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Erste Group Research CEE Special Report | Fixed Income | CEE 23 May 2012

EURO Champion 2012

Between June 8 and July 1, Poland and Ukraine will co-host the European football championship. In this report, we focus on the economic champions of this tournament. What kind of benefits will the hosting countries reap?

Birgit Niessner Petr Bittner Maryan Zablotskyy

On June 8, the opening match will start in Warsaw, Poland. The three-week tournament will end on July 1 with a final game in Kyiv, Ukraine. EURO 2012 host cities


Around 8bn TV viewers will watch football matches

Odds for taking the title

At least 150mn TV viewers around the globe will join each of the 32 matches. The main sports drama is whether the Spanish team, which currently has the European title, along with the World Cup, can become the first to win two consecutive European titles. The bookkeepers odds favor the Spanish winning the championship. The biggest threat to them is seen from Germany and the Netherlands. The lineups of other teams are very strong, with the chances of any other team taking the title (besides the top three favorites) seen at 40%. There will be a clear winner of the championship, but who will be the economic winner? Looking at the EURO 2012 from the perspectives of Poland and Ukraine, do the benefits outweigh the costs? Generally speaking, the economic effects of such events can be divided into two categories, direct and indirect ones. The most visible direct effects are investments and a shortterm increase in inbound tourism revenues. Indirect effects include an increase of the country's tourist attractiveness, growth in economic productivity resulting from the infrastructure improvement and an increase of investment attractiveness. In particular, infrastructure investments are seen as those that will pay off the most via direct and indirect effects.
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Erste Group Research EURO 2012 in Poland-Ukraine

Erste Group Research CEE Special Report | Fixed Income | CEE 23 May 2012

For the EURO 2012 roughly a million tourists will come to watch matches in person, each staying for an average 3-4 nights and spending around EUR 800. Thus tourists will bring at least EUR 800mn to both countries. In addition people will be left with improved infrastructure which they can later utilize for their won benefit. Poland and Ukraine have together spent EUR 30.2 bn in total on infrastructure and sports venues for the best experience of football fans. As a consequence in 2011 both countries showed high growth rates for fixed capital formation (9% for Ukraine and 8.5% for Poland) which boosted growth. In the case of Poland, GDP is increased by about 2% which is spread over a time period of 12 years. In both countries the decrease of the level of investment activities after the financial crisis was softened by EURO 2012 investments, as seen in the below graph. As for the indirect impact, we see possible positive and negative image effects ranging from a boost to local sentiment from a football success to a political boycott of the football matches in Ukraine. Quantifiable Effects of the Euro 2012
Poland Investm ent in EUR bn (over 5 yrs) in % of GDP Em ploym ent effect in tsd. in % of labour force Number of visitors in tsd. Average tourist expenditures in EUR Total tourist spending in EUR m n % of GDP Overall long-term GDP increase 19.8 5.2 20 - 30 0.11 - 0.17 500 - 700 800 400 - 560 0.11 - 0.16 1.4-2.7%
0 EU PL 2004 CZ 2005 2006 HU 2007 RO 2008 2009 SK 2010 HR 2011 UA

Gross Fixed Capital Formation in % of GDP


Ukraine 10.4 9 69 0.31 500 800 400 0.32

10 5 20 15 30 25

Source: Erste Group Research

Source: AMECO, IMF

For more information please refer to our Macro Outlooks for Poland at 13450&PDF=PMLLNAHGCNPGJCKNBDNELCJDJLKJBAE and for Ukraine at 12458&PDF=BGCJFOIOLILJNDCPBBBBPMCPLNFFKOP.
Erste Group Research EURO 2012 in Poland-Ukraine Page 2

