Hewlett Packard Enterprise Company (HPE) Earnings Call Transcript & Summary

I am Nicolas Bornozis of Capital Link and I would like to welcome you to today's webinar, as part of the Capital Link Invest in Greece Webinar Series, which aim to raise the profile of Greece as a business and investment destination. Today's topic is investing in Greece, opportunities and incentives for international investors. And we have with us an excellent panel of government representatives and international investors who have actually invested significantly in Greece and will share their experience from their presence of the investment in Greece. Mr. Panayotis Bernitsas, the managing partner of Bernitsas Law is going to moderate the panel discussion and is going to introduce our panelists. But before that, I will turn the floor over in a second to Ms. Maira Myrogianni, who is the Secretary General for International Economic Affairs of the Ministry of Foreign Affairs and she is also the Chairwoman at the Enterprise Greece. Two very quick remarks. The first one, the usual disclaimer that our webinars are always for informational and educational purposes. And the second one, that our participants can submit questions through the Q&A button at the bottom of the screen and their questions will be addressed if time permits at the end of the discussion. And with this, I'd like to welcome Ms. Maira Myrogianni and turn the floor over to her.

Thank you, Mr. Bornozis. First of all, let me thank you for the invitation to participate in this webinar. Dear friends, dear participants, we think it's very important to have this kind of initiatives in order to have a chance to discuss with each other to promote the possibilities and the opportunities Greece has right now and also to give an example of what's happening in our country. Let me start by saying that, as you said, I'm the Secretary General of the Ministry of Foreign Affairs and also the Chairwoman for the -- at the Enterprise Greece. And this is a reform-based decision, political decision made by the Prime Minister Mitsotakis when he decided in 2019 to bring Enterprise Greece into the auspices and under the Ministry of Foreign Affairs. And we understand that this was a part of the greater reform. We understand that we see now that this reform has brought results. Since Greece is finding itself in a very good position in investments. We had record investments in 2022. And in 2024, we expect to have even more investments happening. Also we had a record of exports in 2022. We have the political stability that was needed and a stable environment, as you know, Economist has ranked Greece as of country of the year in 2022 and 2023. And also has ranked Greece as the country with the best improving business environment, we're the first -- we're second in the Eurozone in growth -- in annual growth. And also, first out of the 34 OECD countries in growth as well. So I think there is a very good momentum for Greece to have -- to receive more investments. We have a very good environment. We have turned all the crisis that have lead before into opportunities. We have different reforms in the law about the strategic investments. So I'm sure Dr. Giannopoulos will say, later on. We have -- we are giving a lot of incentives but it's also important for us to promote investments in Greece in several fields. What I mean by that is that Greece, traditionally, is a country with shipping industry, touristic industry and agriculture, agrifood industry. But also we are promoting our innovation fields, which is becoming a hub in transport and in energy also and also hub in logistics. So there are different fields and sectors in which somebody can invest. We have very good real estate sector that facilitates all the investments we have done, all the work that needed to be done in a governmental level in digitalization. We have a lot of -- now things done digitally, so a lot of permits are digitalized. They are more easily to go through an investment and we have -- we give also tax incentives for several investments. I think it's a very good opportunity to explore. I'm sure that distinguished colleagues in the panel, they are going to talk after, they will elaborate on all these issues. And I'm certain that this webinar will be very successful. And let me thank, again, for organizing it because it's very important to inform people and companies, enterprises about the opportunities that are happening in Greece. Thank you very much.

I had forgotten to unmute myself. So thank you very much for your kind and very insightful introduction. I will now turn the floor over to Mr. Panayotis Bernitsas, the management partner of Bernitsas Law, who is going to introduce our panelists and moderate the discussion.

