unlocking the value creation potential of the “new suez” · 2019-07-18 · amber capital: about...
TRANSCRIPT
Source: Suez
Unlocking the value creation potential of the “New Suez”July 2019
AMBER CAPITAL: ABOUT US
1
Amber Capital currently holds a 1.9% stake in Suez SA (“Suez” or the “Company”) on behalf of the funds the
firm manages (as of 18/07/2019).
Amber Capital is an alternative asset management firm that primarily invests in Europe and has approximately
$1.6 billion in assets under management as of July 1, 2019. Founded in 2005, Amber Capital is based in
London with offices in New York and Milan*. Central to Amber Capital’s investment methodology is the
combination of value-oriented, bottom-up fundamental analysis and a focus on catalyst-driven situations across
the capital structure.
The Investment Team is recognized for its European expertise, and ability to navigate the legal, socio-political
and cultural nuances of in the region. Amber Capital has an active shareholder philosophy and draws on its
expertise in corporate governance. The Investment Team engages with companies and relevant
stakeholders, endeavoring to build trust with the goal of unlocking unrealized value.
* Amber Capital UK LLP is authorised and regulated by the FCA and is registered with the SEC; Amber Capital
LP is registered with the SEC; Amber Capital Italia SGR, SpA is authorized by the Bank of Italy as an asset
manager.
+150 bps+300 bpsto
TABLE OF CONTENTS
2
1 - BACKGROUND 2 - BREAKING DOWN SUEZ’S
UNDERPERFORMANCE
3 - AMBER’S PROPOSALS 4. REPOSITIONING THE “NEW SUEZ”
Executive Summary – Amber Capital’s vision…….…........p.3
Suez: Company Overview……………………….….....…….p.4
Absolute and Relative stock performance……………….……..…p.5
Drivers of underperformance – the “Suez Vicious Cycle”……….p.9
Transition to the “Suez Virtuous Cycle”………...................p.19
Strategy reset through large asset rotation……....p.22
Improve corporate governance and alignment….p.23
Increase the medium-term visibility……………….p.32
“New Suez”: Higher Growth, Asset Lighter, Lower Leverage……p.34
Regression chart………………………………………………….…..p.35
Higher Growth
Higher ROCE
Stronger Balance Sheet
Asset Lighter
Strategy reset through large asset rotation
Improve corporate governance and alignment
with shareholders
Increase medium-term visibility
No EBIT/Share or DPS growth since IPO
Misguided Strategy
Multiple Profit Warnings
Suboptimal Corporate Governance
AMBER CAPITAL’S VISION
3
Amber believes that the upcoming capital markets day is a key catalyst for the new management team to
demonstrate a path for value creation by unlocking the industrial potential of Suez:
“OLD SUEZ” UNDERPERFORMANCE
“NEW SUEZ”UPSIDE POTENTIAL
AMBER CAPITAL’SPROPOSALS
+150 bps+300 bps
ROCE Increase Potential the new management team can unlock through our proposals.
to
Market Capitalization (28.06.19) 7,885 Reported ND/EBITDA’18A 3.2x
Reported Net Debt’18A 8,954 EV/EBITDA’19E* 7.5x
Revenues’18A 17,331 FCF Pre-Growth CAPEX Yield’19E* 11.7%
EBITDA’18A 2,768 Dividend Yield’19E* 5.1%
Reported FCF’18A 1,023 *Based on Amber Capital estimates
DPS’18A 0.65
SUEZ: COMPANY OVERVIEW
4
Suez is one of the world’s leading companies in the water and waste markets. The group operates on all five
continents through four divisions.
45% 41%
27% 25%
31% 29%
1%9%
(5%) (4%)
2,578m EUR2,768m EUR
32.06%
5.97%
3.73%
3.49%0.57%
54.17%
Engie
Criteria Caixa
Employee shareholding
Caltagirone
Treasury shares
Free float
Source: Suez 2018 Reference Document
BACKGROUND (M EUR)
EBITDA CONTRIBUTION BY DIVISION
SHAREHOLDER STRUCTURE
Sources: Suez, Bloomberg, Amber Capital
Water Technologies
& Solutions (WTS)
International
Recycling &
Recovery Europe
Water Europe
International
− Water and waste sectors in more than 15 countries
Source: Suez
Water Technologies & Solutions (WTS)
− Industrial water division (includes GE Water and Industrial Water
Technologies)
Recycling & Recovery Europe
− Collection, pretreatment, sorting and recycling of waste, management of
industrial sites, etc.