Erste Group Research CEE Special Report | Fixed Income | CEE 23 May 2012

Investment boom focused on neglected transport infrastructure Total investments related to the preparation of the UEFA EURO 2012 championship amount to PLN 85.4bn (EUR 19.8bn), or 5.2% of GDP. According to the Master Plan of Polish Ministry of Sport and Tourism the vast majority, nearly 86%, is related to the development and modernization of existing transport infrastructure (roads, urban transport, railways and airports), around 5% to sports infrastructure and the rest to the hotels and others. From the perspective of the economy and its future development, this seems to be the best possible distribution of investments. Transport infrastructure investments will pay off most in Poland and Ukraine, as their infrastructures were in much worse condition compared to earlier organizers of EURO (Austria and Switzerland in 2008, Portugal in 2004). Before EURO 2012 preparations started, Poland had had the fourth lowest density of its motorway network in EU. However, it has been among the countries with the highest transport of goods. This naturally resulted in further deterioration of infrastructure quality. The same is true for the railways. According to a European Commission study, Poland does not have any high-speed railways (above 250 km/h) and has only 5% of lines adjusted to speeds above 160 km/h. Infrastructure investments may also have a positive indirect effect. Besides increasing the efficiency of domestic producers and thus their competitiveness and overall productivity, this can attract more foreign direct investments, as the poor infrastructure was the most important factor discouraging investments in Poland, according to some surveys (e.g. one conducted by the Institute for Market Economics). Should these effects materialize, it would definitely help both countries in times when foreign direct investments plummet (see Chart 1). Chart 2: Financing structure of investments

Infrastructure investments could, among other effects, spur foreign direct investments

Chart 1: Foreign direct investment as % of GDP

9.0 8.1 8.0 7.0 6.0 5.1 5.0 4.1 4.0 6.6



35% 31%

3.0 2.0 1.0 0.0



2.6 1.9

3% 20%

State Budget National Road Fund Local Governments EU Funds EBI Credit Other


HU 2000-2007

PL 2008-2010


Source: Eurostat

Source: Poland Ministry of Sport and Tourism

As for other investment projects, it is praiseworthy that organizers managed to reduce their share of investments in sports infrastructure to below 10%. Idle capacity of sports venues has proven to be the biggest problem organizers of mega sporting events usually struggle with after the main event. Quite often, operating such stadiums is loss-making, even leaving investment costs aside. The massive investment activity also influences the employment rate. In an Impact report published by the Ministry of Sport and Tourism in 2010, the
Erste Group Research EURO 2012 in Poland-Ukraine Page 3

Erste Group Research CEE Special Report | Fixed Income | CEE 23 May 2012

long-time effect is estimated to increase average employment per year by 8.2 thousand persons over a 13-year period, with a peak of 20-30 thousand additional jobs in 2012. This should help bring the unemployment rate to the government target of 12.3% at the end of the year. Distribution of 100% of investment which amounts to 5.2% of GDP
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2008
Source: Impact report

Vast majority of funds went into infrastructure Breakdown of expenses





Expenditure Transport airports roads railroads public transport Sport venues Hotels Team base camps Other Total

PLN bn 94 4 63 17 10 5 5 2 4 110

of total 86% 4% 58% 16% 9% 5% 5% 2% 3% 100%

Source: Masterplan of Ministry of Sport and Tourism

MPC decision could be affected as well; as EU transfers dry up, zloty will lose one of its supporters

And where did all the money come from? The majority of funds came from either central or local government budgets. However, a decent amount of 31% was financed via EU funds (see Chart 2). This helped increase the net EU funds transfer from 0.9% of GDP in 2009 to 2.4% in 2011. According to the Convergence Program, this figure should decline to 0.9% in 2013. Besides its impact on the state budget, the decreasing volume of EU transfers (denominated in euro) could influence the FX rate and, in an extreme scenario, Monetary Policy Council (MPC) decisions as well. The government in the past widely used the exchange of these funds to support the zloty if necessary, exchanging them either at the central bank or on the market. Should these exchanges cease, the MPC will remain alone in its struggle for a stronger zloty and may be tempted to hike earlier. Moreover, there is one more effect that can influence MPC decisions. A temporary CPI increase will likely occur, as hotels, restaurants and retailers will react to the extraordinary inflow of customers. Even though the MPC did not refer to it, it is possible that they factored this effect in already in their surprising rate increase at the beginning of May. Poland will also benefit from the increased number of visitors. According to Polands Institute of Tourism, the number of visitors in 2011 amounted to 13.1mn (up from 12.4mn in 2010) and foreign expenditures in 2010 totaled PLN 31bn (EUR 7.5bn), or 2% of GDP. In this perspective, the additional 500700tsd tourists expected for the championship represent an amount comparable to the y/y change alone. Moreover, daily expenditure per capita averaged approx. EUR 60, while total expenditures per tourist were just EUR 300. Considering this, the expected spending of EUR 1000 per visitor seems a little bit challenging. We would rather stick to a somewhat lower number, around EUR 800. In any case, the overall effect of tourism related benefits will probably be short-lived, helping to cover extraordinary costs (e.g. security measures). As for long-term effects, they are even more disputable, in our view. The so-called Barcelona effect an increase of the country's tourist attractiveness is very rare and dependent on many other factors. Thus, we

