Aegean Airlines

Outperform (from Outperform)

Travel & Leisure

High Risk (from High Risk)

Equity Research | Update

RIC: AGNr.AT, BBG: AEGEAN GA
Changes
Rating - TP
Target price
8.5

of which DPS

Previous
Total stock return

Target Price:

8.5

FTSE MI:

462.61

Evasive maneuvers successful!

EPS

31.2%
2014a

2015e

2016e

5.8x
2.1x
0.3x
2.7x
3.0x
11.2%
19%

8.2x
2.0x
0.3x
3.3x
3.9x
7.9%
25%

6.4x
1.8x
0.2x
2.1x
2.4x
10.1%
35%

1.12
1.12
0.73

0.79
1.12
0.52

1.01
1.22
0.66

216
-149

236
-181

262
-220

912
119
106
80

948
86
73
57

999
117
104
72

Re-iterate Outperform
Aegean lived the drama of the sharp downturn in the Greek economy after the
capital controls were imposed on June 26th. The impact in terms of yields is expected
2017e to be severe (AFe FY 15e -9% y-o-y) but should be partly counterbalanced by strong
5.6x traffic (July passengers up 19% y-o-y - AFe FY 15e +13.2% y-o-y). During the first
1.6x
three weeks the capital controls were imposed, Aegean planes were flying with good
0.2x
1.6x load factors as more of the tickets were pre sold. Thus, the lack of pre-booking
1.8x caused by the adverse conditions in the local banking system did not have an initial
11.6% effect. In order to reboot the demand in the market Aegean was forced to put
41% additional pressure on pricing especially in domestic destinations. Additionally,
demand from international travelers resumed normal levels quite fast in July as the
1.16
1.18 risk was contained when Greece agreed on a new bailout. The company also
0.76 exploited the inability of its biggest competitor (Ryanair) to accept Greek customers
credit cards during the high demand period of July due to the capital controls
291 situation. Overall, tourism showed a significant resilience with the overall effect
-252 being moderate for Aegean. Therefore, we believe that if a pro-bailout coalition
government is formed in upcoming September 20th national elections, economic
1,055
stability will gradually return and tourism is set for a very strong 2016. Aegean will
132
119 find itself at a pole position against completion ready to absorb increased demand.
83

Trading data
1m
3m
6m
8.5%
12.2%
11.3%
Rel. Performance
5.7% -10.3% -13.3%
Abs. Performance
8.1 5.0
H | L 52w
464.2
Market cap. (mn)
Shares outstanding (m): 71.4
39% 181.5
Free float (%, mn)
Avg. vol. Traded (52w): 97.45k
Index constituent & weight:
ASE (1.9%), FTSE LC (1.32%), FTSE MI (1.26%)

12m
8.5%
5.7%

52w performance

400

6.5

September 4, 2015

0.66
9.50

Valuation
P/E
P/BV
EV/Sales
EV/EBITDA
EV/EBIT
Dividend yield
FCF yield
Per share
EPS
EPS old
DPS
BS data (m)
Sh. Equity
Net debt
P&L data (m)
Revenues
EBITDA
EBIT
Net income

Mkt. Price:

8.5

Target price @ 8.4/share

We have adopted a positive scenario for the economy as our base case, but
potential investors should be cautious as the outlook for Greece is still weak.Our new
target price is achieved by lower WACC (11.8% vs. 13.2% previously) but also
downgrading our midterm estimates. Our EPS downgrade stands at -29% for 2015
and -14.7% for 2016 on the back of lower passenger yields.
Trades at discount
It comes as no surprise that Aegean currently trades at a huge discount of 66% in
15 EV/EBITDA terms compared to its EU peers. Investors discount negatively the
Greek economic outlook and the uncertainty generated by the upcoming snap
elections.

8.0
300

7.5

7.0
200
6.5

6.0

100

5.5

0
N-14

5.0
J-15

F-15

A-15

M-15

Vol traded (,000s shares) LH scale

Antonis Diapoulis, Analyst

antonis.diapoulis@alphafinance.gr

J-15
Adjusted price

M-15

New Assumptions
In a snap, a) we increased 2015 fleet to 58 from 57 but kept our long term estimate
to 58 planes, b) adjusted 2015 on the back of recent events by setting passenger
yields down 9% (vs. AFe old -5%) and passengers to 11.4mn vs. AFe old 11.69mn,
c) revisited our cost assumptions adjusting oil estimates (2016 hedge at $6020/barrel vs. $ 75-77 in 2105 -- l/t EBITDAR margin 16-17% vs. AFe old 17% and
CASK CAGR 14/17e -3.9% vs. AFe old 1.2%).
1H 15 snapshot
Revenues, EBITDAR, EBITDA and net income came at 403.6mn (+6% y-o-y, AFe
402.2mn), 67mn (+-8.4% y-o-y, AFe 66.6mn), 19.7mn (-33% y-o-y) and
14.8mn (-8% y-o-y AFe 11.6mn) respectively. Yields retreated by 8% y-o-y and
load factors were down 2.7% annually to 73.4% (RPK/ASK). Traffic was up 15% yo-y to 4.9mn (2.5mn domestic +10% y-o-y - 2.4mn international +20% y-o-y). FCF
was positive by 130.8mn vs. 113.9mn in 1H 14.
Aegean Airlines is a Greek commercial full service aircraft carrier that operates scheduled and charter routes to Greek
(domestic) and international destinations.

T +30 210 367 7532, +30 210 367 7513

Alpha Finance does and seeks to do business with companies covered in its research reports. Consequently, investors should be aware that the firm 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.

