greece/ general retailers company...

Jumbo Greece/ General Retailers Company update

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Investment Research 26 February 2008

Buy

18.8026.2029.20vs Target Price: EUR

Recommendation unchanged

Target price: EURShare price*: EUR

Reuters/Bloomberg BABr.AT/BELA GA Accounting Standard/Since IFRS/2004 Market capitalisation (EURm) 1,140No. of shares (m) 60.6Free float 55.6%

Daily avg. no. trad. sh. 12 mth 125,700Daily avg. trad. vol. 12 mth (m) 2.92Price high 12 mth (EUR) 27.50Price low 12 mth (EUR) 16.50Abs. perf. 1 mth -6.0%Abs. perf. 3 mth -22.0%Abs. perf. 12 mth -13.9%

(EUR) 06/08e 06/09e 06/10eSales (m) 404 495 590EBITDA (m) 126 150 172EBITDA margin 31.1% 30.4% 29.2%EBIT (m) 115 139 158EBIT margin 28.5% 28.0% 26.8%Net Profit (adj.)(m) 81 101 116ROCE 33.2% 33.4% 32.1%Net debt/(cash) (m) 61 58 54Debt Equity 21.8% 16.5% 12.5%Debt/EBITDA 0.5 0.4 0.3Int. cover(EBITDA/Fin.int) 24.1 29.3 33.3EV/Sales 3.0 2.4 2.0EV/EBITDA 9.5 7.9 6.9EV/EBITDA (adj.) 9.9 8.2 7.2EV/EBIT 10.4 8.6 7.5P/E (adj.) 14.0 11.3 9.9P/BV 4.1 3.2 2.6FCF yield 5.7% 7.3% 9.1%Dividend yield 2.0% 2.5% 2.8%EPS (adj.) 1.34 1.66 1.91BVPS 4.62 5.81 7.19DPS 0.38 0.47 0.53 vvdsvdvsdy

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Feb 07 M ar 07 Apr 07 M ay 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08 Feb 08

JUM BO DJ Stoxx General Retailers (Rebased)

Source: Datast ream Shareholders:

*closing price as of 25/02/2008

Significant prospects on a complicated business environment Following the release of H1:08 results (July – December 2007), the

management confirmed the guidance of the current year calling for top and bottom line growth of 15%. However the management has stressed a number of negative factors which compose a complicated business environment in China, while strikes in Greek ports is another issue to be taken into account and could have impact on the group’s performance.

Given the complicated business environment, we prefer to retain a more conservative view proceeding with a decrease in our estimates of around 6% in EPS for the next three years. However, we should underline that we remain positive on the group’s prospects, while our revised estimates still stand higher compared to the management’s guidance.

We conclude with sales at EUR403.7m for this year (fiscal year ending June, 2008), i.e. 3.4% lower compared to our previous estimate, while EBITDA is seen at EUR125.6m vs. our previous estimate of EUR129.2m. Our revised estimate for bottom line stands at EUR81.2m (-5.9% vs. our previous estimate).

Updating the roll-out of stores in Bulgaria and Cyprus, we anticipate sales CAGR for the next three years at c.19% with an equal growth for net earnings during the same period under decreasing operational margins. Our estimates for the next three years also stand higher compared to the management’s forecasts guiding for an average 15% at top and bottom line level.

We proceed with a downward revision in our valuation with our new target price at EUR26.20 per share (vs. EUR29.20 per share previously), which however continues to support a ‘Buy’ recommendation, as it leaves space for 39.4% upside. Our target price is derived calculating a diluted number of shares accounting for the convertible bond.

Worth noting that we do not include in our set of forecasts any assumptions reflecting the group’s intentions to expand in Romania, while we assume the opening of only three stores in Bulgaria. Assuming that Jumbo will enter Romania by year 2010 and the store roll-out program in Bulgaria and Romania will be completed by fiscal year July 2014 – June 2015 for Bulgaria and by fiscal year June 2015 – June 2016 in Romania reaching 12 and 10 stores respectively, the fair value of Jumbo - ceteris paribus - could reach EUR 29.80 per share.

Jumbo released H1:08 financial results yesterday, according to which sales reached EUR238.5m (+17.4% y-o-y). EBITDA settled at EUR72.4m (+20.3% y-o-y,) on improved margin at 30.4% (vs. 29.6% in the respective period last year) and net earnings at EUR48.2m (+21.1% y-o-y).

Head of Research Costis Sinanidis +30 210 817 3386 [email protected] Analyst(s): Maria Psyllou +30 210 817 3381 [email protected]

Jumbo

Forecast Revision Following the release of H1:08 results (July – December 2007), the management confirmed the guidance of the current year calling for top and bottom line growth of 15%. The estimate of the management on the average growth for the next three years also stands at 15% for sales and net earnings. We remind that the guidance does not include any contribution from the Bulgarian operations as opposed to our estimates, which call for contribution at sales level by c.EUR6.0m in FY:08 (operating as of December 2007).