Visitors will bring just modest increase of tourism

Erste Group Research EURO 2012 in Poland-Ukraine

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Erste Group Research CEE Special Report | Fixed Income | CEE 23 May 2012

do not attribute any significant importance to the growth effect through tourism. In base case GDP will rise by 2.1% over an extended time In Poland the overall EURO 2012 economic effect was estimated by the Ministry of Sport and Tourism as a 1.4-2.7% GDP increase (depending on the scenario 1 ; the rise coming to 2.1% in the basic variant), as compared to the GDP value in 2009, while the increase is distributed over an extended period (2008-2020). The absolute value of the cumulative GDP increase amounts to PLN 18.4-36.6 billion, in 2009 prices (PLN 27.9 billion in the basic scenario), with the peak occurring in 2012, when the GDP rises by PLN 5.4-9.5 billion (2009 prices). The cumulative increase of household consumption adds up to PLN 12.8-26.7 billion, in 2009 prices (PLN 20.5 billion in the basic variant). Could Poland benefit from EURO 2012 in any other way? One non-negligible effect is the surge of the gray economy. But, as this sector does not increase state revenues via taxes, it is very difficult to assess its precise contribution to the economy. There is still one more indirect effect, and it is not limited to host countries: Poland could benefit from any extraordinary success of its national team. Even though its FIFA ranking (32nd out of 53 UEFA members) is the worst in Group A, Poland still has a good chance to advance to the play-offs; bookmakers fancy Poland with Russia. And the play-offs are to a larger extent a matter of luck. Thus, Poland can make it with a little bit of luck to a medal position. In such cases, the winning mood stemming from the surprising success usually translates into the hard economy, increasing consumer confidence and household consumption and thus spurring economic growth, at least in the short term.

State will not benefit from thriving gray economy; unexpected success of national team could spur consumption

Three scenarios basic, optimistic and pessimistic were calculated with the main difference with regard to the assumptions on investment outlays in transportation. For more details please refer to Impact report 2010.
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Erste Group Research EURO 2012 in Poland-Ukraine

Erste Group Research CEE Special Report | Fixed Income | CEE 23 May 2012

In total the country has spent 9% of GDP from 2008 to 2012 to prepare for EURO 2012, giving work to 69tsd people each year from 2008 to 2012. 85% of the total expenditures are explicitly related to infrastructure and the rest to the sports venues and organizational expenses. Just less than half of the total funding came from the private sector; the remainder was financed from the state budget. The net government expenditures are much lower than gross costs. The government has estimated the additional tax effects at UAH 30.3bn, or 60% of the total gross state and municipal budget expenses. Ukraine spent 9% of GDP, half of which is from private sector Total costs related to EURO 2012 championship
4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2008 2009 2010
Municipal budget

Vast majority of funds went into infrastructure Breakdown of expenses

Expenditure Transport airports roads railroads public transport Sport venues Hotels Electricity Healthcare Other Total UAH bn 79 22 32 19 6 13 10 2 1 2 107 of total 74% 20% 30% 17% 6% 12% 10% 2% 1% 2% 100% New or renovated +147700 passengers/day 3455km of roads 1700km of railroads 902 new vehicles 192953 seats 290 hotels 44 generating stations 21 hospitals



State budget

Other sources

Source: State Program for EURO 2012 preparation

Source: State Program for EURO 2012 preparation

Transport infrastructure took lions share of total expenditures

Nearly all of infrastructure investments were badly needed for long time

The investments in infrastructure were neither excessive, nor overdone. Most of the changes were badly needed for decades. The airports serving passengers were typically old Soviet-style buildings not suitable even for their existing capacity. Completely new terminals were built in each hosting city, including new runways in all cities except Kyiv. Roads between key cities were in such bad condition that they significantly slowed down and endangered car movement. The roads connecting the biggest cities have been completely renovated. The 540km distance between Lviv and Kyiv was covered by trains overnight taking 7-10 hours. The imported Korean trains on newly-built railroads will run up to 180km per hour - nothing new by European standards, but a huge leap for Ukraine. Public transport was also significantly below necessary capacity, as it mainly relied on private transportation companies using cost-efficient small vehicles. Municipalities greatly expanded their transport inventory, mainly with locally manufactured large buses. The countrys main sports stadium to host the final match did not even have a roof cover prior to renovation. The construction of the most luxurious Donetsk stadium was fully financed by the local football club. Changes to transport and sports infrastructure were long overdue and can hardly be seen as creating overcapacity just for the wellbeing of tourists. The investment may well have not been done if not for the event. This is especially true, as Ukraine was struck by a severe economic crisis in 2009. The need to achieve strict goals in times of falling budget revenues decreased opportunities for fund embezzlement and unnecessary expenditure. The EURO 2012 preparation helped the development of companies and the state apparatus focused on infrastructure, which will be lobbying for continuing expenditures after the championship ends.

