Greece/ Basic Resources Company update

Investment Research 23 September 2011

Buy Significant prospects and strong balance sheet point to an Recommendation unchanged attractive valuation Share price: EUR 5.61 closing price as of 22/09/2011 The uncertain environment in Syria and renewed concerns for global Target pri ce: EU R 12.00 economy has prompted us to adopt a more conservative stance with respect From Target Price: EUR 15.10 to the second awarded power plant in Syria as well as the award of new

projects, impacting our estimates post 2011 and reducing our target price to Reuters/Bloomberg MTKr.AT/METTK GA EUR 12.00 from EUR 15.10 previously. Despite our more conservative Daily avg. no. trad. sh. 12 mth 30,497 estimates, Metka’s investment case remains intact due to: a) solid position in Daily avg. trad. vol. 12 mth (m) 0.26 a broad region (SE Europe, Middle East, Africa) which is characterized by Price high 12 mth (EUR) 11.05 Price low 12 mth (EUR) 5.61 substantial opportunities due to rising demand and high infrastructure Abs. perf. 1 mth 12.1% needs, b) increasing importance of natural gas as the fuel of choice for Abs. perf. 3 mth 26.8% thermal power plants, c) strong balance sheet estimating a net cash position Abs. perf. 12 mth 32.0% of EUR 150m by the end of 2011, presenting management with various

options to exploit it. The catalyst for the stock, in our view, would be the Market capitalisation (EURm) 291 Current N° of shares (m) 52 award of new foreign projects, restoring medium-term visibility and sustaining Metka’s backlog above the EUR 1bn mark. We reiterate our Buy Free float 43% recommendation. Key financials (EUR) 12/10 12/11e 12/12e Sales (m) 614 760 602  We have excluded Syria’s second power plant from our new estimates due to EBITDA (m) 134 125 94 the significant uncertainty. Based on our new estimates, Metka’s backlog EBITDA margin 21.8% 16.5% 15.6% stands at about EUR 1.2bn comprised of the following projects at different EBIT (m) 129 121 89 phases: a) 775 MW plant for RWE-Turcas in Turkey with a contract value of EBIT margin 21.0% 15.9% 14.9% Net Profit (adj.)(m) 56 76 54 EUR 450m, b) 870 MW plant for OMV in Turkey with a contract value of EUR ROCE 27.0% 45.1% 39.6% 475m, c) 700 MW plant in Syria with a contract value of EUR 650m, d) 860 Net debt/(cash) (m) (67) (151) (202) MW plant for OMV in Romania jointly with GE and a contract value for Metka of Net Debt Equity -0.3 -0.5 -0.6 Net Debt/EBITDA 0.5 1.2 2.2 EUR 210m, e) 437 MW plant for Korinthos Power (JV Mytilineos-Motor Oil) in Int. cover(EBITDA/Fin.int) (77.4) (58.5) (26.6) south with a contract value EUR 285m, f) 417 MW plant for PPC in EV/Sales 0.7 0.2 0.1 central Greece with a contract value of EUR 219m, g) two defense contracts EV/EBITDA 3.1 1.1 0.9 with a total value of about USD 50m, for the development of Patriot defense EV/EBITDA (adj.) 4.3 1.1 0.9 EV/EBIT 3.2 1.1 0.9 systems on behalf of United Arab Emirates and Taiwan. We note that the first P/E (adj.) 8.7 3.8 5.3 power plant in Syria seems to be progressing despite the unrest in the country. P/BV 2.1 1.0 0.9 OpFCF yield 11.6% 41.8% 30.5%  On the back of the acceleration of the implementation of the projects Dividend yield 8.6% 8.9% 6.4% evidenced in 2Q:11 results and a reduction in the management fee announced EPS (adj.) 1.08 1.47 1.05 by the CEO in the conference call, we have modestly revised upwards our BVPS 4.49 5.48 6.03 2011 estimates, forecasting group sales, EBITDA and net income of EUR DPS 0.48 0.50 0.36 760m, EUR 125m and EUR 76m respectively, including a “social contribution” tax of c.EUR 12m. On the flip side, the removal of Syria’s project from the

12 vvdsvdvsdy backlog and assuming no contribution from new projects before 2013, has led 11 to a downwards revision of our 2012 estimates. Specifically, we now forecast 10