Please refer to important disclosures in the Disclosure Appendix

Alpha Finance Equity Research

Rating: Outperform| High risk
Share price performance
Target price:
8.5
(%)
1m
6m
of which DPS:
0.66
Rel
9%
11%
Total stock return:
31.2%
Abs
6%
-13%
Mkt cap (mn):
464
Free Float:
39.1%
Enterprise value
283
H | L 52w
8.1
Headline figures
2011a
2012a
2013a
2014a
P&L items (mn)
Revenues
668
563
699
912
Ebitda
-18
3
90
119
62
73
162
209
Ebitdar
Ebit
-31
-9
78
106
Pre tax income
-31
-13
75
95
Minorities
0
0
0
0
Net income
-27
-10
58
80
EPS ()
-0.38
-0.15
0.81
1.12
DPS ()
0.00
0.00
0.00
0.73
No. of shares, weighted
71
71
71
71
Balance sheet items
(mn)
2011a
2012a
2013a
2014a
Fixed assets, net
99
89
81
80
Cash & equivalents
167
149
222
207
Current assets
247
215
339
354
Total assets
418
397
561
627
Equity
169
153
213
216
Minorities
0
0
0
0
Long term debt
71
70
51
50
Long term liabs
111
110
134
125
Short term debt
28
12
8
9
Current liabilities
138
134
215
286
Equity & liabilities
418
397
561
627
Cash flow items (mn)
2011a
2012a
2013a
2014a
Gross cash flow
-27
0
93
91
working capital
-22
-29
-5
-22
Operating cash flow
-5
29
97
114
Capex
6
1
43
50
Free cash flow
-11
7
47
61
debt
-5
-16
-23
-1
equity
0
0
0
-72
Dividends
0
0
0
52
Dividends to mins
0
0
0
0
Net Debt/cash
-68
-67
-163
-149
Y -o - Y change (%)
2011a
2012a
2013a
2014a
Revenues
13%
-16%
24%
30%
Ebitda
-1900%
-117%
2905%
32%
Ebitdar
-18%
19%
121%
29%
Ebit
145%
-71%
-979%
36%
Pre tax income
66%
-60%
-697%
26%
Net income
16%
-62%
-653%
39%
EPS
16%
-62%
-653%
39%
Margins (%)
2011a
2012a
2013a
2014a
Ebitda
-3%
1%
13%
13%
Ebitdar
9%
13%
23%
23%
Ebit
-5%
-2%
11%
12%
Pre tax income
-5%
-2%
11%
10%
Net income
-4%
-2%
8%
9%
Ratios & valuation
2011a
2012a
2013a
2014a
P/E
-17.1x
-44.4x
8.0x
5.8x
P/BV
2.7x
3.0x
2.2x
2.1x
EV/Sales
0.6x
0.7x
0.4x
0.3x
EV/EBITDA
-22.4x
132.9x
3.4x
2.7x
EV/EBITDAR
6.4x
5.4x
1.9x
1.5x
EV/EBIT
-12.9x
-44.9x
3.9x
3.0x
FCF Yield
-2.8%
1.9%
15.7%
19.2%
Dividend Yield
0.0%
0.0%
0.0%
11.2%
Payout ratio
0%
0%
0%
65%
Debt/equity
0.6x
0.5x
0.3x
0.3x
Net debt/ebitda
3.9x
-22.5x
-1.8x
-1.3x
Interest covered
-1.9x
-1.0x
17.0x
9.8x
RoE
-16%
-7%
27%
37%
RoIC
-9%
2%
33%
38%
source: company data & Alpha Finance Research Estimates

Please read important disclosures at the end of the report.

Aegean Airlines
Aegean Airlines
Current Price
6.5
Sector: Travel & Leisure

12m
9%
6%
6.4
2015e

2016e

2017e

948
86
196
73
78
0
57
0.79
0.52
71

999
117
228
104
102
0
72
1.01
0.66
71

1,055
132
243
119
117
0
83
1.16
0.76
71

2015e
78
240
409
661
236
0
50
125
9
300
661
2015e
84
5
80
10
69
0
0
37
0
-181
2015e
4%
-27%
-6%
-31%
-18%
-29%
-29%
2015e
9%
21%
8%
8%
6%
2015e
8.2x
2.0x
0.3x
3.3x
1.4x
3.9x
24.5%
7.9%
65%
0.2x
-2.1x
2.9x
24%
14%

2016e
76
281
457
708
262
0
51
126
10
320
708
2016e
82
-15
97
11
86
2
0
47
0
-220
2016e
5%
35%
16%
42%
31%
27%
27%
2016e
12%
23%
10%
10%
7%
2016e
6.4x
1.8x
0.2x
2.1x
1.1x
2.4x
35.0%
10.1%
65%
0.2x
-1.9x
11.8x
28%
21%

2017e
74
315
493
742
291
0
52
127
11
325
742
2017e
95
-3
98
11
86
2
0
54
0
-252
2017e
6%
12%
7%
14%
15%
15%
15%
2017e
12%
23%
11%
11%
8%
2017e
5.6x
1.6x
0.2x
1.6x
0.9x
1.8x
40.6%
11.6%
65%
0.2x
-1.9x
13.5x
29%
29%

Aegean Airlines is a Greek

commercial full service
aircraft carrier that operates
scheduled and charter
routes to Greek
(domestic) and
international destinations.

website: www.aegeanair.com
all prices as of Septemenr 3rd

Research analyst
Antonis Diapoulis
+30 210 367 7532
antonis.diapoulis@alphafinance.gr

Alpha Finance Equity Research

Aegean Airlines

Valuation Sensitivity
We value Aegean airlines through a DCF model to yield a 2016 target price of 8.5 (vs.
AFe old 9.5). Our valuation methodology is sensitive to oil, passenger traffic
volatility, macroeconomic conditions and all the risks associated with the airline
business. For our DCF model for Aegean airlines we have assumed a variable WACC rate of
c.11.8% (AFe old 13.2%), 0.5% terminal growth rate and a beta of 1.