Erste Group Research EURO 2012 in Poland-Ukraine

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Erste Group Research CEE Special Report | Fixed Income | CEE 23 May 2012

Ukraine heavily relies on railroads, travel on which is very slow Railroad network and passenger density
million passenger-km 60 50 40 30 20 10 0 Hungary Turkey Croatia Bulgaria Austria Poland Serbia Romania Ukraine 1.0 0.5 0.0 per 100km of railnetwork 2.5 2.0 1.5

Road network is under-developed Road network

thsd. km 450 400 350 300 250 200 150 100 50 0 Turkey Croatia Serbia Poland Ukraine km of road per 100 sq. km of land area) 250 200 150 100 50 0 Hungary
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Road netwrok
Source: WDI

Road density

Passengers carried
Source: WDI

Ratio to reailnetwrok

High room rates are among main deterrents for tourists

An additional quantifiable benefit of hosting EURO 2012 is an increased tourist flow, but some football tourists may be discouraged by high room rates. Currently, hotel prices in Ukraine, especially during football matches, are extremely high. This is a result of the tough construction permit process, which limits the number of hotels. Among the arriving football teams, only two chose Ukraine for their base, due to high rent prices. During EURO 2008, the average stay of football tourists in Austria was for 3.6 nights and in Switzerland it was 3.4 nights. In Austria, visitors spent an average of EUR 1,327 per head and in Switzerland they spent EUR 983. For the three week period of the championship around 500,000 tourists are likely to visit Ukraine, each leaving around EUR 800. Eastern Europe has most expensive room rates Average room rates, GBP

Hotel stay in Ukraine is more expensive than in Poland Average hotel prices, GBP
180 160 140 120 100 80 60 40 20 0 Copenhagen London Prague Lisbon Vienna Amsterdam Stockholm Athens Madrid Moscow Helsinki Berlin Kyiv Rome Warsaw Paris

Source: The Hotel Price Index

Source: HRG Hotel Survey

Considering possible qualitative effects of the EURO 2012 retaining a positive image in front of the world press will be difficult. Ukraine is still far below European standards in transport quality and service industries, which may attract negative coverage. On the political side, there is an image problem: Due to the sentencing of Yulia Tymoshenko, some European politicians have decided not to visit Ukraine, in protest. Just as Greece back in 2000 was noted by the world press as making good but very late preparations for the Olympics, Ukraine may also be covered with some bitter taste. Altogether,
Erste Group Research EURO 2012 in Poland-Ukraine


Erste Group Research CEE Special Report | Fixed Income | CEE 23 May 2012

Getting world public to love Ukraine will be a risky game

EURO 2012 will for a brief period put Ukraine in the top global news headlines in its biggest self- presentation so far. Quite importantly, Ukraine will be shown as a co-host with EU member Poland, which vividly demonstrates Ukraines strategic objectives.

Erste Group Research EURO 2012 in Poland-Ukraine

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Erste Group Research CEE Special Report | Fixed Income | CEE 23 May 2012