9 sales, EBITDA and net income of EUR 602m, EUR 94m and EUR 55m 8 respectively compared to EUR 779m, EUR 125m and EUR 75m previously. 7 6  Going forward, management has disclosed that they pursue new power plant 5

4 projects in Turkey, Iraq and central Europe. In addition, Metka’s decision to Σεπ 10 Οκτ 10 Νοε 10 εκ 10 Ιαν 11 Φεβ 11 Μαρ 11 Απρ 11 Μαϊ 11 Ιουν 11 Ιουλ 11 Αυγ 11 Σεπ 11 capitalize on its know-how on CCGT power plants by expanding to the O&M Source: Factset METKA Athex Composite (Rebased) field, starting from Mytilineos group’s three power plants, represents an Shareholders: Mytilineos 57%; opportunity for the company to add a new stable source of revenue.

Analyst(s): Vassilis Roumantzis +30 210 8173 394 [email protected] For company description please see summary table footnote

Produced by: All ESN research is available on Bloomberg (“ESNR”), Thomson-Reuters, Capital IQ, TheMarkets.com, FactSet

Distributed by the Members of ESN (see last page of this report)

Metka

Revised forecasts In light of the uncertain environment in Syria, we have decided to exclude Syria’s second awarded power plant project from Metka’s backlog, impacting our estimates for the period 2012-2014. Recall that this project referred to an EPC contract for a 724 MW CCGT power plant with a total budget of EUR 680m and construction time 40 months after the opening of the Letter of Credit (L/C). Although the Syrian government is still committed, according to Metka’s management, to the implementation of the project on rising power needs, the delay in the L/C opening and potential difficulties in securing financing in the near term necessitate a more conservative stance, in our view. On a positive note, the first of the two power plants awarded by the Syrian government, which began construction late last year, seems to be progressing despite the turmoil in the country and we believe that unless the political situation gets much worse it will be completed without a significant delay. Regarding the execution of the other awarded projects, there has been a significant acceleration in the first half of this year, especially for the two power plants in Turkey, which makes us confident that our 2011 estimates will be achieved. Going forward, management recently disclosed that they pursue new power plant projects in Turkey, Iraq and central Europe. We believe that Metka has good chances to be awarded at least two new energy projects in the coming months, sustaining its backlog above the EUR 1bn mark. In our new estimates, we have assumed that the new projects will contribute to Metka’s sales after 2012, though if a contract was signed in the coming months it would probably have an impact in 2012 too. Below we provide details of Metka’s revised backlog which was estimated at EUR 1.2bn at the end of 1H:11, after removing the second Syrian project: a) Korinthos Power (JV between Mytilineos and Motor Oil): 437 MW CCGT plant in Motor Oil’s refinery site in Ag. Theodoroi with a contract value of EUR 285m. The construction of the plant that was launched during 2H:09 is expected to be completed by 4Q:11. b) PPC (Aliveri): 417 MW CCGT plant in Aliveri in Evia with a contract value of EUR 219m. The construction of this plant which has been delayed for almost 2 years due to archeological findings in the original site, is heading towards its completion. c) OMV Petrom (Romania): 860 MW CCGT plant in Romania, won in partnership with GE, with a contract value corresponding to Metka of EUR 210m. The construction is expected to be completed in 2011. d) PEEGT (Syria): 700 MW CCGT power plant in Syria assigned by the Syrian government to Metka/Ansaldo partnership. This project is the first of the two power plants that were awarded to Metka having a budget of EUR 650m and a construction time of about 36 months. The execution of the project has already started, contributing to 1H:11 sales EUR 82m. The last update by management is that the project proceeds despite the turmoil in the country. e) RWE-Turcas (Turkey): 775 MW CCGT power plant in Turkey with RWE & Turcas Guney Elektrik Uretim, a JV of German utility RWE and locally-based energy company Turcas Petrol. We note that in the above JV, RWE holds 70% share and Turcas 30%. The total investment sum amounts to approximately EUR 500m. The project has accelerated in 2011 contributing in 1H:11 sales about EUR 150m. f) OMV (Turkey): Metka’s second power plant project in Turkey for a total value of EUR 475m. Specifically, Metka and Power Projects (Metka’s 100% local subsidiary) have been awarded a contract by BORASCO (100% subsidiary of OMV Power International GmbH) for the construction and supply of equipment for a 870 MW CCGT plant in Samsun in Turkey. The total budget of the project is EUR 342.3m plus USD 183.1m and has a scheduled delivery is 28.5 months. In 1H:11 it is estimated that Metka recorded sales of about EUR 100m from this project.