− Both public and private customers through service or management contracts,
operational and maintenance contracts etc.
Water Europe (including Chile through controlling stake in Aguas Andinas)
− Collection and treatment of municipal and industrial wastewater, treatment
and distribution of drinking water
− Public service contracts, O&M contracts, engineering and various other type
of contracts20182017
Reference Event Issuance Price Date Price ChangeAnnualized
TSR
IPO €14.00 22/07/2008 -9.4% +4.1%
Agbar Capital Increase ~€14.49* 17/09/2014 -12.4% +1.9%
GE Water Capital Increase €15.80 24/05/2017 -19.7% -5.2%
POOR ABSOLUTE STOCK PERFORMANCE
5
A
B
C
Suez has been a poor performer in absolute terms: Nearly 11 years later, Suez’s
share price still trades below its
IPO level.
~-20% share price
reduction since the
GE Water Capital
Increase.
Source: Bloomberg. Historical Share Price
Source: Bloomberg
*Calculated on the basis of Suez reported figures
7
9
11
13
15
17
19
21
Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
AB
C
Share Price
(28.06.2019)
€12.69
WEAK RELATIVE STOCK PERFORMANCE
6
Suez has widely underperformed its main comparable indices and peers:
Source: Bloomberg
A DECADE OF EMPIRE BUILDING
7
Over the past decade, Suez has been too centered on a capital intensive top-line growth strategy in our view,
mainly through internationalization while not focusing enough on value creation.
Evolution of the key performance indicators of Suez since IPO (2008-2018):
+84%
Growth in
Capital Employed
+40%
Growth in
Revenues
+26%
Growth in
EBIT
-0.2%
-57%
Growth in
EBIT/Share
Growth in
EPS
NO PER SHARE GROWTH OVER 10 YEARS
A bigger Suez does not
mean a more valuable
Suez.
Source: Suez
What has been
happening at
Suez since IPO?
10
11
12
13
14
15
16
17
18
19
Apr-15 Apr-16 Apr-17 Apr-18 Apr-19
SUEZ’S VICIOUS CYCLE
9
Suez’s value destruction cycle has in our view been driven by the recurring application of the “Suez Vicious
Cycle” that has been at the core of the questionable strategy of the company:
HIGH CAPITAL
INTENSITY
SHARE COUNT
INCREASE
LIMITED EARNINGS GROWTH
DECREASING ROCE
INCREASING FINANCIAL LEVERAGE
SUEZ’S
VICIOUSCYCLE
Source: Bloomberg
HIGH CAPITAL INTENSITY
10
Since IPO, Suez has embarked on a highly capital intensive strategy…
Evolution of Suez’s capital employed:
20082018
€10.1bn
International€6.0bn
Water€5.5bn
Waste€4.1bn
+84%
Growth
€18.6bn
Suez’s Acquisitions since IPO
Source: Suez, Reported End of Period Capital Employed
Source: Suez
SHARE COUNT INCREASE
11
… that has resulted in a material increase in the company’s number of issued shares…
480.0
500.0
520.0
540.0
560.0
580.0
600.0
620.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Suez's Year End Shares Outstanding (M)
+5.9%
+4.0%
+10.4%
A
B
C
Reference Share Issuance Main Contributor Comments
+30.0M Agbar Acquisition Acquisition of Criteria’s 24.14% interest in Agbar
+21.8M Acea Stake Acquisition Acquisition of Caltagirone’s 10.85% stake in Acea
+59.0M GE Water Acquisition Acquisition of GE Water
A
B
C
489.7M 621.4M+27% increase
Source: Suez
NO EARNINGS GROWTH
12
… and virtually no earnings growth!