Group Research
Head of Group Research Friedrich Mostbck, CEFA Major Markets & Credit Research Head: Gudrun Egger, CEFA Adrian Beck (AT, SW) Mildred Hager (US, Eurozone) Alihan Karadagoglu (Corporates) Peter Kaufmann (Corporates) Carmen Riefler-Kowarsch (Covered Bonds) Elena Statelov, CIIA (Corporates) Hans Engel (Equities US) Stephan Lingnau (Equities Europe) Ronald Stferle (Equities Asia, Commodities) Macro/Fixed Income Research CEE Head CEE: Juraj Kotian (Macro/FI) Chief Analyst: Birgit Niessner (CEE Macro/FI) CEE Equity Research Head: Henning Ekuchen Chief Analyst: Gnther Artner, CFA (CEE Equities) Gnter Hohberger (Banks) Franz Hrl, CFA (Steel, Construction) Daniel Lion, CIIA (IT) Christoph Schultes, CIIA (Insurance, Utility) Thomas Unger; CFA (Oil&Gas) Vera Sutedja, CFA (Telecom) Vladimira Urbankova, MBA (Pharma) Martina Valenta, MBA (Real Estate) Gerald Walek, CFA (Machinery) Editor Research CEE Brett Aarons Research, Croatia/Serbia Head: Mladen Dodig (Equity) Head: Alen Kovac (Fixed income) Anto Augustinovic (Equity) Ivana Rogic (Fixed income) Davor Spoljar, CFA (Equity) Research, Czech Republic Head: David Navratil (Fixed income) Petr Bittner (Fixed income) Head: Petr Bartek (Equity) Vaclav Kminek (Media) Jana Krajcova (Fixed income) Martin Krajhanzl (Equity) Martin Lobotka (Fixed income) Lubos Mokras (Fixed income) Josef Novotn (Equity) Research, Hungary Head: Jzsef Mir (Equity) Orsolya Nyeste (Fixed income) Zoltan Arokszallasi (Fixed income) Research, Poland Head: Piotr Lopaciuk (Equity) Tomasz Kasowicz (Equity) Marek Czachor (Equity) Michal Hulboj (Equity) Research, Romania Head: Lucian Claudiu Anghel Head Equity: Mihai Caruntu (Equity) Dorina Cobiscan (Fixed Income) Dumitru Dulgheru (Fixed income) Eugen Sinca (Fixed income) Raluca Ungureanu (Equity) Marina Alexandra Spataru (Equity) Research Turkey Head: Erkan Kilimci Sevda Sarp (Equity) Evrim Dairecioglu (Equity) Ozlem Derici (Fixed Income) Mehmet Emin Zumrut (Equity) Goker Mustafa Gorkem (Equity) Sezai Saklaroglu (Equity) +43 (0)5 0100 11902 +43 (0)5 0100 11909 +43 (0)5 0100 11957 +43 (0)5 0100 17331 +43 (0)5 0100 19633 +43 (0)5 0100 11183 +43 (0)5 0100 19632 +43 (0)5 0100 19641 +43 (0)5 0100 19835 +43 (0)5 0100 16574 +43 (0)5 0100 11723 +43 (0)5 0100 17357 +43 (0)5 0100 18781 +43 (0)5 0100 19634 +43 (0)5 0100 11523 +43 (0)5 0100 17354 +43 (0)5 0100 18506 +43 (0)5 0100 17420 +43 (0)5 0100 16314 +43 (0)5 0100 17344 +43 (0)5 0100 11905 +43 (0)5 0100 17343 +43 (0)5 0100 11913 +43 (0)5 0100 16360 +420 956 711 014 +381 11 22 09 178 +385 62 37 1383 +385 62 37 2833 +385 62 37 2419 +385 62 37 2825 +420 224 995 439 +420 224 995 172 +420 224 995 227 +420 224 995 289 +420 224 995 232 +420 224 995 434 +420 224 995 192 +420 224 995 456 +420 224 995 213 +361 235 5131 +361 373 2026 +361 373 2830 +48 22 330 6252 +48 22 330 6251 +48 22 330 6254 +48 22 330 6253 +40 37226 1021 +40 21 311 2754 +40 37226 1028 +40 37226 1029 +40 37226 1026 +40 21311 2754 +40 21311 2754 +90 212 371 2510 +90 212 371 2537 +90 212 371 2535 +90 212 371 2536 +90 212 371 2539 +90 212 371 2534 +90 212 371 2533 Research, Slovakia Head: Maria Valachyova, (Fixed income) Martin Balaz (Fixed income) Research, Ukraine Head: Maryan Zablotskyy (Fixed income) Ivan Ulitko (Equity) Igor Zholonkivskyi (Equity) +421 2 4862 4185 +421 2 4862 4762 +38 044 593 9188 +38 044 593 0003 +38 044 593 1784

Treasury - Erste Bank Vienna

Saving Banks & Sales Retail Head: Thomas Schaufler Equity Retail Sales Head: Kurt Gerhold Fixed Income & Certificate Sales Head: Uwe Kolar Treasury Domestic Sales Head: Markus Kaller Corporate Sales AT Head: Christian Skopek +43 (0)5 0100 84225 +43 (0)5 0100 84232 +43 (0)5 0100 83214 +43 (0)5 0100 84239 +43 (0)5 0100 84146

