Public Power Corporation – Company Update

PPC S.A. Utilities / Greece Reuters/Bloomberg: DEHr.AT / PPC GA July 3, 2019

Reviving the equity story of PPC Rating Neutral vs. previous Unchanged

Just a few days away from the national elections that will most likely lead to a change in government, a key name that will come into investors spotlight is PPC. With the company going through a very challenging period Target Price 1.90 of poor operating profitability and stretched liquidity, the support of its main shareholder, the Greek State, to vs. previous 1.80 its restructuring is of paramount importance for the viability and the turnaround of the most politically sensitive (€/sh) listed name in the ATHEX. In this note we go through the key points that on our view should be high in the Current Share Price* 2.34 *03 /07/ 2019 agenda of a new government. We believe a realistic approach regarding the country’s energy policy along with (€/sh)

a focused management that would utilize the company’s asset base and streamline operations, could stabilize the performance of the company and create equity for the shareholders, without burdening consumers, Stock Data essentially reviving the investment story of PPC. Market Cap (EUR m) 542 The key issues to support the company’s turnaround story include: Free Float 49%  Stabilizing and improving liquidity is on our view one of the first tasks that need to be tackled. Current EV (EUR m) 4,415 management has advanced the scheme for the execution of an arrears securitization transaction expected to Num. of Shares (m) 232.0 yield EUR 400-500m of proceeds for PPC. Also PPC is intensifying efforts to tackle another EUR 1.0bn of gross

arrears of so-called final clients. Additionally to the above government could push to resolve once and for all the Performance (%) 1m 3m 12m issue with PPC’s largest single debtor, LARCO (State owned Nickel company with arrears of about EUR 300m), as Absolute 4.9 44.1 29.1 well as other State related entities (reported arrears of ~EUR 150m). Note that accelerated arrears collection ASE General 4.5 16.7 17.2 apart from liquidity enhancement would increase the company’s capacity to go after new growth initiatives at a much faster pace.  Restoring operating profitability through reviewing tariff policy and controllable opex. PPC has for a long time Day avg. no traded shr (k-12m) 858 avoided (with the “guidance” of the government) the restructuring of its tariffs. With the company having a 2.29 significant exposure on external factors for its fossil fuel production (Nat. gas, oil, CO2) it has now become a Price high-12 m (EUR) necessity to establish cost reflective tariff structures. Yet we believe that massive price increases are not Price low-12m (EUR) 1.11 necessary as an overall approach to the total consumer energy bill needs to be taken. At the same time with PPC’s “controllable” expenditure accounting for ~25% of its sales, streamlining efforts could yield significant savings and cushion external costs. 2.5

 Tackling structural issues of market opening and asset utilization. With Greece following EU guidelines to open 2.0 up the electricity market, PPC as the incumbent player has been affected the most. Realistic and structural measures in regards to the company’s positioning in the market need to be adopted in order to allow PPC to 1.5

recover. The scheduled lignite unit divestment is a first step, still the expected decline in CO2 emissions will be 1.0 just 30% for 2018-22. We argue that further actions are needed taking into account the benefits of a lower carbon footprint for the company similarly to strategies adopted by other EU Utilities. Also with an estimated 0.5 stand-alone EBITDA generation of EUR 650m per year and an implied EV of EUR 6.5bn, PPC’s hydro units plus 0.0 the low voltage grid are its most lucrative assets. We view that exploiting the value of the assets either through Jul 18 Aug 18 Oct 18 Nov 18 Jan 19 Mar 19 Apr 19 Jun 19 sale of minority (or majority stakes) or utilizing them through growth platforms would both unlock value and PUBLIC POWER CORPORATION S.A. ATHEX Composite Index (Rebased) allow PPC to go after new opportunities. Finally note that PPC holds a real estate portfolio (ex-production facilities) with a gross value in excess of EUR 1.0bn, with the company looking to raise EUR 150m in 2020 by PPC is the leading producer and supplier of utilizing its properties. electricity in Greece with c7.0 million  Growth focusing on RES. Despite the significant expansion of RES capacity (ex-large hydro) in Greece over the customers, representing 78% of the Greek last years, PPC has been stagnated at a just 2.0% market share. With the country’s RES capacity seen expanding electricity market. PPC’s current generation by ~7.5% in the near term by adding about 500MW per year, RES expansion for PPC could essentially be the new portfolio consists of conventional thermal and hydroelectric power plants, as well as RES growth and profitability platform. Being a capital intensive business though, focused execution is needed as the units, accounting for c67% of the total company’s leverage remains a drag, while partnerships with recognized players in the sector could be used to installed capacity in the country. circumvent the company’s limited balance sheet capacity. Also given our expectations for consolidation of the fragmented market in the medium term, we believe PPC could play a role in this transition. Shareholders: Greek State 51.12%, Silchester  The sale of the State’s 17% stake in the company to a strategic investor is seen by many as a key turning point International 13.8% in PPC’s course regarding its relationship with the State and the overall character of the company. We believe though that at this early stage of the restructuring, the supportive stance by the State in PPC’s management

efforts and initiatives to transform the company is also important and could yield positive results.

On this report also we update our estimates for 2019-21 based on 1Q19 trends and our understanding of the

key issues for the company going forward. Based on our updated estimates our valuation (50-50 DCF and multiples) yields a Target Price of EUR 1.90/sh (vs. EUR 1.80/sh previous). Given the low visibility, we maintain our Neutral recommendation, noting though that the risk/reward profile could be attractive for risk-loving investors.

EUR m 2017 2018 2019F 2020F 2021F Analyst Revenues 4,943.5 4,741.6 4,653.9 4,482.5 4,480.7 Argyrios Gkonis adj. EBITDA 468.9 260.0 347.1 664.4 730.5 [email protected] Net Income 127.5 (542.0) (398.0) (130.8) (68.1) +30 210 7414462 P/E 3.5 x n.m. n.m. n.m. n.m. EV/EBITDA 5.3 x 18.7 x 12.5 x 6.6 x 5.8 x This report was produced and desseminated in rd Net Debt/EBITDA 8.4 x 14.4 x 11.2 x 5.9 x 5.1 x Athens on July 3 , 2019 at 17.20 CET

Source: AXIA Research

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Public Power Corporation – Company Update

How could a new government support PPC’s turnaround efforts?