Yes. Thank you very much. I'm very happy to, let's say, to have this panel with so distinguished speakers. And in order to examine together the opportunities and incentives for international investors in Greece. Now after the very detailed, let's say, introduction that Ms. Maira Myrogianni made, I think that my role with regard to my introductory remarks will be very, very limited. What I can say is that Greece has outperformed during the last years with regard to foreign investments, attraction of foreign investments has been in the epicenter of the governmental policy and this has produced tangible results. And we see it in various sectors of the economy as Ms. Myrogianni said. So I will not take much longer in, let's say, in the introductory remarks. The distinguished members of our panel are evenly divided between the public and the private sector. And I believe it will be very creative to compare and eventually see their views with regard to the various issues that have to be discussed. I will start with Mr. Gregory Dimitriadis who has, let's say, the gigantic task of managing assets and shares of state-owned companies. And at the same time, supervising some of the most important organizations of the public sector, including the privatization fund, the HFSS, which is the Hellenic Stability Fund and of course, the notorious [indiscernible], which is the owner and manager of all real estate assets in Greece. So now this role will be expanded with the newly established Greek Sovereign Fund, which is going to pass through Parliament within the next 2, 3 weeks. And I would like to ask Mr. Dimitriadis to tell us what the major challenges are with regard to this huge role that he has undertaken and how he sees the management of state assets and especially state shares of state-owned companies and to tell us whether there is an increasing trend of foreign investors to invest in those Greek assets.

Thank you very much, Panayotis, for the introduction. Thank you also Nicolas for organizing this. I think this is a very good initiative. And as Panayotis mentioned, yes, Growthfund is a big task, it's part of all the effort of Greece to bring investments to the country. Maira earlier gave us...

Gregory, I think -- sorry to interrupt. I think you should mute the voice, the loudspeaker of your -- the loudspeaker, not the microphone because we hear an echo.

So what I was saying -- to just repeat without an echo, is that, well, I think everybody organize this, especially Nicolas Bornozis and of course, Panayotis Bernitsas, who has actually now helped us in the legal aspects of the newly -- of the new fund to be established soon. And the question was, if there are major challenges in managing state assets and of course, there are. As we all know, state assets have a specific set of regulations and this comes with a legal framework which is not that -- as flexible as in the private sector. But the whole idea is to actually make these assets, the companies, the subsidiaries that we have perform like they are actually listed private sector companies. And this is what has been the main aim of our strategic plan for the last 3 years, which is to be active shareholders in the sense that we will be very much on top of what happens in our subsidiaries and intervene as necessary in order to restructure them. And we have seen examples of success. We have PPC, the energy company that has been transformed. It was on the verge of bankruptcy 3 years ago. Now it is expanding even abroad, investing even outside Greece. And this is something that can also happen with other state-owned enterprises we have. For example, with our postal services and other ones. And the new legal framework will also strengthen our capacity to do so since we will have further flexibilities. This also means that there's going to be opportunities also for international investors because we need strategic partners in the assets we have. And it's not an aim that we just have 100% equity in all our subsidiaries. The idea is that we mature them, they grow and then we can have some partners who will actually help us grow the business. And actually, the offerings that they have for the citizens because most of them, they offer some public work. The other element which is important is that we have to be a responsible investor in the Greek economy. We collect dividends by the companies in our portfolio. And this -- so as better they perform, we can have more dividends and this is something that we can return to the Greek economy through investments. Under this plan, we are actually now establishing the new fund. We are working with BlackRock in order to set it according to the best-in-class corporate governance and investment practices. And of course, work complementary to whatever else is in the Greek -- in the Greek ecosystem. And so it is RRF, for example, it is Dr. Haris Lambropoulos work and as we -- who has been very successful in running HDBI and transforming even HDBI from what it was before. So all this is part of a coherent effort to make sure that the challenges that the state assets can have can actually turn into opportunities that will welcome strategic investors. And from what we see is that there is interest. We have seen also for constructions, they include even Kalamata Airport, for example, has attracted 4 bids and they include foreign investors in the partnerships with Greek investors. And this is also something we have seen in other aspects like the floating in the stock exchange of the Athens Airport, for example. And these are all indications, clear indications that there is a very positive momentum for the Greek economy, which I believe that even this forum here that brings Growthfund, HDBI and Enterprise Greece together, it's something that collectively, we have to make the -- in light of the opportunities and the profits of investors as great as possible. So -- and this is exactly [indiscernible] Maira earlier presented. And I know we are all in full support of that. And I also want to thank all the members of the -- both Marinos and Haris and Maira for all the cooperation we have.

