Greek Equity Market update Sept2015

Greek Market Update

September 10, 2015

2

Greek Equity Research September 10, 2015

Greek Market Update

Natasha Roumantzi Tel: +30 210 335 4065 Email: [email protected] George Doukas Tel: +30 210335 4093 Email: [email protected] Iakovos Kourtesis Tel: +30 210335 4083 Email: [email protected]

mailto:[email protected]









Table of contents

3

Key Investment Considerations

ATHEX has underperformed benchmarks the past year….

…on the back of rising yields…

…due to spike on the domestic political risk, which outweigh global macro woes

GGBs & ATHEX co-movements

Most non-financials recuperated since capital controls

Market cap/GDP close to the 2012 lows

Top down Greek non financials trade on attractive valuation levels…

....although earnings yield is at par vs GGB yields

On a CAPE basis, non financials trade above long term trend

Piraeus non-financials universe trades at attractive forward multiples

Universe; changes in PTs and ratings

Bottom up | Our Universe valuation implies a 14.5% upside

Bottom up | Our DDM generates an upside of 29%...

…as we assume a 2014-2017 EPS CAGR of 11.1%

We lie below 2015 consensus | more bullish for the mid- to long term

Company pages; non financials

Aegean Airlines (AGNr.AT)

Athens Exchange (EXCr.AT)

Autohellas (AUTr.AT)

Coca Cola HBC (EEEr.AT)

FF Group (HDFr.AT)

Fourlis (FRLr.AT)

Frigoglass (FRIr.AT)

Hellenic Telecoms (OTEr.AT)

Jumbo (BABr.AT)

Motor Oil (MORr.AT)

OPAP (OPAr.AT)

PPC (DEHr.AT)

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Appendix

Piraeus Securities Universe; statistics, financials, valuation

Piraeus Securities Universe | Cash position

Piraeus Securities Radar | Cash position

July 12 | Euro Summit to initiate discussions on a new ESM program

FFA and MoU highlights

Disbursements under previous programs | June ‘15-July ‘18 funding needs

HRADF | Privatization Plan

Economic Outlook (source: Piraeus Bank)

Key Economic Data I Key Economic Data II Important Disclosures

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64

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66

67

68

4

Key Investment Considerations

The sequence of events

Following a 7-month eventful (referendum, capital controls, bank holidays) period of negotiations between the SYRIZA-led coalition government with Independent Greeks and the country’s creditors, a new ESM program was agreed between Greece and its creditors and was ratified by the European parliaments and ESM board as of August 19. The agreement ensured Eur86 bn of funding until end-2018 (including a Eur25 bn backstop facility for banks) and a commitment for discussion of potential debt relief measures in October-November after the conclusion of the first review of the program, in exchange of a new set of measures expected to account for 4.3% of GDP per annum by 2018 fully-phased, the introduction of structural reforms and privatizations. Immediately following the disbursement of a first tranche of Eur13 bn on August 20 to pay liabilities to ECB, IMF and a bridge loan, Greece called a new general election for September 20.

We have cut the valuation of our non-banks universe by an avg of 11% (ranging from 2% to 22% lower, with only two cases where we increased our PT) to incorporate a weakening economic environment due to the imposition of capital controls and the introduction of new austerity measures. According to European Authorities (Baseline scenario of comprehensive assessment exercise), GDP is expected to decline by 2.3% in 2015, and 1.3% in 2016 and increase by 2.7% in 2017. However, Q2 ‘15 GDP surprised on the upside posting a rise of 1.6% yoy, suggesting a GDP rise of 1.1% yoy in H1 ‘15. According to Piraeus Bank economists, the H1 ‘15 reported figure indicates a contraction of 0.7% in 2015 against a previous estimate for a contraction of 2.0%. Piraeus still expects GDP decline of 2.0% to 3.0% in 2016 as a result of the upfront fiscal tightening, subject to political developments and the program implementation

The valuation of our non-banks universe implies an upside potential of 14.5%, following the aforementioned adjustments, while using a DDM model, the upside stands at 29%.

Upside risks to our valuation include a) a smaller than currently anticipated GDP contraction as a result of the emergence of a stable, pro-euro government that will promote structural reforms, privatizations and constant absorption of the Eur30 bn growth package supported by better than expected H1 ‘15 GDP data; b) successful conclusion of the Greek banks’ recapitalization process before the end of 2015; c) successful conclusion of the first review of the program accompanied by debt relief measures; d) steady normalization of liquidity conditions in the market as a result of the alleviation of capital controls, reinstatement of Greek debt waiver by ECB and inclusion of Greek debt in ECB’s QE program

The largest downside risk seems to be the emergence of a political deadlock from the upcoming election. The inability of the current political forces to create a stable government swiftly would intensify and prolong the economic downturn

At this point, our top pick list includes companies with relatively large international exposure, favorable cycle and flexible operating model such as Motor Oil and companies with short term catalysts like OPAP. In our view at some point in 2016, assuming some adjustments on the regulatory framework, we should witness the successful launch of the VLTs project that will further diversify OPAP’s gaming portfolio and will fuel growth over the coming years. We remind that the launch of the VLTs will also bring to the Greek State’s coffers c. EUR 300mn of taxes on an annual basis. On the other hand, Motor Oil is having a favorable cycle with strong USD and benchmark margins, which should feed in the profitability.

Under a swift resolution of the political issue, we would favor companies with healthy balance sheets , established business models that could leverage on the economic recovery such as OTE, Athens Exchange Group and Jumbo. Privatizations could also be a major catalyst in specific cases such as PPC (sale of ADMIE, small PPC) and Lamda Development (Hellinikon project; non rated). We remain positive on tourism related stories like Aegean.

5

Greek equities have massively underperformed benchmarks the past 1.5years, courtesy of the fragile economic environment and political risk. The divergence in performance essentially starts from September 2014, when the market starts to discount early elections. Since then, the segregation of the Greek market vs European peers continues unabated.

ATHEX has underperformed benchmarks the past year….

6

…on the back of rising yields…

GGBs currently trade at c8.9%. The last time the Greek government debt was trading at these levels, (in end-February 2015), the ATHEX stood c41% above its current levels. Or to put it another way, the last time the ATHEX was trading at current levels was back in September 2012, when GGBs stood at 19.5%.

7

…due to spike on the domestic political risk, which outweigh global macro woes

The pressure on Greek equities accelerated from Q2 onwards and remains the underperformer vs most of its European peers. Most of them have positive performance year-to-date. The difference compared to April 2015 is the spill over of the China and EM weakness to European equities and that despite the positive impact of the ECB QE.

8

GGBs & ATHEX co-movements

There has been a broadly similar pattern between debt and equity the past few years, which seems to have been broken lately, as the fall in the yield has not been followed by a positive performance in equities.

GGB & ATHEX swings | start 2008-now

time length (months)

GGB yield change

ATHEX GI performance

Performance (total market ex banks-average per

month) spot P/E total

market ex banks

4 26.7% -14.8% -17.3% 13.2

4 -13.0% -29.4% -37.1% 8.9

3 34.1% -37.0% -9.2% 7.4

12 -9.8% 32.1% 9.5% 9.6

26 490.0% -65.9% -53.2% 7.5

30 -83.3% 60.0% 72.7% 18.7

8 93.5% -33.3% -22.1% 11.8

1 -16.8% -17.9% -6.1% 11.4

9

Greek non-financials surged from the time of the PSI (31/5/12) until the imposition of the capital controls (26/6/15). Our universe gained on average 2.4x. The capital controls reversed this trend although most non-financial stocks have recuperated some of their initial losses.

Prices Prices Current

31/5/2012 26/6/2015 chg % 4/9/2015 chg % vs 26/6

General Index 525.45 797.52 51.78% 646.62 -18.92%

Banks

Alpha Bank 0.16 0.09 -40.9% 0.12 26.6%

Eurobank 4.15 0.14 -96.5% 0.04 -73.6%

National Bank 5.08 1.20 -76.4% 0.54 -55.0%

Piraeus Bank 1.82 0.40 -78.0% 0.09 -76.5%

Companies/Non-Banks

Aegean 1.18 6.18 423.7% 6.49 5.0%

Autohellas 2.27 11.50 405.5% 9.75 -15.2%

Coca Cola HLB AG 18.38 20.01 8.9% 17.97 -10.2%

Folli Follie Group 4.38 24.20 452.5% 19.89 -17.8%

Fourlis 0.65 3.00 360.8% 2.38 -20.7%

Frigoglass 3.32 2.10 -36.7% 2.00 -4.8%

Hellenic Exchanges 2.05 4.64 125.8% 4.63 -0.2%

Jumbo 2.42 7.42 206.6% 7.37 -0.7%

Metka 5.85 7.79 33.2% 7.12 -8.6%

Motor Oil 4.60 8.50 84.8% 9.01 6.0%

OPAP 4.30 7.81 81.6% 7.33 -6.1%

OTE 1.30 8.20 530.8% 8.00 -2.4%

PPC 1.32 4.71 256.8% 4.74 0.6%

Sarantis 1.35 7.58 459.8% 7.23 -4.6%

ON THE RADAR

Athens Water 2.58 5.84 126.4% 5.20 -11.0%

Corinth Pipeworks 0.51 1.08 111.8% 1.01 -6.5%

Ellaktor 0.67 1.87 177.4% 1.41 -24.6%

Elval 0.79 1.49 89.1% 1.73 16.1%

Grivalia Properties 2.02 7.36 264.4% 7.93 7.7%

GEK-Terna 0.52 1.79 247.3% 1.56 -12.8%

Hellenic Petroleum 4.76 4.68 -1.7% 4.61 -1.5%

Intralot 0.69 1.70 146.4% 1.48 -12.9%

Karatzis 1.90 3.58 88.4% 3.68 2.8%

Kleemann 0.62 1.79 187.3% 1.76 -1.7%

Kloukinas 0.24 0.36 50.8% 0.36 -0.3%

Korres 3.27 3.80 16.3% 3.70 -2.6%

Kri-Kri 0.71 1.80 152.2% 1.80 0.0%

Mytilineos 1.66 5.79 248.8% 4.63 -20.0%

Piraeus Port 7.90 13.31 68.5% 14.71 10.5%

Terna Energy 0.92 3.07 235.2% 2.57 -16.3%

Thessaloniki Port 10.23 19.80 93.5% 21.89 10.6%

Thessaloniki Water 2.96 2.66 -10.1% 2.80 5.3%

Thrace Plastics 0.47 1.41 200.0% 1.40 -0.7%

Titan 10.87 21.40 96.9% 20.24 -5.4%

Trastor 0.47 1.40 199.8% 1.40 0.0% Source: Piraeus Securities

Most non-financials recuperated since capital controls

10

Market cap/GDP close to the 2012 lows

11

Top down Greek non financials trade on attractive valuation levels…

12

....although earnings yield stand at par vs GGB yields

The small gap has narrowed since the opening of the market and now equities seem to be at par with GGBs.

13

On a CAPE basis, non financials trade above long term trend

Very weak earnings along with deflation boosts CAPE well above median levels.

14

Piraeus non-financials universe trades at attractive forward multiples

Our non-financial universe trades well below multi-year forward medians on both P/E and EV/EBITDA terms.

Universe (non financials) | changes in ratings and PTs

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Piraeus Securities | Changes in PTs and ratings

Company ticker New Target Price (EUR)

Old Target Price (EUR) New Rating Old Rating

Aegean Airlines AGNr.AT 7.8 9.2 Outperform Outperform

Autohellas AUTr.AT 10.0 10.2 Neutral Outperform

Coca Cola HBC EEEr.AT 17.0 16.2 Neutral Neutral

ATHEX EXCr.AT 5.7 6.8 Outperform Outperform

Frigoglass* FRIr.AT 3.0 U/R Outperform U/R

Folli Follie Group HDFr.AT 28.7 32.2 Outperform Outperform

Fourlis FRLr.AT 4.3 5.5 Outperform Outperform

Jumbo BABr.AT 10.0 11.6 Outperform Outperform

Motor Oil MORr.AT 12.0 11.0 Outperform Outperform

OPAP OPAr.AT 10.8 12.6 Outperform Outperform

OTE** OTEr.AT 9.0 12.0 Neutral Outperform

PPC DEHr.AT 4.0 5.0 Neutral Neutral

Source: Piraeus Securities, Greek Equity Research

* updated as of August 13th

**updated as of July 28th

With this report we update our estimates post the capital controls and the Q2 results and we made the changes presented in the table. We cut our PTs by an average of 11.5% with recommendation changes in the cases of OTE, Frigoglass and Autohellas.

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The valuation of the 12 non-financial stocks that we currently cover, generate an upside potential of 14.5%, down from 26.3% of our previous valuations.

Bottom up | Our Universe valuation implies a 14.5% upside

Piraeus Securities Universe valuation

current price

(COB 4-Sept-2015) Market

cap. PT number of

shares Target Market

cap. Upside

Aegean 6.49 463.5 7.80 71.4 557.1 20.2%

ATHEX 4.63 302.7 5.70 65.4 372.6 23.1%

Autohellas 9.75 118.5 10.00 12.2 121.6 2.6%

CCHBC 17.97 6,609.4 17.00 367.8 6,252.6 -5.4%

Frigoglass 2.00 101.2 3.00 50.6 151.8 50.0%

Fourlis 2.38 121.4 4.30 51.0 219.3 80.7%

FFGROUP 19.89 1,331.6 28.70 66.9 1,921.4 44.3%

Jumbo 7.37 1,002.8 10.00 136.1 1,360.6 35.7%

Motor Oil 9.01 998.2 12.00 110.8 1,329.4 33.2%

OTE 8.00 3,921.2 9.00 490.2 4,411.4 12.5%

OPAP 7.33 2,338.3 10.80 319.0 3,445.2 47.3%

PPC 4.74 1,099.7 4.00 232.0 928.0 -15.6%

Total 18,408.3 21,070.8 14.5%


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Bottom up | Our DDM generates an upside of 29%

Piraeus Sec Non-Banks Universe: 2-Stage Dividend Discount Model (2-Stage DDM)

Inputs Comments Output

PV of Dividends during high growth phase 1,628

Current PV of Terminal value 23,353

Earnings2014 1,377 Actual Total Value 24,981 Dividend payout 42.1% Actual Current Value 19,369

Dividend2014 579 Actual Upside/(Downside) 29.0%

Market capitalization 19,369 Based on the closing prices of Sept. 8th , 2015 of the universe

Phase I: High growth

Expected growth 11.1% EPS CAGR based on our estimates for the next 3 years

Period (years) 3 We assume a 3-year high growth period

Dividend payout 42.1% Assuming an unchanged payout

Risk free rate 0.7% Yield of the 10-year German government bond (EU risk free)

Global risk premium 6.00%

Country premium 8.2% Assuming 816 basis points bond spread and similar volatility between stocks & bonds

EMRP 14.2%

beta 1.0

Cost of equity 14.9%

Phase II: Stable growth

Expected growth 0.7% Drops significantly (equals the risk free rate)

Period perpetuit

y

Dividend payout 89.4% Based on fundamentals (Payout = 1 - g/ROE)

Risk free rate 0.7% Unchanged relative to Stage I

Global risk premium 6.0% Unchanged relative to Stage I Country premium 0.0% Drops to zero

EMRP 6.0% Drops significantly beta 1.0 Unchanged relative to Stage I

Cost of equity 6.7% Drops significantly

Source: Piraeus Securities Greek Equity Research Note: Figures in EUR mn unless otherwise stated

Word of caution The 2-stage DDM best applies in cases where there is high growth potential for a number of years prior to the stable-growth phase, companies pay dividends that approximate FCFE, and leverage is stable. As such, our valuation exercise is highly dependent on the level of growth projected for both phases, the length of the high growth phase, the dividend payouts, as well as the cost of equity (risk) assumptions that we make.

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…as we assume a 2014-2017 EPS CAGR of 11.1%

Piraeus Sec Non-Banks Universe: Sensitivity Analysis based on Different Growth Prospects

Target market capitalization (€ m)

Projected EPS growth

COE 5.0% 10.0% 11.1% 20.0% 0.0% -2.3% -5.0%

16.8% 21,104 24,187 24,929 31,233 18,297 17,095 15,752

Targeted upside

Projected EPS growth

COE 5.0% 10.0% 11.1% 20.0% 0.0% -2.3% -5.0%

16.8% 9% 25% 29% 61% -6% -12% -19%


Based on our DDM model, the market discounts a 2% EPS growth for the same period.

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We lie below 2015 consensus | more bullish for the mid- to long term

Although we stand c7% below 2015 consensus, we are more optimistic for the mid to long term than the consensus. We expect a 2015-2017 EPS CAGR of 12.6%, while the consensus expects a growth of 9.5%.

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Company Pages | non-financials

21

2Q 2015 review: The Greek airline reported revenues of EUR 265.7mn (+4.3%) EBITDAR of EUR 60.4mn (+2.9%) and net profit of EUR 23.1mn slightly lower than the EUR 24.4mn reported in 2Q 2014. However adjusting for EUR 4.5mn one off gains, the EBITDAR was 4.5% lower YoY and the net profit c 20% lower YoY. Yield pressure continued unabated in Q2, it was 9% lower and outpaced unit cost containment (-7.8%). Traffic on the other hand was strong, up by 15.2% with international traffic up by 18.4% on the back of 17.8% higher ASKs.

Outlook: The imposition of the capital controls was waived by the company through aggressive promotional activity, which allowed a strong 19% traffic growth in July. Of course the traffic growth was made possible at the expense of yields, which should have retreated at a much higher pace than the Q2. They do expect a strong Q3 but not as strong as 3Q 2015 was. In the mid-term, the management remained cautious and said during the conference call that they will adopt a much more conservative stance on capacity expansion and will prefer to be flexible on their fleet, implying in our view that they will sell and lease back the aircrafts that they own.

Valuation/estimates: We cut our estimates by 19% and 17% in 2015 and 2016 respectively, as we both cut our top line (courtesy of the revenue loss due to the capital controls and the lower yields) and due to higher than expected costs, relating to the increase of the activity of the airline. Going forward, we assume flat fleet vs our previous estimate for an increase of the fleet by 3 aircrafts. Valuation-wise, our blended DCF/multiples exercise now returns a target price of EUR 7.8/share, which implies an upside of 20%, hence we reiterate our Outperform rating. On our target price, the stock is trading 9.4x P/E 2015e, broadly in line with European flag carriers.

Upside risks: Jet fuel prices, remaining at low levels, macro improvement, which will lead to a strong pick up in domestic demand, loosening of competition from foreign operators, EUR strengthening vs the USD.

Downside risks: further increase in competition, spike in jet fuel prices, further strengthening of the USD, weak tourism

Company description: Aegean Airlines is operating 58 aircrafts in 134 destinations of which 100 are international and 34 are domestic. The airline will have a capacity of 15mn available seats in 2015 and we estimate that will post a passenger traffic of 11.5mn passengers.

