ffgrp

Folli Follie Outperform (from Neutral) Mkt. Price: 19.50

Retail High Risk (from High Risk) Target Price: 24.0

FTSE Market: 446.94

Equity Research | Update

Changes

Target price 24.0

of which DPS 0.00Previous 34.0

Total stock return 23.0%

Valuation 2014a 2015e 2016e 2017eP/E 9.1x 8.5x 6.9x 6.4x

P/BV 0.9x 0.9x 0.8x 0.8x

EV/Sales 1.9x 1.6x 1.5x 1.4x

EV/EBITDA 8.7x 7.5x 6.8x 6.3x

EV/EBIT 9.6x 8.3x 7.5x 6.9x

Dividend yield 1.9% 4.1% 5.1% 5.4%

FCF yield 0.3% 1.1% 3.9% 5.7%

Per share

EPS 2.14 2.28 2.82 3.03

EPS old 3.30 2.08 2.52 3.07

DPS 0.37 0.80 0.99 1.06

BS data (€m)

Sh. Equity 1,334 1,433 1,556 1,688

Net debt 54 94 109 103

P&L data (€m)

Revenues 998 1,222 1,296 1,359

EBITDA 223 259 285 307

EBIT 202 235 259 279

Net income 141 153 189 203

Trading data 1m 3m 6m 12m

Rel. Performance 2% 3% -5% 26%

Abs. Performance -19% -19% -32% -19%

H | L 52w 14.93 31.50

Market cap. (mn) 1305.49

Shares outstanding (m): 129.3

Free float (%, mn) 61% 797.7

Avg. vol. Traded (52w): 99.8k

Index constituent & weight:

ASE (4.77%), FTSE LC (4.5%), FTSE MI (4.3%)

Antonis Diapoulis

Analyst

[email protected]

T +30 210 367 7532, +30 210 367 7513

Please refer to important disclosures in the Disclosure Appendix

3-Sep-15

Folli Follie is a diversified retail group which offers globally own brand jewels, watches and accessories and resells a

strong brand portfolio in Greece and SEE through department stores. FF operates in 28 countries around the globe

and aims to further expand its presence so as to establish its brand in the international fashion world.

Alpha Finance does and seeks to do business with companies covered in its research reports. Consequently, investors should be aware that the firm may

have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their

investment decision.

RIC: HDFr.AT, BBG: FFGRP GA

Rating - TP EPS Could this be the turnaround in Cash Flow? Folli Follie generated a healthy free cash flow in 1H 15 of €13.18mn vs. -€17mn in 1H 14. It was the combination of prudent WC management, favorable FX trends and good l-f-l growth in Asian markets. One cannot disregard the troubling consumer sentiment outlook in China and the gradual turn to a wholesale oriented model in the Jewelry division which has lower margins. Discounting these factors in our model we lowered our target price to €24/share from €34 previously but upgraded our recommendation to “outperform” from Neutral” since we believe that investors have over penalized the stock due to its Greek listing. New Estimates We have upgraded sales and profitability estimates but adopted a more conservative stance in FCF generation during 2015-16. In detail, revenues and EBITDA CAGR 14/17e could reach 10.8% and 11.2% (vs. AFe old 6% and 7.3%) respectively. For gross profit margin we except pressure in the next couple of years and then stability close to 49% in the long term (AFe old 50%). FCF could reach €16.2mn in 2015 and increase to €56mn in 2016 reaching yield of 10-13% by 2019-20 (AFe old 7-8%). We see WC pressure to remain for at least the next three years with WC/Sales ranging around 8% (AFe old 9%). Net debt/EBITDA could continue decreasing in the coming years closing to zero by 2020 depending on the CAPEX plans of the company. 1H 15 Snapshot & CC highlights FFGRP announced 1H 15 figures which came broadly in line in terms of operating profitability but on lower margins than we anticipated since sales beat our estimates by a €31.4mn delta. In a glimpse, sales, EBITDA, EBIT and NI stood at €594.3mn (+24.1% y-o-y, AFe €563mn), €128.1mn (+10% y-o-y, AFe €135.4mn), €113.19mn (+6.2% y-o-y, AFe €120.9mn) and €73.2mn (+11% y-o-y, AFe €73.9mn) respectively. On a cash flow basis FCF (Op. CF – Inv CF) turned positive to €13.18mn vs. €17mn in 1H 14. The most important comments from the CC were: a) JWA target EBITDA margin at 28% for 2015, b) for 3Q in Greece despite the capital controls effect they were almost flat in July and had a very strong August; it was tourism and partial return of the consumer sentiment that helped a lot, c) in China during 3Q they haven’t seen any problem with their business since the middle class in the country is very low leveraged, d) no detailed guidance was given again but it was restated that a double digit growth in top and bottom line is expected for 2015 with CAPEX standing at €60mn, e) when asked for a listing in Honk Kong the CEO stated that they are considering their options but no decision has been taken yet.

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A-14 O-14 N-14 J-15 F-15 A-15 M-15 J-15 S-15

52w performance

Vol traded (,000s shares) LH scale Adjusted price

mailto:[email protected]

Alpha Finance Equity Research Folli Follie

Please read important disclosures at the end of the report. - 1 -

Rating: Neutral | High risk Share price performance Folli Follie

Target price: 24.0 (%) 1m 6m 12m Current Price €19.5

of which DPS: 0.00 Rel 2% -5% 26% Sector: Retail

Total stock return: 23% Abs -19% -32% -19%

Mkt cap (mn): 1305 Free Float: 61.1%

Folli Follie is a diversified retail

group which offers globally own brand jewels, watches

and accessories and resells a strong brand portfolio in Greece and SEE through

department stores and . FF operates in 28 countries

around the globe and aims to further expand its presence so as to establish its brand in the

international fashion world.

