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Citigroup — Citi Corporate and Investment Banking — Bulgarian Capital Markets Day 2017

22 slides from Citigroup's conference presentation, May 18, 2017

  1. Slide 1: CEE Macro Overview

    Citi Corporate and Investment Banking 18 May 2017 Bulgarian Capital Markets Day CEE Macro Overview Plamen Radkov CEEMEA Investment Banking Citigroup Global Markets Ltd

  2. Slide 2: Table of Contents

    Table of Contents 1. CEE Macro Update 2. Capital Markets Update 3. CEE M&A Trends 4. Citi Presence and Track Record in CEE

  3. Slide 3: 1. CEE Macro Update

    1. CEE Macro Update citi

  4. Slide 4: Resilient GDP Growth Well Above EU Average…

    Resilient GDP Growth Well Above EU Average… Real GDP Growth GDP per Capita Growth (PPP) (%, 2010A–2019E) (%, 2010A–2019E) 6.0% 6.0% 5.5% 5.0% 4.8% 4.3% 4.2% 4.0% 4.0% 3.5% 3.5% 3.4% 3.0% 3.0% 3.0% 3.0% 2.9% 2.8% 2.6% 2.3% 2.3% 2.3% 2.2% 2.2% 2.0% 1.8% 2.0% 2.1% 1.8% 1.5% 1.6% 1.3% 1.0% 0.0% 0.0% (1.

  5. Slide 5: …Driven by Exports and Private Consumption

    …Driven by Exports and Private Consumption Exports as % of GDP Unemployment (2010A–2019E) (2013A–2019E) 100% 92.6% 14% 90% 92.2% 13.5% 79.7% 80.3% 80% 12% 11.3% 66.8% 83.1% 70% 63.3% 63.6% 66.4% 10% 11.0% 9.0% 60% 10.2% 48.4% 52.5% 51.9% 59.6% 8.4% 50% 44.0% 7.7% 37.9% 47.8% 8% 8.7% 8.7% 40% 36.5% 3

  6. Slide 6: Per Capita GDP Steadily Converging to EU Levels

    Per Capita GDP Steadily Converging to EU Levels GDP per Capita (PPP) GDP per Capita as % of EU Average (PPP) (US$, 2016A) (%, 2010A–2019E) 40,100 100.0% 90.0% 89.3% 35,010 86.8% 80.0% 84.0% 72.6% 68.4% 71.5% 27,760 70.0% 27,310 71.3% 62.3% 67.8% 64.3% 23,903 60.0% 59.6% 55.6% 51.2% 52.2% 48.0% 19,25

  7. Slide 7: Relatively Healthy Public Finances

    Relatively Healthy Public Finances 140% Italy 120% 100% Spain France Public Debt/GDP (2016) UK EU28 Croatia 80% Slovenia Serbia Hungary Germany 60% Slovakia Lithuania Poland 40% Latvia Czech Republic Romania Bulgaria 20% Estonia 0% (5)% (4)% (3)% (2)% (1)% 0% 1% 2% Budget Balance (2016) Source: EIU.

  8. Slide 8: 2. Capital Markets Update

    2. Capital Markets Update citi

  9. Slide 9: Current Rate Environment in Europe - Close to Record Lows

    Current Rate Environment in Europe - Close to Record Lows CCC Index 10-Year Avg: 16.32% B Index 10-Year Avg: 9.58% BB Index 10-Year Avg: 6.58% 10-Year Bund Rate 5-Year Avg: 12.70% 5-Year Avg: 6.87% 5-Year Avg: 3.96% 4.00 Current: 9.90% Current: 5.10% Current: 2.71% 3.50 10-Year High: 64.62% 10-Year

  10. Slide 10: CEE Debt Primary Market is Open

    CEE Debt Primary Market is Open Eurobond Issuance (€bn) High Yield & Leveraged Finance Issuance (€bn) 40 37.1 20.8 35 31.4 17.6 Issuance Volumes (€bn) 29.4 15.9 30 12.3 8.9 4.0 25.6 24.8 2.3 14.1 5.6 2.6 22.2 25 9.1 2.9 4.7 2.4 2.2 7.3 10.1 20 10.1 9.3 6.0 3.7 8.1 5.1 3.8 1.2 4.6 8.8 0.8 6.3 15 5.6

  11. Slide 11: Strong CEE Equity Markets Recovery Post-Crisis, but Less Dramatic on USD Basis

    Strong CEE Equity Markets Recovery Post-Crisis, but Less Dramatic on USD Basis Index Performance (Local Currency) Index Performance (USD) 300 % Change CAGR 300 % Change CAGR Index 2009-17 2009-17 Index 2009-17 2009-17 WIG (Warsaw ) 128% 10.4% WIG (Warsaw ) 74% 6.9% BET (Bucharest) 95% 8.3% BET (Buch

