In total there were 318 Private Equity exits during this period and the average company was held for 4 years and 9 months, up by 3 months (5.5%) on the financial year Exit Volumes These exits achieved an average EBITDA Compound Annual Growth Rate (CAGR) throughout their turn in PE of 14.1%. The average EBITDA multiple achieved on deal value was 10.1X, up sharply from 7.04X the previous year. EBITDA Growth through Holdtime - Market Average vs. Mid-Market EBITDA Multiple on Deal Value Distribution Chart Market Average Mid-Market The graphs above show the scale of growth throughout the duration of the PE cycle and the spread of EBITDA multiple returns. This recognises that last year s exits, on average, demonstrated both strong EBITDA growth and a healthy sale value on that. When we isolate mid-market transactions, with a reported EV between 50 million and 250 million, of which there were 68 last year, the EBITDA CAGR rises to 18.5% and the EBITDA multiple at sale rises to 11.5X. This reinforces our conviction that the mid-market is the greatest driver of value within the Private Equity market. The concentration of EBITDA multiples indicates that while the market is primarily concentrated between 1 & 25X, there are a number of very wide ranging EBTIDA multiples being crystallised, some of which cause a significant uplift in average Exit Multiple. Copyright DRAX All rights reserved 6

7 The breakdown of exits by sector indicates the scale of Business Services, Technology and Consumer as sectors which constitute the vast majority of exit activity throughout the period. This further emphasises the fact that additional parts of the marketplace, such as Healthcare and Energy, remain limited players in the UK Private Equity marketplace. Exits by Sector Information Technology Consumer Products and Services (B2C) Business Products and Services (B2B) Financial Services Healthcare Materials and Resources Energy Exit by Type of Buyout The breakdown of the route by which these exits came to be in the marketplace reveals that secondary buyouts constituted a narrow majority of the marketplace in This is indicative of the maturity of the marketplace, in that these secondary and tertiary opportunities are more common than primary opportunities. This further indicates the value of primary buyout origination to the marketplace Primary Secondary Gender Breakdown by Role Female % Male % Chair 4% CFO 13% CEO 7% The gender balance of the executive teams demonstrates a significant disparity between the representation of men and women on the boards. In no role do women constitute more than 13% of people, and amongst Chairs, this number falls to 4%. CEO 93% CFO 87% Chair 96% Copyright DRAX All rights reserved 7

8 Value Creation Strategies Our analysis of Private Equity exits throughout the 12 months to April 2018 shows that there are a number of different paths to successful value creation. We investigated four different levers for value creation. These are: 1. Talent 2. Acquisition 3. Internationalisation 4. Technology Enablement In each instance, we looked at the importance of these value creation methods in their own right, understanding which companies have successfully pursued them, and what success looks like in each case. We also considered where more than one lever was being applied at any one time and how they positively or negatively impact upon each other. Copyright DRAX All rights reserved 8

9 Talent Is management change an ubiquitous event during the lifecycle of a Private Equity-backed company? Of the 318 exits in , 98% of companies underwent some variety of appointment or resignation from their board of directors through their hold period. While some of this change is associated with the investment, it is clear that there are a number of reasons for management change through the value creation process. Understanding the drivers of executive change, and the strategic threats and opportunities that it presents to value creation, is key to ensuring successful growth and returns. Copyright DRAX All rights reserved 9

10 Internal, External, and Investor Appointments A large number of changes were made to the leadership teams of the 318 companies we analysed during the PE cycle. On average there were 2.21 changes to named executive directors during the PE cycle. Of this 2.21, 51.5% were appointments of individuals from the investing PE house and 48.5% were independent executive directors, indicating that it is typical for houses to appoint one of their own to the board, and for another director to be appointed from elsewhere. Of these, 43.9% were external hires and 4.6% internal hires. Source of Executive Director Appointments Upper Quartile Executive Team PE House External Hire Internal Hire Average Executive Team PE House External Hire Internal Hire Companies achieving exits in the upper quartile made more changes to their management teams, with an average of 2.43 changes to named executive directors during the PE cycle. Of these, 42% were appointments from the investing PE house and 58% were independent executive directors, with 52.1% external hires and 5.9% internal hires. Although the difference in the number of executive change is slight, it implies that a willingness to make executive change correlates with improved returns. We therefore explored the types of changes they were and at what point in the cycle they were carried out. Copyright DRAX All rights reserved 10

