IPO Watch Europe Q2 2016 €10.9bn IPO proceeds raised in Q2 2016 (Q2 2015: €14.7bn, 26% decline)

95 IPOs in Q2 2016 across Europe (Q2 2015: 124 IPOs, 23% decline)

€14.4bn IPO proceeds raised in H1 2016 (H1 2015: €31.1bn, 54% decline)

www.pwc.co.uk/ipowatch

2

| IPO Watch Europe Q2 2016

Contents

European IPO trends

4

Market volatility

6

Pricing and performance of top 5 IPOs

7

The sector story

8

London focus Overview

9

Relative performance of London IPOs

10

PE trends and the sector story

11

Global perspective

12

Appendix

13

Contacts

16

Stay tuned

“Following the referendum result, there have been a number of transactions postponed due to concerns over market uncertainties. That said, the majority of companies pursuing IPOs for the second half of the year are maintaining their plans. Improved political stability and greater clarity over the UK’s progress on negotiations with the EU will be key to IPO activity picking up again post the traditional quiet summer period. Provided this is the case, the successful completion of the first IPOs coming to market postsummer will set the tone for the remainder of the year. Whilst I do not see activity coming to a standstill, European IPO levels are unlikely to reach the €25bn mark for the year.” Mark Hughes Partner, UK Capital Markets Leader at PwC

IPO Watch Europe Q2 2016 |

3

European IPO trends IPO activity in Europe dropped more than 50% in H1 2016 compared to the same period last year, with OMX featuring as the most active exchange both by value and volume

Figure 1: Quarterly European IPO activity by value and volume H1 2015

Q1 2016

Q2 2016

H1 2016

Total European listings comprise those with: Less than €5m raised

66

23

28

51

Greater than €5m raised

140

27

67

94

Total number of listings

206

50

95

145

31,099

3,490

10,919

14,409

Exercised greenshoe (€m)

2,576

201

771

972

Total money raised (€m)

33,675

3,691

11,690

15,381

240

136

174

163

Money raised excl. greenshoe (€m)

Average offering value (€m)*

* Average offering value has been calculated based on total money raised including greenshoe, excluding listings raising less than €5m

Figure 2: Top 3 stock exchanges in Europe in 2016 (by offering value)

Q2

Euronext

BME

13 IPOs raised*

5 IPOs raised*

OMX 33 IPOs raised*

€3.4bn

€3.0bn

€1.3bn

Average IPO proceeds**

Average IPO proceeds**

Average IPO proceeds**

€263m

€438m

Figure 2: Top 3 stock exchanges in Europe in Q2 2016 (by offering value) Largest IPO: Largest IPO:

Largest IPO:

€201m

Parques Reunidos

Dong Energy

a.s.r.

€2,301m (€2,647m incl. greenshoe)

€1,018m (no greenshoe)

H1

OMX 47 IPOs raised*

€600m (no greenshoe)

London 39 IPOs raised*

€4.2bn

€3.5bn

Average IPO proceeds**

Average IPO proceeds**

€180m

€114m

Largest IPO:

Largest IPO:

Dong Energy

CYBG

€2,301m (€2,647m incl. greenshoe)

€453m (€521m incl. greenshoe)

*Excludes greenshoe **Average proceeds have been calculated on total proceeds including greenshoe, excluding listings raising less than €5m

4

| IPO Watch Europe Q2 2016

Euronext 14 IPOs raised*

€3.0bn Average IPO proceeds**

€263m Largest IPO:

a.s.r. €1,018m (no greenshoe)

European IPO trends Activity levels recovered slightly from Q1, but suffered from the pre- and post-EU referendum uncertainty

Figure 3: H1 European IPO activity since 2007*

450

401

40

400

Value of IPOs (€bn)

35

350

30

214

251

25

186

166

20

250 145

154 121

15 10 5

300 206

11.1

H1 2007

H1 2008

200 150 100

39 38.7

Volume of IPOs

45

0.5

13.7

16.8

3.2

8.6

33.7

31.1

14.4

H1 2010

H1 2011

H1 2012

H1 2013

H1 2014

H1 2015

H1 2016

-

50 -

H1 2009

Value €bn

IPOs

Figure 4: Quarterly European IPO activity since 2013

146

160

Value of IPOs (€bn)