  12. Slide 12: Equity Issuance Down but Increasingly Geographically Diversified

    Equity Issuance Down but Increasingly Geographically Diversified CEE Issuance by Country between 2009-2017 ($bn) #deals(1) 8 15 13 8 14 13 8 11 5 Polish Corporate Offerings Polish Privatisation Programme 11.7 0.3 Romania Privatisations 9.5 Hungarian Privatisation 1.3 7.4 Hungarian 6.5 1.4 Privatisat

  13. Slide 13: Government and Corporate Monetisations Dominate Issuance

    Government and Corporate Monetisations Dominate Issuance CEE Issuance by Type between 2009-2017 ($bn) #deals(1) 8 15 13 8 14 13 8 11 5 IPOs in Early Wave of Polish Privatisations Polish Privatisations Follow-ons 11.7 UniCredit disposal 9.5 Hungary EB into of Pekao Richter Gedeon Hungary EB into MEB

  14. Slide 14: Wide Divergence in Relative Size of Equity Markets

    Wide Divergence in Relative Size of Equity Markets Free-Float Market Cap as a Percentage of GDP 18% 16% 14% 12% Avg. Mkt Cap / GDP 10% 8% 6% 4% 2% 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 Poland Romania Hungary Bulgaria Source: IMF & Bloomberg 10

  15. Slide 15: 3. CEE M&A Trends

    3. CEE M&A Trends citi

  16. Slide 16: M&A Activity on the Rise

    M&A Activity on the Rise CEE M&A Value (US$ in Billions) $37.9 $36.4 $37.3 $35.4 $5.7 $30.8 $14.4 $7.5 $26.6 $24.4 $5.8 $8.4 $4.9 $23.5 $20.3 $20.3 $27.6 $18.8 $4.3 $6.1 $19.9 $18.6 $18.8 $6.5 $11.7 $17.7 $16.9 $2.9 $9.1 $4.3 $7.4 $5.5 $7.3 $3.5 $8.6 $7.6 $15.8 $15.7 $4.7 $4.7 $3.0 $9.6 $3.5 $2.4 $3

  17. Slide 17: Largely Driven by Poland and the Czech Republic

    Largely Driven by Poland and the Czech Republic CEE M&A Value by Country (US$ in Billions) $37.9 $37.3 $36.4 $35.4 $3.6 $1.1 $2.3 $0.3 $0.7 $1.0 $1.5 $8.3 $3.5 $30.8 $0.0 $1.4 $0.2 $6.7 $1.5 $1.2 $1.2 $2.4 $1.4 $25.9 $26.6 $1.3 $1.5 $24.4 $1.1 $1.5 $0.8 $1.1 $4.3 $3.5 $1.0 $3.3 $0.9 $1.1 $0.1 $8.4 $

  18. Slide 18: Sponsors Active as Both Buyers and Sellers

    Sponsors Active as Both Buyers and Sellers PE on the Buyside 184 186 154 149 131 134 134 $6.95 117 $6.03 92 88 $5.61 82 86 $4.14 $3.77 46 47 $3.20 45 $2.79 $2.24 63 33 32 $1.73 $1.72 $2.31 $1.39 $1.40 $0.79 $0.75 $0.73 $0.95 $0.17 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

  19. Slide 19: Cross Border Transactions: Asia Becoming a Significant Driver

    Cross Border Transactions: Asia Becoming a Significant Driver M&A Activity by Region (US$ in Billions) $12.2bn (-1%) WE CSEE $11.5bn $2.2bn (+105%) (+19%) Americas APAC Source: Thomson Reuters SDC. 14

  20. Slide 20: 4. Citi Presence and Track Record in CEE

    4. Citi Presence and Track Record in CEE

  21. Slide 21: Citi's Unmatched Central and Eastern Europe Franchise

    ’s Unmatched Central and Eastern Europe Franchise(1) Citi’s Presence in CEE(1) Citi’s Selected Recent Transactions in Central and Eastern Europe(1) M&A Equity Capital Markets Debt Capital Markets Best Investment Bank in CEE Euromoney - 2016, 2015, 2014 & 2013 - Advisor to Enterprise Advised EPH on t

  22. Slide 22: footprint, and engage with stakeholders to advance shared learning and solutions. Citi’s Sustainable Progress

    IRS Circular 230 Disclosure: Citigroup Inc. and its affiliates do not provide tax or legal advice. Any discussion of tax matters in these materials (i) is not intended or written to be used, and cannot be used or relied upon, by you for the purpose of avoiding any tax penalties and (ii) may have bee

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