Pepco - comment

Exactly how the LfL calculations work in a given period is always hard to tell. The sales/store data does deviate somewhat from the LfL published this morning. Let’s say it’s flat.  But the real cracker will be rent. Store base is up by an amazing 17% over last year. If we extrapolate the IFRS-16 effects on that basis to Q4, we get Old Fashioned EBITDA of a mere €30m for Q4, down from €100m last year. Following the recent news we had revised our expectations down to draw level YoY at 7% margin, but this is far worse => 2% margin. We had been wondering if Warsaw stock market volume technicals are wagging the dog at SEAG and if we want to buy on this dip. We are still looking at that, but there is limited info ahead of the Capital Markets day on the 17-18th of October.