124 20

140

106

105 95 86

15

10

76

76

68

100

82

80 53

52

45

120

50

60

Volume of IPOs

25

40

5

20 3.3

5.4

3.0

14.8

11.4

22.3

6.6

9.2

16.4

14.7

4.6

21.7

3.5

10.9

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

-

2013

2014 Value €bn

2015 Greenshoe €bn

2016

IPOs

*Excludes greenshoe. Note: Excludes IPOs on Borsa Istanbul, Zagreb Stock Exchange and Bucharest Stock Exchange pre 2011

IPO Watch Europe Q2 2016 |

5

Market volatility The outcome of the EU referendum in the UK caused volatility to spike and indices to wobble towards the end of the quarter

Figure 5: Volatility compared to IPO proceeds IPO of Deutsche Pfandbriefbank, Euskaltel and Flow Traders

€1bn+ IPOs of Worldpay, Poste Italiane, Covestro and Scout24

€1bn+ IPOs of Amundi and ABN AMRO

EU referendum in the UK

50 45

12

40

10

35 30

8 25 6 4

20

Falling oil prices, Chinese economy slowdown and threat of impending bear market

China stock market turmoil

2

VSTOXX index

Money raised €bn

14

€1bn+ IPOs of Sunrise, Aena and GrandVision

15 10 5 0

0 Jan

Feb

Mar

Apr

Money raised €bn

May

Jun

Jul 2015

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr 2016

May

Jun

VSTOXX index

Figure 6: Historical performance of major market indices since January 2015

% change since 1 Jan 2015

40% 30% 20% 10%

DAX 30 CAC 40

0% FTSE 100 -10% -20% JanJanFebFebMarMarApr AprMayMayJun JunJul JulAugAugSepSepOct OctNov NovDec DecJan JanFebFebMar MarApr Apr May May Jun Jun 2015 2016

Source: Thomson Reuters as at 30 Jun 2016

6

| IPO Watch Europe Q2 2016

Pricing and performance of top 5 IPOs 4 of the top 5 IPOs priced in the lower half of their pricing range, but most were outperforming their domestic index by the end of the quarter

Figure 7: Top 5 IPOs in Q2 2016 Dong Energy

a.s.r.

Philips Lighting

MONETA Money Bank

Parques Reunidos

Exchange

OMX Copenhagen

Euronext Amsterdam

Euronext Amsterdam

Prague Stock Exchange

BME

IPO date

9 June

10 June

27 May

6 May

29 April

Money raised (€m) incl. greenshoe

2,647

1,018

863

739

600

CK68.00 – CK85.00

€15.50 - €20.50

CK68.00

€15.50

Price range

DKR200 – DKR255

Offer price

DKR235

€18.00 - €22.00 €18.50 - €22.50 €19.50

€20.00

Figure 8: Offer price versus initial price range of top 5 IPOs

Figure 9: Performance of top 5 IPOs

40% 5.6% 3.8%

30%

2.3%

20% -0.3% -2.0%

10% -3.8%

-2.8%

0% Offer price

-7.9% -10.9%

-10%

-15.8%

-20% Dong Energy

a.s.r.

Offer price

Philips Lighting

MONETA Money Bank

Price range

Parques Reunidos

Dong Energy

a.s.r.