Aegean Airlines (AGNr.AT) |Strong traffic despite the capital controls

Company data Market cap. (EUR mn) 464.21

Closing price - Sept.3 (EUR ) 6.5

# of shares (mn) 71.42

Free float (%) 33%

Target Price (EUR) 7.80

Dividend Yield (%) 6.40%

Total Return (%) 26.40%

Rating Outperform

Ratio analysis 2013 2014 2015f 2016f

P/E (x)

8.04

5.78

7.88

6.75

P/E on Target Price (x)

11.26

8.10

11.03

9.44

P/BV (x)

2.18

2.14

2.69

2.24

AEV/EBITDAR (x)

5.46

4.97

5.88

5.25

EV/EBITDA (x)

3.30

2.65

3.36

2.53

Dividend yield

15.38%

10.72%

6.35%

7.41%

ROA

10.65%

14.32%

10.45%

11.62%

ROIC*

9.09%

11.33%

6.31%

7.68%

Key Operating metrics

Total pax (mn) 7.00 10.14 11.50 12.06

Load factor-scheduled services 75.23% 77.18% 76.87% 77.42%

Yield (EUR cents)

8.54

9.51

8.52

7.93

RASK (Revenue/ASK)

6.85

7.48

6.57

6.18

CASK (Cost/ASK)

5.16

5.84

5.30

4.88

*assuming capitalized leasing

George Doukas Tel: +30 2103354093 Email: [email protected]




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Aegean Airlines (AGNr.AT) | Income statement

Aegean Airlines - Profit & Loss Statement Proforma

EUR mn FY13 FY 14 FY 15f FY 16f

Sales 850.0 911.8 951.6 975.7

Other Operating income 9.8 9.7 18.1 13.1

Operating expenses, ex-depr. 0.0 -12.8 -14.3 -14.1

Aircraft lease costs 90.9 90.7 109.7 106.4

EBITDAR 181.6 209.5 202.2 214.2

EBITDAR margin 21.4% 23.0% 21.2% 22.0%

EBITDA 90.7 118.8 92.6 107.8

EBITDA margin 10.7% 13.0% 9.7% 11.1%

Depreciation 14.1 12.8 14.3 14.1

EBIT 76.6 106.0 78.3 93.8

EBIT margin 9.0% 11.6% 8.2% 9.6%

Total Financial expenses (6.0) (11.3) 3.9 3.9

EBT 70.7 94.6 82.2 97.6

EBT margin 8.3% 10.4% 8.6% 10.0%

Minorities 0.0 0.0 0.0 0.0

Tax 18.4 14.4 22.8 28.3

Net profit 52.3 80.2 59.4 69.3

Net profit margin 6.2% 8.8% 6.2% 7.1%

Dividend 0.0 49.8 29.7 34.7

Retained earnings 0.0 30.5 29.7 34.7

EPS reported 0.73 1.12 0.83 0.97

DPS 0.00 0.70 0.42 0.49

Source: Aegean Airlines, Piraeus Securities Greek Equity Research

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Aegean Airlines (AGNr.AT) | Balance sheet and cash flow

Aegean Airlines - Summary Balance Sheet

EUR mn FY 13 FY 14 FY 15f FY 16f

Tangible assets, net 158.5 193.8 162.1 128.0

Total non current assets 222.2 273.4 221.6 210.4

Inventory 11.0 13.2 7.1 7.2

Trade debtors 63.0 54.0 67.8 72.2

Cash & cash equivalents 226.9 207.5 240.4 279.2

Total current assets 339.1 354.0 320.1 363.4

Total assets 561.4 627.4 541.7 573.7

Total equity 212.9 216.5 172.8 207.4

Total long term liabilities 133.6 125.2 127.0 116.2

Provisions 7.4 3.2 6.3 6.5

Trade creditors 50.1 56.8 84.1 84.5

Tax payable 10.2 15.4 18.3 22.6

Total short term liabilities 214.8 285.8 241.9 250.2

Total liabilities 348.5 411.0 368.9 366.3

Total liabilities & equity 561.4 627.4 541.7 573.7


Aegean Airlines - Cash Flow Statement


Cash flow from operations

83.45

104.00

56.28

59.31

Change in Working Capital

20.70

9.79

(9.19)

(1.69)

Operating cash flow

104.15

113.79

47.09

57.62

Capex

(0.34)

42.92

(17.50)

(20.00)

Free Cash Flow to Equity

104.48

60.47

54.19

67.22

Change in capital

-

(72.02)

-

-

Change in debt

(26.90)

(7.85)

(6.99)

-

Non operating cash flows

-

-

-

-

Dividend paid

-

-

(49.75)

(29.46)

Change in cash

77.58

(19.40)

(2.55)

37.76

Cash, beginning

149.30

226.88

207.48

204.93

FX impact

-

-

-

-

Cash, end

226.88

207.48

204.93

242.69


24

As bad as it gets; Political woes, capital controls, the loss of 25 trading days and increased taxation take a toll on current year’s estimates – Banks’ recap to offset part of the losses Q2 ‘15 results Athens Exchange Group announced a weak set of results that stood below our estimates in terms of Operating Profitability and bottom line. 2Q15 turnover came in at EUR 8.43mn in line with our estimates, EBITDA reached EUR 2.58mn, missing our estimate by 18% and Net Profit stood at EUR 1.37mn, missing our estimate by 45%. The miss to our EBITDA estimate is mainly attributed to one-off expenses related to provisions for bad debts & other risks that came in at EUR 0.65mn for the quarter and to the capital concentration tax that amounted to EUR 0.66mn for the quarter. The miss to our Net Profit estimate is attributed to the miss in our EBITDA line and the higher than expected corporate tax rate for the period.

Valuation A prolonged period of political uncertainty and the failure to reach an agreement with the creditors before July, took a toll on y-t-d trading volumes currently standing at EUR 92mn. The declared referendum resulted to the imposition of capital controls, the closing of the stock market and the loss of 25 trading days for 2015. We also point out that the opening of the market early in August came with significant restrictions for Greek investors resulting in even lower volumes. As a result we lower our trading volumes estimate for FY 2015 from EUR 120mn to EUR 85mn and we reduce the number of the trading days for the year to 223 vs. 248 before; we expect some relief towards year-end and we incorporate revenues of c. EUR 3mn from Banks recap. We are now modeling an increased corporate tax rate for the Group that should stand at 30%, as per our estimates. We reduce our target price to EUR 5.7 from EUR 6.8 before, but we maintain an Outperform rating on valuation grounds. At current levels, and excl. cash, the implied P/E for 2016 stands at 9.5x with the implied discount at 19% vs. Group’s 10-year historical average. Our target price of EUR 5.7 implies an upside potential of 22% from current levels.

Upside risks Primary trigger includes a pick-up in trading volumes as the sovereign risk resides and velocity converges to European standards. Volumes above our expectations would also trigger valuation upgrades. Moreover, the increase of the market capitalization of the Greek market due to improved sentiment but also due to the recapitalized banking sector should also enhance revenue streams.

Downside risks Trading volumes below our estimates in the next few years is the main downside risk. A possible re-escalation of the Greek sovereign risk and a risk off approach towards Greek assets would be the most likely candidates behind lower volumes going forward.

Company description Athens Exchange Group is the parent company of the Group of companies that support the operation of the Greek capital market. The parent company and its 100% subsidiaries ATHEX Clear and ATHEX CSD operate the organized cash and derivatives markets, carry out trade clearing, settlement and registration of securities, provide comprehensive IT solutions to the Greek capital market, and promote the development of capital markets culture in Greece. The Company was founded on 29-Mar-2000 and it is headquartered in Athens, Greece.

Athens Exchange Group (EXCr.AT) | As bad as it gets

Fundamentals (EUR mn) 2013 2014 2015e 2016e 2017e

Revenues 81.5 47.3 38.2 44.0 48.5

EBITDA 60.5 25.8 17.2 21.9 25.4

Net profit (adj.) 29.0 18.4 10.7 14.1 16.5

EPS underlying. (EUR) 0.44 0.28 0.16 0.21 0.25

DPS (EUR) 0.20 0.32 0.37 0.40 0.43

Valuation ratios 2013 2014 2015e 2016e 2017e

P/E (x) adj.for cash (underlying) 12.3 7.4 11.5 9.5 8.7

P/E (x) 16.2 14.5 25.5 19.8 17.0

Dividend Yield 2.5% 6.9% 8.0% 8.7% 9.3%

ROE 19.4% 11.4% 6.1% 7.9% 9.9%

Company data

Market cap. (EUR mn) 302.70



Free float (%) 95.00%




Rating Outperform

Iakovos Kourtesis Tel: +30 2103354083 Email: [email protected]




25

Athens Exchange Group (EXCr.AT) | Income Statement

Revenue Analysis 2011 2012 2013 2014 2015e 2016e 2017e

Average Daily Value 82.4 51.9 86.6 127.1 85.1 119.2 138.8

Average number of contracts 49,902 64,356 41,567 48,681 70,588 56,470 62,117

Average Market Cap 44,925 27,474 51,907 69,364 52,064 54,729 57,666

Avg. Market Cap/GDP 21.5% 14.2% 28.5% 38.7% 29.8% 31.7% 32.9%

Trading 7.65 4.95 6.70 9.34 6.39 8.92 10.30

Clearing & Settlement 16.10 10.79 27.71 19.53 14.92 19.71 22.41

Exchange Services 7.14 4.84 34.65 6.92 6.18 4.34 4.55

Depositary Services 4.05 2.85 4.63 3.79 2.90 3.04 3.19

Data Feed 4.26 3.94 3.77 3.63 3.83 4.03 4.23

Other 8.73 6.11 4.01 4.08 4.01 3.94 3.86

Total Revenues 47.92 33.50 81.47 47.29 38.22 43.97 48.54

% change -22.9% -30.1% 143.2% -42.0% -19.2% 15.0% 10.4%

Source: The Company, Piraeus Securities

PROFIT & LOSS (P&L) ITEMS 2011 2012 2013 2014 2015e 2016e 2017e

Sales 47.9 33.5 81.5 47.3 38.2 44.0 48.5

% chng -30.6% -22.8% 146.6% -42.0% -19.2% 15.0% 10.4%

Capital Markets' Commission 1.64 1.08 1.58 2.16 1.33 1.94 2.25

% chng -39.1% -34.3% 46.5% 36.7% -38.3% 46.0% 15.8%

Cost of sales 22.4 20.7 19.4 19.4 19.7 20.2 20.9

% chng 0.4% -7.5% -6.3% -0.1% 1.9% 2.1% 3.7%

% turnover 52% 63% 24% 41% 52% 46% 43%

EBITDA 23.9 11.7 60.5 25.8 17.2 21.9 25.4

% chng -35.5% -51.0% 416.4% -57.4% -33.4% 27.5% 16.1%

EBITDA margin 55.8% 35.5% 74.3% 54.5% 44.9% 49.7% 52.3%

Depreciation & amortization 1.8 1.8 1.4 1.8 1.8 1.8 1.8

% of fixed assets 6.8% 7.0% 5.5% 6.7% 6.6% 6.5% 6.4%

x capex/depreciation 0.37 0.34 0.34 1.22 1.22 1.22 1.22

Operating profit (EBIT) 22.1 9.9 59.1 24.0 15.4 20.1 23.6

% chng -36.2% -55.1% 495.9% -59.4% -35.9% 30.8% 17.5%

Operating profit margin 51.6% 30.0% 72.5% 50.7% 40.2% 45.7% 48.6%

Interest income 5.9 5.6 4.5 3.7 1.6 1.8 1.8

Gains(losses) from revaluation of participations/securities-2.0 0.5 0.0 0.0 0.0 0.0 0.0

Dividend income 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Gains (losses) from securities 0.0 -0.8 -0.5 0.0 0.0 0.0 0.0

Pre-tax profit 26.0 15.1 63.1 27.7 17.0 21.9 25.4

% chng -33.5% -41.7% 316.7% -56.2% -38.7% 29.0% 16.1%

Pre-tax profit margin 60.6% 45.8% 77.5% 58.5% 44.3% 49.7% 52.3%

Income tax 4.3 3.2 16.9 7.9 5.1 6.6 7.6

% effective tax rate 16.6% 21.3% 26.8% 28.5% 30.0% 30.0% 30.0%

Profit after tax 21.5 11.9 32.3 21.0 11.9 15.3 17.8

% chng 1.4% -44.6% 170.9% -34.9% -43.5% 29.0% 16.1%

Net profit margin 50.2% 36.1% 39.6% 44.4% 31.0% 34.8% 36.6%

EPS after tax (in €) 0.33 0.18 0.49 0.32 0.18 0.23 0.27

EPS chng 1.4% -44.6% 170.9% -34.9% -43.5% 29.0% 16.1%

Profit after tax excluding capital return 16.6 7.5 29.0 18.4 10.7 14.1 16.5

EPS after tax (in €) 0.25 0.12 0.44 0.28 0.16 0.21 0.25

Dividends 7.2 5.9 0.0 13.7 7.7 10.0 11.6

Dividend policy: Payout Ratio 33.4% 49.4% 0.0% 65.0% 65.0% 65.0% 65.0%

DPS (in €) 0.11 0.09 0.00 0.21 0.12 0.15 0.18

% chng -26.7% -18.2% -100.0% na -43.5% 29.0% 16.1%

Capital return 5.2 2.0 13.1 7.2 16.5 16.5 16.5

Per share 0.08 0.03 0.20 0.11 0.25 0.25 0.25

Retained profit and reserves 6.5 2.8 13.3 13.8 -18.3 -8.9 -8.7

BVPS (in €) 2.34 2.33 2.77 2.89 3.11 2.83 2.69

% chng 2.7% -0.1% 18.5% 4.7% 7.3% -9.0% -4.8%

Market cap 188.9 284.4 522.9 304.0 302.7 302.7 302.7

End-year number of common shares 65,368,563 65,368,563 65,368,563 65,368,563 65,368,563 65,368,563 65,368,563

End-year/current stock price of common2.89 4.35 8.00 4.65 4.63 4.63 4.63

% chng of stock price (common) -41.0% 50.5% 83.9% -41.9% -0.4% 0.0% 0.0%

EV 68.8 167.5 357.5 149.0 130.6 150.0 159.9

General index 680 908 1,163 826 647 647 647

GI Performance -51.9% 33.4% 28.1% -28.9% -21.7% 0.0% 0.0%

Out/under performance 22.6% 12.8% 43.6% -18.2% 27.2% 0.0% 0.0%

26

Athens Exchange Group (EXCr.AT) | B/S & Cash Flow Statement

BALANCE SHEET (BS) ITEMS 2011 2012 2013 2014 2015e 2016e 2017e

Net fixed assets 26.1 25.2 26.5 27.1 27.5 27.9 28.2

Investments 1.5 0.7 0.1 0.1 0.1 0.1 0.1

Deferred taxation 2.2 1.9 1.8 2.9 2.9 2.9 2.9

Current Assets 130.7 131.5 184.7 275.9 287.4 292.4 304.0

TOTAL ASSETS 165.7 164.2 217.7 310.4 322.3 327.6 339.6

Net debt position -118.6 -116.2 -165.4 -154.9 -172.0 -152.6 -142.7

Shareholders' equity 152.7 152.5 180.8 189.2 203.0 184.7 175.8

Minority interest on share capital 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Long-term liabilities 2.8 2.4 2.4 3.1 3.1 3.1 3.1

Short-term liabilities 10.3 9.3 34.6 118.1 116.2 139.8 160.6

TOTAL EQUITY & LIABILITIES 165.7 164.2 217.7 310.4 322.3 327.6 339.6

RATIO ANALYSIS ON BS ITEMS

Profitability: return on total assets 12.8% 7.2% 16.9% 8.0% 3.8% 4.7% 5.3%

return on equity 14.3% 7.8% 19.4% 11.4% 6.1% 7.9% 9.9%

return on invested capital 11.9% 5.0% 23.6% 8.9% 5.2% 6.7% 7.5%

Free Cash Flow yield 4.9% 1.6% 12.4% -0.8% 4.5% 4.1% 4.9%

CASH FLOW (CF) STATEMENT 2011 2012 2013 2014 2015e 2016e 2017e

EBIT 22.1 9.9 59.1 24.0 15.4 20.1 23.6

Less: Tax paid 12.5 3.2 -3.6 25.5 5.1 6.6 7.6

Plus: Depreciation & amortization 1.8 1.8 1.4 1.8 1.8 1.8 1.8

Gross cash flow 11.4 8.6 64.1 0.2 12.1 15.3 17.8

Plus: Chng in accounts payable -1.1 -1.0 4.6 -1.0 -1.8 1.1 0.9

Plus: Chng in other current liabilities 0.0 -0.1 0.2 0.1 -0.1 0.1 0.1

Less: Chng in accounts receivable 0.4 3.2 4.0 -0.4 -5.5 2.0 1.6

Working capital chng 1.5 4.3 -0.8 0.5 -3.6 0.8 0.6

Operating Cash Flow 9.8 4.3 64.9 -0.2 15.7 14.5 17.1

Less: Purchases of fixed assets 0.7 0.6 0.5 2.2 2.2 2.2 2.2

% of sales (cap ex only) 1.5% 1.9% 0.6% 4.6% 5.7% 5.0% 4.5%

Free Cash Flow 9.2 4.5 65.0 -2.4 13.5 12.3 14.9

Less: Dividends paid 16.3 12.4 7.8 13.1 20.9 24.2 26.5

Plus: Interest income 5.9 5.6 4.5 3.7 1.6 1.8 1.8

Plus: disposal of assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Chng in Cash Position -5.7 -2.4 49.1 -10.5 15.3 5.1 9.2

Cash Position 118.6 116.2 165.4 154.9 172.0 174.9 184.9

27

2Q 2015 results: Autohellas reported a good set of results with Q2 revenues of EUR 44.74mn (+14.8%), EBITDA of EUR 21.7mn (+12.5%) and adjusted net profit of EUR 4.5mn vs EUR 3.4mn last year. Including the dividend from Aegean, the Q2 net stood at EUR 8.8mn (+1.6x). The EBITDA margin retreated by 1pp to 48.5% due to down trading in both leasing and RaC and lower margin in used car sales. RaC revenues grew 12.3% at EUR 19.2mn, leasing was also up by 4.2% at EUR 38.4mn, while sales of used cars stood at EUR 16.2mn (+31.7%). The group continued to expand abroad, by assuming the Hertz franchise in Ukraine. The revenues from non-Greek territories grew 14.5% in 1H at EUR 17.4mn and now represents 22.8% of total revenues.

Outlook: The capital controls may have induced some containment on the vehicle purchases but in any case this shapes to be a good year with strong RaC sales. We are not so confident on leasing as the recovery in the 1H may reverse in the 2H, courtesy of the dire straits of the economy and the impact of the capital controls and the expected recession

Valuation/estimates: We raised our reported 2015 estimates by 20% as we incorporated the Aegean capital return, which was not in our estimates previously. On an underlying basis, our estimates are down by c13%. Going forward, we cut our estimates by 9%. We think that the management will opt for a more conservative approach next year on the back of the increased political uncertainty, while the new subsidiaries that recently started or are about to start, could inflate opex. We also raised the WACC we use in our DCF model and we end up with a PT of EUR 10.0/share, marginally below the previous PT of EUR 10.2. On our estimates, the stock is trading at a fwd P/E of 6.9x, at par with the 10Y avg. fwd P/E. Given that there is no upside, we downgrade the stock to Neutral.

Upside risks: Increased penetration in the foreign markets, which will lead to lower dependence on the Greek market, recovery of the used car market, macro improvement in Greece.

