J&P Avax. 2Q10 preview. Greece, Construction. August 20, 2010

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Greece, Construction J&P Avax 2Q10 preview August 20, 2010 Current price 1.47 Target price 5.40 From 5.40 Upside potential 267.3% Remains Outperform Key data Reuters code AVAr.AT Bloomberg code AVAX GA Mcap 114.2m Shares outstanding 77,654,850 Free float 33.3% Share price performance 1m 3m 12m Volume (k) 37.8 42.4 38.8 Absolute return 10% -8% -56% Relative to ATHEX GI 8% -9% -36% 52-week range ( ) High 4.03 Low 1.26 We expect revenues of 205.2m, down c11% y-o-y with the domestic construction operations remaining strong due the execution of the new BOTs. We estimate that the foreign projects have contributed about 40% of total revenues. We are looking for EBITDA of 14.5m vs 15.7m a year ago, with the respective margin settling to 7.1% from 6.8%. We expect somewhat improved margins in the domestic market, while the foreign ones should also have remained at satisfactory levels. We expect income from associates of 7.2m vs 8.8m a year ago, as we assume that the increases in tax fuel and the extra tax on profitable firms have affected the Attica Road s results. Also note that Attica Road increased the toll fees due to the increase in VAT as of July 1, however, this should not have any material effect in traffic. Finally, we expect net income of 5m vs 9.8m a year ago, assuming that the company will book 1.7m extra taxes due from the recent austerity measures. Based on our estimates, J&P Avax's backlog stood at 2.2bn, including both signed and to be signed projects, while domestic projects represent around 55% of total. The company is due to report 2Q10 results by the end of August. 140 120 100 Key figures and valuation data 80 60 40 20 A S O N D J F M A M J J J&P Avax Analyst Panos Panagiotou T +30 210 6970 685 p.panagiotou@proton.gr General Index 2008 2009 2010e 2011e 2012e Sales 991.1 945.7 849.1 863.4 832.1 EBITDA 40.1 56.4 58.5 54.1 49.7 EBIT 19.1 31.7 33.0 27.3 22.4 EBT 28.3 34.9 38.2 34.0 31.3 Net income 21.0 27.1 24.5 21.8 20.3 EPS 0.27 0.35 0.32 0.28 0.26 Net Debt 377.3 370.4 376.7 358.5 318.2 EV 491.4 484.6 490.8 472.7 432.3 EV/EBITDA 12.3 8.6 8.4 8.7 8.7 P/E 5.4 4.2 4.7 5.2 5.6 P/BV 0.5 0.4 0.4 0.4 0.4 ROCE 3.0% 3.5% 3.1% 2.7% 2.6%

J&P Avax August 20, 2010 Table 1: 2Q10 and 1H10 forecasts ( m) 2Q09 2Q10e y-o-y 1H09 1H10e y-o-y Sales 230.2 205.2-10.9% 459.7 394.1-14.3% COGS 203.6 179.6-11.8% 408.6 336.7-17.6% Gross profit 26.6 25.5-4.1% 51.2 57.4 12.2% Gross margin 11.6% 12.4% 0.9pp 11.1% 14.6% 3.4pp EBITDA 15.7 14.5-7.7% 33.1 32.9-0.6% EBITDA margin 6.8% 7.1% 0.2pp 7.2% 8.3% 1.1pp Net income 9.8 5.0-48.8% 19.3 13.9-27.9% NI margin 4.3% 2.5% -1.8pp 4.2% 3.5% -0.7pp Source: Company data, Proton Bank estimates Risks The recent economic turmoil has caused difficulties in the funding of new projects. Some projects tenders may delay and other may be canceled, while the profitability margins may become thinner. Hence, J&P Avax may find it difficult to renew its backlog, at least in favorable terms, as the current conditions are not helping much. The net debt position still remains high. J&P Avax is a typical construction company and faces all risks related to the cyclicality of the sector. The Greek State is a key client for J&P Avax and hence any pause in tendering projects or payment delays has a direct effect on the group s performance. The new government may amend the current allocation method. The latter may cause some delay in new public project tenders, as well as lack of visibility. Long delays may be caused from