Philips Lighting

MONETA Money Bank

Parques Reunidos

Share performance from IPO to 30 Jun 2016 (%) Domestic index performance from IPO to 30 Jun 2016 (%)

IPO Watch Europe Q2 2016 |

7

The sector story Financials remained the most active sector in H1, while utilities were boosted by the €2bn+ IPO of Dong Energy

Figure 10: IPO value by sector* By offering value (€m)

H1 2015

Q1 2016

Q2 2016

H1 2016

Variance vs H1 2015

Financials

6,881

1,323

3,399

4,722

(2,159)

Consumer Services

5,136

551

2,218

2,769

(2,367)

440

269

2,344

2,613

2,173

Industrials

8,394

233

1,895

2,128

(6,266)

Consumer Goods

2,054

872

678

1,550

(504)

Health Care

1,961

186

154

340

(1,621)

Technology

1,552

45

87

132

(1,420)

Oil & Gas

29

-

112

112

83

Basic Materials

22

11

22

33

11

4,630

-

10

10

(4,620)

31,099

3,490

10,919

14,409

(16,690)

Utilities

Telecommunications Total

“Companies, investors and bankers are all still grappling with what the referendum result means for the UK economy as well as the rest of the EU. Following the initial tumble, the FTSE 100 has recovered to its highest levels since August 2015 whilst the FTSE 250 continues to be hampered by concerns over the UK economy. The financial services sector has been hit hardest along with a broader impact on domestic UK businesses. Over the coming quarters I expect investors to favour IPO candidates with a global exposure and/or offering steady yields.” Viv Maclachlan Director in the UK capital markets group at PwC

Financials

Utilities

Consumer Services

29 IPOs raised in Q2 2016

3 IPO raised in Q2 2016

12 IPOs raised in Q2 2016

€3.4bn*

€2.3bn*

€2.2bn*

Average IPO proceeds**

no meaningful average

Average IPO proceeds**

€204m

€175m Largest IPO:

Largest IPO:

Largest IPO:

a.s.r.

Dong Energy

Parques Reunidos

€1,018m (no greenshoe)

€2,301m (€2,647m incl. greenshoe)

€600m (no greenshoe)

*Excludes greenshoe ** Average proceeds have been calculated based on total proceeds including greenshoe, excluding listings raising less than €5m

8

| IPO Watch Europe Q2 2016

London focus - Overview Activity in H1 2016 was a third of last year’s, depressed by the EU referendum, seeing AIM volume and proceeds overtake the Main Market in Q2

Figure 11: London IPO trends (by offering value)* H1 ‘13 £3.7bn

H1 ‘15

£13.0bn

H1 ‘13

H1 ‘16 £2.7bn

£6.8bn

0.6

8 6 1.1

0.1

4

0.1 0.3 0.0 1.5

0.2 0.3 2.0

H1 ‘15 86

H1 ‘16 39

55

50

0.5

2

H1 ‘14 38

60

Volume of IPOs

Value of IPOs (£bn)

10

H1 ‘14

Figure 12: London IPO trends (by volume)

40

6

1.2 6.4 3.8 7.5 1.3 0.6 3.3 3.1

-

0.0 0.5

0.6 4.5 1.6

0.3

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2016 Main and SFM AIM

21

20

0.2

0.3 0.7

26

30

10

9 18

6 7

16

15

19 9

6

19

14

28

8

12 9

22 6

18

16

4 5

22

9

14 7

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2016 Main and SFM AIM

Figure 13: Top 5 UK IPOs in Q2 2016 Value (£m) Issuer Forterra Motorpoint Group Time Out Group Hadrians Wall Secured Investments Draper Esprit

Excl. greenshoe

Incl. greenshoe

126 100 90 80 79

128 100 90 80 79

Sector Industrials Consumer Services Consumer Services Financials Financials

Market Main Main AIM Main AIM

PE backed Yes No Yes No Yes

Note: Ranking in pounds is different from ranking in euros due to exchange rate

“Despite London being absent from the top 5 IPOs this quarter, AIM has seen a relatively active period in terms of IPO activity with better quality companies raising larger amounts of capital and performing well post IPO. It goes without saying that London IPO activity has suffered in H1 2016 under the uncertainty in the run up to the EU referendum together with the prevailing fragility in the economy resulting from China's slow down and the oil price volatility. With the current political instability in the UK, uncertainty around the exit negotiations with the EU and wider economic conditions, it is difficult to predict how quickly IPO activity will pick up after what I expect to be a muted summer.” Lucy Tarleton Director in the UK capital markets group at PwC