DCF Valuation (mn eu)

EBITDAR
- Capex
- Taxes
+ Depreciation
- Chng WC
- Operating Leasing
Free Cash Flow
WACC
Discounting Factor
Discounted Free Cash Flows
PV of Cash Flows
Plus: Residual Value
Terminal Growth Rate
Minus: Net Debt
Minus: Minorities
Equity Value
Shares (mn)
Dividend 14e
DCF per Share

WACC/Tg sensitivity

2014e
209.47
53.11
14.39
11.01
-22.49
90.68
84.80

2015e
196.34
10.25
21.00
13.40
4.55
109.95
64.00

2016e
227.84
11.75
29.49
13.25
-14.87
110.78
103.93
11.7%
100.0%
0.00

216.8
125.2
0.5%
-220.1
0.0
562.1
71.4
0.7
8.5

2017e
242.84
12.29
33.89
13.12
-3.18
111.19
101.78
11.8%
89.5%
91.07

2018e
217.44
12.85
29.09
11.19
3.59
104.38
78.71
11.8%
80.1%
63.01

2019e
191.14
13.44
20.88
11.08
4.48
106.48
56.94
11.8%
71.6%
40.78

2020e
178.59
14.07
17.27
10.68
17.32
106.38
34.23
11.8%
64.1%
21.93

=1,
Rf/Rp =8%/5%

We present a sensitivity of Aegeans valuation to WACC and terminal growth changes.

Aegean WACC, Terminal Growth Sensitivity

Please read important disclosures at the end of the report.

WACC/Tg

12.8%

11.8%

10.8%

-0.5%

8.1

8.4

8.7

0.5%

8.2

8.5

8.9

1.5%

8.4

8.7

9.1

Alpha Finance Equity Research

Aegean Airlines

Forecast Changes
Forecast Changes
(mn eu)

2014a

Scheduled Services
% change
Charter
% change
Other
% change
Revenues
%change

748.6
3.9%
61.4
-21.1%
101.9
95.7%
911.8
7.3%

new
797.9
6.6%
39.3
-36.0%
111.0
9.0%
948.2
4.0%

100.5
-2.2%
232.8
4.2%
77.6
8.9%
53.9
16.8%
51.5
-0.2%
37.4
8.5%
21.1
13.1%
61.2
5.6%
12.3
45.7%
62.7
0.3%
209.5
15.2%
23.0%
90.7
9.9%
118.8
30.7%
13.0%
12.8
106.0
38.0%
11.6%
11.3
94.6
33.6%
10.4%
14.4
0.0
80.2
53.0%
8.8%
1.12
38.9%
0.0%

110.7
10.2%
213.9
-8.1%
88.8
14.4%
64.1
18.8%
59.8
16.0%
47.9
28.1%
25.0
18.8%
70.4
15.0%
14.1
15.0%
69.0
10.0%
196.3
-6.3%
20.7%
109.9
11.6%
86.4
-27.3%
9.1%
13.4
73.0
-31.1%
7.7%
-4.8
77.8
-17.8%
8.2%
21.0
0.0
56.8
-29.3%
6.0%
0.79
-29.3%
-29.2%

Employee benefits
% change
Aircraft Fuel
% change
Aircraft Maintenance
% change
Overflight expenses
% change
Ground Handling Expenses
% change
Airport Charges
% change
Catering Expenses
% change
Distribution Expenses
% change
Marketing & Advertising
% change
Other Operating Expenses
% change
EBITDAR
%change
EBITDAR margin
Aircraft Lease Cost
% of Turnover
EBITDA
%change
EBITDA margin
Depreciation & amortization
EBIT
% change
EBIT margin
Financials
Pre - Tax Profit
% change
Pre-Tax profit margin
Total Tax
Minorities
Net income
%change
Net Profit margin
EPS
%change
EPS Delta
Source: Company data | AFe

2015e

Please read important disclosures at the end of the report.

2016e
old

841.6
12.4%
60.3
-1.7%
117.2
15.0%
1019.1
12%
113.9
13.4%
202.2
-13.2%
103.0
32.7%
69.6
29.0%
59.7
15.9%
44.8
19.6%
26.8
27.2%
67.3
10.0%
22.1
80.0%
90.9
45.0%
227.3
9%
22.3%
105.72
10.4%
121.6
2%
11.9%
11.13
110.5
4%
10.8%
2.12
108.3
14%
10.6%
28.17
0.00
80.2
0%
7.9%
1.12

new
838.1
5.0%
38.5
-2.0%
122.1
10.0%
998.7
5.3%
115.7
4.6%
185.9
-13.1%
96.1
8.1%
65.4
2.0%
62.8
5.0%
52.7
10.0%
27.7
10.6%
80.9
15.0%
16.3
15.0%
79.3
15.0%
227.8
16.0%
22.8%
110.8
11.1%
117.1
35.5%
11.7%
13.3
103.8
42.2%
10.4%
2.1
101.7
30.8%
10.2%
29.5
0.0
72.2
27.2%
7.2%
1.01
27.2%
-14.7%

2017e
old

884.0
5.0%
59.1
-2.0%
128.9
10.0%
1072.1
5%
122.6
7.6%
213.1
5.4%
98.8
-4.1%
73.1
5.0%
62.7
5.0%
45.6
2.0%
31.0
15.8%
74.0
10.0%
24.3
10.0%
100.0
10.0%
235.1
3%
21.9%
108.45
10.1%
126.7
4%
11.8%
10.98
115.7
5%
10.8%
1.23
114.5
6%
10.7%
29.76
0.00
84.7
6%
7.9%
1.19

new
883.2
5.4%
37.7
-2.0%
134.4
10.0%
1055.2
5.7%
118.0
2.0%
195.8
5.4%
103.8
8.0%
66.7
2.0%
64.7
3.0%
55.3
5.0%
28.7
3.5%
83.4
3.0%
16.6
2.0%
91.2
15.0%
242.8
6.6%
23.0%
111.2
10.5%
131.6
12.5%
12.5%
13.1
118.5
14.2%
11.2%
1.7
116.8
14.9%
11.1%
33.9
0.0
83.0
14.9%
7.9%
1.16
14.9%
2.7%

