Beta Sec – Daily report 27-11-2024- Market Comment- In the Spotlight

27 Νοεμβρίου, 2024

Market Comment

The lowest turnover of the last 11 weeks did not stop AthEx from recording another day of growth, albeit marginal, on Tuesday, making it five in a row. Corporate results for the third quarter continued to flow in keeping selective interest and rotating liquidity into the market.

General index closed at 1,408.05 points, adding 0.13% to Monday’s 1,406.20 points. The large-cap FTSE-25 index expanded 0.15%, ending at 3,409.42 points, though mid-caps contracted 0.05%.

The banks index advanced 0.40%, as National grew 1.57% and Eurobank earned 0.64%, while Alpha declined 0.49% and Piraeus gave up 0.44%. Ellaktor grabbed 3.21%, while Cenergy Holdings parted with 1.86%. In total 62 stocks reported gains, 47 recorded losses and 52 remained unchanged. Turnover amounted to €63.8m, down from Monday’s €206.6m.

Good news from Middle East geopolitics front may provide some floor for optimism in today’s session.

¢ In the Spotlight

PPA, Jumbo: Israel and Lebanon have accepted a US-backed proposal to end the 13-month border conflict that spiraled into an all-out war in September with Hezbollah. The deal stipulates a 60-day cessation of hostilities, which negotiators have described as the foundation of a lasting truce. During that time, Hezbollah fighters are expected to retreat some 40 kilometers from the Israel-Lebanon border, while Israeli ground forces withdraw from Lebanese territory.

Greece/PDMA: Today, November 27, 2024 the Hellenic Republic will auction 26 Weeks T-Bills, in book entry form, with maturity May 30, 2025. The amount to be auctioned is 500 million euro. Settlement date is November 29, 2024. During the auction non – competitive bids can be submitted up to 20% of the auction amount. No additional non-competitive bids will be accepted on November 28, 2024.

HTO: Reportedly the sale of Telecom Romania is expected to be concluded by early 2025.

Thrace Plastics: FY:24 gross interim dividend €0.068/share ex-date January 23. Dividend record date January 24, dividend payment January 29.

Sunrisemezz: €0.0504/share capital return. Ex-capital return date November 27. Capital return record date November 28. Capital return payment December 3.

Phoenix Vega: €0.0128/share capital return. Ex-capital return date November 27. Capital return record date November 28. Payment December 3.

Fourlis (9M:24 results review): The company reported a set of Q3/9M:24 financial performance that came in below our estimates on the EBITDA and Net income line with a disappointing weak Q3:24 despite back to the school enhancement. In more details:

§ Consolidated sales accelerated 4.6% to €407.6mn from €389.6mn in 9M:23 and vs our call for €403.7mn.

§ Retail business revenue was up 2.6% to €390mn driven by increased volume sales across all segments bit in lower prices in the IKEA brand, applying new inter Ikea pricing policy already evident since the beginning of the year.

§ IKEA sales (RHF) up 2.1% to €257.3mn, EBITDA (OPR0 +40.4% to €26.9mn (margin at 10.5% from 7.6%) and EBIT up 55.1% to €21.2mn from €13.7mn. The segment will be enhanced in 2025 with the inclusion of the recently acquired Footlocker business.

§ Sportswear sales (Intersport) up 2.9% to €130.7mn, EBITDA (OPR) -14.3% to €6.6mn vs €7.7mn (weak on higher operating expenses) and EBIT down 51.9% to €1.1mn from €2.3mn.

§ H&B sales at €1.6mn (from €0.5mn in 9M:23), EBITDA (OPR) at -€1.5mn (-€1.2mn in 9M:23) and EBIT -€1.7mn compared to -€1.3mn a year earlier as the business is still in development and expansion phase (increased expenses).

§ Trade Estates income was up 65.6% to €30.3mn with FFO at €10.7mn vs €6.5mn in 9M:23. Gross NAV at €497.9mn with NAV at €303.1mn.