With a new government in Greece traditionally signaling a change in the policy regarding many public sector related entities including PPC, we focus on the main areas that on our view are the most important for the turnaround of the company. The company has since last year initiated a restructuring procedure in order to restore its profitability and liquidity. Yet implementation is the key at a period that time is of the essence, with delivery depending upon the support of the company’s major shareholder, the Greek State. These include:  Liquidity improvement  Operating profitability  Dealing with the company’s structural issues through asset utilization  Growth in RES  Divestment of a 17% stake On our view, delivery on all areas is key for the stabilization of the company and the gradual crystallization of the company’s underlying value. Further delays in the company’s efforts to go after its strategic targets could sustain a period of low operating profitability, further stretching the company’s liquidity and leverage.

Liquidity: Swiftly improve liquidity by utilizing the company’s arrears portfolio and previous years PSO claims

1. Execute the arrears securitization transaction PPC carries on its books arrears of about EUR 2.7bn with a big part accumulated during 2015-17. Following the appointment of a specialized advisor to go through the arrears portfolio in late 2017 and the supportive outcome of a pilot procedure on a small part of the portfolio, management is now ready to “utilize” this asset. In this context PPC has contemplated an arrears securitization transaction for a big part of this portfolio.

More specifically we understand that PPC will be looking to establish a vehicle that will undertake about EUR 250m and EUR 1.3-1.5bn of gross receivables (nominal value) respectively and will be used as collateral to a credit transaction. The two parts will include arrears up to 60 days past due and over 90 days past due respectively. Management aims to proceeds of EUR 200m and EUR 200-300m from each portfolio, while coupon should reflect the quality of the underlying portfolio (we assume mid-single digit and high single digit respectively).The arrears will remains on PPC and the collection will be handled by the appointed servicer, with coupon payments and amortizations paid by the collection of arrears.

It is our understanding that the overall framework will be presented for approval to the company’s BoD in late July/early August. We believe there is audience for such a transactions to be executed (it will be one of the very few similar transaction executed in Europe), especially following the overall improvement of the investment climate for Greek assets.

2. Tackle arrears of the “final-consumers” On top of the above, talking to press, PPC’s Chairman Emanuel Panagiotakis said that PPC will initiate a campaign to tackle about 890,000 consumers that hold arrears in the tune of EUR 1.0bn. The said group includes consumers that have either been cut-off from PPC and changed supplier, or SMEs that have either shut down or operate under different commercial entities. PPC upon preparing the relevant paperwork will move to challenge said consumers to the courts, while for the part that will be deemed not possible to be collected, PPC will seek a settlement on the tax that has paid to the State.

3. Clear arrears with entities within the public sector perimeter, focusing on LARCO One of PPC’s largest single consumers is the State controlled (55.2% stake) nickel company, LARCO, which is estimated to have accumulated over the years arrears towards PPC in the tune of EUR 300- 350m. Note that PPC holds an 11.4% direct stake in LARCO, while NBG also holds 33.4%. LARCO, one of the largest nickel producers in Europe, is facing significant difficulties in posting operating profitability, given that no major restructuring and investments have been taken over the recent years by its major shareholder, the Greek State. Also LARCO carries a liability of EUR 135m related to EU Court

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Public Power Corporation – Company Update

decision for State aid during 2008-11. Amid this environment, various privatization efforts over the last decade have not been successful, given the complexity of the task and the luck of political motivation. PPC has had numerous negotiations with LARCO, offering flexible tariff structures and payments schemes and continues to supply the company with electricity despite LARCO having not met its obligations, thus continuing accumulating arrears. With LARCO continuing facing severe profitability and liquidity issues, a move by a new government to tackle the issue would eventually allow PPC to recover part of this exposure.

At the same time greater public sector consumers including entities related to local municipalities and regional cooperatives are reported to have arrears with PPC to the tune of EUR 150m. With a significant part of these entities entitled to various subsidies from the State, a clearing up of arrears of the State to those entities would allow them to tackle their arrears with PPC.

4. Recover previous years PSO’s PPC has announced that following an opinion by RAE is now able to claim EUR 160-200m of PSO related arrears from the State. In the past (late 2017) PPC had received directly EUR 360m related to previous years PSO claims directly through the State budget surplus. At this point it will be up to the new government (through Ministry of Energy) to settle the said amount either directly through the State coffers depending on available liquidity, or via allowing an increase in PSO charges directly to consumers.

Operating profitability: Support top-line through tariff restructuring and tackle controllable opex

1. Adjust tariffs structure and introduce pass-through mechanism to reflect generation costs and preserve operating profitability over time PPC, although it operates on a fully liberalized environment regarding its pricing policy, any decision regarding pricing policy will still have to be endorsed by the company’s major shareholder, the Greek State. In this context the company has not adopted the necessary adjustments in its tariff structure and offerings that would allow PPC to preserve its profitability.

During 2014-2018, PPC’s average income from energy sales has declined by 10.5% affected primarily from the offered 15% discount since late 2016 to clients paying their bill on time and to a lesser extent by a deteriorating sales mix, with lucrative medium and low voltage clients fleeing to alternative suppliers. During this time PPC has also been benefitted by low wholesale market prices given the low fossil fuel prices (oil, natural gas) in the period, but also the very low CO2 prices.

Currently electricity household electricity tariffs in Greece are about 8.0% lower vs. EU average according to Eurostat data for 4Q18. At the same time wholesale prices in Greece in 4Q18 were on average 18% above EU levels (having increased by 54% in 2017-18, compared to 12.6% on an EU level for the same time). Following these developments, PPC’s management has iterated the need to adjust its tariff policy through the last 12 months, but this has not been endorsed by the State taking also into account the pre-election period for the country.

Exhibit 1. Household electricity prices (inc. tax and VAT) for EU (EUR/MWh)

312 294 300 248 254 216 218 224 229 199 201 202 211 180 average EUR 178.5/MWh 159 165 170 171 132 132 140 142 112 91 101 71 86 41

Source: Eurostat, AXIA Research AXIA Research Page 3

Public Power Corporation – Company Update

Exhibit 2. Household electricity prices (inc. tax and VAT) for EU at Purchase Power Standard terms

280 282 263 266 274 277 234 243 245 average 215.3 219 227 227 200 205 209 183 184 184 187 189 152 164 165 137 145

Source: Eurostat, AXIA Research

Since early 2019, PPC’s management has decided to reduce the discount offered to clients paying their accounts on time from 15% to 10%, with an estimated benefit of about EUR 60m for the year. Yet we do not find this to be adequate, at a time that the additional burden from the higher CO2 prices in 2019 vs. 2018 alone is estimated to be EUR 220m, with total CO2 expenditure for PPC estimated at EUR 506.3m for 2019 (vs. EUR 141.6m in 2017 and EUR 279.2m in 2018).