CAGR 14/17e
old

898.0
1.6%
58.0
-2.0%
141.8
10.0%
1097.8
2%
125.1
2.0%
224.5
5.4%
101.8
3.0%
74.5
2.0%
64.6
3.0%
46.6
2.0%
32.1
3.5%
76.3
3.0%
24.8
2.0%
106.0
6.0%
229.8
-2%
20.9%
108.73
9.9%
121.1
-4%
11.0%
10.85
110.2
-5%
10.0%
1.07
109.2
-5%
9.9%
28.39
0.00
80.8
-5%
7.4%
1.13

new
5.7%

old
6.3%

-15.0%

-1.9%

9.7%

11.6%

5.0%

6.4%

5.5%

7.6%

-5.6%

-1.2%

10.2%

9.5%

7.3%

11.4%

7.9%

7.8%

14.0%

7.6%

10.8%

15.1%

10.9%

7.6%

10.5%

26.4%

13.3%

19.1%

5.1%

3.1%

7.0%

6.2%

3.5%

0.6%

3.8%

1.3%

7.3%

4.9%

1.1%

0.2%

Alpha Finance Equity Research

Operating Statistics
Assumptions
Passengers (mn)
Domestic Passengers
% change
International Passengers
% change
Charter Passengers
% change
Total Passengers
% change
Load Factor (RPK/ASK)
change
Load Factor (Pax/AVS)
change
Pax/flight
% change
RPK (mn)
% change
Capacity
Fleet (total planes)
ASK
% change
Total Available Seats
% change
Total Block Hours
% change
Total Sectors Flown
% change
Average Capacity per Flight
% change
Average Sector Length
(km)
% change
Sales & Cost
RASK
% change
Passenger Yield
% change
CASK (EBITDAR level EURcents)
% change
CASK (EBITDAR level EURcents) excl. Fuel
% change
Brent Prices
EUR/USD FX

Aegean Airlines
2014a

incl.
Olympic

2015e

2016e

2017e

CAGR 14/17e

new

old

new

old

new

old

new

old

5.240
15.2%
4.334
19.7%
0.539
-19.9%
10.113

5.491
4.8%
5.550
28.1%
0.402
-25.5%
11.443

5.546
1.0%
6.105
10.0%
0.402
0.0%
12.053

2.7%

12.1%

12.4%

-9.3%

-0.2%

6.2%

6.9%

5.3%
80%
5.3%
79.8%
5.3%
104
5.3%
12,710
15.9%

0.5%
80%
0.5%
80.2%
0.5%
105
0.5%
12,768
0.5%

5.677
1.0%
6.153
0.0%
0.536
0.0%
12.367
0.5%
82%
0.5%
82.3%
0.5%
106
0.5%
11,940
0.5%

2.2%

13.2%
75.8%
-3.6%
75.8%
-1.9%
99
-2.8%
10,969
14.5%

5.621
1.0%
6.153
10.0%
0.536
0.0%
12.310
5.3%
82%
5.3%
81.9%
5.3%
105
5.3%
11,886
5.3%

5.601
1.0%
6.105
0.0%
0.402
0.0%
12.108

14.4%
78.6%
0.4%
77.3%
4.1%
102
7.6%
9,584
8.4%

5.565
6.2%
5.594
29.1%
0.536
-0.6%
11.695
15.6%
77.8%
-1.0%
77.8%
0.7%
100
-1.4%
11,292
17.8%

0.7%

1.5%

1.2%

2.1%

0.9%

1.4%

10.0%

7.6%

50
12,194
13.6%
13,088
10.2%
148,062
9.0%
99,486
6.3%
132
3.9%

58
14,473
18.7%
15,098
15.4%
177,034
19.6%
115,863
16.5%
130
-1.3%

57
14,511
19.0%
15,028
14.8%
196,248
32.5%
116,699
17.3%
129
-2.4%

58
15,920
10.0%
15,098
0.0%
177,269
0.1%
115,863
0.0%
130
0.0%

57
14,511
0.0%
15,028
0.0%
196,484
0.1%
116,699
0.0%
129
0.0%

58
15,920
0.0%
15,098
0.0%
177,345
0.0%
115,863
0.0%
130
0.0%

57
14,511
0.0%
15,028
0.0%
196,559
0.0%
116,699
0.0%
129
0.0%

9.3%

6.0%

4.9%

4.7%

6.2%

9.9%

5.2%

5.5%

-0.4%

-0.8%

767
4.8%

959
25.0%

966
25.9%

1,054
10.0%

966
0.0%

1,054
0.0%

966
0.0%

11.2%

8.0%

7.5
-27.4%
9.5
-7.6%

6.6
-12.4%
8.6
-9.1%

7.0
-6.1%
9.0
-5.1%

6.3
-4.2%
7.9
-9.1%

7.4
5.2%
9.0
-0.1%

6.6
5.7%
8.3
5.2%

7.6
2.4%
9.2
1.9%

-3.9%

0.4%

-4.6%

-1.1%

5.8
-8.9%

5.3
-9.5%

5.5
-5.4%

4.9
-6.8%

5.8
5.6%

5.2
5.3%

6.0
3.7%

-3.9%

1.2%

3.9
-8.8%
99
1.33

3.8
-3.1%
53
1.10

4.1
5.1%
60
1.10

3.7
-1.3%
55
1.10

4.4
5.7%
70
1.10

3.9
5.3%
60
1.10

4.5
3.1%
75
1.10

0.2%

4.6%

-15.5%
-6.1%

-9.0%
-6.1%

Source: company data | AFe

Technical Terms Glossary: A) ASK Available Seat Kilometres. Represents the number of seats available for scheduled passengers multiplied by the number of
kilometres those seats are flown. B) RPK Revenue Passenger Kilometres; the number of revenue passengers carried multiplied by the distance flown in kilometres. C)
RASK Revenue per Available Seat Kilometre. Revenue refers to revenue from passenger traffic (per available seat kilometre). D) Yield Overall yield is calculated as
total traffic revenues (passenger and cargo) divided by overall RTK (passenger and cargo). Passenger yield is passenger traffic revenue per RPK, and cargo yield is
cargo and mail traffic revenue per cargo and mail RTK.

