Marianna Polykrati, Group Treasurer at Chipita International SA - Eurocrisis Greece, there is light at the end of the tunnel - an insider’s view spoke at the CFO Event UK 2013

1. Euro Crisis: There is light at the end of the
tunnel ? ! An insider’s view
……………………………………………...
Marianna Polykrati
Chipita S.A.

2. Company Description
 Chipita S.A. is a confectionary group of Greek origin with a strong
international footprint.
 Is active in the production and marketing of Pre-packed flour-based Snacks
and Chocolate Confectionaries, headquartered in Athens, Greece.
 Products are made in 10 Countries, with a total of 14 manufacturing plants
and 57 production lines.
 It is present in more than 50 countries worldwide.
 Total sales reach 450 mio. euros out of which less than 20% are in Greece.
 Brand names include “7 days”, “Fineti” and “Molto”.

3. Strong International Footprint
Production & Distribution
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Own Distribution Companies
 Czech Republic
Greece
 Germany
Bulgaria
 Hungary
Russia
Present in more than 35 countries worldwide
 Slovakia
Romania
 Serbia
Poland
 Ukraine
India
Turkey (Jan’14)
Egypt (Minority)
Saudi Arabia (Minority)
Mexico (Minority)
Other Exports
Exports with Support
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Albania
Bosnia
Croatia
FYROM
Kosovo
Moldova
Montenegro
Slovenia
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Estonia
Latvia
Lithuania
Belarus
Kazakhstan
Lebanon
Malta
Cyprus
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Australia
Austria
Armenia
Azerbaijan
Canada
Georgia
Ireland
Iraq
Israel
Libya
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Mongolia
Portugal
Panama
Sweden
Spain
Tajikistan
Turkmenistan
UK
Uzbekistan
USA
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4. Headlines
Greece budget sees end of recession in 2014
Oct 07, 2013 - Greece has predicted that it will emerge from its 6-year long recession next
year, in a sign it may be finally recovering from its debt crisis.
The Greek government made the forecast in a 1st draft of its 2014 budget, which predicted
0.6% growth.
"We foresee the end of recession in 2014," vice finance minister Christos Staikouras said.
"The sacrifices the Greek people have made after a painful period are bearing fruit, we have
the indications of exiting the crisis in 2014," he said.
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6. Scope of the workshop
This purpose of this workshop is to present you a Greek Treasurer’s perspective of how the Financial
Crisis has impacted the operations of corporates in Greece, major problems faced and several
solutions provided.
I will try to walk you through my personal experience gained from the different working
environments that I have dealt within the last 6 years.
And close with my concerns regarding the Greek people daily impacts and the markets perspective.

7. Major Issues faced by all corporates
Formulating a Business Continuity Project
Handling liquidity in distressed situations – Cash flow & working
capital management
Banks’ issues – after recapitalization in June 2013
Restructuring organizations (i.e. cost cutting, closing operations)
Growth & Development

8. Chipita – a Greek group with international presence
Business Continuity Project
• Production facilities existing in 10 countries outside Greece
Handling Liquidity in Crisis and
Distressed Situations
• Focus on preparation of realistic forecast cash flows
• Maximum utilization of cash to support Greek operations
and growth
Working Capital Management
• Clients seek support – frequent review of client profiles
• Suppliers seek support & request lower credit terms
Banks’ own issues
• Healthy corporates are “penalized” to support weaker
corporates in terms of pricing and repayment schedules
Restructuring
• Utilizing plant facilities according to product profitability
• Utilizing idle machinery – reallocating
Growth
• Expand in countries in emerging markets (Turkey & India)

9. A Greek group without international presence
Handling Liquidity in Crisis and
Distressed Situations
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Allocate the cash to support declining operations
Selling the “silverware” (companies & machinery)
Short term cash flow preparation
Request financing from banks and shareholders
Working Capital Management
• Clients and suppliers payments terms are abnormal
• Suppliers from abroad request payment upfront while
suppliers in Greece are pushed to their limits
• Payments from the Greek government are not
Bank financing
• Banks are dealing with Blackrock
• No financing available
Restructuring
• Cost cutting (decrease in salaries)
Growth
• Expansion of net exports (7% of GDP pre-crisis)
• Rebound in investment

10. Can a Greek corporate move forward
For the Greek corporates to move forward, there are several issues for which solutions have to be found:
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Financing has to be provided by the banks, that although have completed the recapitalization
phase, remain still dealing with Blackrock.
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Signs of remaining foreign banks are leaving Greece, i.e. Citibank and BNP.
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Cash deposits are still scarce (after being transferred outside Greece) therefore limiting their
capability gather cash to finance.
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Payments from the Greek government are kept behind (thus the reason for the improvement in its
Working capital).
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Privatizations are not happening.
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Greek corporates cannot be Competitive compared to foreign companies due to the increased funding
cost from Greek banks (10% vs 3% for a German corporate).

11. So, there is no light at the end of the tunnel?
The unemployment rate stands at a record of
almost 28%, and threats of further job cuts in
the civil service have led to strikes and civil
unrest. Young people, the productive work
force is seeking abroad job opportunities.
Cuts in pensions reach in many cases
60% and in salaries 30%, therefore
reducing the Greeks purchasing
power more than 30%, thus the
decline in the corporates sales.
Healthy Greek corporates, due to high
financing costs in Greece, are forced to
move their HQ’s outside Greece in
order to receive cheaper financing i.e.
Viochalko
For people, taxes paid including
extraordinary are almost 60% of their
annual income while extra taxes of 10%
on bank deposits are discussed. There are
3 different taxes on gross assets while
liabilities are not taken in account.
I guess it all comes down to
how long Greeks and
corporates can endure
financially the austerity
measures
Exporting companies
do not benefit from
bank credit and the
government owes VAT
on exports for over a
year.
HBC with operations
outside
Greece, transfers their
HQ abroad.

12. Or Is there light at the end of the tunnel?
Greece's budget prediction
reflects signs of optimism
around the Greek economy.
Economic growth is the key
challenge
Economy stopped
shrinking in Q2 and
employment is starting
to grow.
Tourism is picking
up, leading to a rise in
seasonal employment.
Greece entering the
Emerging Market
index at endNovember.
Manufacturing is also
showing some signs of
recovery, while retail sales
continue to decline, but at a
slower pace.
ASE rallies in the last
months, doubled from its
lows in June 2012.
Country’s debt is cheap and
long. This might enable Greece
to issue bonds (in 3 or 5 years?)
Greece is not the only issue for
Europe, Southern Europe is (higher
sovereign debt).

13. So, what do you think?