On our view a mechanism that would protect PPC from wholesale price fluctuations should be established. We note that that within the contracts offered by the bulk of the alternative providers there is an automated tariff adjustment clause, if wholesale electricity price exceeds a certain band (usually EUR 45-55/MWh), with the difference paid by the customer. This clause does not exist currently in PPC’s low-voltage contracts (65% of total sales volume), while in a big part of its medium and high voltage contracts the CO2 adjustment mechanism has been incorporated.

We understand the sensitivity of higher electricity prices and the implications these might have on the ability of customers to meet their payments. We have to note though that out of the total electricity bill in Greece, about 55% relates to energy consumption with the rest related to network fees, RES support and taxes. This compares to an average of 64% in the EU. Additionally to the above electricity bill in Greece include charges related to municipal tax collection and fees paid towards the national TV and radio broadcaster.

In this context efforts by the government to curb the additional costs and taxes burdening the electricity bills, would be able to mitigate the impact of higher energy prices. Acceleration of the investments for the interconnection of islands could also have a material impact on the amount paid by consumers as Public Service Obligations through electricity bills. We estimate that if the oil-fired generation in the non-interconnected islands was reduced by 50%, the total savings for the consumers would exceed EUR 200m. In a similar context the recently announced reduction in VAT applied on electricity bills (VAT was reduced to 6.0% from 13%) could provide some room to rebalance the charges.

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Public Power Corporation – Company Update

Exhibit 3. Electricity bill components across EU 1Q19

100.0% 11.5% 90.0% 15.3% 80.0% 18.4% 15.7% 70.0% 60.0% 16.1% 28.3% 50.0% 40.0% 30.0% 54.0% 20.0% 40.8% 10.0% 0.0%

Energy Network Taxes VAT Source: VaasaETT

It is worth noting that in the past (November 2007) when PPC faced a similar profitability crunch, the newly appointed management at the time with the support of a recently re-elected government (Greece held general elections in September 2007) proceeded to tariff increases that exceeded 20% on average.

2. Tackle controllable opex and operational efficiencies According to our estimates PPC’s “controllable expenses” amounted in 2018 to about EUR 1.22bn, representing about 25% of the total revenues of the company. Expenses include payroll (EUR 722m in 2018), third party fees, utilities and maintenance (EUR 220m in 2018), various materials and other.

In respect of personnel, PPC’s management has acknowledged specific initiatives that will lead to a reduction in personnel count by about 4,000 (that is about 25%) over the next 4 years. This will come through the transfer of employees to the lignite units to be divested, natural attrition (500 employees have departed in 2019 ytd), termination of temporary contracts and employees leaving as part of the disposal of Amuntaio and Kardia lignite units. We estimate that delivering on the said targets could lower personnel expenditure by about EUR 300m on an annual basis.

Exhibit 4a. PPC’s “controllable expenses” (EUR m) Exhibit 4b. PPC’s reported OPEX breakdown 2018 (% of total)

Other, 12.2% 82.6 105.8 Fuel+CO2, Other (ex-one offs) 219.1 220.6 29.2%

114.2 106.6 Utilities/maintenance 60.5 66.4

Materials/consumables

Energy 743.9 722.5 Third party fees Purchases , 39.8% Payrol Payroll, 19.3% 2017 2018

Source: The Company, AXIA Research

Press reports in the past have hindered the case of a VRS targeting additional 2,000 employees. Given that average annual payroll is cEUR 45,000, we estimate this will have a cost in the tune of EUR 180m (assume 2-year payroll compensation will be granted). We have to note though the PPC’s Chairman has dismissed any VRS discussions saying that it is not necessary.

In a similar context, note that ahead of the launch of the tender for PPC’s lignite units (930MW), management proceeded to a streamlining of personnel expenses (Megalopoli) and lignite procurement costs (Meliti) that yielded annual savings of about EUR 30m (or c15% of 2018 revenues of the units).

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Public Power Corporation – Company Update

Exhibit 5a. PPC’s Generation division ex-fuel opex Exhibit 5b. PPC’s Supply division Recurring Opex

540 25.0 140 3.5

24.0 120 3.0 520 23.0

22.0 100 2.5 500 21.0 80 2.0 480 20.0 60 1.5 19.0 460 18.0 40 1.0

17.0 440 20 0.5 16.0

420 15.0 0 0.0 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Ex-fuel Opex (EUR m) Ex-fuel Opex (EUR/MWh) Reccuring Opex (EUR m) Reccuring Opex (EUR/MWh)

Source: The Company, AXIA Research

Deal with structural issues, reviewing market opening framework, lignite divestment options and hydro and grid asset utilization. Exploit real estate portfolio.

1. Review measures taken for opening up the electricity market that affect PPC’s profitability. In the context of opening up the domestic electricity market and aligning with EU framework, PPC’s market share in the supply market has been agreed back in 2016 between the EU Institutions and the Ministry of Energy to reach 50% by December 2019, following specific interim milestones. Recall that these guidelines follow EU Court decisions against PPC’s monopoly in lignite and hydro generation in the country.

In order to facilitate this reduction, Ministry of Energy agreed to the launch in 2017 of auctions (NOME) of lignite and hydro generation of PPC through future contracts, at prices reflecting the respective generation costs and in any case below wholesale market prices. The auctioned volume targets have been set in conjunction with PPC’s market share evolution and tracking error from the interim milestone targets. Given the very low pace in the reduction of PPC’s market share, the auctioned volumes have been adjusted higher both in 2017 and 2018. For 2018 specifically PPC sold through NOME 12.5GWh, representing almost 75% of its lignite and hydro generation.

The sale of those volumes at prices below wholesale (auction price is regulatory calculated based on PPC’s generation cost in the preceding year), led to significant losses for PPC especially in 2H18, with FY2018 total expense standing at EUR 223m (vs. EUR 72m in 2017). Given that PPC remains far from the interim target, a significant amount of losses is expected to be booked in 2019 as well (we estimate about EUR 225m).

NOME auctions could be abolished upon PPC meeting the targeted market share (50%), but given the very slow pace of penetration of alternative suppliers to the supply market, we view this very unlikely to be achieved in the near term. In this context we believe a review of targets and potentially further structural measures will need to be taken to make sure the country complies with EU regulation, but also stop PPC from realizing significant operating losses.

