Jumbo

Greece/ General Retailers Company update

Produced by: All ESN research is available on Bloomberg (“ESNR”), Thomson-Reuters, Capital IQ, TheMarkets.com, FactSet

Distributed by the Members of ESN (see last page of this report)

Investment Research Reason: Company Results 30 May 2012

Accumulate

2.76

closing price as of 29/05/2012

3.90

5.10from Target Price: EUR

from Buy

Target price: EUR

Share price: EUR

Reuters/Bloomberg BABr.AT/BELA GA

Daily avg. no. trad. sh. 12 mth 175,581

Daily avg. trad. vol. 12 mth (m) 0.67

Price high 12 mth (EUR) 5.01

Price low 12 mth (EUR) 2.71

Abs. perf. 1 mth -24.4%

Abs. perf. 3 mth -25.2%

Abs. perf. 12 mth -43.6%

Market capitalisation (EURm) 359

Current N° of shares (m) 130

Free float 53%

Key financials (EUR) 06/11 06/12e 06/13e

Sales (m) 490 493 494

EBITDA (m) 135 132 128

EBITDA margin 27.6% 26.7% 25.9%

EBIT (m) 120 114 109

EBIT margin 24.5% 23.2% 22.1%

Net Profit (adj.)(m) 95 95 91

ROCE 17.2% 15.1% 13.3%

Net debt/(cash) (m) (2) (23) (34)

Net Debt Equity 0.0 0.0 -0.1

Net Debt/EBITDA 0.0 -0.2 -0.3

Int. cover(EBITDA/Fin.int) (94.3) (62.3) (50.0)

EV/Sales 1.3 0.6 0.6

EV/EBITDA 4.6 2.4 2.4

EV/EBITDA (adj.) 4.6 2.4 2.4

EV/EBIT 5.1 2.8 2.8

P/E (adj.) 6.8 3.8 4.0

P/BV 1.2 0.6 0.5

OpFCF yield 14.5% 28.8% 28.7%

Dividend yield 0.0% 7.7% 7.6%

EPS (adj.) 0.73 0.73 0.70

BVPS 4.02 4.54 5.03

DPS 0.00 0.21 0.21

2.5

3.0

3.5

4.0

4.5

5.0

5.5

May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12

vvdsvdvsdy

JUMBO Stoxx General Retailers (Rebased)Source: Factset Shareholders: Vakakis Apostolos-Evangelos 27%; FMR

LLC 10%; Franklin Templeton 10%;

For company description please see summary table footnote

Downgrade to ‘Accumulate’ on heightened uncertainties

We have reduced our target price to EUR 3.90/share (vs. EUR 5.10/share

previously) on the back of increased uncertainties surrounding Greece’s

economic and political environment at present. We downgrade our rating to

‘Accumulate’ from ‘Buy’ to reflect the elevated risk profile of Greek equities in the

current environment. Bear in mind that our P&L forecasts and valuation are

based on the fundamental assumption that Greece will not exit the euro, a risk

that has been factored in the stock price at present.

Jumbo 3Q11/12 results were broadly in line with consensus estimates but the 5.7%

y-o-y increase in sales was not translated into higher EBITDA (-2.3% y-o-y) and net

profits (-2.0% y-o-y) due to a lower gross margin (55.1% vs. 56.5% in 3Q11/10) and

a higher SGA/sales ratio (42.4% vs. 39.4% in 3Q11/10). In particular, Jumbo

reported quarterly sales of EUR 87.3m (as expected, the management has already

released this figure), EBITDA of EUR 17.3m and net earnings of EUR 10.1m. In the

9-month period July 11 – March 12, revenues came in at EUR 380.3m (+2% y-o-y),

EBITDA settled at EUR 95.5m (+2.5% y-o-y), while net profits reached EUR 67.9m

(+5.6% y-o-y). The management reiterated its guidance for sales growth between

0% and 1% this year.

We have fine-tuned our P&L forecasts for the current fiscal year but downward

adjusted our 2013 estimates to reflect flat revenues and increased operating

expenses due to the opening of new stores in existing markets and the entry in the

Romanian market. Specifically, we look for revenues of EUR 493m (+0.6% y-o-y),

EBITDA of EUR 131.5m (-2.7% y-o-y) and net earnings of EUR 94.7m (unchanged

vs. last year) in FY11-12. We have reduced our FY12-13 forecasts by 1.4% on the

top line, by 4% on the EBITDA line and by 5% on the bottom line to reflect the

deteriorating consumer sentiment in Greece, a weaker euro that will negatively

affect the gross margin and increased SGA expenses. On the whole, we look for

net earnings of EUR 90.6m in FY12-13, down by 4% y-o-y, expecting a rebound in

FY13-14 on the back of a normalized macroeconomic environment in Greece.

The company seems attractively valued at current levels, especially when

compared to its European retail peers (c. 67% discount in terms of P/E ’13). We

view that current valuation mainly reflects country-specific risks and more

specifically the ‘drachma scenario’. We view that this development will negatively

hit Jumbo’s financial performance which is a pure importer with no production

facilities in Greece; however, its successful market positioning and resilient

business model should help the company to survive even in a worst case scenario.

On top of that, the management has now focused its efforts on geographical

diversification by attaining presence in the Balkans (Bulgaria, Romania, FYROM,

Albania) in order to reduce the repercussions of an ‘accident’ in Greece.

Following the June 17 elections and if the result is deemed as ‘market friendly’, we

expect a gradual recovery of the stock on the back of its appealing valuation (P/E

(13e) 4.0x and EV/EBITDA (13e) 2.4x). We reiterate that in the short term, the

challenging economic environment in Greece will take its toll on Jumbo’s Greek

business throughout 2012 and 2013. In the long-term, we remain confident on

management and the business model of the group, while we recognize significant

prospects from the development of Jumbo operations in the Balkans.

