greek market update february 2016

Greek Market Update

2

Greek Equity Research February 2016

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]

Please see last page for important disclosures and analyst certification.

mailto:[email protected]









3

Table of contents

Key Investment Considerations

2015 politics & the market

Politics remain the main risk

Macros remain weak despite early signs of recovery

Non-Financials seem attractive

Company Section

Aegean Airlines (AGNr.AT)

Athens Exchange Group (EXCr.AT)

Autohellas (AUTr.AT)

Coca Cola HBC (EEEr.AT)

Folli Follie Group (HDFr.AT)

Fourlis (FRL.AT)

Frigoglass (FRIr.AT)

Hellenic Telecoms (OTEr.AT)

Jumbo (BABr.AT)

Motor Oil (MORr.AT)

OPAP (OPAr.AT)

PPC (DEHr.AT)

Titan Cement (TTNr.AT)

Piraeus Securities Universe

Important Disclosures

Page

4

5-7

8

9-11

12-18

19

20-22

23-25

26-28

29-31

32-34

35-37

38-40

41-43

44-46

47-49

50-52

53-55

56-58

59


4

Key Investment Considerations

We update our Top Pick list, which includes Motor Oil, OTE, FFGROUP and Jumbo. MOH enjoys a favorable benchmark margin environment, as well as favorable FX dynamics. OTE combines attractive valuation multiples with low leverage, produces at least Eur0.5 bn of free cash flow per year and sets to benefit from rising broadband penetration. FFGRPOUP offers exposure to growing markets such as the Chinese one and attractive valuations due to recent stock weakness. Jumbo enjoys solid fundamentals, significant market share gains in Greece and growing international presence due to recent entrance in the Romanian market

Apart from our top picks, we have Outperform ratings on Aegean Airlines, ATHEX, OPAP and Fourlis. In the banking sector, we have an Outperform rating on Alpha Bank

The valuation of our non-bank universe implies an upside potential of 19.8%, while the DDM model generates an upside of 14.7%

A positive contribution by the banking sector could render the Greek market as the best performing market in 2016. Greek banks trade at a c70% discount to their tangible book, while they also enjoy capital ratios of around 19%. A swift conclusion of the programme review followed by a restructuring of Greek debt could lead bank valuations to double

Further, OECD leading indicator points to a rebound of the economic activity in Greece. The recent upgrade of Greece by S&P is another positive signal

Positive triggers to our valuation include a) the successful and timely completion of the review of the Greek programme; b) a firm resolution of the Greek debt issue; c) better than currently anticipated economy dynamics with key catalyst being the privatization programme (i.e. regional airports, ports, Hellinikon and energy market), efficient absorption of EU funds and possible consumption recovery supported by lower fuel costs; and d) effective management of the banking sector’s NPLs

Apart from the volatility of the global environment, the key domestic down-side risk is political instability triggered by the implementation of politically sensitive reforms such as the pension reform


5

2015, a year to remember

• 25 January: 1st Elections, Syriza wins

36.3% of the vote and makes a

coalition govt. with ANEL .

• 24 February: 1st agreement between

Greece and its creditors. Further

negotiations needed to clarify issues.

• 26 June: 4-month negotiations bear

no fruits; PM Tsipras calls a

referendum on creditors’ proposals

for 5 July.

• 28 June: Capital controls initiated;

Athens Exchange to remain closed as

of 29 June.

• 5 July: Referendum yields a 61% No

vote.

• 3 August : ATHEX reopens.

• 14 August: Parliament approves draft

law enacting 3rd bailout.

• 20 August: PM Tsipras resigns.

• 20 September: 2nd elections, Syriza

wins 35.5% of the vote and forms a

coalition govt. with ANEL.

• 31 October: comprehensive

assessment of Greek banks published

• 17 November-14 December : bank

recaps

0

20

40

60

80

100

120

2015 in a chart | politics and the market

ATHEX Composite Greek Banks Piraeus Universe

1st elections

Capital controls-ATHEX ceases trading

ATHEX reopens

2nd elections

Sources: Factset, Bloomberg, Piraeus Securities


6

Increased political risk, the capital controls and the weakness of the banking sector were the key highlights in 2015 that led to weakness across Greek assets.

A tumultuous year for Greek equities and GGBs alike…

-23.6%

-7.5%

8.5% 12.7%

9.6% 6.8%

-7.2%

10.7%

33.5%

-0.3

-0.2

-0.1

0

0.1

0.2

0.3

0.4 ATHEX 2015 performance vs peers

Sources: Factset, Bloomberg, Piraeus Securities

6.00

9.00

12.00

15.00

18.00

550

600

650

700

750

800

850

900

950

1,000 ATHEX GI vs 10Y GGB yield 2015

ATHEX GI - Left axis 10y GGB yield - right axis

400

500

600

700

800

900

1,000

1,100

ATHEX Composite vs EuroStoxx600 | 2015 performance

Greece ATHEX Composite STOXX Europe 600 (Rebased)

4.0

6.0

8.0

10.0

12.0

14.0

16.0MSCI Greece vs MSCI Europe | 2015 performance

MSCI Greece MSCI Europe (Rebased)


7

…as Banks had a tough year, while non-financials had a much better picture

Greek non-financials had a much better performance with our non-banks universe retreating by c4%, while banks literally collapsed before recuperating some of the losses at the very back end of the year, cutting the losses to 37.3%. The General Index fell by 23.6% and the FTSE Large Cap by 30.8%.

Sources: Factset, Bloomberg, ATHEX, Piraeus Securities

0

20

40

60

80

100

120ATHEX Composite ex-banks vs Greek banks 2015

ATHEX Composite ex-banks Greek banks

0

20

40

60

80

100

120

140

160

180 PS Universe vs ATHEX Composite 2000-2015

Universe ATHEX Composite

55

65

75

85

95

105

115

PS Universe vs ATHEX Composite 2015

Universe ATHEX Composite


8

Politics remain a risk; review of the programme the key focus in the short term

Main short to mid-term challenges • Pass the Pension reform from the

Parliament • Resolve the migrant standoff

between EU and Greece • Pass the review of the Greek

programme

If successful… • ….will lead to a repricing of Greek assets

higher • It could at a later stage instigate the

initiation of the talks for a possible restructuring of the Greek debt

If not successful… • …will lead to an increase of political risk • Could shake the foundations of the

Greek coalition government and possibly lead to early elections

• Will put downward pressure on Greek assets

Sources: ELSTAT, Piraeus Securities

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

0

50,000

100,000

150,000

200,000

250,000

19

32

19

36

19

40

19

58

19

62

19

66

19

70

19

74

19

78

19

82

19

86

19

90

19

94

19

98

20

02

20

06

20

10

20

14

Greece | Pension reform driven by adverse demographic trends

Marriages/1,000 persons Births

Syriza (left); 145

ANEL (right); 10

New Democracy

(centre-right); 75

Golden Dawn (far right); 18

PASOK (Centre-left);

17

KKE (Communists)

; 15 ToPotami (centre-left);

11

Centrists (centre); 9

Greek parliament | parties and # of MPs

Syriza and Anel are the coalition partners in the Greek government

S&P already discounts the successful review of the Greek programme by end-March 2016. In this context Greece was upgraded to B- from CCC+ with a Stable outlook on 22 January 2016.


9

Greek Macros remain weak; there are though some early signs of recovery #1

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

196

0

196

3

196

6

196

9

197

2

197

5

197

8

198

1

198

4

198

7

199

0

199

3

199

6

199

9

200

2

200

5

200

8

201

1

201

4

Average CPI 1960-2015

• Annual CPI remains in negative territory continuously since March 2013

• Expectations for 2016 call for marginally positive inflation

• Low oil prices and tight fiscal policy should keep price growth at bay

• Unemployment remains at elevated levels especially in the 15-29 age bracket

• Recent fall in unemployment is mainly driven by the tourism sector and an increase in part time employment (c9% of total)

75.0

85.0

95.0

105.0

115.0

125.0

135.0

Jan

00

No

v00

Sep

01

Jul0

2

May

03

Mar

04

Jan

05

No

v05

Sep

06

Jul0

7

May

08

Mar

09

Jan

10

No

v10

Sep

11

Jul1

2

May

13

Mar

14

Jan

15

Greece | Seasonally adj. industrial production index 2000-2015

• Industrial production remains at depressed levels

• All main industrial groupings remain on negative trajectory although energy production should pick up in the following quarters due to low natgas prices

• PMI turning to marginal growth territory (50.2) first time in 16 months in December before retreating to 50 in January

0.0

5.0

10.0

15.0

20.0

25.0

30.0

1Q

20

01

3Q

20

01

1Q

20

02

3Q

20

02

1Q

20

03

3Q

20

03

1Q

20

04

3Q

20

04

1Q

20

05

3Q

20

05

1Q

20

06

3Q

20

06

1Q

20

07

3Q

20

07

1Q

20

08

3Q

20

08

1Q

20

09

3Q

20

09

1Q

20

10

3Q

20

10

1Q

20

11

3Q

20

11

1Q

20

12

3Q

20

12

1Q

20

13

3Q

20

13

1Q

20

14

3Q

20

14

1Q

20

15

3Q

20

15

Greece | Unemployment rate (%) 2001-2015

22.0

23.0

24.0

25.0

26.0

27.0

28.0

29.0

1Q 2014 2Q2014 3Q2014 4Q2014 1Q 2015 2Q2015 3Q2015

Greece | Unemployment rate (%) 1Q2014-3Q2015

Sources: EU, IMF, ELSTAT, AMECO, Markit, Piraeus Securities

25.00

30.00

35.00

40.00

45.00

50.00

55.00

60.00

1/3

1/13

3/2

9/13

5/3

1/13

7/3

1/13

9/3

0/13

11/

29/1

3

1/3

1/14

3/3

1/14

5/3

0/14

7/3

1/14

9/3

0/14

11/

28/1

4

1/3

0/15

3/3

1/15

5/2

9/15

7/3

1/15

9/3

0/15

11/

30/1

5

1/3

1/16

Greek PMI returns to Neutral territory

10

Greek Macros remain weak; there are though some early signs of reversal #2

• Wages for the whole country are at 2 year highs…

• …but domestic demand is still floundering and is not expected to grow before 2017

• Construction shows some signs of improvement mainly due to public investments

• January-September 2015 building volume and surface was up by 40.7% and 10.4% respectively with private activity down in the low to mid single digits

• Significant fall in productivity from peak to trough

• No productivity gains in the past 2 years, while capacity utilization remains at very low levels..

• …and gross capital formation is very low but with limited (if any) downside.

Sources: EU, IMF, ELSTAT, AMECO, Piraeus Securities

80.0

85.0

90.0

95.0

100.0

105.0

110.0

115.0

120.0

125.0

130.0

1Q

200

6

3Q

200

6

1Q

200

7

3Q

200

7

1Q

200

8

3Q

200

8

1Q

200

9

3Q

200

9

1Q

201

0

3Q

201

0

1Q

201

1

3Q

201

1

1Q

201

2

3Q

201

2

1Q

201

3

3Q

201

3

1Q

201

4

3Q

201

4

1Q

201

5

3Q

201

5

Seasonally adj. Wage Index 2006-2015 (2012=100)

80

85

90

95

100

105

110

115

20

15

20

14

20

13

20

12

20

11

20

10

20

09

20

08

20

07

20

06

20

05

20

04

20

03

20

02

20

01

20

00

19

99

19

98

19

97

19

96

19

95

Total Productivity Greece vs Euro-area 1995-2015 (2010=100)

Greece EuroArea

-18.3% peak to trough

flat since 2013

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

2017

e

2016

e

2015

e

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

Greece vs Euro-area | domestic demand YoY chg

Greece Euro-area

2008-15 demand declined by 35.3%

50

55

60

65

70

75

80

85

1/1/

200

0

1/10

/200

0

1/7/

200

1

1/4/

200

2

1/1/

200

3

1/10

/200

3

1/7/

200

4

1/4/

200

5

1/1/

200

6

1/10

/200

6

1/7/

200

7

1/4/

200

8

1/1/

200

9

1/10

/200

9

1/7/

201

0

1/4/

201

1

1/1/

201

2

1/10

/201

2

1/7/

201

3

1/4/

201

4

1/1/

201

5

1/10

/201

5

Capacity Utilization (%)

0

50

100

150

200

250

300

4Q

200

0

3Q

200

1

2Q

200

2

1Q

20

03

4Q

200

3

3Q

200

4

2Q

200

5

1Q

20

06

4Q

200

6

3Q

200

7

2Q

200

8

1Q

20

09

4Q

200

9

3Q

201

0

2Q

201

1

1Q

20

12

4Q

201

2

3Q

201

3

2Q

201

4

1Q

20

15

Greece | Construction production index 4Q2000-3Q2015

4Q MA

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0% Gross capital formation (% of GDP, 4Q MA)

Government Households Business (non-financial)

11

OECD Composite leading indicator points to a rebound in economic activity

• After the plunge of the index during the 2015 as a result of the spike in political risk, sentiment now points to a rebound in economic activity

• Greece seems to have built expectations of outperformance vs the rest of the South and the wider EuroArea.

Sources: OECD, Piraeus Securities

97.5

98

98.5

99

99.5

100

100.5

101

101.5

102

102.5

103

OECD Composite leading indicators

Greece

Ireland

Italy

Portugal

Euro area (19countries)

12

On historical data, the Greek market does not seem to be attractive …

• Earnings yield for the market now stands at 7.2% marginally lower than the long term median of 7.6%. On the other hand GGB yields remain elevated and limit the upside potential of equities.

• Schiller P/E remains well above long term averages on the back of a combination of weak earnings and deflation; however, the Greek multiple stands well below global levels

Sources: Factset, Bloomberg, ATHEX, Effect, Piraeus Securities

0

5

10

15

20

25

30

35

40

1/0

1/2

00

16

/11

/20

01

11

/19

/20

01

4/2

9/2

00

21

0/0

7/2

00

23

/17

/20

03

8/2

5/2

00

32

/02

/20

04

7/1

2/2

00

41

2/2

0/2

00

45

/30

/20

05

11

/07

/20

05

4/1

7/2

00

69

/25

/20

06

3/0

5/2

00

78

/13

/20

07

1/2

1/2

00

86

/30

/20

08

12

/08

/20

08

5/1

8/2

00

91

0/2

6/2

00

94

/05

/20

10

9/1

3/2

01

02

/21

/20

11

8/0

1/2

01

11

/09

/20

12

6/1

8/2

01

21

1/2

6/2

01

25

/06

/20

13

10

/14

/20

13

3/2

4/2

01

49

/01

/20

14

2/0

9/2

01

57

/20

/20

15

12

/28

/20

15

ATHEX dividend yield (ex-banks) vs GGB 10Y yield

Dividend yield 10Y GGB yield

0

10

20

30

40

01

/01

/01

06

/11

/01

11

/19

/01

04

/29

/02

10

/07

/02

03

/17

/03

08

/25

/03

02

/02

/04

07

/12

/04

12

/20

/04

05

/30

/05

11

/07

/05

04

/17

/06

09

/25

/06

03

/05

/07

08

/13

/07

01

/21

/08

06

/30

/08

12

/08

/08

05

/18

/09

10

/26

/09

04

/05

/10

09

/13

/10

02

/21

/11

08

/01

/11

01

/09

/12

06

/18

/12

11

/26

/12

05

/06

/13

10

/14

/13

03

/24

/14

09

/01

/14

02

/09

/15

07

/20

/15

12

/28

/15

ATHEX GI Earnings Yield vs GGBs yield

GGB yield Earnings Yield

13

• The plunge of the market during January, widened the P/E discount to 18.5% vs the long term median from 14.3% at the end of the 2015

• The EV/EBITDA discount vs the median stands at 11.9%, largely unchanged vs a month ago

• Schiller P/E of our universe has de-rated since the highs of last year and is now hovering around its mean

• In all, the market seems to have incorporated some EPS downgrades

…Much better picture for our non-financials universe #1

Sources: Factset, Bloomberg, ATHEX, Effect, Piraeus Securities

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

Jan

-10

Ap

r-10

Jul-

10

Oct

-10

Jan

-11

Ap

r-11

Jul-

11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12

Oct

-12

Jan

-13

Ap

r-13

Jul-

13

Oct

-13

Jan

-14

Ap

r-14

Jul-

14

Oct

-14

Jan

-15

Ap

r-15

Jul-

15

Oct

-15

Jan

-16

Piraeus non-banks Universe; Schiller P/E 2010-now

Schiller P/E Median

0

5

10

15

20

25

1/3

1/20

00

7/3

1/20

00

1/3

1/20

01

7/3

1/20

01

1/3

1/20

02

7/3

1/20

02

1/3

1/20

03

7/3

1/20

03

1/3

0/20

04

7/3

0/20

04

1/3

1/20

05

7/2

9/20

05

1/3

1/20

06

7/3

1/20

06

1/3

1/20

07

7/3

1/20

07

1/3

1/20

08

7/3

1/20

08

1/3

0/20

09

7/3

1/20

09

1/2

9/20

10

7/3

0/20

10

1/3

1/20

11

7/2

9/20

11

1/3

1/20

12

7/3

1/20

12

1/3

1/20

13

7/3

1/20

13

1/3

1/20

14

7/3

1/20

14

1/3

0/20

15

7/3

1/20

15

1/2

9/20

16

Consensus 12m Fwd P/E- PS non financials universe

0

2

4

6

8

10

12

2/2

9/20

00

7/3

1/20

00

12/

29/2

000

5/3

1/20

01

10/

31/2

001

3/2

9/20

02

8/3

0/20

02

1/3

1/20

03

6/3

0/20

03

11/

28/2

003

4/3

0/20

04

9/3

0/20

04

2/2

8/20

05

7/2

9/20

05

12/

30/2

005

5/3

1/20

06

10/

31/2

006

3/3

0/20

07

8/3

1/20

07

1/3

1/20

08

6/3

0/20

08

11/

28/2

008

4/3

0/20

09

9/3

0/20

09

2/2

6/20

10

7/3

0/20

10

12/

31/2

010

5/3

1/20

11

10/

31/2

011

3/3

0/20

12

8/3

1/20

12

1/3

1/20

13

6/2

8/20

13

11/

29/2

013

4/3

0/20

14

9/3

0/20

14

2/2

7/20

15

7/3

1/20

15

12/

31/2

015

Consensus 12M Fwd EV/EBITDA-PS non financials universe

14

• The low double digit discount in terms of P/E and EV/EBITDA expands significantly when we look on P/B and P/CF, suggesting concerns over the balance sheet valuation and the sustainability of cash flows

• Comparing our universe with the Greek corporate bond space, we see equities on the brink of entering the Buy zone

Much better picture for our non-financials universe #2

Sources: Factset, Bloomberg, ATHEX, Effect, Piraeus Securities, Piraeus Bank (Piraeus Bank’s proprietary corporate bond index includes 15 issues from CCHBC, OTE, Hellenic Petroleum, Intralot, Frigoglass, PPC, Titan, Motor Oil).