Downside risks: weak tourism next year, leasing and used car market remains in doldrums, pricing erosion.

Company description: Autohellas is one of the largest Hertz franchisees in the world. It currently represents Hertz in the markets of Greece, Cyprus, Bulgaria, Romania, Serbia, Montenegro, Ukraine and recently Croatia.

Autohellas (AUTr.AT) | Strong Rent-a-Car the main driver

Company data








Rating Neutral


P/E (x) adj. 20.8 7.8 8.4 7.5

P/E on Target Price (x) 20.4 7.7 8.3 7.3

PEG (x) 0.1 -1.1 0.5 1.6

P/CE (x) 2.3 1.9 1.6 1.6

P/BV (x) 0.8 0.7 0.7 0.6

P/FCFE (x) 12.1 -7.8 32.5 8.0

EV/EBITDA (x) 3.5 3.3 3.1 2.9

EV/Sales (x) 1.6 1.7 1.6 1.5

Earnings yield 5.2% 12.7% 16.4% 13.4%

Net debt/EBITDA 1.7 1.8 1.7 1.5

ROA 1.7% 4.0% 4.9% 3.9%

RoE 4.3% 9.0% 10.8% 8.4%






28

Autohellas (AUTr.AT) | Income Statement

Autohellas - Profit & Loss estimates


Sales 151.4 161.1 174.9 177.6

Services 122.3 132.1 147.7 147.4

Used cars 29.1 29.1 27.3 30.3

EBITDA 68.7 81.1 89.6 90.6

Depreciation 49.4 51.1 55.9 60.6

EBIT 19.3 29.9 33.7 30.0

EBT 13.1 20.8 29.3 23.8

EBTAM

Tax 6.6 4.7 8.5 6.9

Net profit 6.5 16.1 20.8 16.9

Net profit (clean) 6.1 16.1 15.0 16.9

Dividend 0.0 9.8 7.5 8.4

Adj. number of shares 12.1 12.1 12.2 12.2

EPS 0.54 1.33 1.71 1.39

EPS (clean) 0.50 1.33 1.23 1.39

DPS 0.64 0.81 0.62 0.69

Source: Autohellas, Piraeus Securities Greek Equity Research

29

Autohellas (AUTr.AT) | Balance Sheet and Cash Flow

Autohellas - Consolidated Balance Sheet


Net fixed assets 233.7 263.1 280.1 280.1


Inventory 1.1 1.2 1.3 1.3


Other current assets 26.9 33.8 39.0 39.5


Assets available for sale 0.0 0.0 0.0 0.0

Total assets 393.0 404.0 420.8 430.1

Total equity 151.1 178.8 192.1 200.5


Total short term debt 144.2 24.7 26.2 26.6

Trade & other creditors 11.5 19.9 21.4 21.5



Total liabilities & equity 393.0 404.0 420.8 430.1

Source: Autohellas, Piraeus Securities Greek Equity Research

Autohellas Hertz - Cash Flow Statements


Cash earnings 51.72 49.18 77.74 77.53

Change in inventories 0.1 0.3 -0.1 0.0

Change in trade debtors 7.2 -2.6 -1.8 -0.3

Change in other long term assets 0.0 0.0 0.0 0.0

Change in other current assets 0.0 0.0 -1.3 -0.3

Change in trade creditors -0.6 11.8 1.6 0.1

Change in other current liabilities 0.0 0.0 1.7 0.3

Purchases of vehicles -71.3 -107.5 -103.2 -92.8

Proceeds from the sale of vehicles 29.6 29.3 27.3 30.3

change in WC (ex-fleet) 6.7 9.5 0.0 -0.1

Change in Working Capital -35.0 -68.7 -75.9 -62.7

OpCF before investments 16.70 -19.48 1.89 14.81

CAPEX (net) -6.3 3.4 2.0 1.0

Free Cash Flow to Equity 10.4 -16.1 3.9 15.8

Change in capital -7.7 0.0 0.0 0.0

Change in debt -45.4 -33.1 1.5 0.4

Dividend paid 0.0 0.0 -9.8 -7.5

Change in cash -42.8 -49.2 -4.4 8.7

Cash beginning 107.2 64.4 15.2 10.7

Cash from discontinued operations 0.0 0.0 0.0 0.0

Cash, end of year 64.4 15.1 10.7 19.5 Source: Autohellas, Piraeus Securities Greek Equity Research

30

1H 2015 results: Coca Cola HBC reported revenues of EUR 3.15bn (-1%) with comparable EBIT at EUR 219mn (+31.2%) on 3.8% volume growth. Comparable EPS stood at EUR 0.389, +43.5% YoY (net profit of EUR 141.7mn).

Outlook: The management raised the FX impact to EUR 155mn from EUR 140mn previously, while they expect the group to post volume growth this year. Restructuring initiatives should amount EUR 45mn this year. In the 2H the group plans pricing initiatives in markets with FX headwinds, H2’15 margin will be broadly in line with 2H 2014, while debt in September will be repaid by own funds, target net debt/EBITDA is seen at 1.5-2x. In 2016, revenues will grow at half the pace of volume growth. In all, the outlook for the group is somewhat improved, although remains fragile, mostly due to pricing challenges in key markets, the volatility in the Russian market and expectations that input costs cannot remain at the current very low levels in 2016. Moreover, although we do expect CCHBC to return to volume growth, this will be anemic at best.

Valuation/estimates: We have raised our estimates by 8% in 2015 and by 5.1% in 2016 to account for the trends in the various markets and the higher than expected margins, as well as the feedback of the management during the conference call. We set a new target price of EUR 17.0/share from EUR 16.2/share previously and we retain our Neutral rating on the stock.

Upside risks: macro improvement in key markets like Russia and Italy, sustained low levels of input costs, demand recovers faster than expected, higher than expected pricing, FX improvement (mainly RUB), capex lower than anticipated.

Downside risks: spikes in commodity prices, further slowdown in key markets, further weakening of key currencies.

Company description: CCHBC is an anchor bottler of the Coke system, operating in 28 countries, selling 2bn cases annually through 136 brands and employing 36,362 employees. The company has its primary listing in LSE (FTSE100 constituent) and a second listing in the ATHEX.

Coca Cola HBC (EEEr.AT) | Challenges in various markets subside

Company data

Market cap. (EUR mn) 6,702.01



Free float (%) 54%



Total Return (%) -4.40%

Rating Neutral


P/E (x) 22.80 24.16 21.31 20.63

P/E on Target Price (x) 20.27 21.48 18.94 18.34

PEG (x) -5.39 1.70 7.31 2.10

P/EBITDA (x) 8.84 9.03 8.41 7.80

P/BV (x) 2.26 2.40 2.30 2.17

EV/EBITDA (x) 10.91 11.01 10.10 9.22

EV/EBIT (x) 22.06 22.62 18.84 16.36

Earnings yield 3.31% 4.40% 4.18% 4.85%

ROE 7.47% 10.58% 9.62% 10.52%

ROIC 6.02% 6.94% 7.49% 8.43%

Interest coverage (x) 4.08 4.95 6.43 7.50

Net debt/EBITDA 2.07 1.98 1.69 1.41

Net debt/Equity Source: Piraeus Securities, Greek Equity Research

0.53 0.53 0.46 0.39





31

Coca Cola HBC (EEEr.AT/CCH.L) | Income Statement

CCH - Profit & Loss estimates


Volumes 2,060.5 2,002.9 2,037.6 2,078.1

Established Markets 650.6 615.2 609.2 620.1

Developing Markets 381.0 358.3 369.8 380.6

Emerging Markets 1,028.9 1,029.4 1,058.7 1,077.3

Sales 6,874.0 6,510.2 6,401.0 6,475.6

Established Markets 2,539.6 2,448.9 2,449.2 2,520.6

Developing Markets 1,105.6 1,054.1 1,082.4 1,108.5

Emerging Markets 3,228.8 3,007.2 2,869.4 2,846.6

EBITDA 756.1 742.1 797.4 859.0

EBITDA margin 11.0% 11.4% 12.5% 13.3%

EBITDA (comparable)

EBITDA (clean) 822.6 784.7 842.4 859.0

EBITDA margin 12.0% 12.1% 13.2% 13.3%

EBIT 373.7 361.1 427.4 484.0

EBIT margin 5.4% 5.5% 6.7% 7.5%

EBIT (clean) 453.9 424.7 472.4 484.0

EBIT margin 6.6% 6.5% 7.4% 7.5%

EBT 294.1 352.0 368.9 427.5

EBT (clean) 364.1 402.0 413.9 427.5

Minorities (pre-tax)

EBTAM

Tax 72.9 57.8 88.5 102.6

tax rate 24.79% 16.42% 24.00% 24.00%

EATBM (continuing operations) 221.2 294.2 280.4 324.9

EATBM (discontinued operations) 47.7% 49.0% 46.0%

EATBM 221.2 294.2 280.4 324.9

Minorities (after-tax) 0.0 -0.6 0.0 0.0

Net profit 221.2 294.8 280.4 324.9

Net profit (clean) 293.1 277.4 314.6 324.9

Dividend 129.8 132.4 154.3 149.4


EPS 0.60 0.80 0.76 0.88

EPS (clean) 0.80 0.75 0.86 0.88

DPS 0.35 0.36 0.42 0.41

32

Coca Cola HBC (EEEr.AT/CCH.L) | Balance Sheet and Cash Flow

CCH - Consolidated Balance Sheet


Net fixed assets 4,823.2 4,508.9 4,479.4 4,478.9

Total non current assets 5,123.2 4,816.9 4,803.4 4,817.9

Inventory 429.0 414.2 399.7 403.0


Other current assets 985.1 1,011.6 1,012.3 1,041.0

Total current assets 2,151.6 2,062.1 1,862.4 1,911.4

Total assets 7,274.8 6,879.0 6,665.8 6,729.3

Total equity 2,967.3 2,791.1 2,917.2 3,092.6

Total long term liabilities 2,241.4 1,892.0 1,892.0 1,892.0


Total liabilities 4,307.5 4,087.9 3,748.6 3,636.7

Total liabilities & equity 7,274.8 6,879.0 6,665.8 6,729.3

Sources: Company, Piraeus Securities

CCH - Cash Flow Statements


Cash earnings 701.80 657.49 686.98 762.22

Change in Working Capital 84.9 13.2 -19.5 -26.9

% of change in sales -49.7% -3.6% 17.8% -36.1%

Cash flow before investments 786.70 670.69 667.52 735.29

Cash flow from investments -330.8 -337.1 -340.5 -374.5

CAPEX -355.3 -360.1 -367.3 -372.8

Free Cash Flow to Equity 455.9 333.6 327.1 360.8

Change in capital 0.0 0.0 0.0 0.0

Change in debt 108.1 -209.3 -306.0 -117.0

Dividend paid -128.2 -129.4 -132.4 -154.3

Other -134.5 -101.3 -74.5 -72.5

Minorities 0.0 0.0 0.0 0.0

Exchange difference -2.9 -10.4 0.0 0.0

Change in cash 298.4 -116.8 -185.8 17.0

Cash beginning 439.1 737.5 636.3 450.5


Cash, end of year 737.5 620.7 450.5 467.4

Sources: Company, Piraeus Securities

33

Faster roll-out of the franchise business in China & higher financials trim our EBITDA and bottom line estimates Q2 15 results review Folli Follie Group announced a rather mixed set of 2Q15 results that stood above our estimates in terms of top & bottom line and below in terms of EBITDA with significant EBITDA margin erosion of 4pps. Sales came in at EUR 325.6mn increased by 29.7%, beating our estimate by 11.8%. We point out top line growth across all business units. For 1H15 sales stood at EUR 594.3mn up by 24.1%; excl. FX management commented that 1H sales increased by 8%. EBITDA stood at EUR 61.8mn increased by 7.1%, missing our estimate by 5.6%. The miss to our estimate is attributed to a significant erosion of the EBITDA margin in the JWA division that came in at 23.7% vs. our estimate of 27.6% and to EBITDA losses in the Retail/Wholesale division due to higher discount market environment and one-off items that impacted division’s profitability. Net Profit stood at EUR 38.7mn beating our estimate by 1.9%. The Group recorded a Net Debt position of EUR 78mn vs. EUR 54mn at the end of 2014 and EUR 61mn in 1Q15 mainly due to increased Capex needs that stood at EUR 44.8mn vs. EUR 13.8mn the year ago period. Management guided for increased Capex that will stand at EUR 60mn for the FY period that in our view will take a toll on Group’s weak FCF generation; management also commented that as of 2016 Capex will stand on average at EUR 50mn/year that will be invested on infrastructure, IT systems R&D. On the FCF front the Group recorded OFCF of EUR 15.3mn vs. cash outflow of EUR 15.4mn the year ago period since increased W/C requirement were offset by the positive effect of FX differences amounting to EUR 75.8mn. Management guided for a double digit growth in the top & bottom line, while no guidance was provided in terms of operating profitability and FCF generation.

Valuation We reduce our EBITDA and bottom line estimates to incorporate reduced margins from the faster roll-out of the franchise business in China, currently accounting for 33% of JWA division’s sales, as well as higher financials and a slightly increased tax rate. We value Folli Follie Group by employing a combination of SOTP valuation on targeted 2016 EV/EBITDA multiples for each business segment separately (50% weight) along with the use of Discounted Cash flow model (50% weight). Our valuation exercise generates a target price of EUR 28.7/share with an implied P/E ratio of 10.8x the Group’s projected earnings for FY 2016 or broadly in line Group’s historical average of 10.5x. With shares changing hands at current levels on a 2016E P/E of 7.5x and an EV/EBITDA of 5.4x, we maintain an Outperform rating. Our target price implies an upside potential of 44.5% from current levels.

Upside risks Gaining significant market share through increased Folli Follie and Links of London brands awareness in Asia; Further consolidation of the Greek market in favour of department stores and malls; Expansion of operations in new regions- US penetration with Folli Follie and Links brands; Opportunities within the Dufry network; Distribution agreements with more brands in Greece and SEE; Expansion of the Collective retail concept in Greece, Bulgaria and Romania

Downside risks Weak FCF generation and high WC needs; Dependency on consumer spending levels; Potential delays in the new POS/ Department stores rollout; Margin pressure from the increasing wholesale contribution

Company description Folli Follie is a diversified retail Group that operates in four different segments; Jewellery, Watches & Accessories (70.6% of total sales in 2014), Department Stores (15.4% of total sales in 2014) and Retail/Wholesale (14% of total sales in 2014). At the end of 1H15, it operated 987 POS in 28 countries with a focus on Greater China. Other important markets for the Group are the United Kingdom, North America, Japan, Greece, Bulgaria and Romania. At the end of 2Q15, Folli Follie Group operated in total 677 POS of FF brand and 123 POS for Links of London.

Folli Follie Group (HDFr.AT)|Focus on Chinese operations

Key financials FF Group 2010 2011 2012 2013 2014 2015E 2016E 2017E

Turnover (€ m) 989.6 1,021.4 1,110.0 934.2 998.1 1,169.8 1,248.1 1,330.2

EBITDA (€ m) 193.3 198.7 212.8 194.7 223.0 250.2 279.5 297.4

Net profit (€m) 83.3 89.5 93.6 344.6 141.2 149.7 177.7 190.8

Reported EPS (€) 1.37 1.34 1.40 5.15 2.11 2.24 2.65 2.85

Adj. EPS 1.38 1.36 1.42 5.15 2.11 2.24 2.65 2.85

Rep. P/E (x) 8.0 5.8 9.2 4.5 12.5 8.9 7.5 7.0

Adj. P/E (x) 7.9 5.7 9.1 4.5 12.5 8.9 7.5 7.0

DPS/Capital Return 0.00 0.00 0.00 0.00 0.75 0.33 0.19 0.20

EV/EBITDA (x) 6.9 5.7 4.3 8.0 8.3 6.0 5.3 4.9

FCF yield (%) -1.7% -7.5% -1.0% 18.8% 0.3% -4.0% 4.2% 4.3%

Net Debt/EBITDA 3.4 3.0 2.9 -0.1 0.2 0.6 0.5 0.3

Company data








Rating Outperform





34

Folli Follie Group (HDFr.AT) | Income Statement

PROFIT & LOSS 2011 2012 2013 2014 2015 e 2016 e 2017 e

Turnover 1,021 1,110 934 998 1,170 1,248 1,330

% chng 3.2% 8.7% -15.8% 6.8% 17.2% 6.7% 6.6%

COGS & SG&A 874 957 774 807 960 1,010 1,075

EBITDA 199 213 195 223 250 279 297

% chng 2.8% 7.1% -8.5% 14.5% 12.2% 11.7% 6.4%

EBITDA margin 19.5% 19.2% 20.8% 22.3% 21.4% 22.4% 22.4%

Net depreciation 25 27 21 21 30 31 31

EBIT 174 186 173 202 220 249 266

% chng 1.3% 6.8% -6.7% 16.7% 8.9% 13.0% 6.9%


Net interest expenses 52 55 -224 9 -20 -12 -12

Pre-tax profit 122 131 398 193 200 237 254

% chng -2.2% 7.3% 203.8% -51.5% 3.9% 18.3% 7.3%

Minority stake in profits 2 2 3 4 4 4 4

Income tax 31 35 50 47 47 56 60


Profit after tax 90 94 345 141 150 178 191

% chng 7.5% 4.6% 268.1% -59.0% 6.0% 18.7% 7.4%


EPS after tax (in Euro) / Reported 1.34 1.40 5.15 2.11 2.24 2.65 2.85

EPS chng -2.7% 4.6% 268.1% -59.0% 6.0% 18.7% 7.4%

Dividends 0 0 0 0 13 14 14


DPS (in Euro) 0.00 0.00 0.00 0.00 0.19 0.20 0.22

Market cap 517 865 1,567 1,767 1,332 1,332 1,332

Shares Outstanding 66,948,210 66,948,210 66,948,210 66,948,210 66,948,210 66,948,210 66,948,210

End-year/current stock price 7.72 12.92 23.40 26.40 19.89 19.89 19.89

% chng of common stock price -29.6% 67.4% 81.1% 12.8% -24.7% 0.0% 0.0%

EV 1,132 1,500 1,561 1,848 1,513 1,493 1,471

EV/Turnover 1.11 1.35 1.67 1.85 1.29 1.20 1.11

General index 680.42 907.90 1,162.68 826.18 646.62 646.62 646.62

GI Performance -51.9% 33.4% 28.1% -28.9% -21.7% 0.0% 0.0%

Out/under performance 46.3% 25.4% 41.4% 58.8% -3.7% 0.0% 0.0%

35

Folli Follie Group (HDFr.AT) | B/S & Cash Flow Statement

BALANCE SHEET 2011 2012 2013 2014 2015 e 2016 e 2017 e

Net fixed assets 691 697 390 399 429 449 468

Current Assets 1,010 1,096 1,025 1,364 1,560 1,623 1,709

Accounts receivable 536 592 518 700 820 875 933

Inventories 339 378 255 367 472 510 569

Cash 136 126 252 297 267 237 207

TOTAL ASSETS 1,724 1,816 1,572 1,970 2,206 2,289 2,394

Net debt position 596 615 -29 54 151 127 102

Shareholders' equity 721 805 1,160 1,334 1,454 1,603 1,768

Minority interest on share capital 18 20 23 27 30 34 37

Long-term liabilities 396 506 64 348 345 345 345

Bank debt 315 429 36 304 304 304 304

Short-term liabilities 589 485 324 260 378 307 244

Accounts payable & other ST liabilities 154 152 120 182 229 213 205

Liabilities for taxes 17 20 17 32 35 34 34

Liabilities to banks 417 312 187 47 114 60 5

TOTAL EQUITY & LIABILITIES 1,724 1,816 1,572 1,970 2,206 2,289 2,394

RATIO ANALYSIS 2011 2012 2013 2014 2015 e 2016 e 2017 e

Liquidity: Current ratio 1.7 2.3 3.2 5.2 4.1 5.3 7.0

Acid Test 1.1 1.5 2.4 3.8 2.9 3.6 4.7

Activity: Avg receivables to turnover days 194.4 202.7 185.0 264.4 276.2 264.2 264.1