Analyst(s): Dimitris Birbos +30 210 81 73 392 dbirbos@ibg.gr

Jumbo

Page 2

Forecasts Revision

The management maintained its guidance for FY11/12 announcing that its sales in the 10-

month period July 11 – April 12 (which include Easter sales), remained within the annual

target (0% -1%), while the uncertainty that followed the election results in Greece has not

impacted Jumbo’s sales performance in May. Accordingly, we have fine-tuned our annual

estimates for FY11/12 remaining in line with management guidance. We look for revenues

of EUR 493m (+0.6% y-o-y), EBITDA of EUR 131.5m (-2.7% y-o-y) and net profits of EUR

94.7m (+0.1% y-o-y). Our annual estimates implies that 4Q sales will drop by 4% y-o-y to

EUR 113m on seasonality reasons (earlier celebration of the Orthodox Easter this year),

while quarterly EBITDA are seen down by 14% y-o-y to EUR 36m due to unfavourable

currencies (weaker euro) and increased preopening expenses relating to the new stores in

Greece (Lavrio) and Bulgaria (Russell). Accordingly, quarterly net profits are seen settling at

EUR 26.8m, down by 12% y-o-y.

Jumbo preview

EUR m 1Q11/12 2Q11/12 1H11/12 3Q11/12 9M11/12 4Q11/12e FY11/12e

Sales 120.5 172.5 293.1 87.3 380.3 112.7 493.0

% y-o-y 3.5% -0.7% 1.0% 5.7% 2.0% -3.9% 0.6%

Cost of sales -62.7 -79.8 -142.6 -39.1 -181.7 -51.8 -233.5

Gross profits 57.8 92.7 150.5 48.1 198.6 60.8 259.5

% margin 48.0% 53.7% 51.4% 55.1% 52.2% 54.0% 52.6%

Other income 1.5 1.1 2.5 2.9 5.4 0.9 6.3

Administrative expenses -5.3 -5.6 -10.8 -4.6 -15.4 -4.0 -19.4

Distribution costs -32.0 -37.0 -69.0 -32.4 -101.4 -25.5 -126.9

Other expenses -0.6 -2.9 -3.5 -1.1 -4.6 -0.5 -5.1

Operating Results (EBIT) 21.4 48.3 69.7 12.9 82.6 31.7 114.4

Plus: Depreciation 4.2 4.3 8.5 4.4 12.9 4.3 17.1

EBITDA 25.6 52.7 78.3 17.3 95.5 36.0 131.5

margin 21.2% 30.5% 26.7% 19.8% 25.1% 31.9% 26.7%

% y-o-y 5.5% 2.8% 3.6% -2.3% 2.5% -14.2% -2.7%

Net interest income 0.4 0.7 1.1 -0.5 0.6 1.5 2.1

Net profit before tax 21.8 49.0 70.8 12.4 83.2 33.2 116.5

Income Tax -3.9 -9.1 -13.0 -2.3 -15.3 -6.5 -21.8

Net proft after tax 17.9 39.9 57.8 10.1 67.9 26.8 94.7

% y-o-y 7.7% 6.8% 7.1% -2.0% 5.6% -11.7% 0.1%

Source: IBG, The company

However, the economic sentiment remains tough for Greek retailers with the expectations

index in the retail sector reaching historic lows in March 2012 and consumer confidence

deteriorating after October 2011. In this environment, retail sales have been severely hit

with the turnover index in the non-food sector tumbling by 15% y-o-y in the period Jan-12 –

Feb 12. In this context, Jumbo has outperformed the market due to its resilient business

model (competitive priced products combined with product enrichment) and management’s

strategic decision to accelerate the implementation of its investment program.

Jumbo

Page 3

-11%

-7%

-13%

-4%

-8%-8%

-2% -2%

-4%

-8%

-6%

-11%

-7%

-8%

-15%

-13%

-11%

-9%

-7%

-5%

-3%

-1%

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12

Retail Trade

-21%

-16%

-26%

-12%-10%

-13%

-5% -6%

-9%

-14%

-9%

-13% -13%

-17%

-30%

-25%

-20%

-15%

-10%

-5%

0%

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12

Non-Food sector

-72.1

-67.3 -66.2

-70.0

-68.5

-75.0 -76.8

-71.2

-73.6

-83.8

-82.3-81.9

-80.1

-83.5

-79.3 -78.7

-85.0

-80.0

-75.0

-70.0

-65.0

-60.0

Consumer confidence

57.5

64.8

66.7

62.0

52.9

55.0

56.9 57.257.1

62.8

59.7

54.1

56.0

52.751.9 52.4

50.0

52.0

54.0

56.0

58.0

60.0

62.0

64.0

66.0

68.0

Expectations Index in Retail Trade

Expectations Index in Retail Trade Consumer Confidence Index

Source: IBG, IOBE

Turnover Index in Retail Trade (% y-o-y) Turnover Index in Non-Food Sector* (% y-o-y)

Source: IBG, Hellenic Statistical Authority, * Excluding automotive fuel

Given that the recessionary environment in Greece will persist throughout 2012, we expect

additional pressure for Jumbo’s Greek business on a like-for-like basis, while the contagion

of the Greek crisis to Cyprus makes us conservative for the performance of this geography

as well.

Regarding the roll-out of its stores in the current fiscal year, the company has already

opened 5 new stores (4 in Greece and 1 in Bulgaria) and has disclosed that it will

inaugurate its new store in Bulgaria within May. For the next fiscal year (July 2012-June

2013), we expect the opening of three new stores, 1 in Cyprus and 2 in Bulgaria and the

development of two new stores, one in Greece and the first point of sale in Romania during

2014. On the whole, we expect that the company will increase the numbers of its stores

from 45 in 2010 to 65 in 2014.

Greek operations are expected to be negatively affected by the worsening consumer

sentiment as a result of rising unemployment and increased taxation on personal income

that have a direct impact on disposable income. We forecast a high single-digit rate of

decline in sales from Greece in FY12/13, but the contribution of the new four stores opened

in the previous year will contain revenue erosion.

Jumbo

Page 4

We look for sales of EUR 412m in FY11/12 (- 1.4% y-o-y) and EUR 404m in FY12/13 (-2%

y-o-y) from the Greek business. Revenues from Cyprus are seen growing by 5% y-o-y this

year, while the opening of a new store in Pafos during FY12/13 will further improve the

performance of this geography (+10% y-o-y), mitigating the gradually weakening economic

environment. In relation to Bulgaria, the opening of the new stores in the previous years will

maintain the positive sales momentum (+32% y-o-y in FY11/12, +15% in FY12/13); On the

whole, we have cut our revenue estimates by 1.4% to EUR 494.5m (+0.3% y-o-y) for

FY12/13 and EUR 508.4m (+2.8% y-o-y) for FY13/14.