§ Consolidated EBITDA (OPR) up 40.9% to €44.4mn from €31.5mn with EBITDA margin improvement to 10.9% from 8.1% gaining 2.9%.

§ Retail business EBITDA (OPR) reached €27.9mn from €22.6mn in 9M:23 with margin at 7.1% from 5.9%. Still the figure is 12% below our call for €50.5mn.

§ The reason in the miss of the EBITDA (OPR) figure comes from the weak performance of the sportswear segment.

§ Net income settled at €12mn vs €5.2mn a year earlier, just 1.8% below our call.

§ A weak EBITDA performance, mainly due to sportswear business segment will not please the market.

§ Awaiting, as reiterated again the deconsolidation of TE that will alleviate financial leverage on he company’s B/S.

§ FY:24 PE 9.3x, DY 3%. Outperform remains purely on valuation ground.

The following table summarizes Fourlis group Q3/9M:24 financial performance vs our estimates.

Fourlis	2023	2024	Y-o-Y	2024 Est.	Act. vs	2023	2024	Y-o-Y	2024 Est.	Act. vs
EUR m.	9Μ	9Μ	(%)	9Μ	Est.	Q3	Q3	(%)	Q3	Est.
Sales	389.6	407.6	4.6%	403.7	1.0%	142.9	150.6	5.4%	146.7	2.7%
EBITDA	31.5	44.4	41.0%	50.5	-12.1%	4.4	6.5	50.1%	12.6	-48.3%
EBITDA Mrg	8.1%	10.9%	+281 bps	12.5%	-0 bps	3.0%	4.3%	+129 bps	8.6%	-49.7%
Net Income	5.2	12.0	130.8%	12.2	-1.8%	3.4	0.5	-85.8%	2.9	-83.0%
Net Mrg	1.3%	2.9%	+161 bps	3.0%	-0 bps	2.4%	0.3%	-209 bps	2.0%	-83.4%

Kri Kri (9M:24 results review): A n in line and expected set of Q3/9M:24 performance with a touch of better top line growth than our expectations and slightly worse EBITDA and Net income due to margin deterioration, yet in line with management’s FY:24 guidance. In more details:

§ Turnover amounted to €207.48mn compared to €176.67mn in 2023 (an increase of +17.4%).

§ Gross profit amounted to €69.45mn against €62.74mn in 2023.

§ EBITDA amounted to €43.72mn against €41.54mn in 2023.

§ Profit before tax amounted to €40.06m against €37.84m in 2023.

§ Net profit after tax amounted to €36.36m against €30.19m in 2023.

§ In the yogurt segment, total sales increased by +16.3% in value and +19.7% in volume. Export yogurt sales show a strong double-digit growth of +29.9%, exceeding €98mn. Yogurt exports make up 62.2% of total dairy sales. That strong boost in export sales, contributed by the major markets of Italy and the UK as well as Kri Kri’s entrance in new markets, such as France.

§ In the domestic Greek market, yogurt sales exceeded €59.6mn, decreased by -0.8% in value, but increased by +5.4% in volume. That decrease in sales value was a result of reduced prices aiming to support domestic consumers. As far as the market condition is concerned, the shift of consumers to PL yogurts continues, in search of value-for-money products and result of inflationary pressures. PL yogurt market share increased by +0.9 p.p. in volume, reaching 35.9%, and therefore applying strong pressure on branded yogurts. That pressure has led KRI-KRI branded yogurts to a small market share loss (-1.2 percentage point in value), reaching 15.1% of market share and establishing KRI Kri position as the second player in the market [Circana data (ex. IRI) in value, Jan.-Sep. 2024]. Kri Kri benefit sfrom those market developments, since it is the largest producer of private label yogurts in the domestic market commanding above 90% MS.