Avg trade creditors to purchases days 118.4 110.5 90.7 144.6 156.1 128.7 118.3

Financial Structure: Liabilities to equity 1.3 1.1 0.3 0.4 0.5 0.4 0.3

Bank debt to equity 1.0 0.9 0.2 0.3 0.3 0.2 0.2

Profitability: Return on equity 14.3% 12.3% 35.1% 11.3% 10.7% 11.6% 11.3%

Return on invested capital 9.0% 8.8% 11.0% 9.1% 9.0% 9.7% 9.8%

CASH FLOW 2011 2012 2013 2014 2015 e 2016 e 2017 e

Profit after tax before minorities 88 37 366 145 153 181 194

Plus: Depreciation & amortization 25 21 20 21 30 31 31

Plus: Chng in provisions / Other Non-Cash -8 9 27 43 0 0 0

Plus: Net Interest Expenses 2 2 -1 2 1 1 1

Gross cash flow 118 75 -55 200 185 213 227

Plus: Chng in accounts payable -28 77 -1 42 47 -16 -8

Less: Chng in accounts

receivable+inventories 90 132 -68 186 226 93 116

Working capital chng 118 55 -67 144 178 107 120

Operating cash flow 0 24 6 56 6 106 107

Less: Purchases of fixed assets 23 20 15 36 60 50 50

Less: Investments (net) 16 13 21 22 0 0 0

Free cash flow -39 -9 295 5 -54 56 57

36

Reduce estimates and target price due to adverse economic environment in Greece Q2 15 results Fourlis announced 2Q15 results that stood in line with our estimates for the core business segments, while it recorded higher than expected losses from the non-core business segments. 2Q15 sales came in at EUR 94.5mn, flat y-o-y, beating our estimate by 0.8% due to slightly better performance across all segments. EBITDA stood at EUR 5.9mn, increased by 6.3%, missing our estimate by 2.3% due to higher than expected losses from the non-core business segments. 2Q15 Net Losses stood at EUR 1.3mn vs. our estimate for losses of EUR 0.3mn due to losses related to the commercial center in Bulgaria. Net Debt for the period stood at EUR 144.5mn vs. EUR 135mn at the end of 2014. Increased Net Debt is attributed to operating losses of EUR 7.5mn, while Capex spending stood at EUR 5.4mn. At the end of 1H15 the Group recorded Free Cash outflow of EUR 9.65mn. In terms of the various business segments performance, IKEA recorded 2Q15 sales of EUR 61.8mn up 4.3% benefited by market share gains, while EBITDA stood at EUR 3.6mn up by 11%, while the respective margin increased by 35bps. Intersport recorded sales of EUR 31mn up by 5.9% benefited by strong growth momentum in its foreign operations. EBITDA stood at EUR 3.2mn, flat y-o-y, with the respective margin down by 65bps, due to increased weight of the foreign operations that carry lower margins. On 3Q performance management commented that July’s sales were reduced by 18% but at the end of August 60% of the losses have been recovered.

Valuation We reduce our EBITDA estimates by c. 12% to incorporate the deteriorating economic environment and the reduced liquidity in the Greek market after the imposition of the capital controls; our bottom line is negatively affected due to the application of an increased corporate tax rate in Greece. We remind that c. 65% of Group’s sales is derived from Greece. We decrease our target to EUR 4.30/share from EUR 5.50 before with an implied upside potential of 80.6% from current levels. As a result we maintain our Outperform rating. At current levels, Fourlis trades on a 2016E EV/EBITDA of 6.7x or at 30% discount vs. Group’s 7-years historical average of 9.6x (during the crisis) and at a 2017E EV/EBITDA multiple of 5.9x, implying an 38.3% discount vs. Group’s 7-years historical average.

Upside risks Signs of improved performance for IKEA (rising sales and improving margins), Intersport/Athete Foot, as well as the introduction of new IKEA outlets (none included in our new set of forecasts) would justify earnings upgrades and higher valuation for the group, in our view. New business ventures and/or licensing agreements could be a major catalyst for the stock going forward.

Downside risks Losing the IKEA license or keeping the license on worse terms (regarding procurement of merchandise and royalties on sales); a deterioration of same store IKEA sales due to the austerity measures in Greece and recession; lower operating margins for IKEA; tax charges on previous fiscal years; additional windfall taxes; additional VAT hikes; working capital overshooting; a prolonged (let alone harsher) recession in Greece and/or Cyprus; additional austerity measures that put pressure on disposable income and spending

Company description Fourlis is a leading retailer in the home furniture sector through the IKEA brand name and is the exclusive marketer of IKEA-branded products in Greece, Cyprus and Bulgaria through the current seven stores (five in Greece, one in Cyprus and one in Bulgaria) and the six pick-up points. The Company also operates 106 outlets for athletic products under the Intersport brand name in Greece, Cyprus, Romania Turkey and Bulgaria. In addition, the Group has recently acquired franchise rights for the operation of Athlete’s Foot retail concept in Greece and Turkey with four (4) pilot openings during 2015.

Fourlis (FRL.AT) | Greek macros weigh

Fundamentals (€ m) 2013 2014 2015F 2016F 2017F

Sales 403.27 413.37 409.26 420.97 439.66

EBITDA 25.42 25.91 30.02 33.92 37.20

Net profit -8.29 -11.48 -0.89 4.05 7.72

EPS (€) -0.16 -0.23 -0.02 0.08 0.15

DPS (€) 0.00 0.00 0.00 0.00 0.00

Net debt 128.86 135.04 127.45 124.82 115.82

Valuation ratios 2013 2014 2015F 2016F 2017F

P/E (x) na na na 29.96 15.72

P/BV (x) 1.23 0.74 1.00 1.00 1.00

EV/Sales (x) 0.82 0.68 0.57 0.54 0.50

EV/EBITDA (x) 12.97 10.89 7.72 6.75 5.91

Company data








Rating Outperform





37

Fourlis (FRLr.AT) | Income Statement

IKEA 2014e 2015 2016 2017 3-Year CAGR

Sales 267.74 270.42 279.89 289.68 2.7%

% chng 0.5% 1.0% 3.5% 3.5%

EBITDA 19.67 20.59 22.00 23.78 6.5%

% chng -7.7% 4.7% 6.8% 8.1%

margin 7.3% 7.6% 7.9% 8.2%

EBIT 9.95 10.88 12.28 14.06 12.2%

% chng -14.7% 9.3% 12.9% 14.5%

margin 3.7% 4.0% 4.4% 4.9%

Source: Company, Piraeus Securities

Intersport 2014 2015e 2016e 2017e 3-Year CAGR

Sales 122.35 132.59 141.08 149.98 7.0%

% chng 10.2% 8.4% 6.4% 6.3%

EBITDA 10.83 11.21 11.92 13.43 7.4%

% chng 43.2% 3.5% 6.4% 12.6%

margin 8.9% 8.5% 8.5% 9.0%

EBIT 7.23 7.43 8.08 9.46 9.4%

% chng 120.9% 2.7% 8.8% 17.1%

margin 5.9% 5.6% 5.7% 6.3%

Source: Company, Piraeus Securities

PROFIT & LOSS 2011 2012 2013 2014 2015 e 2016 e 2017 e

Turnover 438.2 420.3 403.3 413.4 409.3 421.0 439.7

% chng -31.3% -4.1% -4.0% 2.5% -1.0% 2.9% 4.4%

COGS & SG&A 410.3 400.2 378.1 387.7 379.2 387.0 402.5

EBITDA 28.0 20.1 25.4 25.9 30.0 33.9 37.2

% chng -40.9% -28.2% 26.6% 1.9% 15.9% 13.0% 9.7%

EBITDA margin 6.4% 4.8% 6.3% 6.3% 7.3% 8.1% 8.5%

Net depreciation 13.0 17.3 14.6 20.0 13.8 13.6 13.7

EBIT 15.0 2.8 10.6 5.7 16.2 20.4 23.5

% chng -58.5% -81.4% 279.8% -46.4% 185.6% 25.7% 15.5%


Net interest expenses -10.6 -14.1 -15.6 -13.1 -14.1 -13.6 -12.7

Pre-tax profit 4.1 -11.7 -5.8 -9.1 -0.6 5.3 10.2

% chng -85.6% -387.1% -50.1% 56.4% -93.9% -1064.8% 90.6%

Minority stake in profits -0.6 -0.2 0.0 0.0 0.0 0.0 0.0

Income tax 2.4 -0.3 2.5 2.3 0.3 1.3 2.5

% effective tax rate 57.9% 2.2% -42.0% -25.6% -61.4% 24.1% 24.1%

Profit after tax 2.3 -11.3 -8.3 -11.5 -0.9 4.1 7.7

% chng -84.8% -590.2% -26.3% 38.4% -92.2% -553.7% 90.6%

Net profit margin 0.5% -2.7% -2.1% -2.8% -0.2% 1.0% 1.8%

EPS after tax (in Euro) 0.05 -0.22 -0.16 -0.23 -0.02 0.08 0.15

EPS chng -84.6% -590.2% -26.4% 37.5% -92.2% -553.7% 90.6%

Adj EPS 0.14 0.13- 0.16- 0.23- 0.02- 0.08 0.15

% chng -64% -191% 26% 38% -92% -554% 91%

Dividends 0.0 0.0 0.0 0.0 0.0 0.0 0.0


DPS (in Euro) 0.00 0.00 0.00 0.00 0.00 0.00 0.00

% chng na na na na na na na

Market cap 73 100 209 164 121 121 121

Adj number of shares 50,625,233 50,625,233 50,672,902 50,992,322 50,992,322 50,992,322 50,992,322

Basic number of shares 50,992,322 50,992,322 50,992,322 50,992,322 50,992,322 50,992,322 50,992,322

EV 207 231 330 282 232 229 220

End-year/current stock price common shares 1.43 1.97 4.09 3.22 2.38 2.38 2.38

% chng of common stock price -74.5% 37.8% 107.6% -21.3% -26.1% 0.0% 0.0%

Out/under performance -47.0% 3.2% 62.1% 10.8% -5.6% n.a n.a

38

Fourlis (FRLr.AT) | B/S & Cash Flow Statement

BALANCE SHEET 2011 2012 2013 2014 2015 e 2016 e 2017 e

Net fixed assets 297 298 300 292 277 276 272

Current Assets 194 164 135 155 157 161 169


Inventories 89 77 75 86 87 90 95

Cash 56 42 28 35 35 35 35

TOTAL ASSETS 491 462 435 447 434 438 441

Net debt position 143 138 129 135 127 125 116

Shareholders' equity 188 177 169 158 158 162 169



Bank debt 89 124 111 105 105 105 105

Other 10 10 11 10 11 11 12





TOTAL EQUITY & LIABILITIES 491 462 435 447 434 438 441

RATIO ANALYSIS 2011 2012 2013 2014 2015 e 2016 e 2017 e

Avg receivables to turnover days 67 34 31 27 29 29 29

Avg trade creditors to purchases days 152 138 147 160 171 166 162

Avg inventories to turnover days 74 67 68 76 77 78 79

Financial Structure: Bank debt to equity 1.06 1.02 0.93 1.07 1.03 0.99 0.89

Fixed to total assets 60.5% 64.6% 69.0% 65.3% 63.9% 63.1% 61.7%

Profitability: Return on total assets 0.5% -2.4% -1.8% -2.6% -0.2% 0.9% 1.8%

Return on equity 1.1% -6.2% -4.8% -7.0% -0.6% 2.5% 4.7%

Return on capital employed 3.8% 1.0% 2.6% 1.1% 5.4% 6.5% 7.1%

CASH FLOW 2011 2012 2013 2014 2015 e 2016 e 2017 e

Profit after tax before minorities 1.7 -11.4 -8.3 -11.5 -0.9 4.1 7.7


Plus: Chng in provisions/other 14.0 -7.7 -16.9 -10.0 0.0 0.0 0.0

Plus: Changes in taxes payable -2.0 0.0 1.1 -0.5 -2.3 0.9 1.2

Gross cash flow 37.4 13.3 6.1 11.1 24.8 32.2 35.3

Plus: Chng in accounts payable -5.4 0.8 1.2 12.0 -3.2 0.9 2.5

Less: Chng in accounts receivable 12.7 5.6 -7.7 2.5 0.3 1.6 2.2

Less: Chng in inventories 3.2 -11.8 -1.5 10.7 0.9 3.4 4.9

Working capital chng 21.3 -7.0 -10.4 1.2 4.4 4.1 4.6

Operating cash flow 50.4 22.2 22.3 9.3 20.4 28.1 30.7


Less: Chng in investments 4.6 8.0 4.6 1.0 0.0 0.0 0.0

Free cash flow -27.3 4.6 6.1 -5.8 8.4 18.1 23.7

39

2Q 2015 results: Frigoglass reported revenues from continuing operations (i.e. from the cool business) of EUR 111.2mn (+1.2%), EBITDA of EUR 12.0mn (-8.8%) and adj. net loss of EUR 1.2mn from losses of EUR 0.35mn last year. The results were spot on our estimates; we were expecting revenues of EUR 111.1mn, EBITDA of EUR 12.1mn and net loss of EUR 1.0mn.

Outlook: The outlook in cool remains rather unfavourable. However we are optimistic that in 2016, the group will return to profitability after three years of restructurings and streamlining of its asset base. The sale of the glass (proceeds at USD 225mn, to be concluded by end-2015)will allow a fast deleveraging of the balance sheet, while it will also take pressure off the cash flow (glass is a capital intensive business) and the P&L, allowing for much better normalized returns. Hence we think that when the cool market recovers, which is expected to be in full force in 2017, the benefit of running a single cool business will be even more pronounced.

Valuation/estimates: We expect Frigoglass to report a net loss of EUR 12mn in 2015, turning to a small profit in 2016. However we think that there is upside risk, if we see the recent trend of increased sales to the Coke system stabilizing or even increasing. We are buyers on the stock with a price target of EUR 3.0/share.

Upside risks: increased consume confidence in Europe, which leads to increased capex by bottlers and brewers, , further drop in input costs, stabilization or strengthening of EM currencies like RUB, hefty payout due to the sale of glass sometime in the next quarters.

Downside risks: further macro deterioration in Europe and in other key markets, increase in input costs.

Company description: Frigoglass is the global leader in Ice Cold Merchandisers. Its main client is the Coke system and a number of other blue chip players like brewers. The group has operations in North America, Europe, Africa, Asia and Australia. Recently the group launched the Frigoglass Service Operation, which operates across 4 continents in 13 locations delivering value added service solutions.

Frigoglass (FRIr.AT) | Pure restructuring play

Company data




Free float (%) 56%


Dividend Yield (%) 0%


Rating Outperform

Ratio analysis 2013 2014f 2015f 2016f

P/E (x) adj. -7.3 -4.3 -8.3 46.8

P/E on Target Price (x) -11.0 -6.4 -12.6 70.8

PEG (x) 0.0 0.1 0.1 0.1

P/CE (x) 31.4 25.7 35.2 5.6

P/BV (x) 1.3 2.6 1.1 1.0

P/FCFE (x) -12.5 4.3 0.6 44.6

EV/EBITDA (x) 5.2 13.0 6.8 5.7

EV/Sales (x) 0.6 1.1 0.6 0.5

Earnings yield -30.7% -13.7% -12.0% 2.1%

FCFE yield -8.0% 23.2% 181.1% 2.2%

ROA -5.3% -2.3% -2.1% 0.5%

RoE -38.9% -36.0% -12.6% 2.2%





40

Frigoglass (FRIr.AT) | Income Statement

Frigoglass - Profit & Loss estimates

EUR mn FY 13 FY 14* FY 15f FY 16f

Sales 522.5 339.6 340.5 366.5

Coolers 398.4 339.6 340.5 366.5

Glass 124.1 0.0 0.0 0.0

EBITDA 63.9 29.3 29.2 34.7

EBITDA (underlying) 63.9 29.3 29.2 34.7

EBITDA (clean) 63.9 29.3 29.2 34.7

Coolers 34.9 29.3 29.2 34.7

Nigeria 29.0 0.0 0.0 0.0

Plastics 0.0 0.0 0.0 0.0

EBITDA margin 12.2% 8.6% 8.6% 9.5%

Depreciation 33.9 17.6 14.9 15.9

EBIT 30.0 11.6 14.3 18.8

Net financial expense 46.69 10.04 24.79 15.99

Net capital gains 0.0 0.0 0.0 0.0

Net extraordinary gains -22.8 0.0 0.0 0.0

EBT -16.7 1.6 -10.4 2.9

Minorities (pre-tax)

EBTAM

Tax 11.5 10.9 1.6 0.7

EATBM (continuing operations) -28.2 -9.4 -12.0 2.1

EATBM (discontinued operations) 0.0 0.0 0.0 0.0

EATBM -28.2 -9.4 -12.0 2.1

Minorities (after-tax) 2.6 4.4 0.0 0.0

Net profit -30.8 -13.7 -12.0 2.1

Net profit (clean) -13.8 -23.5 -12.0 2.1

Dividend 0.0 0.0 0.0 2.1


EPS -0.61 -0.27 -0.24 0.04

EPS (clean) -0.27 -0.47 -0.24 0.04

DPS 0.00 0.00 0.00 0.04

FY14 results are proforma, excluding glass

41

Frigoglass (FRIr.AT) | Balance Sheet and Cash Flow

Frigoglass - Consolidated Balance Sheet

EUR mn FY 13 Proforma

FY 14 ProForma

FY 15f ProForma

FY 16f

Net fixed assets 245.0 115.7 112.8 98.8


Inventory 118.1 72.9 75.9 80.3




Total assets 581.8 591.6 562.2 394.7

Total equity 112.5 77.0 133.8 134.8





Total liabilities & equity 581.8 591.6 562.2 394.7 Source: Company, Piraeus Securities Greek Equity Research

Frigoglass - Cash Flow Statements


Cash earnings 27.96 47.77 6.56 8.95

Change in Working Capital -12.0 1.1 19.0 -4.9

CAPEX (net) -24.0 -25.6 -12.0 -1.8

CAPEX -24.9 -28.7 -12.0 -13.0

Free Cash Flow to Equity -8.0 23.2 181.4 2.2

Change in capital 0.2 -35.5 0.0 0.0

Change in debt -9.9 8.8 -30.6 -167.4

Dividend paid -0.4 -0.3 0.0 0.0

Other 8.8 -20.2 0.0 0.0

Minorities 0.0 0.0 0.0 0.0

Exchange difference -8.2 4.5 0.0 0.0

Change in cash -17.4 -19.5 150.8 -165.2

Cash beginning 77.0 59.5 41.0 191.8


Cash, end of year 59.5 40.0 191.8 26.7 Source: Company, Piraeus Securities Greek Equity Research

42

Q2 ’15 results: OTE reported net revenues of Eur953.5 mn (+0.3% yoy), the best performance since 2008, thanks to positive trends in the domestic fixed-line and increased revenues at OTEGlobe; recurring EBITDA of Eur318.4 mn (-8.0% yoy) impacted by the absence of one-offs and increased distribution costs in Romania; and recurring net profit of Eur47.2 mn (-34.5% yoy). The domestic fixed-line revenues were up 0.6% yoy thanks to a) the slowdown in line losses which led to the stabilization of retail revenues and b) increased take-up of broadband and TV services which led to a rise in wholesale revenues by 2.6% yoy. EBITDA margin rose to 38.5% from 37.0% in Q2 ’14. The Greek mobile reported service revenue decline of 4.6% yoy and EBITDA margin contraction of 90 bps yoy to 36.3%, on weak economic environment in Greece. Telecom Romania reported EBITDA decline of 42% yoy as Q2 ‘14 included Eur8.5 mn in revenues from disposal of real estate and due to increased expansion-related costs. Romania mobile reported a decline in service revenues of 1.8% yoy and EBITDA margin of 21.8%, down 370 bps yoy on high distribution costs. OTE reported FCF of Eur106.1 mn (+6.5% yoy). At end-June 2015, OTE had net debt of Eur1.05 bn or c0.8x EBITDA and cash balance of Eur1.08 bn, the bulk of which is held overseas as OTE will use Eur629 mn to repay the bond that matures on May 2016.