Gross margin is seen stabilizing in the range of 52% - 53% in the next years, while we

expect a higher SGA/sales ratio due to the opening of new stores and the entry in the

Romanian market that will incur increased marketing expenses. As a result, we expect

group’s EBITDA margin to drop from 26.7% this year to 25.9% in FY12/13. We look for

FY13 EBITDA of EUR 127.9m, down by 2.7% y-o-y, expecting a rebound in FY14 when the

economic conditions in Greece are expected to show some improvement.

Accordingly, we look for net earnings of EUR 90.6m in FY13, down by 4% y-o-y and EUR

93.4m in FY14, up by 3% y-o-y. In general, we anticipate that Jumbo will remain under

pressure in the next fiscal year (July 12 – June 13), outperforming the market though,

thanks to its attractive pricing policy.

Jumbo P&L forecasts

EUR m 2011 2012f 2013f 2014f

# of stores - Greece 44 48 48 50

# of stores - Cyprus 3 3 4 4

# of stores - Bulgaria 5 7 9 10

# of stores - Romania 0 0 0 1

# of stores year end 52 58 61 65

Greece - Sales 418.3 412.3 404.4 405.4

Cyprus - Sales 51.9 54.6 60.0 61.9

Bulgaria - Sales 19.8 26.1 30.2 36.3

Romania - Sales 0.0 0.0 0.0 4.8

Sales 490.0 493.0 494.5 508.4

% change 0.5% 0.6% 0.3% 2.8%

Gross profit 260.7 259.5 260.3 267.6

% margin 53.2% 52.6% 52.6% 52.6%

SGA -139.4 -146.3 -151.9 -157.8

SGA/sales 28.5% 29.7% 30.7% 31.0%

Other income / expenses -1.5 1.2 1.0 1.0

EBIT 119.9 114.4 109.3 110.8

% margin 24.5% 23.2% 22.1% 21.8%

Depreciation 15.3 17.1 18.6 20.0

EBITDA 135.1 131.5 127.9 130.7

margin 27.6% 26.7% 25.9% 25.7%

% change -6.6% -2.7% -2.7% 2.2%

Net financials 1.4 2.1 2.6 3.1

EBT 121.3 116.5 111.9 113.9

Income taxes -26.7 -21.8 -21.3 -20.5

Net profit 94.6 94.7 90.6 93.4

% change -5.4% 0.1% -4.3% 3.0%

Source: IBG, The company

Jumbo

Page 5

The following table summarizes our new set of forecasts, which includes our revised view

on Greece’s macroeconomic prospects and FX fluctuations. On the whole, we have fine-

tuned our FY12e EPS forecasts and cut our FY13 and FY14 net earnings forecasts by 5%

and 6% respectively to reflect increased pressure on the performance of the Greek and the

Cypriot business as well as the impact of a weaker euro on the gross margin.

Forecast Changes for the period 2012-2014

EUR m 2012f 2013f 2014f

Sales - New 493.0 494.5 508.4

Sales - Old 493.5 501.6 515.4

New vs. Old -0.1% -1.4% -1.4%

EBITDA - New 131.5 127.9 130.7

EBITDA - Old 132.4 133.8 138.2

New vs. Old -0.7% -4.4% -5.4%

Net income - New 94.7 90.6 93.4

Net income - Old 95.3 95.4 99.7

New vs. Old -0.7% -5.0% -6.3%

Source: IBG

Jumbo

Page 6

Valuation & Rating

Lower target price on the back of elevated uncertainties in Greece

We have valued Jumbo using a 3-stage DCF model, which is based on explicit forecasts for

the period 2013-2016. We stick to our assumptions for a 3% FCF growth rate for the period

2017-2018 when we expect that Jumbo will enter its maturity stage and a perpetuity growth

rate of 1.0%, assuming an optimal gearing ratio of 25%. The main change in our model is

the increase in our discount rate (WACC) from 11.5 to 13.0% previously to reflect increased

uncertainties in the economic and political environment in Greece.

Following the changes in our P&L forecasts and assumptions, our DCF model returns a

target price of EUR 3.90 per share (vs. EUR 5.10/share previously), which is c. 40% above

current price levels. However, we downgrade our rating on the stock by one notch (from

‘Buy’ to ‘Accumulate’) to reflect the elevated risk profile of Greek equities in the current

environment. Bear in mind that our valuation is based on the fundamental assumption that

Greece will not exit the euro, a risk that has been factored in the stock price at present.

We reiterate that in the short term, the challenging economic environment in Greece will

take its toll on Jumbo’s Greek business throughout 2012 and 2013. In the long-term, we

remain confident on management and the business model of the group, which remains the

leader discount retailer in the local market, while we recognize significant prospects from

the development of Jumbo operations in the Balkans (Bulgaria, Romania, FYROM,

Albania).

DCF Valuation

EUR m 2013f 2014f 2015f 2016f 2017f 2018f

Revenues 494 508 530 565

EBIT 109 111 116 127

Plus: Depreciation 19 20 22 23

Less: Tax 21 20 21 23

Less: CAPEX 64 65 62 55

Less: Δ(WC) 6 11 13 17

Less: Investment in Associates 0 0 0 0

Free Cash Flow to the Firm 37 34 41 54 56 58

WACC 13.0% 13.0% 13.0% 13.0% 13.0% 13.0%

2nd stage growth rate 3.0% 3.0%

PV of FCFF 2013-2018 32.5 26.8 28.6 33.4 30.5 27.8

Sum of PV of FCFF 2013-2018 179.6

Terminal Growth Rate (Perpetuity) 1.0%

Terminal Value (Perpetuity) 299

Enterprise Value 478.5

Less: Net Debt / (Cash) FY12e -22.5

Equity Value 501.1

No of share 130.0

Value per Share 3.90

Source: IBG

Jumbo

Page 7

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

06

/09

08

/09

10

/09

12

/09

02

/10

04

/10

06

/10

08

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10

/10

12

/10

02

/11

04

/11

06

/11

08

/11

10

/11

12

/11

02

/12

04

/12

Jumbo Euro STOXX Retail

Peer Group Analysis

On our new estimates, Jumbo trades 3.8x its FY11/12e net earnings, which implies a deep

discount against the selected peers (weighted average ratio) and the benchmark index

(Euro Stoxx Retail). In our view, this pricing gap mainly reflects country-specific risks and in

particular a ‘drachma scenario’ as Jumbo’s performance is closely correlated to the adverse

economic environment in Greece. As illustrated in the graph below, Jumbo traded at 35%

discount vs. the relevant index over the last 3 years. This discount has now widened to 67%

on the back of Greece’s risks.