11 Director Appointments The vast majority of the directors brought into a team were new CFOs. 64% of all companies and 73% of the companies achieving upper quartile exits changed their CFO during the PE cycle. This was an increase on the previous year of 6% on average and 5% for the upper quartile, indicating an increased willingness of investors and management teams to recognise the need for change amongst CFOs. Changes to Management During Investment Average Upper Quartile CEO 38% 36% CFO 64% 73% COO 23% 21% CTO 22% 30% CRO 15% 17% We found that the rate of change amongst upper quartile companies was very similar across the functions outside of CFOs. The only exception to this was for CTOs where we found that 30% of upper quartile companies will change their CTO compared to 22% of all PE companies, indicating that agility in this appointment correlates with improved returns. % of Companies Changing each role through the PE cycle CFO CEO COO CTO CRO Average Upper quartile Very few companies (8%) do wholesale changes to their management team through the hold period, where all the named directors are changed throughout and the C-suite is different entirely from beginning to end. This indicates that it is not the quantity of changes made that drives success, but rather the quality of strategic hires that is important. Copyright DRAX All rights reserved 11

12 The Timing of Management Changes Changes to CEOs & CFOs in cycle 220 UQ CFO Change AVG CFO Change 200 UQ CEO Change EBITDA Growth AVG CEO Change Year 1 Year 2 Year 3 Year 4 Year 5 Average Upper quartile Those companies which changed their CFOs during the PE cycle did so 21 months on average into the cycle. The most successful upper quartile teams changed their CFOs even more frequently, and at an earlier stage, with the companies bringing in new CFOs on average 13 months into the cycle. Changes to CEOs took place on average at 22 months into the cycle, while companies in the most successful upper quartile made the change considerably quicker, at 11 months into the cycle. These changes are occurring 4 months earlier than they were in our analysis of the financial year , indicating an increasing willingness of investors to make a change early in the cycle. Additionally, the difference between upper quartile and average performing companies has been maintained, despite both sets making change earlier. This indicates the importance of these changes to the performance of a company to exit are highly correlated to improved returns. The appointment of COOs, CTOs and CMOs are evenly spread throughout the Private Equity cycle, without notable difference between upper quartile and average companies. Copyright DRAX All rights reserved 12

13 Management Change as a Value Creation Strategy Our analysis into management change indicates that there is a strong correlation between making changes to the management team and the success of the exit. The most successful companies make changes to their management team more often and earlier than the average. However, wholesale changes and a high volume of management changes are not on their own sufficient to maximise value creation Our research shows three clear findings: 1. Changing a CFO and doing so earlier in the cycle correlates with an increased return 2. Changing a CEO earlier in the cycle correlates with an increased return 3. Changing a CTO correlates with an increased return Correlation between EBITDA Growth & Change in CFO 160% 140% 120% Growth 100% 80% 60% 40% 20% 0% CFO change in Months The significance of this correlation, particularly amongst CFOs, can be seen in the chart above. As shown, the companies which changed their CFO earlier into the PE cycle also achieved a higher EBITDA CAGR than the average. One might speculate that, while this will be partly due to the positive effect of bringing in a new CFO at an early stage, it will also be driven by the difficulties facing those companies which change their CFOs later on. Copyright DRAX All rights reserved 13

14 Understanding Talent In order to understand leadership capital within UK Private Equity we looked at the key determinants of successful value creation amongst leadership teams. We have already identified that management change is a key value creation strategy for Private Equity whose effective execution relies upon a proportionate and strategic application of talent at certain times in the value creation cycles. We then looked at the CEO, CFO and Chair team within the exited companies of the 12 months to April 2018, in order to evaluate their experience prior to beginning the value creation cycle they have just successfully completed. In doing this, we have been able to develop a comprehensive profile of the nuances and differences in profiles between CEOs, CFOs and Chairs, and can appreciate the particular requirements for each role. We considered these elements within the following framework: Situational: Ownership Model Experience, Corporate Model Experience, Exit Experience, Transaction Experience, Value Creation Strategy Experience Situational Domain Domain: Sector Experience, Business Model Experience, Client Base Experience, Geography Experience, Service Experience Behavioural Functional Functional: Prior Role Experience, Current Role Experience, Background Experience, Training and Education Behavioural: drxdata is currently developing ways of assessing the behavioural characteristics of Leadership teams for a report to be published in Using this framework, we have developed a drxdata Success Propensity Model for the effective analysis of both a team and an individual working within Private Equity. This model is able to indicate an individual s likely effectiveness within a team and company. The drxdata Success Propensity Model benchmarks both teams and individuals against a set of independent criteria prior to beginning the value creation cycle. Understanding the distinct yet complimentary characteristics of a leadership team allows for even greater application of talent as a value creation strategy. Copyright DRAX All rights reserved 14