However the management has stressed a number of negative factors which compose a complicated business environment among which the increase of cost of money in China, the increase of cost of raw materials & transports and delays in shipments due to the overheating of the Chinese economy. On top of that, strikes in Greek ports is another issue to be taken into account and could have direct and indirect impact on the group’s performance.

Given the complicated business environment, we prefer to retain a more conservative view proceeding with a decrease in our estimates of around 6% in EPS for the next three years. However, we should underline that we remain positive on the group’s prospects which remains the leader in the local toys/ baby/ stationary/ seasonal products market with increasing market shares (targeting 38% for toys) and continuous enrichment of its product mix. Besides, historically, Jumbo has proved to treat successfully the negative market factors. Moreover, note that our revised estimates continue standing higher compared to the management’s guidance.

We remind that our forecasts for this year (ending June, 2008) assume the opening of one metropolitan store in the north suburbs of Athens (Varimbombi) and one additional store in Bulgaria. Both stores have already initiate operations as of December, 2007. However, in our revised estimates we do not include the operation of one new store in Cyprus during this year (as of April, 2008 based on our previous estimates), since there is no development in the procedure for its opening. Consequently, we transfer its opening to a latest date (i.e. in fiscal year July 2009 – June 2010).

All in all, we conclude with sales at EUR403.7m for this year (fiscal year ending June, 2008), i.e. 3.4% lower compared to our previous estimate, while EBITDA is seen at EUR125.6m vs. our previous estimate of EUR129.2m. Our revised estimate for bottom line stands at EUR81.2m (-5.9% vs. our previous estimate).

The changes in our estimates for this year come as a result of the following factors:

- Jumbo stores (as all commercial stores) didn’t operate during the last Sunday of the year 2007 (as it was the case one year before), i.e. in a critical period due to the high seasonality of the toy sector – especially if we take into account that Christmas period sales traditionally account for c.28% of the total year turnover.

- H1:08 results are burdened by the amount of EUR1.4m on additional taxation by tax reserves (included in Q2:08 financial results).

- The opening of the new store of Cyprus included in our previous estimates as of April, 2008 is transferred in the fiscal year July 09 - July 10. Consequently we do not expect any contribution from additional new stores this year.

Jumbo

Jumbo Forecasts Revision

EUR m 2007 Actual

2008e New

New vs. Old y-o-y ch. 2009f

NEW Revision y-o-y change

2010f NEW Revision y-o-y

change

Revenues 342.7 403.7 -3.4% 17.8% 494.8 -6.3% 22.6% 590.0 -5.2% 19.2%

EBITDA 105.5 125.6 -2.8% 19.0% 150.4 -4.8% 19.8% 172.3 -4.5% 14.5%

EBITDA Margin 30.8% 31.1% 30.4% 29.2% Pre-tax profit 91.8 109.9 -3.2% 19.7% 133.5 -5.1% 21.5% 153.1 -5.1% 14.7%

% of Sales 26.8% 27.2% 27.0% 26.0% Net Profit 67.9 81.2 -5.9% 19.6% 100.8 -5.7% 24.1% 115.6 -5.8% 14.7%

% of Sales 19.8% 20.1% 20.4% 19.6% Source: Marfin Analysis

For the period FY:08-FY:11e we expect four new openings in Attiki region (one already opened in Varimbobi in December, 2007), three new openings in the Greek province, two new opening in Cyprus and three new openings in Bulgaria (one already opened in Sofia in December, 2007), without assuming any closing. We continue retaining a rather conservative stance on the prospects of Bulgarian operations, despite the fact that we have included in our estimates one more store in the region, since the company has communicated that it has secured space for the opening of two additional stores (on top of the first one, which recently initiated operations). The management has stated that it plans further expansion in Bulgaria with 8-12 stores in the next eight years, something that could further support estimates for the group. However, we prefer at this stage to include only three stores, until we have the first indications in the region. Note also that our numbers do not assume any operations in Romania, since the evolution of the plans in this country are dependant on the success of the Bulgarian business.

New openings in the period July 2007 – June 2011 July 07 - June 08 July 08 - June 09 July 09 - June 10 July 10 - June 11

Attiki (Varimbobi): mid December 2007 – already opened Attiki (Renti) – August 2008 Attiki – December 2009 Cyprus - December 2010

Bulgaria - December 07 – already opened

Attiki (next to Mall Marousi): December 2008 Greek Province: December 2009 Bulgaria3 - September 2010

Greek Province – March 2009 Greek Province: April 2010

Bulgaria2 – September 2009

Larnaca – December 2009

Source: The Company, Marfin Analysis

On the whole, we anticipate sales CAGR for the next three years at c.19% with an equal growth for net earnings during the same period under decreasing operational margins. Our estimates for the next three years also stand higher than the management’s forecasts guiding for an average 15% at top and bottom line level.

