GREECE: The Ne w Reform Agenda
Investment & Business Opportunities in Greece
A Global Investor’s Perspective
Nikos Stathopoulos 30th October, 2008 New York City
BC Partners London Paris Milan Hamburg Geneva New York AGENDA
Greece as an investment destination
Case Studies
Conclusions
BC Partners London Paris Milan Hamburg Geneva New York Private Equity is a Major Player in European M&A
European LBO Activity as a % of all European M&A value
2007
BC Partners London Paris Milan Hamburg Geneva New York BC Partners: a Leading Global Private Equity Fund – 1
BC Funds Investments by Sector Investment in 67 companies since foundation in 1986 ̶ Total transaction value of US$100bn Automotive Health 6% Retail ̶ Invested in 13 countries in Europe, US and Asia 8% 23% ̶ Current portfolio companies representing an aggregate turnover Media/Telecom of US$30bn and employing 81,000 employees 11%
Service Consumer 14% goods Over US$17b n ra ise d in e ig ht f und s 19% ̶ Fund VIII with US$9.3bn of equity Industry 19% ̶ Up to US$2.4bn equity for single transaction available plus International Presence additional equity from BC funds co-investors ̶ Average transaction value of investments of US$3.1bn since 2000 New York/ (from US$141m to US$29.9bn) London
London Presence in Europe and the US Hamburg
̶ Offices in London, Paris, Milan, Geneva, Hamburg, and New York Paris ̶ 50 investment professionals with broad individual experience Geneva
Milan
BC Partners London Paris Milan Hamburg Geneva New York BC Partners: a Leading Global Private Equity Fund – 2
Selected Transactions
Media & Telecom Healthcare Consumer & Retail Automotive Industrials Services Leisure
BC Partners London Paris Milan Hamburg Geneva New York SE Europe Growing as an Investment Destination
Deals are increasingly financed by local banks, with less exposure to international credit markets
€bnEmerging Markets Buyout Activity # deals €bn Global Buyout Activity # deals
30 160 300 1000 140 25 250 800 120 20 200 100 600 15 80 150 400 10 60 100 40 5 50 200 20 0 0 0 0 Q1 07 Q2 07 Q3 07 Q4 07 Q108 Q1 07 Q2 07 Q3 07 Q4 07 Q108
Value (LHS) Volume (RHS) Value (LHS) Volume (RHS)
Source: Dealogic
BC Partners London Paris Milan Hamburg Geneva New York GDP Growth has Outpaced WE Economies
Western Europe South East Europe GDP Growth Index (2004=100) GDP Growth Index (2004=100) 130 130
125 125
120 120
115 115
110 110
105 105
100 100
95 95
90 90 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008
France Ge rm any Italy Spain UK Greece Bulgar ia Rom ania Serbia Turkey
Source: IMF, Note: Constant currency
BC Partners London Paris Milan Hamburg Geneva New York Recent Key Transactions in SE Europe
€684m €984m
€1,600m €300m
Regency Entertainment Neochimiki
TIM Hellas Infote
N/D €2,000m €910m UN Migros Turk UN RoRo Mey Icki
BC Partners London Paris Milan Hamburg Geneva New York AGENDA
Greece as an investment destination
Case Studies
Conclusions
BC Partners London Paris Milan Hamburg Geneva New York Case Study I: Regency Entertainment
BC Partners London Paris Milan Hamburg Geneva New York Transaction overview
BC Partners acquired Regency Entertainment for €1.0bn
100% Dionysus Leisure 100%
Thessaloniki Casino 100% Mont Parnes Casino 34.3% Hyatt Regency Hotel 100% ` In January 2006, the main shareholders of Regency Entertainment (ex Hyatt Regency Casinos) agreed to sell the ir 51. 87% s ta ke in the company to BC P ar tners
` BC Partners spent the following two years acquiring the remaining free float
` The company owns 100% of the only casino in Thessaloniki and 34.3% of the nearest casino to Athens. The two casinos account for more than 50% of the Greek gaming market
` The company also owns 100% of the Hyatt Regency hotel in Thessaloniki
First ever LBO o f a company li ste d on t he At hens Stoc k Exc hange
BC Partners London Paris Milan Hamburg Geneva New York Rationale for transaction
` Local monopoly position
` Prime locations in densely populated areas
` Very favourable industry dynamics
` High barriers to entry
` Untapped demand to be exploited in Athens
` Redevelopment of Mont Parnes Casino
` Experienced management team
` Highly cash generative business
` Potential for a number of operations improvements
BC Partners London Paris Milan Hamburg Geneva New York EBITDA evolution
€145m
€105m
Dec 05 Dec 07
38% growth in EBITDA in 24 months
BC Partners London Paris Milan Hamburg Geneva New York Case Study II: TIM Hellas
BC Partners London Paris Milan Hamburg Geneva New York Transaction overview
Apax Partners and Texas Pacific Group acquire TIM Hellas for €1.6bn
` On 4 April 2005, TIM International announced a conditional agreement for the disposal of its 80.87% equity stake in TIM Hellas
` The acquirer was a special purpose vehicle owned by private equity funds advised by Apax Partners and Texas PifiGPacific Group
` TIM International received approximately €1,114m for its holding, which is equivalent to €16.43 per share and corresponds to an Enterprise Value of €1.6 billion for 100% of TIM Hellas
` Minority shareholders received the same price with that of TIM International
Largest ever LBO in Greece First ever LBO of a Greek Société Anonyme
BC Partners London Paris Milan Hamburg Geneva New York Rationale for transaction
` One of three players in attractive market
` Very high barriers to entry in mobile market
` Strong dependable cashflows from subscriber base
` Strong brand associated with innovation in Greece
` Under-penetrated Greek mobile market with 78% penetration vs 90-100% in most EU countries
` Rationale for Q-Telecom was synergies from using the same network
` Company was badly managed by Telecom Italia – losing market share New strategy
Exploit potential in Increase customer Increase ARPU(a) and Increase customer next generation acquisition stimulate usage retention services (a) Average Revenue Per User
BC Partners London Paris Milan Hamburg Geneva New York EBITDA evolution
€415m
€250m +
June 05 Feb 07
66% growth in EBITDA in 20 months
BC Partners London Paris Milan Hamburg Geneva New York AGENDA
Greece as an investment destination
Case Studies
Conclusions
BC Partners London Paris Milan Hamburg Geneva New York Foreign Investors are Increasingly Interested in the Region
(a) FDI / GDP 12%
Bulgaria 10% 18.2 Cyprus 11.4 6.5 12.9 Serbia 8% 6.4
Romania
6% 35.9 Turkey Ukraine Hungary GDP (2007)
// 4% 53. 6 25.1 21. 3 Russia FDI 99.9 2% Greece 12.5 0% -20% 0% 20% 40% 60% 80% 100% Amount invested -2% x '03-'07 (a) F or 2007 d at a. N omi na l GDP use d FDI CAGR CAGR (03 (03-07) 07) (€ bn) Source: Economist Intelligence Unit data, Central bank reports
BC Partners London Paris Milan Hamburg Geneva New York Greece - Key Challenges
Administrative obstacles
̶ Bureaucracy ̶ Unions/industrial actions/labour terms ̶ Changing tax regimes
Size of market
Political stability
GDP growth slowdown
Transparency and speed of decision-making
Investor protection
BC Partners London Paris Milan Hamburg Geneva New York