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Heracles Group Analysts’ Day - 12 th April 2006. Agenda. Highlights 2005 Financial & Market Overview Financial Performance. Highlights 2005. Domestic market decline lower than expected Better market conditions for exports Increased fuel prices affected operating margin
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Agenda • Highlights 2005 • Financial & Market Overview • Financial Performance
Highlights 2005 • Domestic market decline lower than expected • Better market conditions for exports • Increased fuel prices affected operating margin • 44.1 million € refunded by Greek State • Positive net tax effect of 50.3 million € from property revaluation • Full compliance with Sarbanes Oxley Act • Acquisition of ATLAS S.A. (Aggregates)
Market Overview • Historical growth due to the Olympic Games construction projects • Solid future evolution driven mainly by private housing • One of the highest per capita consumptions worldwide, driven by • Significant use of concrete in the buildings • Housing & real estate viewed as a solid investment • Potential for summer housing / secondary housing for Northern Europeans • Infrastructure still lagging behind European standards
Heracles is the market leader Ready Mix concrete producers consume two thirds of the total cement supplies Market Shares – Customer Structure
Heracles Sales Breakdown: Domestic / Exports • Domestic sales are expected to absorb the majority of our production • Exports (cement& clinker) will cover the rest of our production capacity
Sales Variance Analysis 2005 vs 2004 • Cement market decreased by 3% due to the finalization of Olympic projects and the reduction of public spending • Exports volume increased by 8% thanks to higher production availability (lower domestic sales ) • Domestic selling prices increased gradually by 4,8 % (1 general increase and 4 targeted increases) • Export selling prices increased by 15% thanks to better market conditions
NPAT Variance Analysis 2005 vs 2004 • Cost of sales adversely affected by increased prices in fuels • Greek State refund 44.1m € recorded as exceptional income • Deferred tax positively affected by property revaluation for tax purposes