What’s new? Q4/FY 2021 results were weak and below our estimates once adjusted for one-off items. FY sales/EBITDA/net income came in at E408m/E60m/E40m or +4%/-5%/+4% yoy. But if you take out E3.6m of revaluation gains (land plot sale in Romania), FY net income was E36.5m or -5.5% yoy; while H2 net income was down -25% yoy (adjusted).

What’s new? Ever since our last update (Dec 9), Russia invaded Ukraine and soon after SAR announced a E55m acquisition (enterprise value) in Poland, its biggest M&A deal in the last many years. Sarantis is present in Ukraine through its 90% owned subsidiary Ergopack (home and personal care products), contributing E28m of sales and E1.5m EBIT in 2020. This would be less than 7% of total sales and 3% of total EBITDA, and therefore seems manageable, both P&L and in valuation terms. The worst-case scenario would be for SAR to write-off the entire carrying value of Ergopack, which we estimate at E18m-E20m. Latest available financial accounts of Ergopack show equity of E19m (EUR/UAH at 32) with zero debt. If not a full write-off, SAR will not avoid an impairment, in our view.

This note is about investing, not trading or event-driven ideas. We believe our OI rated stocks will outperform the market on a risk-adjusted basis in the next 12-18 months. We recommend you own OPAP, Jumbo, PPC, Alpha Bank and ADMIE. We downgrade OTE given it is trading at our target price. We assume the pandemic will be less of a risk; we consider the end of free money and elevated costs and reiterate cash flow conversion as our #1 criterion.

What’s new? We talked to the company. We understand there is inflation / COGS pressure that could cost them as much as 200bps in gross margin terms, with management trying to increase prices as a counter measure. We estimate the target is to defend / maintain 2020 EBITDA of E63m. If successful, shares are trading 10x EBITDA 2021E.

With this note we briefly share our views on all the names we cover. We start with our OI picks, followed by Radar and DOI names. We have added several names in our Universe, most of which on a Not Rated (NR) basis.