Q1 revenues/clean EBITDA/net grew by +2%/+12%/-17% yoy. Aggregates and RMC volume up with cement sales flat. Strong Greece and East Med were weighed down by flattish US and weak SEE. Bottom line declined on higher taxes and minorities from the US (13.3%). Cautiously optimistic. In line with peers, Titan management shared a cautiously optimistic outlook for 2025 based on adverse weather conditions (US, SEE) normalizing, solid US pricing & infrastructure spending, and signs of stabilization in Egypt (strong exports).

This is our BoP Greek equities briefing. We have not made many changes compared to our semi-annual one in July: we downgraded Alpha and Helex; and upgraded Eurobank. Plus, we re-visited GEK, reiterating OI and replacing its soon-to-be-delisted RES subsidiary, Terna Energy.

Neither sales nor reported EBITDA grew in Q3 compared to the same period last year. The latter was burdened by VRS costs in Greece, plus adverse weather conditions and IPO expenses, in the US. Adjusted EBITDA grew by +5% with US EBITDA +10% yoy…

We are resuming coverage on Titan, admittedly with a big delay following the company’s Investor Day last September, and given the stock is up +100% in the last 12 months. Following the release of Q1 24 results, management expects 2024 will be > 2023 and announced their intention to IPO the US business (55% of EBITDA; 15%-25% minority stake) by early 2025.
Conclusion: a) Fetching US cement peer valuation of 8x-10x EBITDA for US ops (vs 5.2x currently for the entire group) can re-rate shares further, assuming US EBITDA can grow by 8%-10% p.a. in 2024-2026; b) Sep 2023 Investor Day guidance had a short life, with 2023 results far exceeding it.

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.