Outlook: The positive fixed-line trends should continue being helped by the slow-down in line losses, improving competitive environment and growing broadband and pay-TV subscriber numbers. EBITDA should be supported by the top line improvement and cost cutting. At end-June, OTE completed a VES for more than 600 people expected to yield Eur30 mn of annual savings. We would expect the decline in mobile revenues to continue due to lower consumer spending. The bank holiday and the capital controls initially led to a deterioration in the working capital, which has started normalizing. At Q2 ‘15 conference call, management said that recurring FCF should end up close to the initial target of Eur0.5 bn, partly subject to clearing of accruals by state entities (the Greek state accounts for 5%-10% of fixed-line revenues). Management also reiterated capex target of Eur0.5 bn, with room to postpone or scale down projects.

Valuation: Our DCF-based SoTPs model provides a TP of Eur9.0 as of end-2015, which values the group at 3.9x 2015E EBITDA . The model values the domestic fixed-line business at 4.5x 2015E EBITDA; the Greek mobile at 3.9x 2015E EBITDA; Telecom Romania at 4.6x 2015E EBITDA (total EV of Eur622 mn); the Romanian mobile at 5.5x 2015E EBITDA and the Albanian mobile at 4.7x 215E EBITDA. We have used a rf of 8.0% for the Greek operations. In terms of valuation sensitivity to the rf, for every 1% change in the rf, TP changes by c8.0%.

Upside risks: Key drivers of the domestic telecoms market are rising broadband and pay-TV penetration, regulatory stabilization and consolidation activity. The aforementioned benefits should be accentuated by the recovery of the economy.

Downside risks: OTE derives 75% of its revenues and 80% of its EBITDA in Greece. Weak consumer, govt and corporate spending should affect revenues, EBITDA and cash flows. OTE is also subject to regulatory risks. In case of currency mismatch, the company’s profitability and ability to meet the 2018 and 2020 maturities of Eur700 mn each could be affected.

Company description OTE has fixed-line market share of 56.7% with 2.7 mn retail access lines, broadband market share of 43.6% with 1.43 mn broadband retail subscribers and 377k TV subscribers. It owns 54% of Telecom Romania (2.16 m voice lines, 1.2 mn broadband subscribers, 1.4 mn TV subscribers) with the remaining being held by the Romanian govt. It has mobile operations in Greece (Cosmote has c50% market share with 7.4 mn subscribers); in Romania (Telecom Romania Mobile has a market share of c23% and 5.86 mn subscribers); and in Albania (Telecom Albania has 2.0 mn subscribers). Shareholders are DT (40%) and the Greek state (10%). DT has a call option on the state’s stake.

Hellenic Telecoms (OTEr.AT) | Resilient business model

Company data

Market cap. (€ mn) 3,916.30

Closing Price - Sept 3 (€) 7.99



Target Price (€) 9.0

Dividend yield (%) 1.1%


Rating Neutral

Valuation ratios (Sept 3) 2013 2014 2015E 2016E 2017E

P/E (x) reported 13.61 14.65 20.89 14.52 12.41

P/E (x) recurring 16.04 12.34 13.17 14.52 12.41

EV/EBITDA (x) reported 4.59 3.64 3.90 3.41 2.94

EV/EBITDA (x) recurring 3.72 3.55 3.64 3.41 2.94

EV/Revenues (x) 1.33 1.29 1.29 1.22 1.07

FCFE Yield (%) 19.1% 14.9% 9.8% 12.1% 15.0%

Div Yield (%) 0.00% 1.00% 1.05% 1.31% 1.69%

Fundamentals 2013 2014 2015E 2016E 2017E

FCF recurring (€ mn) 749 583 386 472 587

Dividend (€ mn) 0 39 41 51 66

DPS (€) - 0.08 0.08 0.10 0.14

EPS reported (€) 0.59 0.55 0.38 0.55 0.64

EPS recurring (€) 0.50 0.65 0.61 0.55 0.64

% chg yoy -32.8% 29.9% -6.3% -9.3% 17.0%

Net Debt/Equity (x) 0.78 0.53 0.44 0.25 0.03

Net Debt/EBITDA (x) 1.03 0.79 0.74 0.46 0.06

ROE (%) 13.9% 15.7% 13.5% 11.3% 12.1%

Sources: company data & Piraeus Securities estimates

Natasha Roumantzi Tel: +30 210 335 4065 Email: [email protected]




43

Hellenic Telecoms (OTEr.AT) | Income Statement: 2010-2017E

Income statement (Eur mn) 2010A 2011A 2012A 2013A * 2014A 2015E 2016E 2017E

Revenues:

OTE - fixed line 2,169.8 1,912.2 1,704.0 1,557.2 1,511.7 1,507.2 1,499.6 1,507.1

% chg -10.1% -11.9% -10.9% -8.6% -2.9% -0.3% -0.5% 0.5%

Mobile 2,797.1 2,600.0 2,057.0 1,881.2 1,772.3 1,672.6 1,572.9 1,591.1

% chg -7.9% -7.0% -20.9% -8.5% -5.8% -5.6% -6.0% 1.2%

Telecom Romania - fixed line 716.9 655.1 619.6 609.5 609.1 596.9 590.9 590.9

% chg -8.4% -8.6% -5.4% -1.6% -0.1% -2.0% -1.0% 0.0%

All Other 449.1 464.8 462.1 448.0 456.2 456.2 456.2 456.2

% chg 7.8% 3.5% -0.6% -3.1% 1.8% 0.0% 0.0% 0.0%

Group operating revenues 6,132.9 5,632.1 4,842.7 4,495.9 4,349.3 4,232.9 4,119.7 4,145.4

intersegment adjustments 650.2 593.7 512.4 441.8 430.9 423.3 412.0 414.5

Group operating revenues (net) 5,482.7 5,038.4 4,330.3 4,054.1 3,918.4 3,809.6 3,707.7 3,730.8

EBITDA:

OTE - fixed line 661.1 560.3 494.5 568.3 599.2 617.9 629.8 633.0

% chg -9.6% -15.2% -11.7% 14.9% 5.4% 3.1% 1.9% 0.5%

margin 30.5% 29.3% 29.0% 36.5% 39.6% 41.0% 42.0% 42.0%

Mobile 974.5 915.9 755.9 652.8 594.6 537.7 502.3 525.2

% chg -9.0% -6.0% -17.5% -13.6% -8.9% -9.6% -6.6% 4.6%

margin 34.8% 35.2% 36.7% 34.7% 33.5% 32.1% 31.9% 33.0%

Telecom Romania - fixed line 178.9 149.5 166.1 159.3 159.9 128.3 130.0 135.9

% chg -31.5% -16.4% 11.1% -4.1% 0.4% -19.8% 1.4% 4.5%

margin 25.0% 22.8% 26.8% 26.1% 26.3% 21.5% 22.0% 23.0%

All Other 107.3 108.9 101.9 81.1 67.9 66.6 66.1 66.1

% chg 3.2% 1.5% -6.4% -20.4% -16.3% -1.9% -0.7% 0.0%

margin 24% 23% 22% 18% 15% 15% 15% 15%

VRS provisions (173.9) (68.9) (123.0) (278.4) (36.1) (90.0) - -

Total EBITDA reported 1,747.9 1,662.8 1,392.9 1,177.9 1,385.5 1,260.5 1,328.3 1,360.3

% chg -20.4% -4.9% -16.2% -15.4% 17.6% -9.0% 5.4% 2.4%

EBITDA margin 31.9% 33.0% 32.2% 29.1% 35.4% 33.1% 35.8% 36.5%

Total EBITDA recurring 1,919.4 1,731.8 1,515.9 1,456.3 1,421.6 1,350.5 1,328.3 1,360.3

% chg -9.8% -9.8% -12.5% -3.9% -2.4% -5.0% -1.6% 2.4%

EBITDA margin 35.0% 34.4% 35.0% 35.9% 36.3% 35.4% 35.8% 36.5%

Depreciation & amortization (1,363.0) (1,310.2) (818.4) (842.5) (796.4) (811.4) (811.4) (811.4)

EBIT reported 384.9 352.6 574.5 335.4 589.1 449.1 516.9 548.9

Net financial expense (285.0) (237.5) (5.3) (20.6) (193.7) (133.3) (101.5) (68.6)

EBT reported 99.9 115.1 569.2 314.8 395.4 315.7 415.4 480.3

Income taxes (74.9) (128.7) (103.9) (130.9) (123.9) (111.9) (140.8) (159.6)

Other taxes (67.0) - 110.0 (20.0)

Windfall tax (97.0) - -

Less minorities (178.6) (133.3) 25.2 6.1 4.1 (3.5) 5.0 5.3

Net Profit recurring 507.1 312.9 363.5 244.2 317.3 297.4 269.7 315.5

Net Profit reported 39.6 119.7 440.1 287.8 267.4 187.4 269.7 315.5

Sources: OTE & Piraeus Securities estimates

44

Hellenic Telecoms (OTEr.AT)|Balance Sheet & Cash Flow:2010-2017E

Balance Sheet (Eur mn) 2010A 2011A 2012A 2013A* 2014A 2015E 2016E 2017E

Net Fixed Assets 4,978 4,328 3,914 3,279 3,103 2,897 2,626 2,354

Net Intangible (telecommunication licenses) 332 433 448 475 575 605 605 605

Goodwill from consolidated subsidiaries 572 569 567 506 506 506 506 506

Investments 157 1 1 0 0 0 0 0

Other Long -Term assets 1,081 1,076 1,054 1,089 1,126 1,126 1,126 1,126

Inventories 161 125 111 97 88 83 81 82

Accounts receivables 1,011 929 823 703 685 699 681 664

Other current assets 230 593 276 233 208 202 197 187

Cash & cash equivalents 1,017 1,037 1,172 1,461 1,514 1,203 962 1,363

Total assets 9,538 9,091 8,366 7,843 7,804 7,322 6,783 6,887

Equity (it includes minorities) 1,653 1,757 1,989 2,296 2,498 2,641 2,865 3,119

of which Minority interests 553 374 390 375 376 373 378 383

Reserve for VRS 30 - - - - - - -

Long-term loans 3,211 4,139 2,635 2,557 2,173 1,496 1,440 706

Other long-term liabilities 718 693 675 584 698 629 612 616

Short-term loans (incl short-term portion of long-term debt) 2,088 763 1,416 400 465 710 134 734

Accounts payable 769 750 785 924 998 971 945 951

Other current liabilities 879 823 733 846 828 762 704 709

Reserve for VRS (current portion) 189 166 134 238 143 113 83 53

Liabilities & shareholders funds 9,538 9,091 8,366 7,843 7,804 7,322 6,783 6,887

* Globul has been deconsolidated as of 2013


Cash flow (Eur mn) 2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E

Net Income 40 120 440 288 267 187 270 316

Depreciation & Amortization 1,363 1,310 818 843 796 811 811 811

Other (455) 44 (88) (136) (148) (166) (104) (22)

Change in Working Capital 167 98 (10) 273 102 (38) (5) 22

Assets classified as held for sale (380)

Operating Cash Flow 1,114 1,192 1,161 1,268 1,018 796 972 1,127

Capex (net) (751) (717) (554) (605) (604) (635) (540) (540)

Free Cash Flow (recurring) 363 574 606 749 583 386 472 587

Sale of Cosmofon (less capital gains),

acquisition of ZAPP, acquisition of Germanos

10% minority stake, sale of Telecom Serbia,

Hellas Sat and Globul 380 720

Free Cash Flow 363 476 986 1,383 414 161 432 587

Change in debt: increase/(decrease) (122) (398) (851) (1,094) (318) (432) (632) (134)

Dividends 93 58 - - - 39 41 51

Share buyback 43

Financing Cash Flow (215) (456) (851) (1,094) (361) (471) (673) (186)

Change in cash 148 20 135 289 53 (311) (241) 401

Cash Balance 1,017 1,037 1,172 1,461 1,514 1,203 962 1,363


45

….on the back of a deteriorating economic environment in Greece Q3 14/15 results / FY Sales pre-announcement Jumbo announced a good set of 3Q14/15 results that stood broadly in line with our estimates with the exception of EBITDA that came in 3.4% above our estimates on slightly better than expected gross profit margin. Sales came in at EUR 105mn up by 11.5%; we point out good growth momentum in Greece with sales growth of 7.9%, while both Cyprus and Bulgaria recorded double digit growth; Romania’s sales came in at EUR 4.6mn vs. EUR 1.9mn the year ago period supported by the opening of three new stores. During 3Q Jumbo recorded gross profit of EUR 57.6mn up 8.8% with the respective margin shaping at 54.8% (-132bps). Gross profit margin contraction was fully expected due to adverse FX movements that should intensify towards year end. EBITDA stood at EUR 20.6mn up 17% and 3.4% above our estimate for EUR 20mn. EBITDA margin expanded by c. 92bps benefited by better than expected gross profit margin and slightly lower Opex as % of sales. Net Profit stood at EUR 11.9mn up 12.7% and in line with our estimate. Cash flow generation remained resilient with OCF standing at EUR 78.2mn vs. EUR 81.8mn the year ago period, due to payment of higher taxes. On 30-July-2015 Jumbo announced that FY 2014/15 sales came in at EUR 582.55mn posting an increase of 7.5%.

Valuation We reduce our estimates by c. 4-6% on top line and Operating profitability and by c. 7-9% on bottom line to incorporate the deteriorating economic environment and the reduced disposable income in Greece after the imposition of the capital controls, as well as the increased corporate tax rate in the country. We remind that c. 75% of Group’s operating profitability is derived from Greece. We use a combination of DCF method and P/E multiples to derive our target price. Our DCF model generates a target price of EUR 10.70/share with the implied P/E ratio for 2016/17 standing at 12.0x, slightly above Group’s 10-year historical average of 10.8x. Our targeted P/E ratio for 2015/16 projected earnings stands at 10.8x (in line with Group’s 10-years historical average) with a derived target price of EUR 9.30/share. The average of the two methods derives a target price of EUR 10.00/share with a targeted P/E of 11.5x Group’s 2016/17 earnings. Our target price implies an upside potential of 35.8% from current levels.

Upside risks Apart from lower bond yields (ie lower sovereign risks), faster or more rollouts and higher-than-expected same-store sales (on improved customer visits and/or higher spending per customer) are the two main factors that could place upside risk on our estimates.

Downside risks Medium term, the investment case depends on domestic private consumption, the timing of new store rollouts, and the pace of expansion in Romania. Additional taxation of any form would hurt earnings and valuation. Jumbo’s management has cautioned investors over the impact from VAT hikes, COGS inflation, higher freights and a weaker Euro vis-à-vis the USD on the group’s gross profit margin. We also highlight risks associated with overdependence on Chairman Vakakis and the remote event of important injury from a non-branded product malfunction.

Company description Jumbo is the largest retailer and wholesaler of toys, infant products, books & stationery and seasonal, home & mother opportunity products in Greece. It enjoys a 40% share in the domestic market. The Company’s distribution network at the end of June 2015 will account for 72 retail stores, 53 in Greece, 5 in Cyprus, 8 in Bulgaria and 6 in Romania with a net sales surface of c. 404,103m2.