We continue recognizing among the key growth catalysts for Jumbo the continuous enrichment of its product mix, which offset seasonality effect and support strong like for like growth. An additional catalyst is the development of its network in the local market (Athens and province), while we identify significant prospects from the expansion of the company’s operations in Balkans, which could support upgrades in our (and consensus) estimates and boost valuation. Note that the product diversification has expanded the group’s product portfolio and consequently the target group. Nevertheless, the company strategy focuses on keeping its toys oriented identity.

Jumbo

Jumbo Group Sales Forecasts

Jumbo Group 2007 2008e 2009f 2010f 2011f # of Stores year end 39 41 44 49 51 # of new openings 2 2 3 5 2 new selling capacity (sq.m.) 16,300 15,300 26,000 33,900 14,700 # of Stores closed -4 0 0 0 0 closed selling capacity (sq.m.) -6,564 0 0 0 0 Net selling capacity (sq.m.) 187,739 203,039 229,039 262,939 277,639 y-o-y change 5.5% 8.1% 12.8% 14.8% 5.6% Effective selling capacity (sq.m.) 182,877 196,443 220,164 249,364 273,818 y-o-y change 5.0% 7.4% 12.1% 13.3% 9.8% Sales per effective Selling capacity (EUR) 1,854 2,035 2,228 2,348 2,464 y-o-y change LFL 16.0% 9.7% 9.5% 5.4% 4.9% Retail sales (EURm) 339.1 399.7 490.6 585.5 674.6 y-o-y change 21.8% 17.9% 22.7% 19.4% 15.2% Wholesales/Exports/Other (EUR m) 3.55 4.04 4.24 4.45 4.67 Sales EUR m 342.68 403.72 494.84 590.00 679.28 y-o-y change 21.8% 17.8% 22.6% 19.2% 15.1%

Source: The Company, Marfin Analysis

Jumbo

Valuation & Rating

We decrease our target price at EUR 26.20 per share, we retain our ‘Buy’ recommendation

We proceed with a downward revision in our valuation with our new target price at EUR26.20 per share (vs. EUR29.20 per share previously), which however continues to support a ‘Buy’ recommendation, as it leaves space for 39.4% upside. The stock has recorded y-t-d losses of 24%, while it is 33% lower compared to its 52-week high. We remind that our target price occurs calculating a diluted number of shares accounting for the convertible shares.

For our calculations, we use a traditional DCF exercise, accounting for a risk free rate of 4.5% a risk premium of 4.5% and an adjusted beta of 1.These assumptions yield a variable WACC than ranges from 7.3% to 8.8%.

Finally, we keep our assumption for a perpetuity growth of 2.0%, since we assume the company will continue to enhance its product categories leading to a strong like for like growth and will continue its geographical expansion.

Key financial assumptions of our 10 years period DCF model

EUR m 2008f 2009f 2010f 2011f 2012f 2013f 2014f 2015f 2016f 2017f

Sales 403.72 494.84 590.00 679.28 732.46 780.87 832.52 887.60 946.36 1009.04 EBITDA 125.56 150.43 172.28 194.28 205.82 214.74 228.94 244.09 259.30 276.48 EBITDA margin 31.1% 30.4% 29.2% 28.6% 28.1% 27.5% 27.5% 27.5% 27.4% 27.4% - taxes -28.6 -32.7 -37.5 -42.6 -46.0 -47.9 -51.4 -55.3 -59.1 -63.4 - Capital Expenditure -44.55 -54.52 -58.87 -15.04 -4.45 -4.89 -5.38 -5.92 -6.51 -7.17 - Working Capital Needs -24.40 -32.01 -40.40 -33.26 -32.79 -24.40 -24.50 -26.48 -27.19 -30.66 Free Cash Flow to the Firm (FCFF) 28.0 31.2 35.5 103.3 122.6 137.5 147.6 156.3 166.6 175.2 Weighted Average Cost of Capital (WACC) 7.33% 7.61% 7.84% 8.20% 8.35% 8.46% 8.56% 8.63% 8.70% 8.75% Discount Factor 0.9 0.9 0.8 0.7 0.7 0.6 0.6 0.5 0.5 0.4 PV of FCFF 26.05 26.94 28.31 75.39 82.13 84.48 83.09 80.61 78.63 75.74 Sum of PV of Cash Flows (2008e-2017f) 641.4

Terminal Growth Rate (perpetuity) 2%

Terminal Value (perpetuity) 1122.2

Enterprise Value 1,763.6

Net Debt / (cash) 60.90

Value to Firm 1,702.7

Value Per Share (EUR) 26.20

Current Price (EUR) 18.80

Upside / (Downside) potential 39.4%

Source: Marfin Analysis

At our target price, Jumbo trades at 21.0x and 16.9x ‘08 and ‘09 earnings respectively.