Fixed Income & Credit Institutional Sales

Institutional Sales Head: Manfred Neuwirth Bank and Institutional Sales Head: Jrgen Niemeier Institutional Sales AT, GER, LUX, CH Head: Thomas Almen Margit Hraschek Rene Klasen Marc Pichler Sabine Vogler Bank and Savingsbanks Sales Head: Marc Friebertshuser Geog Bartel Carsten Demmler Mathias Gindele Andreas Goll Ulrich Inhofner Sven Kienzle Manfred Meyer Jrg Moritzen Michael Schmotz Klaus Vosseler Institutional Sales CEE Head: Jaromir Malak Central Bank and International Sales Head: Christoph Kampitsch Abdalla Bachu Antony Brown Sales CEE Tomasz Karsznia Pawel Kielek Piotr Zagan Institutional Sales Slovakia Head: Peter Kniz Sarlota Sipulova Institutional Sales Czech Republic Head: Ondrej Cech Milan Bartos Radek Chupik Pavel Zdichynec Institutional Sales Croatia Antun Buric Institutional Sales Hungary Norbert Siklosi Institutional Sales Romania Head: Ciprian Mitu Ruxandra Carlan Institutional Solutions and PM Head: Zachary Carvell Brigitte Mayr Mikhail Roshal +43 (0)5 0100 84250 +43 (0)5 0100 85503 +43 (0)5 0100 84323 +43 (0)5 0100 84117 +43 (0)5 0100 85521 +43 (0)5 0100 84118 +43 (0)5 0100 85543 +43 (0)5 0100 85540 +43 (0)5 0100 83215 +43 (0)5 0100 85580 +43 (0)5 0100 85562 +43 (0)5 0100 85561 +43 (0)50100 85544 +43 (0)50100 85541 +43 (0)5 0100 83213 +43 (0)5 0100 85581 +43 (0)5 0100 85542 +43 (0)5 0100 85560 +43 (0)50100 84254 +43 (0)50100 84979 +44 207623 4159 +44 207623 4159 +48 22 538 6281 +48 22 538 6223 +43 (0)50100 84256 +421 2 4862 5624 +421 2 4862 5629 +420 2 2499 5577 +420 2 2499 5562 +420 2 2499 5565 +420 2 2499 5590 +385 (0)6237 2439 +36 1 235 584 +40 213121199 6200 +40 21 310-4449 612 +43 (0)50100 83308 +43 (0)50100 84781 +43 (0)50100 84787

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Erste Group Research CEE Special Report | Fixed Income | CEE 23 May 2012

This research report was prepared by Erste Group Bank AG (Erste Group) or its affiliate named herein. The individual(s) involved in the preparation of the report were at the relevant time employed in Erste Group or any of its affiliates. The report was prepared for Erste Group clients. The information herein has been obtained from, and any opinions herein are based upon, sources believed reliable, but we do not represent that it is accurate or complete and it should not be relied upon as such. All opinions, forecasts and estimates herein reflect our judgment on the date of this report and are subject to change without notice. The report is not intended to be an offer, or the solicitation of any offer, to buy or sell the securities referred to herein. From time to time, Erste Group or its affiliates or the principals or employees of Erste Group or its affiliates may have a position in the securities referred to herein or hold options, warrants or rights with respect thereto or other securities of such issuers and may make a market or otherwise act as principal in transactions in any of these securities. Erste Group or its affiliates or the principals or employees of Erste Group or its affiliates may from time to time provide investment banking or consulting services to or serve as a director of a company being reported on herein. Further information on the securities referred to herein may be obtained from Erste Group upon request. Past performance is not necessarily indicative for future results and transactions in securities, options or futures can be considered risky. Not all transactions are suitable for every investor. Investors should consult their advisor, to make sure that the planned investment fits into their needs and preferences and that the involved risks are fully understood. This document may not be reproduced, distributed or published without the prior consent of Erste Group. Erste Group Bank AG confirms that it has approved any investment advertisements contained in this material. Erste Group Bank AG is regulated by the Financial Market Authority (FMA) Otto-Wagner-Platz 5,1090 Vienna, and for the conduct of investment business in the UK by the Financial Services Authority (FSA). Please refer to for the current list of specific disclosures and the breakdown of Erste Groups investment recommendations

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