Thank you very much for that. Let me ask now Dr. Marinos Giannopoulos, who is the CEO of Enterprise Greece. Dr. Giannopoulos, you are, in fact, the [indiscernible] ambassador of the Greek government towards foreign investors. You are the one-stop shop, the welcoming office for foreign investors. And I wanted to ask you, if you can, let's say, briefly describe the mission, the specific incentives and the support mechanism that you have at your disposal in order to guide and assist foreign investors who are interested in investing in Greece.

First of all, thank you for the question and thank Mr. Bornozis for giving us the platform in the form of time to be able to explain what we do and put to the public the opportunities and the incentives and present Greece as an investment destination for any potential investors. I'm really glad that we have a really good partner with, first of all, Gregory and Haris and of course Maira and our 3 success stories that we're going to hear from -- later. Enterprise Greece is the official investment trade agency of Greece under the auspices of the Ministry of Foreign Affairs. And essentially, our mission is to promote exports and attract investments, promote Greece as an attractive investment destination, lay down why it's an attractive investment destination, support foreign investors throughout their investment projects. Of course, facilitate the trade and expo activities for big products and services. We've -- organizing national publicly [indiscernible] trade fairs, trade missions that we participate with the Prime Minister, with the support of the other organizations as well, enhance all the global competitiveness of the Greek businesses. And of course, showcase the brand Greece as a business destination. Now going back to the second part of your question, kind of what we think is the support mechanism we have. First of all, you heard Gregory Dimitriadis and you'll hear from Haris as well, some of the major support mechanisms that are on offer. And I think our work is also to promote them. So even if we weren't here today, we're going to talk about them anyway because that is the way we direct part of our investors to speak to them. The first one is, the Investment Incentives Law, which is different type of taxes and subsidies [indiscernible] development, R&D subsidies, tax exemptions, leasing subsidies [indiscernible] government to shape businesses invest in Greece. One main thing that we have in Enterprise Greece is the strategic investments, the Fast Track Law as we would like to call it. Basically, it offers extra incentives for significant investments that are based in Greece and the main 3 extra incentives that you get is the fast track but everything is run through a central secretariat for your licensing procedures. You have extra financial incentives depending on the category. And of course, you have a dedicated [indiscernible] too that has better building regulations. Leaving that, [indiscernible] we heard Gregory mentioned Recovery and Resilience fund, it's something that's been going on for many years now and have been quite successful. We're also talking about partnership agreements that include got significant resources that you're going to get from various PE funds that can help potentially get some more funding into Greece. Access to different investment networks and partnerships. And of course, all the support that we can navigate through local businesses that we can offer, especially being under the office of the Ministry of Foreign Affairs, being a neutral kind of ground. We can talk to everyone and help support any kind of investment environment conditions.

Well, thank you very much for that. We understand, of course, that foreign investors face certain challenges due to the environment, due to the different language, due to the specificities, let's say, of the public sector. And we understand that Enterprise Greece and organizations like yours assist them in mitigating the various challenges. Could you please give us some specific examples of what these interventions lead to?