Enterprise value 1940 H | L 52w 21.9 34.4

Headline figures 2011a 2012a 2013a 2014a 2015e 2016e 2017e

P&L items (€mn)

Revenues 1,021 1,110 934 998 1,222 1,296 1,359

Ebitda 199 213 195 223 259 285 307

Ebit 174 186 173 202 235 259 279

Pre tax income 122 131 398 193 204 244 264

Minorities 2 2 3 4 4 4 4

Net income 90 94 345 141 153 189 203

EPS (€) 1.36 1.42 5.22 2.14 2.28 2.82 3.03

DPS (€) 0.00 0.00 0.00 0.37 0.80 0.99 1.06

No. of shares, weighted 66 66 66 66 67 67 67

2011a 2012a 2013a 2014a 2015e 2016e 2017e

Fixed assets, net 233 240 175 186 231 266 303

Cash & equivalents 136 126 252 297 256 241 247

Current assets 1,010 1,096 1,025 1,364 1,415 1,518 1,632

Total assets 1,724 1,816 1,572 1,970 2,059 2,191 2,335

Equity 721 805 1,160 1,334 1,433 1,556 1,688

Minorities 18 20 23 27 27 27 27 website:

Long term debt 315 429 36 304 315 315 315 http://www.follifolliegroup.com

Long term liabs 396 506 64 348 359 359 359

Short term debt 417 312 187 47 35 35 35 all prices as of September 3rd

Current liabilities 9 5 6 5 5 5 5

Equity & liabilities 1,724 1,816 1,572 1,970 2,059 2,191 2,335 Research analyst

2011a 2012a 2013a 2014a 2015e 2016e 2017e Antonis Diapoulis

Gross cash flow 116 122 -1 200 181 218 234 +30 210 367 7532

Δworking capital 116 98 -7 144 101 108 96 [email protected] Operating cash flow 0 24 6 56 80 110 139

Capex 36 39 -289 52 64 55 57

Free cash flow -35 -16 296 5 16 56 81

Δdebt -54 9 -237 129 -1 0 0

Δequity 103 -10 46 0 0 0 0

Dividends 0 0 0 25 54 66 71

Dividends to mins -1 0 0 1 4 4 4

Net debt/ (cash) 596 615 -29 54 94 109 103

Y -o - Y change (%) 2011a 2012a 2013a 2014a 2015e 2016e 2017e

Revenues 3% 9% -16% 7% 22% 6% 5%

Ebitda 0% 7% -9% 15% 16% 10% 8%

Ebit -2% 7% -7% 17% 16% 10% 8%

Pre tax income -6% 7% 204% -52% 6% 19% 8%

Net income 1% 5% 268% -59% 8% 23% 8%

EPS -8% 5% 268% -59% 7% 23% 8%

Margins (%) 2011a 2012a 2013a 2014a 2015e 2016e 2017e

Ebitda 19% 19% 21% 22% 21% 22% 23%

Ebit 17% 17% 19% 20% 19% 20% 21%

Pre tax income 12% 12% 43% 19% 17% 19% 19%

Net income 9% 8% 37% 14% 13% 15% 15%

Ratios & valuation 2011a 2012a 2013a 2014a 2015e 2016e 2017e

P/E 14.4x 13.7x 3.7x 9.1x 8.5x 6.9x 6.4x

P/BV 1.7x 1.6x 1.1x 0.9x 0.9x 0.8x 0.8x

EV/Sales 1.9x 1.7x 2.1x 1.9x 1.6x 1.5x 1.4x

EV/EBITDA 9.8x 9.1x 10.0x 8.7x 7.5x 6.8x 6.3x

EV/EBIT 11.2x 10.4x 11.2x 9.6x 8.3x 7.5x 6.9x

FCF Yield -1.8% -0.8% 22.7% 0.3% 1.1% 3.9% 5.7%

Dividend Yield 0.0% 0.0% 0.0% 1.9% 4.1% 5.1% 5.4%

Payout ratio 0% 0% 0% 18% 35% 35% 35%

Debt/equity 1.0x 0.9x 0.2x 0.3x 0.2x 0.2x 0.2x

Net debt/ebitda 3.0x 2.9x -0.1x 0.2x 0.4x 0.4x 0.3x

Interest covered 2.6x 3.2x 3.3x 7.3x 6.7x 12.3x 13.3x

RoE 12% 11% 29% 10% 10% 12% 12%

RoIC 9% 10% 11% 10% 11% 12% 12%

source: company data & Alpha Finance Research Estimates



Folli Follie in a box

Folli Follie –Good FCF generation – Upgrade to outperform despite lower Target price

Key assumptions:

1. Summary: Folli Follie continues to successfully establish its international brand by continuing its expansion in China during the

past 12 months. Benefits from the EUR/USD FX rate movement in the start of 2015 and good sales growth resulted in a healthy

FCF generation in 1H 15 which could be sustainable in 2015 but also in the long term. On the other hand, worries over the

Chinese economy and the transition to a wholesale model which has lower margins are potential risks. With this note we have

adopted a weaker FCF growth scenario during 15-16 to our previous estimates in order to discount potential risks and a higher

WACC which yields a significantly lower target price. Nevertheless, the negative absolute performance of the stock during the

past 12 months gives a significant upside from current levels, allowing us to upgrade the recommendation to ‘Outperform’ from

‘Neutral’.

2. New Estimates: We expect the group to present revenues and EBITDA CAGR 14/17e of 11% and 11.2% (vs. AFe old 6% and

7%) respectively. In contrast, EBITDA margins are lower by 0.6-1% in the midterm and reach 23% in the long term vs. AFe old

23%. Additionally, we have downgraded 2015-17 FCF yields to 1.1-6% vs. AFe old 6.4-8.6% since we have assumed more

challenges in WC management and higher CAPEX for network expansion.

3. Target Price: Our 2016 target price stands at €24/share (AFe old €34/share). We have assumed an average WACC of 11.5%

(AFe old 9.3%) a terminal growth of 1.5% (vs. AFe old 2.5%), ERP of 5% and weighted risk free rate of 8% (AFe old 5% each).

4. Model Assumptions: Our estimates are affected by the following factors: a) the growth of the store network, the working

capital needs generated and revenues l-f-l growth for the Jewelry Watches Accessories (JWA) segment, b) FX volatility for the

gross margins, c) l-f-l sales growth for department store & retail wholesale segments, d) the level of synergies/co-operation with

Dufry, e) macroeconomic and political conditions and f) management tactical decisions. We have assumed that Folli Follie will

operate 739 (unchanged) POS by the end of 2016 and add 31 new per annum on the back of a variable l-f-l of 0.6-1.4% in the l/t

(vs. AFe old 35 Pos & 3-3.5%). For the next two years though (2015-16) we have assumed a small figure in l-f-l growth resulting

from the slowdown in many markets, FX impact and the fact that sales are mostly generated by new Pos rather than organic.

Gross margins will stand at 48-49% (vs. AFe old 50%) in the long term influenced mostly by the JWA segment expansion.

5. Debt/FCF/CAPEX: We expect net debt to reach to €109mn in 2016 (vs. net cash €29mn in 2013– net debt/EBITDA 2016

0.38x). In the long term (2020) we forecast net debt/EBITDA of -0.15x (AFe old -0.8x), FCF yield of 14% (AFe old 17%) and a

Capex/sales of 4.2% (AFe old 2%).