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Public Power Corporation – Company Update

Exhibit 6a. Supply market share evolution Exhibit 6a. PPC’s market share reduction targets

100.0% 6.00% 95% 87% 95.0% 81% 5.00% 90.0% 75% 85.0% 69% 4.00% 62% 80.0% 56% 75.0% 3.00% 49% 70.0% 2.00% 65.0% 60.0% 1.00% 55.0%

50.0% 0.00%

Jul Jul Jul

Jan Jan Jan Jan

Sep Sep Sep

Nov Nov Nov

Mar Mar Mar Mar

May May May

2016 2017 2018 2019 Aug-15 … Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 PPC Protergia Heron Elpedisson

Source: Enex, AXIA Research

In this context we recon the completion of the divestment of lignite units as a key measure that would allow access of alternative producers to lignite generation could allow for a review of the overall situation and NOME measures, removing PPC’s obligation to sell its production below wholesale prices.

Another measure that has been discussed in the past by PPC’s management was the outright sale of portfolio of consumers in the supply division. This would also allow for the swift reduction of PPC’s market share and importantly prevent the targeting by third parties to the higher margin part of PPC’s clientele. Although it could prove to be a complex task given that it would need to somehow achieve client consent, similar transactions have taken place in the EU in the past. Moreover it could allow PPC to immediately realize some cash gains from the sale.

Finally, recall the “small PPC” plan that was drafted in 2013 (and canceled in 2015) and entailed the curve-out of 30% of PPC’s generation capacity (lignite, hydro and natural gas) along with 30% of its clientele and the divestment of the said part. We believe the pairing of lignite generation with some hydro would be an attractive investment proposal and essentially introduce another vertical player in the market enhancing competition and allowing PPC to use the proceeds to focus on other growth levers.

2. Review strategy on lignite disposal Apart from the overall EU guidelines for opening up the market, PPC faces the reality of having a very CO2 heavy generation footprint. In this context PPC’s plan calls for the reduction of its lignite fired capacity from 4.3GW in 2017 to 2.2GW by 2022. The plan entails the divestment of Meliti and Megalopoli units (930MW), decommissioning of Kardia and Amuntaio (1.8GW) and commissioning of the new Ptolemaida 5 unit (660MW). Yet we note that according to the company’s estimates, PPC will still emit about 18m MT of CO2 per year in 2020 (vs 23.4m MT in 2018). This at currently prevailing prices CO2 translates to EUR 450m annually of expenditure for emission rights purchases.

Exhibit 7a. PPC lignite capacity evolution plan Exhibit 7a. PPC CO2 emissions volumes (MW) estimates (mMT)

4,337 930 31.7 1,221

23.4 22.8 660 2,516 17.7 17.2 18.1 600

2017 Divestment of Decommissioning DecommissioningCommissioning of 2022E Meliti and of Kardia I to IV of Amuntai I & II Ptolemaida V Megalopoli 2017 2018 2019E 2020E 2021E 2022E

Source: The Company, AXIA Research

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Public Power Corporation – Company Update

At the same time, we underline the reality of lignite being a domestic fuel and thus its exploitation having a strategic importance for the energy safety of the country. In a similar context across the EU it is widely appreciated that lignite will have a role in the energy mix in the medium term as a transitionary fuel, until technological developments and renewable energy expansion allow the full transition.

Taking the above into account, over the recent years the bulk of European utilities have launched campaigns to reduce or even eliminate their CO2 emissions. The main target has been the reduction of their expose to CO2 fluctuations that would allow them to go after expansion in other areas and to a lesser extend the realization of capital gains from the transactions. In this context we have seen transactions being structured in a way that the seller participates or undertakes part of the operational liabilities of the disposed portfolio. On the other side of the table, buyers are looking to exploit the transition phase and the role of lignite in this period, through focused operation of the units and by streamlining operational costs.

Taking the above into account we believe that a further review of PPC’s lignite fleet could potentially allow the company to further reduce its CO2 exposure and reduce a significant burden from its non- controllable expenses. In this context we note that upon implementation of the target model in the Greek energy market, the potential for direct bilateral PPAs between producers and large industrial consumers that have access to EU support schemes for CO2 emissions could also play a role in the outlook of lignite generation.

3. Crystalize/exploit value of hydro and grid assets PPC’s most lucrative assets, its hydro units and the distribution grid operations are generating about EUR 600-650m of recurring EBITDA per year (EUR 400m from grid and EUR 200-250m from hydro on our estimates) on a stand-alone basis. With these asset classes traditionally attracting investors looking for long term stable returns (infrastructure funds, pension funds etc.), public and private transactions are implying metrics in the tune of 10.0x EV/EBITDA. This yields an EV for PPC’s hydro and grid portfolio of EUR 6.5bn, which is currently burdened under the overall inefficiency of other parts of PPC’s operations. Also note that according to our understanding the said assets are not currently allowed to be directly collateralized against any debt obligations as long as they remains under PPC’s control.

Many times press has been circulating the potential of an outright sale of hydro units (potentially as a “sweetener” to the lignite divestment process), we believe that PPC could also consider alternatives that would allow the company to maintain those high value assets in its portfolio:  Divest a minority stake in hydro/grid. This would allow PPC to realize significant proceeds that could be used to reduce the company’s leverage and support its expansion plans to new profitability platforms (i.e. RES expansion). Also the execution of a transaction should have a positive impact for the company valuation, with the market realizing the breadth of PPC’s portfolio. On our estimates the sale of a minority stake in PPC’s hydro portfolio could bring more than EUR 1.0bn of cash for the company, while another EUR 1.5bn could be realized from a sale of a minority stake in the grid.  Use said assets in the context of a contribution in kind in order to be able to participate in new growth platforms. Given that liquidity remains a drag for PPC, assuming the company has recognized a specific growth opportunity, it could fund its equity participation with the contribution of a stake on the assets. This structure could be considered for RES platforms, opportunities abroad but also projects relating the grid infrastructure (smart metering).

4. Exploit real estate portfolio PPC holds according to management real estate assets with a gross value in excess of EUR 1.0bn at current prices (peak value in 2007 reached about EUR 1.7bn). The assets refer to industrial sites (not including production facilities), office and storage facilities and land and are located both within city limits and outside cities. Currently management has announced plans to raise EUR 150m in 2020 by utilizing part of the company’s real estate portfolio. We understand a potential structure would entail the setup of a subsidiary that would undertake some properties and thereafter an outright sale of a stake to a partner that could also involve the management of the properties.

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Public Power Corporation – Company Update

Investments: Focus on RES expansion

Despite the significant growth in the domestic RES capacity and generation over the last 10 years (34% CAGR in 2008-17), PPC has not managed to achieve a meaningful presence in the sector. In 2018 PPC’s installed RES capacity stood at just 128MW (excluding large hydro), or about 2.0% of the total RES installed capacity in the country (6.2GW as of Mar’19).