Key Financials (EUR) 2008 2018 Delta CAGR 08-18
Capital Employed (EoP)/Share 20.69 30.17 +45.8% +3.8%
Revenues/Share 25.26 28.04 +11.0% +1.0%
EBITDA/Share 4.30 4.48 +4.3% +0.4%
EBIT/Share 2.16 2.16 -0.2% 0.0%
Earnings/Share 1.09 0.47 -56.9% -8.1%
Dividend/Share 0.65 0.65 0% 0%
Evolution of KPIs per share since IPO:
Economic reality:
A decade after the IPO,
Suez has not achieved
any growth in
EBIT/Share, EPS and
DPS.
Key Financials (bn EUR) 2008 2018 Delta CAGR 08-18
Capital Employed (EoP) 10.1 18.6 +84.1% +6.3%
Revenues 12.4 17.3 +40.2% +3.4%
EBITDA 2.1 2.8 +31.7% +2.8%
EBIT 1.1 1.3 +26.1% +2.3%
Adjusted Net Income (M) 533 290 -45.6% -5.9%
Evolution of KPIs in absolute terms since IPO:
Perception of growth:
Top-line culture at Suez
led to the illusion of a
growth cycle over the
years in our view.
Transition from “Growth
Perception” to “Economic
Reality” for shareholders
Source: Suez
Source: Suez
a decade later (2008-2018)
No growth in EBIT/Share
No growth in EPS
No growth in DPS
Suez should urgently transition from a top-line to a bottom-line
culture to get back on a path of value creation for shareholders
in our view.
Why has Suez’s
underperformance
deepened over the recent
years?10
11
12
13
14
15
16
17
18
19
20
POOR CAPITAL ALLOCATION
14
Over the recent years (2013-2018), Suez has invested €13bn for virtually no earnings accretion:
Invested Capital
€13bn
Incremental EBIT Incremental FCF
€0.1bn€0
Suez has been a poor
capital allocator.
Source: Suez Reporting
Invested Capital = Sum (over 2013-2018) of Concession Renewals + Maintenance CAPEX + Development Investments + Financial Investments
Incremental EBIT = Reported EBIT 2018 – Reported EBIT 2013
Incremental FCF = Reported FCF 2018- Reported FCF 2013
DECREASING ROCE
15
As a consequence, the company’s Return on Capital Employed ratio has been in free fall:
7.8% 7.9%
7.0%
6.8%
6.2%
2014A 2015A 2016A 2017A 2018A
Group ROCE Evolution
ROCE (Post-Tax) WACC
160 BPS OF
VALUE
DESTRUCTION
Source: Suez
Suez share price
performance
Source: Bloomberg
10
12
14
16
18
20
Apr-15 Apr-16 Apr-17 Apr-18 Apr-19
INCREASING LEVERAGE
16
Suez had to tap into its balance sheet capacity to continue investing with no earnings expansion:
2.7x
2.9x
3.0x
3.2x 3.2x
3.1x
3.3x
3.4x
3.8x 3.8x
2014A 2015A 2016A 2017A 2018A
Group Financial Leverage Evolution
Reported Net Debt to EBITDA Total Net Debt to EBITDA (incl. hybrids)
Source: Suez
A STRATEGY RESET IS NOW CRITICAL
Value
Creation
Potential
Restructuring
Opportunity
OPPORTUNITY OF NEW CEO
BERTRAND CAMUS
ROCE MATTERS FOR THE SHARE PRICE
New management should reconsider the capital allocation strategy of the group.
Sources: Suez, Amber Capital Estimate, Bloomberg
What can Suez
do now?
SUEZ’S VIRTUOUS CYCLE
19
The appointment of Bertrand Camus as new CEO of Suez marks the beginning of a new chapter for the
company. The new management team has a unique opportunity to reposition Suez as asset lighter, faster growing
and more profitable:
PORTFOLIO REVIEW
SELL RESTRUCTURE REPOSITION
STRENGTHEN BALANCE
SHEET
UNLOCK GROWTH
POTENTIAL
IMPROVE ROCE
SUEZ’S
VIRTUOUSCYCLE
A STRATEGIC RESET IS KEY TO REPOSITION SUEZ
New CEO,
New Chapter,
New Suez
It is time to break
with the past.