That's really a easy question to answer. But what I usually say that in a perfect business environment, I think enterprise business investment agencies like Enterprise Greece wouldn't be needed because everything will run smoothly. And that's kind of will act as a one-stop shop, as you mentioned, as an adviser to do the business because always -- we're talking about the complex, regulatory environment but obviously it's trying to change and make it better with all the different permits or approvals that you might need for your projects. I mean, we got the legal framework, we got the incentives around with all the [indiscernible] processes that the government is currently trying to smooth and also been trying to better. And that's why we act as an adviser to the government as well by listening to what the investors have to say. So potentially find any gaps on the legal framework, to inform the government that, listen, this needs to change, maybe there's something that can be done there. Of course, any infrastructure and constraints, that can be with logistics that, as you heard from Gregory before, we -- Greece is expanding, Greece is upgrading its infrastructure but it's a process, it doesn't happen overnight. So any improvements takes time. And of course, any kind of betterment for marinas, to airports, to any other big projects will take time to be able to facilitate even more projects surrounding the area. Let's not forget, of course, the economic volatility and the financial stability concerns that any investor might have, especially on the current geopolitical place in Greece and around us. But it's up to us to inform and reassure the investor that, listen, there is a stable government, it has been shown it's been success story. You heard Maira talk about the economy's second year running as the top performance economy. That in part due to the stock market as well, which is increasing. So all of that builds kind of what we like to say the investment environment in Greece that should reassure the investors to come and invest.

Thank you very much. Now let me turn myself to Prof. Haris Lambropoulos, who is the President of the Hellenic Development Bank of Investments. The Development Bank is a substantial facilitator and co-investor in funds that invest in Greek companies. And of course, it plays a very important role as Mr. Dimitriadis also said before, in the development of Greece. I would like to ask what is role of the Hellenic Development Bank in facilitating, mediating between international investments and, let's say, the Greek environment through the venture capital or the private equity funds that -- where it's go invests and what opportunities there are for those funds that would like to invest in Greece.

Okay. Thank you so much, dear Mr. Bernitsas. I would like also from my side to congratulate the organizers of this very important webinar and state that I'm very happy and honored to be coordinated by one of the top legal firms of our country and especially its managing partner, namely Mr. Panayotis Bernitsas. So in saying so, I would like to say that the Hellenic Development Bank of Investments is the sovereign fund of funds of Greece. We are an NPI, a national public institution. So there is also a Hellenic Development Bank, which is a national public bank offering debt and guarantee instruments. From our side, we co-invest on the equity side. So we are the equity investment instrument of the Hellenic Republic, managing public and European resources and investing on behalf of the Greek state. As also Gregory said earlier and Marinos as well as Maira -- Ms. Myrogianni explained, we are all working collaboratively to add on our -- on the development and financing chain of the Greek government and the Greek policies. So we are part of this very important chain. So as you also implied in your question, we are a sovereign fund investor. Our mandate is to impose governance terms, strict governance terms or our fund management teams that they apply through our calls, open calls. Let me say that this is a significant difference from other peer institutions around Europe. So we have open calls. We have currently under management, EUR 2.1 billion to procure and invest in newly to be established funds mainly along with other private investors, mainly on a pari-passu basis, meaning on the same terms with no privileges as compared to other investors. Although we offer privileges in some cases to private investors because we want to demonstrate derisking of investment and to attract, let's say, smart money in -- to be invested in Greek companies with innovative, extrovert and growth characteristics. So we are talking about growth capital through our portfolio funds. Currently, as Gregory implied earlier, we have reformed the Hellenic Development Bank of Investments during the past 4 years and from a negligible portfolio of venture capital and private equity funds, we are very happy to say that today we manage a portfolio of 27 private equity and venture capital funds where we have committed about EUR 700 million from our side and they have raised about EUR 900 million from their part, meaning that they manage in total EUR 1.5 billion and still growing. So we are very happy on that. That means that there is an investment appetite for Greece. And also, if I can compare that with the past 20 years, this is twice the public resources invested in such schemes, venture capital and private equity -- equity schemes, equity investment schemes as compared to the past 20 years. That does not mean that we do, right, our work only. But to the contrary, from my side, I want to demonstrate that there is an investment traction and an investment perspective for Greece and that's why the Greek -- the foreign investors and the private investors, they do trust our fund managers to invest in the Greek economy, in the Greek companies.

Thank you very much for that. May I ask an additional question? You mentioned privileges. And I would like to ask you whether there are specific incentives for investing, let's say, in the Hellenic Development bank through the VCs or PEs?