Peer Group Valuation

Country Mkt Cap P/E 12f P/E 13f EV/EBITDA

12f EV/EBITDA

13f

Value Retailers

Big Lots Inc. USA 1,999 11.5x 10.2x 5.3x 4.7x

Family Dollar Stores Inc. USA 6,269 18.4x 16.0x 9.1x 8.1x

Dollar Tree Inc. USA 9,455 20.6x 17.8x 10.7x 9.6x

Game Retailers

Mattel Inc. USA 8,561 13.3x 11.8x 9.1x 8.1x

Hasbro Inc. USA 3,674 12.3x 11.3x 7.1x 6.8x

Total Weighted Average 16.4x 14.4x 9.1x 8.2x

Euro Stoxx / Retail EU 13.5x 12.0x

Jumbo (IBG) Greece 359 3.8x 4.0x 2.4x 2.4x

Premium/(Discount) to weighted avg. -76.9% -72.5% -73.6% -70.7%

Premium/(Discount) to benchmark index -71.9% -67.1%

Source: Factset, IBG, Data as of 29/05/12

Following the June 17 elections and if the result is deemed as ‘market friendly’, we expect a

gradual recovery of the stock on the back of its appealing valuation (P/E (13e) 4.0x and

EV/EBITDA (13e) 2.4x).

Jumbo vs. European peers (in terms of Forward P/E)

Source: Factset, IBG

Jumbo

Page 8

9M:11 / 12 Results Review

Overview

Jumbo 3Q11/12 results were broadly in line with consensus estimates but the 5.7% y-o-y

increase in sales was not translated into higher EBITDA (-2.3% y-o-y) and net profits (-2.0%

y-o-y) due to a lower gross margin (55.1% vs. 56.5% in 3Q11/10; IBG call for 55.5%) and a

higher SGA/sales ratio (42.4% vs. 39.4% in 3Q11/10; IBG call for 39.9%). Against our

numbers, quarterly EBITDA and net profits were 3.5% and 7% below our estimates

respectively.

In particular, Jumbo reported 3Q11/12 sales of EUR 87.3m (as expected, the management

has already released this figure), EBITDA of EUR 17.3m and net earnings of EUR 10.1m. In

the 9-month period July 11 – March 12, revenues came in at EUR 380.3m (+2% y-o-y),

EBITDA settled at EUR 95.5m (+2.5% y-o-y, in line with consensus), while net profits

reached EUR 67.9m (+5.6% y-o-y, 0.7% below market expectations and -1.1% against our

estimates).

Group EBITDA margin shaped at 19.8% in 3Q11/12 vs. 21.4% a year ago as a result of: 1)

a 140bps decline in the gross margin and b) increased operating expenses (+14% y-o-y).

Greece posted a 250bps deterioration in its EBITDA margin, Cyprus was also weak (-

170bps), while Bulgaria’s EBITDA margin declined sharply by 720bps due to the

preopening expenses relating to the new store in Russell.

Jumbo 9M / 3Q 11-12 P&L Statement

EUR m 9M 11/12 9M 10/11 y-o-y 3Q 11/12 3Q 10/11 y-o-y

Revenues 380.3 372.7 2.0% 87.3 82.5 5.7%

COGS -181.7 -180.1 0.9% -39.1 -35.9 9.1%

Gross Profit 198.6 192.6 3.1% 48.1 46.7 3.1%

Gross Margin 52.2% 51.7% 55.1% 56.5%

Other Income 5.4 1.9 187.4% 2.9 0.5 432.4%

Administrative Expenses -15.4 -14.9 2.8% -4.6 -4.2 8.8%

Distribution Costs -101.4 -93.8 8.1% -32.4 -28.3 14.6%

Other Expenses -4.6 -3.8 21.8% -1.1 -1.0 12.1%

EBIT 82.6 81.9 0.9% 12.9 13.7 -5.9%

EBIT Margin 21.7% 22.0% 14.8% 16.6%

Depreciation 12.9 11.3 13.9% 4.4 3.9 10.5%

EBITDA 95.5 93.2 2.5% 17.3 17.7 -2.3%

EBITDA Margin 25.1% 25.0% 19.8% 21.4%

Net Financial Results 0.6 0.2 252.7% -0.5 -0.7 -30.1%

EBT 83.2 82.0 1.5% 12.4 13.0 -4.7%

Income Tax -15.3 -17.7 -13.5% -2.3 -2.7 -14.9%

% tax rate 18.4% 21.6% 18.5% 20.7%

Net Profit 67.9 64.3 5.6% 10.1 10.3 -2.0%

Net margin 17.9% 17.3% 11.6% 12.5% Source: The Company, IBG

Jumbo

Page 9

Sales analysis

Per product category, toys sales grew by 6.6% y-o-y to EUR 26.3m (30% of total sales) due

to seasonality (earlier celebration of Easter) and home product sales increased by 8% y-o-y

to EUR 23.7m (27% of total sales) in the quarter. On the flip side, revenues from baby

apparel were down by 8% y-o-y in 3Q11/12. We view that the negative surprise in the gross

margin should be attributed to the accelerated revenue erosion in the high-margin baby

apparel category and the increased portion of branded products (toys) in the sales mix due

to the Easter period.