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Metka

g) Defence contract: Metka has signed two defense contracts with a total value of about USD 50m, which were won in cooperation with Raytheon Company/IDS (Integrated Defense Systems) and Intracom Defense Electronics for the development of Patriot defense systems on behalf of United Arab Emirates and Taiwan. Keep in mind that defense projects carry a high operating margin. Below we show the breakdown of Metka’s estimated revenues in the period 2011-2014.

Table 1: Our turnover forecasts for 2011-14

EUR m 2011e y-o-y 2012e y-o-y 2013e y-o-y 2014e y-o-y Signed contracts Total largescale energy projects 690 557 330 0 Endesa Hellas (Ag. Nikolaos) 10 0 0 0 PPC (Aliveri) 15 10 0 0 PETROM (Romania) 67 0 0 0 PEEGT (Syria) Plant 1) 160 250 240 0 Korinthos Power (JV Mytilineos - Motor Oil) 79 0 0 0 OMV (Turkey) 159 117 0 0 RWE-Turcas (Turkey) 200 180 90 0 Other projects 20 5 10 10 Defence projects 20 10 0 0 Total signed projects 730 572 340 10 % of total revenues 96.1% 95.0% 61.8% 2.5% Total new projects 180 360 % of total revenues 32.7% 90.0% Subsidiaries 30 30 30 30 % of total revenues 3.9% 5.0% 5.5% 7.5% Total Metka Revenues 760 31% 602 -21% 550 -8.6% 400 -27.3% Source: IBG estimates

2011 EPS revised upwards by 7% - 2012-13 EPS estimates impacted by Syria

Our previous sales estimates of EUR 755m for 2011 seems to be achievable given the fast acceleration of projects witnessed in 1H:11 and the continuation of the Syrian project despite the protests in the country. Against this background, we have fine-tuned our estimates forecasting sales of EUR 760m, with an upside coming from Turkey. Our estimate for the EBITDA margin was positively affected by management’s decision to set a cap on management fee at EUR 6m implying a saving of EUR 4m as our previous estimate for the fee was EUR 10m. With our new estimates, 2011 EBITDA margin stands at 16.5% compared to 16.2% previously. Note that in 1H:11 the EBITDA margin stood at 15% which was attributed to one-off costs in the Romanian subsidiary, hence we expect company’s margin to be restored in the second half. Below the EBITDA line, we have trimmed financial expenses due to a more favourable working capital. Furthermore, we have included EUR 1.5m as income from participations derived from Metka’s 10% stake in ETADE S.A. which is implementing a 800 MW CCGT project for PPC in Megalopolis. On the tax front, we assume an effective tax rate of 32% including a “social contribution” tax of EUR 12m. Overall, our 2011 net income estimate has been revised upwards by 7%. On the flip side, our decision to exclude the second Syrian project from our estimates, has led to a 26% reduction to our 2012 net income estimate to EUR 55m, which also includes a “social contribution” tax of EUR 11m.

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Below we show our changes in headline estimates for the period 2011-2013: Table 2: Forecast changes for 2011-2013 EUR m 2011E 2012E 2013E Sales New 760 602 550 Sales Old 755 779 621 Change 0.7% -23% -11.4%

EBITDA New 125.5 94.1 81.7 EBITDA Old 121.9 125.5 89.5 Change 3% -25% -8.7%

Net income New 76.2 55.2 57.6 Net earnings Old 71.2 74.6 60.4 Change 7% -26% -4.6% Source: IBG estimates

O & M: A potential new source of revenue

Metka’s decision to capitalize on its high know-how on combined cycle gas turbine (CCGT) plants by expanding to the Operation & Maintenance (O&M) field for thermal power plants represents an opportunity for the company to add a new stable source of revenue. Specifically, Metka’s CEO announced during the conference call for 1H:11 results that Metka will undertake the O&M of Mytilineos group’s three power plants with a total capacity of 1,200 MW, initially charging the cost and at a later stage the cost plus a fee (no more details have been given). Furthermore, the new activity will include Metka’s existing maintenance contract valued at EUR 94m for PPC’s under development 800 MW CCGT plant in Megalopolis, which is expected to start contributing to company’s revenues after 2013. Metka’s medium-term target is to use the experience from the operation of the aforementioned plants to offer package solutions to clients, especially in emerging markets where there is lack of skilled personnel in plant operation, combining the EPC contract for the development of a power plant with the outsourcing of the O&M.