0

0.5

1

1.5

2

2.5

3

Earnings Yield vs Bond Yield | PS non banks universe vs Piraeus Bank Corporate Bond Index

<2stdv Sell

>2stdv Buy

0

1

2

3

4

5

Jan

-00

Sep

-00

May

-01

Jan

-02

Sep

-02

May

-03

Jan

-04

Sep

-04

May

-05

Jan

-06

Sep

-06

May

-07

Jan

-08

Sep

-08

May

-09

Jan

-10

Sep

-10

May

-11

Jan

-12

Sep

-12

May

-13

Jan

-14

Sep

-14

May

-15

Jan

-16

Consensus 12m Fwd P/B- PS non financials universe

P/B Median

0

5

10

15

20

Jan

-00

Sep

-00

May

-01

Jan

-02

Sep

-02

May

-03

Jan

-04

Sep

-04

May

-05

Jan

-06

Sep

-06

May

-07

Jan

-08

Sep

-08

May

-09

Jan

-10

Sep

-10

May

-11

Jan

-12

Sep

-12

May

-13

Jan

-14

Sep

-14

May

-15

Jan

-16

Consensus 12m Fwd P/CF-PS non financials universe

P/CF Median

15

• The operating margin seems to have reached a plateau and slowly moving on an uptrend

• Deleveraging is progressing for our universe

• The broader market though remains relatively leveraged

Operating performance on the mend…

Sources: Factset, Bloomberg, ATHEX, Effect, Piraeus Securities,

0

1

2

3

4

5

Net debt/EBITDA, PS Universe vs ATHEX Composite (ex-banks)

PS Universe (ex-banks) ATHEX Composite (ex-banks)

0

1

2

3

4

5

6

7

8

Jan

-00

Sep

-00

May

-01

Jan

-02

Sep

-02

May

-03

Jan

-04

Sep

-04

May

-05

Jan

-06

Sep

-06

May

-07

Jan

-08

Sep

-08

May

-09

Jan

-10

Sep

-10

May

-11

Jan

-12

Sep

-12

May

-13

Jan

-14

Sep

-14

May

-15

Interest coverage PS Universe (ex-Banks) vs ATHEX Composite (ex-banks)

Universe (ex-banks)Interest coverage ATHEX (ex-banks) interest coverage)

0

5

10

15

20

25

30

35

40

45

1/3

1/2

000

9/2

9/2

000

5/3

1/2

001

1/3

1/2

002

9/3

0/2

002

5/3

0/2

003

1/3

0/2

004

9/3

0/2

004

5/3

1/2

005

1/3

1/2

006

9/2

9/2

006

5/3

1/2

007

1/3

1/2

008

9/3

0/2

008

5/2

9/2

009

1/2

9/2

010

9/3

0/2

010

5/3

1/2

011

1/3

1/2

012

9/2

8/2

012

5/3

1/2

013

1/3

1/2

014

9/3

0/2

014

5/2

9/2

015

1/2

9/2

016

PS Universe | EBITDA margin seesm to have stabilized

EBITDA margin

Median


16

We see a 19.8% upside derived from our Non-Financial universe

• We see a c6% upside from end-2015 levels based on our target market caps and 19.8% based on 22 January closing prices. Note that our universe grew 5% last year, while excluding CCHBC it was down 4%

• From our outperform list we favour Motor Oil, OTE, Jumbo and FFGRP

53.10%

26.20%

14.50% 14.00% 13.20% 12.60%

1.50%

-1.00% -6.80% -9.00%

-28.50% -34.50%

-40.00%-30.00%-20.00%-10.00%

0.00%10.00%20.00%30.00%40.00%50.00%60.00%

2015 performance | PS non financials universe

Piraeus Securities Universe valuation (non-financials)

current price

(COB 22-Jan-

2016) Market cap. PT

number of

shares

Target

Market

cap.

Total

Expected

return

Aegean 6.89 492.1 8.50 71.4 607.0 24.6%

ATHEX 4.54 296.8 5.40 65.4 353.0 20.8%

Autohellas 10.95 133.1 10.00 12.2 121.6 -8.1%

CCHBC 18.25 6,712.4 17.00 367.8 6,252.6 -6.7%

Frigoglass 1.62 82.0 2.40 50.6 121.4 48.1%

Fourlis 2.56 130.5 3.85 51.0 196.3 50.4%

FFGROUP * 12.95 867.0 22.40 66.9 1,499.6 73.0%

Jumbo * 9.76 1,327.9 11.80 136.1 1,605.5 20.9%

Motor Oil * 8.91 987.1 14.00 110.8 1,551.0 57.8%

OTE* 7.60 3,725.1 10.20 490.2 4,999.5 34.3%

OPAP 6.39 2,038.4 9.00 319.0 2,871.0 42.5%

PPC 3.32 770.2 3.70 232.0 858.4 13.2%

Total expected upside 17,562.6 21,037.0 19.8%

Source: Piraeus Securities, Greek Equity Research

* Top picks


17

Our DDM model generates a 14.7% upside

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

Inputs Comments

Current Output

Earnings2014 1,385 PS 2015e PV of Dividends during high growth phase1,597

Dividend payout 43.8% PS 2015e PV of Terminal va lue 18,547

Dividend2014 607 PS 2015e Total Value 20,144

Market capita l i zation 17,562 Based on the clos ing prices of 22 Jan., 2016 Current Value 17,562

Upside/(Downside) 14.7%

Phase I: High growth

Expected growth 1.0% 2011-2016 EPS CAGR

Period (years ) 4 We assume a 4-year high growth period

Dividend payout 43.8% Assuming an unchanged payout

Risk free rate 0.4% Yield of the 10-year German government bond (EU risk free)

Global risk premium 5.8% EMRP used for developed markets

Country premium 14.3% Assuming 910 bas is points bond spread and 1.5x higher volati l i ty for equities

EMRP 20.1%

beta 1.0

Cost of equity 20.4%

Phase II: Stable growth

Expected growth 0.4% Drops s igni ficantly (equals the risk free rate)

Period perpetuity

Dividend payout 94.3% Based on fundamentals (Payout = 1 - g/ROE)

Risk free rate 0.4% Unchanged relative to Stage I

Global risk premium 5.8% Unchanged relative to Stage I

Country premium 0.0% Drops to zero

EMRP 5.8% Drops s igni ficantly

beta 1.0 Unchanged relative to Stage I

Cost of equity 6.2% Drops s igni ficantly

Source: Piraeus Sec Research Department Note: Figures in EURO million unless otherwise stated

Word of cautionThe 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.


18

We are more cautious than consensus

We stand 5.5% below 2016 consensus mainly due to lower estimates on PPC and OPAP.

OPAP

PPC

OTE

MOH

EXAE

BELA FFGRP AEGN OTOEL

FRIGO

CCH FOYRK!

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

-4.00 -2.00 0.00 2.00 4.00 6.00 8.00 10.00

Sale

s gr

ow

th 2

01

6/2

01

5 c

hg

(%)

EBITDA margin 2016/2015 chg (pps)

Consensus estimates on PS non financial universe

Sources: Bloomberg, Factset, Piraeus Securities -100.0% -50.0% 0.0% 50.0% 100.0%

FFGRP GA

FOYRK GA

EXAE GA

CCH LN

AEGN GA

FRIGO GA

OPAP GA

PPC GA

BELA GA

HTO GA

MOH GA

OTOEL GA

Piraeus Securities 2016e estimates vs consensus

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

1,800.0

Consensus Net profit 15e Consensus Net profit 16e Consensus Net profit 17e

Piraeus Securities below consensus

6.8% below Consensus

5.5% below consensus


19

Company Section


20

3Q 2015 review: Q3 revenues landed at EUR 388.5mn (+11.8%) EBITDAR at EUR 132.3mn (+17.5%, despite a 9.4% growth YoY in cash costs) and net profit at EUR 67.1mn (+7.2%). We were expecting revenues at EUR 366mn , EBITDAR at EUR 116.1mn and net profit at EUR 59.9mn. Given that cash costs were just 2% higher than our estimates or just EUR 5.8mn higher (EUR 290.6mn vs. PSe EUR 284.8mn) the large delta vs. our estimates is mainly attributed to the much higher top line, which in turn is due to the much lower decline in the yield (-8%).

Outlook: We are positive on the name due to favourable jet fuel dynamics and expectations of continuing growth in inbound traffic. Aegean has been resilient, managing to weather a very difficult period for Greece essentially unscathed, maintaining strong profitability, good cash flow generation and a healthy balance sheet. The outlook for the Greek tourism remains positive with the migrant crisis the main downside risk.

Valuation/estimates: We expect Aegean to expand its operating margin in 2016 due to top line expansion and lower jet fuel costs. Yields should continue falling due to competition from LCCs and mainly Ryanair. In all we see Aegean expanding its bottom line in the low double digits. Valuation-wise we, our blended DCF/multiples exercise returns a target price of EUR 8.5/share, which implies a total upside of 32%, hence we remain Buyers on the stock. On our target price, the stock is trading 7.3x P/E 2016e, broadly in line with European flag carriers.

Valuation triggers: Further decrease in jet fuel prices, 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: escalation of the migrant crisis, which could have a negative spill over to inbound tourism, 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) |Low jet fuel price to support profitability

Company data Market cap. (EUR mn) 492.06

Closing price – Jan.22 (EUR ) 6.89

# of shares (mn) 71.42

Free float (%) 33%

Target Price (EUR) 8.50

Dividend Yield (%) 8.70%

Total Return (%) 32.07%

Rating Outperform

Ratio analysis 2014 2015f 2016f 2017f

P/E (x)

6.13

6.54

5.92

4.76

P/E on Target Price (x)

7.56

8.07

7.31

5.88

P/BV (x)

2.27

2.80

2.33

1.93

AEV/EBITDAR (x)

5.10

5.38

5.03

4.50

EV/EBITDA (x)

2.89

2.86

2.27

1.72

Dividend yield

10.11%

8.72%

9.63%

11.97%

ROA

14.32%

12.79%

13.28%

15.10%

ROIC*

11.33%

8.09%

8.43%

9.93%

Key Operating metrics

Total pax (mn) 10.14 11.58 12.65 13.38

Load factor-scheduled services 77.18% 78.11% 78.62% 78.96%

Yield (EUR cents)

9.51

8.74

8.11

7.86

RASK (Revenue/ASK)

7.48

6.71

6.39

6.33

CASK (Cost/ASK)

5.84

5.31

4.97

4.80

*assuming capitalized leasing

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





21

Aegean Airlines (AGNr.AT) | Income statement

Aegean Airlines - Profit & Loss Statement

EUR mn FY 14 FY 15f FY 16f FY 17f

Sales 911.8 977.9 1,040.3 1,099.7

EBITDAR 209.5 221.5 242.4 274.9

EBITDAR margin 23.0% 22.7% 23.3% 25.0%

EBITDA 118.8 112.8 125.5 153.0

EBITDA margin 13.0% 11.5% 12.1% 13.9%

Depreciation 12.8 14.3 14.1 12.9

EBIT 106.0 98.5 111.5 140.1

EBIT margin 11.6% 10.1% 10.7% 12.7%

Total Financial expenses (11.3) 6.1 5.6 5.4

EBT 94.6 104.6 117.0 145.5

EBT margin 10.4% 10.7% 11.3% 13.2%

Minorities 0.0 0.0 0.0 0.0

Tax 14.4 29.3 33.9 42.2

Net profit 80.2 75.2 83.1 103.3

Net profit margin 8.8% 7.7% 8.0% 9.4%

Dividend 49.8 42.9 47.4 58.9

Retained earnings 30.5 32.4 35.7 44.4

EPS reported 1.12 1.05 1.16 1.45

DPS 0.70 0.60 0.66 0.82

Source: Aegean Airlines, Piraeus Securities Greek Equity Research


22

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

Aegean Airlines - Summary Balance Sheet

EUR mn FY 14 FY 15e FY 16f FY 17f

Tangible assets, net 193.8 162.1 128.0 117.1

Total non current assets 273.4 214.9 209.8 240.0

Inventory 13.2 7.2 7.6 7.8

Trade debtors 54.0 69.7 77.0 84.4

Cash & cash equivalents 207.5 221.3 258.2 280.5

Total current assets 354.0 339.1 386.3 418.7

Total assets 627.4 553.9 596.0 658.7

Total equity 216.5 175.4 211.2 255.6

Total long term liabilities 125.2 127.0 116.2 116.2

Provisions 3.2 6.5 6.9 7.3

Trade creditors 56.8 84.7 89.0 91.9

Tax payable 15.4 23.5 27.2 33.8

Total short term liabilities 285.8 251.5 268.7 286.9

Total liabilities 411.0 378.5 384.9 403.1

Total liabilities & equity 627.4 553.9 596.0 658.7


Aegean Airlines - Cash Flow Statement


Cash flow from operations 104.00 71.46 67.34 81.01

Change in Working Capital 9.79 (7.99) 2.85 1.07

Operating cash flow 113.79 63.47 70.19 82.08

Capex 42.92 (17.50) (20.00) 2.00

Free Cash Flow to Equity 60.47 70.57 79.79 69.68

Change in capital (72.02) - - -

Change in debt (7.85) (6.99) - -

Non operating cash flows - - - -

Dividend paid - (49.75) (42.89) (47.37)

Change in cash (19.40) 13.83 36.90 22.31

Cash, beginning 226.88 207.48 221.31 258.21

FX impact - - - -

Cash, end 207.48 221.31 258.21 280.52



23

Heading for a new start after the completion of Banks’ recap Q3 ‘15 results Athens Exchange Group announced a rather weak set of 3Q15 results that stood below our estimates. Results were negatively affected by the capital controls that led to the loss of 23 trading days during 3Q15 and continuous restrictions in the trading activity of the Greek private investors. 3Q15 revenues came in at EUR 4.55mn, decreased by 52% y-o-y, missing our estimate by c. 10%. The miss to our estimate is attributed to lower revenues from trading, clearing and depository services, partly offset by higher than expected revenues from Other Services. EBITDA stood at EUR 0.06mn, vs. our estimate for EUR 0.64mn. The miss to our estimate is attributed to lower than expected top line and slightly higher costs. Finally, Net Profit reached EUR 0.12mn missing our estimate by 69%, mainly due to lower than expected Operating Profitability.

Valuation Athens Exchange Group entered a new era after the completion of Banks’ recap, which added c. EUR 9bn on market’s capitalization. The stock could see higher levels upon the successful completion of reforms, the existence of a stable political environment and the entrance of the Greek economy on a recovery path. At the moment taking into account the pending pension reform, we prefer to take a more conservative stance and as a result we reduce our 2016 estimates on average trading volumes from EUR 119.2mn to EUR 110mn. However, the negative impact from the reduced estimates going forward is not fully reflected in our target price that is benefited from the fact that we roll over our model forward to include FY 2018 in our explicit estimates. Our DCF model generates a target price of EUR 5.4/share vs. EUR 5.7 before, with the implied upside potential at 24.4% from current levels. As a result we reiterate an Outperform rating on the stock. At current levels EXAE trades at 2017E P/E (excl. cash) of 10.3x or at 20.2% discount vs. Group’s 10-year historical average of 12.8x. The recent announcement for the privatization of Piraeus Port (67% stake acquired Cosco) provides an additional valuation trigger and could lead to increased volumes during 2016. We also point Group’s rich Net Cash position that at the end of the 9M period amounted to EUR 132.5mn (EUR 2.03/share), accounting for c. 44.1% of Group’s market cap.