With the country targeting further a c7.5% CAGR growth of RES capacity (wind and solar) up to 2030, PPC is expected to focus on expanding its footprint at the market. Yet the capital intensive nature of the RES business along with the stretched liquidity and high leverage, are affecting the company’s ability to capture the market momentum. In this context until now PPC has been engaged in small scale minority transactions and various MoUs. Also the company’s has not been successful in its effort to license through RES capacity auctions the development of the largest solar park in the country (200MW) in its depleted lignite mines in Northern Greece.

Exhibit 8a. RES capacity expansion targets in Exhibit 8a. RES capacity (% of total ex-hydro) of EU Greece (GW) Utilities 2018

66.0%

6.9

5.5

3.3 20.8% 20.4% 2.6 6.4 4.2 7.9% 7.3% 2.4 3.4 5.8% 1.1% 2016 2020E 2025E 2030E EDP ENEL RWE Endesa EDF CEZ PPC Wind Solar

Source: The Company, AXIA Research

We view that the restoration of the company’s operating profitability and additional debt capacity generated through asset utilization (i.e. real estate, sale of minority stakes/leveraging of hydro/grid) could support and accelerate the investment plans of the company in the RES sector. Another way for PPC to circumvent its near term liquidity challenges could be to partner up with solid players in the market and setup a RES platform that could develop or even acquire RES assets. At a later stage PPC could increase its stake in the platform.

Also we believe that going forward PPC could take advantage of its overall size in the domestic electricity market and potentially play a role in the consolidation of the rather fragmented market, especially in solar.

In this context PPC’s strategic plan call for RES capacity to reach 700MW by 2022. Note that this level of RES capacity would generate about EUR 80m of EBITDA per year, providing a significant boost to the operating profitability of the company.

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Public Power Corporation – Company Update

1Q19 Review-A challenging start of the year

PPC released last week its key figures for 1Q19. As it was expected the company posted a very poor operating performance with EBITDA losses shaping at EUR 51.3m and bottom line losses of EUR 205.1m

Looking on the top line, PPC’s average domestic retail market share, declined to 77.1%, compared to 83.8% in 1Q2018, resulting to a decrease in sales by 6.2% y-o-y. Note that electricity demand in Greece in 1Q19 increased by 4.2% y-o-y, with total demand (including exports) rising by 6.7% y-o-y. The higher demand and the increase of average revenue due to the partial recovery of CO2 emission allowances expenditure from the Medium and High Voltage tariffs supported PPC’s total revenues that settled at EUR 1,138m in 1Q19 vs EUR 1,135m in 1Q18.

Operating expenses though increased by 21.6% y-o-y on the back of higher energy generation and purchases costs. More specifically PPC’s costs were affected by:  higher natural gas production volumes (+68% y-o-y) and prices (+32.5% y-o-y)  higher emission allowance purchases due to higher CO2 prices (lignite output was though down by 20% y- o-y)  higher wholesale market price, with SMP up by 33.6% y-o-y to EUR 68.05/MWh  Higher negative impact from NOME, due to increased volumes vs. 1Q18 that also led to increased energy purchases volumes

On a positive note, payroll and other controllable expenses declined by 2.1% y-o-y. Also reversals for bad debt provisions amounted to EUR 17.7m, continuing the positive trend of previous quarters.

Exhibit 9. PPC 1Q19 key financials EUR m 1Q18 1Q19 y-o-y 1Q19E Total Revenues 1,135 1,138 0.3% 1,104 Total Opex 977.6 1,189.2 21.6% 1,174.0 Reported EBITDA 157.1 -51.3 NM -69.8 EBITDA margin 13.8% -4.5% -6.3% EBT -18.7 -233.5 NM -244.8 Net Income -12.6 -205.1 NM -224.8 Source: The Company, AXIA Research

Looking on cash flow, capex in 1Q19 amounted to EUR 203.8m vs. EUR 182.8m in 1Q18. Despite the negative operating profitability and high capex, net debt at the end of 1Q19 stood at EUR 3.625bn, reduced by EUR 119.5m vs. Dec’18. This depicts the positive contribution from WC in the context of i) arrears collection and ii) pre-payments for FY19 consumption from the Greek State. Cash at hand at end 1Q19 amounted to EUR 575m. We note though that in April PPC repaid in full its EUR 350m Eurobond.

AXIA Research Page 10

Public Power Corporation – Company Update

Updating estimates

We review our estimates for PPC, taking into account our outlook for the domestic electricity market, as well as the key initiatives and priorities that would be in focus of a new management. Our updated estimates taking into account 1Q19 trends call for 2019 EBITDA of EUR 347.1m compared to adj. EBITDA of EUR 260m in 2018, on the back of positive developments in RES support framework, lower NOME volumes in 2H19 and announced price increases (discount reduction). On the flip side, higher CO2 prices and market share erosion are expected to negatively affect financials. For 2020, we expect a further improvement in EBITDA to reach EUR 664.4m, primarily on the back of assumed further tariff increases (low single digit) and operational streamlining. Bottom line though is expected to remain on the red for the near term.

Exhibit 10. PPC’s headline estimate changes EUR m 2018a 2019E 2020F 2021F adj. EBITDA New 260.0 347.1 664.4 730.5 Old 418.0 673.0 767.5 New-vs-Old -17.0% -1.3% -4.8% Net Income New (542.0) (398.0) (129.2) (62.5) Old (337.4) (63.7) (4.4) New-vs-Old 18.0% NM NM Source: AXIA Research

More specifically for 2019, we expect PPC’s revenues from energy sales to decline by 3.9% to EUR 4.094bn, on the back of market share erosion (we assume PPC’s market share to average 74% in 2019 vs. 82% in 2018). Note that average income is seen increasing though by 1.2% y-o-y on the back of announced reduction of 15% discount to 10% and partial recovery of CO2 costs from medium and high voltage tariffs. Taking into account that income from other sales (PSOs of third parties, distribution network fees) is expected to move higher as PPC’s market share declines, we expect total sales in 2019 to stand at EUR 4.653bn, down by 1.8% y-o-y. For 2020-21, we assume management will proceed with a further rationalization of its tariff offerings realizing an increase in average income of energy sales of about 5.7% in total. At the same time we assume PPC’s market share will average by 2021, 60%. We therefore forecast total revenues of EUR 4.482bn in 2020 and EUR 4.480bn in 2021.