Jumbo

Valuation multiples at Target Price

2008f 2009f

EV/Sales 4.4 x 3.6 x EV/EBITDA 13.6 x 11.3 x EV/EBIT 18.3 x 15.7 x P/E 21.0 x 16.9 x P/BV 6.1 x 4.8 x Dividend Yield 1.4% 1.7%

Source: Marfin Analysis

Worth noting that we continue not to include in our set of forecasts any assumptions reflecting the group’s intentions to expand dynamically in Romania, while we assume the opening of only three stores in Bulgaria. The reason that we have not incorporated in our forecasts Romania and/or an extensive network in Bulgaria is because we consider the opening of the three stores in Bulgaria as a pilot project. In our view, based on the macroeconomic figures of these countries we believe that Jumbo’s concept will be successful. Assuming that Jumbo will enter Romania by year 2010 and the store roll-out program in Bulgaria and Romania will be completed by fiscal year July 2014 – June 2015 for Bulgaria and by fiscal year June 2015 – June 2016 in Romania reaching 12 stores in Bulgaria and 10 stores in Romania, the fair value of Jumbo - ceteris paribus - could reach EUR 29.80 per share.

Jumbo

Risks & concerns FX risks due to high dependence on purchases from Asia. Recall that the company

will seek to adjust the product mix in order to offset any possible negative impact in profitability in case of adverse FX movements

Delays in the new hyper-stores operation

Potential unfavourable macroeconomic trends in the future that may have a negative impact in the company’s financial performance, since as a retail company Jumbo is affected by factors that influence consumer behaviour

Difficult business conditions in China and a stricter competitive environment that could negatively affect the cash flow discipline of previous years, among which the revaluation of Chinese Yuan, the increase of cost of money in China, the increase of cost of raw materials & transports and delays in shipments due to the overheating of the Chinese economy

Direct and indirect impact from the strike in Greek ports

Possible delays in shipments of toys in China on the back of stricter safety controls

Risks faced when entering a new unknown market from possible unexpected complications

Oil price rises that in turn affect the cost of toys manufacturing increasing raw material price for the company,

Increasing demand for electronic games rather than traditional games as years go by

The high dependence of the company’s structure from the Chairman & CEO and major shareholder of the group

Stock overhang concerns: Jumbo’s major shareholder, Mr. Vakakis, has proceeded in various placements in the past. However, all stock sales have taken place at substantially lower stock prices and do not seem to have an overhang impact over time. We would not exclude further placements in the future and

Overhang concerns on the convertible debt.

Jumbo

H1:08 Financial Results Review Jumbo released H1:08 financial results yesterday, according to which sales reached EUR238.5m (+17.4% y-o-y). EBITDA settled at EUR72.4m (+20.3% y-o-y) and net earnings at EUR48.2m (+21.1% y-o-y).

Jumbo stores didn’t operate during the last Sunday of the year 2007, i.e. in a critical period due to the high seasonality of the sector, as it was the case one year before.

Encouraging enough, EBITDA margin improved at 30.4% in H1:08 vs. 29.6% in the respective period last year, despite the negative complicated market conditions.

Jumbo H1:08 group results key figures (IFRS)

Consolidated (EUR m) IFRS

H1:08 Actual

H1:07 Actual y-o-y % Q2:08

Actual Q2:07 Actual y-o-y % H1:08 MAe Actual vs.

MAe

Sales 238.5 203.2 17.4% 149.1 127.6 16.9% 238.49 0% EBITDA 72.4 60.2 20.3% 51.2 42.7 20.0% 71.58 1% EBITDA margin 30.4% 29.6% 34.4% 33.5% 2.7% 30.0% EBT 64.9 53.2 22.0% 47.6 39.3 21.1% 64.11 1% EBT margin 27.2% 26.2% 31.9% 30.8% Net earnings 48.2 39.7 21.4% 34.9 29.0 20.5% 48.02 0% Net margin 20.2% 19.5% 23.4% 22.7% 20.1%

Source: The company, Marfin Analysis

Improvement in margins – as we understand – comes as a result of the improvement in the company’s product mix emphasizing on the added value non-branded and seasonal products, the continuous product enrichment combined with the favorable EUR/USD parity.

Note that H1:08 results also include an one-off item of EUR1.4m from tax reserves, while excluding this amount tax rate well improved in H1:08 standing at 23.7% vs. 25.5% in the respective period last year.