Key Estimates : TP €25/share (vs AFe old €34)

Revenues - EBITDA – POS CAGR 14/17e 10.8%, 11.2% & 5.2% resp., l-f-l 16e 0.6%, 2 yr avg WC/Sales 0.08x, Gross

profit margin 2016 48.5%

Latest news

Announced the exclusive representation of Shiseido products in Greece and Cyprus,

FFGRP will distribute a €0.2/share capital return. The Share buyback program will continue.

1H 15 Highlights

Good 1H 15 results broadly in line with AFe but net income. sales, EBITDA, EBIT and NI stood at €594.3mn (+24.1%

y-o-y, AFe €563mn), €128.1mn (+10% y-o-y, AFe €135.4mn), €113.19mn (+6.2% y-o-y, AFe €120.9mn) and

€73.2mn (+11% y-o-y, AFe €73.9mn) respectively. On a cash flow basis FCF (Op. CF – Inv CF) turned positive to

€13.18mn vs. €17mn in 1H 14.

WACC TG Sensitivity

WACC/Tg 0.5% 1.5% 2.5%

10.5% 24.8 € 27.0 € 29.9 €

11.5% 22.2 € 24.0 € 26.2 €

12.5% 20.2 € 21.6 € 23.2 €



Valuation – Assumptions Snapshot - Sensitivity

(mn eu) FY 12a FY 13e FY 14e FY 15e FY 16e FY 17e FY 18e FY 19e FY 20e Revenues 1110 934 998 1222 1296 1359 1423 1487 1552 EBITDA 213 195 223 259 285 307 328 349 370 EBIT * (1 - tax rate) (I) 136 150 146 173 198 211 228 242 257 CAPEX 39 -289 52 64 55 57 60 63 66 Depreciation & Amortization 27 21 21 24 26 27 29 30 32 - (Capex - Depreciation) (II) 12 -310 31 40 29 30 31 33 34 - Change in Working Capital (III) 98 -7 144 101 108 96 94 65 48 Reinvestment (II+III=IV) 110 -318 175 141 137 126 125 97 82 Free Cash Flow (I-IV) 25 468 -29 33 61 86 102 145 175 WACC 11.0% 12.1% 11.8% 12.2% 11.4% 11.4% 11.4% 11.4% 11.4% Discounting Factor 90% 81% 72% 65% 58% Discounted FCF 55 69 74 94 102

PV of Cash Flows 395 + Residual Value 1115 Terminal Growth Rate 2.0% Assumptions - Net Debt 109 ERP:5%, Beta 1 - Minorities 4 Rf: 8% + Dufry stake 209

Equity Value 1606

Shares (mn) 67 Dividend per Share 0.00 DCF per share 24.0

Valuation

We perform a DCF analysis for Folli Follie group on top of which we add the valuation of the

stake held in Dufry. Our valuation exercise now yields a 2016 target price of €24/share (AFe

old €34). We have assumed a variable average WACC of 11.5% (AFe old 9.3%), an ERP and

weighted Rf of 8% and 5% respectively (AFe old 5% both) and a terminal growth rate of 2%

(vs. AFe old 2.5%) in order to grasp the long term upside potential of the company due to

exposure foreign markets like China. Our valuation uses what we believe are fair estimates for

the business of the company, taking into account the risky environment it operates in.

Folli Follie DCF model

Source: Company data | AFe |



Assumptions by segment

In this section we present a detailed review of our main assumptions and any changes we

have incorporated.

1. Jewelry Watches Accessories:

a. Network: FF operated 677 by 1H 15. By the end of the current year we

expect FF to operate 693 (AFe old 701) points of sale out of which 443 in

Asia (AFe old 436), 151 in Europe (AFe old 154), 25 in North America (AFe

old 37) and an additional 74 spread worldwide (AFe old 74 - airport

terminals). Thus, we have assumed 46 new POS in 2016, and then 31 per

annum (vs. AFe old 35). Total number of POS at to 863 by 2020 (vs. AFe

old 900). Net additions are mostly in China and some in Europe. For the US

we have very few net additions (1 per annum) as the company’s strategy is

yet unclear.

JWA Stores Forecast

Source: company data, AFe |RHS:% y-o-y change, LHS: stores absolute number| please note that in 2015e l-f-l in gross and includes FX impact of c. 10%

b. Revenues (71-72% of l/t sales): We expect revenues to grow with a GAGR

14/17e of 11.4% (vs. AFe old 7.2%) mostly fueled by sales in Asia (CAGR

14/17e 13.2% vs. AFe old 7.7%), POS net additions in other areas,

synergies from Dufry airport shops and favorable FX rates. 2015 Like for like

growth excluding any FX gains should stand at -2.5% in Asia (AFe old -2%),

-5% in Europe (AFe old -3%) and highly negative in the US (AFe old 5%).

We see these trends reversing by single digit figures from 2017 onwards.

c. Gross Profit margin: Historically, Gross profit margins stood at 56-58%. We

feel that as older units mature, new pos enter the network and most

importantly the company reverses to a more wholesale oriented model,

margin could drop 2-4% in the long term settling to 52% (vs. 53-54%

previously).

d. CAPEX: Having set an average of 31 POS net additions per annum we

437

488

539

607

662 693

739 770

3.6%

18.3%

10.0% 9.7%

22.0%

7.3% 5.6%

-8.1%

7.9%

-2.6%

0.7%

17.3%

0.6% 1.4%

-10%

-5%

0%

5%

10%

15%

20%

25%

0

100

200

300

400

500

600

700

800

900

2010a 2011a 2012a 2013a 2014a 2015e 2016e

POS JWA revenues growth % l-f-l



expect total capex including any reallocations and maintenance to reach

€50mn per annum (l/t CAPEX/Sales 5% - AFE old 2%).

JWA Profitability margins evolution

Source: company data, AFe

2. Department Stores:

a. Network: FF operates six department stores, four in Athens (Attica, Golden

Attica, Attica in the Mall and Factory Outlet) and two in Thessaloniki (Attica

North and one in the center of the city which opened recently in late 2014).

b. Revenues (13-14% of l/t sales): This segment continues to have a strong

performance since 2Q 13. It has been affected by the conditions in the

Greek economy in 1H 15 but not in terms of sales but mostly margins. We

expect sales CAGR 14/17e of 7.2% (vs. 3.8% previously).