On the generation side our estimates assume that PPC’s total generation volumes will decline by about 3.0% CAGR in 2019-21 on the back of lower lignite capacity and lower output from oil fired units in the islands. Also we expect natural gas generation of the company to ramp up increasing by 15% in the period. Amid this environment we model for fuel expenses (natural gas and oil) to decline by 3.0% CAGR in 2018-21. On the other hand, despite the lower lignite generation volumes pointing to a 25% decline in emissions in 2018-21, we model for effective CO2 prices of EUR 24/MT and 26/MT for 2019 and 2020 respectively pointing to CO2 expenses of EUR 506.7m in 2019 and EUR 456.9m in 2020 (vs. EUR 279.2m in 2018).

In respect of energy purchases expenditure, our baseline scenario calls for a 35% reduction between 2018 and 2021. This is primarily premised on: i) lower purchased volumes due to market share decline; ii) abolition of RES support fee (ELAPE) as of 2019; and iii) decline of NOME volumes as of 2H19 assuming the execution of the lignite units divestment tender and the fully abolishment on NOME obligation by 2H20.

In respect of payroll, we assume the gradual reduction of employees according to the company’s plan (units decommission and natural attrition) to reduce headcount by 15% in 2018-21, leading to annual savings of almost EUR 150m. On provisions we believe the trend of reversals will continue as the company’s efforts to collect arrears intensify following the upcoming execution of securitization transaction (2H19).

Below the EBITDA line we note the increase in company’s financial expenses in 2019-20 that is primarily driven by the coupon of the securitization structure (we assume 7.5% on a gross amount of EUR 500m). AXIA Research Page 11

Public Power Corporation – Company Update

Exhibit 11. PPC’s operating and PnL estimates 2018 2019E 2020F 2021F Total demand (y-o-y) 0.5% 2.5% 2.0% 2.0% PPC Generation volumes (MWh) 27,369.0 26,420.4 25,207.4 24,699.4 …o/w lignite 11,111.0 10,555.5 9,499.9 9,024.9 …o/w nat.gas 6,362.0 6,680.1 7,348.1 7,348.1 PPC Generation market share 53.8% 50.4% 47.8% 45.8% PPC supply market share 81.9% 74.7% 65.4% 61.6% Total PPC Revenues 4,741.6 4,653.9 4,482.5 4,480.7 Payroll 871.3 703.6 675.5 648.4 Natural gas purchases 383.6 393.6 433.0 440.9 Fuel oil purchases 659.5 611.4 531.4 505.1 Energy purchases 1,799.2 1,564.2 1,232.7 1,168.9 …o/w Pool 973.6 947.1 850.8 825.8 …o/w CACs 12.1 23.0 20.1 14.2 …o/w RES account deficit 196.3 0.0 0.0 0.0 CO2 279.2 506.7 456.9 463.0 Transmission system charges 151.5 137.1 132.2 129.7 Materials and Utilities 327.2 309.8 295.4 285.7 Cash Opex 4,544.9 4,356.8 3,868.0 3,750.2 Provisions/(reversal) -19.4 -50.0 -50.0 0.0 Total Opex 4,525.5 4,306.8 3,818.0 3,750.2 EBITDA 216.1 347.1 664.4 730.5 margin 4.6% 7.5% 14.8% 16.3% D&A 644.9 676.0 680.9 678.6 Net Financials -79.3 -94.5 -121.0 -118.3 EBT -509.0 -423.4 -137.5 -66.4 Net Income -542.0 -398.0 -129.2 -62.5 Source: AXIA Research

In respect of the arrears securitization transaction, as we have noted earlier, we expect PPC to raise about EUR 500m of credit, underwriting a gross arrears portfolio of ~EUR 1.5bn. We have assumed an average coupon of 7.5% with debt servicing costs (maturities and coupon) paid through the collections from the portfolio. Additional positive developments in respect of PPC’s liquidity could be expected from: i) PPC recently launched a scheme to go after EUR 1.0bn of arrears on its portfolio related to “final clients” that could yield additional liquidity sources; and ii) collection of PSO’s for 2011, with the company claiming an amount of EUR 160-200m. These are not included in our estimates and would further reduce the company’s leverage.

Taking into account the intensification of the collections efforts by the specialized agent and despite the low operating profitability and increased capex mainly for generation projects (EUR 700m in 2019-20), we expect break even FCF in 2012-20.

We note that in our estimates we do not take into account any proceeds from the divestments of the lignite units and also do not assume any material expansion in RES.

Exhibit 12. PPC’s FCF estimates EUR M 2018 2019E 2020F 2021F adj. EBITDA 260.0 347.1 664.4 730.5 WC and taxes 364.5 100.9 141.5 Investments (758.0) (758.0) (528.0) FCF (46.4) 7.4 344.1 Net Financials (94.5) (121.0) (118.3) FCFE (140.9) (113.6) 225.7 Net Debt 3,744 3,884 3,998 3,772 Net Debt/adj. EBITDA 14.4 x 11.2 x 6.0 x 5.2 x Source: AXIA Research

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Public Power Corporation – Company Update

Valuation

Following our updated estimates, we review our valuation for PPC. Our 50-50 weighted DCF and multiples (EV/EBITDA) methodology yields a target price of EUR 1.90/sh (vs. EUR 1.80/sh previously). We reckon the uncertainties regarding the outlook of the company, but we note that the risk/reward profile might be attractive for a risk loving investor given the distressed trading levels. Nevertheless we maintain our Neutral recommendation on the stock as we await to see the intentions and commitment of the new government to support the company’s turnaround story.

On our estimates PPC trades at 12.5x-6.6x EV/EBITDA for 2019-20, compared to 7.5x-6.x of EU Utilities (median).