Jumbo

Jumbo: Summary tables P R OF IT & LOSS (EUR m) 2005 2006 2007e 2008e 2009e 2010e C A GR 10/ 05Sales 229.1 281.3 342.7 403.7 494.8 590.0 20.8%Cost o f Sales & Operating Costs (excl. Pers. Expenses) 0.0 0.0 0.0 0.0 0.0 0.0Personnel Expenses -166.4 -201.7 -240.2 -282.6 -349.4 -423.6Non Recurrent Expenses/Income 1.6 3.2 3.0 4.4 4.9 5.9EB IT D A 64.2 82.8 105.5 125.6 150.4 172.3 21.8%EB IT D A (adj.) * 62.7 79.6 102.5 121.1 145.5 166.4Depreciation, Amortisation & Write Downs -7.5 -8.5 -8.8 -10.5 -11.8 -14.0EB IT 56.7 74.4 96.7 115.1 138.6 158.3 18.0%EBIT (adj.)* 55.1 71.1 93.7 110.6 133.7 152.4Net Financial Interest -5.8 -4.9 -4.9 -5.2 -5.1 -5.2Other Financials 0.0 0.0 0.0 0.0 0.0 0.0Associates 0.0 0.0 0.0 0.0 0.0 0.0Other N o n R ecurrent Items 0.0 0.0 0.0 0.0 0.0 0.0Earnings Before Tax (EBT) 49.4 66.3 88.8 105.4 128.6 147.2 24.6%Tax -16.8 -20.0 -23.9 -28.6 -32.7 -37.5Tax rate 33.0% 28.9% 26.0% 26.1% 24.5% 24.5%Discontinued Operations 0.0 0.0 0.0 0.0 0.0 0.0M ino rit ies 0.0 0.0 0.0 0.0 0.0 0.0N et P ro f it ( repo rted) 34.1 49.4 67.9 81.2 100.8 115.6Net Profit (adj.) 34.1 49.4 67.9 81.2 100.8 115.6C A SH F LOW (EUR m)Cash Flow from Operations before change in NWC 41.7 57.9 76.7 91.7 112.6 129.6 25.5%Change in Net Working Capital -2.8 21.7 15.2 18.0 25.2 33.3C ash F lo w fro m Operat io ns 38.9 79.6 91.9 109.7 137.8 162.9Capex -39.1 -31.5 -45.5 -44.6 -54.5 -58.9F ree C ash F lo w -0.2 48.1 46.4 65.2 83.2 104.0 R +Net Financial Investments 0.0 0.0 0.0 0.0 0.0 0.0Dividends -12.3 -13.9 -19.4 -23.1 -28.2 -32.4Other (incl. Capital Increase & share buy backs) 0.0 56.0 0.0 0.0 0.0 0.0C hange in N et D ebt -12.4 90.2 27.0 42.0 55.0 71.6NOPLAT 56.7 74.4 96.7 115.1 138.6 158.3B A LA N C E SH EET & OT H ER IT EM S (EUR m)Net Tangible Assets 144.2 167.2 203.9 238.0 280.7 325.6Net Intangible Assets (incl.Goodwill) 0.0 0.0 0.0 0.0 0.0 0.0Net Financial Assets & Other 2.8 2.9 2.7 2.7 2.7 2.7T o tal F ixed A ssets 147.0 170.1 206.6 240.7 283.4 328.3 17.4%Net Working Capital 54.1 75.8 91.0 109.0 134.2 167.4Total capital invested/employed 198.4 243.0 294.9 347.0 414.9 493.0Shareho lders Equity 115.0 168.2 221.8 279.8 352.4 435.6 30.5%M inorities Equity 0.0 0.0 0.0 0.0 0.0 0.0N et D ebt 76.8 70.2 66.3 60.9 58.2 54.5 -6 .7%Provisions 4.6 5.1 4.9 4.9 4.9 4.9Other Liabilities 29.9 33.2 42.4 48.5 56.6 65.7T o tal M arket C ap 283.2 536.0 1,038.7 1,139.6 1,139.6 1,139.6Enterprise Value (EV adj.) 357.2 603.3 1,102.2 1,197.8 1,195.1 1,191.3M A R GIN S A N D R A T IOSSales growth 21.4% 22.8% 21.8% 17.8% 22.6% 19.2%EBITDA growth 26.7% 28.9% 27.4% 19.0% 19.8% 14.5%EBIT growth 36.0% 31.1% 30.1% 19.0% 20.5% 14.2%EB IT D A margin 28.0% 29.4% 30.8% 31.1% 30.4% 29.2%EBIT margin 24.8% 26.4% 28.2% 28.5% 28.0% 26.8%D ebt/ Equity (gearing) 66.8% 41.7% 29.9% 21.8% 16.5% 12.5%Debt/EBITDA 1.2 0.8 0.6 0.5 0.4 0.3Interest cover (EBITDA/Fin.interest) 11.2 17.0 21.5 24.1 29.3 33.3ROCE 28.6% 30.6% 32.8% 33.2% 33.4% 32.1%WACC 7.0% 7.0% 7.0% 7.3% 7.6% 7.8%R OC E/ WA C C 4.1 4.4 4.7 4.5 4.4 4.1EV/CE 1.80 2.48 3.74 3.45 2.88 2.42OpFCF/EV -0.1% 8.0% 4.2% 5.4% 7.0% 8.7%EV/Sales 1.56 2.14 3.22 2.97 2.42 2.02EV/ EB IT D A 5.6 7.3 10.4 9.5 7.9 6.9EV/EBITDA (adj.)* 5.7 7.6 10.8 9.9 8.2 7.2EV/EBIT 6.3 8.1 11.4 10.4 8.6 7.5EV/EBIT (adj.)* 6.5 8.5 11.8 10.8 8.9 7.8P/E (adj.) 8.3 10.8 15.3 14.0 11.3 9.9P/BV 2.5 3.2 4.7 4.1 3.2 2.6F C F yield -0.1% 9.0% 4.5% 5.7% 7.3% 9.1%Payout ratio 35.9% 28.2% 28.6% 28.5% 28.0% 28.0%D ividend yield (gro ss) 4.3% 1.2% 1.7% 2.0% 2.5% 2.8%P ER SH A R E D A T A (EUR )EP S (repo rted) 0.61 0.82 1.12 1.34 1.66 1.91 25.5%EP S (adj.) 0 .61 0.82 1.12 1.34 1.66 1.91 25.5%BVPS 2.06 2.78 3.66 4.62 5.81 7.19 28.4%DPS 0.22 0.23 0.32 0.38 0.47 0.53 19.4%Source: Company, M arf in Analysis est imates. * Where EBITDA (adj.) or EBIT (adj.)= EBITDA (or EBIT) +/- Non Recurrent Expenses/ Income2004 restated as IFRS proforma