Jumbo 9M / 3Q 11-12 sales per product category

EUR m 9M 11/12 9M 10/11 y-o-y 3Q 11/12 3Q 10/11 y-o-y

Toys 123.1 123.3 -0.1% 26.3 24.7 6.6%

% of total 32.4% 33.1% 30.2% 29.9%

Baby apparel 41.8 43.8 -4.6% 10.7 11.5 -7.6%

% of total 11.0% 11.8% 12.2% 14.0%

Stationary 33.0 32.4 1.8% 6.0 5.7 5.7%

% of total 8.7% 8.7% 6.9% 6.9%

Seasonal / Other 91.3 91.8 -0.5% 20.6 18.7 10.0%

% of total 24.0% 24.6% 23.6% 22.7%

Home products 91.1 81.5 11.8% 23.7 21.9 8.1%

% of total 24.0% 21.9% 27.1% 26.5%

Total Sales 380.3 372.7 2.0% 87.3 82.5 5.7%

Source: The Company, IBG

Sales from Greece and Cyprus increased by 4.7% y-o-y and 6.5% y-o-y respectively in the

quarter reflecting the earlier celebration of Easter this year, while sales from Bulgaria grew

by 26.5% y-o-y in 3Q11/12 thanks to the contribution of the new store in Burgas. Greece

remains the key market for Jumbo accounting for 83.7% of total sales in 3Q11/12; however

its share was down compared to a 84.5% a year earlier.

Jumbo 9M / 3Q 11-12 sales per country

EUR m 9M 11/12 9M 10/11 y-o-y 3Q 11/12 3Q 10/11 y-o-y

Greece 316.4 317.9 -0.5% 73.0 69.8 4.7%

% of total 83.2% 85.3% 83.7% 84.5%

Cyprus 42.9 39.5 8.5% 10.2 9.6 6.5%

% of total 11.3% 10.6% 11.7% 11.6%

Bulgaria 21.0 15.2 37.6% 4.0 3.2 26.5%

% of total 5.5% 4.1% 4.6% 3.9%

Total Sales 380.3 372.7 2.0% 87.3 82.5 5.7%

Source: The Company, IBG

Jumbo

Page 10

EBITDA analysis

Greek EBITDA was marginally down by 1.6% y-o-y in 9M11/12 settling at EUR 87.2m, while

the respective margin remained close to last year’s level. The deterioration observed in the

EBITDA margin of Bulgaria should be attributed to the preopening expenses relating to the

new stores opened during the current fiscal year, while Cyprus delivered a healthy margin

(up by 140bps y–o-y) on a 9-month basis. We note that the EBITDA margin in Greece

dropped by 250bps y-o-y in 3Q11/12 mainly due to the opening of the new store in Attica as

well as the increased participation of branded products in the sales mix. On the whole,

Greece remains Jumbo’s key market representing about 80% of group’s EBITDA from

operating activities (excluding other activities).