*Excludes greenshoe Source: London Stock Exchange

IPO Watch Europe Q2 2016 |

9

London focus - Relative performance of London IPOs £1 invested in each of the UK IPOs raising more than £5m would have resulted in a gain of £3.76 (or +13%)

Figure 14: Share price performance of London IPOs relative to the FTSE all share index, from IPO to 30 June 2016 (%) -40%

-20%

0%

20%

40%

60%

80%

100%

120%

129

Directa Plus (£13m)

50

Blue Prism Group (£21m)

43

Harwood Wealth Management Group (£14m)

41

Mereo BioPharma Group (£11m) Cerillion (£10m)

33

Comptoir Group (£16m)

33 23

Yu Group (£10m)

20

CYBG (£344m) Hotel Chocolat Group (£56m)

17

Osirium Technologies (£9m)

16 16

MaxCyte (£10m) Joules Group (£78m)

10

Midwich Group (£75m)

10 10

Ascential (£280m) Pacific Industrial & Logistics REIT (£10m)

7

Watkin Jones (£131m)

7 5

Accrol Group Holdings (£64m)

2

Shield Therapeutics (£32m) Draper Esprit (£79m)

1

CMC Markets (£218m)

1

Hadrians Wall Secured Investments (£80m)

-5

Puma VCT 12 (£31m)

-6

Motorpoint Group (£100m)

-7

Oncimmune Holdings (£11m)

-8

companies have outperformed the index

9 companies have underperformed the index

-12

Time Out Group (£90m)

-14

Metro Bank (£400m)

Forterra (£126m)

20

-11

Countryside Properties (£304m)

Morses Club (£68m)

140%

-17

Main and SFM AIM

-21

Note: Threshold of £5m | Relative performance based on the FTSE All Share Index for Main Market and SFM listed companies and FTSE AIM All Share index for AIM quoted companies Source: Dealogic and Thomson Reuters as of 30 June 2016

10 | IPO Watch Europe Q2 2016

London focus - PE trends and the sector story PE still represented over 50% of activity in a subdued market Financials are still leading the charge in H1 2016 with 46% of total proceeds, despite being down two thirds from last year

Figure 15: Value of London PE-backed IPOs vs non PE-backed IPOs in London* 8

Figure 16: Volume of London PE-backed IPOs vs non PE-backed IPOs in London* 30

74%

25

5

53%

93%

4 98%

3 2

59%

46%

6

Volume of IPOs

Value of IPOs (£bn)

7

82% 100%

1

58%

59% 84%

79% 54%

20

33% 89%

50%

70%

33%

64%

-

53%

10 5

60%

43%

15

75%

56% 50%

50% 100%

50%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2016 PE-backed Non PE-backed

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2016 PE-backed Non PE-backed

Figure 17: London IPO value by sector (excl. greenshoe) By offering value (£m)

H1 2015

Q1 2016

Q2 2016

H1 2016 Variance vs. H1 2015

3,225

980

268

1,248

377

304

119

423

46

2,061

280

284

563

(1,498)

Industrials

525

131

201

333

(192)

Health Care

213

42

22

65

(148)

Technology

352

35

9

44

(309)

Financials Consumer Goods Consumer Services

Utilities Basic Materials Telecommunications Oil & Gas Total value (£m)

(1,977)

-

10

4

14

14

10

-

13

13

3

-

-

-

-

-

-

-

-

-

-

6,763

1,782

920

2,702

(4,061)

* UK IPOs raising over €50m, excludes closed-end funds, SPACs, SPVs, Capital Pool companies, Investment Managers, REITs, Royalty Trusts Source: Dealogic, Bloomberg

IPO Watch Europe Q2 2016 | 11

Global perspective Global markets have seen some recovery in Q2 after a slow start to the year, but are still well below previous years’ activity levels

Figure 18: Global IPO activity* 475

70 365

249

40 30

400 294

50

450

377

376

365

301

271

350

225

222

215

189

243

300 250 200 150

20

Volume of IPOs

Value of IPOs (€bn)