Jumbo

Recommendation system

From the 18th October 2004, the Members of ESN use a New Recommendation System.

The new ESN Recommendation System is Absolute. It means that each stock is rated on the basis of a total return, measured by the upside potential (including dividends) over a 6 months time horizon.

The ESN spectrum of recommendations (or ratings) for each stock comprises 5 categories: Buy, Accumulate (or Add), Hold, Reduce and Sell (in short: B, A, H, R, S).

Meaning of each rating or recommendation:

• Buy: the stock is expected to generate a total return of over 15% during the

next 6 months time horizon.

• Accumulate: the stock is expected to generate a total return of 5% to 15%

during the next 6 months time horizon.

• Hold: the stock is expected to generate a total return of 0% to 5% during the

next 6 months time horizon

• Reduce: the stock is expected to generate a total return of 0 to -15% during the


• Sell: the stock is expected to generate a total return below -15% during the


• Rating Suspended: the rating is suspended due to a capital operation (take-

over bid, SPO, …) where the issuer or a related party of the issuer is or could

be involved or to a change of analyst covering the stock

• Not Rated: there is no rating for a company being floated (IPO) by the issuer or

a related party of the issuer

Jumbo

Disclosure Appendix The information and opinions in this report were prepared by Investment Bank of Greece, which is regulated by the Hellenic Capital Market Commission. Investment Bank of Greece has not entered any agreement with the subject companies for the execution of this analysis.

This report is for informative purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to buy, any security. While the information contained herein has been obtained from sources believed to be reliable, we do not represent that it is accurate or complete and it should not be relied upon as such. In producing its research reports, members of Investment Bank of Greece research department may have received assistance from the subject company(ies) referred to in this report. Any such assistance may have included access to sites of the issuers, visits to certain operations of the subject company(ies), meetings with management, employees or other parties associated with the subject company(ies) and the handing by them of historical data regarding the subject company(ies) (financial statements and other financial data), as well as of all publicly available information regarding strategy and financial targets. Investment Bank of Greece research personnel are prohibited from accepting payment or reimbursement of travel expenses from site visits to subject companies. It should be presumed that the author(s) of this report, in most cases, has had discussions with the subject company(ies) to ensure factual accuracy prior to publication. All opinions, projections and estimates constitute the judgment of the author as of the date of the report and are given in good faith, but are subject to change without notice. Prices and availability of financial instruments also are subject to change without notice. Investment Bank of Greece or one of its affiliates or persons connected with it may from time to time buy and sell securities referred herein. Although Investment Bank of Greece does not set a predetermined frequency for publication, if this is a fundamental research report, it is the intention of Investment Bank of Greece to provide research coverage of the subject company(ies), including in response to news affecting this issuer, subject to applicable quiet periods and capacity constraints. Investment Bank of Greece may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any company mentioned in this report. Investment Bank of Greece does and seeks to do business with companies covered in their research reports. Thus, investors should be aware that the firms may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Securities referred to in this research report are subject to investment risks, including the possible loss of the principal amount invested. This report is intended for professional investors only and it is not to be reproduced or copied or reprinted or transmitted for any purpose without permission. We certify that this report has been published in accordance with our conflict management policy and guidelines. According to Investment Bank of Greece policies, the Analysis Department of Investment Bank of Greece is bound by confidentiality, with the exception of data allowed to be published in accordance with the applicable laws. Investment Bank of Greece relies on information barriers to control the flow of information in one or more areas within Investment Bank of Greece organisation. The communication between the Analysis Department of Investment Bank of Greece and the other departments of the aforementioned company is restricted by Chinese Walls set between the different departments, so that Investment Bank of Greece can abide by the provisions regarding confidential information and market abuse.