§ In the domestic ice cream market, sales presented a strong double-digit increase by +16.7% in value. The favorable weather conditions for the IC sales, the expansion of the company’s sales network and the introduction of new ice cream products resulted in the double-digit growth. The increased inflow of tourists in Greece contributed to growth as well. KRI-KRI’s market share increased by +0.1 p.p. in value (14.0%) and decreased by -1.2 p.p. in volume (11.7%) [NIELSEN, Jan.-Sep. 2024].

§ Planned investments, totaling €50 million, for the next 3 years, are expected to contribute decisively to the further development of KRI-KRI’s economic activity, which is also diffused to the local community.

§ Overall a satisfactory set of results enhancing guidance for FY:24 sales in excess of €245mn and EBIT margin above the 16% threshold.

The company remains a top pick (Outperform rating) trading at a projected FY:24 PE multiple of 12.4x, EV/EBITDA at 9.8x, CF yield at 9.2% and DY 2.8%.

The following table summarizes Kri Kri’s Q3/9M:24 financial performance vs our estimates:

Kri Kri	2023	2024	Y-o-Y	2024 Est.	Act. vs	2023	2024	Y-o-Y	2024 Est.	Act. vs
EUR m.	9Μ	9Μ	(%)	9Μ	Est.	Q3	Q3	(%)	Q3	Est.
Sales	176.7	207.5	17.4%	204.3	1.6%	63.7	76.6	20.3%	73.4	4.4%
EBITDA	41.5	43.7	5.2%	43.9	-0.4%	12.8	14.3	11.4%	14.4	-1.1%
EBITDA Mrg	23.5%	21.1%	-244 bps	21.5%	-41 bps	20.1%	18.6%	-149 bps	19.7%	-104 bps
Net Income	30.2	36.4	20.4%	36.72	-1.0%	9.0	10.0	11.6%	10.4	-3.5%
Net Mrg	17.1%	17.5%	+44 bps	18.0%	-45 bps	14.1%	13.1%	-102 bps	14.2%	-107 bps

Hellenic Exchanges (9M: 24 CC highlights): During the CC for the analysis of the company’s 9M:24 performance, management indicated that Q4:24 personnel costs will continue to run at high single digit growth rate, similar to the one recorded in Q3, ie. +7.5%. and it is unlikely that it moves back to double digit growth rates again. ADTV for the remainder of the year will hover at the area of €130mn, lower than our FY:24 estimate for €145mn. We will need to make relevant adjustments on that.

New trading pattern of charges effective as of last Monday. Bundles for regular and frequent clients and different charges on continuous trading or in auctions make for an 1.1% now in trading from 1.3% previously.

Regarding the upgrade to Developed market status in 2025, apart from FTSE Russel and S&P that have placed HELEX in their watch list for a potential upgrade, consultation over a 6-month period will continue with results no sooner than end 2025. MSCI and STOXX have not yet taken any action regarding the status reference.

The following table summarizes results vs. our estimates for HELEX Q3/9M:24 financial performance:

Hellenic Exchanges	2023	2024	Y-o-Y	2024 Est.	Act. vs	2023	2024	Y-o-Y	2024 Est.	Act. vs
EUR m.	9Μ	9Μ	(%)	9Μ	Est.	Q3	Q3	(%)	Q3	Est.
Sales	34.4	39.8	15.6%	39.0	2.1%	11.5	13.0	13.3%	12.2	6.7%
EBITDA	14.3	18.4	28.9%	17.2	7.2%	4.8	5.6	17.9%	4.4	28.1%
EBITDA Mrg	41.6%	46.4%	+478 bps	44.2%	+220 bps	41.6%	43.2%	+169 bps	36.0%	+725 bps
Net Income	9.6	13.2	37.5%	11.86	11.7%	3.1	3.9	26.2%	2.49	55.9%
Net Mrg	28.0%	33.3%	+530 bps	30.4%	+287 bps	26.7%	29.8%	+305 bps	20.4%	+941 bps