Please read important disclosures at the end of the report.

Alpha Finance Equity Research

Aegean Airlines

1H 15 Review
Quarterly results
Revenues
%change
Cost Of Sales
% change
% of Sales
Gross Profit
% change
% margin
EBITDAR
%change
EBITDAR margin
Aircraft Lease Cost
EBITDA
%change
EBITDA margin
EBIT
% change
EBIT margin
Financials
Income from Investments
Pre - Tax Profit
% change
Pre-Tax profit margin
Total Tax
Minorities
Net income
%change
Net Profit margin

2Q 14a
254.7
12.7%
183.1
12.8%
71.9%
71.6
12.5%
28.1%

1H 14a
388.6
8.5%
298.1
7.0%
76.7%
90.5

FY 14a
911.8
7.3%
659.5
5.3%
72.3%
252.3

1Q 15a
138.1
3.1%
123.3
7.2%
89.3%
14.8

2Q 15e
264.1
3.7%
189.2
3.4%
71.6%
74.9

1H 15e
402.2
3.5%
312.5
4.8%
77.7%
89.7

2Q 15a
265.5
4.3%
197.8
8.0%
74.5%
67.7

1H 15a
403.6
3.9%
321.1
7.7%
79.5%
82.6

23.3%

27.7%

10.7%

28.4%

22.3%

25.5%

20.5%

58.8
12.9%
23.1%

72.7
21.1%
18.7%

209.5
15.2%
23.0%

6.8
-51.4%
4.9%

59.8
1.7%
22.6%

66.6
-8.4%
16.5%

60.2
2.5%
22.7%

67.0
-7.9%
16.6%

22.9

43.4

90.7

20.9

28.7

49.6

26.3

47.2

35.9
22.1%
14.1%

29.3
98.6%
7.5%

118.8
30.7%
13.0%

-14.1
115.1%
-10.2%

31.1
-13.3%
11.8%

17.0
-42.1%
4.2%

33.9
-5.5%
12.8%

19.7
-32.6%
4.9%

32.9
27.2%
12.9%

23.2
186.8%
6.0%

106.0
38.0%
11.6%

-17.4
80.5%
-12.6%

28.1
-14.5%
10.6%

10.7
-54.1%
2.6%

30.3
-8.0%
11.4%

12.8
-44.9%
3.2%

0.0
0.0

1.2
0.0

11.3
0.0

-5.2
0.0

0.0
0.0

-5.2
0.0

-1.0
0.0

-6.1
0.0

32.8
22.5%
12.9%

22.0
204.7%
5.7%

94.6
33.6%
10.4%

-12.3
13.2%
-8.9%

28.1
-14.3%
10.6%

15.8
-27.9%
3.9%

31.2
-4.9%
11.8%

18.9
-13.9%
4.7%

8.5
0.00

6.0
0.00

14.4
0.00

-4.0
0.00

8.2
0.00

4.2
0.00

8.1
0.00

4.2
0.00

24.3
20.7%
9.5%

15.9
130.5%
4.1%

80.2
53.0%
8.8%

-8.3
-0.5%
-6.0%

19.9
-18.0%
7.5%

11.6
-27.2%
2.9%

23.1
-4.9%
8.7%

14.8
-7.4%
3.7%

Please read important disclosures at the end of the report.

Alpha Finance Equity Research

Aegean Airlines

Financial Statements
Profit & Loss Statement (mn
eu)
Revenues
%change
Cost Of Sales
% change
Gross Profit
Operating expenses (inventory use)
Other operating expenses
Other Operating income
Total Gross Profit
%change
Gross profit margin