Department sales evolution & Profitability

Source :company data, AFe | RHS: Gross profit margin, LHS: Revenues per POS, mn eu

c. Gross Profit margin: Department stores used to enjoy high gross profit

margins of 35-36% before the crisis. In 1H 15 margin remained high at

35.7%. Since new store openings have not put much pressure in this

26%

23% 23%

27% 28%

27% 28%

28%

24% 21% 21%

25% 27% 26% 27% 27%

58%

56%

55% 54% 54%

51% 51%

52%

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52%

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15%

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25%

30%

2010a 2011a 2012e 2013a 2014a 2015e 2016e 2017e

EBITDA Margin (LHS) EBIT Margin (LHS) Gross Profit Margin (RHS)

34%

36%

35%

36% 36%

36% 36% 36%

33%

34%

34%

35%

35%

36%

36%

-50.0

0.0

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2010a 2011a 2012a 2013a 2014a 2015e 2016e 2017e

I. Attica II. Golden Attica (NorthLandmark)

III. Factory Outlet IV. Attica North

V. Attica The Mall Athens VI. Attica Tsimiski

Gross Profit Margin



segment we have kept mid and long term margins stable to 34% (AFe old

midterm 35%, L/T 35%).

d. CAPEX: We identify maintenance CAPEX at c. €1mn per annum from 2015

onwards since we assume no new stores (l/t CAPEX/sales 1%).

3. Retail Wholesale:

a. Network/Revenues (14-15% of sales): This segment combines a number of

retail activities spread in four countries namely Greece, Cyprus and Bulgaria.

FF operates both as wholesale distributer for a number of brands but also

has set up some retail reseller networks for some of them. Economic

environment is mixed in 1H 15 but sales were up 40%. Unfortunately,

expansion generated negative margins thus EBITDA stood at -€2.3mn in 2Q

15. We have set revenue CAGR 14/17e of 12.2% (vs. AFe old 2.2%) on the

back of long term prospects.

b. Gross Profit margin: Revenues have been good but profitability has not

followed. Margins dropped to 6% in 1H 15 and given the circumstances in

these markets in order for FF to attract sales it must sacrifice profits. We

estimate gross profit margin in the long term will reach c. 45% vs. AFe old

50%.

c. CAPEX: Low CAPEX mostly maintenance in the range of €1.8-2mn per

annum (l/t CAPEX/sales 2% - unchanged to AFe old)

Retail/wholesale sales evolution & Profitability

Source: company data, AFe

40% 40% 40%

46% 51% 48% 48% 48%

0%

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20%

30%

40%

50%

60%

0

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100

150

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2010a 2011a 2012a 2013a 2014a 2015e 2016e 2017e

Greece Romania Bulgaria Gross profit margin



1 For detailed accounts refer to the financial sector of this report

4. Folli Follie Group1:

a. Key Financial Forecasts: We estimate revenue and EBITDA CAGR 14/17e of

10.8% and 11.3% (vs. AFe old 6% and 7.3%). Gross profit margin will

reach 48.3% n 2015 and it should gradually stabilize to 49.2% in the long

term (2020). Similarly, EBITDA margin, seen at 21.2% in 2015, should

gradually converge to 23.4% in the long term.

b. Debt: We estimate that by the end of 2015 net debt will stand at €94.4mn

(gross amount not excluding money market products if any). In the coming

years we expect that net debt will reach to c. €109mn by 2016 (net

debt/EBITDA 0.4x) and transform to net cash by 2020 assuming that the

company enters a more mature expansion phase.

c. Working Capital/CAPEX/FCF: Working capital management is the most

important aspect of FF business. We still believe that the operating cycle will

remain high pushing capital needs up. Fortunately in 1H 15 the company

presented a healthy FCF of €13.18mn vs. -€17mn in 1H 14. The company

has not given any guidance but we believe that the trend will remain

positive and growing in the coming years. FCF could be positive in 2015 and

from 2016 we expect a healthy FCF yield of c.4% (l/t now stands at 14%

vs. AFe old 17%).



Forecast Changes

Forecast Changes 2013a 2014a 2015e 2016e 2017a CAGR 14/17 P&L (mn eu) old new old new old new old new

Revenues 934.2 998.1 1030.0 1222.0 1111.9 1296.1 1190.2 1359.0 6.0% 10.8%

% change -15.8% 6.8% 3.2% 22.4% 8.0% 6.1% 7.0% 4.9%

Cost of Goods sold 463.5 496.3 515.0 631.8 557.0 667.0 596.4 696.4 % change -16.2% 7.1% 3.8% 27.3% 8.1% 5.6% 7.1% 4.4%

Gross profit 470.7 501.8 515.0 590.2 554.9 629.1 593.8 662.7 % change -15.5% 6.6% 2.6% 17.6% 7.8% 6.6% 7.0% 5.3% % margin 50.4% 50.3% 50.0% 48.3% 49.9% 48.5% 49.9% 48.8%

EBIT 173.4 202.4 204.7 234.8 229.1 258.8 250.0 279.2 % change -6.7% 16.7% 1.2% 16.0% 11.9% 10.2% 9.1% 7.9% % margin 18.6% 20.3% 19.9% 19.2% 20.6% 20.0% 21.0% 20.5%

EBITDA 194.7 223.0 226.2 259.0 250.9 284.5 272.1 306.5 6.9% 11.2%

% change -8.5% 14.5% 1.4% 16.1% 10.9% 9.9% 8.4% 7.7% % margin 20.8% 22.3% 22.0% 21.2% 22.6% 22.0% 22.9% 22.6%

Finacials 224.24 -9.56 0.19 -30.73 0.19 -14.98 -5.22 -14.82

PBT 397.6 192.8 198.7 204.1 223.1 243.8 244.8 264.4 % change 203.6% -51.5% 3.1% 5.9% 12.3% 19.5% 9.7% 8.4% % margin 42.6% 19.3% 19.3% 16.7% 20.1% 18.8% 20.6% 19.5%

Taxes 50.11 47.36 28.80 47.05 38.23 51.11 38.87 57.37 rate 12.6% 24.6% 14.5% 23.1% 17.1% 21.0% 15.9% 21.7%

Minorities 2.87 4.14 3.25 4.14 3.25 4.14 3.25 4.14

Net income 344.7 141.3 166.6 152.9 181.6 188.5 202.7 202.9 12.8% 12.8%

% change 267.8% -59.0% 17.9% 8.2% 9.0% 23.3% 11.6% 7.6% % margin 36.9% 14.2% 16.2% 12.5% 16.3% 14.5% 17.0% 14.9%



Forecast Changes (per

Segment) 2014a 2015e 2016e 2017e CAGR 14/17

(mn eu) old new old new old new old new

Sales of JWA 704.9 735.6 860.0 800.9 922.4 869.3 973.9 7.2% 11.4% % change 9.7% 5.0% 22.0% 8.9% 7.3% 8.5% 5.6%

% of total 70.6% 71.4% 70.4% 72.0% 71.2% 73.0% 71.7% Travel Retail 136.9 140.6 185.7 143.4 189.4 146.3 193.2 2.2% 12.2%