A NEW PARADIGM FOR UTILITIES AS FOOTPRINT FOR SUEZ
20
The utilities sector has reinvented itself over the past few years by embarking on a large asset rotation cycle to
optimize its ROCE and accelerate its growth profile. We look at a few examples over the period 2015-2018:
Asset Rotation
ROCE Increase
DPS Growth
Cost cutting
Board Size
Enel
9 members
Naturgy
12 members
Veolia
13 members
Engie
14 members
Utilities / infrastructure
Industry
Sizable asset rotation to optimize portfolios
Material improvements
Double-digit growth
Digitalization drove large
savings
Reduction of board sizes
Current Suez
Very limited capital rotation
Decreasing ROCE
No growth
Limited net savings
Large board
19 members
Source: Company reporting, Amber Capital estimate, Bloomberg
ENGIE CASE STUDY: A SUCCESSFUL ASSET LIGHT STRATEGY
21
Engie has embarked on an asset light growth path allowing it to constantly recycle capital, reduce risk and
unlock value while accelerating growth through the DBpSO strategy. Suez can learn from its shareholders.
DevelopmentD BuildB PartialP SellS OperateO
Increase Engie IRR Share risk
Accelerate capital
rotation to
increase growth
Keep the industrial
side of the assets
PRE-DBPSO
2016-2018
Win more projects
Development & construction risk Keep a stake & monetize NPV O&M, Energy management & asset
optimization
Source: Engie CMD 2019
CAPEX
MW ADDED
€3.7bn
2.8 GW
€1.7bn
8.0 GW
-54%
+2.9x
POST-DBPSO
2019-2021
✓IRR DBpSO = IRR Buy & Hold + 400 bps
BENEFITS OF DBPSO ASSET LIGHT STRATEGY
Source: Engie CMD 2019
WIND AND
SOLAR
CAPACITY
Strategy reset
through large
asset rotation
SUEZ NEEDS A DEEP PORTFOLIO REVIEW
23
Suez has a compelling opportunity to review its portfolio ahead of its capital markets day following a decade
of limited portfolio management:
What are the underperforming assets of the group?
Which assets could be monetized?
How can Suez redeploy proceeds?
What is the most value enhancing portfolio management strategy?
1.6%3.3%
4.5%
1.8% 1.2% 1.2% 1.8%0.8% 3.1%
2.0% 1.3%
2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A
Disposals as % of Capital Employed
Average of 2.1% per
annum only.
Source: Suez
STEP 1: PORTFOLIO REVIEW
24
Suez should engage in a large portfolio review by assessing the Growth, ROCE and FCF generation levels of its
assets. The underperforming assets should fall into the scope of review.
Agbar
SpainOther Waste Europe
United
Water
Sita France
Decision criteria Scope of review
Allocation in
Step 2
Look at the contribution of each asset to Suez’s capital employed
Categorize assets based on criteria: ROCE and Growth
Underperforming assets are placed in the scope of review
The greater the capital employed contribution the more urgent the situationSource: Amber Capital
Acea
Source: Amber CapitalSource: Amber Capital
Gro
wth
RO
CE
STEP 2: ASSET REVIEW
25
Conduct a precise analysis on the
possibility of implementing a cost-
cutting plan in order to increase ROCE
Try to optimize the structure to boost
returns
1. Restructure
Asset A
Agbar
Spain
Asset B
Asset C
2. Asset light
model3. Sell
If Suez is not the natural owner of the
asset but is best to operate it, follow a
“DBpSO-type” model: sell a stake and
keep the operation
Asset light model for value and growth
If the previous options are not
achievable, Suez should sell the greater
stake possible in the asset
This option is even more attractive when
there is appetite for the asset
Use of proceeds
in Step 3
Source: Amber Capital
Agbar
SpainOther Waste Europe
United
Water
Sita France
Acea
STEP 3: USE OF PROCEEDS
26
Asset divesture mechanically leads to an earnings reduction
Part of the proceeds can be used to buy back shares in order to limit /
eliminate the earnings dilution effect
Additionally, Suez can opportunistically capitalize on the
undervaluation of its shares, based on the company’s assessment, by
acquiring them
Proceeds
from
Step 2
Share buy
back
Suez management has been communicating on its ability to find
investment opportunities at rate of returns of WACC+400bps
Thanks to the proceeds and the healthier capital employment, Suez will
be able to exploit these opportunities and invest in more performing
assets
Reinvest
In addition to the incremental investment capacity, the asset rotation
proceeds could allow Suez to delever in order to strengthen the balance
sheet
The asset-lighter new strategy would require lower levels of financial
leverage, which is addressed at this step
Deleverage
Key to
value
creation
7.5x 7.5x
12.0x
Suez TradingMultiple
Consensusvaluation
Expectedmultiple
CASE STUDY: SALE OF AGBAR SPAIN1
27
Agbar is an ideal candidate to initiate an asset rotation cycle. The asset is now mature and has lower returns
than the group’s cost of capital. We believe it should now be owned by financial investors.