Valuation triggers 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) | Heading for a new start

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

Fundamentals (EUR mn) 2014 2015f 2016e 2017e 2018e

Revenues 47.3 34.0 40.2 45.7 52.6

EBITDA 25.8 13.3 18.8 23.3 27.2

Net profit (adj.) 18.4 8.1 11.9 15.1 16.8

EPS underlying. (EUR) 0.28 0.12 0.18 0.23 0.26

DPS (EUR) 0.32 0.25 0.36 0.42 0.45

Valuation ratios 2014 2015f 2016e 2017e 2018e

P/E (x) adj.for cash (underlying) 7.4 24.2 12.5 10.3 9.7

P/E (x) 14.5 37.0 22.7 18.4 16.6

Dividend Yield 6.9% 4.6% 7.8% 9.0% 9.7%

ROE 11.4% 4.9% 7.0% 9.2% 10.7%

Company data

Market cap. (EUR mn) 296.77

Closing price - Jan. 22 (EUR ) 4.54


Free float (%) 95%




Rating Outperform




24

Athens Exchange Group (EXCr.AT) | Income Statement

Athens Exchange Group

P&L (in Euro m) Revenues 2012 2013 2014 2015e 2016e 2017e 2018e

Average Daily Value 51.9 86.6 127.1 85.7 110.1 128.1 153.8

Average no of contracts 64,356 41,567 48,681 68,493 58,219 64,041 67,243

Average Market Cap 27,474 51,907 69,364 43,769 52,071 61,932 72,909

Turnover velocity (avg market cap) 47.0% 41.1% 45.4% 43.7% 52.8% 51.7% 52.7%

Avg Cap/GDP 14.2% 28.5% 39.1% 24.9% 29.9% 34.6% 39.4%

Trading 5.0 6.7 9.3 5.6 8.3 9.7 11.7

Clearing & Settl. 10.8 27.7 19.5 11.9 17.2 20.2 24.1

Exchange Serv. 4.8 34.7 6.9 6.7 4.2 4.7 5.3

Depository & Clearinghouse 3.2 5.0 4.1 2.8 3.2 3.7 4.3

Data Feed 3.9 3.8 3.6 3.4 3.6 3.8 3.8

Other 5.3 3.7 3.8 3.7 3.6 3.6 3.5

Turnover 33.0 81.5 47.3 34.0 40.2 45.7 52.6

% chng -22.8% 146.6% -42.0% -28.0% 18.1% 13.7% 14.9%

Source: The Company, Piraeus Securities

PROFIT & LOSS (P&L) ITEMS 2011 2012 2013 2014 2015e 2016e 2017e 2018e

Sales 47.9 33.5 81.5 47.3 34.0 40.2 45.7 52.6

% chng -30.6% -22.8% 146.6% -42.0% -28.0% 18.1% 13.7% 14.9%

Capital Markets' Commission 1.64 1.08 1.58 2.16 1.23 1.80 2.10 2.52

% chng -39.1% -34.3% 46.5% 36.7% -43.0% 46.2% 17.2% 20.0%

Cost of sales 22.4 20.7 19.4 19.4 19.5 19.6 20.3 22.8

% chng 0.4% -7.5% -6.3% -0.1% 0.6% 0.5% 3.7% 12.5%

% turnover 52% 63% 24% 41% 57% 49% 44% 43%

EBITDA 23.9 11.7 60.5 25.8 13.3 18.8 23.3 27.2

% chng -35.5% -51.0% 416.4% -57.4% -48.3% 41.3% 23.8% 16.6%

EBITDA margin 55.8% 35.5% 74.3% 54.5% 39.1% 46.8% 51.0% 51.8%

Depreciation & amortization 1.8 1.8 1.4 1.8 1.8 1.8 1.8 1.8

% of fixed assets 6.8% 7.0% 5.5% 6.7% 6.6% 6.3% 5.9% 5.8%

x capex/depreciation 0.37 0.34 0.34 1.22 1.38 1.94 1.94 0.83

Operating profit (EBIT) 22.1 9.9 59.1 24.0 11.5 17.0 21.5 25.4

% chng -36.2% -55.1% 495.9% -59.4% -51.9% 47.8% 26.4% 18.0%

Operating profit margin 51.6% 30.0% 72.5% 50.7% 33.9% 42.4% 47.1% 48.3%

Interest income 5.9 5.6 4.5 3.7 1.9 1.9 1.9 1.9

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

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

Pre-tax profit 26.0 15.1 63.1 27.7 13.4 18.9 23.4 27.3

% chng -33.5% -41.7% 316.7% -56.2% -51.6% 41.2% 23.8% 16.6%

Pre-tax profit margin 60.6% 45.8% 77.5% 58.5% 39.3% 47.0% 51.1% 51.8%

Income tax 4.3 3.2 16.9 7.9 4.0 5.7 7.0 8.2

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

Profit after tax 21.5 11.9 32.3 21.0 9.4 13.2 16.4 18.1

% chng 1.4% -44.6% 170.9% -34.9% -55.4% 41.2% 23.8% 10.5%

Net profit margin 50.2% 36.1% 39.6% 44.4% 27.5% 32.9% 35.8% 34.4%

EPS after tax (in €) 0.33 0.18 0.49 0.32 0.14 0.20 0.25 0.28

EPS chng 1.4% -44.6% 170.9% -34.9% -55.4% 41.2% 23.8% 10.5%

Profit after tax excluding capital return 16.6 7.5 29.0 18.4 8.1 11.9 15.1 16.8

EPS after tax (in €) 0.25 0.12 0.44 0.28 0.12 0.18 0.23 0.26

Dividends 7.2 5.9 0.0 13.7 6.1 8.6 10.6 11.8

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

DPS (in €) 0.11 0.09 0.00 0.21 0.09 0.13 0.16 0.18

% chng -26.7% -18.2% -100.0% na -55.4% 41.2% 23.8% 10.5%

Capital return 5.2 2.0 13.1 7.2 10.0 15.0 16.5 17.5

Per share 0.08 0.03 0.20 0.11 0.15 0.23 0.25 0.27

Retained profit and reserves 6.5 2.8 13.3 13.8 -14.3 -7.9 -8.7 -10.1

BVPS (in €) 2.34 2.33 2.77 2.89 3.00 2.78 2.66 2.52

% chng 2.7% -0.1% 18.5% 4.7% 3.5% -7.3% -4.3% -5.0%

Market cap 188.9 284.4 522.9 304.0 346.5 296.8 296.8 296.8

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 65,368,563

End-year/current stock price of common2.89 4.35 8.00 4.65 5.30 4.54 4.54 4.54

% chng of stock price (common) -41.0% 50.5% 83.9% -41.9% 14.0% -14.3% 0.0% 0.0%

EV 68.8 167.5 357.5 149.0 202.4 155.4 166.2 176.2

General index 680 908 1,163 826 631 534 534 534

GI Performance -51.9% 33.4% 28.1% -28.9% -23.6% -15.4% 0.0% 0.0%

Out/under performance 22.6% 12.8% 43.6% -18.2% 49.2% 1.2% 0.0% 0.0%


25

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

BALANCE SHEET (BS) ITEMS 2011 2012 2013 2014 2015e 2016e 2017e 2018e

Net fixed assets 26.1 25.2 26.5 27.1 27.8 29.5 31.1 30.8

Investments 1.5 0.7 0.1 0.1 0.1 0.1 0.1 0.1

Deferred taxation 2.2 1.9 1.8 2.9 12.9 5.9 5.9 5.9

Current Assets 130.7 131.5 184.7 275.9 360.0 355.0 367.4 380.5

TOTAL ASSETS 165.7 164.2 217.7 310.4 405.2 394.8 409.0 421.7

Net debt position -118.6 -116.2 -165.4 -154.9 -143.9 -141.3 -130.5 -121.5

Shareholders' equity 152.7 152.5 180.8 189.2 195.8 181.5 173.6 164.9

Minority interest on share capital 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0

Long-term liabilities 2.8 2.4 2.4 3.1 3.1 3.1 3.1 3.1

Short-term liabilities 10.3 9.3 34.6 118.1 206.3 210.2 232.2 252.6

TOTAL EQUITY & LIABILITIES 165.7 164.2 217.7 310.4 405.2 394.8 409.0 421.7

RATIO ANALYSIS ON BS ITEMS

Profitability: return on total assets 12.8% 7.2% 16.9% 8.0% 2.6% 3.3% 4.1% 4.4%

return on equity 14.3% 7.8% 19.4% 11.4% 4.9% 7.0% 9.2% 10.7%

return on invested capital 11.9% 5.0% 23.6% 8.9% 4.0% 6.3% 7.5% 8.4%

Free Cash Flow yield 4.9% 1.6% 12.4% -0.8% 0.0% 5.3% 3.8% 5.3%

CASH FLOW (CF) STATEMENT 2011 2012 2013 2014 2015e 2016e 2017e 2018e

EBIT 22.1 9.9 59.1 24.0 11.5 17.0 21.5 25.4

Less: Tax paid 12.5 3.2 -3.6 25.5 4.0 5.7 7.0 8.2

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

Gross cash flow 11.4 8.6 64.1 0.2 9.3 13.2 16.3 19.0

Plus: Chng in accounts payable -1.1 -1.0 4.6 -1.0 -2.6 1.2 1.1 1.3

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

Less: Chng in accounts receivable 0.4 3.2 4.0 -0.4 4.1 -5.0 2.5 3.1

Working capital chng 1.5 4.3 -0.8 0.5 6.9 -6.3 1.3 1.6

Operating Cash Flow 9.8 4.3 64.9 -0.2 2.4 19.5 15.0 17.4

Less: Purchases of fixed assets 0.7 0.6 0.5 2.2 2.5 3.5 3.5 1.5

% of sales (cap ex only) 1.5% 1.9% 0.6% 4.6% 7.3% 8.7% 7.6% 2.8%

Free Cash Flow 9.2 4.5 65.0 -2.4 -0.1 16.0 11.5 15.9

Less: Dividends paid 16.3 12.4 7.8 13.1 20.9 16.1 23.6 27.1

Plus: Interest income 5.9 5.6 4.5 3.7 1.9 1.9 1.9 1.9

Plus: disposal of assets 0.0 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 -10.0 0.0 10.0 10.0

Cash Position 118.6 116.2 165.4 154.9 144.9 144.9 154.9 164.9


26

3Q 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: 2015 shapes to be a good year with good sales from both RaC and leasing. In Q4, we expect a relatively weak Q4, on the back of the impact of the capital controls and some deterioration in the mix of the inbound traffic, along with a change policy by Ryanair, which hurt RaC sales. Going forward, we assume a moderate growth in sales and EBITDA given the high base in the RaC. Leasing growth may have been tampered by the capital controls and the further tightening of the fiscal policy, which could have a negative spill over in corporate investment. We believe that the management will opt for a more conservative approach in 2016 to account for the increased political uncertainty and a possible negative impact from the migrant crisis.

Valuation/estimates: We assume a loss making Q4, bringing the total net profit at cEUR 21mn, a strong print anyway. Our target price stands at EUR 10.0/share, which implies a fwd P/E of 7.2x, broadly in line with long term multiple. Given the negative upside we retain our Neutral rating on the stock.

Valuation triggers: 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 in 2016, 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) | Good tourism flow the main driver

Company data




Free float (%) 26.16%



Total Return (%) -3.08%

Rating Neutral

Ratio analysis 2014 2015e 2016f 2017f

P/E (x) adj. 8.2 8.9 7.9 7.5

P/E on Target Price (x) 7.5 8.1 7.2 6.9

PEG (x) -1.2 0.5 1.7 1.3

P/CE (x) 2.0 1.7 1.7 1.7

P/BV (x) 0.7 0.7 0.7 0.6

P/FCFE (x) -8.3 34.2 8.4 4.1

EV/EBITDA (x) 3.4 3.1 3.0 2.9

EV/Sales (x) 1.7 1.6 1.5 1.4

Earnings yield 12.1% 15.6% 12.7% 13.3%

Net debt/EBITDA 1.8 1.7 1.5 1.3

ROA 4.0% 4.9% 3.9% 4.0%

RoE 9.0% 10.8% 8.4% 8.4%

Source: Piraeus Securities, Greek Equity Research






27

Autohellas (AUTr.AT) | Income Statement

Autohellas - Profit & Loss estimates


Sales 161.1 174.9 177.6 175.5

Services 132.1 147.7 147.4 146.9

Used cars 29.1 27.3 30.3 28.7

EBITDA 81.1 89.6 90.6 87.5

Depreciation 51.1 55.9 60.6 59.1

EBIT 29.9 33.7 30.0 28.4

EBT 20.8 29.3 23.8 23.5

EBTAM

Tax 4.7 8.5 6.9 6.8

Net profit 16.1 20.8 16.9 17.7

Net profit (clean) 16.1 15.0 16.9 17.7

EPS 1.33 1.71 1.39 1.45

EPS (clean) 1.33 1.23 1.39 1.45

DPS 0.81 0.62 0.69 0.73


28

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

Autohellas - Consolidated Balance Sheet


Net fixed assets 263.1 280.1 280.1 265.6


Inventory 1.2 1.3 1.3 1.3


Other current assets 33.8 39.0 39.5 39.1


Assets available for sale 0.0 0.0 0.0 0.0

Total assets 404.0 420.8 430.1 438.6

Total equity 178.8 192.1 200.5 209.3


Total short term debt 24.7 26.2 26.6 26.3

Trade & other creditors 19.9 21.4 21.5 21.8



Total liabilities & equity 404.0 420.8 430.1 438.6

Source: Autohellas, Piraeus Securities Greek Equity Research

Autohellas Hertz - Cash Flow Statements


Cash earnings 49.18 77.74 77.53 76.35

Change in inventories 0.3 -0.1 0.0 0.0

Change in trade debtors -2.6 -1.8 -0.3 0.2

Change in other long term assets 0.0 0.0 0.0 0.0

Change in other current assets 0.0 -1.3 -0.3 0.2

Change in trade creditors 11.8 1.6 0.1 0.3

Change in other current liabilities 0.0 1.7 0.3 -0.3

Purchases of vehicles -107.5 -103.2 -92.8 -74.3

Proceeds from the sale of vehicles 29.3 27.3 30.3 28.7

change in WC (ex-fleet) 9.5 0.0 -0.1 0.4

Change in Working Capital -68.7 -75.9 -62.7 -45.2

OpCF before investments -19.48 1.89 14.81 31.19

CAPEX (net) 3.4 2.0 1.0 1.0

Free Cash Flow to Equity -16.1 3.9 15.8 32.2

Change in capital 0.0 0.0 0.0 0.0

Change in debt -33.1 1.5 0.4 -0.3

Dividend paid 0.0 -9.8 -7.5 -8.4

Change in cash -49.2 -4.4 8.7 23.4

Cash beginning 64.4 15.2 10.7 19.5

Cash from discontinued operations 0.0 0.0 0.0 0.0

Cash, end of year 15.1 10.7 19.5 42.9 Source: Autohellas, Piraeus Securities Greek Equity Research


29

3Q 2015 trading update: Coca Cola HBC reported Q3 volumes in the tune of 577.28mn u.c. (+5.4%); easy comps (cycling a 4.7% volume decline), along with good weather across markets and strong growth in the water category helped volume growth, particularly in the established (+7.4%) and the developing segment (+10.4%). On the other hand the emerging segment was off by c10mn cases due to deteriorating Russian market. Pricing was down by 3.5% and 3% in the established and developing segments respectively on the back of deflationary environment prohibiting pricing initiatives and an adverse sales mix due to increased water volumes. In all revenues declined by 2.7% at EUR 1,768.83mn.

Outlook: The management reiterated its guidance of volume growth in 2015 with operating margin expansion. FX impact is now seen EUR 10mn higher than previously anticipated due to RUB weakness in Q3; the total impact is now seen at EUR 165mn. However costs savings in other areas and especially in resin should balance the impact. For 2016 they expect slightly higher input costs and mild inflation in Europe, which will allow some pricing realization. Q4 is expected to be weak given the 4 less trading days, which will balance the 4 extra days of 1Q 2015. Going forward we expect an improved performance in 2016 although Q1 could be hit by higher than expected FX losses due to the significant pressure on certain EM currencies and mainly the RUB.

Valuation/estimates: We have a target price of EUR 17.0/share and an Underperform rating on the stock. CCHBC currently trades at a c6% premium over peers on a P/E 16e basis. In 2016, we expect the group to continue growing its volumes in the low single digits, while pricing could be positive after three years of negative pricing.

