What’s new? Jumbo published H1 results and it would not be Jumbo if these did not include contradictory messages.
• Revenues/EBITDA/net income grew +13%/+12%/+17% yoy in H1. Management reiterated full year guidance (possibly at the high end), which combined with the August trading statement (8M sales +11% yoy) it implies revenues will go down by 7% in the remaining 4 months of the year, while net income will go down by -22% yoy overall in H2.
• Management announced a special dividend of E0.38/share (2.7% yield) while committing on the same yoy ordinary dividend of E0.77/share (5.4% yield), despite stressing the ongoing uncertainty, volatile market conditions and headwinds ahead.
• Which is the reason why it has postponed investment decisions for 2024, citing uncontrolled increase in costs. But still going through with 1 new store in Romania in 2022 and 2 more in 2023.
Conclusion: we reiterate OI on a PT of E21.5 (unchanged). We believe there is upside risk to the company’s guidance for 2022, not incorporated in our estimates. We continue to recommend Jumbo for its successful business model, strong balance sheet, cash flow generation and dividend policy. All currently priced at 6.9x EPS (x-cash), 4.6x EBITDA and 8% FCFE yield 2023E.

What’s new? This update can be best summarized by adding ‘Solidarity Tax’ to our latest note titled ‘Unprecedented Earnings’, published two weeks ago on Q2 results. The European Commission used a different term: ‘Solidarity Contribution’ on excess profits generated from activities of oil, gas, coal, and refinery sectors. Equal to a 33% charge against 2022 pre-tax profits >20% of the last three-year average (2019-2021).
Although not exactly a surprise to see refineries paying windfall taxes on their huge earnings generated (so far) in 2022, we admit we expected the Greek government to pre-empt such a move, the same way it did with the electricity companies. Instead, it was the European Commission recommending the tax.
Conclusion. Bottom line, this is bad news for Motor Oil and Hellenic Petroleum, with their share prices down c.10% compared to Sep 1 (our previous update). Not sure about the final bill but pretty sure it will be in the hundreds of EURm. In the table below we show our estimates on different scenarios (group or refining-only earnings, adjusted or reported etc.) and outline our thoughts. Member states have the final saying on implementing this solidarity tax.
We conclude…

With this Q&A note we describe the political situation in Greece with regards to the next elections scheduled for 2023. The electoral system effective in the forthcoming elections implies a second round will be unavoidable. Even then, YTD polls suggest a two-party coalition is required to form a government. We see the political risk rising significantly in 2023. Investors should factor this into their strategies including Greek equities.
When are the next government elections due? Several months ago, we bet on early elections taking place before or right after the summer season. Apparently, we were wrong. The previous parliamentary elections took place on July 7, 2019, which means the 4-year tenure expires in July 2023.
Next July then? No. Several ‘technical’ issues mean elections will most likely take place several weeks (or months) before the due date. The Prime Minister, Mitsotakis, has also stated next elections will take place in the spring of 2023.
What ‘technical’ issues? because next elections will take place under…

What’s new? Fourlis reported weak H1 results last week with revenues and clean EBIT at E213m and E2.8m or +15%/-67% yoy, reflecting higher opex (+40%) and despite gross margin rising by +300bps yoy. Results are burdened by E5m-E6m additional energy costs and foregone revenues of E8m-E10m due to out-of-stock products.
Still, the big news was the guidance provided for 2025 in the conference call that followed. Management expects sales of E750m and EBIT margin of 7.5%-8.0% from the retail business alone (IKEA, Intersport, and Holland Barrett) post rental expenses paid to (equity consolidated by then) Trade Estates REIT. In other words, EBIT will reach c. E60m in 2025 without counting for any contribution from Trade Estates REIT.
Sales of E750m in 2025 (from E500m in 2022E; +50%) break down to E450m from IKEA (from c. E315m in 2022E), E250m from Intersport (from c. E185m in 2022E) and E50m from Holland Barrett (from E0m in 2022E); while retail EBIT of E60m in 2025 compares with E12.5m-E15.0m in 2022 (2.5%-3.0% margin; +4x higher); or E20m if we adjust for the higher energy costs (vs. 2021) which presumably should normalize going forward.
Fourlis guidance is based on a) three new, medium-sized, IKEA stores (8-10k sqm) in Patras, Heraklion and Ellinikon; b) E15m-E20m per new IKEA store; c) higher overall consumer spending; d) the addition of Holland Barrett; e) gross margin of 42% (from 45%); and f) opex at 35% of sales (from 42%).
Conclusion: We reiterate DOI with our PT at E3.6 (from E4.6). The business plan is obviously ambitious. Management is making a big bet on new sales per IKEA and Intersport stores with the resulting EBIT driven from operating leverage. If they pull it off, Fourlis is a great investment opportunity at current prices, trading at c.4.0x EBITDAL 2025E (guidance).

What’s new? PPC reported Q2 results, showing a much better picture in EBITDA and cash flow terms compared to the horrifying Q1. Management reiterated its FY 2022 recurring EBITDA target (o/w half coming from the 51% owned distribution business), which sounds good considering the rather chaotic business conditions prevailing in the European electricity generation and supply markets. It also confirmed its strategic target towards RES additions, ultimately replacing lignite capacity, which was and remains our anchor argument in favor of the investment case.
Conclusion. We will repeat the conclusion reached in our previous quarterly assessment: ‘’[…] is the business plan on track and can the company install 5GW of RES in the next 4-6 years? Our answer to this question is ‘Yes’, which means the investment thesis remains intact, and the stock is worth >E10 per share. We reiterate OI on a lower PT of E11.5.’’ We realize our call has already gone and will continue to go through extreme volatility given the low visibility in the short/medium term.