Mature
AssetROCEAGBAR < WACCSUEZ
Infrastructure,
Pension, PE
Funds
Ass
et a
lloca
tion
Use
of
pro
ceed
s
Disposal of Agbar Spain would unlock value and reposition Suez
Estimated transactional multiple of 12.0x EV/EBITDA3
High appetite for infrastructure assets as well as Iberia
Assuming an 19E EBITDA of €250M5, the unlocked value would be
(12.0-7.5)*250 = c. €1.1bn ie ~ € 1.8/Share
Gross proceeds4:
+ €3,000M
Share buy back
€1,000m
Growth capex
€1,000m
Deleveraging
€1,000m
Growth Profile ROCE Profile Potential buyers
SUEZ
VIRTUOUS CYCLE APPLICATIONA
sset re
view
✓ Crystallize
significant value
✓Allow firepower
to invest further
✓Delever
✓ Buyback shares
+4.5x
3
2: Average multiple of Exane BNPP, JP Morgan, Goldman Sachs, Barclays 3: Amber Capital Estimate based on comparable transactions
4: Pre-minorities, capital gain tax and other adjustments
2
1: Full perimeter of Spain considered for illustrative purposes. A revised perimeter of the asset could be considered by the management should it be value enhancing.
5: Amber Capital Estimate
VALUE CREATION CYCLE
28
Suez has a considerable industrial opportunity ahead to grow faster. Through the application of the “virtuous
cycle”, we believe the company could unlock this potential and reposition itself structurally as we detail below
throughout the Agbar example:
Disposal of
Agbar at
12.0x
EV/EBITDAReinvest in Growth WACC + 400bps
Delever
Share Buybacks
Unlock
Value
€1.0bn
APPLICATION OF “SUEZ VIRTUOUS CYCLE” – AGBAR ASSET ROTATION EXAMPLE
KPI Pre-Asset Rotation Post-Asset Rotation “New Suez”
Group EBITDA CAGR 18-21 +3.5% +6.5% ✓ Higher growth
Net Debt/EBITDA 3.25x 2.66x ✓ Lower leverage
Share count (M) 621.4 550, -10% ✓ Share count reduction
Group EBITDA/Share CAGR 18-21 +3.5% +10.0% ✓ Per share upside
Group ROCE 6.2% 6.7% Year 1 / 8.3% Year 3 ✓ Value creation
€1.0bn
€1.0bn
Source: Amber Capital
Improve
corporate
governance
and alignment
19 19
14.0 14.213.7 13.6
12.5
11
13
15
17
19
Suez Engie (Pre-AGM 2019)
Engie (Post-AGM 2019)
SX5E(Average)
SX6E(Average)
CAC 40(Average)
SBF 120(Average)
Num
ber
of
Dir
ect
ors
Size of Board of Directors
Source: Bloomberg, Company reporting
Average 13.6
REDUCE THE SIZE OF THE BOARD
30
Suez should reduce the size of its board to allow for a more agile corporate governance structure and a more
efficient decision making process:
Suez should follow in the footsteps of its main shareholder, Engie, and
also reduce the Size of its Board to achieve a leaner structure.