Exhibit 13. EU Integrated Utilities valuation comps

Company Country MCap P/E EV/EBITDA Net Debt/EBITDA EUR m 2019 2020 2021 2019 2020 2021 2019 2020 2021 CEZ, a. s. Czech Republic 11,034 16.6 12.8 12.7 6.4 5.9 5.8 2.9 2.5 2.3 PGE Polska Grupa Poland 4,221 7.8 7.2 5.3 4.0 4.0 3.3 1.8 1.4 1.2 TAURON Polska Poland 710 2.8 2.9 2.1 4.3 4.1 3.6 3.6 3.3 3.1 EDP Portugal 12,340 15.0 13.7 12.9 9.3 8.8 8.5 5.6 3.9 3.5 Enel SpA Italy 63,643 13.4 12.2 11.4 7.1 6.8 6.5 3.0 2.5 2.4 E.ON SE Germany 21,203 14.1 13.3 12.3 6.4 4.6 4.4 1.2 1.2 0.9 Uniper SE Germany 9,892 NA NA NA 8.6 6.8 6.2 -0.4 1.1 0.8 innogy SE Germany 23,294 27.3 24.6 21.6 10.4 10.3 9.6 23.3 4.8 4.8 RWE Germany 13,632 23.6 12.7 9.1 11.3 6.0 5.0 -5.9 -1.7 -0.7 E.ON SE Germany 21,203 14.1 13.3 12.3 6.4 4.6 4.4 1.2 1.2 0.9 Endesa, S.A. Spain 24,595 16.1 15.8 14.8 8.2 8.2 7.9 2.2 2.0 2.1 Iberdrola, S.A. Spain 56,095 17.3 16.1 15.2 9.8 9.1 8.6 4.1 3.7 3.6 VERBUND AG Austria 16,259 29.7 22.5 20.8 15.9 13.1 12.5 2.6 1.5 1.0 ENGIE SA France 32,964 13.1 11.6 10.6 5.2 4.9 4.7 2.6 2.2 2.1 EDF France 33,794 16.2 12.1 11.6 4.4 3.9 3.8 2.9 2.5 2.4 BKW AG Switzerland 3,145 16.2 13.3 11.9 8.2 7.3 6.8 1.0 1.2 0.9

Average 16.2 13.6 12.3 7.9 6.8 6.4 3.2 2.1 2.0

Median 16.1 13.3 12.3 7.6 6.4 6.0 2.6 2.1 2.1 PPC Greece 542 NM NM NM 12.5 6.6 5.8 11.2 5.9 5.1 Source: Capital IQ, AXIA Research

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Public Power Corporation – Company Update

Detailed Financials Income Statement* 2017 2018 2019E 2020F 2021F Revenues 4,943.5 4,741.6 4,653.9 4,482.5 4,480.7 Total OPEX 4,114.8 4,525.5 4,306.8 3,818.0 3,750.2 y-o-y -2.1% 10.0% -4.8% -11.3% -1.8% o/w Provisions (non-cash) 75.5 (19.4) (50.0) (50.0) - EBITDA 828.7 216.1 347.1 664.4 730.5 EBITDA margin 16.8% 4.6% 7.5% 14.8% 16.3% adj. EBITDA 468.9 260.0 347.1 664.4 730.5 Depreciation 591.8 644.9 676.0 680.9 678.6 EBIT 236.9 (428.7) (328.9) (16.5) 51.9 Other 0.9 0.8 - - - Interest Income 109.8 105.2 94.0 89.0 84.0 Interest Expense (206.0) (184.5) (188.5) (211.7) (208.3) Net Financials (96.2) (79.3) (94.5) (122.7) (124.3) EBT 145.2 (509.0) (423.4) (139.2) (72.4) Income Tax (17.7) (32.9) 25.4 8.4 4.3 EAT 127.5 (542.0) (398.0) (130.8) (68.1) Minorities 0.01 0.03 - - - Net Income 127.5 (542.0) (398.0) (130.8) (68.1) EPS 0.55 (2.34) (1.72) (0.56) (0.29) Declared Dividend (Total) - - - - - DPS - - - - -

Balance Sheet 2017 2018 2019E 2020F 2021F Total Fixed assets 11,637.5 10,958.2 11,040.2 11,117.3 10,966.7 Investments 22.5 20.6 20.6 20.6 20.6 Other 95.2 231.6 231.6 231.6 231.6 Total non-current assets 11,755.2 11,210.5 11,292.5 11,369.6 11,219.0 Inventories 731.4 714.3 701.3 614.0 552.4 Net Receivables 1,325.7 1,206.0 955.8 873.2 766.5 Other 1,200.2 701.6 299.2 283.3 263.3 Cash and equivalent 345.7 280.3 389.3 257.5 302.8 Total current assets 3,603.0 2,902.2 2,345.6 2,028.1 1,885.0 Total Assets 15,358 14,113 13,638 13,398 13,104 Share Capital 575.4 575.4 575.4 575.4 575.4 Other 3,300.0 3,117.6 2,837.8 2,837.8 2,837.8 Retained earnings 1,735.0 249.9 -148.0 -278.9 -346.9 Minority rights 0.1 0.1 0.1 0.1 0.1 Total Equity 5,611 3,943 3,265 3,134 3,066 Interest bearing Bonds and loans 3,738.9 3,190.5 3,500.5 3,400.5 3,300.5 Other non-current liabilities 2,630.3 3,368.7 3,368.7 3,368.7 3,368.7 Total non-current liabilities 6,369.2 6,559.3 6,869.3 6,769.3 6,669.3 Trade and other payables 2,191.7 1,644.0 1,671.1 1,695.6 1,592.5 Short term borrowings 30.0 46.5 46.5 46.5 46.5 Current portion of debt 500.4 714.8 714.8 714.8 714.8 Other current liabilities 656.4 1,205.2 1,071.2 1,037.1 1,014.5 Total current liabilities 3,378.5 3,610.4 3,503.5 3,493.9 3,368.3 Total Equity and Liabilities 15,358.2 14,113 13,638 13,398 13,104 Gross Debt 4,304.5 4,023.7 4,261.7 4,161.7 4,061.7 Cash and equivalent 347.2 279.8 389.3 257.5 302.8 Net Debt 3,957.3 3,743.9 3,872.4 3,904.2 3,758.9

Cash Flow 2017 2018 2019E 2020F 2021F EBT 145.3 (505.7) (423.4) (139.2) (72.4) Non-Cash Adjustments (103.1) 686.6 720.6 753.6 802.9 WC Changes 143.4 1,067.5 329.0 226.1 62.7 Income tax paid (8.7) (160.5) 25.4 8.4 4.3 Net Cash from operating activities 176.8 1,087.9 651.6 848.9 797.6 Capex (427.5) (865.4) (758.0) (758.0) (528.0) Other investing 827.8 169.5 94.0 89.0 84.0 Change in debt (337.6) (280.8) 310.0 (100.0) (100.0) Net Interest paid (195.0) (164.2) (188.5) (211.7) (208.3) Dividends Paid (0.0) - - - - Net increase/(decrease) in cash and equivalent 44.6 (53.1) 109.1 (131.8) 45.3 Year start cash 207.0 251.6 198.5 307.6 175.9 End year cash (ex-restricted) 251.6 198.5 307.6 175.9 221.1 2017-18 Figures refer to continued operations Source: AXIA Research

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Public Power Corporation – Company Update

Per share data 2017 2018 2019F 2020F 2021F EPS 0.5 (2.3) (1.7) (0.6) (0.3) BVPS 24.2 17.0 14.1 13.5 13.2 DPS - - - - -