Jumbo (BABr.AT): Taking a more conservative stance…

Fundamentals (€ m) 2012/2013 2013/2014 2014/2015F 2015/2016F 2016/2017F

Sales 502.18 541.85 582.55 615.84 655.18

Reported EBITDA 110.39 146.52 154.76 161.49 171.60

Recurring EBITDA 133.96 146.52 154.76 161.49 171.60

Reported net profit 73.96 101.25 107.22 110.53 118.28

EPS (€) 0.57 0.74 0.79 0.81 0.87

DPS (€) 0.00 0.36 0.27 0.28 0.30

FCF yield (%) 3.3% 5.3% 6.0% 6.4% 7.9%

Valuation ratios 2012/2013 2013/2014 2014/2015F 2014/2015F 2016/2017F

P/E (x) 12.83 16.07 9.35 9.07 8.48

EV/Sales (x) 1.85 2.78 1.44 1.30 1.14

EV/EBITDA (x) 8.40 10.27 5.43 4.95 4.35

Company data








Rating Outperform





46

Jumbo (BABr.AT) | Income Statement

PROFIT & LOSS Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 e Jun-16 e Jun-17 e

Turnover 490.0 494.3 502.2 541.8 582.6 615.8 655.2

% chng 0.5% 0.9% 1.6% 7.9% 7.5% 5.7% 6.4%

COGS & SG&A 354.8 359.9 368.1 395.3 427.8 454.3 483.6

EBITDA 135.1 134.4 110.4 146.5 154.8 161.5 171.6

% chng -6.6% -0.5% -17.9% 9.4% 5.6% 4.4% 6.3%

EBITDA margin 27.6% 27.2% 22.0% 27.0% 26.6% 26.2% 26.2%

Net depreciation 15.3 17.4 18.9 19.4 20.9 22.4 23.9

EBIT 119.9 117.0 91.6 127.1 133.9 139.1 147.7

% chng -9.1% -2.4% -21.7% 10.4% 5.3% 3.9% 6.2%


Net interest expenses -1.4 -2.4 -4.1 -2.9 -3.8 -7.8 -9.5

% of avg debt -20.3% 14.8% 16.0% 4.0% 2.6% 4.2% 4.1%

Pre-tax profit 121.3 119.5 95.7 130.0 137.6 146.9 157.2

% chng -6.5% -1.5% -19.9% 35.8% 5.9% 6.7% 7.0%

Minority stake in profits 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Minority profit/Net profit 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Income tax 26.7 22.2 21.7 28.7 30.4 36.3 38.9


Profit after tax 94.6 97.3 74.0 101.2 107.2 110.5 118.3

% chng 19.4% 2.9% -24.0% 36.9% 5.9% 3.1% 7.0%


EPS after tax (in Euro) 0.73 0.75 0.57 0.74 0.79 0.81 0.87

EPS chng 17.6% 2.9% -24.0% 31.0% 5.9% 3.1% 7.0%

Dividends 0.0 0.0 0.0 49.0 37.0 38.1 40.8


DPS (in Euro) 0.00 0.00 0.00 0.36 0.27 0.28 0.30

% chng na na na na -24.6% 3.1% 7.0%

Market cap 639 377 948 1627 1003 1003 1003

Diluted number of shares 130,148,975 130,148,973 129,994,676 136,029,796 136,059,759 136,059,759 136,059,759

Basic number of shares 130,148,975 130,148,973 129,994,676 136,059,759 136,059,759 136,059,759 136,059,759

EV 637 347 927 1505 840 799 746

End-year/current stock price common shares 4.92 2.90 7.29 11.96 7.37 7.37 7.37

% chng of common stock price 4.0% -41.0% 151.1% 64.1% -38.4% 0.0% 0.0%

Out/under performance 16.6% 23.5% 81.1% 14.5% 15.7% 0.0% 0.0%

47

Jumbo (BABr.AT) | B/S & Cash Flow Statement

BALANCE SHEET Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 e Jun-16 e Jun-17 e

Net fixed assets 378 415 431 446 481 505 528

Current Assets 396 412 421 552 585 636 685


Inventories 174 180 176 186 190 195 198

Cash 158 185 170 288 328 368 408

TOTAL ASSETS 795 857 894 1,034 1,095 1,170 1,240

Net debt position -2 -31 -21 -122 -162 -204 -257

Shareholders' equity 523 593 639 745 803 876 957



Bank debt 154 152 1 144 144 144 144

Subsidies 0 0 1 2 3 4 5





TOTAL EQUITY & LIABILITIES 795 857 894 1,034 1,095 1,170 1,240

RATIO ANALYSIS

Activity: Avg working capital to turnover days 125 122 120 119 120 120 119

Avg receivables to turnover days 257 257 257 257 257 257 257

Avg trade creditors to purchases days 159 159 159 159 159 159 159

Avg inventories to turnover days 121 121 121 121 121 121 121

Financial Structure: Bank debt to equity 0.30 0.26 0.23 0.22 0.21 0.19 0.16

Fixed to total assets 50.2% 51.9% 52.9% 46.7% 46.6% 45.6% 44.8%

Profitability: Return on total assets 12.4% 11.8% 8.4% 10.5% 10.1% 9.8% 9.8%

Return on equity 19.4% 17.4% 12.0% 14.6% 13.9% 13.2% 12.9%

Return on capital employed 13.4% 12.5% 9.4% 10.9% 10.8% 10.4% 10.4%

CASH FLOW

Profit after tax before minorities 81.8 90.5 78.4 111.7 107.2 110.5 118.3


Plus: net interest expenses -1.4 -2.4 -4.1 -2.9 -3.8 -7.8 -9.5

Less: gain/loss on disposal of PP&E 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Gross cash flow 95.7 105.5 93.1 128.2 124.3 125.2 132.7

Plus: Chng in accounts payable 8.0 -2.2 -3.6 -0.1 -0.5 -3.8 0.3

Less: Chng in accounts receivable 6.0 -9.4 5.1 7.0 2.9 5.3 3.3

Less: Chng in inventories -2.0 6.0 -4.5 10.2 3.9 4.9 3.3

Working capital chng -1.8 -3.9 3.2 20.5 8.2 14.8 7.5

Operating cash flow 97.5 109.4 68.5 121.0 116.2 110.3 125.2


Less: Chng in investments -0.3 -0.2 -1.0 -0.6 0.0 0.0 0.0

Free cash flow 41.1 59.6 31.2 85.7 60.3 64.5 79.4

48

2Q 2015 results: Motor Oil reported a strong set of results with clean EBITDA at EUR 168.2mn up by 4.7x and clean net profit of EUR 89mn vs losses of EUR 12.1mn in 2Q 2014. The dramatic improvement in benchmark margins (+2.4x YoY) led the refining margin at USD 9.1/bbl compared to USD 3.7/bbl in 2Q 2015. 1H clean EBITDA stood at EUR 281.5mn (+311%) and clean net profit landed at EUR 137.4mn vs EUR 11.4mn losses last year.

Outlook: Benchmark margins remained strong in July-August and should remain on elevated levels in the short term , courtesy of the consistently low crude levels and the favourable EURUSD rate. Motor Oil is hedged against Greek woes by generating c69% of its sales through exports.

Valuation/Estimates: We raised our estimates on both refining and trading margins, which led to a blended margin of USD 8.2/bbl vs USD 6.8/bbl previously. As a result, we now estimate the refinery to report EUR 252.4mn in clean net profit or EUR 2.28/share, a jump of 28% compared to our previous estimates and 2.4x higher vs the 2014 reading of EUR 105.4mn. Valuation-wise we raise the WACC in our DCF model to 12.3% from 11.7% previously to account for the increased Greek risk. Our model now returns a target price of EUR 12.0/share, up from EUR 11.0. We are strong Buyers on the stock.

Upside Risks: Further improvement in benchmark margins, further strengthening of the USD vs the EUR, macro normalization in Greece, which could reduce the chunk of the domestic sales, which command higher margins compared to exports.

Downside risks: spikes or plunge in crude prices, strengthening of the EUR , deterioration in benchmark margins.

Company description: Motor Oil operates one of the most complex refineries in Europe with a total capacity of over 180,000 bbl/d. The Nelson complexity index of the refinery stands at 11.54. The refinery includes a hydrocracker and an FCC complex and thus they can produce a wide array of products. The refinery exports c69% of its production with the rest absorbed in the domestic market. Apart fomr the refinery, the group also owns a large number of owned petrol stations, among which the Shell franchise.

Motor Oil (MORr.AT) | Strong benchmark margins drive profits

Company data








Rating Outperform

Ratio analysis 2013 2014 2015F 2016F

P/E (x) -222.2x -12.5x 4.1x 4.4x

P/BV (x) 2.0x 2.5x 1.6x 1.3x

P/CE (x) 8.7x 5.1x 3.0x 3.1x

P/FCFE (x) 10.4x 10.0x 5.3x 4.3x

EV/EBITDA (x) 10.6x 37.5x 3.3x 3.1x

EV/Sales (x) 0.2x 0.2x 0.2x 0.2x

RoCE -1.4% -2.7% 22.5% 21.2%

RoIC -1.4% -2.7% 22.5% 21.2%

RoE 5.0% 25.6% 38.0% 29.6%

RoA 1.1% 4.4% 10.6% 9.3%

Earnings yield 2.5% 10.1% 24.3% 22.6%

Dividend Yield 2.1% 0.0% 10.1% 9.6%

Spread 7.4% 10.0% 8.8% 13.5%

Net debt to equity (x) 1.78x 2.16x 1.04x 0.70x

Net debt to market cap. (x) 0.89x 0.86x 0.67x 0.54x

Net Debt/ EBITDA (x) 5.01x 17.30x 1.30x 1.10x

Net debt/Clean EBITDA (x) 4.16x 2.94x 1.30x 1.10x





49

Motor Oil (MORr.AT) | Income Statement

Motor Oil Group | Profit & Loss Statements

EUR mn 2013 2014 2015F 2016F

Sales 9,282.34 9,050.15 7,089.92 7,546.11

EBITDA 184.97 51.48 532.16 508.38

LIFO EBITDA 222.97 302.48 532.16 508.38

LIFO EBITDA margin 2.4% 3.3% 7.5% 6.7%

Depreciation 93.44 97.76 99.32 101.70

EBIT 91.53 -46.28 432.85 406.69

EBIT margin 1.0% -0.5% 6.1% 5.4%

Financial expenses 71.59 61.78 75.64 73.44

EBT 19.94 -108.05 357.21 333.25

EBT margin 0.2% -1.2% 5.0% 4.4%

Tax 24.49 -24.87 104.68 97.73

Minorities 0.13 0.12 0.14 0.14

Net profit -4.68 -83.30 252.38 235.37

EPS (EUR) -0.04 -0.75 2.28 2.12

DPS (EUR) 0.20 0.00 0.95 0.90

50

Motor Oil (MORr.AT) | Balance Sheet and Cash Flow

Motor Oil Group, Cash Flow Statements

EUR mn 2013 2014 2015F 2016F

Cash earnings 83.58 0.98 353.31 337.03

Working capital chg 86.43 163.35 -97.72 -37.91

Operating cash flows 170.01 164.32 255.58 299.12

CAPEX -70.33 -60.66 -59.00 -59.00

Free cash flow 99.68 103.66 196.58 240.12

Free cash flow yield 9.6% 10.0% 18.9% 23.1%

New debt -129.97 104.17 -24.94 0.00

New capital -11.08 0.00 0.00 0.00

Other items 0.00 0.00 0.00 0.00

Dividend paid -33.39 -22.28 0.00 -104.79

Net change in cash -74.75 185.54 171.65 135.33

Cash, beginning 196.44 121.69 307.23 478.88

Cash, end 121.69 307.23 478.88 614.21

Motor Oil Group | Balance Sheet

EUR mn 2013 2014 2015F 2016F

Intangible assets 49.39 47.15 41.87 36.56

Tangible assets 1,083.18 1,073.79 1,038.75 1,001.37

Other long term assets 100.37 96.25 96.25 96.25

Total fixed assets 1,232.95 1,217.19 1,176.87 1,134.18

Inventory 542.75 484.48 384.74 414.07

Trade & other receivables 445.70 399.54 340.43 362.33


Total assets 2,343.08 2,408.42 2,380.92 2,524.79

Share capital (& premium) 83.09 83.09 83.09 83.09

Reserves 437.35 328.97 581.36 711.94

Shareholders funds 520.44 412.06 664.44 795.03

Minority rights 1.21 1.44 1.58 1.72

Total equity 521.65 413.50 666.02 796.75

Long term debt 717.19 827.21 967.74 967.74

Other long term liabilities 131.74 118.40 118.40 118.40

Short term debt 331.19 370.78 205.32 205.32

Trade payables 637.53 674.12 417.54 430.87

Other payables 3.79 4.42 5.88 5.70

Total liabilities 1,821.43 1,994.92 1,714.87 1,728.02

Total liabilities & equity 2,343.08 2,408.42 2,380.90 2,524.77

Net fixed assets 1,101.21 1,098.79 1,058.48 1,015.78

Working capital 347.13 205.49 301.75 339.83

Invested capital 1,448.34 1,304.28 1,360.22 1,355.61

of which: Net debt 926.69 890.78 694.18 558.84

51

VLTs Roll-out will be the focal point

Q2 ‘15 results OPAP announced a good set of 2Q15 results that stood above our estimates across all lines due to strong KINO performance and lower than expected payout ratio. Revenues came in at EUR 1,042.5mn increased by 10.1%. We point out the better than expected performance of the two key games of the Group, KINO and Stihima and the strong performance of Joker. Stihima wagers reached EUR 319.7mn decreased by 12% due to tough comps related to the World Cup event in the year ago period. Payout ratio for the period stood at 72.2% vs. 72.7% the year ago period. Kino’s wagers reached EUR 495.4mn up by 3.2%. KINO’s payout stood at 69% vs. 69.3% the year ago period. Hellenic Lotteries reported revenues of EUR 113.4mn c. in line with our estimate of EUR 111mn; Hellenic Lotteries posted a similar run rate to 1Q15. GGR for the period stood at EUR 340.8mn up by 15.1%, beating our estimate by 3.9%. EBITDA came in at EUR 93.2mn, up by 35.8%, beating our estimate by 4.3% due to increased operating leverage that offsets increased distribution costs from the full consolidation of Hellenic Lotteries. Net Profit for the period stood at EUR 51.9mn vs. EUR 15.6mn the year ago period. The Group will distribute an interim dividend of EUR 0.17/share. Cash Flow from Operations stood at EUR 74.3mn vs. EUR 129.7mn the year ago period despite higher operating profitability due to payments acceleration to minimize future operational risk.

Valuation We reduce our estimates on OPAP to incorporate the temporary suspension of the VLT’s project due to the stricter regulatory framework, the increased corporate tax rate and the deteriorating economic environment in Greece after the imposition of the capital controls. We are now modelling the launch of the VLTs project at some point during 1Q16. We value OPAP by employing a combination of Sum–of-the-Parts valuation with Discounted Cash flow models for each business segment separately (70% weight) and a multiples-based valuation on a targeted 2016 EV/EBITDA multiple of 7.0x (15% weight), 12.5% below peers, as well as a targeted 2016 P/E of 13.5x ( 15% weight) slightly below peers. The average weighted target price of the three methods stands at EUR 10.80/share that implies an upside potential of 47.4% from current levels. We thus maintain our Outperform rating.

Upside risks New projects to perform stronger than expected; New betting options, such as live betting, to help Stihima sales; VLT’ daily gross win to surpass consensus’ expectations; International expansion could generate synergies in lottery and betting operation; Participation in cross border ‘Euro Millions’-type lotteries

Downside risks Permanent suspension or further delays in the launch of the VLTs project; Deepening of the recession in the Greek economy; Agents’ strikes in case of disagreements related to the fees of the land-based business or the new games; Risk of losing market share from illegal Internet betting competition; VLTs and monitor games to cannibalize KINO sales/higher Capex needs for new games

Company description OPAP is a leading Greek gaming company that has a dominant position in the Greek legal gaming market with a 71% market share. It was established in 1958 and holds the sole concession, recently extended up to 2030, to operate and manage 11 numerical lottery and sports betting games in Greece. The Company offers its games through the largest land-based distribution network of 4,869 POS in Greece and Cyprus. OPAP recently acquired the licence for the deployment of 35,000 VLT’s in gaming halls in Greece; 16,500 will be directly operated by OPAP while another 18,500 will be subcontracted to third parties. The operation of the VLT’s is currently suspended but we expect it to be launched during 1Q16. An OPAP led consortium also acquired the licence for the offering of scratch and lottery tickets for a 12-years period.

OPAP (OPAr.AT): VLTs roll-out will be the focal point

Fundamentals (€ m) 2013 2014 2015F 2016F 2017F

Revenues 3,711.06 4,259.07 4,190.77 6,021.23 10,461.50

GGRs 1,219.92 1,377.68 1,360.48 1,581.52 2,074.08

EBITDA 221.73 346.52 345.77 403.47 492.14

Net profit 141.12 195.00 195.16 208.37 274.28

EPS (€) 0.44 0.61 0.61 0.65 0.86

DPS (€) 0.25 0.70 0.76 0.77 1.01

Dividend yield 2.6% 7.9% 10.4% 10.5% 13.8%

Valuation ratios 2013 2014 2015F 2016F 2017F

P/E (x) 21.86 14.56 11.98 11.22 8.53

FCF yield 2.24% 9.99% 6.06% 14.45% 20.80%

EV/EBITDA (x) 13.57 7.33 6.22 5.00 3.54

Ratios are computed on recurring earnings, av erage prices f or 2014 and last close f rom 2015 onwards

Company data








Rating Outperform





52

OPAP (OPAr.AT) | Income Statement

OPAP PROFIT & LOSS 2009 2010 2011 2012 2013 2014 2015 e 2016 e 2017 e

GGR 1,781 1,654 1,413 1,302 1,220 1,378 1,360 1,582 2,074

% chng -3.7% -7.1% -14.5% -7.9% -6.3% 12.9% -1.2% 16.2% 31.1%

EBITDA 967 911 733 673 222 347 346 403 492

% chng -8.3% -5.7% -19.6% -8.2% -67.0% 56.3% -0.2% 16.7% 22.0%

EBITDA margin 54.3% 55.1% 51.8% 51.7% 18.2% 25.2% 25.4% 25.5% 23.7%

Net depreciation 43 39 42 43 44 50 57 107 106

EBIT 924 872 690 630 178 296 289 296 386

% chng -3.8% -5.7% -20.8% -8.8% -71.8% 66.8% -2.6% 2.7% 30.2%

Operating profit margin 51.9% 52.7% 48.9% 48.4% 14.6% 21.5% 21.2% 18.7% 18.6%

Net interest expenses -23.1 -19.1 -9.7 8.4 10.2 9.4 -4.0 8.3 13.3

Pre-tax profit 947 890 700 638 188 306 285 305 399

% chng -4.7% -6.1% -21.3% -8.8% -70.6% 62.8% -6.9% 7.0% 31.0%

Minority stake in profits 0.0 0.0 0.0 0.0 0.0 4.2 4.1 4.8 5.0

Taxes 353 314 162 133 47 106 85 91 120

% effective tax rate 37.2% 33.8% 22.4% 20.0% 26.5% 34.6% 30.0% 30.0% 30.0%

Profit after tax 594 576 537 505 141 195 195 208 274

% chng -18.5% -3.0% -6.7% -5.9% -72.1% -61.4% 0.1% 6.8% 31.6%

Net profit margin 33.3% 34.8% 38.0% 38.8% 11.6% 14.2% 14.3% 13.2% 13.2%

Adjusted Profit after tax 692 668 537 505 141 195 195 208 274

% chng -5.0% -3.5% -19.5% -5.9% -72.1% 38.2% 0.1% 6.8% 31.6%

EPS after tax (in Euro) 1.86 1.81 1.68 1.58 0.44 0.61 0.61 0.65 0.86

EPS chng -18.5% -3.0% -6.7% -5.9% -72.1% 38.2% 0.1% 6.8% 31.6%

Dividends 558 491 230 182 80 224 242 246 323

Dividend policy: Payout Ratio 94.0% 84.4% 42.6% 35.6% 57.1% 115.8% 115.8% 110.0% 110.0%

DPS (in Euro) 1.75 1.54 0.72 0.57 0.25 0.70 0.76 0.77 1.01

% chng -20.4% -12.0% -53.2% -20.6% -56.3% 180.8% 8.2% 1.7% 31.0%

Market cap 4,893 4,128 2,179 1,723 3,085 2,839 2,338 2,338 2,338

Diluted number of shares 319,000,000 319,000,000 319,000,000 319,000,000 319,000,000 319,000,000 319,000,000 319,000,000 319,000,000

Basic number of shares 319,000,000 319,000,000 319,000,000 319,000,000 319,000,000 319,000,000 319,000,000 319,000,000 319,000,000

EV 4295 3562 2267 1510 3008 2542 2149 2017 1745

End-year/current stock price common shares 15.34 12.94 6.83 5.40 9.67 8.90 7.33 7.33 7.33

% chng of common stock price -25.8% -15.6% -47.2% -20.9% 79.1% -8.0% -17.6% 0.0% 0.0%