Yes. Of course, I would like to highlight that there is a regulatory framework, which is very advantageous. It is comparable to any other major frameworks, for example, Luxembourg, yes. It is tax transparent or tax neutral, depending on the appetite of the investors. Our calls, as I said earlier, some of them, they have a cap on the returns that we expect and we leave the rest for the private investors, although most of our FMAs, Fund Management Agreements are on a pari-passu basis, same terms, same conditions, same returns, no privileges for us. We try to facilitate private investors to invest in the Greek entrepreneurial ecosystem, whether this is on the start-up or in the grown-up phase of investments. We have, in our portfolio and we have seen that specialized management teams, both in terms of local knowledge and scientific background. And of course, we have very strong international and pan-European partnerships. So I can name, for example, on the international level, our co-investment agreement with Mubadala Capital, where we have a co-investment partnership with them. They have already invested in 3 of our funds with Abu Dhabi Developmental Holdings as well that they have recently announced through one of their portfolio companies, Masdar, their landmark acquisition of Terna Energy, where we acted as facilitators. We have not invested but we facilitated to the largest extent the successful completion of this fund. And on the pan-European level, we collaborate with all our major peers like Bpifrance, KfW Capital, Tesi from Finland, EIFO from Denmark, CDP from Italy. And personally, I have the honor to be elected and participating in the Board of Directors of the European Investment Bank and the European Investment Fund. And we have a global European, let's say, overview of what is happening in Greece and we are eager to welcome the new sovereign fund instrument of the Growthfund and collaborate with Gregory and his team.

Excellent. That is very, very encouraging and very, very good news. Congratulations for the good work. And now let us see how the market perceives those opportunities. I will start with Mr. George Nikolaou, Head of Chubb Business Services, EMEA, who is responsible for the launch of a new technology services center in Thessaloniki, Greece in early 2023, to deliver innovative technologies that enhance the customer experience, increase efficiency and accelerate the company's digital transformation. Chubb's investment, of course, gives us a lot of optimism about Greece's active role in the Brave New World that is under formation. And I would like to ask you whether this journey to implementation was smooth or rather bumpy in the first place, Mr. Nikolaou?

Thank you, Mr. Bernitsas for the question and thank you, Mr. Bornozis for the invitation to discuss such a critical topic for the Greek economy. So the ride has been smooth and bumpy at the same time. First of all, who is Chubb? Chubb, we're a world leader in insurance, operating in 54 countries and territories. Our stock is traded in the New York Stock Exchange as part of the S&P 500 Index. In Greece, we established an engineering center, a hub, to serve the digital technology needs of this 40,000 people organization. We were able to find great professionals, great human resources that were quickly integrated into our global organization and became productive very quickly. We currently employ over 250 people, aiming to reach 500 and we only started less than 2 years ago. At the same time, acknowledging that so far it's been a successful ride. We do have strong headwinds. We lack public infrastructure in Thessaloniki. We lack real estate solutions for our office needs. We have steep start-up costs, establishing a new operation in a new country. And we even lack certain critical skills in hiring the people we want. So it's been smooth and bumpy at the same time. And I mean the good news is that we're here, we're making good progress. Unfortunately, we haven't gotten much support from anywhere other than ourselves.

Okay. But that's very good to hear. My experience from Thessaloniki despite the fact that there were complaints that it becomes a provincial city, is that it is a vibrant city and that it becomes a hub for new technologies with a lot of young people and the universities there and one feels -- when in Thessaloniki, you feel how vibrant the city is and how much energy there is, which is a very good omen for the future because sometimes when we speak about Greece, some people think it's only Athens or the Athens area or the Adriatic area. And I would like to ask you another question, which is you said you didn't have much help apart from what you managed to do on your own. What do you think should be? What advice would you give, let's say, to the public authorities? And what sort of support would you like the Greek government to give to investors who are interested in investing in this country in order to enhance, let's say, their investments in Greece.