objections submitted by the companies that have unsuccessfully participated in tenders. There is a risk that J&P Avax may witness further increase in the working capital needs on delays in the collection of receivables. In the new tax law the government imposes higher taxation on the profits to be distributed, which may also have a direct effect on concessions. The group participates in tenders for sizeable projects abroad that can easily boost the backlog size and hence the value of the core business. The concessions portfolio may prove to be undervalued as the bulk of the dividend payments approaches. The assumptions for the new concessions may be conservative as well. Valuation & rating Our target price on J&P Avax remains at 5.40 per share and the rating is Outperform. For more details please refer to our latest note dated 04/06/2010. 2 Greece, Construction

August 20, 2010 J&P Avax Table 2: Valuation ( ) in m per share Construction DCF 51.8 0.67 Attica Road DDM 269.9 3.48 Attikes Diadromes DDM 20.7 0.27 Gefyra (Rio-Antirio Brigde) DDM 59.8 0.77 Car Parks DDM 20.7 0.27 New BOTs 56.9 0.73 Real estate Mkt value (x0.5) 12.5 0.16 Minus debt related to Athena acquisition and other debt 76.2 0.98 Total J&P Avax 416.1 5.40 Upside/downside 267.3% Source: Proton Bank estimates We also apply a sensitivity analysis to our J&P Avax target price vs the WACC at the construction DCF and the long term growth. Table 3: Sensitivity analysis ( ) Long term growth -1.0% -0.5% 0.0% 0.5% 1.0% 8.2% 5.9 6.1 6.4 6.6 6.9 9.2% 5.5 5.6 5.8 6.0 6.2 WACC 10.2% 5.1 5.2 5.4 5.5 5.7 11.2% 4.8 4.9 5.0 5.1 5.2 12.2% 4.5 4.6 4.7 4.8 4.9 Source: Proton Bank estimates Greece, Construction 3

J&P Avax financial statements 2009 2010e 2011e 2012e 2009 2010e 2011e 2012e Profit & Loss (in m) Cash Flow Statement (in m) Sales 945.7 849.1 863.4 832.1 y-o-y % (10.2%) 1.7% (3.6%) EBIT 31.7 33.0 27.3 22.4 Cost of Goods Sold 845.9 754.0 769.6 739.9 Non cash items 24.7 25.5 26.8 27.3 Gross Profit 99.7 95.0 93.8 92.1 Gross Cash Flow 56.4 58.5 54.1 49.7 Gross margin 10.5% 11.2% 10.9% 11.1% SGAs 41.6 37.4 41.4 44.1 Working Capital (6.2) 39.3 18.7 5.1 Other Income (1.7) 0.8 1.7 1.7 Tax 4.8 0.7 13.2 12.4 EBITDA 56.4 58.5 54.1 49.7 Cash Flow from Operations 57.8 18.6 22.3 32.3 y-o-y % 3.8% (7.5%) (8.2%) EBITDA margin 6.0% 6.9% 6.3% 6.0% CAPEX (30.0) (33.3) (25.2) (15.0) Depreciation 24.7 25.5 26.8 27.3 Investments (31.9) 0.0 0.0 0.0 EBIT 31.7 33.0 27.3 22.4 Cash Flow from Investments (61.9) (33.3) (25.2) (15.0) y-o-y % 4.2% (17.1%) (18.2%) Financials net (26.5) (23.9) (23.5) (22.1) Change in ST debt (6.5) 5.2 (18.0) (40.6) Income from associates 29.7 29.1 30.2 31.0 Change in LT debt (8.5) 0.0 0.0 0.0 EBT 34.9 38.2 34.0 31.3 Dividends (3.3) (3.0) (3.6) (3.8) y-o-y % 9.5% (11.1%) (7.9%) Interest & Investment Income 3.2 5.2 6.6 8.9 EBT margin 3.7% 4.5% 3.9% 3.8% Capital Increase 0.0 0.0 0.0 0.0 Taxes 7.8 11.4 10.5 9.5 Subsidies and other items 11.1 6.2 18.1 18.0 EAT 27.1 26.8 23.5 21.8 Cash Flow from Financing (4.0) 13.7 3.1 (17.5) y-o-y % (1.1%) (12.3%) (7.2%) Minorities 0.0 2.3 1.7 1.5 Change in Cash and Equivalents (8.2) (1.0) 0.1 (0.2) Net Income 27.1 24.5 21.8 20.3 y-o-y % (9.5%) (11.0%) (6.9%) Per Share Data (in ) Net margin 2.9% 2.9% 2.5% 2.4% EPS 0.35 0.32 0.28 0.26 CEPS 0.67 0.67 0.65 0.63 Balance Sheet DPS 0.040 0.039 0.05 0.05 Net Fixed Assets 241.2 248.9 247.4 235.0 BVPS 3.37 3.65 3.88 4.10 Investments & other 243.1 239.2 239.8 238.5 No Of Shares (Yr-end, m) 77.65 77.65 77.65 77.65 Total Fixed Assets 484.2 488.1 487.1 473.6 Adj. No Of Shares (m) 77.65 77.65 77.65 77.65 Inventories 