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Metka

Valuation

Following our new estimates, we have reduced our target price to EUR 12.00 from EUR 15.10 previously, reiterating our Buy recommendation on more than 100% upside from current market levels. Our DCF model is based on a WACC of 11.7%, using a beta of 1.20, a risk premium of 4% plus 2% for country’s high exposure to emerging markets, a risk free rate of 4.5% and an after tax cost of borrowing of 4.8%. The terminal value is based on 2014 NOPLAT derived from a turnover level of EUR 400m and an EBITDA margin of 14%, implying a conservative valuation based on a 2007-2012 average sales level of EUR 500m and an EBITDA margin above 17%. Table 3: Metka DCF valuation

(EUR m) 2011e 2012e 2013e 2014e NOPLAT 94.8 70.6 60.9 41.2 Depreciation 4.5 4.7 4.9 5.0 Extraordinaries* 22.5 -8.9 -10.1 - Gross cash flow 121.9 66.5 54.8 46.2 Change in working capital 34.9 28.5 9.29 29.1 Capex -5.0 -5.0 -5.0 -5.0 FCF 151.7 89.9 59.1 70.4 DCF 135.8 72.1 42.4 45.2 Sum of PV (2011E-2014E) 295.5 Terminal Value 278.4 Net cash (end 2010) 69 Minorities 19 Total Shareholders’ value 623.5 Target Price 12.00 Source: IBG *mainly includes social contribution tax paid in 2011-2013 and cash receipt in 2011 from ETADE sale

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Metka

1H:11 results review – A strong performance on backlog acceleration

Metka reported strong 1H:11 financial results, exceeding consensus estimates, on the parallel implementation of seven main projects: Specifically, group turnover, EBITDA and net income settled at EUR 478m (+86% YoY), EUR 72.2m (-2% YoY) and 49.6m (+2% YoY) respectively compared to consensus (Reuters) of EUR 341m, EUR 56.8m and EUR 38m. Keep in mind that the results are not directly comparable since 1H:10 numbers had benefited from the sale of a subsidiary for EUR 32.4m. Metka’s results were positively affected by the acceleration of the implementation of the EPC energy projects signed abroad and especially in Turkey and Syria. Metka’s EBITDA margin settled at 15%, below company’s normalized margin of 16-17%, attributed to one- off costs in Romania. Finally, Metka retained a healthy balance sheet with a net cash position of about EUR 40m.

Table 4: Metka 1Η:11/2Q:11 Group Key P&L forecasts

EUR m 1H:11e YoY 2Q:11 2Q:10 YoY Revenues 477.8 86% 315.8 118.6 166% EBITDA 72.2 -2% 46.2 22.8 103% EBITDA margin 15.1% 14.6% 19.2% Net Income 49.6 2% 31.6 10.8 192% Net Income margin 10.4% 10% 9.1%