% change 28.8% 13.9% 35.7% 2.0% 2.0% 2.0% 2.0% % of total 13.7% 14.7% 15.2% 14.8% 14.6% 14.4% 14.2% Retail & Whole Sale 153.5 151.2 173.4 164.9 181.4 171.9 188.9 3.8% 7.2%

% change 12.7% 4.3% 13.0% 9.1% 4.6% 4.2% 4.2% % of total 15.4% 13.6% 14.2% 12.9% 14.0% 12.3% 13.9% Department stores 2.8 2.6 2.9 2.7 2.9 2.7 3.0 -1.1% 2.0%

% change 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% % of total 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% Other

% change 998.1 1030.0 1222.0 1111.9 1296.1 1190.2 1359.0 6.0% 10.8% % of total 6.8% 6.0% 22.4% 8.0% 6.1% 7.0% 4.9%

Revenues

% change 186.9 191.0 225.1 211.0 245.1 229.8 262.7 7.1% 12.0%

16.6% 3.7% 20.4% 10.5% 8.9% 8.9% 7.2%

EBIT 26.5% 26.0% 26.2% 26.4% 26.6% 26.4% 27.0% Jewllery, Watches Accessories 92.4% 93.3% 95.9% 92.1% 94.7% 91.9% 94.1% % change 13.9 12.6 9.8 13.3 12.1 13.9 14.5 0.0% 1.4%

% margin 49.9% 14.5% -29.8% 5.3% 23.8% 5.1% 19.9% % of total 10.2% 9.0% 5.3% 9.3% 6.4% 9.5% 7.5% Travel Retail 6.9% 6.2% 4.2% 5.8% 4.7% 5.6% 5.2% % change 11.93 9.37 11.86 12.92 14.69 14.64 16.87 7.1% 12.3%

% margin 41.6% 18.6% -0.6% 37.8% 23.8% 13.3% 14.9% % of total 7.8% 6.2% 6.8% 7.8% 8.1% 8.5% 8.9% Retail & Whole Sale 5.9% 4.6% 5.1% 5.6% 5.7% 5.9% 6.0% % change -10.42 -8.29 -11.91 -8.10 -13.13 -8.31 -14.87 -7.3% 12.6%

% margin 124.8% 0.1% 14.3% -2.4% 10.2% 2.6% 13.3% % of total -372.2% -318.8% -417.1% -305.2% -450.7% -307.1% -500.5% Department stores -5.2% -4.1% -5.1% -3.5% -5.1% -3.3% -5.3% % change

% margin % of total 202.4 204.7 234.8 229.1 258.8 250.0 279.2 7.3% 11.3%

Other 16.7% 5.1% 16.0% 11.9% 10.2% 9.1% 7.9% % change 20.3% 19.9% 19.2% 20.6% 20.0% 21.0% 20.5% % margin

% of total

196.0 201.9 235.2 222.3 255.4 241.3 273.0 7.2% 11.7%

14.2% 3.3% 20.0% 10.1% 8.6% 8.6% 6.9%

EBIT 27.8% 27.4% 27.3% 27.8% 27.7% 27.8% 28.0% % change 87.9% 89.2% 90.8% 88.6% 89.8% 88.7% 89.1% % margin 15.1 14.1 11.1 14.5 13.3 14.9 15.5 -0.3% 0.9%

Forecast Changes 2014a 2015e 2016e 2017e

Cash Flow Metrics old new old new old new

FCF 4.54 81.87 16.16 66.39 55.64 107.34 81.40 FCF yield 0.3% 6.2% 1.1% 5.0% 3.9% 8.6% 5.7% Operating Cycle 364.80 310.00 321.00 328.00 335.00 336.00 348.00 WC 144.10 88.34 101.30 117.45 108.14 96.32 95.54 Cash 297.17 303.98 255.70 303.55 241.20 336.69 247.45