2009a

2010a

2011a

2012a

2013a

2014a

2015e

2016e

2017e

622.7
1.8%
505.5
2.3%
117.2
9.4
0.0
9.4
117.3
-1.2%
18.8%

591.0
-5.1%
507.8
0.5%
83.2
0.9
0.0
17.0
99.3
-15.3%
16.8%

668.2
13.1%
589.5
16.1%
78.8
1.0
0.0
10.3
88.0
-11.3%
13.2%

562.9
-15.8%
461.0
-21.8%
101.9
0.9
0.0
5.0
106.0
20.4%
18.8%

698.9
24.2%
507.1
10.0%
191.8
1.7
0.0
10.2
200.4
89.0%
28.7%

911.8
30.5%
659.5
30.1%
252.3
1.0
0.0
9.7
261.0
30.3%
28.6%

948.2
4.0%
703.9
6.7%
244.3
1.1
0.0
13.0
256.1
-1.9%
27.0%

998.7
5.3%
719.9
2.3%
278.8
1.1
0.0
13.0
290.6
13.5%
29.1%

1055.2
5.7%
759.5
5.5%
295.7
1.2
0.0
13.0
307.5
5.8%
29.1%

21.4
3.4%

23.5
4.0%

26.3
3.9%

32.6
5.8%

37.9
5.4%

51.5
5.7%

59.8
6.3%

62.8
6.3%

64.7
6.1%

95.9
-6.2%
15.4%

75.8
-21.0%
12.8%

61.8
-18.5%
9.2%

73.4
18.9%
13.0%

162.4
121.2%
23.2%

209.5
29.0%
23.0%

196.3
-6.3%
20.7%

227.8
16.0%
22.8%

242.8
6.6%
23.0%

Aircraft Lease Cost

% of Turnover

64.3
10.3%

74.8
12.7%

79.5
11.9%

70.5
12.5%

72.7
10.4%

90.7
9.9%

109.9
11.6%

110.8
11.1%

111.2
10.5%

EBITDA
%change
EBITDA margin

31.5
-45.1%
5.1%

1.0
-96.9%
0.2%

-17.7
R-2.6%

3.0
R+
0.5%

89.8
2905.4%
12.8%

118.8
32.3%
13.0%

86.4
-27.3%
9.1%

117.1
35.5%
11.7%

131.6
12.5%
12.5%

Depreciation & amortization

EBIT
% change
EBIT margin

12.0
19.5
-61.1%
3.1%

13.5
-12.5
-164.1%
-2.1%

13.0
-30.7
145.0%
-4.6%

11.8
-8.8
-71.2%
-1.6%

12.1
77.7
-979.4%
11.1%

12.8
106.0
36.4%
11.6%

13.4
73.0
-31.1%
7.7%

13.3
103.8
42.2%
10.4%

13.1
118.5
14.2%
11.2%

-4.7

1.9

0.1

0.8

-1.0

11.3

-4.8

2.1

1.7

Pre - Tax Profit

% change
Pre-Tax profit margin

32.5
-18.6%
5.2%

-18.7
-157.5%
-3.2%

-31.2
66.5%
-4.7%

-12.6
-59.6%
-2.2%

75.1
-697.0%
10.7%

94.6
26.0%
10.4%

77.8
-17.8%
8.2%

101.7
30.8%
10.2%

116.8
14.9%
11.1%

% nominal tax rate

% effective tax rate
Total Tax
Minorities

29.2%
9.5
0.0

-24.6%
4.6
0.0

12.8%
-4.0
0.0

16.9%
-2.1
0.0

23.1%
17.3
0.0

15.2%
14.4
0.0

27.0%
21.0
0.0

29.0%
29.5
0.0

29.0%
33.9
0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

23.0
-21.8%
3.7%

-23.3
-201.3%
-3.9%

-27.2
16.5%
-4.1%

-10.5
-61.5%
-1.9%

57.8
-652.6%
8.3%

80.2
38.9%
8.8%

56.8
-29.3%
6.0%

72.2
27.2%
7.2%

83.0
14.9%
7.9%

Administration Expenses
% of Turnover
EBITDAR
%change
EBITDAR margin

Financials

Income from previous activities

Net income
%change
Net Profit margin
source: company data & AFe

Please read important disclosures at the end of the report.

Alpha Finance Equity Research

Balance Sheet statement
(mn)
Cash
Accounts receivable
Receivables from Aircraft sales
Inventories
Pre - payments
Other
Current Assets

Aegean Airlines
2009a

2010a

2011a

2012a

2013a

2014a

2015e

2016e

2017e

208
66
0
9
5
11
300

184
67
0
6
10
18
286

167
52
0
6
12
10
247

149
47
0
5
4
9
215

222
77
0
11
5
24
339

207
88
0
13
11
35
354

240
109
0
14
11
35
409

281
116
0
15
11
35
457

315
117
0
16
11
35
493

Non-current Assets

111
1
0
28
7
15
162

118
5
0
20
8
10
161

99
27
0
20
13
12
171

89
27
0
20
17
9
182

81
56
27
21
20
16
222

80
57
30
56
19
31
273

78
57
30
56
0
31
252

76
56
30
56
0
31
250

74
56
30
56
0
31
250

Total Assets

462

447

418

397

561

627

661

708

742

S/T debt
L/T Debt Payable
Accounts payable
Taxes Payable
Leasing (payments)
S/T Provisions
Accrued Expenses
Liabilities from Derivatives
Other
Pre - sold revenues

0
0
41
9
5
1
20
7
20
29
133

0
20
41
5
7
1
12
1
20
30
137

20
0
41
0
8
1
15
0
19
33
138

0
4
48
0
8
4
12
2
17
39
134

0
0
54
10
8
7
22
4
65
46
215

0
0
63
15
9
3
23
35
70
66
286

0
0
66
11
9
3
23
35
74
78
300

0
1
75
8
9
3
23
35
83
83
320

0
2
75
7
9
3
23
35
83
87
325

20
0
6
58
0
104

0
0
7
76
0
109

0
0
8
71
0
111

8
0
8
62
0
110

0
0
8
51
39
134

0
0
7
50
35
125

0
0
7
50
35
125

1
0
7
50
35
126

2
0
7
50
35
127

46
145
32
1
0
225

46
145
-1
11
0
201

46
145
-29
7
0
169

46
145
-39
1
0
153

46
145
20
2
0
213

46
73
99
-1
0
216

46
73
119
-1
0
236

46
73
144
-1
0
262

46
73
173
-1
0
291

462

447

418

397

561

627

661

708

742

Fixed Assets, net (tangible)

Intangible assets, net
Goodwill
Pre - payments to buy Tangible assets
Deferred Tax Asset
Other L/T receivables

Current liabilities
L/T Debt
Deferred Tax Liability
Provisions for Retirement
Leasing
Other r l/t liabs (from OA)

L/T Liabilities
Share Capital
Share Premium
Retained Earnings
Reserves
Own Shares

Shareholders Equity
Minorities

Total liabilities &

shareholders' Equity
source: company data & AFe

Please read important disclosures at the end of the report.

Alpha Finance Equity Research

Cash Flow Statement (mn eu)
Net income
Plus: Depreciation & Amortization
Plus: Chng in Provisions
Plus: Chng in Taxes Payable
Plus: Minorities
Plus: non cash taxes
Gross Cash Flow
Plus: Chng in Acc Payable
Plus: Chng in other current Liabilities
Less: Chng in Acc. Receivable
Less: Other Receivable
Less: Chng in Inventories
Working Capital Chng
Operating Cash Flow
Less: Purchases of Fixed Assets
Less: Chng in Investments
Free Cash Flow
Less: Dividends Paid
Plus: Equity Chng
Plus: Debt Chng
Less: Dividends to Minorities
Plus: Consolidation adjustments
Plus: Other
Chng in Cash Position
Cash Position
source: company data & AFe

Aegean Airlines
2009a
23.0
11.8
13.8
3.4
0.0
(3.6)
48.4
(6.2)
4.4
(4.0)
9.3
(1.9)
5.2
43.2
51.3
0.0
(8.0)
17.8
0.0
(2.7)
0.0
(1.4)
55.7
25.8
208.3

2010a
(23.3)
12.9
7.8
(4.0)
0.0
(1.4)
(8.0)
(0.4)
(6.8)
1.3
7.4
(3.2)
12.5
(20.5)
13.1
0.0
(33.6)
0.0
0.0
19.9
0.0
0.0
(10.3)
(24.0)
184.3

Please read important disclosures at the end of the report.

