We are not brave enough to assume another double-digit sales growth year (we model in +8%) and given political/sovereign uncertainty we stick to our DOI rating, albeit on much higher PT thanks to our revised EPS and discount rate; QE (lower country risk) or more acquisitions could send shares higher; back-of-the-envelope exercise shows that E50m of firepower could add E10m in EBITDA (+25%) in the next 3 years – sending EV/EBITDA down to 6.5x.

Mid-single-digit L4L sales growth + acquisitions should result to double-digit reported sales growth in 2016, according to management; the same goes for earnings, with margins expanding on operating leverage. This means shares trade 7.0x EBITDA and 11x EPS 2016E, not demanding considering corporate strategy/consistency/balance sheet strength over the years (p. 3). We argue thin trading volumes (and sovereign uncertainty = high discount rates) stand in the way of…

Greek like-for-like sales growth of +1.0% in Q1/-1.0% in Q2 /-1.0% in Q3 (-1.0% in 9M) is way better than company’s implicit estimate for real GDP growth of -4.0% (Apr) or initial expectations by creditors for -2.3%. Real GDP is actually +0.4% yoy in the first nine months (nominal -0.5% yoy) ‘chewing up’ capital controls and the bank holiday imposed in the middle of the year; we up our group sales by 3.5% (+E10m) but leave our earnings estimates unchanged and in line with guidance. PT and rating unchanged implying capitalization at 10% FCFE yield. Acquisitions monitoring in line with business strategy.

Management reiterated FY 2015 guidance and its strategy with both to be updated during the summer; It seems Q2 will shape the company’s future in many fronts (acquisitions, local economy); so far Q2 sales run rate is equally strong as the one in Q1 on the back of acquisitions made in 2014 and higher advertising. We believe there is some work to be done on EBIT x- EL. No price effect from a possible VAT re-balancing (only volume elasticity). At 13.5x EPS 2015E and 8.6x EBITDA 2015E it remains DOI…contact@researchgreece.com

Downbeat mood; SAR expects Greek GDP to drop by 4% yoy; still, group sales will grow by 8% yoy on acquisitions, foreign operations and EBIT (x-EL) will grow by 30% yoy (+E5m) on operating leverage and synergies. No wonder strategy remains intact with more acquisitions targeted in 2015 (not included in our estimates). Remains DOI given limited upside at current levels and thin trading. Shares have performed better than the market in the last six months.