30.5 26.9 27.4 26.4 Account Receivables 542.6 546.7 560.6 544.8 Valuation Data Cash & Equivalents 139.3 138.2 138.3 138.1 P/E (x) 4.2 4.7 5.2 5.6 Other Current Assets 181.5 163.0 146.8 124.8 P/CF (x) 2.2 2.2 2.3 2.3 Total Current Assets 893.9 874.8 873.1 834.1 P/BV (x) 0.4 0.4 0.4 0.4 Total Assets 1,378.2 1,362.9 1,360.3 1,307.7 Div. Yield (%) 2.7% 2.6% 3.1% 3.3% EV / Sales (x) 0.5 0.6 0.5 0.5 Accounts Payable 348.8 309.9 305.7 283.8 EV / EBITDA (x) 8.6 8.4 8.7 8.7 Short Term Debt 299.0 304.2 286.2 245.6 Dividends Payable 0.0 0.0 0.0 0.0 Ratios Taxes Payable 23.0 33.7 30.9 28.1 Tax Rate 22.2% 29.8% 30.8% 30.3% Other 157.1 140.9 143.3 138.1 ROE (avg) 10.7% 9.0% 7.5% 6.6% Total Current Liabilities 827.8 788.7 766.2 695.6 ROCE-average 3.5% 3.1% 2.7% 2.6% Long Term Debt 210.7 210.7 210.7 210.7 Net Debt / Equity 1.4 1.3 1.2 1.0 Minorities 12.8 15.1 16.8 18.3 Interest Coverage 1.2 1.4 1.2 1.0 Other LT Liabil. & Prov. 65.0 65.0 65.0 65.0 Inventory days 13 13 13 13 Total Liabilities 1,116.2 1,079.4 1,058.6 989.5 Accounts receivable days 209 235 237 239 Total Equity 261.9 283.4 301.7 318.2 Accounts payable days 150 150 145 140 Source: Company data, Proton Bank estimates

Required Disclosures Proton Bank Equity Allocations Rating Count % of total Count % of total % of rating category Outperform 13 54.2% 0 0.0% 0.0% Neutral 9 37.5% 0 0.0% 0.0% Underperform 0 0.0% 0 0.0% n.m. Under Review 2 8.3% 0 0.0% 0.0% Total 24 0 Proton Bank s Equity ratings definitions Outperform: Expected outperformance above 7% Neutral: Expected relative performance +/- 7% Underperform: Expected underperformance above 7% Benchmark Index: ASE General Index Coverage IB Services (over 2Q10) Time Horizon: Twelve (12) months, unless otherwise stated General Disclosures Sources of information: Reports prepared by Proton Bank analysts are based on public information. Analysts are required to use information only from credible sources. Analysts' compensation: Based on individual analyst performance considering also the success of their recommendations. No compensation is received based on investment banking fees generated from transactions with the covered companies. Internal procedures: Chinese Walls rules ensure that there is no exchange of price sensitive information between the Research and Investment Banking departments. Regulation: Proton Bank is a member of the Athens Exchange SA and regulated by the Hellenic Capital Market Commission. Frequency of reports: No pre-determined frequency. Ratings History Date Rating Target Price 04/09/2009 Outperform 6.60 23/11/2009 Outperform 6.60 03/12/2009 Outperform 6.40 17/03/2010 Outperform 6.40 08/04/2010 Outperform 6.50 19/05/2010 Outperform 6.50 04/06/2010 Outperform 5.40 20/08/2010 Outperform 5.40 Companies mentioned Company Rating Price Date/Time Disclosures J&P Avax Outperform 1.47 Closing of August 19 - Company Specific Disclosures 1. Proton Bank and its affiliated companies own 5% or more of the total share capital of the company. 2. The company and its affiliated companies own 5% or more of the total share capital of Proton Bank and/or its affiliated companies. 3. Proton Bank acts as a market maker for the securities of the company. 4. Proton Bank has acted as manager or co-manager in the underwriting or placement of the company s shares during the past 12 months. 5. Proton Bank has received compensation from the company for investment banking services during the past 12 months. 6. Proton Bank has received compensation from the company for the preparation of the research report. 