SX5E – Euro Stoxx 50, SX6E – European Utilities Index, SBF120 – Société des Bourses Françaises 120
IMPROVE MANAGEMENT’S ALIGNMENT
31
The alignment of the management with shareholders has to be materially improved:
CompanyEBITDA/EBIT/
PBT
FCF/
DebtIndividual
Net Profit/
EPS
ROE/
ROCERevenues CAPEX
TSR/
Dividends
Qualitative
SafetyTotal
Utilities
Average25% 14% 12% 12% 5% 0% 4% 3% 24% 100%
Suez Pre-AGM 2019
20% 20% 0% 0% 10% 0% 0% 25% 25% 100%
Suez Current 20% 20% 0% 0% 0% 10% 0% 15% 35% 100%
CEO Annual Variable Compensation Criterias (Short-Term):
FREE CASH FLOW MISMATCH
Company uses FCF before Growth
CAPEX, Dividends to Minorities,
Hybrids Coupon as remuneration
criteria.PR
OBLE
MS
SO
LUTIO
NS
REVIEW FCF DEFINITION
Management should be remunerated
on Equity Free Cash Flow generation
after Growth CAPEX to increase
alignment with shareholders. Capital
intensity matters.
ABSENCE OF NET PROFIT
Management is not remunerated on
bottom line metrics. This provides
more incentives for empire building.
INTRODUCE EPS
Earnings Per Share and per share
financial metrics should be
introduced to emphasize value
creation over empire building.
REPLACED ROCE WITH REVENUES
Remuneration committee has
removed the ROCE as a
remuneration criteria to replace it
with Revenues – a clear
misalignment with shareholders.
EMPHASIZE ROCE
Management should be remunerated
on value creation rather than topline
expansion. ROCE should be core in
the annual variable compensation.
Practices from the past should be abandoned – Ordinary tasks should not be subject to Exceptional Remunerations:
Exceptional bonus to be granted to Mr Chaussadefor the acquisition of GE Water
€1.0M
Share price evolution since the acquisition of GE Water
-20%Why?
Management should
be remunerated
based on value
creation rather than
empire building.
A leaner Suez can be
a more valuable Suez.
Source: Suez, RBC
Source: BloombergSource: Suez
Increase
medium-term
visibility
INCREASE MEDIUM-TERM VISIBILITY
33
Suez needs to improve the visibility of the business. The group should present a multi-year guidance at the CMD
with clear objectives on: Growth, ROCE, Equity FCF And Leverage.
CompanyMulti-Year
Guidance
RERATING
SIMPLIFICATION
VISIBILITY
EXECUTION
DRIVERS FOR THE RERATING OF SUEZ
Source: Company’s Reporting
New Suez:
higher growth,
asset lighter,
lower leverage
“NEW SUEZ”: VALUE CREATION POTENTIAL
35
Through a proper strategic review including ambitious asset rotation and an asset lighter model to drive growth,
we believe Suez could achieve significant valuation creation by expanding its ROCE by +150 bps to +300 bps.
We highlight below a key correlation between ROCE and Enterprise Value/Capital Employed across the utilities
sector in Europe:
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
1.80
1.90
2.00
2.10
2.20
2.30
2.40
2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0%
ROCE (Post-Tax)
ROCE (Post-Tax) FY19e (x) vs EV/CE (y)
Current Suez
New Suez
Source: Company reporting, Amber Capital estimate
European utility companies+150bps +300bps
+0.6x
+0.3x
Virtuous Cycle
Opportunity
Rerating
Opportunity
EV/CE
6.2%
1.05x
Current Veolia
IMPORTANT INFORMATION
36
IMPORTANT INFORMATION
This document has been provided for information purposes only and may not under any circumstances be relied upon by any person in evaluating the merits of investing or disinvesting Suez securities. This document
presents Amber Capital’s analysis of Suez current financial situation and of the possible actions that the management of the company could implement to unlock value.
This document does not recommend or suggest any investment strategy and does not express any investment recommendation or any opinion as to the current or future price of any investment and must not be
treated as doing so by any person.
Any forward-looking statements in this document are based on assumptions which may not prove accurate and hypothetical scenarios which may not occur. This document is not a solicitation with respect to the
purchase or sale of any security or any Amber Fund.