Valuation triggers: 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

Closing price –Jan.22 (EUR ) 18.22


Free float (%) 54%



Total Return (%) -4.40%

Rating Neutral


P/E (x) 24.19 21.34 20.66 18.82

P/E on Target Price (x) 22.54 19.88 19.25 17.53

PEG (x) 1.70 7.32 2.11 -2.14

P/EBITDA (x) 9.04 8.42 7.82 7.45

P/BV (x) 2.41 2.30 2.17 2.05

EV/EBITDA (x) 11.02 10.11 9.23 8.62

EV/EBIT (x) 22.65 18.86 16.38 14.90

Earnings yield 4.39% 4.18% 4.84% 5.31%

ROE 10.58% 9.62% 10.52% 10.87%

ROIC 6.94% 7.49% 8.43% 9.04%

Interest coverage (x) 4.95 6.43 7.50 8.69

Net debt/EBITDA 1.98 1.69 1.41 1.17

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

0.53 0.46 0.39 0.32






30

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

CCH - Profit & Loss estimates


Volumes 2,002.9 2,037.6 2,078.1 2,136.6

Established Markets 615.2 609.2 620.1 637.2

Developing Markets 358.3 369.8 380.6 389.9

Emerging Markets 1,029.4 1,058.7 1,077.3 1,109.5

Sales 6,510.2 6,401.0 6,475.6 6,654.9

Established Markets 2,448.9 2,449.2 2,520.6 2,587.7

Developing Markets 1,054.1 1,082.4 1,108.5 1,135.7

Emerging Markets 3,007.2 2,869.4 2,846.6 2,931.5

EBITDA 742.1 797.4 859.0 901.4

EBITDA margin 11.4% 12.5% 13.3% 13.5%

EBITDA (clean) 784.7 842.4 859.0 901.4

EBITDA margin 12.1% 13.2% 13.3% 13.5%

EBIT 361.1 427.4 484.0 521.4

EBIT margin 5.5% 6.7% 7.5% 7.8%

EBIT (clean) 424.7 472.4 484.0 521.4

EBIT margin 6.5% 7.4% 7.5% 7.8%

EBT 352.0 368.9 427.5 469.4

EBT (clean) 402.0 413.9 427.5 469.4

Minorities (pre-tax)

EBTAM

Tax 57.8 88.5 102.6 112.7

tax rate 16.42% 24.00% 24.00% 24.00%

Net profit 294.8 280.4 324.9 356.7

Net profit (clean) 277.4 314.6 324.9 356.7

EPS 0.80 0.76 0.88 0.97

EPS (clean) 0.75 0.86 0.88 0.97

DPS 0.36 0.42 0.41 0.45


31

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

CCH - Consolidated Balance Sheet


Net fixed assets 4,508.9 4,479.4 4,478.9 4,492.1

Total non current assets 4,816.9 4,803.4 4,817.9 4,846.1

Inventory 414.2 399.7 403.0 425.4


Other current assets 1,011.6 1,012.3 1,041.0 1,067.8

Total current assets 2,062.1 1,862.4 1,911.4 2,118.7

Total assets 6,879.0 6,665.8 6,729.3 6,964.8

Total equity 2,791.1 2,917.2 3,092.6 3,285.3

Total long term liabilities 1,892.0 1,892.0 1,892.0 1,892.0


Total liabilities 4,087.9 3,748.6 3,636.7 3,679.6

Total liabilities & equity 6,879.0 6,665.8 6,729.3 6,964.8

Sources: Company, Piraeus Securities

CCH - Cash Flow Statements

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

Cash earnings 673.10 686.98 762.22 775.08

Change in Working Capital 13.2 -19.5 -26.9 -6.4

Cash flow before investments 686.30 667.52 735.29 768.69

Cash flow from investments -337.1 -340.5 -374.5 -393.2


Change in capital 0.0 0.0 0.0 0.0

Change in debt -209.3 -306.0 -117.0 0.0

Dividend paid -129.4 -132.4 -154.3 -149.4

Other -101.3 -74.5 -72.5 -68.0

Minorities 0.0 0.0 0.0 0.0

Exchange difference -10.4 0.0 0.0 0.0

Change in cash -101.2 -185.8 17.0 158.0

Cash beginning 737.5 636.3 450.5 467.4


Cash, end of year 636.3 450.5 467.4 625.4

Sources: Company, Piraeus Securities


32

Buy on weakness Q3 15 results review Folli Follie Group announced a rather mixed set of 3Q15 results that stood above our estimates in terms of top line and below in terms of EBITDA & bottom line. Sales came in at EUR 281.2mn increased by 14.8%, beating our estimate by 1.5%. For the 9M15 period sales stood at EUR 875.5mn up by 20.9%. EBITDA stood at EUR 47mn increased by 4.6%, missing our estimate by 8%. The miss to our estimate is attributed to a significant erosion of the EBITDA margin in the JWA division that came in at 20.4% vs. our estimate of 23.7% due to the payment of rents amounting to c. EUR 5mn as guarantee for large POS that opened their gates at Japan and Hong Kong. Net Profit for the period stood at EUR 31mn missing our estimate by 1.7%, due to lower operating profitability and a higher than expected effective tax rate that came in at 29.8%; this was partly offset by positive financials. The Group recorded a Net Debt position of EUR 123mn vs. EUR 54mn at the end of 2014 and EUR 32mn in 3Q14 mainly due to increased Capex needs that stood at EUR 29.77mn vs. EUR 13.46mn 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 and EUR 50-55mn going onwards that will be invested on the new concepts of Folli & Links, as well as on infrastructure, IT systems, R&D etc. On the FCF front the Group recorded OFCF of -EUR 3.4mn vs. cash flow of EUR 20.5mn the year ago period since increased W/C requirement were offset by the positive effect of FX differences amounting to EUR 70mn. 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 Following the announcement of a mixed set of 3Q15 results and the elevated concerns on China’s GDP growth rate over the coming years, we reduce our EBITDA estimates going forward by c. 8.5% on average due to the increased participation of the wholesale channel in Chinese sales. As a result, we reduce our target price from EUR 28.7 to EUR 22.4/share. The recent stock weakness leaves a significant upside potential from our TP, currently standing at 73.5%, thus creating a buying opportunity. Outperform rating maintained. At current levels the shares change hands at a 2017E P/E of 4.9x and an EV/EBITDA multiple of 3.8x, with an implied discount of 51.2% over Group’s 10-year historical average of 7.7x.

Valuation triggers 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; Deceleration of growth in Chinese economy could seriously affect the growth prospects of the Group; 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 9M15, it operated 999 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 3Q15, Folli Follie Group operated in total 686 POS of FF brand and 124 POS for Links of London.

Folli Follie Group (HDFr.AT)|Buy on weakness


Company data


Closing price – Jan. 22 (EUR ) 12.95


Free float (%) 50%




Rating Outperform

Key financials FF Group 2011 2012 2013 2014 2015E 2016E 2017E 2018E

Turnover (€ m) 1,021.4 1,110.0 934.2 998.1 1,186.3 1,265.5 1,334.7 1,406.8

EBITDA (€ m) 198.7 212.8 194.7 223.0 242.2 255.6 271.6 287.9

Net profit (€m) 89.5 93.6 344.6 141.2 147.6 161.8 175.1 187.8

Reported EPS (€) 1.34 1.40 5.15 2.11 2.20 2.42 2.62 2.81

Adj. EPS 1.36 1.42 5.15 2.11 2.20 2.42 2.62 2.81

Rep. P/E (x) 5.8 9.2 4.5 12.5 7.8 5.4 5.0 4.6

Adj. P/E (x) 5.7 9.1 4.5 12.5 7.8 5.4 5.0 4.6

DPS/Capital Return 0.00 0.00 0.00 0.75 0.33 0.07 0.12 0.13

EV/EBITDA (x) 5.7 4.3 8.0 8.3 5.5 4.1 3.8 3.5

FCF yield (%) -7.5% -1.0% 18.8% 0.3% -7.5% 3.0% 6.1% 7.1%

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





33

Folli Follie Group (HDFr.AT) | Income Statement

PROFIT & LOSS 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Turnover 1,021 1,110 934 998 1,186 1,266 1,335 1,407

% chng 3.2% 8.7% -15.8% 6.8% 18.9% 6.7% 5.5% 5.4%

COGS & SG&A 874 957 774 807 982 1,048 1,103 1,159

EBITDA 199 213 195 223 242 256 272 288

% chng 2.8% 7.1% -8.5% 14.5% 8.6% 5.5% 6.2% 6.0%

EBITDA margin 19.5% 19.2% 20.8% 22.3% 20.4% 20.2% 20.3% 20.5%

Net depreciation 25 27 21 21 27 28 28 29

EBIT 174 186 173 202 215 228 243 259

% chng 1.3% 6.8% -6.7% 16.7% 6.2% 6.0% 6.7% 6.4%


Net interest expenses 52 55 -224 9 -16 -10 -8 -7

Pre-tax profit 122 131 398 193 199 217 235 251

% chng -2.2% 7.3% 203.8% -51.5% 3.0% 9.5% 8.0% 7.1%

Minority stake in profits 2 2 3 4 4 4 4 4

Income tax 31 35 50 47 47 51 55 59


Profit after tax 90 94 345 141 147.6 161.8 175.1 187.8

% chng 7.5% 4.6% 268.1% -59.0% 4.5% 9.7% 8.2% 7.3%


EPS after tax (in Euro) / Reported 1.34 1.40 5.15 2.11 2.20 2.42 2.62 2.81

EPS chng -2.7% 4.6% 268.1% -59.0% 4.5% 9.7% 8.2% 7.3%

Dividends 0 0 0 0 5 8 9 9


DPS (in Euro) 0.00 0.00 0.00 0.00 0.40 0.12 0.13 0.14

Market cap 517 865 1,567 1,767 1,158 867 867 867

Shares Outstanding 66,948,210 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 17.30 12.95 12.95 12.95

% chng of common stock price -29.6% 67.4% 81.1% 12.8% -34.5% -25.1% 0.0% 0.0%

EV 1,132 1,500 1,561 1,848 1,340 1,051 1,030 1,002

EV/Turnover 1.11 1.35 1.67 1.85 1.13 0.83 0.77 0.71

General index 680.42 907.90 1,162.68 826.18 631.35 534.34 534.34 534.34

GI Performance -51.9% 33.4% 28.1% -28.9% -23.6% -15.4% 0.0% 0.0%

Out/under performance 46.3% 25.4% 41.4% 58.8% -14.2% -11.6% 0.0% 0.0%


34

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

BALANCE SHEET 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Net fixed assets 691 697 390 399 432 459 481 503

Current Assets 1,010 1,096 1,025 1,364 1,560 1,664 1,757 1,853

Accounts receivable 536 592 518 700 833 890 939 990

Inventories 339 378 255 367 479 536 590 645

Cash 136 126 252 297 247 237 227 217

TOTAL ASSETS 1,724 1,816 1,572 1,970 2,178 2,309 2,424 2,542

Net debt position 596 615 -29 54 151 148 123 92

Shareholders' equity 721 805 1,160 1,334 1,454 1,601 1,758 1,925

Minority interest on share capital 18 20 23 27 31 35 39 44

Long-term liabilities 396 506 64 348 345 345 345 345

Bank debt 315 429 36 304 304 304 304 304

Short-term liabilities 589 485 324 260 349 328 282 228

Accounts payable & other ST liabilities 154 152 120 182 220 213 202 191

Liabilities for taxes 17 20 17 32 35 35 34 33

Liabilities to banks 417 312 187 47 94 81 46 4

TOTAL EQUITY & LIABILITIES 1,724 1,816 1,572 1,970 2,178 2,309 2,424 2,542

RATIO ANALYSIS 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Liquidity: Current ratio 1.7 2.3 3.2 5.2 4.5 5.1 6.2 8.1

Acid Test 1.1 1.5 2.4 3.8 3.1 3.4 4.1 5.3

Activity: Avg receivables to turnover days 194.4 202.7 185.0 264.4 278.4 265.1 263.7 263.6

Avg trade creditors to purchases days 118.4 110.5 90.7 144.6 149.5 125.6 112.6 101.3

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

Bank debt to equity 1.0 0.9 0.2 0.3 0.3 0.2 0.2 0.2

Profitability: Return on equity 14.3% 12.3% 35.1% 11.3% 10.6% 10.6% 10.4% 10.2%

Return on invested capital 9.0% 8.8% 11.0% 9.1% 8.9% 8.8% 8.8% 8.8%

CASH FLOW 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Profit after tax before minorities 88 37 366 145 152 166 179 192

Plus: Depreciation & amortization 25 21 20 21 27 28 28 29

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

Plus: Net Interest Expenses 2 2 -1 2 1 6 5 4

Gross cash flow 118 75 -55 200 180 200 213 225

Plus: Chng in accounts payable -28 77 -1 42 38 -7 -10 -11

Less: Chng in accounts

receivable+inventories 90 132 -68 186 246 114 103 106

Working capital chng 118 55 -67 144 207 119 110 113

Operating cash flow 0 24 6 56 -27 81 103 112

Less: Purchases of fixed assets 23 20 15 36 60 55 50 50

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

Free cash flow -39 -9 295 5 -87 26 53 62


35

Strong set of 3Q15 results on the back of market share gains and decreased marketing expenses for IKEA Q3 15 results Fourlis announced a strong set of results well-above our estimates due to the strong performance of IKEA during 3Q15. On a Group levels Fourlis reported sales of EUR 112.6mn, decreased by 3.5%, beating our estimate by 5.1%. EBITDA came in at EUR 11.3mn, up 42.7%, well above our estimate of EUR 8mn, mainly due to strong performance of the flagship IKEA. Net Profit for the period reached EUR 2.9mn, vs. our estimate for EUR 0.02mn. Flagship IKEA reported a strong 3Q15, with sales shaping at EUR 76.6mn, flat y-o-y, beating our estimate by 5.4%; EBITDA stood at EUR 8.6mn, well above our estimate of EUR 6.4mn; the beat to our estimate is attributed to better top line and significant savings on the distribution expenses that accounted for 28% of sales vs. 31.3% the year ago period. These savings came from the freeze of marketing spending, while savings of c. EUR 2mn were recorded from the reduction of the catalogues distributed by 50%, as well as from the distribution of half sized catalogues. Management commented that it plans to return to its normal catalogue policy in 2016, thus leading to tough comps for the current FY. Intersport reported sales of EUR 34.7mn, 3.7% above our estimate, while EBITDA for the period came in at EUR 3mn vs. our estimate for EUR 2.5mn. The beat to our estimate is attributed to a better than expected gross profit margin and a better top line. Net Debt for the period stood at EUR 141.6mn, vs. EUR 135mn at the end of 2014, mainly due to Capex spending amounting to EUR 11.6mn

Valuation We proceed with small changes in our P&L estimates and we slightly raise our Capex estimates . We remind that c. 65% of Group’s sales is derived from Greece. We value Fourlis by employing a combination of a 10-year Discounting Cash Flow model (50% weight) and a multiples based valuation on a targeted 2017 EV/EBITDA multiple of 7.5x (50% weight), below Group’s historical average during the crisis of 9.6x (since 2008). Our DCF model generates a target price of EUR 3.85/share, while our multiples based method generates a target price of EUR 3.84/share. The average of the two methods target price stands at EUR 3.85/share that implies an upside potential of 50.3% from current levels. We thus maintain our Outperform rating.

Valuation triggers 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 Increased competition in both IKEA’s and Intersport’s markets; 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 107 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) | Gaining market share in a shrinking market

Company data








Rating Outperform


Fundamentals (€ m) 2014 2015f 2016e 2017e 2018e

Sales 413.37 409.26 420.97 439.66 463.40

EBITDA 25.91 30.02 33.92 37.20 39.52

Net profit -11.48 0.53 5.55 9.13 11.57

EPS (€) -0.23 0.01 0.11 0.18 0.23

DPS (€) 0.00 0.00 0.00 0.00 0.00

Net debt 135.04 127.45 125.42 120.04 113.14

Valuation ratios 2014 2015f 2016e 2017e 2017e

P/E (x) na na 23.50 14.30 11.29

P/BV (x) 0.80 0.85 1.00 1.00 1.00

EV/Sales (x) 0.68 0.64 0.57 0.53 0.49

EV/EBITDA (x) 10.89 8.77 7.04 6.27 5.73





36

Fourlis (FRLr.AT) | Income Statement

IKEA 2014e 2015 2016 2017 2018 3-Year CAGR

Sales 267.74 270.42 279.89 289.68 301.27 3.7%

% chng 0.5% 1.0% 3.5% 3.5% 4.0%

EBITDA 19.67 20.59 22.00 23.78 23.87 5.0%

% chng -7.7% 4.7% 6.8% 8.1% 0.4%

margin 7.3% 7.6% 7.9% 8.2% 7.9%

EBIT 9.95 10.88 12.28 14.06 14.15 9.2%

% chng -14.7% 9.3% 12.9% 14.5% 0.6%

margin 3.7% 4.0% 4.4% 4.9% 4.7%

Source: Company, Piraeus Securities

Intersport 2014 2015e 2016e 2017e 2018e 3-Year CAGR

Sales 122.35 132.59 141.08 149.98 162.13 6.9%

% chng 10.2% 8.4% 6.4% 6.3% 8.1%

EBITDA 10.83 11.21 11.92 13.43 15.65 11.8%

% chng 43.2% 3.5% 6.4% 12.6% 16.6%

margin 8.9% 8.5% 8.5% 9.0% 9.7%

EBIT 7.23 7.43 8.08 9.46 11.50 15.7%

% chng 120.9% 2.7% 8.8% 17.1% 21.6%

margin 5.9% 5.6% 5.7% 6.3% 7.1%

Source: Company, Piraeus Securities

PROFIT & LOSS 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Turnover 438.2 420.3 403.3 413.4 409.3 421.0 439.7 463.4