Financials

Profit & Loss (mn eu) 2011a 2012a 2013a 2014a 2015e 2016e 2017e

Revenues 1021.4 1110.0 934.2 998.1 1222.0 1296.1 1359.0

% change 2.7% 8.7% -15.8% 6.8% 22.4% 6.1% 4.9%

0.0 553.2 586.3 652.6 769.7 817.2 860.5

Cost of Goods sold 504.9 553.2 463.5 496.3 631.8 667.0 696.4

% change 2.8% 9.6% -16.2% 7.1% 27.3% 5.6% 4.4%

Gross profit 516.5 556.9 470.7 501.8 590.2 629.1 662.7

% change 2.6% 7.8% -15.5% 6.6% 17.6% 6.6% 5.3%

% margin 50.6% 50.2% 50.4% 50.3% 48.3% 48.5% 48.8%

EBIT 174.0 185.8 173.4 202.4 234.8 258.8 279.2

% change -1.5% 6.8% -6.7% 16.7% 16.0% 10.2% 7.9%

% margin 17.0% 16.7% 18.6% 20.3% 19.2% 20.0% 20.5%

Depreciation 24.8 27.0 21.3 20.6 24.2 25.8 27.3

EBITDA 198.7 212.8 194.7 223.0 259.0 284.5 306.5

% change 0.2% 7.1% -8.5% 14.5% 16.1% 9.9% 7.7%

% margin 19.5% 19.2% 20.8% 22.3% 21.2% 22.0% 22.6%

PBT 121.9 131.0 397.6 192.8 204.1 243.8 264.4

% change -6.0% 7.4% 203.6% -51.5% 5.9% 19.5% 8.4%

% margin 11.9% 11.8% 42.6% 19.3% 16.7% 18.8% 19.5%

Taxes 30.6 35.3 50.1 47.4 47.1 51.1 57.4

rate 25.1% 26.9% 12.6% 24.6% 23.1% 21.0% 21.7%

Minorities 1.8 2.0 2.9 4.1 4.1 4.1 4.1

Net income 89.5 93.7 344.7 141.3 152.9 188.5 202.9

% change 1.4% 4.7% 267.8% -59.0% 8.2% 23.3% 7.6%

% margin 8.8% 8.4% 36.9% 14.2% 12.5% 14.5% 14.9%

EPS 1.356 1.420 5.221 2.140 2.284 2.816 3.030

% change -8.4% 4.7% 267.8% -59.0% 6.7% 23.3% 7.6%

Source: AFe | company data



Sales B/D (mn eu) 2011a 2012a 2013a 2014a 2015e 2016e 2017e

Sales of JWA 493.3 583.8 642.4 704.9 860.0 922.4 973.9

% change 3.6% 18.3% 10.0% 9.7% 22.0% 7.3% 5.6%

% of total 48.3% 52.6% 68.8% 70.6% 70.4% 71.2% 71.7%

Retail & Whole Sale 106.2 98.4 106.3 136.9 185.7 189.4 193.2

% change -9.4% -7.3% 8.0% 28.8% 35.7% 2.0% 2.0%

% of total 10.4% 8.9% 11.4% 13.7% 15.2% 14.6% 14.2%

Department stores 125.9 123.8 136.2 153.5 173.4 181.4 188.9

% change -7.7% -1.7% 10.0% 12.7% 13.0% 4.6% 4.2%

% of total 12.3% 11.2% 14.6% 15.4% 14.2% 14.0% 13.9%

Other 5.1 3.7 2.5 2.8 2.9 2.9 3.0

% change -27.1% -20.0% -2.5% 2.0% 2.0% 2.0% 2.0%

% of total 0.5% 0.3% 0.3% 0.3% 0.2% 0.2% 0.2%

Intersegment 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Revenues 1021.4 1110.0 934.2 998.1 1222.0 1296.1 1359.0

% change 2.7% 8.7% -15.8% 6.8% 22.4% 6.1% 4.9%


Gross Profit B/D (mn eu) 2011a 2012a 2013a 2014a 2015e 2016e 2017e

JWA 276.3 322.5 348.8 377.1 438.6 472.9 502.0

% change 0.0% 16.7% 8.2% 8.1% 16.3% 7.8% 6.1%

% margin 56.0% 55.2% 54.3% 53.5% 51.0% 51.3% 51.5%

% of total 53.5% 57.9% 74.1% 75.2% 74.3% 75.2% 75.7%

Retail & Whole Sale 42.8 38.9 48.8 69.1 89.1 90.9 92.7

% change -7.6% -9.2% 25.5% 41.7% 28.9% 2.0% 2.0%

% margin 40.3% 39.5% 46% 51% 48% 48% 48%

% of total 8.3% 7.0% 10.4% 13.8% 15.1% 14.5% 14.0%


% change -3.1% -3.3% 11.9% 12.1% 13.7% 4.4% 4.2%

% margin 35.7% 35.1% 35.7% 35.5% 35.7% 35.7% 35.7%

% of total 8.7% 7.8% 10.3% 10.9% 10.5% 10.3% 10.2%

Other 1.0 0.3 0.5 0.7 0.5 0.6 0.6

% change -32.9% -64.5% 38.8% 38.1% -21.2% 13.3% 2.0%

% margin 18.8% 9.2% 18.9% 23.3% 18.0% 20.0% 20.0%

% of total 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%

Gross profit 516.5 556.9 470.7 501.8 590.2 629.1 662.7

% change 2.6% 7.8% -15.5% 6.6% 17.6% 6.6% 5.3%

% margin 50.6% 50.2% 50.4% 50.3% 48.3% 48.5% 48.8%




EBITDA B/D (mn eu) 2011a 2012a 2013a 2014a 2015e 2016e 2017e Jeweler, Watches Accessories 114.4 132.4 171.5 196.0 235.2 255.4 273.0

% change -8.4% 15.7% 29.5% 14.2% 20.0% 8.6% 6.9%

% margin 23.2% 22.7% 26.7% 27.8% 27.3% 27.7% 28.0%

% of total 57.6% 62.2% 88.1% 87.9% 90.8% 89.8% 89.1%

Retail & Whole Sale -8.7 -6.3 10.4 15.1 11.1 13.3 15.5

% change 557.6% -27.7% -265.4% 44.6% -26.0% 19.0% 16.6%

% margin -8.2% -6.4% 9.8% 11.0% 6.0% 7.0% 8.0%

% of total -4.4% -3.0% 5.4% 6.8% 4.3% 4.7% 5.0%


% change -24.8% -41.9% 50.2% 34.9% -0.7% 21.6% 13.7%

% margin 8.8% 5.2% 7.1% 8.5% 7.5% 5.5% 5.8%

% of total 5.6% 3.0% 5.0% 5.9% 5.0% 5.5% 5.8%

Other -2.34 -3.5 -5.0 -1.1 -0.3 0.1 0.1

% change 80.4% 49.1% 44.2% -78.9% -73.1% -151.0% 2.0%

% margin -45.8% -94.1% -192.7% -37.9% -10.0% 5.0% 5.0%

% of total -1.2% -1.6% -2.6% -0.5% -0.1% 0.1% 0.0%

EBITDA 198.7 212.8 194.7 223.0 259.0 284.5 306.5

% change 0.2% 7.1% -8.5% 14.5% 16.1% 9.9% 7.7%

% margin 19.5% 19.2% 20.8% 22.3% 21.2% 22.0% 22.6%




Balance Sheet (mn eu) FY 11a FY 12e FY 13e FY 14e FY 15e FY 16e FY 17e

Cash & Cash Equivalent 135.5 126.5 251.6 297.2 255.7 241.2 247.4

Inventories 339.2 377.6 254.8 366.6 467.4 502.5 543.7

Trade receivables 399.5 445.5 390.4 533.8 505.5 568.2 614.4

Other Current Assets 136.1 146.3 127.7 166.0 186.0 206.0 226.0

Derivatives 0.1 0.0 0.0 0.4 0.0 0.0 0.0 Other Financial assets at FV through profit 0.1 0.0 0.0 0.0 0.0 0.0 0.0

Current Assets 1010.4 1096.0 1024.5 1363.9 1414.6 1517.9 1631.5

Tangible Fixed Assets 233.2 240.1 175.3 185.8 231.4 266.5 302.7

Intangible Assets 103.7 99.6 11.9 11.7 11.4 11.1 10.8

Goodwill 252.8 252.8 91.9 94.5 94.5 94.5 94.5

Investment property 73.8 72.9 76.1 76.0 70.2 64.4 58.5

Investments in Subsidies 0.0 0.5 14.5 0.7 0.0 0.0 0.0

Investments available for sale 0.4 0.6 153.7 207.2 207.2 207.2 207.2

Deferred tax claims 22.3 22.6 3.5 0.0 0.0 0.0 0.0

Other long term assets 27.3 30.8 20.4 29.8 29.8 29.8 29.8

Non Current Assets 713.5 719.9 547.3 605.7 644.6 673.5 703.6

Total Assets 1723.9 1815.8 1571.8 1969.6 2059.2 2191.4 2335.1

L/T Debt 314.7 428.8 35.9 304.3 315.3 315.3 315.3

Deferred tax liabilities 30.9 36.1 12.8 19.0 19.0 19.0 19.0

Employee benefit liabilities 9.4 8.3 2.5 3.7 3.7 3.7 3.7

Total l/t provisions 3.4 3.7 3.5 3.5 3.5 3.5 3.5

Other l/t liabilities 37.2 29.3 9.7 17.7 17.7 17.7 17.7

L/T Liabilities 395.5 506.2 64.4 348.3 359.3 359.3 359.3

S/T debt 417.2 312.2 186.6 46.8 34.8 34.8 34.8

Derivatives 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Trade & Other Payables 154.0 152.3 120.3 181.9 173.1 182.7 194.6