Source: IBG, Metka *1Q:10 includes EUR 32.4m capital gain from ETADE sale

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Metka

Metka: Summary tables PROFIT & LOSS (EURm) 12/2008 12/2009 12/2010 12/2011e 12/2012e 12/2013e Sales 381 339 614 760 602 550 Cost of Sales & Operating Costs 0.0 0.0 0.0 0.0 0.0 0.0 Non Recurrent Expenses/Income 0.0 0.0 36.9 0.0 0.0 0.0 EBITDA 66.8 60.6 134 125 94.1 81.7 EBITDA (adj.)* 66.8 60.6 96.8 125 94.1 81.7 Depreciation -5.3 -4.8 -4.7 -4.5 -4.7 -4.9 EBITA 61.5 55.8 129 121 89.5 76.8 EBITA (adj)* 61.5 55.8 92.1 121 89.5 76.8 Amortisations and Write Downs 0.0 0.0 0.0 0.0 0.0 0.0 EBIT 61.5 55.8 129 121 89.5 76.8 EBIT (adj.)* 61.5 55.8 92.1 121 89.5 76.8 Net Financial Interest -3.6 -1.6 1.7 2.1 3.5 4.4 Other Financials 0.0 0.4 -7.5 -9.0 -9.0 -5.0 Associates 0.0 0.0 0.0 0.0 0.0 0.0 Other Non Recurrent Items 0.0 0.0 2.2 1.5 2.5 0.0 Earnings Before Tax (EBT) 58.0 54.6 125 116 86.5 76.2 Tax -13.2 -17.6 -36.2 -37.3 -30.0 -16.8 Tax rate 22.8% 32.2% 28.9% 32.3% 34.7% 22.0% Discontinued Operations 0.0 0.0 0.0 0.0 0.0 0.0 Minorities -3.4 -1.8 -2.1 -2.0 -2.0 -1.9 Net Profit (reported) 41 35 87 76 54 58 Net Profit (adj.) 41 35 56 76 54 58 CASH FLOW (EURm) 12/2008 12/2009 12/2010 12/2011e 12/2012e 12/2013e Cash Flow from Operations before change in NWC 40.3 59.7 113 86.9 60.3 56.1 Change in Net Working Capital -17.8 -14.3 -56.4 34.9 28.5 9.3 Cash Flow from Operations 22.4 45.4 56.6 122 88.8 65.4 Capex -1.8 -2.6 -4.2 -5.0 -5.0 -5.0 Net Financial Investments 0.0 0.0 0.0 0.0 0.0 0.0 Free Cash Flow 20.6 42.8 52.4 117 83.8 60.4 Dividends -21.8 -10.4 -24.9 -25.9 -18.5 -19.6 Other (incl. Capital Increase & share buy backs) -4.0 -18.8 17.6 -6.5 -13.9 -4.0 Change in Net Debt -5 14 45 84 51 37 NOPLAT 46 42 70 93 70 60 BALANCE SHEET & OTHER ITEMS (EURm) 12/2008 12/2009 12/2010 12/2011e 12/2012e 12/2013e Net Tangible Assets 65.8 62.5 58.7 59.2 59.5 59.6 Net Intangible Assets (incl.Goodwill) 7.9 8.0 1.8 1.8 1.8 1.8 Net Financial Assets & Other 4.2 8.2 6.7 6.7 6.7 6.7 Total Fixed Assets 77.9 78.6 67.2 67.6 68.0 68.1 Net Working Capital 138 91.4 198 145 115 116 Net Capital Invested 216 170 266 213 183 184 Group Shareholders Equity 158 173 250 304 334 375 o/w own Shareholders Equity 143 157 233 285 313 352 Net Debt -8.0 -21.6 -66.7 -151 -202 -239 Provisions 3 3 2 2 2 2 Other Net Liabilities or Assets 62 16 80 58 49 45 Net Capital Employed 216 170 266 213 183 184 GROWTH & MARGINS 12/2008 12/2009 12/2010 12/2011e 12/2012e 12/2013e Sales growth 34.0% -10.9% 80.8% 23.8% -20.8% -8.6% EBITDA (adj.)* growth 16.8% -9.2% 59.6% 29.6% -25.0% -13.2% EBITA (adj.)* growth 17.9% -9.3% 65.0% 31.4% -26.0% -14.1% EBIT (adj)*growth 17.9% -9.3% 65.0% 31.4% -26.0% -14.1% Net Profit growth 12.6% -14.9% 59.2% 35.9% -28.5% 5.6% EPS adj. growth 12.6% -14.9% 59.2% 35.9% -28.5% 5.6% DPS adj. growth -16.2% -52.3% 140.0% 3.9% -28.5% 5.6% EBITDA margin 17.5% 17.9% 21.8% 16.5% 15.6% 14.9% EBITDA (adj)* margin 17.5% 17.9% 15.8% 16.5% 15.6% 14.9% EBITA margin 16.1% 16.4% 21.0% 15.9% 14.9% 14.0% EBITA (adj)* margin 16.1% 16.4% 15.0% 15.9% 14.9% 14.0% EBIT margin 16.1% 16.4% 21.0% 15.9% 14.9% 14.0% EBIT (adj)* margin 16.1% 16.4% 15.0% 15.9% 14.9% 14.0%