% chng -31.3% -4.1% -4.0% 2.5% -1.0% 2.9% 4.4% 5.4%

COGS & SG&A 410.3 400.2 378.1 387.7 379.2 387.0 402.5 423.9

EBITDA 28.0 20.1 25.4 25.9 30.0 33.9 37.2 39.5

% chng -40.9% -28.2% 26.6% 1.9% 15.9% 13.0% 9.7% 6.2%

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

Net depreciation 13.0 17.3 14.6 20.0 13.8 13.6 13.7 13.9

EBIT 15.0 2.8 10.6 5.7 16.2 20.4 23.5 25.7

% chng -58.5% -81.4% 279.8% -46.4% 185.6% 25.7% 15.5% 9.1%


Net interest expenses -10.6 -14.1 -15.6 -13.1 -12.1 -11.6 -10.9 -10.3

Pre-tax profit 4.1 -11.7 -5.8 -9.1 1.4 7.3 12.0 15.2

% chng -85.6% -387.1% -50.1% 56.4% -115.8% 405.8% 64.3% 26.7%

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

Income tax 2.4 -0.3 2.5 2.3 0.9 1.8 2.9 3.7

% effective tax rate 57.9% 2.2% -42.0% -25.6% 63.6% 24.1% 24.1% 24.1%

Profit after tax 2.3 -11.3 -8.3 -11.5 0.5 5.6 9.1 11.6

% chng -84.8% -590.2% -26.3% 38.4% -104.6% 953.6% 64.3% 26.7%

Net profit margin 0.5% -2.7% -2.1% -2.8% 0.1% 1.3% 2.1% 2.5%

EPS after tax (in Euro) 0.05 -0.22 -0.16 -0.23 0.01 0.11 0.18 0.23

EPS chng -84.6% -590.2% -26.4% 37.5% -104.6% 953.6% 64.3% 26.7%

Adj EPS 0.14 0.13- 0.16- 0.23- 0.01 0.11 0.18 0.23

% chng -64% -191% 26% 38% -105% 954% 64% 27%

Dividends 0.0 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 0.00

% chng na na na na na na na na

Market cap 73 100 209 164 153 131 131 131

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 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 50,992,322

EV 207 231 330 282 263 239 233 227

End-year/current stock price common shares 1.43 1.97 4.09 3.22 3.00 2.56 2.56 2.56

% chng of common stock price -74.5% 37.8% 107.6% -21.3% -6.8% -14.7% 0.0% 0.0%

Out/under performance -47.0% 3.2% 62.1% 10.8% 21.9% 0.8% n.a n.a


37

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

BALANCE SHEET 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Net fixed assets 297 298 300 292 279 280 281 282

Current Assets 194 164 135 155 157 161 169 177


Inventories 89 77 75 86 87 90 95 101

Cash 56 42 28 35 35 35 35 35

TOTAL ASSETS 491 462 435 447 436 442 450 459

Net debt position 143 138 129 135 127 125 120 113

Shareholders' equity 188 177 169 158 159 165 174 185



Bank debt 89 124 111 105 105 105 105 105

Other 10 10 11 10 11 11 12 12





TOTAL EQUITY & LIABILITIES 491 462 435 447 436 442 450 459

RATIO ANALYSIS 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Avg receivables to turnover days 67 34 31 27 29 29 29 30

Avg trade creditors to purchases days 152 138 147 160 171 166 162 158

Avg inventories to turnover days 74 67 68 76 77 78 79 80

Financial Structure: Bank debt to equity 1.06 1.02 0.93 1.07 1.02 0.97 0.89 0.80

Net Debt / EBITDA 5.13 6.87 5.07 5.21 4.25 3.70 3.23 2.86

Fixed to total assets 60.5% 64.6% 69.0% 65.3% 64.1% 63.4% 62.5% 61.4%

Profitability: Return on total assets 0.5% -2.4% -1.8% -2.6% 0.1% 1.3% 2.0% 2.5%

Return on equity 1.1% -6.2% -4.8% -7.0% 0.3% 3.4% 5.4% 6.4%

Return on capital employed 3.8% 1.0% 2.6% 1.1% 5.2% 6.2% 6.8% 7.1%

CASH FLOW 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Profit after tax before minorities 1.7 -11.4 -8.3 -11.5 0.5 5.6 9.1 11.6


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

Plus: Changes in taxes payable -2.0 0.0 1.1 -0.5 -1.7 0.8 1.1 0.8

Gross cash flow 37.4 13.3 6.1 11.1 24.8 31.6 34.8 36.5

Plus: Chng in accounts payable -5.4 0.8 1.2 12.0 -3.2 0.9 2.5 3.6

Less: Chng in accounts receivable 12.7 5.6 -7.7 2.5 0.3 1.6 2.2 2.7

Less: Chng in inventories 3.2 -11.8 -1.5 10.7 0.9 3.4 4.9 6.1

Working capital chng 21.3 -7.0 -10.4 1.2 4.4 4.1 4.6 5.2

Operating cash flow 50.4 22.2 22.3 9.3 20.4 27.5 30.3 31.4


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

Free cash flow -27.3 4.6 6.1 -5.8 6.4 15.5 18.3 19.4


38

3Q 2015 results: Frigoglass reported sales of EUR 66.1mn (+26.5%) with marginally positive EBITDA at EUR 0.2mn vs losses of EUR 1.6mn in 3Q 2014. The net losses widened to EUR 16.6mn from EUR 10.9mn last year and worse than our EUR 6.9mn estimate, on the back of (Russian Ruble and SA Rand) associated FX losses. The top line was much better than our estimates, however margins were lower, while the cEUR 5.0 FX losses were also above our estimates. Another highlight of the weak quarter was the increase in net debt to EUR 301mn (+11.1%) and the negative equity (for the first time).

Outlook: The management guided for a deterioration in Q4’s market conditions in Russia, which will more than offset the sales growth achieved in 9M. It seems that Russia will remain in doldrums for the next few quarters and its weight is such that the whole Eastern European segment will struggle. On the other hand we could see Western Europe performing better although the growth should come from Asia and Africa, where margins are thinner. The company has not concluded yet the sale of the glass business, which is now expected to be sealed in 1Q 2016 (initial target the 4Q 2015), which is not supportive of sentiment.

Valuation/estimates: We expect Frigoglass to remain in the red in 2016 due to weak demand in Europe, which is the market where Frigoglass is mainly making its money. We have set an end-2016 target price of EUR 2.40/share; despite the significant upside, we remain on the sidelines, as we have not seen signs of a sustainable recovery, while we will need to see the plans of the management, post the glass sale to be more firm on the case.

Valuation triggers: 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, failure to close the glass sale.

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, especially in the brewing sector. 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) | Sale of the glass business the key short term catalyst

Company data




Free float (%) 56%


Dividend Yield (%) 0%


Rating Neutral

Ratio analysis 2014 2015f 2016f 2017f

P/E (x) adj. n/m n/m n/m 6.1

P/E on Target Price (x) n/m n/m n/m 10.2

PEG (x) -0.2 0.0 0.0 0.1

P/CE (x) 21.1 n/m 8.4 3.0

P/BV (x) 2.1 1.1 1.1 1.0

P/FCFE (x) 3.5 0.5 13.3 6.4

EV/EBITDA (x) 12.4 8.5 7.2 4.8

EV/Sales (x) 1.1 0.6 0.6 0.5

Earnings yield -16.8% -39.6% -3.8% 16.4%

FCFE yield 28.4% 196.8% 7.5% 15.6%

ROA -2.3% -6.1% -0.8% 3.5%

RoE -36.0% -43.5% -4.2% 16.5%






39

Frigoglass (FRIr.AT) | Income Statement

Frigoglass - Profit & Loss estimates

EUR mn FY 14* FY 15e FY 16f FY 17f

Sales 339.6 326.2 336.9 367.7

Coolers 339.6 326.2 336.9 367.7

Glass 0.0 0.0 0.0 0.0

EBITDA 29.3 23.7 27.0 38.2

EBITDA (clean) 29.3 23.7 27.0 38.2

EBITDA margin 8.6% 7.3% 8.0% 10.4%

Depreciation 17.6 14.9 12.9 13.5

EBIT 11.6 8.8 14.1 24.7

Net financial expense 10.04 33.40 16.46 5.80

EBT 1.6 -24.6 -2.4 18.9

Tax 10.9 7.9 0.7 5.5

Minorities (after-tax) 4.4 0.0 0.0 0.0

Net profit -13.7 -32.4 -3.1 13.4

Net profit (clean) -23.5 -32.4 -3.1 13.4

EPS -0.27 -0.64 -0.06 0.27

EPS (clean) -0.47 -0.64 -0.06 0.27

DPS 0.00 0.00 0.00 0.09

FY14 results are proforma, excluding glass


40

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

Frigoglass - Consolidated Balance Sheet

EUR mn Proforma

FY 14 ProForma

FY 15f ProForma

FY 16f Proforma

FY17f

Net fixed assets 115.7 112.8 101.8 90.6


Inventory 72.9 72.5 75.2 80.7




Total assets 591.6 535.8 381.2 382.2

Total equity 77.0 113.3 111.3 120.0





Total liabilities & equity 591.6 535.8 381.2 382.2 Source: Company, Piraeus Securities Greek Equity Research

Frigoglass - Cash Flow Statements

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

Cash earnings 47.77 -13.82 2.82 28.52

Change in Working Capital 1.1 19.2 5.2 -13.5

CAPEX (net) -25.6 -12.0 -1.8 -2.2


Change in capital -35.5 0.0 0.0 0.0

Change in debt 8.8 -31.7 -155.2 -14.8

Dividend paid -0.3 0.0 0.0 0.0

Other -20.2

Minorities 0.0 0.0 0.0 0.0

Exchange difference 4.5 0.0 0.0 0.0

Change in cash -19.5 129.5 -149.0 -2.1

Cash beginning 59.5 41.0 170.5 21.6


Cash, end of year 40.0 170.5 21.6 19.5 Source: Company, Piraeus Securities Greek Equity Research


41

Hellenic Telecoms (OTEr.AT) | Resilient business model

Q3 ’15 results: OTE reported net revenues of Eur971.5 mn (-1.7% yoy), affected by weak Romtelecom; recurring EBITDA of Eur350.1 mn (-5.7% yoy) impacted by the absence of one-offs and increased distribution costs in Romania; and net profit of Eur78.3 mn (+13.3% yoy). The domestic fixed-line revenues were up 0.2% 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 4.4% yoy. EBITDA margin rose to 41.7% from 40.1% in Q3 ’14. The Greek mobile reported service revenue decline of 3.3% yoy and EBITDA margin contraction of 100 bps yoy to 39.6%, on the weak economic environment in Greece. Telecom Romania reported EBITDA decline of 31.7% yoy due to the 46% yoy decline of real estate and copper sales. Romania mobile reported a decline in service revenues of 2.7% yoy and EBITDA margin of 24.4%, down 150 bps yoy on high distribution costs. OTE reported FCF of Eur93 mn (-27% yoy), impacted by liquidity restrictions in the economy. At end-Sept 2015, OTE had net debt of Eur1.09 bn or c0.8x EBITDA and cash balance of Eur1.05 bn.

Outlook: The positive fixed-line trends should be further supported 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 ‘15, 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 Q3 ‘15 results CC, management said that recurring FCF should end up close to the initial target of Eur0.5 bn, partly subject to the 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 Eur10.2 as of end-2016, which values the group at 4.3x 2016E 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 c7.0%. We raise OTE to Outperform (from Neutral) on improved risk/reward.

Valuation triggers: Key drivers of the domestic telecom 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.

Company description OTE has fixed-line market share of c57% with 2.7 mn retail access lines, broadband market share of c44% with 1.46 mn broadband retail subscribers and 414k 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 5.76 mn subscribers); and in Albania (Telecom Albania has 2.0 mn subscribers). Shareholders are DT (40%) and the Greek state (10%). DT has a right of first refusal on the Greek state’s stake.

Company data

Market cap. (€ mn) 3,725.14

Closing Price - Jan 22 (€) 7.60


52W average volume (#) 643,271


Target Price (€) 10.2


Rating (new) Outperform

Rating (old) Neutral

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

Valuation ratios (Jan 22) 2013 2014 2015E 2016E 2017E

P/E (x) reported 12.94 13.93 20.21 13.78 11.78

P/E (x) recurring 15.25 11.74 13.58 13.78 11.78

EV/EBITDA (x) reported 4.43 3.50 3.79 3.26 2.79

EV/EBITDA (x) recurring 3.59 3.41 3.51 3.26 2.79

EV/Revenues (x) 1.29 1.24 1.23 1.16 1.01

P/BVPS (x) 1.94 1.76 1.64 1.50 1.36

FCFE Yield (%) 20.1% 15.7% 11.2% 12.7% 15.8%

Div Yield (%) 0.00% 1.05% 1.09% 1.38% 1.78%

Earnings yield (%) 6.6% 8.5% 7.4% 7.3% 8.5%

Fundamentals 2013 2014 2015E 2016E 2017E

FCF recurring (€ mn) 749 583 418 471 588

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 0.65

EPS recurring (€) 0.50 0.65 0.56 0.55 0.65

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

Net Debt/EBITDA recurring (x) 1.03 0.79 0.74 0.46 0.05

ROE (%) 13.9% 15.7% 12.5% 11.4% 12.1%

Sources: company data & Piraeus Securities estimates





42

Hellenic Telecoms (OTEr.AT) | Income Statement: 2012-2017E

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

Revenues:

OTE - fixed line 1,704.0 1,557.2 1,511.7 1,513.2 1,505.6 1,513.2

% chg -10.9% -8.6% -2.9% 0.1% -0.5% 0.5%

Mobile 2,057.0 1,881.2 1,772.3 1,690.6 1,590.1 1,608.5

% chg -20.9% -8.5% -5.8% -4.6% -5.9% 1.2%

Telecom Romania - fixed line 619.6 609.5 609.1 593.9 587.9 587.9

% chg -5.4% -1.6% -0.1% -2.5% -1.0% 0.0%

All Other 462.1 448.0 456.2 469.9 469.9 469.9

% chg -0.6% -3.1% 1.8% 3.0% 0.0% 0.0%

Group operating revenues (net) 4,330.3 4,054.1 3,918.4 3,840.8 3,738.2 3,761.5

EBITDA:

OTE - fixed line 494.5 568.3 599.2 620.4 632.4 635.5

margin 29.0% 36.5% 39.6% 41.0% 42.0% 42.0%

Mobile 755.9 652.8 594.6 543.2 507.5 530.7

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

Telecom Romania - fixed line 166.1 159.3 159.9 117.5 123.5 129.3

margin 26.8% 26.1% 26.3% 19.8% 21.0% 22.0%

All Other 101.9 81.1 67.9 65.8 65.8 65.8

margin 22% 18% 15% 14% 14% 14%

VRS provisions (123.0) (278.4) (36.1) (100.0) - -

Total EBITDA reported 1,392.9 1,177.9 1,385.5 1,246.9 1,329.2 1,361.3

EBITDA margin 32.2% 29.1% 35.4% 32.5% 35.6% 36.2%

Total EBITDA recurring 1,515.9 1,456.3 1,421.6 1,346.9 1,329.2 1,361.3

EBITDA margin 35.0% 35.9% 36.3% 35.1% 35.6% 36.2%

Depreciation & amortization (818.4) (842.5) (796.4) (811.4) (811.4) (811.4)

EBIT reported 574.5 335.4 589.1 435.5 517.8 549.9

Net financial expense (5.3) (20.6) (193.7) (133.2) (101.4) (68.4)

EBT reported 569.2 314.8 395.4 302.2 416.4 481.5

Income taxes (103.9) (130.9) (123.9) (108.0) (141.1) (159.9)

Other taxes 110.0 (20.0)

Less minorities 25.2 6.1 4.1 (10.0) 5.0 5.3

Net Profit recurring 363.5 244.2 317.3 274.3 270.3 316.3

Net Profit reported 440.1 287.8 267.4 184.3 270.3 316.3

Sources: OTE & Piraeus Securities estimates


43

Hellenic Telecoms (OTEr.AT)|Balance Sheet & Cash Flow:2012-2017E

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

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

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

Goodwill from consolidated subsidiaries 567 506 506 506 506 506

Investments 1 0 0 0 0 0

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

Inventories 111 97 88 84 82 82

Accounts receivables 823 703 685 705 686 670

Other current assets 276 233 208 204 198 188

Cash & cash equivalents 1,172 1,461 1,514 1,205 964 1,366

Total assets 8,366 7,843 7,804 7,332 6,793 6,898

Equity (it includes minorities) 1,989 2,296 2,498 2,632 2,856 3,111

of which Minority interests 390 375 376 366 371 377

Reserve for VRS - - - - - -

Long-term loans 2,635 2,557 2,173 1,496 1,440 706

Other long-term liabilities 675 584 698 634 617 621

Short-term loans 1,416 400 465 710 134 734

Accounts payable 785 924 998 979 952 958

Other current liabilities 733 846 828 768 710 715

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

Liabilities & shareholders funds 8,366 7,843 7,804 7,332 6,793 6,898

* Globul has been deconsolidated as of 2013


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

Net Income 440 288 267 184 270 316

Depreciation & Amortization 818 843 796 811 811 811

Other (88) (136) (148) (162) (105) (21)

Change in Working Capital (10) 273 102 (36) (5) 22

Assets classified as held for sale

Operating Cash Flow 1,161 1,268 1,018 798 971 1,128

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

Free Cash Flow (recurring) 606 749 583 418 471 588

Sale of Cosmofon (less capital gains),

acquisition of ZAPP, acquisition of Germanos

10% minority stake, sale of Telecom Serbia, 380 720

Free Cash Flow 986 1,383 414 163 431 588

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

Dividends - - - 39 41 51

Share buyback 43

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

Change in cash 135 289 53 (308) (241) 402

Cash Balance 1,172 1,461 1,514 1,205 964 1,366



44

Recession Proof…….. 6M Sales pre-announcement Jumbo announced that 6M15/16 sales came in at EUR 371.7mn, increased by 8.97% posting strong performance across all geographical segments. Sales preannouncement implies strong performance during the 2Q15/16 period, with sales shaping at EUR 219.1mn, up 12%. Strong growth momentum is mainly attributed to ‘’increased productivity’’ in Greek operations that posted increased sales by 3% during the 6M period; 2Q performance is even more impressive for Greek operations with the implied sales growth standing at 6.6% or EUR 152.4mn. Management commented that 6M sales in Cyprus and Bulgaria stood in line with initial expectations, while sales in Romania doubled. During the current FY, Group’s restructuring plan includes the closure of two small, first generation stores, which in the future will be replaced by new hyper stores in areas where the Group is not present yet.