Current Income Tax 8.6 15.0 11.5 26.8 26.8 26.8 26.8

Current Tax Liabilities 8.7 4.9 5.6 5.0 5.0 5.0 5.0

Dividends payable 0.1 0.1 0.0 0.0 0.0 0.0 0.0

S/T liabilities 588.6 484.5 323.9 260.5 239.7 249.4 261.2

Share Capital 20.1 20.1 20.1 20.1 20.1 20.1 20.1

Share Premium 145.2 145.2 145.2 95.0 95.0 95.0 95.0

Other Reserves -22.9 -14.3 47.7 291.7 291.7 291.7 291.7

Other Equity -95.7 -114.6 -130.7 -38.0 -38.0 -38.0 -38.0

Retained earnings 674.7 768.2 1077.8 965.3 1064.7 1187.2 1319.1

Equity 721.4 804.7 1160.1 1334.1 1433.4 1556.0 1687.9

Minority Interests 18.4 20.4 23.3 26.8 26.8 26.8 26.8

Equity & Minorities 739.8 825.1 1183.4 1360.9 1460.2 1582.8 1714.7

Total Liabilities 1723.9 1815.8 1571.8 1969.6 2059.2 2191.4 2335.1




Cash Flow(mn eu) 2011a 2012a 2013e 2014a 2015e 2016e 2017e

Net income 89.5 93.7 344.7 141.3 152.9 188.5 202.9

Plus: Depreciation & Amortization 24.8 27.0 21.3 20.6 24.2 25.8 27.3

Plus: Chng in Provisions 1.8 -8.7 -25.5 9.2 0.0 0.0 0.0

Plus: Chng in Taxes Payable -2.4 2.6 -2.9 15.4 0.0 0.0 0.0

Plus: Minorities 1.8 2.0 2.9 4.1 4.1 4.1 4.1

Plus: non cash taxes 0.4 4.8 -4.2 9.7 0.0 0.0 0.0

minus: other non-cash items 0.0 0.0 337.0 0.0 0.0 0.0 0.0

Plus Dividends received 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Gross Cash Flow 115.8 121.6 -0.8 200.3 181.2 218.5 234.3

Plus: Chng in Acc Payable -9.2 -1.7 -32.0 61.6 -8.8 9.6 11.9

Plus: Chng in other current Liabilities 25.1 -1.5 0.0 0.0 0.0 0.0 0.0

Less: Chng in Acc. Receivable 64.4 46.1 -4.9 90.1 -28.3 62.6 46.2

Less: Other Receivable 24.9 10.1 31.4 20.0 20.0 20.0 20.0

Less: Chng in Inventories 42.2 38.4 -65.8 95.6 100.8 35.2 41.2

Working Capital Chng 115.7 97.9 (7.3) 144.1 101.3 108.1 95.5

Operating Cash Flow 0.1 23.6 6.5 56.2 79.9 110.3 138.8

Less: Purchases of Fixed Assets 35.6 35.3 -200.6 26.1 63.4 54.4 57.1

Less: Chng in Investments 0.0 4.2 -88.4 25.6 0.3 0.3 0.3

Free Cash Flow (35.5) (15.8) 295.5 4.5 16.2 55.6 81.4

Less: Dividends Paid -0.2 0.0 0.0 24.7 53.5 66.0 71.0

Plus: Equity Chng 103.0 -10.2 45.9 0.4 0.0 0.0 0.0

Plus: Debt Chng -54.1 9.2 -237.0 128.6 -1.0 0.0 0.0

Plus: Grants Chng 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Less: Dividends to Minorities -1.3 0.0 0.0 0.6 4.1 4.1 4.1

Plus: Consolidation adjustments -13.4 7.7 20.7 -62.2 0.7 0.0 0.0

Plus: Other 0.2 0.1 0.0 -0.4 0.4 0.0 0.0

Chng in Cash Position 1.7 (9.0) 125.1 45.6 (41.5) (14.5) 6.2

Cash Position 135.5 126.5 251.6 297.2 255.7 241.2 247.4



DISCLOSURE APPENDIX

ALPHA FINANCE INVESTMENT SERVICES S.A. (‘Alpha Finance’) Headquarters: 5, Merlin Street, GR – 106 71 Athens, www.alphafinance.gr T +30-210-367 7400, F +30-210-331 1193, [email protected] Ministry of Development, S.A. Registration Number: 19420/06/B/89/01,G.E.MI.1176701000 Regulated by the Hellenic Capital Market Commission, License No. 42/13.04.1989

Analyst Certification The research analyst(s) undersigned and responsible for the preparation of this report certify (-ies) that a) the views expressed in this report accurately

reflect their (his/her) personal views about any and all of the securities or issuers mentioned in this report and b) no part of the analyst’s compensation

was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Analysts receive compensation

based upon various factors, including the quality and accuracy of research, productivity, experience, individual reputation, competitive factors and feedback

from clients.

Company specific regulatory disclosures

Disclosure checklist for companies mentioned & other price data information

Reuters Rating Price Price date/time Disclosure

Folli Follie HDFr.AT Neutral €19.94 Official close @ 15 September 2015 2 Source: Alpha Finance 1. Alpha Finance and/or its affiliate(s) has acted as manager/co-manager/adviser in the underwriting or placement of securities of this company within the

past 12 months 2. Alpha Finance and/or its affiliate(s) has received compensation for investment banking services from this company within the past 12 months

3. Alpha Finance makes a market in the securities of this company

4. Alpha Finance and its affiliate(s) owns five percent or more of the total share capital of this company

5. The company and its affiliate(s) owns five percent or more of the total share capital of Alpha Finance and its affiliates

6. Alpha Finance has sent the research report to the company prior to publication for factual verification

7. Following 6, Alpha Finance has changed the contents of the initially sent research report, with respect to: no change

8. Alpha Finance has received compensation from the company for the preparation of this research report

Major changes vs. previous research reports

Date of report Price on report date (€) TP (€) Rating Forward1 EPS (€)

15/9/2014 29.45 34 Neutral 2.5

Source: Alpha Finance | 1: next year’s EPS used from December onwards Ratings and target price history

Price chart for Folli Follie Rating history for Folli Follie

DATE Rating Share Price (€) Price Target (€)

16/01/2013 outperform 13.5 16.6

22/10/2013 neutral 20.1 18.9

17/02/2014 neutral 25 25

15/09/2014 neutral 29.3 34

04/09/2015 outperform 19.94 24

Regulatory disclosures This report has been prepared by Alpha Finance Investment Services S.A. (‘Alpha Finance’), a wholly owned subsidiary of Alpha Bank A.E. Alpha Finance is

regulated by the Hellenic Capital Markets Commission (HCMC). Alpha Finance has in effect management policies to identify and confront potential conflicts

of interest that could arise in the research division of the company and/or its affiliates (“Chinese Walls”).

http://www.alphafinance.gr/



Valuation method Our valuation for the FF Group is based on a DCF model. We use a WACC rate of 11.5% with terminal growth rate of 2% to value the group.