60

500

100

10

50

-

Q1

Q2

Q3

Q4

Q1

2013

Q2

Q3

Q4

Q1

2014

EMEA (€bn)

Q2

Q3

Q4

Q1 2016

2015

Americas (€bn)

Q2

Asia Pacific (€bn)

IPOs

Figure 19: Top 10 global IPOs in H1 2016 Issuer

€m (incl. greenshoe) Exchange

Sector

Deal type Privatisation/ PE

Dong Energy

2,647

Copenhagen

Utilities

China Zheshang Bank

1,720

Hong Kong

Financials

-

MGM Growth Properties

1,068

New York

Financials

Carve out

US Foods Holding

1,048

New York

Consumer Goods

a.s.r.

1,018

Amsterdam

Financials

Privatisation

BOC Aviation

1,004

Hong Kong

Industrials

Carve out

Bank of Tianjin

878

Hong Kong

Financials

-

Philips Lighting

863

Amsterdam

Industrials

Carve out

LaSalle Logiport

835

Tokyo

Financials

-

MONETA Money Bank

739

Prague

Financials

Carve out

“Global IPO activity picked up in Q2 after a slow start of the year, largely reflecting normal seasonal trends. However, year-to-date proceeds raised were less than half of those raised in the first half of 2015. Given recent global market reactions to the outcome of the EU referendum in the UK, and the upcoming general elections in the US, it is likely that Asia Pacific will be the region to watch for IPO activity in H2, especially with the recently launched jumbo IPO of the Postal Savings Bank of China in Hong Kong.” Clifford Tompsett Partner, Head of the Global IPO Centre at PwC

* Excludes greenshoe Source: Dealogic

12 | IPO Watch Europe Q2 2016

PE

Appendix - IPOs by market

Appendix 1: European IPOs by market H1 2015 Stock exchange TOTAL London Stock Exchange NASDAQ OMX Euronext BME (Spanish Exchange) Prague SIX Swiss Exchange Borsa Italiana Deutsche Börse Warsaw Borsa Istanbul Oslo Børs & Oslo Axess Irish Stock Exchange Zagreb Stock Exchange Bucharest Wiener Börse Total

IPOs

Q1 2016 Value (€m)*

IPOs

Q2 2016 Value (€m)*

IPOs

H1 2016 Value (€m)*

IPOs

Value (€m)*

55 55 26 8 2 13 10 18 4 6 2 2 4 1 206

9,345 3,863 4,904 6,903 1,882 1,483 1,301 321 23 644 394 36 31,099

18 14 1 5 1 2 3 5 1 50

2,327 811 3 3 28 288 19 11 3,490

21 33 13 5 1 2 5 2 8 1 4 95

1,180 3,436 2,986 1,300 656 633 437 17 92 92 90 10,919

39 47 14 10 1 3 7 5 13 2 4 145

3,507 4,247 2,989 1,303 656 633 465 305 111 103 90 14,409

17 34 18 5 2 4

3,234 8,824 4,837 6,898 1,882 1,392

5 9 1 -

592 2,026 -

12 7 10 3 1 2 2

3,236 432 2,954 1,300 656 633 378

17 16 10 3 1 3 2

3,828 2,458 2,954 1,300 656 633 378

EU-REGULATED NASDAQ OMX (Main) London Main and SFM Euronext BME (Spanish Exchange) (Main) Prague SIX Swiss Exchange Borsa Italiana (Main) Deutsche Börse (Prime and General Standard) Warsaw (Main) Oslo Børs Irish Stock Exchange (Main) Zagreb Stock Exchange Wiener Börse EU-regulated sub-total

8

1,301

3

288

1

3

4

291

6 3 2 2 1 102

315 586 394 36 29,699

1 19

17 2,923

5 3 46

91 90 9,773

6 3 65

108 90 12,696

EXCHANGE-REGULATED London AIM NASDAQ OMX (First North) Borsa Istanbul Borsa Italiana (AIM) Euronext (Alternext) Deutsche Börse (Entry Standard) BME (Spanish Exchange) (MAB) Warsaw (NewConnect) Oslo Axess Bucharest (AeRO) Exchange-regulated sub-total Europe total