2011a
(27.2)
2.4
7.4
(5.0)
0.0
(5.1)
(27.5)
0.4
1.9
(15.1)
(4.7)
(0.0)
(22.0)
(5.4)
5.7
0.0
(11.1)
0.0
0.0
(4.8)
0.0
0.0
(1.6)
(17.5)
166.8

2012a
(10.5)
11.6
2.0
0.0
0.0
(3.5)
(0.4)
7.3
4.8
(5.3)
(11.3)
(0.6)
(29.3)
28.9
1.5
20.0
7.5
0.0
0.0
(16.4)
0.0
0.0
(8.5)
(17.4)
149.4

2013a
57.8
21.6
6.9
10.2
0.0
(3.7)
92.8
5.1
57.5
29.9
22.4
5.6
(4.7)
97.4
42.9
7.3
47.2
0.0
0.0
(23.1)
0.0
0.0
48.7
72.9
222.2

2014a
80.2
11.0
(6.8)
5.2
0.0
1.5
91.1
9.9
56.8
10.7
31.2
2.3
(22.5)
113.6
50.3
2.8
60.5
52.2
(72.0)
(0.6)
0.0
0.0
49.4
(14.8)
207.4

2015e
56.8
13.4
0.0
(4.9)
0.0
18.9
84.2
2.9
15.9
21.7
0.6
1.0
4.5
79.7
10.2
0.0
69.4
36.9
0.0
0.0
0.0
0.0
0.0
32.5
239.9

2016e
72.2
13.3
0.0
(3.0)
0.0
0.0
82.4
8.6
13.7
7.0
0.0
0.5
(14.9)
97.3
10.8
1.0
85.5
46.9
0.0
2.0
0.0
0.0
0.0
40.6
280.5

2017e
83.0
13.1
0.0
(1.0)
0.0
0.0
95.1
(0.0)
4.6
0.4
0.0
1.0
(3.2)
98.3
11.3
1.0
86.0
53.9
0.0
2.0
0.0
0.0
0.0
34.1
314.6

Alpha Finance Equity Research

Aegean Airlines

DISCLOSURE APPENDIX
ALPHA FINANCE INVESTMENT SERVICES S.A. (Alpha Finance)

Headquarters: 5, Merlin Street, GR 106 71 Athens, www.alphafinance.gr

T +30-210-367 7400, F +30-210-331 1193, reception@alphafinance.gr
Ministry of Development, S.A. Registration Number: 19420/06/B/89/01, G.E.MI.1176701000
Regulated by the Hellenic Capital Market Commission, License No. 42/13.04.1989
Analyst Certification
The research analyst(s) undersigned and responsible for the preparation of this report certify (-ies) that a) the views expressed in this report accurately
reflect their (his/her) personal views about any and all of the securities or issuers mentioned in this report and b) no part of the analysts compensation
was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Analysts receive compensation
based upon various factors, including the quality and accuracy of research, productivity, experience, individual reputation, competitive factors and feedback
from clients.
Company specific regulatory disclosures
Disclosure checklist for companies mentioned & other price data information
Reuters
Rating
Price
Aegean Airlines
AGNr.AT
Outperform
6.5

Price date/time
Official close @
4 September 2015

Disclosure
none

Source: Alpha Finance

1. Alpha Finance and/or its affiliate(s) has acted as manager/co-manager/adviser in the underwriting or placement of securities of this company within the
past 12 months
2. Alpha Finance and/or its affiliate(s) has received compensation for investment banking services from this company within the past 12 months
3. Alpha Finance makes a market in the securities of this company
4. Alpha Finance and its affiliate(s) owns five percent or more of the total share capital of this company
5. The company and its affiliate(s) owns five percent or more of the total share capital of Alpha Finance and its affiliates
6. Alpha Finance has sent the research report to the company prior to publication for factual verification
7. Following 6, Alpha Finance has changed the contents of the initially sent research report, with respect to: no change
8. Alpha Finance has received compensation from the company for the preparation of this research report
Major changes vs. previous research reports
Date of report
Price on report date ()
9-5-2015
7.50

TP ()
9.5

Rating
Outperform

Forward1 EPS ()
1.12

Source: Alpha Finance | 1: next years EPS used from December onwards
Ratings and target price history
Price chart for Aegean Airlines

Rating history for Aegean Airlines

DATE
23/03/2011
05/09/2011
24/11/2011
06/04/2012
09/05/2012
30/11/2012
15/10/2013
23/12/2013
15/09/2014
22/09/2014
09/04/2015
04/09/2015

Rating
neutral
neutral
neutral
neutral
neutral
neutral
outperform
outperform
outperform
outperform
outperform
outperform

Share Price ()
2.01
1.63
1.57
1.38
1.32
1.70
5.02
5.90
6.82
7.70
7.54
7.54

Price Target ()
2.00
1.90
1.90
1.60
1.27
2.00
6.00
8.50
10.00
9.30
9.50
8.50

Regulatory disclosures
This report has been prepared by Alpha Finance Investment Services S.A. (Alpha Finance), a wholly owned subsidiary of Alpha Bank A.E. Alpha Finance is
regulated by the Hellenic Capital Markets Commission (HCMC). Alpha Finance has in effect management policies to identify and confront potential conflicts
of interest that could arise in the research division of the company and/or its affiliates (Chinese Walls).