Out/under performance -39.7% 31.0% 9.7% -40.7% 39.8% 29.5% 5.2% 0.0% 0.0%

53

OPAP (OPAr.AT) | B/S & Cash Flow Statement

BALANCE SHEET 2009 2010 2011 2012 2013 2014 2015 e 2016 e 2017 e

Net fixed assets 442 397 1,221 1,214 1,301 1,341 1,372 1,299 1,225

Current Assets 654 631 285 516 297 409 375 548 920

Accounts receivable 39 47 52 28 35 92 91 130 227

Inventories 1 0 0 1 1 3 3 4 8

Cash 599 558 196 368 242 291 264 397 669

TOTAL ASSETS 1,097 1,027 1,505 1,731 1,598 1,751 1,746 1,847 2,145

Net debt position -599 -566 88 -213 -77 -297 -189 -322 -594

Shareholders' equity 602 683 885 1,162 1,125 1,168 1,112 1,074 1,025

Minority interest on share capital 0 0 0 0 0 67 71 75 80

Long-term liabilities 75 74 431 264 72 59 134 134 134

Bank debt 0 0 251 166 0 0 75 75 75

Provisions 43 64 61 49 51 51 51 51 0

Short-term liabilities 602 683 885 1,162 1,125 1,168 1,112 1,074 1,025

Accounts payable & other ST liabilities 139 84 87 59 70 170 166 244 436

Liabilities for taxes 250 143 18 35 122 178 158 164 192

Liabilities to banks 0 0 33 85 165 0 0 0 0

Dividends 0 0 0 0 0 0 0 0 0

TOTAL EQUITY & LIABILITIES 1,097 1,027 1,505 1,731 1,598 1,751 1,746 1,847 2,145

RATIO ANALYSIS 2009 2010 2011 2012 2013 2014 2015 e 2016 e 2017 e

Liquidity: Current ratio 1.56 2.33 1.50 1.70 0.74 0.90 0.87 0.97 1.02

Acid Test 1.56 2.33 1.50 1.70 0.74 0.89 0.87 0.96 1.01

Activity: Avg receivables to turnover days 0 0 0 0 0 0 0 0 0

Avg trade creditors to purchases days 12 10 9 8 7 11 16 14 13

Financial Structure: Debt to equity 0.82 0.50 0.70 0.49 0.42 0.44 0.51 0.65 1.01

Bank debt to equity 0.12 0.11 0.53 0.30 0.21 0.05 0.12 0.12 0.13

Profitability: Return on equity 142% 90% 69% 49% 12% 17% 17% 19% 26%

Return on invested capital 115% 90% 58% 39% 10% 16% 17% 18% 24%

CASH FLOW 2009 2010 2011 2012 2013 2014 2015 e 2016 e 2017 e

Profit after tax before minorities 594 576 537 505 141 199 199 213 279

Plus: Depreciation & amortization 43 40 44 44 44 50 57 107 106

Plus: Chng in provisions for environmental liability10 8 15 -3 -12 2 0 0 0

Plus: Changes in taxes payable 53 -43 -136 41 60 57 -20 6 28

Gross cash flow 674 558 445 578 220 307 232 335 427

Plus: Chng in accounts payable -16.9 -43 13 -41 -25 73 -4 78 192

Less: Chng in accounts receivable+inventories -35.6 8.7 6.0 -15.9 -0.6 42.1 -1.6 41.0 99.5

Working capital chng -14.8 106.8 -7.6 26.3 -87.0 7.1 2.7 -37.3 -92.0

Operating cash flow 689 451 453 552 307 299 229 372 519

Less: Purchases of fixed assets 14 24.6 861 34 238 16 88 34 33

Less: Dividends paid 655 463 345 230 182 80 224 242 246

Free cah flow 674 427 -408 517 69 284 142 338 486

54

2Q 2015 results: PPC reported Q2 revenues of EUR 1,364.7mn (+1.5%), EBITDA of EUR 326.9mn, a surge of 37.2%, which expanded the margin by 6.3pps. The reason for the margin expansion was mainly the 29.6% lower fuel expense or EUR 76.5mn on absolute numbers, which in turn fed into the bottom line and led to net profits in the tune of EUR 49.9mn vs EUR 15mn last year.

Outlook: The management downgraded its guidance and now expects sales of EUR 5.8mn (electricity revenues at EUR 5.6bn) and an EBITDA margin of 19.5-20.5% from sales of EUR 5.9bn (electricity revenues at EUR 5.7bn) and a margin of 21-22% previously. Given that the assumption on brent oil price and the EURUSD used by PPC is more favourable than the one used in the previous guidance, it seems that they are assuming significant market share losses in the 2H of the year. In any case the environment is bound to deteriorate due to weakening macros. There should be pressure from over dues building up, which the utility is proactively trying to mitigate. In the mid term, the new government and the implementation of the new MoU could provide some boost on the stock in case there will be indeed sale of assets and full liberalization of the market. In this case, the investment story of PPC and consequently its valuation could alter significantly. This binary nature of the case is making us cautious on the stock.

Valuation/estimates: We have updated our estimates in light of the Q2 results and the guidance of the management. We stand slightly higher in terms of sales, at EUR 5.84bn vs the guidance of EUR 5.8bn, while our EBITDA margin stands at 20.2%, at the high end of the range provided by the management. All in, we cut our bottom line by 42% in 2015 and by 10% in 2016. Our new target price stands at EUR 4.0/share vs EUR 5.0 previously. Our exercise does not take into consideration any impact from a possible introduction of the NOME auctions and/or sale of any asset. We retain our Neutral rating on PPC.

Upside risks: even lower input costs, reduction of over dues and bad debt, CO2 free allocation reinstated, privatization plans go ahead.

Downside risks: further macro deterioration, spike in input costs, further build up of over dues and bad debt, rising CO 2 prices, regulatory risk (unfavourable lignite and hydro auctions)

Company description: PPC is the incumbent electricity utility in Greece with a market share in supply in excess of 97% and a market share in generation of more than 70%. The company has installed capacity of c12GW.

PPC (DEHr.AT) | Regulatory risk and over dues the key issues

Company data







Total Return (%) -9.53%

Rating Neutral


P/E (x) adj. 13.45 10.21 7.12 6.59

P/BV (x) 0.19 0.20 0.18 0.18

PEG (x) 0.03 0.17 0.88 0.08

P/CF (x) 1.38 1.35 1.17 1.04

EV/EBITDA (x) 6.56 6.06 5.37 5.04

EV/EBIT (x) 22.67 17.43 15.04 13.88

Earnings yield (20.45%) 8.29% 14.04% 15.18%

ROA (10.35%) 1.42% 1.73% 1.81%

ROE (4.06%) 1.58% 2.50% 2.66%

ROIC (16.02%) 2.21% 2.64% 2.74%

Net debt/EBITDA 5.31 4.99 4.44 4.13

Net debt/Equity 0.87 0.83 0.84 0.79





55

PPC (DEHr.AT) | Income Statement

PPC | Profit & loss statement

EUR mn 2013 2014 2015f 2016f

Revenues 5,970.83 5,863.65 5,848.45 5,803.60

yoy (0.24%) (1.80%) (0.26%) (0.77%)

EBITDA reported 881.63 1,022.15 1,183.85 1,212.07

yoy (12.03%) 15.94% 15.82% 2.38%

EBITDA margin 14.77% 17.43% 20.24% 20.88%

Depreciation & Amortization 626.42 666.60 760.98 771.61

Interest income, net (218.51) (215.92) (205.46) (205.46)

Other income/gain 1.56 0.55 0.55 0.55

EBT 34.86 137.65 217.96 235.55

yoy (67.33%) 294.82% 58.34% 8.07%

EBT margin 0.58% 2.35% 3.73% 4.06%

Tax 246.76 46.32 63.21 68.31

Effective tax rate 707.8% 33.7% 29.0% 29.0%

Minorities 0.00 0.00 0.00 0.00

Net profit reporrted (225.31) 91.33 154.75 167.24

yoy (638.33%) (140.53%) 69.44% 8.07%

Net margin -3.77% 1.56% 2.65% 2.88%

Net profit underlying 81.91 107.98 154.75 167.24

EPS (0.97) 0.39 0.67 0.72

EPS Underlying 0.35 0.47 0.67 0.72

DPS 0.00 0.05 0.23 0.25

56

PPC (DEHr.AT) | Balance Sheet and Cash Flow

PPC | Balance sheet 2013 2014 2015e 2016e

Tangible fixed assets 12,931.7 13,689.5 13,603.2 13,361.2

Intangible fixed assets 22.2 69.9 69.9 69.9

Other long term receivables 15.8 131.5 131.5 402.0

Total non current assets 12,996.3 13,915.0 14,156.8 14,160.9

Inventories 785.3 737.8 702.9 691.9

Trade receivables 1,305.6 1,772.7 1,934.2 1,773.1

Other receivables 250.0 294.1 293.7 292.7



Total current assets 2,816.4 3,458.3 3,211.2 3,094.5

Total assets 15,812.7 17,373.4 17,368.0 17,255.5

Total equity 5,403.6 6,134.7 6,235.2 6,344.0

Long term loans 3,008.9 4,851.5 3,106.2 3,376.5

Total non current liabilities 6,413.7 8,513.2 6,790.9 7,130.4

trade and other payables 1,698.3 1,672.8 1,611.7 1,509.5

Short term loans 97.3 97.0 96.9 96.6

Total current liabilities 3,995.4 2,725.4 4,341.8 3,781.0

Total Liabilities 15,812.7 17,373.4 17,367.9 17,255.4

PPC - Cash flow 2013 2014 2015e 2016e

Cash earnings 1,161.6 1,208.5 1,184.4 1,212.6

(Increase)/decrease in WC (98.1) (773.3) (250.6) 2.7

Operating cash flow 1,063.6 435.2 933.8 1,215.4

Interest received 47.4 64.2 64.2 64.2

capex (721.6) (670.4) (768.2) (625.5)

Customers contributions & subsidies

4.2 11.7 (109.4) (85.2)

investments (3.3) (0.0) (0.0) (0.0)

Cash flow used in investments (673.4) (594.5) (813.4) (646.5)

Free cash flow 390.2 (159.3) 120.4 568.9

change in short term debt (72.7) (0.3) 1,677.4 (458.6)

proceeds from loans 285.0 1,234.4 - 270.3

payments of long term debt (363.3) (646.7) (1,745.2) -

Dividends (5.8) (0.0) (11.6) (54.2)

Interest paid (252.5) (253.9) (269.7) (269.7)

Cash flow used in financing (409.4) 333.5 (349.1) (512.2)

change in cash (19.2) 174.3 (228.6) 56.7

Cash beginning 279.5 260.3 434.6 205.9

Cash-end period 260.3 434.6 205.9 262.6

57

Appendix

58

Piraeus Securities Universe | statistics, financials, valuation

Reuters Last Daily Chg Target Mcap Ytd Perf Ytd Rel P/BVOutperform Code Price € (%) Price € T.Ε.R. € mn (%) (%) 2014 2015E 2014 2015E 2016E 2015E 2014 2015E 2016EAutohellas AUTr.AT 9.750 -6.3% 10.00 8.9% 118.54 5.1% 34.2% 8.2% 6.4% 7.4x 7.9x 7.0x 0.6x 3.2x 3.0x 2.9xAegean Airlines AGNr.AT 6.490 -0.2% 7.80 26.5% 463.50 -5.9% 20.2% 9.1% 6.3% 6.6x 7.9x 6.7x 2.7x 2.5x 3.4x 2.5xFolli Follie Group HDFr.AT 19.890 -0.3% 28.70 45.0% 1,331.60 -24.7% -3.7% 3.8% 0.8% 9.4x 8.9x 7.5x 0.9x 6.2x 5.9x 5.2xFourlis FRLr.AT 2.380 2.6% 4.30 80.7% 121.36 -26.1% -5.6% 0.0% 0.0% <0 <0 30.0x 0.8x 9.9x 8.3x 7.3xFrigoglass FRIr.AT 2.000 1.0% 3.00 50.0% 101.19 19.8% 53.0% 0.0% 0.0% <0 <0 47.3x 1.1x 13.1x 6.9x 5.7xHellenic Exchanges EXCr.AT 4.630 1.5% 5.70 23.1% 302.66 -0.4% 27.2% 6.9% 9.7% 16.4x 28.3x 21.5x 1.5x 5.7x 7.6x 6.9xJumbo BABr.AT 7.370 -4.9% 10.00 35.7% 1,002.76 -13.0% 11.2% 4.9% 3.7% 9.9x 9.4x 9.1x 1.2x 6.0x 5.4x 4.9xMetka MTKr.AT 7.120 3.2% 14.50 106.3% 369.89 -15.7% 7.7% 3.5% 2.7% 4.1x 6.9x 6.8x 0.7x 0.8x 1.2x 0.6xMotor Oil Hellas MORr.AT 9.010 -4.0% 12.00 43.7% 998.15 38.6% 77.1% 0.0% 10.5% 9.5x 4.0x 4.2x 1.5x 36.7x 3.2x 3.1xOpap OPAr.AT 7.330 1.1% 10.80 58.9% 2,338.27 -17.6% 5.2% 9.5% 11.6% 12.0x 12.0x 11.2x 2.1x 5.9x 6.2x 5.0xNeutralCoca Cola HBC AG EEEr.AT 17.970 -1.4% 17.00 -3.3% 6,610.05 14.6% 46.4% 2.0% 2.1% 23.8x 22.7x 21.4x 2.3x 10.9x 10.2x 9.1xOTE OTEr.AT 8.000 0.1% 9.00 13.8% 3,921.20 -12.1% 12.3% 1.0% 1.3% 14.7x 14.6x 14.6x 1.5x 3.6x 3.7x 3.2xPPC DEHr.AT 4.740 1.3% 4.00 -10.8% 1,099.68 -12.2% 12.2% 1.1% 4.9% 10.2x 7.1x 6.6x 0.2x 6.1x 5.4x 5.0xUnder ReviewAlpha Bank ACBr.AT 0.119 8.2% U/R n/a 1,519.52 -74.6% -67.5% 0.0% 0.0% <0 U/R U/R U/R n/a U/R U/REurobank EURBr.AT 0.038 -2.6% U/R n/a 558.90 -79.7% -74.0% 0.0% 0.0% <0 U/R U/R U/R n/a U/R U/RNational Bank NBGr.AT 0.540 -0.4% U/R n/a 1,907.90 -63.3% -53.1% 0.0% 0.0% <0 U/R U/R U/R n/a U/R U/RSarantis SRSr.AT 7.230 -0.6% U/R n/a 251.39 -4.9% 21.5% 0.0% U/R U/R U/R U/R U/R U/R U/R U/RRestrictedPiraeus Bank BOPr.AT 0.094 1.1% Restricted n/a 573.59 -89.7% -86.8% 0.0% 0.0% <0 n/a ###### n/a n/a n/a #VALUE!

Reuters Last Daily Chg Value VolumeWarrants Code Price € (%) € mn mnAlpha Bank GRALFAw.AT 0.037 5.7% 0.04 1.03National Bank GRETEw.AT 0.058 0.0% 0.01 0.18Piraeus Bank GRTPEIw.AT 0.015 7.1% 0.05 3.17

EV/EBITDADiv.Yield P/E

59

Piraeus Securities Universe | Cash position

PS Universe cash position (based on 1H15 figures)

Cash Reserves (EUR mn)

% of cash in Greece or EUR (mn) Gross Debt (EUR

mn)

bonds/debt with foreign

institutions (% or EUR in mn)

% of sales in Greece % of EBITDA

in Greece

ATHEX 148.4 EUR 148.4 or 100% 0.0 0 100% 100%

OPAP 217.7 small amount is held In Greece 105.0 0 95% 96%

FF GROUP 272.4 holds limited cash reserves in Greece 350.0 93.50% 26% 9%

JUMBO 266.5 EUR 162.1mn or 61% 160.5 EUR 145mn 79% 80%

FOURLIS 26.0 EUR 12mn or 50% 167.0 41.25% 65% 75%

TITAN 220.0 c. EUR 12mn 850.0 90.00% 25% 21%

OTE 1,085.7 we estimate that almost Eur1,000mn is held

abroad 2,148.1 100.00% 75% 80%

Aegean 291.7 c. EUR 10mn 0 0 n/a n/a

CCHBC 830.0 EUR 1mn 2,031.4 100.00% 5% 4%

Autohellas 23.4 c EUR 19mn (parent figure) 177.6 0 79% 75%

MOH 582.6 c EUR 12mn 1,439.0 EUR 410mn 21% 21%

Frigoglass 38.6 EUR 0.2mn 343.9 100% 1% 0.00%

PPC 702.0 c90% 4,853.8 62% 97%+ 98%+

Metka 288.0 EUR 0.05mn 4.4 n/a 12% 10.00%

Sarantis 23.0 0% 32.0 0.00% 35% 65%

Source: Piraeus Securities

60

Piraeus Securities Radar | Cash position

PS Radar stocks (based on 1Q15 figures)

Cash Reserves (EUR mn)

% of cash in Greece or EUR (mn)

Gross Debt (EUR mn)

bonds/debt with foreign institutions (% or EUR in

mn) % of sales in Greece

% of EBITDA in Greece

Athens Water 243.5 we assume 100% 0.0 0 100% 100%

Corinth Pipeworks 28.5 n/a 166.0 n/a 6% n/a

Ellaktor 448.3 n/a 1,473.3 n/a backlog at EUR 3.8bn from

which 47% comes from Greece

n/a

Elval 37.6 n/a 302.9 n/a 10% n/a

Grivalia Properties 155.0 n/a 62.7 n/a 88.1% of properties located

in Greece n/a

GEK-Terna 320.1 n/a 725.0 n/a n/a n/a

Hellenic Petroleum 1,155.0 50% 3,242.0 50% 50% 50%

Intralot 388.4 n/a 725.0 86.20% n/a n/a

Karatzis 19.1 n/a 35.4 n/a n/a n/a

Kleemann 24.0 n/a 16.6 n/a 80% n/a

Kloukinas 2.0 n/a 19.4 n/a n/a n/a

Korres 9.2 n/a 31.4 n/a 59% n/a

Kri-Kri 2.4 n/a 11.6 n/a 83% n/a

Mytilineos 336.0 5% 764.0 n/a 34.70% 28.50%

Piraeus Port 55.5 we assume 100% 86.5 we assume 0% 100% 100%

Terna Energy 175.6 n/a 444.4 n/a n/a n/a

Thessaloniki Port 81.7 we assume 100% 0.0 0 100% 100%

Thessaloniki Water 54.6 we assume 100% 0.0 we assume 0% 100% 100%

Thrace Plastics 29.7 n/a 65.5 n/a 83% n/a

Source: Piraeus Securities

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July 12 | EuroSummit to initiate discussions on a new ESM program

The Euro Summit of July 12 asked the Greek govt to legislate two sets on measures as prior-actions for the approval of the third financial assistance program.

The first set of measures was voted on July 15 as detailed in the table below:

Fiscal measures voted at the Parliament on July 14, 2015

(Eur mn) 2015 2016 2017 2018

VAT reform 795 2,390 2,390 2,390

Increase of corporate tax from 26% to 29% 410 410 410

Adjustments in insurance taxes 76 76 76

Luxury tax 49 49 49

Increases in the sol idari ty tax 215 215 215

Increase of tax advance from 75% to 100% 445

Increase/introduction of healthcare contributions by pens ioners for main and supplementary pens ions 422 854 854 854

Unification of supplementary pens ion funds into ETEA 16 16 16

Abol ishment of early reti rements 4 26 43 60

TOTAL 1,221 4,481 4,053 4,070

% of GDP 0.7 2.5 2.3 2.3

Source: July 14 bill & Piraeus Bank Economic Research

A second set of reforms was voted on July 22 which included a) the adoption of the Code of Civil Procedure which should accelerate the judicial process and reduce costs; and b) the incorporation of the BRRD into the Greek law.

