ECONOMY

Germanos powers ahead to larger shares in Greek and Eastern European markets

After two years of recession in the information technology and telecommunications product retail markets, and amid signs of saturation in mobile telephony, only one market player seems to have held its own. The Germanos group continues to expand in Greece and abroad; it recently reached a deal to distribute products/services of Vodafone-Panafon, adding to its agreements with the other two major cellular operators, CosmOTE and Telestet. In this interview, Germanos’s Managing Director Yiannis Karayiannis lays out plans, including expansion to new markets abroad. The group is already active in five countries of Central and Eastern Europe, and is considering setting up shop in Serbia and Ukraine. You recently announced a deal with Vodafone. What benefits do you expect? Will you revise upward your 2003 forecasts for turnover and profits? This agreement gives substance to our company’s basic principle for comprehensive customer service. Consumers can now choose from almost the full range of cellular operators. Germanos is now the sole nationwide sales network offering the full range of alternative services in mobile telephony. We believe that this agreement will provide economic benefits for both parties. But given that we have a conservative inclination, it would be too early to speak about revising our forecasts; we will let time show. How are the IT and telecom product retail markets faring now? What is the forecast for your market’s growth rate this year, given the maturation of the mobile telephony sector in Greece? Our forecast is strongly positive. We believe that with the existing technologies and services we shall have two more years of strong growth, despite the already high penetration rate in Greek mobile telephony. This will happen because a large number of existing subscribers are inactive. Beyond that, new products and technologies (MMS, 3G) are coming onto the market, giving us further growth potential in the ensuing years. But we see the telecoms market as a whole in the process of formation, with particular opportunities in the next three to five years. Our 2002 results were within targets, with net sales rising about 20 percent to 516.7 million euros and pretax profits by about 10 percent to 29.6 million. Our foreign sales accounted for about 10 percent of the total and our target is for this to reach 30-40 percent in the next three years. For 2003, we are targeting an average 20 percent growth in turnover and 10-15 percent in profits. To what do you attribute the improvement in operating profitability and performance? The main factors of our growth lie in augmenting our market shares in Greece and abroad and the broadening of our sectors of activity. Also, having invested considerable sums in logistics, information technology and human resources, we now enjoy lower operating costs in comparison with previous years. We ensure that our capital is invested for maximum efficiency and growth in the basic sectors. What part of your revenue comes from industrial activities and are you planning more investment there? What projects did Sunlight undertake recently and which of these concern foreign markets? One of the biggest achievements of our group – not widely known – is our production of industrial batteries. Germanos is making big strides in this domain and has managed to stand valiantly in the world market. We produce batteries for autonomous energy, for submarines, telecom applications, industrial systems, transport and other uses. We have invested considerable sums in our plant in Neo Olvio, Xanthi, which produces extremely competitive products. Our three-year investment plan in this domain is in its final stage; battery production accounts for 10 percent of turnover and 15 percent of profits. Let me note that the value of orders currently being processed is in excess of 120 million euros and we have clients in more than 20 countries. Karayiannis says Germanos targets the leading market positions in the countries where it invests. The group today numbers 531 retail outlets, of which 282 are in Greece, 114 in Poland, 60 in Romania, 43 in Bulgaria, 18 in Cyprus and 14 in the Former Yugoslav Republic of Macedonia. «We do not so much place importance on the number of branches as on creating a homogenous chain which consumers will recognize, particularly in our broader geographical region where population mobility is high. In other words, we aim to have the Germanos name valued and recognized in these countries in the same way as in Greece. We are now studying the Serbian and Ukrainian markets.