Analyst Certification The following analysts: Costis Sinanidis, Maria Psyllou hereby certify that the views about the companies and securities contained in this report accurately reflect their personal views and that no part of their compensation was or will be directly or indirectly related to the specific recommendations or views in this report. The analysts mentioned above who prepared this report have the below mentioned financial interests in the companies covered in this report……none……

Important Regulatory Disclosures on Subject Company The information and opinions in this report were prepared by INVESTMENT BANK of GREECE, which is member of the Athens Exchange S.A. and regulated by the Hellenic Capital Market Commission. The compensation of the research analysts, strategists, or research associates principally responsible for the preparation of this research report may depend on various factors such as quality of work, stock picking, client feedback and overall firm profitability. Stock Ratings You should carefully read the definitions of all ratings used in the research report. Moreover, you should carefully read the entire research report to obtain a clear view of the analyst’s opinions and not infer its contents from the rating alone.

Marfin Analysis Research Rating Distribution Data current as of 22/02/2008

Buy Accumulate Hold Reduce Sell Marfin Analysis Total Coverage 51% 22% 20% 0% 2% % of companies in each rating category that are investment banking clients 5% 2% 2% 0% 0% Note that 2 companies are currently under review / not rated Retail 25% 25% 50% 0% 0% % of companies in each rating category that are investment banking clients 0% 0% 0% 0% 0%

Jumbo

Regulatory Disclosures on Subject Companies 1. As of the date mentioned on the first page of this report, Investment Bank of Greece (or any of its affiliated companies) owns 5% or more of a class of common equity securities in the following companies mentioned in this report: Vivartia, OTE, Attica Group, Blue Star Ferries, Hygeia, LogicDIS

2. As of the date mentioned on the first page of this report, the following subject companies mentioned in this report own 5% or more of a class of common equity securities of Investment Bank of Greece (or any of its affiliated companies): Marfin Popular Bank

3. Investment Bank of Greece acts as a market maker for the following securities of the subject companies mentioned in this report: Alpha Bank, CCHBC, CosmOTE, EFG Eurobank, Emporiki Bank, National Bank, OPAP, OTE, Piraeus Bank, PPC, Hellenic Exchanges, Intralot, Mytilineos, Hellenic Technodomiki, GEK, Bank of Cyprus

4. Within the last 12 months, Investment Bank of Greece has provided underwriting services to the following companies mention in this report: GPSB

5. Within the last 12 months, Investment Bank of Greece had a contractual relationship or have received compensation for financial advisory services from the following subject companies mentioned in this report: Vivartia, GEK/Terna, GPSB, Motor Oil, Euroline, Interinvest, Vivere, Hygeia Rating History 1. 21/11/2007 Buy Target Price EUR29.20 2. 07/11/2007 Buy Target Price EUR 29.20 3. 25/05/2007 Accumulate Target Price EUR 29.20 4. 17/03/2007 Buy Target Price EUR 23.40 5. 21/02/2007 Buy Target Price EUR 23.40 6. 30/11/2006 Accumulate Target Price EUR 17.00 7. 02/10/2006 Outperform, Target Price EUR 14.20 8. 26/05/2006 Outperform, Target Price EUR 13.00 9. 28/02/2006 Outperform, Target Price EUR 11.80 10. 02/09/2005 Outperform, Target Price EUR 8.10 11. 25/05/2005 Neutral, Target Price EUR 7.10 12. 21/02/2005 Neutral, Target Price EUR 6.50

