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Public Power Corporation (PPC) | Greener, faster, stronger

Greenification roadmap intact, without funding overhang – PPC’s Capital Markets Day (CMD) delivered a clear and cohesive roadmap for the next chapter of the Group’s transformation, building on the message communicated last year. Although the updated targets reflected mainly the 1-year rollover (to 2028e), the messaging indicated a sharpening of strategic focus on renewables, flexible generation, networks and customer solutions across SE Europe. The shift in the generation mix is set to accelerate meaningfully, with lignite phased out from 2026, and the portfolio tilting decisively towards RES/distribution. Most importantly, with EBITDA rebased at structurally higher levels and a sizeable portion of the investment plan being discretionary, management was unequivocal that no equity capital will be required, reinforcing confidence that the balance-sheet trajectory remains manageable and fully compatible with PPC’s investment-grade aspirations.

Profit engine reloaded; 11% EBITDA CAGR in 2025-28e, >20-25% net profit CAGR – Mgt has guided for €2.9bn EBITDA in 2028e, c10% above most pre-CMD market estimates, a notable uplift driven primarily by RES, flexible capacity and grids, with the investment cycle front-loaded to underpin LT cash generation. Most importantly, PPC will be funneling c85% of its €10bn 2026-28e capex envelope into RES/networks, materially deepening the weight of clean activities in the portfolio. These will result in a 2025-28e EBITDA CAGR of 11% on our recalibrated estimates, with >60% of Group 2028e EBITDA stemming from RES and regulated grid operations. Net income is also poised to compound at an even faster clip (>20-25% CAGR) thanks to the positive pendulum of operating leverage and lower depreciation. Overall, PPC is set to continue its transition into a credible multi-year 2-digit profit growth algorithm, one of the fastest growth stories among EU utilities.

The data center (DC) optionality – PPC used the CMD to set out its thinking on DCs, framing them as a meaningful yet clearly discretionary growth lever. With global hyperscale demand accelerating, Europe faces a sizeable capacity gap, opening space for new regional hubs, while Greece is increasingly attractive vs congested FLAP-D markets thanks to strong fibre links, subsea-cable routes, ample land and faster permitting. Against this backdrop, PPC highlighted Kozani as its flagship site, offering immediate grid access and proximity to flexible generation. Development will be phased and anchor-driven, with no equity deployed absent long-term contracts and a funding structure aligned with credit metrics. DC projects remain outside the 2028 plan and represent pure upside.

Valuation; reiterating Buy – We raise FY’26-27e EBITDA 7-8% on accelerated RES implementation, eyeing FY’27e EBITDA of €2.56bn, now being broadly aligned with mgt target. We pencil in c€9bn net capex (post subsidies) over 2026-28e and a progressive dividend policy in line with guidance, which will result in net debt/EBITDA staying near the 3.5x mark envisaged by mgt (net debt/EBITDA), a level in sync with sector norms. Rolling fwd our valuation to end 2026, we lift our PT to €21, which would place PPC at 7.1x 1yr fwd EV/EBITDA, still a discount vs EU peers, despite its superior growth profile.