The new up to Eur86bn ESM program was approved by all relevant institutions on August 19, allowing for the disbursement of the first tranche of Eur13bn plus Eur10bn for the banks’ recap transferred into a segregated ESM account. An additional amount of Eur3.0bn will be disbursed in September-October, subject to the fulfillment of certain prior actions. The proceeds will be used by the govt for the clearing of arrears.

For the continuation of program disbursements including the Eur3.0bn mentioned above, Greece is required to proceed with pension reforms including the implementation of zero deficit clause or alternative measures by October 2015; the adoption of policies to fully offset the impact of the Constitutional Court ruling on the 2012 pension reform; adoption of the OECD toolkit; the establishment of the new privatization fund by end-October with the aim to be fully operational by end-2015; the adoption of decisive actions including the necessary regulatory changes to address the issue of NPLs, in steps until end-2016 , complete the recapitalization of Greek banks by end-2015 and strengthen the governance of HFSF and the banks.

62

FFA and MoU highlights

ESM prepared the FFA (the Financial Facility Agreement) which sets the terms and conditions of the new loan to Greece. The key condition is the MoU (draft agreed at staff level – 11 August 2015) which was agreed by the Institutions and Greece

The overall financial envelope of the ESM program amounts to Eur86 bn which includes a bank buffer of Eur25 bn which could be used to address bank recapitalization costs for viable banks and resolution costs for non-viable banks. ESM may not disburse the entire amount as IMF is also expected to participate; privatization receipts may also reduce the amount to be disbursed; finally, market access towards the second half of the program may also reduce the amount to be disbursed by ESM

The loan will be disbursed in several tranches during the 3-year period with an avg maturity of 32.5 years. The interest rate will be around 1.0%. The loan proceeds will be used for debt servicing, banks, clearing of arrears and built up of cash buffers

Debt sustainability can be achieved through the implementation of the program and other debt-related measures excluding nominal haircuts – after the positive completion of the first program review, the Eurogroup can consider measures so that gross financing needs can remain at a sustainable level (meaning debt servicing approach)

IMF’s participation in the new program is conditional on two issues: a) specification of fiscal, structural and financial sector reforms such as the pension reform ; and b) the debt sustainability

ESM board approved the new loan program on August 19, unlocking the first tranche to Greece on August 20.

The first tranche amounts to Eur26 bn comprised of two sub-tranches. The first sub-tranche amounts to Eur16 bn, of which a) Eur13 bn were disbursed in August 20 to be used for the repayment of GGBs held by ECB amounting to Eur3.2 bn; the repayment of the Eur7.2 bn bridge loan that was granted in July; some other debt repayments of cEur1.6 bn and clearance of arrears and other state uses of cEur1.0 bn and b) Eur3.0 bn will be paid in Sept and Oct subject to certain prior-actions and will be also used for the clearing of state arrears. The second sub-tranche amounts to Eur10.0 bn and will be reserved for banks. It will not be transferred to Greece and will be kept in a segregated account at the ESM. It can be disbursed following a request by SSM, an assessment by DGComp and an approval by ESM.

A second tranche for banks of up to Eur15 bn can be made available after the first review and no later than 15 Nov, subject to the completion of the AQR and stress test. The specific amount will initially be transferred to a segregated ESM account and can be released upon approval of the ESM board

MoU highlights

Primary balance targets: -0.25% in 2015, +0.5% in 2016, +1.75% in 2017 and +3.5% in 2018

Pension system reform by October 2015 including the implementation of the zero deficit clause or mutually agreeable alternative measures. By December 2015, Greece should also integrate all social security funds under a single entity (IKA), establish a new board and management team and create a common pool of funds that will be fully operational by end-2016

Banking sector - MoU requires recapitalization of the banks, measures to enhance insolvency framework and a significant improvement of the governance of the banks and the HFSF. Following the results of the AQR and the stress tests and the assessment of capital needs of the four banks by ECB and the submission of capital plans by the banks, any remaining identified capital shortfalls will be addressed fully by end-2015. The bail in instrument will apply to senior bondholders, while bail in of depositors is excluded. The law relating to govt guarantees on DTA will be amended aiming to limit the link between the banks and the state. Greece should take urgently steps to tackle the NPL problem through the development of necessary instruments including the opening of the market for NPL servicing and disposal and exploring the possibility of a bad bank

Privatizations fund – govt should endorse the establishment of the new privatization fund by the end of October with the aim to be operational by end 2015. It will be established in Greece; it will be supervised by the relevant European institutions; the fund’s task will be to manage valuable assets through privatizations and other means with the aim to increase their value. The shares of Greek banks after their recapitalization will be transferred to the fund. The target is for the fund to release Eur50 bn, of which Eur25 bn will be used for the repayment of the recapitalization of banks and 50% of the remaining Eur25 bn will be used to decrease the debt to GDP ratio and the remaining 50% will be used for investments . Privatization proceeds (excluding bank shares) over the period 2015-2017 are analyzed as follows: Eur1.4 bn in 2015, Eur3.7 bn in 2016 and Eur1.3 bn in 2017. The govt should announce the binding bid dates for Piraeus and Thessaloniki ports by end- October

63

Disbursements under previous programs | June ‘15-July ‘18 funding needs

Disbursements under previous programmes (Eur bn)

Bilateral loans from Euro-zone - May 2010 52.90

EFSF - March 2012 130.90

IMF 31.95

1st programme - May 2010 20.20

2nd programme - March 2012 * 11.75

Total 215.75

*under the 2nd programme, IMF could still disburse Eur16 bn

Sources: EFSF, IMF and Piraeus Securities Research

Funding needs June '15 to July '18 - estimate (Eur bn)

Bridge loan to cover June and July IMF, ECB and interest payments 7.20

Gross financing needs August '15 to July '18 90.20

Amortization 33.80

Repayment IMF and BoG loans 2.10

Interest payments 17.80

Arrears clearance 7.00

Cash buffer for deposit build-up 4.50

Bank recapitalization 25.00

Total gross funding needs plus bridge loan 97.40

less primary surplus 6.00

less privatization proceeds 2.50

less SMP/ANFA profits 7.70

Funding needs to be covered by ESM and IMF 81.20

Source: EU assessment, July 10 & Piraeus Bank Economic Research

64

HRADF | Privatization Plan

The HRADF prepared an updated privatization plan with key privatization projects detailed below:

Regional Airports, through a long-term concession – HRADF has approved Fraport’s Eur1.2 bn offer – Parliamentary approval by January 2016 and delivery of airports by March 2016

Hellinikon, through the sale of 100% of Hellinikon S.A. which will own 30% of the property and develop and manage 100% of the property for 99 years – Lamda Development has signed the relevant contract with a total financial consideration of Eur915 mn – the deadline for the fulfillment of all pre-requisitives to validate the agreement is November 14, 2016

Astir Vouliagmenis, through the sale of 81,122,156 shares of Astir Palace – JERMYN has signed the relevant contract with a consortium of Turkish and Arabic Investors – expected closing date is end-June 2016

Hellenic Gas Transmission System Operator (DESFA), through the sale of 66% of DESFA’s shares (31% HRADF and 35% Hellenic Petroleum) to SOCAR – the transaction is currently reviewed by DG Comp

Piraeus Port (OLP), through the sale of 67% of OLP’s shares (HRADF holds 74%) – five investors have been pre-selected including COSCO –binding offers should be submitted by November 2015 with Parliamentary approval by February 2016

Thessaloniki Port (OLTH), through the sale of 67% of OLTH’s shares (HRADF holds 74%) – eight investors have been pre-selected – binding offers should be submitted by February 2016 with Parliamentary approval by June 2016

TRAINOSE (ROSCO) through the sale of 100% of the company’s shares – three investors have been pre-selected – binding offers should be submitted by December 2015

Athens International Airport (AIA), through the sale of 30% of the AIA shares and extension of concession (HRADF holds 30% and the right to extend concession for 20 more years up to 2046 and Hellenic Republic holds 25%); options currently assessed include trade sale and IPO – launch of tender by December 2015 and expression of interest by February 2016

Egnatia Motorway, through a long-term (35 years) concession of Egnatia Motorway – advisors to be hired in August 2015

Hellenic Petroleum (HRADF holds 35%) – alternative options for disposing the stake are being evaluated (including a strategic investor) to be presented by November 2015

OTE (Hellenic Republic owns 6% of the shares and IKA another 4%; DT owns 40% and has a call option on the 10% state stake) – Hellenic Republic to decide on the percentage of shares to be transferred to HRADF

PPC, through the sale of 17% of the shares, potentially in 2016 – decisions on pending issues include the sale of ADMIE by PPC and the spin-off of about 30% of the production capacity (‘Mikri DEI’) - strategy to be determined by HRADF’s BoD by end-2016

Thessaloniki Water (EYATH), through the sale of a minority stake of 23% (HRADF holds 74%) – no specific dates

Athens Water (EYDAP), through the sale of 11% of the shares (HRADF holds 27%) - no specific dates

DEPA (HRADF holds 65% and Hellenic Petroleum holds 35%) – alternative privatization options will be assessed – no specific dates

65

Economic Outlook (source: Piraeus Bank)

Key Economic Data (YoY % change, unless otherwise stated)

2014 2016 2017

(July estimate) (August estimate)

Real GDP 0.8% -2.0% -0.7% -3.0% to -2.0% 2.0% to 3.0%

Nominal GDP -1.8% -4.0% -1.7% -1.0% to -2.0% 3.0% to 4.0%

GDP deflator -2.6% -2.0% -1.0% 0.5% to 1.5% 1.0% to 2.0%

Inflation -1.3% -1.5% -1.5% 1.0% to 2.0% 1.0% to 2.0%

Unemployment (% of labour force) 26.5% 27.0% 26.0% 25.0% to 26.5% 24.0% to 25.0%

Sources: ELSTAT, Piraeus Bank Research

2015

66

Key Economic Data I

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

GDP constant prices - Eur bn 158.4 165.0 170.7 180.8 188.7 193.0 203.7 210.9 210.4 203.8 193.8 180.0 167.4 185.1 186.5

% chg 4.0% 3.7% 3.2% 6.6% 5.0% 0.9% 5.8% 3.5% -0.4% -4.4% 5.3% -8.9% -6.6% -3.9% 0.8%

Final consumption - Eur bn 140.3 146.1 153.7 157.5 163.4 169.7 176.2 184.2 189.2 189.2 175.9 158.3 149.1 168.6 170.1

% chg 3.2 4.2% 4.2% 4.3% 4.3% 4.5% 3.5% 3.9% 1.8% -0.4% -6.4% -9.7% -7.2% -3.0% 0.9%

Private - Eur bn 109.4 114.8 120.3 124.2 129.0 134.7 140.5 146.0 150.5 148.4 140.1 124.9 117.3 128.0 129.7

% chg 2.5 4.3% 5.1% 3.8% 4.4% 4.5% 2.7% 3.9% 3.1% -1.4% -7.3% -10.9% -8.1% -2.0% 1.3%

Public - Eur bn 31.2 31.4 33.7 33.4 34.5 34.9 35.7 37.6 36.8 37.4 35.8 33.4 31.8 40.6 40.2

% chg 6.0% 4.4% 2.2% 5.7% 4.2% 4.3% 5.5% 5.1% -2.1% 1.6% -4.3% -6.6% -5.0% -6.5% -0.9%

Gross fixed capital - Eur bn 33.2 34.8 38.1 42.6 42.7 40.0 48.2 56.8 53.0 46.0 36.4 30.3 23.0 21.2 21.7

% chg 2.7% 1.4% -1.1% 15.7% 5.5% -12.9% 17.4% 17.8% -6.6% -13.2% -20.9% -16.8% -28.7% -9.5% 2.7%

Exports - Eur bn 39.5 39.5 36.2 37.3 43.7 44.8 46.2 51.1 52.9 43.1 45.1 45.1 42.5 51.6 56.3

% chg 22.2% 0.6% -7.3% -0.7% 18.5% 3.4% 5.2% 10.6% 3.5% -18.5% 4.6% 0.0% 1.2% 2.1% 9.0%

Imports - Eur bn 58.6 59.3 58.5 60.3 63.7 62.7 67.9 78.2 80.2 64.5 60.9 55.5 48.2 56.4 60.6

% chg 19.0% 1.2% -3.4% 5.8% 7.1% -0.7% 13.7% 15.1% 2.6% -19.6% -5.5% -9.0% -9.1% -1.6% 7.4%

GDP current prices - Eur bn 141.7 152.0 162.3 178.6 193.0 199.2 217.8 232.8 242.1 237.4 226.2 207.8 194.2 182.4 179.1

% chg 5.6% 7.2% 6.8% 10.0% 8.1% 3.2% 9.4% 6.9% 4.0% -1.9% -4.7% -8.2% -6.5% -6.1% -1.8%

Final consumption - Eur bn 120.0 129.3 139.6 149.7 161.3 174.0 185.7 199.8 213.7 218.5 207.3 189.1 175.8 166.4 164.4

% chg 6.6% 7.7% 7.9% 7.2% 7.8% 7.8% 6.7% 7.6% 6.9% 2.3% -5.1% -8.8% -7.1% -5.4% -1.2%

Private - Eur bn 92.6 99.3 106.7 114.1 122.4 131.5 139.6 150.0 161.2 160.5 154.1 140.7 130.2 129.9 128.9

% chg 5.9% 7.2% 7.4% 7.0% 7.3% 7.4% 6.1% 7.4% 7.5% -0.5% -3.9% -8.8% -7.4% -0.2% -0.8%

Public - Eur bn 25.2 27.7 30.6 33.0 36.2 39.3 42.4 46.4 49.1 54.0 48.9 44.1 41.1 36.5 35.5

% chg 9.4% 10.0% 10.6% 7.9% 9.6% 8.7% 7.9% 9.5% 5.6% 10.1% -9.5% -9.8% -6.8% -11.2% -2.6%

Gross fixed capital - Eur bn 35.4 36.9 37.5 44.3 47.4 41.1 50.3 59.9 57.4 49.7 39.1 32.0 22.7 21.5 18.9

% chg 6.0% 4.1% 1.8% 18.1% 6.8% -13.1% 22.2% 19.3% -4.2% -13.5% -21.4% -18.1% -28.9% -5.6% -11.8%

Exports - Eur bn 33.5 34.7 32.9 33.2 40.1 42.5 46.2 52.4 56.6 45.1 50.0 52.9 54.8 55.1 59.0

% chg 30.0% 3.5% -5.2% 0.9% 20.9% 5.9% 8.7% 13.6% 7.9% -20.2% 10.7% 5.8% 3.7% 0.6% 7.0%

Imports - Eur bn 49.1 50.9 49.6 52.4 57.3 58.9 69.1 81.4 88.0 69.7 69.4 67.1 63.5 60.6 63.3

% chg 28.9% 3.8% -2.6% 5.7% 9.3% 2.7% 17.5% 17.7% 8.2% -20.7% -0.5% -3.3% -5.3% -4.7% 4.5%

External deficit - Eur bn -15.6 -16.2 -16.7 -19.2 -17.2 -16.4 -23.0 -28.9 -31.4 -24.6 -19.4 -14.2 -8.7 -5.4 -4.3

% chg 26.7% 4.3% 2.9% 15.2% -10.6% -4.8% 40.3% 25.9% 8.7% -21.8% -21.1% -26.6% -38.8% -37.9% -20.5%

GDP deflator 3.1% 3.4% 3.9% 2.9% 1.9% 2.4% 3.3% 4.7% 2.3% 1.1% 1.0% 0.1% -2.3% -2.6%

Inflation 0.029 3.7% 3.9% 3.4% 3.0% 3.5% 3.3% 2.9% 4.2% 1.2% 4.7% 3.3% 1.5% -0.9% -1.4%

Sources: ELSTAT, BoG, FinMin and Piraeus Securities research

67

Key Economic Data II

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

General govt deficit - Eur mn -5,031 -6,542 -7,465 -9,738 -13,940 -10,068 -12,109 -15,833 -23,968 -36,166 -24,113 -19,964 -11,604 -3,327 -6,356

as % of GDP -3.7% -4.3% -4.6% -5.5% -7.2% -5.1% -5.6% -6.8% -9.9% -15.2% -10.7% -9.6% -6.0% -1.8% -3.5%

Total revenues - Eur bn 58.5 59.8 63.0 67.3 70.6 75.2 85.4 94.8 98.3 88.6 92.7 91.0 88.8 87.2 82.0

as % of GDP 41.3% 39.3% 38.8% 37.7% 36.6% 37.8% 39.2% 40.7% 40.6% 37.3% 41.0% 43.8% 45.7% 47.8% 45.8%

Total expenditures - Eur bn 63.6 66.3 70.6 77.1 84.3 85.6 98.5 110.6 122.3 124.7 117.8 112.2 105.6 109.6 88.3

as % of GDP 44.9% 43.6% 43.5% 43.2% 43.7% 43.0% 45.2% 47.5% 50.5% 52.5% 52.1% 54.0% 54.4% 60.1% 49.3%

Primary govt balance as % of GDP 2.0% 0.7% -0.7% -2.6% -1.0% -1.3% -2.0% -4.8% -10.5% -4.8% -3.1% -0.9% 1.2% 0.4%

General govt debt - Eur bn 141.0 157.6 159.2 168.0 183.2 219.1 225.0 239.3 263.3 299.7 330.3 356.0 304.7 319.2 317.1

as % of GDP 0.9948 103.7% 98.1% 94.1% 94.9% 110.0% 103.3% 102.8% 108.8% 126.2% 146.0% 171.3% 156.9% 175.0% 177.1%

Interest costs - Eur mn 10,100 9,457 8,741 8,587 8,986 9,007 9,778 10,684 11,937 11,917 13,236 15,066 9,742 7,271 5,613

as % of GDP 7.1% 6.4% 5.6% 5.0% 4.8% 4.6% 4.7% 4.7% 5.0% 5.0% 5.9% 7.3% 5.0% 4.0% 3.1%

as % of debt 7.2% 6.3% 5.5% 5.2% 5.1% 4.5% 4.4% 4.6% 4.8% 4.2% 4.2% 4.4% 2.9% 2.3% 1.8%

Unemployment rate 0.112 10.8% 10.3% 9.7% 10.5% 9.9% 8.9% 8.3% 7.7% 9.4% 12.7% 17.9% 24.4% 27.5% 26.5%

Employment change yoy -6.9% -7.8% -3.8% 0.7%

Unit Labour costs change yoy 7.8% -1.6% -0.2% -3.3% -7.0% -1.6%

Private credit growth -4.0% -3.9% -3.1%

Domestic Private deposit growth -7.3% 1.1% -1.8%

Eurosystem funding - Eur bn 121.1 73.0 56.4

CA deficit as % of GDP -7.2% -6.5% -6.5% -5.8% -7.6% -11.4% -14.6% -14.9% -11.2% -10.1% -9.9% -2.4% 0.6% 0.9%

Sources: ELSTAT, BoG, FinMin and Piraeus Securities research

68

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Economy & Finance

Greek Equity Market update Sept2015