15 Team Success Propensity There is clear evidence that on the drxdata Success Propensity Model, average exit teams demonstrate strong functional and domain scores but relatively weak behavioural and situational scores. This implies that in these areas there is the biggest missed opportunity for effective value creation through the talent hires that have been made through the PE hold period. Success Propensity Modelling of Avg and UQ PE Exits Situational Behavioural 0 Domain UQ Team Avg Team Functional Average companies have a higher domain score than upper quartile companies. This indicates that there may be too much of a focus on having operated in the domain previously (i.e. sector experience). This in turn comes at the expense of effectively understanding the situation and value creation plan and seeking to identify individuals who have previous experience of executing such a strategy successfully. Copyright DRAX All rights reserved 15

16 Individual Success Propensity The variation amongst the individuals within the upper quartile teams on their success propensity scores is also highly revealing of how a successful team of individuals is constituted within PE. We have observed a high degree of variation between the roles, as investigated below. Success Propensity Modelling of UQ PE Exits Individuals Situational Behavioural Domain UQ CEO UQ CFO UQ Chair UQ Team Functional In particular, CFOs have lower domain and situational experience but have a high degree of functional and behavioural experience. Conversely, CEOs may lack functional experience (i.e. experience as a CEO in Private Equity) but have a high degree of sectoral and situational knowledge. Chairs are most likely to represent a fully rounded experience, with particularly high situational and functional scores. Copyright DRAX All rights reserved 16

17 This analysis has significant consequences on how we view management change as a value creation strategy for Private Equity. We have already shown that there is a high volume of executive change through a Private Equity company s hold period, and that a willingness to make changes and the timing of these changes can correlate strongly with returns. This value creation strategy is then further reinforced by a qualitative difference in the hires that are made by upper quartile and average performing companies. In particular, our research indicates that: 1. Average teams tend to have a higher domain score than upper quartile companies. This indicates that there is a tendency to hire individuals with sectoral experience in Private Equity which does not correlate with increased returns. 2. Upper quartile teams tend to have a higher situational score than average teams. This indicates that these companies hire more individuals who have previously executed the value creation strategy pursued by a company, and that this correlates strongly with increased returns. Copyright DRAX All rights reserved 17

18 Management Teams Key Traits Summary Through this analysis we have been able to develop a comprehensive understanding of the nuanced and balanced nature of a successful Private Equity backed management team. In particular, we are able to further understand how complimentary experience across a team can dampen, co-exist or amplify other attributes in the team. The key findings amongst these areas are: Value Creation Strategy Experience of executing a value creation strategy previously is one of the greatest differentiators between a successful upper quartile exit and an average exit. CFOs usually only pursued the value creation strategy a little over 30% of the time, whereas Chairs of successful upper quartile exits will typically have done so twice, either as an executive or non-executive. Role Upper quartile Chairs were more likely to have previously served as a Chair. Private Equity There is a strong correlation between previous Private Equity experience held by a team and the quality of the exit they achieve. CEOs tended to have significantly less PE experience than either the CFOs or Chairs for both average exits and for those exits in the most successful upper quartile. Newly appointed CFOs had 18 months more experience than those in place for the whole cycle. For teams which achieved exits in the most successful upper quartile this rose to 26 months more experience. Newly appointed Chairs in the most successful upper quartile had achieved an average of 5.9 transactions (exits and investments) compared to an average of 3.8 transactions for all newly appointed Chairs. Sector The amount of sector experience was not evenly distributed amongst the three members of the executive team. The CEO had by far the most sector experience, both for teams achieving average exits and for those achieving the most successful upper quartile exits. Additionally we have looked at the following areas, and found negligible differentiation amongst the following areas of research between the average and upper quartile companies: Previous role experience amongst CEOs The training background of CFOs The level of Private Equity experience amongst CEOs The level of transaction experience amongst CEOs Sector experience The level of sector experience was significantly greater amongst CEOs when compared to CFOs & Chairs Copyright DRAX All rights reserved 18

19 Acquisition Copyright DRAX All rights reserved 19

20 Acquisition Acquisitions are a recognised method for value creation in Private Equity which seek to consolidate multiple companies into a single platform, reduce cost and maximise market coverage. They are therefore a very legitimate method of value creation by portfolio companies. Our survey of the 318 exits in shows that the companies collectively made 282 bolt-on acquisitions during the PE cycle. In order to understand the importance of acquisitions in driving value creation, and their role in successfully executing a value creation plan, we analysed the likelihood of companies making acquisitions, the volume of acquisitions and when in the PE cycle they were made. Likelihood of Making Acquisitions Our research indicates that acquisitions are a significant value creation method pursued by a substantial part of the market. It found that 35.5% of upper quartile companies made an acquisition through their hold period, compared to 27.5% of average PE portfolio companies. % of Companies making acquisitions through their hold period, UQ vs Avg UQ 35.5% AVG 27.5% Copyright DRAX All rights reserved 20