Alpha Finance Equity Research

Aegean Airlines

Valuation method
We value Aegean airlines through a DCF models to yield a 2015 target price of 8.5. Our valuation methodology is sensitive to oil, passenger traffic
volatility, macroeconomic conditions and all the risks associated with the airline business. For our DCF model for Aegean airlines we have assumed a
variable WACC rate of c.11.8%, a terminal value of 0.5% and a beta of 1.
Risk rating
We rate Aegean as high risk based on the qualitative/quantitative assessment of risk we apply on the company (see definitions of risk below). We
consider the following the biggest investment risks for the shares Airline Industry Related: a) Geopolitical concerns, b) seasonality, c) terrorist events, d)
sensitivity to tourist traffic, e) any obstacles in the merge with Olympic, f) LCCs intensifying domestic competition, g) domestic competition from non air
transportation, h) airport slot availability. Business Model related: a) Fleet restructure execution risk, b) international expansion to increase fuel usage and
maintenance costs, c) progression of load factors in new routes, d) possible overcapacity in international routes, d) EU regulation on greenhouse gas
emissions could pose additional costs in the future and e) climate change could negatively affect tourist traffic to Mediterranean destinations.
Macroeconomic related: a) Foreign exchange risk, b) increasing oil prices, c) the current economic environment in Greece.
Definitions of Fundamental and Risk Ratings and Allocations
RISK RATING
High (H)

Relative to

Horizon2

Coverage3

IB services4

TRP1 > +15%

ASE Index

Dec.11

10/50

10.0%

16/50

0.0%

4/50

0.0%

Alpha Finance belongs to the same group of companies

1/50

0.0%

Alpha Finance is currently rendering investment banking services

0/50

0.0%

No rating currently available

19/50

0.0%

Low (L)

TRP1 > +5%

Outperform O/P
FUNDAMENTAL
RATING

Medium (M)

Neutral N

(5%) < TRP < +5%

Underperform U/P

TRP < (5%)

Restricted (G) R(G)

Restricted (IB) R (IB)
Under review UR/ Not rated NR

TRP < (15%)

Source: Alpha Finance | Data as of 31.12.10 | 1: Total Return Potential (=capital return + dividend yield) | 2: except otherwise stated | 3: Percentage of
companies under coverage within this category as of 31.12.10 | 4: Percentage of companies within this rating category for which investment banking
services were provided over the past 12 months, as of 31.12.10. In several occasions, subject to the analyst's view and/or due to volatility of the shares,
the ratings applied may fall out of the brackets described in the table above.
The Alpha Finance universe consists of 50 companies accounting as of 31.12.10 for 79.9% of total market value

Risk ratings explained

We derive the overall risk rating for a stock by applying a 60% weight on quantitative and a 40% weight on qualitative factors. We use a scale from 1 to 3
to describe low, medium and high risk respectively. We compute two different quantitative risks namely liquidity and volatility. We assign equal weights
to liquidity and volatility risks to arrive at a so-called trading or quantitative risk for the specific stock researched. Using a scale of 1-to-3 scale, each
analyst also assigns a qualitative risk that is entirely up to his/her discretion to determine. Following this, we calculated the combined risk of the specific
stock applying the weights mentioned earlier. All IPOs are classified high risk for 12 months after their listing date.
Definitions of Risk Ratings
Quant factor

Definition

Brackets

Risk rating

Liquidity

Number of shares traded over the last 12 months as % of

total shares outstanding

If less than or equal to 33%

If greater than 33% but less than or equal to 66%
If greater than 66%

High
Medium
Low

Volatility

The standard deviation of daily changes during the last

12 months. Volatility is used as a statistical measure of
dispersion and indicates the propensity of a specific
equity to suffer large swings in price. The stocks volatility
is measured against the volatility of the ASE index

If equity volatility against the markets is greater than 2

If equity volatility against the markets is greater than 1.5
but less than or equal to 2
If equity volatility against the markets is less than or
equal to 1.5

High
Medium
Low

Source: Alpha Finance | Data as of 31.12.10 | The quant factors are updated at the end of each calendar quarter
General disclaimer
This report has been prepared by Alpha Finance.
This report by no means provides investment advice as to any financial instruments contained herein. We aim to express our value judgments as to
possible or existing investments, without any existing contractual obligation to our clients. We cannot assume any liability for any investments undertaken
by our clients, since these investments will be a product of their own free will. The information contained in this report has been taken from sources,
which we deem to be reliable. We do not represent that such information is accurate or complete and it should not be relied upon as such. All opinions
and estimates expressed herein constitute our judgment as of this date and are subject to change without notice. Past performance is not indicative of
future results. The opinions and recommendations herein do not take into account individual client circumstances, objectives or needs. This report is
published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial
instruments.
2015 Alpha Finance. All rights reserved. This report may not be reproduced or redistributed, in whole or in part, without the written permission of Alpha
Finance and Alpha Finance accepts no liability whatsoever for the actions of third parties in this respect.

Alpha Finance Equity Research

Aegean Airlines
Alpha Finance Investment Services S.A.
Member of the AE, CSE
5 Merlin street,
106 71 Athens
Greece
T +30-210-367 7400
F +30-210-331 1193
reception@alphafinance.gr
www.alphafinance.gr

Equities Research
Manousos Stathoudakis, Director
Antonis Diapoulis
Angelos Chorafas
Nikos Katsenos
Katia Zahari
research@alphafinance.gr
T +30-210-367 7545

Sales & Trading

Spyros Malavazos, Director
Equities Sales | Foreign
Institutions
Natasa Martseki, Director
Vassilis Galleos
Ioannis Batistakis
Equities Sales & Trading |
Institutions
Kostas Tzimos
Maria Vryoni
Giota Kouli
Chris Xikis

Market Making |
Equities & Derivatives
Andreas Papanayotopoulos,
Director
Stelios Tzaras
International Markets |
Sales & Trading
Andreas Papanayotopoulos,
Director
Giannis Giouremos
George Sarris
Sofia Giannakou

Derivatives Sales & Trading

Lefteris Syrrakos, Director
Andreas Markogiannis
Angelos Kostis
Stavros Tsimpos
Equities Trading | Retail
Andreas Tzevelekos, Head
Maria Saranti
name.surname@alphafinance.gr

Equities Sales | Retail

Pantelis Tsitos, Director
Kostantinos Kostoulas,
Deputy Director
Leonidas Kyriakopoulos
Stavroula Galani
Lazaros Koutromanos
Kleanthis Schinas