The information and this document are not intended to be used to and do not themselves solicit proxies to vote in any Suez shareholders’ meeting, nor will Amber Capital or its Funds accept proxies from any Suez
shareholder to attend and vote in any Suez shareholders’ meeting.
This document. the information and analyses contained herein are not intended as tax, legal or investment advice. you should not rely on the information contained herein in connection with any investment decision.
The distribution of this document may be restricted by law in certain jurisdictions. Persons into whose possession this document comes are required to inform themselves about and to observe any such restrictions.
In the United Kingdom, this document is being distributed to, and is directed at (i) persons in the United Kingdom who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”) or (b) high net worth entities falling within Article 49 of the FPO (such persons in (i) or (ii) being “relevant persons”). Persons who are not relevant
persons must not rely on or act upon this document.
This document is directed only at persons who are “professional clients” or “eligible counterparties” (as defined in the rules of the UK Financial Conduct Authority). Other persons must not rely on or act on this
document in any way and the services of Amber Capital will not be available to such other persons.
Any investor who subscribes, or proposes to subscribe, for an investment in any Amber Fund must be able to bear the risks involved and must meet the Fund’s suitability requirements. Some or all alternative
investment programs may not be suitable for certain investors. No assurance can be given that the Fund’s investment objectives will be achieved. Private funds are typically speculative and involve a substantial
degree of risk. The Fund may be leveraged and engage in other speculative investment practices that may increase the risk of investment loss. Past results are not necessarily indicative of future performance and
performance may be volatile. An investor must realize that he or she could lose all or a substantial amount of his or her investment.
The information contained in this presentation is based upon proprietary research and analysis of public information conducted by Amber Capital and its affiliates, the reasonableness of which must be evaluated by
investors and prospective investors. Forward-looking information contained in this document, including all statements of opinion and/or belief, are based on a variety of estimates, assumptions, projections and
predictions by Amber Capital. These estimates and assumptions are inherently uncertain and are subject to numerous business, industry, market, regulatory, competitive, and financial risks that are outside of Amber
Capital’s control. There can be no assurance that the assumptions will prove accurate.
One or more Amber Funds may have a position in the securities of any company mentioned in this document.
Amber Capital has total investment discretion over its Funds which are dependent upon the services of Amber Capital. The use of a single group of advisors could mean lack of diversification and, consequently,
higher risk. Private funds are generally highly illiquid. There is generally no secondary market for an investor’s interest in a private fund, and none should be expected to develop. There will be restrictions on
transferring interests in the Fund. The fees and expenses that may be earned by Amber Capital and its affiliates may offset the Fund’s trading profits. The instruments in which the Fund will invest may involve
complex tax structures, and there may be delays in distributing important tax information. The Fund will not be subject to the same regulatory requirements as a mutual fund, including the SEC’s registration and
disclosure requirements. Certain of the trades executed may take place on foreign markets, which inherently involves a greater degree of risk. Funds are subject to various other risk factors and conflicts of interest.
For further information regarding risk factors and conflicts of interest with respect to a Fund, please refer to its confidential prospectus, supplement and application form.
Amber Capital UK LLP is authorized and regulated by the UK Financial Conduct Authority, Amber Capital LP is registered as an investment adviser with the U.S. Securities and Exchange Commission and Amber
Capital Italia SGR SpA is regulated by the Bank of Italy. Registration does not imply a certain level of skill or training. The information in this document has not been approved or verified by any regulatory
authority, and no regulatory authority has endorsed these materials or passed upon the merits of an investment.
CONTACT INFORMATION
37
PARIS
Footprint Consultants
Alexis de Maigret
Phone: +33 6 13 62 38 23
Philippe Manière
LONDON
Maitland/AMO
Jais Mehaji
Phone: +44 207 379 5151
James Isola
MEDIA
NEW YORK
900 Third Avenue
New York, NY 10022
USA
LONDON
14-17 Market Place
Kent House
London W1W 8AJ
United Kingdom
MILAN
Piazza del Carmine 4
20121 Milan
Italy
AMBER CAPITAL