21 Volume of Acquisitions Surprisingly, the volume of acquisitions made by those companies that do acquire through their hold period indicates that upper quartile performing companies generally acquire fewer portfolio companies compared to the average portfolio company. This suggests that the value creation process is not solely enhanced by acquisition, but by the effectiveness of the acquisitions in contributing to a wider strategy. Number of Acquisitions made by those that acquire through hold period, UQ vs Avg Timing of Acquisitions Given the unexpected finding that successful PE backed portfolio companies acquire fewer boltons, we looked at other factors which may affect the value created by acquisitions. We began by investigating at which point in their hold period companies were likely to make acquisitions. This indicated that upper quartile companies generally made their acquisitions earlier in the cycle, concentrating their acquisitions into a 12 month window between months 18 and 30 of the cycle. Average portfolio companies were likely to have a less concentrated period of acquisitions over more than 18 months, between 27 and 45 months into their cycle When Acquisitions are made through hold period, UQ vs Avg EBITDA Growth Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Average PE EBITDA Growth Upper Quartile PE EBITDA Growth Copyright DRAX All rights reserved 21

22 The Size of Acquisitions Upper quartile performing companies tend to be 24% larger than the average portfolio company. Given this difference in size, it is perhaps unsurprising that they tend to make slightly smaller acquisitions on average, concentrated between 37% and 78% of their own size, while the average portfolio company makes investments concentrated between 53% and 86%. More significantly, the total range of acquisitions that are made are very different, with the upper quartile business making acquisitions of up to 120% of their own size, while average portfolio companies make acquisitions that are only 107% of their own size. From this analysis, one could suggest that upper quartile companies may be more ambitious in their acquisitions and effective in their integration, while average portfolio companies are prone to making smaller acquisitions that fail to shift the dial or capture the benefits of integration. Relative Size of Acquisitions AVG UQ 0% 20% 40% 60% 80% 100% 120% Sector Breakdown Business Services and Financial Services companies were significantly more likely to make acquisitions than other sectors. They were significantly over represented as a proportion of bolt-ons, indicating that these sectors are more prone to deploying acquisition as a value creation strategy. By contrast, Consumer and Energy companies see the biggest disparity between their likelihood to make an acquisition and the volume of exits. This is likely to reflect structural considerations in value creation within these markets. Relative Bolt-on Acquisitions and Exits activity Information Technology Consumer Products and Services (B2C) Business Products and Services (B2B) Financial Services Healthcare Materials and Resources Energy Bolt-ons Exits Copyright DRAX All rights reserved 22

23 Acquisition as a Value Creation Strategy Our analysis of acquisition as a value creation strategy reveals that it is a legitimate and potentially value enhancing strategy to pursue. However, the execution of the strategy appeared to be of significant importance, as: Upper Quartile companies are more likely to make acquisitions through their hold period Upper Quartile companies tend to acquire fewer companies than average companies that pursue the same strategy Upper Quartile companies make their acquisitions earlier in their cycle, and in a more concentrated fashion These factors together present a nuanced view of the acquisition strategy for Private Equity and indicate that, while a valuable strategy, the ability to integrate companies rapidly and to make choice and strategic acquisitions are likely to be key determinants of the value realised through acquisition. Copyright DRAX All rights reserved 23

24 Internationalisation Copyright DRAX All rights reserved 24

25 Internationalisation Internationalisation is seen to present an opportunity for significant value creation through the exposure to larger marketplaces, thus increasing the total market that the company is exposed to and competes with. It is perhaps therefore unsurprising that we found nearly twice as many upper quartile companies (20%) were reporting export revenues at exit as average portfolio companies. % of Companies reporting export revenues UQ AVG Amongst those companies that do internationalise through their hold period, growth in international revenues outstripped growth in domestic revenues by an average of 2% p.a. This figure rises to 3.4.% p.a. for upper quartile companies. This is a significant contributory factor to value creation, as it implies that for upper quartile companies, international success accounted for 19% of top-line growth through the hold period, while for average portfolio companies it accounts for 14% of overall revenue. The additional value created by Internationalisation for UQ companies The difference Internationalisation makes to top-line growth Copyright DRAX All rights reserved 25