Jumbo 9M / 3Q 11-12 EBITDA per country

EUR m 9M 11/12 9M 10/11 y-o-y 3Q 11/12 3Q 10/11 y-o-y

Greece 87.2 88.7 -1.6% 16.3 17.3 -6.1%

% margin 27.6% 27.9% 22.3% 24.8%

Cyprus 16.7 14.8 12.5% 4.1 4.0 2.0%

% margin 38.9% 37.5% 40.2% 41.9%

Bulgaria 5.6 5.4 4.5% 0.1 0.9 -83.3%

% margin 26.8% 35.2% 3.6% 26.9%

Source: The Company, IBG

Jumbo

Page 11

Jumbo: Summary tables

PROFIT & LOSS (EURm) 06/2009 06/2010 06/2011 06/2012e 06/2013e 06/2014e

Sales 468 487 490 493 494 508

Cost of Sales & Operating Costs -323 -343 -355 -361 -367 -378

Non Recurrent Expenses/Income 0.0 0.0 0.0 0.0 0.0 0.0

EBITDA 145 145 135 132 128 131

EBITDA (adj.)* 145 145 135 132 128 131

Depreciation -16.5 -12.9 -15.3 -17.1 -18.6 -20.0

EBITA 128 132 120 114 109 111

EBITA (adj)* 128 132 120 114 109 111

Amortisations and Write Downs 0.0 0.0 0.0 0.0 0.0 0.0

EBIT 128 132 120 114 109 111

EBIT (adj.)* 128 132 120 114 109 111

Net Financial Interest -4.9 -2.1 1.4 2.1 2.6 3.1

Other Financials 0.0 0.0 0.0 0.0 0.0 0.0

Associates 0.0 0.0 0.0 0.0 0.0 0.0

Other Non Recurrent Items 0.0 0.0 0.0 0.0 0.0 0.0

Earnings Before Tax (EBT) 123 130 121 116 112 114

Tax -27.5 -50.5 -26.7 -21.8 -21.3 -20.5

Tax rate 22.3% 38.9% 22.0% 18.7% 19.0% 18.0%

Discontinued Operations 0.0 0.0 0.0 0.0 0.0 0.0

Minorities 0.0 0.0 0.0 0.0 0.0 0.0

Net Profit (reported) 95.7 79.2 94.6 94.7 90.6 93.4

Net Profit (adj.) 95.7 100.0 94.6 94.7 90.6 93.4

CASH FLOW (EURm) 06/2009 06/2010 06/2011 06/2012e 06/2013e 06/2014e

Cash Flow from Operations before change in NWC 107 100 90.7 112 109 113

Change in Net Working Capital -22.0 3.6 1.8 -8.4 -6.4 -11.0

Cash Flow from Operations 85.4 104 92.4 103 103 102

Capex -47.5 -65.6 -56.6 -55.5 -63.5 -65.0

Net Financial Investments 2.7 4.5 7.5 0.0 0.0 0.0

Free Cash Flow 40.6 42.9 43.3 48.0 39.3 37.3

Dividends -27.9 -24.5 0.0 -27.5 -27.2 -28.9

Other (incl. Capital Increase & share buy backs) 1.3 39.4 -24.5 -0.3 -0.3 1.8

Change in Net Debt 14.0 57.8 18.9 20.2 11.8 10.1

NOPLAT 96.1 100 95.9 91.5 87.5 88.6

BALANCE SHEET & OTHER ITEMS (EURm) 06/2009 06/2010 06/2011 06/2012e 06/2013e 06/2014e

Net Tangible Assets 280 338 378 417 462 508

Net Intangible Assets (incl.Goodwill) 0.0 0.0 0.0 0.0 0.0 0.0

Net Financial Assets & Other 11.4 10.8 21.1 21.2 20.8 20.4

Total Fixed Assets 292 349 400 438 483 528

Inventories 191 176 174 178 181 187

Trade receivables 65.9 63.7 58.4 62.1 65.0 71.0

Other current assets 5.6 5.8 4.7 5.0 5.0 5.0

Cash (-) -110 -141 -158 -175 -186 -190

Total Current Assets 372 387 396 421 437 453

Total Assets 664 736 795 859 921 981

Shareholders Equity 356 452 523 590 653 720

Minority 0.0 0.0 0.0 0.0 0.0 0.0

Total Equity 356 452 523 590 653 720

Long term interest bearing debt 181 156 154 152 5.3 145

Provisions 2.9 3.1 3.7 3.7 3.7 3.7

Other long term liabilities 3.0 5.2 5.4 5.4 5.4 5.4

Total Long Term Liabilities 187 164 163 161 14.5 154

Short term interest bearing debt 3.0 1.9 1.9 0.8 147 0.0

Trade payables 66.4 50.2 58.2 57.6 56.5 57.4

Other current liabilities 51.9 67.6 49.2 49.3 49.4 49.9

Total Current Liabilities 121 120 109 108 253 107

Total Liabilities and Shareholders' Equity 664 736 795 859 921 981

Net Capital Employed 436 477 530 577 628 684

Net Working Capital 196 196 179 188 194 206

GROWTH & MARGINS 06/2009 06/2010 06/2011 06/2012e 06/2013e 06/2014e

Sales growth 15.8% 4.2% 0.5% 0.6% 0.3% 2.8%

EBITDA (adj.)* growth 15.2% 0.0% -6.6% -2.7% -2.7% 2.2%

EBITA (adj.)* growth 10.4% 2.8% -9.1% -4.6% -4.4% 1.3%

EBIT (adj)*growth 10.4% 2.8% -9.1% -4.6% -4.4% 1.3%

Jumbo

Page 12

Jumbo: Summary tables

GROWTH & MARGINS 06/2009 06/2010 06/2011 06/2012e 06/2013e 06/2014e

Net Profit growth 16.0% 4.4% -5.4% 0.1% -4.3% 3.0%

EPS adj. growth 16.0% -1.2% -6.7% 0.1% -4.3% 3.0%

DPS adj. growth 15.0% -17.9% -chg +chg -1.0% 6.5%

EBITDA (adj)* margin 30.9% 29.7% 27.6% 26.7% 25.9% 25.7%

EBITA (adj)* margin 27.4% 27.0% 24.5% 23.2% 22.1% 21.8%

EBIT (adj)* margin 27.4% 27.0% 24.5% 23.2% 22.1% 21.8%

RATIOS 06/2009 06/2010 06/2011 06/2012e 06/2013e 06/2014e

Net Debt/Equity 0.2 0.0 0.0 0.0 -0.1 -0.1

Net Debt/EBITDA 0.5 0.1 0.0 -0.2 -0.3 -0.3

Interest cover (EBITDA/Fin.interest) 29.5 70.5 nm nm nm nm

Capex/D&A 287.1% 506.6% 370.1% 323.7% 341.5% 325.6%

Capex/Sales 10.2% 13.5% 11.6% 11.3% 12.8% 12.8%

NWC/Sales 41.9% 40.2% 36.6% 38.1% 39.3% 40.5%

ROE (average) 29.9% 24.7% 19.4% 17.0% 14.6% 13.6%

ROCE (adj.) 20.2% 18.8% 17.2% 15.1% 13.3% 12.4%

WACC 10.6% 10.6% 10.6% 13.0% 13.0% 13.0%

ROCE (adj.)/WACC 1.9 1.8 1.6 1.2 1.0 1.0

PER SHARE DATA (EUR)*** 06/2009 06/2010 06/2011 06/2012e 06/2013e 06/2014e

Average diluted number of shares 121.2 128.2 129.9 129.9 129.9 129.9

EPS (reported) 0.79 0.62 0.73 0.73 0.70 0.72

EPS (adj.) 0.79 0.78 0.73 0.73 0.70 0.72

BVPS 2.93 3.53 4.02 4.54 5.03 5.54

DPS 0.23 0.19 0.00 0.21 0.21 0.22

VALUATION 06/2009 06/2010 06/2011 06/2012e 06/2013e 06/2014e

EV/Sales 1.8 1.3 1.3 0.6 0.6 0.6

EV/EBITDA 6.0 4.3 4.6 2.4 2.4 2.2

EV/EBITDA (adj.)* 6.0 4.3 4.6 2.4 2.4 2.2

EV/EBITA 6.7 4.7 5.1 2.8 2.8 2.7

EV/EBITA (adj.)* 6.7 4.7 5.1 2.8 2.8 2.7

EV/EBIT 6.7 4.7 5.1 2.8 2.8 2.7

EV/EBIT (adj.)* 6.7 4.7 5.1 2.8 2.8 2.7

P/E (adj.) 8.4 6.1 6.8 3.8 4.0 3.8

P/BV 2.3 1.3 1.2 0.6 0.5 0.5

Total Yield Ratio 3.1% 0.0% 7.7% 7.6% 8.1%

EV/CE 1.8 1.2 1.1 0.5 0.5 0.4

OpFCF yield 10.7% 16.9% 14.5% 28.8% 28.7% 28.5%

OpFCF/EV 9.9% 16.8% 15.0% 32.9% 33.9% 34.8%

Payout ratio 29.1% 30.6% 0.0% 29.0% 30.0% 31.0%

Dividend yield (gross) 3.5% 4.0% 0.0% 7.7% 7.6% 8.1%

EV AND MKT CAP (EURm) 06/2009 06/2010 06/2011 06/2012e 06/2013e 06/2014e

Price** (EUR) 6.60 4.73 4.92 2.76 2.76 2.76

Outstanding number of shares for main stock 121.2 129.9 129.9 129.9 129.9 129.9

Total Market Cap 800 615 639 359 359 359

Net Debt 74 16 -2 -23 -34 -44

o/w Cash & Marketable Securities (-) -110 -141 -158 -175 -186 -190

o/w Gross Debt (+) 184 158 156 153 152 145

Other EV components -11 -11 -21 -21 -21 -20

Enterprise Value (EV adj.) 863 620 616 315 303 294

Source: Company, Investment Bank of Greece estimates.