Raised Guidance The impressive performance during the 1H/2Q period is mainly attributed to the strong performance of the Greek operations that exceeded all expectations – it is clear that this is attributed to market share gains related to the value for money concept adopted by the Group, while it seems that the capital controls imposed by the Greek government led to reduced competition in the Greek market. Following the positive 6M sales pre-announcement, the management raised its guidance for the FY 2015/16 period and now expects increased sales in the range of 6-8% vs. the previous estimate that called for increased sales in the range of 0-4%.

Valuation We raise our estimates to incorporate Group’s strong performance during the 6M period. We stand in line with Company’s guidance for FY 2015/16 and we now project sales of EUR 627.75mn, up 7.8% y-o-y, EBITDA of EUR 169.3mn, increased 6.3% and Net Profit of EUR 111.7mn up 6.5%. We raise our target price to EUR 11.8/share from EUR 11.2/share, before, with an implied upside potential of 21% from current levels, thus reiterating an Outperform rating. Our DCF-P/E derived target price reflects a targeted P/E of 13.6x the Group's FY 2016/17 projected earnings, slightly above Group’s pre-crisis historical average of 13.1x. We are modeling Sales, EBITDA and NI CAGRs of 7.1%, 6.0% and 6.4%, respectively, during the 2015/16-2017/18 period. We proceed with an upgrade of our estimates to incorporate the strong top line performance during the 6M period; on the gross profit margin front, we are modeling gross profit margin contraction of 28bps for the current FY. We expect the EBITDA margin to stabilize at around 27% benefited from increased operating efficiency. We are now modeling an effective tax rate of 24.7%.

Valuation triggers 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 2016 will accounted for 73 retail stores, 53 in Greece, 5 in Cyprus, 8 in Bulgaria and 7 in Romania with a net sales surface of c. 412,103m2.

Jumbo (BABr.AT): Recession Proof…

Company data








Rating Outperform


Fundamentals (€ m) 2012/2013 2013/2014 2014/2015 2015/2016F 2016/2017E 2017/2018E

Sales 502.18 541.85 582.55 627.75 668.06 714.83

Reported EBITDA 110.39 146.52 159.26 169.26 178.17 189.43

Recurring EBITDA 133.96 146.52 159.26 169.26 178.17 189.43

Reported net profit 73.96 101.25 104.84 111.67 117.77 126.32

EPS (€) 0.57 0.74 0.77 0.82 0.87 0.93

DPS (€) 0.00 0.36 0.00 0.22 0.23 0.25

FCF yield (%) 3.3% 5.3% 7.2% 4.0% 5.9% 6.2%

Valuation ratios 2012/2013 2013/2014 2014/2015 2015/2016F 2016/2017E 2017/2018E

P/E (x) 12.83 16.07 9.63 11.89 11.28 10.51

EV/Sales (x) 1.85 2.78 1.47 1.78 1.59 1.40

EV/EBITDA (x) 8.40 10.27 5.38 6.60 5.97 5.28





45

Jumbo (BABr.AT) | Income Statement

PROFIT & LOSS Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 e Jun-17 e Jun-18 e

Turnover 490.0 494.3 502.2 541.8 582.5 627.7 668.1 714.8

% chng 0.5% 0.9% 1.6% 7.9% 7.5% 7.8% 6.4% 7.0%

COGS & SG&A 354.8 359.9 368.1 395.3 423.4 458.5 489.9 525.4

EBITDA 135.1 134.4 110.4 146.5 159.3 169.3 178.2 189.4

% chng -6.6% -0.5% -17.9% 9.4% 8.7% 6.3% 5.3% 6.3%

EBITDA margin 27.6% 27.2% 22.0% 27.0% 27.3% 27.0% 26.7% 26.5%

Net depreciation 15.3 17.4 18.9 19.4 21.2 22.7 24.2 25.7

EBIT 119.9 117.0 91.6 127.1 137.9 146.5 153.9 163.7

% chng -9.1% -2.4% -21.7% 10.4% 8.5% 6.2% 5.1% 6.3%


Net interest expenses -1.4 -2.4 -4.1 -2.9 1.0 -1.9 -2.6 -4.2

% of avg debt -20.3% 14.8% 16.0% 4.0% -0.7% 1.0% 1.1% 1.4%

Pre-tax profit 121.3 119.5 95.7 130.0 137.0 148.4 156.5 167.9

% chng -6.5% -1.5% -19.9% 35.8% 5.4% 8.3% 5.5% 7.3%

Minority stake in profits 0.0 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% 100.0%

Income tax 26.7 22.2 21.7 28.7 32.1 36.7 38.7 41.5


Profit after tax 94.6 97.3 74.0 101.2 104.8 111.7 117.8 126.3

% chng 19.4% 2.9% -24.0% 36.9% 3.5% 6.5% 5.5% 7.3%


EPS after tax (in Euro) 0.73 0.75 0.57 0.74 0.77 0.82 0.87 0.93

EPS chng 17.6% 2.9% -24.0% 31.0% 3.5% 6.5% 5.5% 7.3%

Dividends 0.0 0.0 0.0 49.0 0.0 30.1 31.8 34.1


DPS (in Euro) 0.00 0.00 0.00 0.36 0.00 0.22 0.23 0.25

% chng na na na na -100.0% n/a 5.5% 7.3%

Market cap 639 377 948 1,627 1,010 1,328 1,328 1,328

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

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

EV 637 347 927 1,505 857 1,116 1,063 1,000

End-year/current stock price common shares 4.92 2.90 7.29 11.96 7.42 9.76 9.76 9.76

% chng of common stock price 4.0% -41.0% 151.1% 64.1% -38.0% 31.5% 0.0% 0.0%

Out/under performance 16.6% 23.5% 81.1% 14.5% -5.5% 96.3% 0.0% 0.0%


46

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

BALANCE SHEET Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 e Jun-17 e Jun-18 e

Net fixed assets 378 415 431 446 498 525 550 574

Current Assets 396 412 421 552 557 640 707 784


Inventories 174 180 176 186 198 217 227 235

Cash 158 185 170 288 299 339 379 419

TOTAL ASSETS 795 857 894 1,034 1,090 1,199 1,291 1,392

Net debt position -2 -31 -21 -122 -152 -212 -265 -328

Shareholders' equity 523 593 639 745 797 909 997 1,091



Bank debt 154 152 1 144 144 144 144 144

Subsidies 0 0 1 2 3 4 5 6





TOTAL EQUITY & LIABILITIES 795 857 894 1,034 1,090 1,199 1,291 1,392

RATIO ANALYSIS Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 e Jun-17 e Jun-18 e

Activity: Avg working capital to turnover days 125 122 120 119 114 112 117 116

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



Financial Structure: Bank debt to equity 0.30 0.26 0.23 0.22 0.18 0.16 0.15 0.13

Fixed to total assets 50.2% 51.9% 52.9% 46.7% 48.9% 46.7% 45.3% 43.7%

Profitability: Return on total assets 12.4% 11.8% 8.4% 10.5% 9.9% 9.8% 9.5% 9.4%

Return on equity 19.4% 17.4% 12.0% 14.6% 13.6% 13.1% 12.4% 12.1%

Return on capital employed 13.4% 12.5% 9.4% 10.9% 11.4% 10.9% 10.5% 10.3%

CASH FLOW Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 e Jun-17 e Jun-18 e

Profit after tax before minorities 81.8 90.5 78.4 111.7 105.3 111.7 117.8 126.3


Plus: net interest expenses -1.4 -2.4 -4.1 -2.9 1.0 -1.9 -2.6 -4.2

Less: gain/loss on disposal of PP&E 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0

Gross cash flow 95.7 105.5 93.1 128.2 127.5 132.5 139.5 146.9

Plus: Chng in accounts payable 8.0 -2.2 -3.6 -0.1 -0.8 -6.0 0.6 0.8

Less: Chng in accounts receivable 6.0 -9.4 5.1 7.0 -15.2 3.5 1.6 1.9

Less: Chng in inventories -2.0 6.0 -4.5 10.2 11.6 19.6 9.4 8.2

Working capital chng -1.8 -3.9 3.2 20.5 -9.3 30.4 11.7 15.5

Operating cash flow 97.5 109.4 68.5 121.0 129.0 102.2 127.7 131.4


Less: Chng in investments -0.3 -0.2 -1.0 -0.6 -2.9 0.0 0.0 0.0

Free cash flow 41.1 59.6 31.2 85.7 72.7 53.0 78.6 82.2


47

3Q 2015 results: MOH reported adjusted EBITDA of EUR 172.7mn (+53%), while EPS stood at EUR 0.71 up from EUR 0.48 in 3Q 2014 and above our EUR 0.70 estimate. However excluding a one-off tax that was not in our estimates, the EPS was EUR 0.82. The Q3 inventory losses stood at EUR 61mn, broadly in line with expectations. MOH reported a clean refining margin of USD 75.4/mt in Q3, 12% higher YoY, somewhat below our estimate of USD 76.4/mt. The OpCF post capex stood at EUR 153.5mn in Q3 (vs. EUR 44mn in 3Q2014) and EUR 200mn in 9M 15 vs. EUR 71mn last year driven by good WC management.

Outlook: Benchmark margins remained strong in Q3 and Q4 and should remain at elevated levels in the short term, due to consistently low crude levels and the favourable EURUSD rate. Motor Oil is hedged against Greek weakness by generating c69% of its sales through exports.

Valuation/Estimates: On our Q3 review report (23 Nov.2016) we raised our 2016 estimates by c13% in the operating line and 18% in the bottom line, as we assume lower Brent price and stronger USD compared to our previous estimates. Valuation-wise, we rolled over our model to get an end-2016 target price; our exercise now returns a target price of EUR 14.0/share from EUR 12.0 previously. MOH currently trades at a 47% and 62% discount in EV/EBITDA 16-17e respectively vs its peers.

Valuation triggers: Further improvement in benchmark margins, further strengthening of the USD vs the EUR, macro normalization in Greece and lower oil prices could stimulate domestic demand, which could increase the contribution of domestic sales, which command higher margins compared to exports.

Downside risks: Domestic macro deterioration, a spike in political risk which could jeopardize the recovery, deterioration of 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 from 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


Closing price - Jan.22 (EUR ) 8.91






Rating Outperform


P/E (x) -11.8 4.5 3.5 4.4

P/BV (x) 2.4 1.6 1.2 1.0

P/CE (x) 4.9 2.8 2.6 3.0

P/FCFE (x) 9.5 3.9 2.8 3.8

EV/EBITDA (x) 36.5 3.3 2.3 2.3

EV/Sales (x) 0.2 0.2 0.2 0.1

RoCE -2.73% 21.78% 28.12% 24.06%

RoIC -2.73% 21.76% 28.08% 24.02%

RoE 25.58% 40.97% 33.09% 22.67%

RoA 4.38% 9.84% 9.71% 7.15%

Earnings yield 10.68% 26.11% 28.21% 22.48%

Dividend Yield 0.00% 6.69% 8.56% 7.88%

Net debt to equity (x) 2.2 1.0 0.4 0.2

Net debt to market cap. (x) 0.9 0.6 0.4 0.2

Net Debt/ EBITDA (x) 17.3 1.3 0.6 0.4

Net debt/Clean EBITDA (x) 2.9 1.2 0.6 0.4






48

Motor Oil (MORr.AT) | Income Statement

Motor Oil Group | Profit & Loss Statements

EUR mn 2014 2015 2016 2017

EBITDA 51.48 489.33 574.37 496.66

EBITDA margin 0.6% 7.1% 7.9% 6.1%

Inventory gains/losses -251.00 -55.00 0.00 0.00

'LIFO' EBITDA 302.48 544.33 574.37 496.66

'LIFO' EBITDA margin 3.3% 7.9% 7.9% 6.1%

EBIT -46.28 390.02 472.68 392.58

EBIT margin -0.5% 5.7% 6.5% 4.9%

Financial income 12.85 1.22 1.68 1.97

Interest income 2.69 1.22 1.68 1.97

Capital gain 10.17 0.00 0.00 0.00

Earnings from participations 0.00 0.00 0.00 0.00

Other 0.00 0.00 0.00 0.00

Interest expense 74.62 83.84 80.41 80.41

Extra-ordinary income 0.00 0.00 0.00 0.00

EBT -108.05 307.40 393.94 314.14

EBT margin -1.2% 4.5% 5.4% 3.9%

Tax -24.87 90.24 115.33 92.07

EATBM -83.18 217.16 278.61 222.07

Net profit -83.30 217.02 278.46 221.93


49

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 0.98 324.25 382.81

Working capital chg 86.43 163.35 -20.28 20.58

Operating cash flows 46.7% 317.3% -4.1% 3.6%

CAPEX 170.01 164.32 303.97 403.40

Free cash flow -70.33 -60.66 -49.00 -49.00

Free cash flow yield -38.0% -117.8% -10.0% -8.5%

New debt 99.68 103.66 254.97 354.40

New capital 10.1% 10.5% 25.8% 35.9%

Other items -129.97 104.17 -24.94 0.00

Dividend paid -11.08 0.00 0.00 0.00

Net change in cash 0.00 0.00 0.00 0.00

Cash, beginning -33.39 -22.28 0.00 -66.07

Cash, end -74.75 185.54 230.04 288.33

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 1,028.75 981.37

Other long term assets 100.37 96.25 96.25 96.25

Total fixed assets 1,232.95 1,217.19 1,166.87 1,114.18

Inventory 542.75 484.48 500.73 490.70

Trade & other receivables 445.70 399.54 413.79 437.43


Total assets 2,343.08 2,408.42 2,618.65 2,867.90

Share capital (& premium) 83.09 83.09 83.09 83.09

Reserves 437.35 328.97 545.99 758.39

Shareholders funds 520.44 412.06 629.08 841.48

Minority rights 1.21 1.44 1.58 1.72

Total equity 521.65 413.50 630.66 843.20

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 637.53 674.12 684.33 718.53

Other payables 3.79 4.42 12.19 14.70

Total liabilities 1,821.43 1,994.92 1,987.97 2,024.68

Total liabilities & equity 2,343.08 2,408.42 2,618.63 2,867.87

Net fixed assets 1,101.21 1,098.79 1,048.48 995.78

Working capital 347.13 205.49 218.00 194.90

Invested capital 1,448.34 1,304.28 1,266.47 1,190.68

of which: Net debt 926.69 890.78 635.79 347.46


50

In the eye of the storm – Tax imposed on land-based games already priced in - VLT’s roll-out could provide some relief as of 2017 Q3 ‘15 results OPAP announced a solid set of 3Q15 results that stood above our estimates on the back of strong KINO performance, lower payout and improved Operating efficiency. GGR for the period came in at EUR 300.9mn, down 12.9%, beating our estimate by 2.3% due to better wagers and mainly a lower pay-out ratio that stood at 66.6% vs. our estimate for 67.2%. EBITDA came in at EUR 87.1mn, down 7.6%, beating our estimate by 7.9%. This is attributed to improved operating efficiency& the above mentioned better GGR, in conjunction with reduced SG&A expenses of 3.4%. Net Profit reached EUR 49.1mn, beating our estimate by 9.7% due to slightly lower than expected effective tax rate (29.5% vs. our estimate for 30%).

Recent Developments On 19-Nov-2015, the Greek government passed a law that imposes a tax of EUR 0.05/column across all OPAP’s legacy games. The new tax should be implemented, as of 01-Jan-2016. Since the first press reports on this issue were released, the stock has lost c. 35% of its market cap. In our view, current price levels shows this news to be largely priced in. On 12-Jan-2016, OPAP filed to the Greek Council of State, a petition for the annulment and suspension of the special levy imposed on OPAP’s legacy games as of 1-Jan-2016; a verdict on this issue should be released by end – January. On 26-Nov-2015, OPAP filed an arbitration request under the 2011 VLT License Agreement with the London Court of International Arbitration for damages in excess of EUR 1bn.

Valuation We reduce our estimates on OPAP to incorporate the imposition of the levy of 0.05/column on legacy games and the temporary suspension of the VLT’s project due to the stricter regulatory framework. For 2016, we are looking for decreased KINO wagers by 20%, while Stihima’s wagers should drop 25%, on the back of additional burden due to increased competition. We are modelling Group wagers to decrease 15.8%, with GGR down 14.5% and decreased EBITDA by 24%. We value OPAP by employing a combination of Sum–of-the-Parts valuation with Discounted Cash flow models for each business segment separately (60% weight) and a multiples-based valuation on a targeted 2017 EV/EBITDA multiple of 6.4x (20% weight), 18% below peers, as well as a targeted 2017 P/E of 12.2x ( 20% weight) 10% below peers. The average weighted target price of the three methods stands at EUR 9.0/share that implies an upside potential of 38% from current levels. Thus we maintain our Outperform rating.