21 38 4 9 8 2 3 12 3 4 104 206

521 629 23 91 67 5 6 58 1,400 31,099

9 9 1 2 1 5 4 31 50

301 219 11 28 3 3 2 567 3,490

14 21 1 3 3 1 2 3 1 49 95

748 200 92 59 32 14 1 1,146 10,919

23 30 2 5 4 1 7 7 1 80 145

1,049 419 103 87 35 14 3 3 1,713 14,409

* Excludes greenshoe

IPO Watch Europe Q2 2016 | 13

Appendix - Exchange activity by value

Appendix 2: IPO offering value by stock exchange* Stock exchange offering value (€m) NASDAQ OMX OMX Copenhagen OMX Stockholm OMX Helsinki OMX Iceland OMX Tallinn OMX Vilnius London Stock Exchange Euronext Euronext Paris Euronext Amsterdam Euronext Brussels BME (Spanish Exchange) Prague Stock Exchange SIX Swiss Exchange Borsa Italiana Deutsche Börse Warsaw Borsa Istanbul Oslo Børs & Oslo Axess Irish Stock Exchange Zagreb Stock Exchange Bucharest Stock Exchange Wiener Börse Total

*Excludes greenshoe

14 | IPO Watch Europe Q2 2016

H1 2015 3,863 168 3,308 322 65 9,345 4,904 2,908 1,696 300 6,903 1,882 1,483 1,301 321 23 644 394 36 31,099

Q1 2016 811 477 317 17 2,327 3 3 3 28 288 19 11 3,490

Q2 2016 3,436 2,301 869 232 20 14 1,180 2,986 683 2,280 23 1,300 656 633 437 17 92 92 90 10,919

H1 2016 4,247 2,778 1,186 249 20 14 3,507 2,989 686 2,280 23 1,303 656 633 465 305 111 103 90 14,409

Appendix - Exchange activity by volume

Appendix 3: IPO volume by stock exchange Stock exchange offering volume NASDAQ OMX OMX Copenhagen OMX Stockholm OMX Helsinki OMX Iceland OMX Tallinn OMX Vilnius London Stock Exchange Euronext Euronext Paris Euronext Amsterdam Euronext Brussels BME (Spanish Exchange) Prague Stock Exchange SIX Swiss Exchange Borsa Italiana Deutsche Börse Warsaw Borsa Istanbul Oslo Børs & Oslo Axess Irish Stock Exchange Zagreb Stock Exchange Bucharest Stock Exchange Wiener Börse Total

H1 2015 55 1 44 6 2 1 1 55 26 19 3 4 8 2 13 10 18 4 6 2 2 4 1 206

Q1 2016 14 1 10 2 1 18 1 1 5 1 2 3 5 1 50

Q2 2016 33 2 25 4 1 1 21 13 7 5 1 5 1 2 5 2 8 1 4 95

H1 2016 47 3 35 6 1 1 1 39 14 8 5 1 10 1 3 7 5 13 2 4 145

IPO Watch Europe Q2 2016 | 15

Contacts About IPO Watch Europe IPO Watch Europe surveys all new primary market equity IPOs on Europe’s principal stock markets and market segments (including exchanges in the EU, Iceland Norway, Turkey and Switzerland) on a quarterly basis. Movements between markets on the same exchange are excluded. This survey was conducted between 1 April and 30 June 2016 and captures IPOs based on their first trading date. All market data is sourced from the stock markets themselves and has not been independently verified by PricewaterhouseCoopers LLP.

Katherine Howbrook (Press office) +44 (0) 20 7212 2711 [email protected] Mark Hughes (Partner, UK Capital Markets leader) +44 (0) 20 7804 3824 [email protected] Vivienne Maclachlan (Director, Capital Markets) +44 (0) 20 7804 1097 [email protected] Lucy Tarleton (Director, Capital Markets) +44 (0) 20 7212 3856 [email protected]

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2016 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.