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Metka

Metka: Summary tables RATIOS 12/2008 12/2009 12/2010 12/2011e 12/2012e 12/2013e Net Debt/Equity -0.1 -0.1 -0.3 -0.5 -0.6 -0.6 Net Debt/EBITDA -0.1 -0.4 -0.5 -1.2 -2.2 -2.9 Interest cover (EBITDA/Fin.interest) 18.6 38.5 nm nm nm nm Capex/D&A 34.3% 53.2% 89.3% 110.0% 107.0% 102.1% Capex/Sales 0.5% 0.8% 0.7% 0.7% 0.8% 0.9% NWC/Sales 36.2% 26.9% 32.3% 19.1% 19.1% 21.0% ROE (average) 30.7% 23.5% 28.7% 29.4% 18.2% 17.3% ROCE (adj.) 21.8% 25.9% 27.0% 45.1% 39.6% 33.9% WACC 11.7% 11.7% 11.7% 11.7% 11.7% 11.7% ROCE (adj.)/WACC 1.9 2.2 2.3 3.9 3.4 2.9

PER SHARE DATA (EUR)*** 12/2008 12/2009 12/2010 12/2011e 12/2012e 12/2013e Average diluted number of shares 52.0 52.0 52.0 52.0 52.0 52.0 EPS (reported) 0.80 0.68 1.68 1.47 1.05 1.11 EPS (adj.) 0.80 0.68 1.08 1.47 1.05 1.11 BVPS 2.74 3.02 4.49 5.48 6.03 6.78 DPS 0.42 0.20 0.48 0.50 0.36 0.38

VALUATION 12/2008 12/2009 12/2010 12/2011e 12/2012e 12/2013e EV/Sales 0.9 1.4 0.7 0.2 0.1 0.1 EV/EBITDA 5.0 7.9 3.1 1.1 0.9 0.6 EV/EBITDA (adj.)* 5.0 7.9 4.3 1.1 0.9 0.6 EV/EBITA 5.4 8.6 3.2 1.1 0.9 0.6 EV/EBITA (adj.)* 5.4 8.6 4.5 1.1 0.9 0.6 EV/EBIT 5.4 8.6 3.2 1.1 0.9 0.6 EV/EBIT (adj.)* 5.4 8.6 4.5 1.1 0.9 0.6 P/E (adj.) 8.3 14.4 8.7 3.8 5.3 5.1 P/BV 2.4 3.2 2.1 1.0 0.9 0.8 Total Yield Ratio 3.0% 4.9% 8.9% 6.4% 6.7% EV/CE 1.6 2.9 1.6 0.6 0.5 0.3 OpFCF yield 6.5% 8.9% 11.6% 41.8% 30.5% 22.4% OpFCF/EV 6.8% 9.5% 13.6% 91.0% 107.9% 143.9% Payout ratio 52.6% 29.5% 28.7% 34.0% 34.0% 34.0% Dividend yield (gross) 6.3% 2.0% 8.6% 8.9% 6.4% 6.7%

EV AND MKT CAP (EURm) 12/2008 12/2009 12/2010 12/2011e 12/2012e 12/2013e Price** (EUR) 6.6 9.8 9.4 5.6 5.6 5.6 Outstanding number of shares for main stock 52.0 52.0 52.0 52.0 52.0 52.0 Total Market Cap 344 507 489 291 291 291 Net Debt -8.0 -21.6 -66.7 -151 -202 -239 o/w Cash & Marketable Securities (-) -19.4 -32.1 -68.9 -151 -202 -239 o/w Gross Debt (+) 11.4 10.4 2.2 0.0 0.0 0.0 Other EV components -4 -8 -7 -7 -7 -7 Enterprise Value (EV adj.) 332 477 416 134 82 45 Source: Company, Marfin Analysis estimates.

Notes * Where EBITDA (adj.) or EBITA (adj) or EBIT (adj.)= EBITDA (or EBITA or EBIT) +/- Non Recurrent Expenses/Income **Price (in local currency): Fiscal year end price for Historical Years and Current Price for current and forecasted years ***EPS (adj.) diluted= Net Profit (adj.)/Avg DIL. Ord. (+ Ord. equivalent) Shs. EPS (reported) = Net Profit reported/Avg DIL. Ord. (+ Ord. equivalent) Shs. Sector: Basic Resources/Industrial Metals Company Description: Metka, 57.4% owned by industrial group Mytilineos, is the leading electromechanical and metallic construction company in Greece. Over the last few years Metka has specialized in the construction and delivery of turn key thermal power plants undertaking a number of projects in Greece and SE Europe. Metka’s official backlog currently stands at c.EUR 2bn of which more than 90% is in foreign countries.