Valuation triggers Possible mitigation actions to adjust for gambling levy (bet pricing, adj. payout, further cost cutting); 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 Additional taxes imposed by the Greek government; 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 the Greek gaming company that has a leading 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. Back in 2011, OPAP 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 4Q16. An OPAP led consortium also acquired the licence for the offering of scratch and lottery tickets for a 12-years period.

OPAP (OPAr.AT): In the eye of the storm

Company data



# of shares (mn) 319





Rating Outperform


Fundamentals (€ m) 2014 2015F 2016F 2017F 2018F

Revenues 4,259.07 4,300.50 3,621.29 8,283.51 10,686.41

GGR 1,377.68 1,400.90 1,198.27 1,734.54 2,028.26

EBITDA 346.52 360.37 273.27 387.54 441.27

Net profit 195.00 205.11 144.04 198.08 238.74

EPS (€) 0.61 0.64 0.45 0.62 0.75

DPS (€) 0.70 0.70 0.49 0.67 0.81

Dividend yield 7.9% 8.6% 7.7% 10.5% 12.7%

Valuation ratios 2014 2015F 2016F 2017F 2017F

P/E (x) 14.56 12.60 14.15 10.29 8.54

FCF yield 9.99% 6.11% 7.47% 19.94% 17.25%

EV/EBITDA (x) 7.33 6.54 6.84 4.07 3.30

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





51

OPAP (OPAr.AT) | Income Statement

OPAP PROFIT & LOSS 2009 2010 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

GGR 1,781 1,654 1,413 1,302 1,220 1,378 1,401 1,198 1,735 2,028

% chng -3.7% -7.1% -14.5% -7.9% -6.3% 12.9% 1.7% -14.5% 44.8% 16.9%

EBITDA 967 911 733 673 222 347 360 273 388 441

% chng -8.3% -5.7% -19.6% -8.2% -67.0% 56.3% 4.0% -24.2% 41.8% 13.9%

EBITDA margin 54.3% 55.1% 51.8% 51.7% 18.2% 25.2% 25.7% 22.8% 22.3% 21.8%

Net depreciation 43 39 42 43 44 50 57 68 108 109

EBIT 924 872 690 630 178 296 303 205 280 334

% chng -3.8% -5.7% -20.8% -8.8% -71.8% 66.8% 2.4% -32.4% 36.5% 19.2%

Operating profit margin 51.9% 52.7% 48.9% 48.4% 14.6% 21.5% 21.6% 17.1% 16.1% 16.4%

Net interest expenses -23.1 -19.1 -9.7 8.4 10.2 9.4 -4.0 6.9 9.7 14.9

Pre-tax profit 947 890 700 638 188 306 299 212 290 348

% chng -4.7% -6.1% -21.3% -8.8% -70.6% 62.8% -2.1% -29.2% 36.7% 20.3%

Minority stake in profits 0.0 0.0 0.0 0.0 0.0 4.2 4.3 4.3 4.7 5.2

Taxes 353 314 162 133 47 106 90 64 87 105

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

Profit after tax 594 576 537 505 141 195 205 144 198 239

% chng -18.5% -3.0% -6.7% -5.9% -72.1% -61.4% 5.2% -29.8% 37.5% 20.5%

Net profit margin 33.3% 34.8% 38.0% 38.8% 11.6% 14.2% 14.6% 12.0% 11.4% 11.8%

Adjusted Profit after tax 692 668 537 505 141 195 205 144 198 239

% chng -5.0% -3.5% -19.5% -5.9% -72.1% 38.2% 5.2% -29.8% 37.5% 20.5%

EPS after tax (in Euro) 1.86 1.81 1.68 1.58 0.44 0.61 0.64 0.45 0.62 0.75

EPS chng -18.5% -3.0% -6.7% -5.9% -72.1% 38.2% 5.2% -29.8% 37.5% 20.5%

Dividends 558 491 230 182 80 224 222 157 215 259

Dividend policy: Payout Ratio 94.0% 84.4% 42.6% 35.6% 57.1% 115.8% 100.8% 100.8% 100.8% 100.8%

DPS (in Euro) 1.75 1.54 0.72 0.57 0.25 0.70 0.70 0.49 0.67 0.81

% chng -20.4% -12.0% -53.2% -20.6% -56.3% 180.8% -0.9% -29.2% 36.7% 20.8%

Market cap 4,893 4,128 2,179 1,723 3,085 2,839 2,584 2,038 2,038 2,038

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

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

EV 4,295 3,562 2,267 1,510 3,008 2,542 2,356 1,868 1,579 1,458

End-year/current stock price common shares 15.34 12.94 6.83 5.40 9.67 8.90 8.10 6.39 6.39 6.39

% chng of common stock price -25.8% -15.6% -47.2% -20.9% 79.1% -8.0% -9.0% -21.1% 0.0% 0.0%

Out/under performance -39.7% 31.0% 9.7% -40.7% 39.8% 29.5% 19.1% -6.8% 0.0% 0.0%


52

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

BALANCE SHEET 2009 2010 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Net fixed assets 442 397 1,221 1,214 1,301 1,341 1,372 1,368 1,313 1,259

Current Assets 654 631 285 516 297 409 416 343 736 961

Accounts receivable 39 47 52 28 35 92 93 78 179 231

Inventories 1 0 0 1 1 3 3 3 6 8

Cash 599 558 196 368 242 291 303 245 534 655

TOTAL ASSETS 1,097 1,027 1,505 1,731 1,598 1,751 1,788 1,710 2,049 2,220

Net debt position -599 -566 88 -213 -77 -297 -228 -170 -459 -580

Shareholders' equity 602 683 885 1,162 1,125 1,168 1,142 1,129 1,113 1,092

Minority interest on share capital 0 0 0 0 0 67 71 76 80 85

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

Bank debt 0 0 251 166 0 0 75 75 75 75

Provisions 43 64 61 49 51 51 51 51 51 0

Short-term liabilities 602 683 885 1,162 1,125 1,168 1,142 1,129 1,113 1,092

Accounts payable & other ST liabilities 139 84 87 59 70 170 170 144 344 448

Liabilities for taxes 250 143 18 35 122 178 162 136 159 177

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

Dividends 0 0 0 0 0 0 0 0 0 0

TOTAL EQUITY & LIABILITIES 1,097 1,027 1,505 1,731 1,598 1,751 1,788 1,710 2,049 2,220

RATIO ANALYSIS 2009 2010 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Liquidity: Current ratio 1.56 2.33 1.50 1.70 0.74 0.90 0.94 0.92 1.02 1.06

Acid Test 1.56 2.33 1.50 1.70 0.74 0.89 0.94 0.92 1.01 1.05

Activity: Avg receivables to turnover days 0 0 0 0 0 0 0 0 0 1

Avg trade creditors to purchases days 12 10 9 8 7 11 16 18 11 14

Financial Structure: Debt to equity 0.82 0.50 0.70 0.49 0.42 0.44 0.50 0.45 0.77 0.96

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

Profitability: Return on equity 142% 90% 69% 49% 12% 17% 18% 13% 18% 22%

Return on invested capital 115% 90% 58% 39% 10% 16% 18% 12% 16% 20%

CASH FLOW 2009 2010 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Profit after tax before minorities 594 576 537 505 141 199 209 148 203 244

Plus: Depreciation & amortization 43 40 44 44 44 50 57 68 108 109

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

Plus: Changes in taxes payable 53 -43 -136 41 60 57 -16 -26 23 18

Gross cash flow 674 558 445 578 220 307 246 197 343 385

Plus: Chng in accounts payable -16.9 -43 13 -41 -25 73 0 -26 200 103

Less: Chng in accounts receivable+inventories -35.6 8.7 6.0 -15.9 -0.6 42.1 0.9 -15.2 104.5 103.9

Working capital chng -14.8 106.8 -7.6 26.3 -87.0 7.1 1.1 11.0 -96.0 0.4

Operating cash flow 689 451 453 552 307 299 245 186 439 385

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

Less: Dividends paid 655 463 345 230 182 80 224 222 157 215

Free cah flow 674 427 -408 517 69 284 158 152 406 352


53

3Q 2015 results: PPC reported Q3 sales of EUR 1,538.7mn (-3.3%), EBITDA of EUR 132.6mn (-2.6%) and net loss of EUR 99mn. The results were below our estimates in all lines; we were expecting total sales oat EUR 1,571.4mn (-1.25% YoY), EBITDA at EUR 243.7mn, -1.2% YoY and net loss at EUR 12.1mn. The significant delta vs our estimates is almost solely attributed to provisions, which skyrocketed to EUR 374mn (+5.8x) vs our estimate of EUR 248mn. On a 9M basis PPC reported revenues in the order of EUR 4,484.7mn (+1.3%), EBITDA at EUR 773.4mn (-2.6%) and net profit at EUR 5.9mn (-95.2%).

Outlook: The management lowered its 2015 guidance for the FY EBITDA margin, now expecting a reading in the tune of 17.5-18.5% vs 19.5-20.5% previously. Sales are seen at EUR 5.8bn (electricity revenues at EUR 5.6bn) unchanged compared to the previous guidance. Going forward the low oil and natgas prices will take some burden off the cost base, however will make the competition in the pool market even stiffer and will eventually put pressure on market shares in both the wholesale and the supply business. The sale of ADMIE is the big question mark; it could boost the valuation of PPC but under the current set up, it seems to be a negative development for the utility as it is loosing a valuable asset and it will not be paid in full in due course. Moreover there are concerns over the valuation of the sale.

Valuation/estimates: We have recently updated our estimates in light of the Q3 results and the guidance of the management. We now expect the utility to hover around break-even levels in both 2015 and 2016. The stock trades at a c14% premium over European peers in EV/EBITDA terms. Our new target price stands at EUR 3.60/share vs EUR 4.0 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.

Valuation triggers: reduction of overdues and bad debts, CO2 free allocation reinstated, privatization plans go ahead at favourable terms.

Downside risks: further macro deterioration, spike in input costs, further build up of overdues and bad debts, rising CO2 prices, regulatory risk (unfavourable lignite and hydro auctions), unfavourable terms in the ADMIE privatization.

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 overdues the key issues

Company data






Dividend Yield (%) 0%


Rating Neutral


P/E (x) adj. 7.26 n/m 174.01 5.64

P/BV (x) 0.15 0.13 0.13 0.13

PEG (x) -0.09 1.45 0.06 -0.15

P/CF (x) 1.35 1.18 1.07 0.93

EV/EBITDA (x) 5.75 6.27 6.36 5.41

EV/EBIT (x) 16.54 30.16 31.94 16.88

Earnings yield 11.65% (0.11%) 0.57% 17.74%

ROA 1.42% 0.83% 0.80% 1.51%

ROE 1.58% (0.01%) 0.07% 2.25%

ROIC 2.21% 1.27% 1.21% 2.27%

Net debt/EBITDA 4.99 5.47 5.57 4.74

Net debt/Equity 0.83 0.87 0.90 0.89






54

PPC (DEHr.AT) | Income Statement

PPC | Profit & loss statement

EUR mn 2014 2015e 2016f 2017f

Revenues 5,863.65 5,839.18 5,638.73 5,448.17

yoy (1.80%) (0.42%) (3.43%) (3.38%)

EBITDA reported 1,022.15 979.49 992.74 1,167.33

yoy 15.94% (4.17%) 1.35% 17.59%

EBITDA margin 17.43% 16.77% 17.61% 21.43%

Depreciation & Amortization 666.60 775.84 794.96 792.83

Interest income, net (215.92) (205.46) (191.98) (179.17)

Other income/gain 0.55 0.55 0.55 0.55

EBT 137.65 (1.26) 6.35 195.88

yoy 294.82% (100.92%) (603.36%) 2,986.13%

EBT margin 2.35% -0.02% 0.11% 3.60%

Tax 46.32 (0.37) 1.84 56.80

Effective tax rate 33.7% 29.0% 29.0% 29.0%

Minorities 0.00 0.00 0.00 0.00

Net profit reported 91.33 (0.90) 4.51 139.07

yoy (140.53%) n/a n/a 2,986.13%

Net margin 1.56% -0.02% 0.08% 2.55%

Net profit underlying 107.98 (0.90) 4.51 139.07

EPS 0.39 (0.00) 0.02 0.60

EPS Underlying 0.47 (0.00) 0.02 0.60

DPS 0.05 0.00 0.00 0.21


55

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

PPC | Balance sheet 2014 2015 2016e 2017e

Tangible fixed assets 13,689.5 13,588.3 13,709.9 13,633.2

Intangible fixed assets 69.9 69.9 69.9 69.9

Other long term receivables 131.5 131.1 408.9 601.1

Total non current assets 13,915.0 14,193.9 14,566.6 14,695.4

Inventories 737.8 732.3 700.1 645.1

Trade receivables 1,772.7 1,933.8 1,719.2 1,640.2

Other receivables 294.1 293.7 283.8 270.8



Total current assets 3,458.3 3,323.0 3,028.2 2,869.3

Total assets 17,373.4 17,516.9 17,594.8 17,564.7

Total equity 6,134.7 6,133.8 6,138.3 6,228.7

Long term loans 4,851.5 4,969.0 5,129.3 5,153.9

Total non current liabilities 8,513.2 8,651.5 8,899.3 8,987.6

trade and other payables 1,672.8 1,679.1 1,527.4 1,348.8

Short term loans 97.0 96.9 93.6 89.3

Total current liabilities 2,725.4 2,731.6 2,557.2 2,348.4

Total Liabilities 17,373.4 17,516.9 17,594.8 17,564.7

PPC - Cash flow 2014 2015 2016e 2017e

Cash earnings 1,208.5 980.0 993.3 1,167.9

(Increase)/decrease in WC (773.3) (148.5) 103.1 (88.4)

Operating cash flow 435.2 831.5 1,096.4 1,079.5

Interest received 64.2 64.2 64.2 64.2

capex (670.4) (768.2) (1,012.8) (814.5)

Customers contributions & subsidies

11.7 (109.4) (65.7) (89.6)

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

Cash flow used in investments (594.5) (813.4) (1,014.3) (840.0)

Free cash flow (159.3) 18.1 82.1 239.5

change in short term debt (0.3) (0.1) (22.8) (30.1)

proceeds from loans 1,234.4 117.5 160.4 24.6

payments of long term debt (646.7) - - -

Dividends (0.0) (11.6) - -

Interest paid (253.9) (269.7) (256.2) (243.4)

Cash flow used in financing 333.5 (163.9) (118.6) (248.9)

change in cash 174.3 (145.7) (36.5) (9.4)

Cash beginning 260.3 434.6 288.8 252.3

Cash-end period 434.6 288.8 252.3 242.9


56

Titan Cement (TTNr.AT) | Well-positioned to capture future growth

Well-positioned to capture future growth / Risks for 2016 in Egypt Q3 15 results review Titan announced 3Q15 results that came broadly in line with our estimates. All in all, the US operations helped to offset pressures in Greece and Egypt. 3Q15 Sales stood at EUR 356.6mn up 17%, in line with our estimates; sales benefited by strength in the US that helped to offset weakness in Greece. EBITDA came in at EUR 59.9mn, up 4.2%, missing our estimate by 2.3% due to the collapse of the domestic market in Greece and weaker than expected pricing in Egypt. The Group posted Net Profit of EUR 12mn, in line with our estimate but lower by 57% y-o-y due to FX gains of EUR 21mn recorded in the year ago period. Operating Free Cash Flow for the period stood at EUR 8mn, due to high Capex spending of EUR 128mn directed to the US and Egypt to capture market opportunities and improve cost efficiencies. Net Debt for the period stood at EUR 650mn, vs. EUR 529mn the year ago period, due to high Capex spending and adverse FX movements. Cash reserves stood at EUR 168mn, with only EUR 3mn placed in the Greek banking system, while the bulk of the remaining cash is located in the UK’s banking system.

Outlook: The two main markets that should drive growth in 2016 should be the US and Egypt; recovery is set to continue in the US, while the main effort in Egypt will be the restoration of EBITDA margins at healthy levels; on the other hand the Group plans to focus on the exports in the Greek market, while there is no visible catalyst for recovery in SEE, since demand in the area is closely related to the recovery of Europe. We point out that a potential depreciation of the Egyptian pound in 2016 would delay recovery for at least one year.

Valuation: We point out that the environment in Titan’s markets remains mixed; US and Egypt should drive growth in 2016, while demand in Greece will remain at low levels. Based on our current estimates, the Group trades at a 2017E EV/EBITDA multiple of 6.3x implying a 21.2% discount vs. Group’s 10-year historical average of 7.9x. In the near term we would expect the Group to Outperform the Greek market due to i) Titan is a net exporting Company with c. 75% of Group’s sales and 80% of Group’s EBITDA derived outside of Greece, ii) strong recovery in the US market, iii) the limited amount of cash reserves held in Greece (EUR 3mn), iv) limited participation of Greece in Group’s asset base that stands at c. 20% and v) Titan’s resilient business model. At the moment we have our rating and target price on Titan Under Review.