Risks to our forecasts and valuation • FX risks due to high dependence on purchases from Asia. Recall that the company will seek to adjust the product mix in order to offset

any possible negative impact in profitability in case of adverse FX movements • Delays in the new hyper-stores operation • Potential unfavorable macroeconomic trends in the future that may have a negative impact in the company’s financial performance, since

as a retail company Jumbo is affected by factors that influence consumer behavior • Difficult business conditions and a stricter competitive environment that could negatively affect the cash flow discipline of previous years, • Possible delays in shipments of toys in China on the back of stricter safety controls • Risks faced when entering a new unknown market from possible unexpected complications • Oil price rises that in turn affect the cost of toys manufacturing increasing raw material price for the company • Increasing demand for electronic games rather than traditional games as years go by • The high dependence of the company’s structure from the Chairman & CEO and major shareholder of the group • Stock overhang concerns: Jumbo’s major shareholder, Mr. Vakakis, has proceeded in various placements in the past. However, all stock

sales have taken place at substantially lower stock prices and do not seem to have an overhang impact over time. We would not exclude further placements in the future, and

• Overhang concerns on the convertible debt.

Additional disclosures 1. Additional note to our U.S. readers: This document may be distributed in the United States solely to “major US institutional investors” as defined in Rule 15a-6 under the US Securities Exchange Act of 1934. Each person that receives a copy, by acceptance thereof, represents and agrees that he/she will not distribute or otherwise make available this document to any other person. 2. All prices and valuation multiples are based on the closing of ATHEX’s last session prior to the issue of this report, unless otherwise indicated. 3. Our research reports are available upon request, at www.marfininvest.com, on Bloomberg’s IBGR and ESNR functions, on Thomson One Analytics website and on Reuters website. 4. Additional information is available upon request.

Jumbo

Investment Bank of Greece

Equity Research

Costis Sinanidis (Head of Research) Andreas Balaskas Vassilis Karnapatis Lillian Katelani Konstantinos Manolopoulos Chrissoula Moussiou Maria Psyllou Vassilis Roumantzis Natalia Svyrou-Svyriadi Dimosthenis Triggas Konstantinos Zouzoulas

Sales and Trading

Evi Anagnostopoulou Spiros Argyriou Elias Dimitros Phillipos Dragoumis Thodoris Edipidis Elias Kalfoglou George Katimertzis Nick Katsanos Anthony Kouleimanis George Kounadis Petros Mylonas Harris Smirnopoulos Thanos Trikatzis John Tsigounis Theodore Varelas

Derivatives Products

Elias Georgopoulos Konstantinos Gravas Fedon Kachtitsis Andreas Kanellakis Symeon Kapnopoulos Nikos Kontaroudis Kostas Kountos Stavros Pavlidis Marnia Stabouli Christos Tsaousoglou Ioanna Tsega Thanos Varvitsiotis George Zafiropoulos

Foreign Equities

Michael Andreadis Michael Papoulis Stelios Stavrakakis

Asset Management

Pantelis Baliotis Christos Kalogirou Manos Mavrogenis Periklis Tzanetos

European Securities Network (ESN LLP)

Michael Andreadis, ESN Country Sales & Trading Co-ord Nikos Kontaroudis, ESN Member Representative Costis Sinanidis, ESN Country Manager & Country Research Co-ord

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Jumbo Greece General Retailers

Banca Akros S.p.A. Viale Eginardo, 29 20149 Milano Italy Phone: +39 02 43 444 389 Fax: +39 02 43 444 302

Bank Degroof Rue de I’Industrie 44 1040 Brussels Belgium Phone: +32 2 287 91 16 Fax: +32 2 231 09 04

Caja Madrid Bolsa S.V.B. Serrano, 39 28001 Madrid Spain Phone: +34 91 436 7813 Fax: +34 91 577 3770

Caixa-Banco de Investimento Rua Barata Salgueiro, 33-5 1269-050 Lisboa Portugal Phone: +351 21 389 68 00 Fax: +351 21 389 68 98

CM - CIC Securities 6, avenue de Provence 75441 Paris Cedex 09 France Phone: +33 1 4016 2692 Fax: +33 1 4596 7788

Equinet AG Gräfstraße 97 60487 Frankfurt am Main Germany Phone:+49 69 – 58997 – 410 Fax:+49 69 – 58997 – 299

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Members of ESN (European Securities Network LLP)

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Danske Markets Equities Holmens Kanal 2-12 DK-1092 Copenhagen K Denmark Phone: +45 45 12 00 00 Fax: +45 45 14 91 87

SNS Securities N.V. Nieuwezijds Voorburgwal 162 P.O.Box 235 1000 AE Amsterdam The Netherlands Phone: +31 20 550 8500 Fax: +31 20 626 8064

NCB Stockbrokers Ltd. 3 George Dock, Dublin 1 Ireland Phone: +353 1 611 5611 Fax: +353 1 611 5781

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