Notes* Where EBITDA (adj.) or EBITA (adj)= EBITDA (or EBITA) -/+ Non Recurrent Expenses/Income and where EBIT (adj)= EBIT-/+ Non Recurrent Expenses/Income - PPA amortisation

**Price (in local currency): Fiscal year end price for Historical Years and Current Price for current and forecasted years Sector: General Retailers/Broadline Retailers

Company Description: Jumbo is the largest toys/babies apparel/bookstore/seasonal products retailer in the Greek market. The company

has a resilient business model based on its geographical sales network expansion strategy, wide assortment of products and

competitive pricing policy. Jumbo continuously enriches its product range, capitalising on its experience and excellent market

positioning in order to smooth out seasonality, as well as coping with the stability in the toy market and increasing clientele. The

management has communicated expansion in its network targeting 63-65 stores in Greece, Cyprus and Bulgaria in the medium term

while it is planning to open its first store in Romania by 2013.

Jumbo

Page 13

ESN Recommendation System The ESN Recommendation System is Absolute. It means that each stock is rated on the

basis of a total return, measured by the upside potential (including dividends and capital

reimbursement) over a 12 month time horizon.

The ESN spectrum of recommendations (or ratings) for each stock comprises 5 categories:

Buy, Accumulate (or Add), Hold, Reduce and Sell (in short: B, A, H, R, S).

Furthermore, in specific cases and for a limited period of time, the analysts are allowed to rate

the stocks as Rating Suspended (RS) or Not Rated (NR), as explained below.

Meaning of each recommendation or rating:

Buy: the stock is expected to generate total return of over 20% during the next 12 months time horizon

Accumulate: the stock is expected to generate total return of 10% to 20% during the next 12 months time horizon

Hold: the stock is expected to generate total return of 0% to 10% during the next 12 months time horizon.

Reduce: the stock is expected to generate total return of 0% to -10% during the next 12 months time horizon

Sell: the stock is expected to generate total return under -10% during the next 12 months time horizon

Rating Suspended: the rating is suspended due to a capital operation (take-over bid, SPO, …) where the issuer of the document (a partner of ESN) or a related party of the issuer is or could be involved or to a change of analyst covering the stock

Not Rated: there is no rating for a company being floated (IPO) by the issuer of the document (a partner of ESN) or a related party of the issuer

History of ESN Recommendation System

Since 18 October 2004, the Members of ESN are using an Absolute Recommendation System (before was a Relative Rec. System) to rate any single stock under coverage.

Since 4 August 2008, the ESN Rec. System has been amended as follow.

Time horizon changed to 12 months (it was 6 months)

Recommendations Total Return Range changed as below:

Disclosure Appendix The information and opinions in this report were prepared by Investment Bank of Greece, which is regulated by the Bank of Greece (License No: 52/2/17.12.99) and by the Hellenic Capital Market Commission. Investment Bank of Greece has not entered any agreement with the subject companies for the execution of this analysis.

This report is for informative purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to buy, any security. While the information contained herein has been obtained from sources believed to be reliable, we do not represent that it is accurate or complete and it should not be relied upon as such. In producing its research reports, members of Investment Bank of Greece research department may have received assistance from the subject company(ies) referred to in this report. Any such assistance may have included access to sites of the issuers, visits to certain operations of the subject company(ies), meetings with management, employees or other parties associated with the subject company(ies) and the handing by them of historical data regarding the subject company(ies) (financial statements and other financial data), as well as of all publicly available information regarding strategy and financial targets. Investment Bank of Greece research personnel are prohibited from accepting payment or reimbursement of travel expenses from site visits to subject companies. It should be presumed

BEFORE

-15% 0% 5% 15%

SELL REDUCE HOLD ACCUMULATE BUY

TODAY

-10% 0% 10% 20%

SELL REDUCE HOLD ACCUMULATE BUY

BEFORE

-15% 0% 5% 15%

SELL REDUCE HOLD ACCUMULATE BUY

BEFORE

-15% 0% 5% 15%

SELL REDUCE HOLD ACCUMULATE BUY

TODAY

-10% 0% 10% 20%

SELL REDUCE HOLD ACCUMULATE BUY

TODAY

-10% 0% 10% 20%

SELL REDUCE HOLD ACCUMULATE BUY

Jumbo

Page 14

that the author(s) of this report, in most cases, has had discussions with the subject company(ies) to ensure factual accuracy prior to publication. All opinions, projections and estimates constitute the judgment of the author as of the date of the report and are given in good faith, but are subject to change without notice. Prices and availability of financial instruments also are subject to change without notice. Investment Bank of Greece or one of its affiliates or persons connected with it may from time to time buy and sell securities referred herein. Although Investment Bank of Greece does not set a predetermined frequency for publication, if this is a fundamental research report, it is the intention of Investment Bank of Greece to provide research coverage of the subject company(ies), including in response to news affecting this issuer, subject to applicable quiet periods and capacity constraints. Investment Bank of Greece may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any company mentioned in this report. Investment Bank of Greece does and seeks to do business with companies covered in their research reports. Thus, investors should be aware that the firms may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Securities referred to in this research report are subject to investment risks, including the possible loss of the principal amount invested. This report is intended for professional investors only and it is not to be reproduced or copied or reprinted or transmitted for any purpose without permission. We certify that this report has been published in accordance with our conflict management policy and guidelines. According to Investment Bank of Greece policies, the Analysis Department of Investment Bank of Greece is bound by confidentiality, with the exception of data allowed to be published in accordance with the applicable laws. Investment Bank of Greece relies on information barriers to control the flow of information in one or more areas within Investment Bank of Greece organization. The communication between the Analysis Department of Investment Bank of Greece and the other departments of the aforementioned company is restricted by Chinese Walls set between the different departments, so that Investment Bank of Greece can abide by the provisions regarding confidential information and market abuse.

Analyst Certification

The following analysts: Dimitris Birbos hereby certify that the views about the companies and securities contained in this report accurately reflect their personal views and that no part of their compensation was or will be directly or indirectly related to the specific recommendations or views in this report.

