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Heracles Group Analysts’ Day – 24th May 2007. Agenda. Highlights 2006 Financial & Market Overview Financial Performance. Highlights 2006. Safety cascading program launched and in progress Domestic market boomed due to private residential activity Better market conditions for exports
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Agenda • Highlights 2006 • Financial & Market Overview • Financial Performance
Highlights 2006 • Safety cascading program launched and in progress • Domestic market boomed due to private residential activity • Better market conditions for exports • Customer orientation program fully deployed • Increased fuel, power and raw material prices affected cost, partly set off by performance improvement of fuel mix and power consumption. • Headcount reduction compensated wages’ general increase • Organizational restructuring program initiated
Market Overview • Prior historical high in 2003 due to the Olympic Games construction projects • Market boomed in 2006 to all times high due to private residential activity (VAT in construction resulted in sharp increase of permits in 2nd half of 2005) • Slow down of private housing smoothen by an increase in infrastructure construction • 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 / secondary housing for Northern Europeans / development of resort constructions • Infrastructure still lagging behind European standards
Heracles is the market leader (*) (*) 2005 Cement Industry Association Statistics Ready Mix concrete producers consume two thirds of the total cement supplies Customer structure remains stable Market Shares – Customer Structure
Heracles Sales Breakdown: Domestic / Exports • Domestic market is a priority and absorbs the majority of production • Exports (cement& clinker) cover the rest of our production capacity
Sales Variance Analysis 2006 vs 2005 • Domestic cement volume increased by 16% due to the dynamic private building activity • Exports volume decrease by 23%, largely compensated by export selling prices increase by 19% thanks to better market conditions • Domestic selling prices increased at inflation level
NPAT Variance Analysis 2006 vs 2005 • Cost of sales adversely affected by increased prices in fuels, power and raw materials as well as departure cost • One off positive effects in 2005 from Greek State refund and deferred tax on property revaluation for tax purposes • One off negative effect in 2006 from cost of voluntary retirement scheme and prior years income tax
Fuel Prices Evolution • Steam coal price increase 2006 vs 2005: +4% • Pet coke price increase 2006 vs 2005: +28%