Valuation ratios 2017 2018 2019F 2020F 2021F P/E 3.5 x n.m. n.m. n.m. n.m. EV/EBITDA 5.3 x 18.7 x 12.7 x 6.7 x 5.9 x EV/EBIT 18.6 x n.m. n.m. n.m. 82.9 x EV/Sales 0.9 x 0.9 x 0.9 x 1.0 x 1.0 x P/BV 0.1 x 0.1 x 0.2 x 0.2 x 0.2 x Div. yield 0.0% 0.0% 0.0% 0.0% 0.0% FCF yield % 84.5% 76.1% -37.0% -5.9% 26.8% ROA 1.9% 0.8% -3.5% -2.8% -1.0% ROE 2.2% -9.7% -10.1% -4.0% -2.2% ROIC 1.4% -2.8% -2.2% -0.1% 0.4%

Growth rates 2017 2018 2019F 2020F 2021F Revenues -4.3% -4.1% -1.9% -3.7% 0.0% EBITDA -13.9% -73.9% 60.6% 91.4% 10.0% EBIT -19.3% -281.0% -23.3% -95.0% -414.8% EBT -47.5% -450.5% -16.8% -67.1% -48.0% Net Income -60.3% -524.9% -26.6% -67.1% -48.0%

Profitability ratios 2017 2018 2019F 2020F 2021F EBITDA margin 16.8% 4.6% 7.5% 14.8% 16.3% EBIT margin 4.8% -9.0% -7.1% -0.4% 1.2% Net Income margin 2.6% -11.4% -8.6% -2.9% -1.5%

Leverage Ratios 2017 2018 2019F 2020F 2021F Net Debt/EBITDA 4.8 x 17.3 x 11.2 x 5.9 x 5.1 x FFO / Total Debt 0.2 x 0.0 x 0.1 x 0.1 x 0.2 x Gearing (Total debt / Debt + Equity) 0.4 x 0.5 x 0.6 x 0.6 x 0.6 x Net Debt / Equity 0.7 x 0.9 x 1.2 x 1.2 x 1.2 x

Coverage Ratios 2017 2018 2019F 2020F 2021F FFO Interest Coverage ((FFO + Int.) / Int.) 8.5 x 2.3 x 3.9 x 5.5 x 5.9 x Pretax Interest Coverage (EBIT / Int.) 2.5 x -5.4 x -3.5 x -0.1 x 0.4 x 2017-18 Figures refer to continued operations Source: AXIA Research

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Public Power Corporation – Company Update

Disclosures

General information This research report was prepared by AXIA Ventures Group Limited, a company incorporated under the laws of Cyprus (referred to herein, together with its subsidiary companies and affiliates, collectively, as “AXIA”) which is authorised and regulated by the Cyprus Securities and Exchange Commission (authorisation number 086/07). AXIA is authorized to provide investment services in the United Kingdom, Cyprus, Greece and in Portugal pursuant to its permissions under the Markets in Financial Instruments Directive and may also provide similar services in other countries, inside or outside of the European Union, subject to the applicable provisions. AXIA Ventures Group Limited is not a registered broker-dealer in the United States (U.S.), and, therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. In the U.S., this research report is intended solely for persons who meet the definition of “major U.S. institutional investors” in Rule 15a-6 under the U.S. Securities and Exchange Act, as amended, or persons listed under Rule 15a-6(4)) and is meant to be disseminated only through “Axia Capital Markets LLC”, a wholly owned subsidiary of AXIA Ventures Group Limited and associated US registered broker-dealer in accordance with Rule 15a-6 of the US Securities and Exchange Act.

Content of the report The persons in charge of the preparation of this report, the names of whom are disclosed below, certify that the views and opinions expressed on the subject security, issuer, companies or businesses covered by this research report (each a “Subject Company” and, collectively, the “Subject Companies”) are their personal opinions and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendations or views contained in this research report.

Whilst all substantial sources of information for the research are indicated in this report, including, without limitation, bases of valuation applied to any security or derivative security, such information has not been disclosed to the Subject Companies for their comments and no such information is hereby certified.

All information contained herein is subject to change at any time without notice. No member of AXIA has an obligation to update, modify or amend this research report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate, or if research on the Subject Company is withdrawn. Further, past performance is not indicative of future results.

Persons responsible for this report: Argyrios Gkonis (Analyst), Constantinos Zouzoulas (Head of research).

Key Definitions AXIA Research 12-month rating* Buy The stock to generate total return** of and above 10% within the next 12-months The stock to generate total return**between -10% and 10% within the next 12- Neutral months Sell The stock to generate total return** of and below -10% within the next 12 months Under Review Stock’s target price or rating is subject to possible change Applicable Laws / Regulation and AXIA Ventures Group Limited policies might Restricted restrict certain types of communication and investment recommendations Not Rated There is no rating for the company by AXIA Ventures Group Limited * Exceptions to the bands may be granted by the Investment Review Committee of AXIA taking into account specific characteristics of the Subject Company **Total return: % price appreciation equals percentage change in share price from current price to projected target price plus projected dividend yield.

Rating history for Public Power Corporation S.A. Date Rating Share Price (EUR) Target Price (EUR) 31/10/2013 Buy 10.67 12.60 26/04/2014 Buy 11.21 13.30 26/02/2015 Buy 7.5 8.90 25/05/2015 Under Review 5.06 U/R 03/06/2015 Neutral 4.68 5.50 08/03/2015 Under Review 4.14 U/R 18/12/2015 Sell 4.17 3.70 18/04/2016 Neutral 2.96 2.90 02/11/2016 Neutral 2.93 3.20 29/03/2017 Neutral 2.75 3.20 22/06/2017 Under Review 2.31 U/R 18/07/2017 Neutral 2.30 2.20 11/09/2018 Neutral 1.60 1.80 03/07/2019 Neutral 2.34 1.90

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Public Power Corporation – Company Update

AXIA Ventures Group Limited Rating Distribution as of today Of which Investment Coverage Universe Count Percent Count Percent Banking Relationships Buy 16 70% 3 3 13% Neutral 3 13% Sell Restricted 1 4% Not Rated Under Review 3 13%

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Public Power Corporation – Company Update

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Public Power Corporation – Company Update

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Constantinos Zouzoulas [email protected] +30 210 7414460 Jonas Floriani [email protected] +44 208 068 3516 Argyrios Gkonis [email protected] +30 210 7414462 Celia Hjioannou [email protected] +357 22 742016

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Thanos Adamantopoulos [email protected] +44 207 9876033

Maria Mitsouli [email protected] +30 210 7414424

Vaia Dotsia [email protected] +30 210 7414430

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