Risk rating We rate the FF Group as high risk based on the qualitative/ quantitative assessment of risk we apply on the company (see definitions of risk below). We consider the following the biggest investment risks for the shares: a) Greek Economic environment – Political risk – Consumer behavior b) FX risk (any strengthening of the euro against other currencies like Yen and USD would adversely affect the business travel retail sector) ,c ) Interest rate risk – Prices – inflation – Credit risk – Liquidity risk – Inventory risk, d) Cost Pressures might arise from manufacturing goods in foreign countries (inflationary pressures in labor costs or raw materials), e) Maintaining its brand perception as affordable luxury goods., f) Further downturn in the Greek tourist industry.

Definitions of Fundamental and Risk Ratings and Allocations

RISK RATING Low (L) Medium (M) High (H) Relative to Horizon2 Coverage3 IB services4

FU

ND

AM

EN

TA

L

RA

TIN

G

Outperform O/P TRP1 > +5% TRP1 > +15% ASE Index Dec.’11 10/50 10.0%

Neutral N (5%) < TRP1 < +5% 16/50 0.0%

Underperform U/P TRP1 < (5%) TRP1 < (15%) 4/50 0.0%

Restricted (G) R(G) Alpha Finance belongs to the same group of companies 1/50 0.0%

Restricted (IB) R (IB) Alpha Finance is currently rendering investment banking services 0/50 0.0%

Under review UR/ Not rated NR No rating currently available 19/50 0.0%

Source: Alpha Finance | Data as of 31.12.10 | 1: Total Return Potential (=capital return + dividend yield) | 2: except otherwise stated | 3: Percentage of companies under coverage within this category as of 31.12.10 | 4: Percentage of companies within this rating category for which investment banking services were provided over the past 12 months, as of 31.12.10. In several occasions, subject to the analyst's view and/or due to volatility of the shares, the ratings applied may fall out of the brackets described in the table above. The Alpha Finance universe consists of 50 companies accounting as of 31.12.10 for 79.9% of total market value

Risk ratings explained We derive the overall risk rating for a stock by applying a 60% weight on quantitative and a 40% weight on qualitative factors. We use a scale from 1 to 3

to describe ‘low, ‘medium’ and ‘high’ risk respectively. We compute two different quantitative risks namely liquidity and volatility. We assign equal weights

to liquidity and volatility risks to arrive at a so-called trading or quantitative risk for the specific stock researched. Using a scale of 1-to-3 scale, each

analyst also assigns a qualitative risk that is entirely up to his/her discretion to determine. Following this, we calculated the combined risk of the specific

stock applying the weights mentioned earlier. All IPOs are classified ‘high risk’ for 12 months after their listing date.

Definitions of Risk Ratings

Quant factor Definition Brackets Risk rating

Liquidity Number of shares traded over the last 12 months as % of total shares outstanding

If less than or equal to 33% High If greater than 33% but less than or equal to 66% Medium If greater than 66% Low

Volatility

The standard deviation of daily changes during the last 12 months. Volatility is used as a statistical measure of dispersion and indicates the propensity of a specific equity to suffer large swings in price. The stock’s volatility is measured against the volatility of the ASE index

If equity volatility against the market’s is greater than 2 High If equity volatility against the market’s is greater than 1.5 but less than or equal to 2

Medium

If equity volatility against the market’s is less than or equal to 1.5

Low

Source: Alpha Finance | Data as of 31.12.10 | The quant factors are updated at the end of each calendar quarter

General disclaimer This report has been prepared by Alpha Finance.

This report by no means provides investment advice as to any financial instruments contained herein. We aim to express our value judgments as to

possible or existing investments, without any existing contractual obligation to our clients. We cannot assume any liability for any investments undertaken

by our clients, since these investments will be a product of their own free will. The information contained in this report has been taken from sources,

which we deem to be reliable. We do not represent that such information is accurate or complete and it should not be relied upon as such. All opinions

and estimates expressed herein constitute our judgment as of this date and are subject to change without notice. Past performance is not indicative of

future results. The opinions and recommendations herein do not take into account individual client circumstances, objectives or needs. This report is

published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial

instruments.

© 2014 Alpha Finance. All rights reserved. This report may not be reproduced or redistributed, in whole or in part, without the written permission of Alpha

Finance and Alpha Finance accepts no liability whatsoever for the actions of third parties in this respect.


Alpha Finance Investment Services S.A.

Member of the AE, CSE 5 Merlin street, 106 71 Athens Greece

T +30-210-367 7400 F +30-210-331 1193 [email protected] www.alphafinance.gr

Equities Research Manousos Stathoudakis, Director Antonis Diapoulis Angelos Chorafas Nikos Katsenos Katia Zahari [email protected] T +30-210-367 7545

Sales & Trading Spyros Malavazos, Director Equities Sales | Foreign Institutions Natasa Martseki, Director Vassilis Galleos Ioannis Batistakis Equities Sales & Trading | Institutions Kostas Tzimos Maria Vryoni Giota Kouli Chris Xikis Derivatives Sales & Trading Lefteris Syrrakos, Director Andreas Markogiannis Angelos Kostis Stavros Tsimpos Equities Trading | Retail Andreas Tzevelekos, Head Maria Saranti

Market Making | Equities & Derivatives Andreas Papanayotopoulos, Director Stelios Tzaras International Markets | Sales & Trading Andreas Papanayotopoulos, Director Giannis Giouremos George Sarris Sofia Giannakou

Equities Sales | Retail Pantelis Tsitos, Director Kostantinos Kostoulas, Deputy Director Leonidas Kyriakopoulos Stavroula Galani Lazaros Koutromanos Kleanthis Schinas

[email protected]


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Documents

eps old

folli follie

long term afe old

high risk target price

ftse market

f yield

retail high risk

ftse mi