The analysts mentioned above who prepared this report have the below mentioned financial interests in the companies covered in this report……none……

Important Regulatory Disclosures on Subject Company

The information and opinions in this report were prepared by INVESTMENT BANK of GREECE, which is member of the Athens Exchange S.A. and regulated by the Bank of Greece (License No: 52/2/17.12.99) and by the Hellenic Capital Market Commission.

The compensation of the research analysts, strategists, or research associates principally responsible for the preparation of this research report may depend on various factors such as quality of work, stock picking, client feedback and overall firm profitability.

Stock Ratings

You should carefully read the definitions of all ratings used in the research report. Moreover, you should carefully read the entire research report to obtain a clear view of the analyst’s opinions and not infer its contents from the rating alone.

IBG Research Rating Distribution

Data current as of 25/05/2012

Buy Accumulate Hold Reduce Sell

IBG Research Total Coverage 32% 28% 40% 0% 0%

% of companies in each rating category that are investment banking clients 4% 0% 4% 0% 0%

Note that we have suspended our rating on 7 companies

Retail 25% 25% 50% 0% 0%

% of companies in each rating category that are investment banking clients 0% 0% 0% 0% 0%

Regulatory Disclosures on Subject Companies

1. As of the date mentioned on the first page of this report, Investment Bank of Greece (or any of its affiliated companies) owns 5% or more of a class of common equity securities in the following companies mentioned in this report: Vivartia, Attica Group, Blue Star Ferries, Hygeia Group, SingularLogic

2. As of the date mentioned on the first page of this report, the following subject companies mentioned in this report own 5% or more of a class of common equity securities of Investment Bank of Greece (or any of its affiliated companies): Marfin Popular Bank

3. Investment Bank of Greece acts as a market maker for the following securities of the subject companies mentioned in this report: Alpha Bank, ATEbank, Bank of Cyprus, Coca Cola Hellenic, EFG Eurobank, Ellaktor, GEK TERNA, Hellenic Exchanges, Hellenic Postbank, Intralot, Mytilineos, National Bank, OPAP, OTE, Piraeus Bank, PPC

4. Within the last 12 months, Investment Bank of Greece has provided advisory services to the following companies mention in this report: Hellenic Postbank

5. Within the last 12 months, Investment Bank of Greece had a contractual relationship or have received compensation for financial advisory services from the following subject companies mentioned in this report: Vivartia, GEK TERNA, Hellenic Postbank, Motor Oil, Euroline, Interinvest, Vivere, Hygeia Group

Jumbo

Page 15

Rating History

1. 25/04/2012 Buy, Target Price EUR 5.10

2. 17/02/2012 Buy, Target Price EUR 5.90

3. 16/11/2011 Buy, Target Price EUR 5.90

4. 04/10/2011 Buy, Target Price EUR 5.90

5. 09/09/2011 Buy, Target Price EUR 6.60

6. 08/06/2011 Buy, Target Price EUR 6.60

7. 02/05/2011 Accumulate, Target Price EUR 6.20

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12

Buy Accumulate Hold Reduce Sell Not rated

Price history Target price history

Source: Factset & ESN, price data adjusted for stock splits. This chart shows Investment Bank of Greece continuing coverage of this stock; the current analyst may or may not have covered it over the entire period.

Risks to our forecasts and valuation

FX risks due to high dependence on purchases from Asia. Recall that the company will seek to adjust the product mix in order to offset any

possible negative impact in profitability in case of adverse FX movements.

Unfavourable macroeconomic trends that may have a negative impact in the company’s financial performance, since as a retail company

Jumbo is affected by factors that influence consumer behaviour.

Difficult business conditions and a stricter competitive environment that could negatively affect the cash flow discipline of previous years.

Possible delays in shipments of toys in China on the back of stricter safety controls.

The high dependence of the company’s structure from the Chairman & CEO and major shareholder of the group.

Oil price fluctuations that in turn affect the cost of toys manufacturing and freight costs, increasing input prices for the company.

Stock overhang concerns: Jumbo’s major shareholder, Mr. Vakakis, has proceeded in various placements in the past. However, all stock sales

have taken place at substantially lower stock prices and do not seem to have an overhang impact over time. We would not exclude further

placements in the future.

Additional disclosures

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2. All prices and valuation multiples are based on the closing of ATHEX’s last session prior to the issue of this report, unless otherwise indicated.

3. Our research reports are available upon request at www.ibg.gr, on Bloomberg’s IBGR and ESNR functions and on Thomson Reuters website.

4. Additional information is available upon request.

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www.snssecurities.nl regulated by the AFM - Autoriteit Financiële Markten

Jumbo

Greece General Retailers

Members of ESN (European Securities Network LLP)

Caixa-Banco de Investimento Rua Barata Salgueiro, 33-5 1269-050 Lisboa Portugal Phone: +351 21 389 68 00 Fax: +351 21 389 68 98

SNS Securities N.V. Nieuwezijds Voorburgwal 162 P.O.Box 235 1000 AE Amsterdam The Netherlands Phone: +31 20 550 8500 Fax: +31 20 626 8064

NCB Stockbrokers Ltd.

3 George Dock, Dublin 1 Ireland Phone: +353 1 611 5611 Fax: +353 1 611 5781

Bank Degroof Rue de I’Industrie 44 1040 Brussels Belgium Phone: +32 2 287 91 16 Fax: +32 2 231 09 04

Equinet Bank AG Gräfstraße 97 60487 Frankfurt am Main Germany Phone:+49 69 – 58997 – 410 Fax:+49 69 – 58997 – 299

Pohjola Bank plc

P.O.Box 308 FI- 00013 Pohjola Finland Phone: +358 10 252 011 Fax: +358 10 252 2703

CM - CIC Securities

6, avenue de Provence 75441 Paris Cedex 09 France Phone: +33 1 4596 7940 Fax: +33 1 4596 7748

Bankia Bolsa Serrano, 39 28001 Madrid Spain Phone: +34 91 436 7813 Fax: +34 91 577 3770

Banca Akros S.p.A. Viale Eginardo, 29 20149 Milano Italy Phone: +39 02 43 444 389

Fax: +39 02 43 444 302

Investment Bank of Greece

24B, Kifisias Avenue 151 25 Marousi Greece Phone: +30 210 81 73 000 Fax: +30 210 68 96 325