Valuation triggers Stronger than expected recovery of the US market; deleveraged B/S allows increased Capex in the following years that will enhance productivity in areas with strong demand; increased inbound tourism in Greece could boost demand for houses in the rural areas of Greece (mainly popular tourist destinations) by both EU and non-EU citizens; restart of public works in Greece; return of European Union to growth should enhance building activity in the Balkans; potential acquisitions in areas that will enhance diversification of portfolio

Downside risks FX Risks with the main concern related to the Egyptian pound in 2016; climate changes and natural disasters; production problems related to shortage of fuels

Company description Titan Cement Co. S.A. is a vertically integrated producer of cement and other related building materials. The Group is engaged in the production, trading and distribution of various product classes that include cement, ready mix & aggregates, concrete, cement blocks, dry mortars, fly ash, as well as porcelain ware. The Group activates in four different geographical segments namely, Greece, South Eastern Europe (SEE), Egypt and the United States of America and its activities span in nine (9) countries. Titan was founded in 1902 and it is headquartered in Athens, Greece. The parent company has been listed on the Athens Stock Exchange since 1912. The Group operates at the moment 13 plants with a total production capacity of 25mn tons of cement that drops to 21mn tons if we exclude minorities.


Company data





Target Price (EUR) n/a


Total Return (%) n/a

Rating U/R

Titan EUR mn 2013 2014 2015f 2016e 2017e 2018e

Sales 1,127.9 1,158.4 1,386.2 1,521.2 1,617.5 1,736.9

EBITDA 186.4 181.6 213.5 259.4 298.5 340.4

EBIT 71.5 76.6 102.3 142.4 177.1 214.7

Net Profit -36.1 30.9 41.4 63.9 78.4 96.7

EPS -0.44 0.38 0.51 0.78 0.96 1.18

DPS 0.10 0.31 0.20 0.31 0.38 0.41

P/E (x) -44.8 50.6 33.5 21.7 17.7 14.4

EV/EBITDA (x) 11.0 11.2 9.1 7.5 6.3 5.3

Net Debt 509 541 603 598 538 464





57

Titan Cement (TTNr.AT) | Income Statement

Titan's Projections FY '14 FY '15e y/y (%) FY'16e FY'17e FY'18e

Greece 284.9 271.3 -4.8% 276.4 282.7 290.2

USA 468.9 668.4 42.5% 755.3 796.8 872.3

Balkans 207.7 202.6 -2.5% 206.8 214.7 224.1

Egy pt 196.8 243.9 23.9% 282.7 323.3 350.3

Group Sales 1,158.4 1,386.2 19.7% 1,521.2 1,617.5 1,736.9

Greece 37.1 38.5 3.8% 39.6 41.5 43.4

USA 46.5 95.9 106.4% 131.4 154.6 187.5

Balkans 67.2 56.9 -15.2% 57.7 60.2 63.8

Egy pt 30.9 22.2 -28.1% 30.6 42.1 45.7

Group EBITDA 181.6 213.5 17.6% 259.4 298.5 340.4

EBITDA margin 15.7% 15.4% 17.1% 18.5% 19.6%

PROFIT & LOSS (P&L) ITEMS 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Sales 1,091.4 1,130.7 1,127.9 1,158.4 1,386.2 1,521.2 1,617.5 1,736.9

% chng -19.2% 3.6% -0.2% 2.7% 19.7% 9.7% 6.3% 7.4%

EBITDA 242.7 195.8 186.4 181.6 213.5 259.4 298.5 340.4

% chng -23.0% -19.3% -4.8% -2.6% 17.6% 21.5% 15.1% 14.1%

EBITDA margin 22.2% 17.3% 16.5% 15.7% 15.4% 17.1% 18.5% 19.6%

Depreciation & amortization 138.6 130.7 114.8 105.0 111.2 117.0 121.3 125.7

Operating profit (EBIT) 104.0 65.1 71.5 76.6 102.3 142.4 177.1 214.7

% chng -45.9% -37.4% 9.9% 7.0% 33.7% 39.1% 24.4% 21.2%

Net financials 66.3 65.6 80.2 34.7 47.3 58.4 74.5 89.0

Income from participations 0.0 0.8 0.7 -4.9 -4.9 -5.9 -6.9 -7.9

Pre-tax profit 37.7 -1.3 -9.4 46.8 60.0 89.9 109.6 133.7

% chng -71.0% -103.5% 618.9% -600.2% 28.1% 49.9% 21.8% 22.0%

EBT margin 3.5% -0.1% -0.8% 4.0% 4.3% 5.9% 6.8% 7.7%

Income tax 16.1 17.5 19.6 11.1 14.2 21.3 26.0 31.7

% effective tax rate 42.6% -1346.1% -209.8% 23.7% 23.7% 23.7% 23.7% 23.7%

Minority stake interests 10.7 5.7 7.1 4.8 4.3 4.7 5.2 5.3

Net income 11.0 -24.5 -36.1 30.9 41.4 63.9 78.4 96.7

% chng -89.3% -322.7% 47.1% -185.8% 33.8% 54.2% 22.8% 23.3%

Net margin 1.0% -2.2% -3.2% 2.7% 3.0% 4.2% 4.8% 5.6%

EPS (in €) 0.14 -0.30 -0.44 0.38 0.51 0.78 0.96 1.18

EPS chng -89.3% -322.6% 47.1% -185.7% 33.8% 54.2% 22.8% 23.3%

Dividends 0.0 0.0 8.5 25.4 16.6 25.5 31.4 33.8

Dividend policy: Payout Ratio 0.0% 0.0% -23.5% 82.0% 40.0% 40.0% 40.0% 35.0%

DPS (in €) 0.00 0.00 0.10 0.31 0.20 0.31 0.38 0.41

% chng -100.0% #DIV/0! #DIV/0! 199.6% -34.8% 54.2% 22.8% 7.9%

Market cap 895.9 1,082.1 1,532.0 1,485.5 1,369.7 1,323.8 1,323.8 1,323.8

End-year number of common shares 73,916,342 73,951,871 73,982,062 74,087,882 74,087,882 74,087,882 74,087,882 74,087,882

End-year/current stock price of common 11.59 13.96 19.80 19.17 17.61 17.00 17.00 17.00

% chng of stock price (common) -29.4% 20.4% 41.8% -3.2% -8.1% -3.5% 0.0% 0.0%

EV 1,714 1,775 2,058 2,031 1,981 1,933 1,877 1,808

General index 680.4 907.9 1,162.7 826.3 631.4 534.3 534.3 534.3

GI Performance -51.9% 33.4% 28.1% -28.9% -23.6% -15.4% 0.0% 0.0%

Out/under performance 46.7% -9.7% 10.8% 36.2% 20.2% 14.1% 0.0% 0.0%


58

Titan Cement (TTNr.AT) | B/S & Cash Flow Statement

BALANCE SHEET (BS) ITEMS 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Net fixed assets 1,887.5 1,759.0 1,564.9 1,673.0 1,731.8 1,774.8 1,773.5 1,767.8

Intangible & other assets 546.1 527.5 414.0 446.1 432.7 419.7 407.1 394.9

Current Assets 811.1 717.3 580.0 576.2 719.3 935.2 1151.4 1389.5

Accounts receivable 233.6 199.2 172.8 157.4 188.4 206.8 219.9 236.1

Inventories 242.8 233.8 221.4 275.8 330.0 362.1 385.1 413.5

Cash & cash equivalent 333.9 284.3 184.3 142.9 200.8 366.3 546.4 739.9

TOTAL ASSETS 3,277.7 3,032.0 2,663.9 2,811.2 3,000.9 3,248.1 3,451.4 3,672.9

Net debt position 707.7 595.6 508.5 540.8 603.4 597.9 537.8 464.3

Shareholders' equity 1,557.5 1,534.5 1,416.4 1,507.0 1,523.0 1,570.3 1,623.2 1,688.5

Minority interest on share capital 143.0 125.5 122.7 120.6 124.9 129.7 134.8 140.1

Non Current liabilities 1,097.6 975.7 828.6 898.4 1,070.7 1,233.1 1,355.5 1,477.9

Long-term Debt 815.1 705.2 599.1 634.2 804.2 964.2 1,084.2 1,204.2

Deferred tax liabilities 191.9 178.8 163.5 184.1 185.9 187.8 189.7 191.6

Provisions & other LT liabilities 90.7 91.6 66.0 80.1 80.6 81.1 81.6 82.1

Current liabilities 479.6 396.4 296.5 285.2 282.2 315.0 338.0 366.4

Accounts payable 228.7 208.6 187.2 220.5 263.8 289.5 307.8 330.6

Liabilities for taxes 22.2 11.9 10.1 11.0 14.1 21.2 25.9 31.6

Liabilities to banks 226.6 174.6 93.7 49.5 0.0 0.0 0.0 0.0

Other short-term liabilities 2.1 1.3 5.4 4.3 4.3 4.3 4.3 4.3

TOTAL EQUITY & LIABILITIES 3,277.7 3,032.0 2,664.2 2,811.2 3,000.9 3,248.1 3,451.4 3,672.9

RATIO ANALYSIS ON BS ITEMS

Liquidity: Current ratio 1.69 1.81 1.96 2.02 2.55 2.97 3.41 3.79

Acid Test 1.00 1.09 1.33 1.52 2.02 2.47 2.92 3.32

Activity: Avg receivables to turnover days 74 70 60 52 46 47 48 48



Financial Structure: Net debt / Equity 0.45 0.39 0.36 0.36 0.40 0.38 0.33 0.27

Net debt / EBITDA 2.92 3.04 2.73 2.98 2.83 2.31 1.80 1.36

Interest Coverage Ratio 1.4 0.8 1.1 1.1 1.7 2.0 2.2 2.3

Profitability: Return on equity 0.7% -1.6% -2.4% 2.1% 2.7% 4.1% 4.9% 5.8%

Return on invested capital 0.9% -0.8% -1.3% 1.7% 2.0% 2.8% 3.2% 3.6%

Free Cash Flow yield 17.0% 11.8% 7.5% 4.8% -0.3% 5.0% 11.1% 13.6%

CASH FLOW (CF) STATEMENT 2011 2012 2013 2014 2015 e 2016 e 2017 e 2018 e

Pre-tax profits 37.7 -1.3 -9.4 46.8 60.0 89.9 109.6 133.7


Plus: Non-cash items 5.9 -17.0 -4.0 4.0 0.0 0.0 0.0 0.0

Plus: Net interest expenses 66.3 65.6 80.2 34.7 47.3 58.4 74.5 89.0

Less: Taxation paid 37.0 21.4 22.1 20.9 11.1 14.2 21.3 26.0

Gross cash flow 211.6 156.6 159.6 169.6 207.4 251.1 284.1 322.4

Working capital chng 3.1 -8.7 4.6 -16.9 41.8 24.8 17.7 21.9

Operating Cash Flow 208.5 165.3 164.2 152.7 165.5 226.3 266.4 300.4


Less: Chng in investments 0.1 15.1 4.4 -0.7 0.0 0.0 0.0 0.0

Free Cash Flow 152.2 128.0 115.6 71.6 -4.5 66.3 146.4 180.4

Less: Dividends paid 24.9 19.1 2.3 19.8 25.4 16.6 25.5 31.4

Less: Interest expenses 73.3 73.4 58.0 55.3 59.5 70.7 81.9 91.5

Plus: Interest received 7.2 0.0 3.6 2.1 2.2 2.3 2.4 2.5

Plus: Equity chng 0.0 58.8 0.2 0.6 0.0 0.0 1.0 2.0

Plus: Debt chng 197.9 -148.2 -151.0 -44.5 120.5 160.0 120.0 120.0

Plus: Grants 0.0 0.0 0.0 0.9 0.0 0.0 0.0 0.0

Plus: Other 6.7 3.5 -8.1 3.2 24.5 24.2 17.8 11.4


59

Piraeus Securities Universe | statistics, financials, valuation

Prices as of COB, 1 February 2016

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 2016E

Alpha Bank ACBr.AT 1.830 0.0% 3.44 88.0% 2,812.49 -26.5% -16.7% 0.0% 0.0% <0 <0 13.2x 0.3x n/a n/a n/aAegean Airlines AGNr.AT 7.300 -1.9% 8.50 24.7% 521.34 6.9% 21.1% 8.1% 8.2% 7.5x 6.9x 6.3x 3.0x 3.0x 3.1x 2.5xFolli Follie Group HDFr.AT 14.620 1.2% 22.40 53.7% 978.78 -15.5% -4.2% 5.1% 0.5% 6.9x 6.6x 6.0x 0.7x 4.6x 4.7x 4.4xFourlis FRLr.AT 2.600 -0.4% 3.85 48.1% 132.58 -13.3% -1.8% 0.0% 0.0% <0 251.5x 23.9x 0.8x 10.3x 8.7x 7.6xHellenic Exchanges EXCr.AT 4.480 -0.2% 5.40 26.1% 292.85 -15.5% -4.2% 7.1% 5.6% 15.9x 36.3x 24.6x 1.5x 5.3x 11.2x 8.0xJumbo BABr.AT 9.700 -0.4% 11.80 21.6% 1,319.78 0.0% 13.3% 3.7% 0.0% 13.0x 12.6x 11.8x 1.7x 8.2x 7.3x 6.5xMotor Oil Hellas MORr.AT 10.330 4.3% 14.00 41.3% 1,144.39 3.8% 17.6% 0.0% 5.8% 10.9x 4.4x 4.1x 1.8x 39.5x 3.6x 2.6xOpap OPAr.AT 6.800 0.3% 9.00 44.9% 2,169.20 -16.0% -4.9% 10.3% 12.5% 11.1x 10.6x 15.1x 1.9x 5.4x 5.4x 7.3xOTE OTEr.AT 8.080 1.3% 10.20 27.2% 3,960.42 -12.6% -0.9% 1.0% 1.0% 12.5x 14.4x 14.7x 1.4x 3.7x 4.0x 3.4xNeutral

Autohellas AUTr.AT 10.110 0.0% 10.00 5.0% 122.91 -3.3% 9.6% 7.9% 6.1% 7.6x 8.2x 7.3x 0.6x 3.3x 3.0x 2.9xEurobank EURBr.AT 0.757 0.8% 1.38 82.3% 1,654.80 -27.2% -17.5% 0.0% 0.0% <0 <0 24.7x 0.3x n/a n/a n/aFrigoglass FRIr.AT 1.560 -3.1% 2.40 53.8% 78.93 -17.5% -6.5% 0.0% 0.0% <0 <0 <0 1.1x 12.3x 8.4x 7.1xNational Bank NBGr.AT 0.252 1.2% 0.51 102.4% 2,305.08 -26.5% -16.7% 0.0% 0.0% <0 <0 18.9x 0.3x n/a n/a n/aPPC DEHr.AT 3.490 0.3% 4.00 14.6% 809.68 -10.1% 1.9% 1.4% 0.0% 7.5x 5.2x 4.8x 0.1x 5.8x 5.1x 4.8xUnderperformCoca Cola HBC AG EEEr.AT 18.940 1.8% 17.00 -8.2% 6,972.60 -4.3% 8.4% 1.9% 2.0% 25.1x 24.0x 22.6x 2.4x 11.4x 10.6x 9.6xUnder Review

Metka MTKr.AT 7.280 4.6% U/R n/a 378.20 1.4% 14.9% 3.4% 2.6% 4.2x U/R U/R U/R 0.9x U/R U/RSarantis SRSr.AT 7.290 0.6% U/R n/a 253.48 -5.6% 7.0% 2.1% 2.2% 14.8x 13.8x 12.0x 1.5x 9.8x 8.6x 7.1xTitan TTNr.AT 17.770 0.4% U/R n/a 1,369.42 0.9% 14.3% 1.7% 1.7% <0 44.3x 21.2x 0.9x 9.7x 10.5x 8.2xRestrictedPiraeus Bank BOPr.AT 0.184 1.7% Restricted n/a 1,606.91 -33.8% -25.0% 0.0% 0.0% <0 <0 10.3x 0.2x n/a n/a n/a

Reuters Last Daily Chg Value VolumeWarrants Code Price € (%) € mn mn

Alpha Bank GRALFAw.AT 0.002 0.0% 0.00 0.19National Bank GRETEw.AT 0.006 20.0% 0.00 0.47Piraeus Bank GRTPEIw.AT 0.001 0.0% 0.00 0.00

Notes: Bank target prices are based on a 6% rf rate (10-year bond yield)

EV/EBITDADiv.Yield P/E


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Coverage Universe

Piraeus Securities Research Stock Ratings

Weighted on Mcap

Un-weighted Rating Definitions Investment Banking Activities within

12-month period

Outperform : 50.5% 47.4% Total return (*) expected to be greater than 10% compared to the market’s return (**) over a 12-month period

-

Neutral: 8.4% 26.3% Total return (*) expected to be between -10%/+10% compared to the market’s return (**) over a 12-month period

-

Underperform: 30.7% 5.3% Total return (*) expected to be below -10% compared to the market’s return (**)over a 12-month period

-

Restricted: 0.9% 5.3%

In certain circumstances that Piraeus Securities S.A. policy or applicable law / regulations preclude certain types of communication and investment recommendations

-

Under Review: 9.4% 15.8% Rating/TP may be subject to future revision - (*) Total return = Price appreciation + Dividend (**) Market return = Risk free rate + 5% (an approximation of equity risk premium) Investment ratings are determined by the ranges described above at the time of initiation of coverage, a change in rating, or a change in target price. At other times, the expected total returns may fall outside of these ranges because of price movement and/or volatility. Such interim deviations from specified ranges will be permitted but will become subject to review by Research Management.

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RESEARCH SALES/ TRADING Natasha Roumantzi

George Doukas

Iakovos Kourtesis

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Constantinos Xenos

Dimitris Dardanis

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Alexandros Malamas

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