26 International Acquisitions The geographical spread of bolt-on acquisitions is also a strong indicator of the use of internationalisation as a value creation strategy, with 27% of all companies making a bolt-on doing so overseas. This figure rises to 39% amongst those upper quartile companies that also made a bolt-on, indicating that a willingness to inorganically expand overseas corresponds to increased returns. Acquisitions by Geography UK Europe USA Other Exit Route through Internationalisation The significance of international expansion as a value creation strategy is also made evident by the exit route of those companies that make international acquisitions against those making only UK acquisitions. As demonstrated below, those with international acquisitions are almost twice more likely to be acquired by overseas companies (either funds or trade buyers), as 43% of companies without an international acquisition were bought by overseas parties, compared to 79% of companies with an international acquisition. Companies without Intl Acquisitions Companies with Intl Acquistions UK USA EU Other UK USA EU Other Copyright DRAX All rights reserved 26

27 Technology Enablement Copyright DRAX All rights reserved 27

28 Technology - Enablement Effective technology enablement strategies can both add value to the performance of a company overall and to the value of the EBITDA multiple achieved at exit. There are several ways to identify the extent to which a company prioritises a technology enablement strategy: Chief Technology Officers Amongst upper quartile companies, a CTO is 14% more likely to be an established board member at exit than amongst average portfolio companies. This implies that these companies are significantly more likely to have engaged in technological advances within their companies. % of Companies with a CTO on their board at exit AVG UQ Furthermore, we know that upper quartile companies are significantly more likely to seek to change their CTOs through their hold period than average performing companies. This again implies a strategic engagement with technology as an enabler of value creation within the company. It also indicates that there is a close interplay between talent and other value creation strategies as they are key to enabling the pursuit and execution of these strategies. % of Companies that Change a CTO through their hold period AVG UQ Copyright DRAX All rights reserved 28

29 Digital Presence We also considered the effectiveness of a company s digital footprint, through the amount of traffic that the company s website received relative to its revenue. This allowed an accurate appreciation of how efficiently it maximises the value of its digital assets. The measurement tool Alexa was used to measure website traffic, where a lower score indicates a better ranking. When we considered upper quartile performance against average performance, we got a very distinct pattern, with the best performing companies having the greatest Alexa/revenue rankings. Alexa Rank 2,500,000 2,000,000 1,500,000 1,000, ,000 0 LQ AVG UQ Alexa Rank Furthermore, this pattern applied cross sector. Both B2B and B2C models continued this behaviour, clearly indicating that a strong digital presence is important across the marketplace. This is notable, as often B2B business models, that are not technology enabled, do not consider digitalisation a significant value creation strategy. However our evidence indicates that it has value creation potential in all circumstances. Copyright DRAX All rights reserved 29

30 Summary Remarks from Graham Roadnight There is no magic pill to guarantee a successful private equity investment and exit cycle. However no one invests to stand still, let alone lose money. So with money multiple buy-ins being what they are today it is unquestionably important to understand what can drive value creation during the investment cycle. Management change, internationalisation, acquisitions and adopting technologies are all legitimate levers. But knowing how these levers will drive value, and how and when to pull on them, is both heavily nuanced and textured, which means that it would be too simplistic to try and produce a boiler plate that would guarantee success. By analysing last year s 318 exits, the 2018 drxdata Leadership Capital Insights Report illustrates the commonality of characteristics that are concentrated in upper quartile exits. Is it coincidence or science? The danger of putting the outcome down to the coincidence of buying well, or the timing of buying at the right point in the cycle, is that it prevents conversations in which success or failure is unravelled to develop an understanding that could be either avoided or repeated. The key objective of Drax is to provide our clients with insights developed from the sensitive nature of the assignments we undertake and to provide the best advice before action. drxdata provides Drax and our clients with an even greater ability to develop access to the best insights into the leadership capital within Private Equity Investments and what impact this has on driving value. I would like to take this opportunity to thank the drxdata team, the Chairs who generously gave up their time to challenge and corroborate its findings and the operating partners and members of the Value Creation teams across Private Equity who throughout the year helped shape the focus of this year s Leadership Capital Insights Report. Copyright DRAX All rights reserved 30

31 This report was published using drxdata, Drax s proprietary Data Capability. For further information, please contact: Samuel Robberts, Head of drxdata E: sr@draxexecutive.com T: +44 (0) Drax Executive Ltd Copyright Notice This report and its content are the copyright of Drax Executive Ltd Drax Executive Ltd All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only; you may copy the content to individual third parties for their personal use, but only if you acknowledge the report as the source of the material. you may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any website or other form of electronic retrieval system. We take the protection of our copyright very seriously. If we discover that our copyright materials have been used in contravention of this notice, we may bring legal proceedings seeking monetary damages and/or an injunction to stop the use our materials. This can also include an order to pay our legal costs. Copyright DRAX All rights reserved 31