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ESN Recommendation System The 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 and capital reimbursement) over a 12 month 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) . Furthermore, in specific cases and for a limited period of time, the analysts are allowed to rate the stocks as Rating Suspended (RS) or Not Rated (NR) , as explained below. Meaning of each recommendation or rating:

• Buy : the stock is expected to generate total return of over 20% during the next 12 months time horizon • Accumulate: the stock is expected to generate total return of 10% to 20% during the next 12 months time horizon • Hold : the stock is expected to generate total return of 0% to 10% during the next 12 months time horizon. • Reduce : the stock is expected to generate total return of 0% to -10% during the next 12 months time horizon • Sell : the stock is expected to generate total return under -10% during the next 12 months time horizon • Rating Suspended : the rating is suspended due to a capital operation (take- over bid, SPO, …) where the issuer of the document (a partner of ESN) 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 of the document (a partner of ESN) or a related party of the issuer

History of ESN Recommendation System Since 18 October 2004 , the Members of ESN are using an Absolute Recommendation System (before was a Relative Rec. System) to rate any single stock under coverage. Since 4 August 2008 , the ESN Rec. System has been amended as follow. • Time horizon changed to 12 months (it was 6 months) • Recommendations Total Return Range changed as below:

TODAY

SELL REDUCE HOLD ACCUMULATE BUY -10% 0% 10% 20% BEFORE SELL REDUCE HOLD ACCUMULATE BUY -15% 0% 5% 15%

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Metka

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 organization. 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: Vassilis Roumantzis 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 Exchange S.A. and regulated by the Bank of Greece (License No: 52/2/17.12.99) and 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 16/09/2011 Buy Accumulate Hold Reduce Sell Marfin Analysis Total Coverage 40% 20% 32% 0% 0% % of companies in each rating category that are investment banking clients 4% 0% 4% 0% 0%

Note that we have suspended our rating on 2 companies Construction & Building materials 50% 0% 50% 0% 0% % of companies in each rating category that are investment banking clients 0% 0% 25% 0% 0%

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, Attica Group, Blue Star Ferries, Hygeia Group, SingularLogic 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: , ATEbank, Bank of , Coca Cola Hellenic, EFG Eurobank, , GEK TERNA, Hellenic Exchanges, Hellenic Postbank, Intralot, Mytilineos, National Bank, OPAP, OTE, , PPC 4. Within the last 12 months, Investment Bank of Greece has provided advisory services to the following companies mention in this report: Hellenic Postbank 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, Hellenic Postbank, Motor Oil, Euroline, Interinvest, Vivere, Hygeia Group

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Metka

Rating History 1. 28/07/2011 Buy, Target Price €15.10 2. 13/05/2011 Buy, Target Price €15.10 3. 17/03/2011 Buy, Target Price €15.10 4. 09/12/2010 Buy, Target Price €15.10 5. 12/11/2010 Buy, Target Price €14.30 6. 13/09/2010 Buy, Target Price €14.30 7. 30/08/2010 Buy, Target Price €14.60 8. 30/07/2010 Buy, Target Price €14.60 9. 17/05/2010 Buy, Target Price €14.60 10. 26/03/2010 Buy, Target Price €14.30

16 15 14 13 12 11 10 9 8 7 6 5 4 Σεπ 10 Οκτ 10 Νοε 10 εκ 10 Ιαν 11 Φεβ 11 Μαρ Απρ Μαϊ 11 Ιουν Ιουλ Αυγ 11 Σεπ 11 Οκτ 11 11 11 11 11

Price history Target price history

Buy Accumulate Hold Reduce Sell Not rated

Source: Factset & ESN, price data adjusted for stock splits. This chart shows Marfin Analysis continuing coverage of this stock; the current analyst may or may not have covered it over the entire period.

Risks to our forecasts and valuation • Postponements in the execution of existing contracts • Delay in new tenders for power plants due to the uncertain global economic environment. • Pressure in margins due to increased competition, execution of many projects simultaneously or potential claims from customers • The expansion outside Greece imply additional risks such as political risks. • The social unrest in Syria could result in significant delays in the implementation of two power plant projects in this country with a total budget of EUR 1.33bn. • Shifts to new technologies in power plants that Metka does not have the know-how

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Metka Greece Basic Resources