7. Proton Bank has sent the research report prior to publication for factual verification. 8. If 7 applies, Proton Bank has made the following changes to the initially sent report: no changes. 9. The research analyst(s) who prepared this report has financial interest in the company. 10. The research analyst(s) who prepared this report holds a board member position in the company. General disclaimer The above material was produced by PROTON Bank and is for the use of intended recipients only. The above material should not be reproduced or redistributed, in whole, or in part, for any purpose, without PROTON Bank explicit prior consent. The material contained herein is based on public information believed to be reliable and is presented in good faith, however, PROTON Bank cannot guarantee in any way its correctness, accuracy, or completeness. All information, opinions, estimates, forecasts and valuations contained herein, are those of PROTON Bank at the date of this material and are subject to change without notice. This material is published for information purposes only and does not represent an offer to sell or a solicitation to buy an asset, security or financial instrument. Changes in interest rates or foreign exchange rates may affect the value and price of, or the income from securities or investment positions discussed herein. The assets, securities and financial instruments discussed herein, may not be suitable for all investors, depending on individual needs, objectives and financial conditions. Investors therefore should seek professional advice and exercise their independent judgment and make their own decisions. PROTON Bank accepts no liability whatsoever for any direct or indirect loss arising from any use of this material. PROTON Bank including its officers, personnel and related associates may have or had, for their own account, investment positions related to the material discussed herein, before, during or after the above material reaches customers of PROTON Bank. PROTON Bank including its officers, personnel and related associates may provide or have provided investment banking, commercial banking, or other financial services to the issuer of the securities, derivatives or other financial instruments mentioned herein. Consequently, PROTON Bank including its officers, personnel and related associates, may possess information which is not presented herein. For any additional information, concerning the use of the present document and material, please contact PROTON Bank.

PROTON BANK S.A. Eslin & 20 Amaliados St., 115 23 Athens, Greece T +30 210 69 70000 Bloomberg Page PRTB <GO> Research Vassilis Kararizos Panos Panagiotou John Stamatakos Vassilis Raptis Vassilis Gouzios George Kaknis v.kararizos@proton.gr p.panagiotou@proton.gr j.stamatakos@proton.gr v.raptis@proton.gr v.gouzios@proton.gr g.kaknis@proton.gr +30 210 6970 690 +30 210 6970 685 +30 210 6970 687 +30 210 6970 688 +30 210 6970 689 +30 210 6970 686 Equities Sales Neoclis Karavellas Sophia Kyprianidou Andonis Petropoulos Spyros Valatas n.karavellas@proton.gr s.kyprianidou@proton.gr a.petropoulos@proton.gr s.valatas@proton.gr +30 211 1081 551 +30 211 1081 586 +30 211 1081 589 +30 211 1081 556 Equities Trading Marilena Fella Helen Hatzidrosou Maria Mavrantonaki m.fella@proton.gr e.hatzidrosou@proton.gr m.mavrantonaki@proton.gr +30 211 1081 546 +30 211 1081 542 +30 211 1081 540 Derivatives Sales Vassilis Kallipolitis Andonis Yiannopoulos v.kallipolitis@proton.gr a.yiannopoulos@proton.gr +30 211 1081 285 +30 211 1081 583 Bonds - Swaps Structured products Marina Giannarou m.giannarou@proton.gr +30 211 1081 643