WorldReginfo - 7e8aa245-6fa7-49ad-8b5e-43ecd131807e

Transcript

1

2 CONTENTS 1. Message from the Chairman of the Board of Directors 3 2. VIOHALCO 6 3. Steel Operations Copper Operations Aluminium Operations Real Estate Development Operations Invitation to Shareholders General Meeting 60 The paper of this Annual Report has been produced from forests and plantations under the FSC scheme and contains 60% pulp from recycled paper.

3 VIOHALCO at a glance Activities VIOHALCO is the holding company of the largest Greek metals processing group. VIOHALCO, directly or indirectly, participates in over 90 companies, which operate in the sectors of Steel, Copper and Aluminium processing, production and trade. Over 70% of the consolidated turnover of VIOHALCO is realized in markets outside Greece. Through its subsidiary NOVAL, VIOHALCO is also active in real estate development. Consolidated financials (amounts in Euro million) TURNOVER TOTAL ASSETS EARNINGS/ LOSSES BEFORE TAXES V I O H A L C O S. A. EQUITY

4 A N N U A L R E P O R T

5 1. Message from the Chairman of the Board of Directors 2009 was marked by unprecedented circumstances that arose from the global financial crisis and the resultant international financial recession, which altogether shaped a quite difficult market. Major infrastructure projects were postponed, the construction sector shrunk due to financing difficulties and demand in all sectors decreased due to shaken consumer confidence. At the same time, 2009 was marked by continuous changes in basic metal prices with steel prices being reduced, mainly in the first half of the year, whereas aluminium, copper and zinc prices rose. Nevertheless, the prices of all end products decreased, due to the overall shrinkage of demand. In this light, VIOHALCO companies took all dynamic steps required for dealing with the crisis. The main strategic goals of the management of the VIOHALCO companies included the orientation to new markets and new products, optimum management of inventories, ongoing decrease of operating costs, strategic restructuring of investments and finally, further boost of liquidity. In this context, the consolidated turnover of VIOHALCO, in the fiscal year 2009, amounted to Euro 2,298 million, a 38.9% decrease compared to Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to Euro 91.0 million compared to Euro million, while consolidated earnings before taxes and minority interests amounted to losses equal to Euro 89.9 million compared to losses equal to Euro 34.6 million in the fiscal year Net consolidated earnings after taxes and minority interests amounted to losses equal to Euro 76.8 million or Euro per share, compared to losses equal to Euro 11.3 million or per share in As regards the parent company VIOHALCO S.A., in 2009, earnings before taxes amounted to Euro 3.9 million compared to Euro 33.2 million, reduced by 88.2% due to the non-distribution of dividends for the fiscal year 2008 from the subsidiaries. Earnings after taxes amounted to losses equal to Euro 0.2 million or Euro per share, compared to profits equal to Euro 32.1 million or Euro per share in Note that both consolidated earnings and those of the company were charged with the Extraordinary Contribution of Social Responsibility under Law 3808/2009, equal to Euro 11.1 million and Euro 2.8 million respectively. In the steel sector, the consolidated turnover of SIDENOR stood in 2009 at Euro 938 million compared to Euro 1,713 million, i.e. a 45.3% decrease. The decrease in private building activity and the delay in the implementation of major infrastructure projects, led to reduced volumes of sales which were combined with the low selling prices of steel products and thus led to decreased turnover and also to squeezed profitability margins for the SIDENOR Group. The pipes sector was a positive component thanks to CORINTH PIPEWORKS which, despite its reduced turnover, achieved a considerable improvement of its organic profitability, taking advantage of the correction of steel and plastics international prices and of the drop in freight rates, in conjunction with further improvement of the output of its production plants. During 2009, the SIDENOR Group remained focused on the implementation of its development plans and invested Euro 45 million in the context of its strategy to further improve both efficiency and capacity of its production plants. In the aluminium sector, the turnover of the ELVAL Group stood at Euro 690 million compared to Euro 902 million in 2008, a 23.5% decrease, as a result of the low demand and reduced prices. Especially in the extrusion sector, the drop in the construction sector in Greece played a major role. In this light, the diversification of sales in other sectors of economic activity, the ongoing control of customers' credit lines and the strict management of working capital, were some of the measures taken to deal with the above circumstances. In parallel with the above actions, the ELVAL Group pursued the implementation of its investment plans, which in the fiscal year 2009 totalled Euro 51.0 million. At the same time, it further strengthened its links with FURUKAWA SKY V I O H A L C O S. A. 3

6 A N N U A L R E P O R T

7 ALUMINUM, which has acquired 25% of the subsidiary BRIDGNORTH ALUMINIUM. In the copper sector, the sales of the HALCOR Group dropped by 43.4% and amounted to Euro 679 million compared to Euro 1,200 million in 2008, as a result of the drop in demand and consequently, of the volume of sales, the decreased copper price and the drop in processing prices. Under these circumstances, the Group s investments amounted to Euro 28.8 million and were restricted to operations that had already been scheduled since last year and to the necessary improvements - upgrades of existing mechanical equipment. The above investments concerned the parent company s plants at Oinofyta, the upgrade of the production facilities of SOFIA MED in Bulgaria, the production facilities of HELLENIC CABLES in Greece and the cable plant of ICME ECAB in Romania. As regards real estate management activities, in 2009, VIOHALCO and its subsidiaries continued to develop the urban properties they own, in order to raise revenues through leasing to third parties. At the same time, during the fiscal year, construction on the property at Kifissos Avenue, Aigaleo, continued, a part of which has already been leased to IKEA while work at the office complex located at Kifissias Avenue, Athens, has reached the final stage of completion. Throughout 2009, the VIOHALCO companies carried on their activities showing respect for the natural and social environment. For VIOHALCO and its subsidiaries, environmental protection is a non-negotiable priority and thus, is the cornerstone of their corporate philosophy and operation. This is a commitment demonstrated through investments and integrated environmental management systems, that have already been put in place in order to reduce the environmental footprint of the companies production plants. Concurrently, all the VIOHALCO companies develop employee environmental training and awareness programmes, so as to attain the ongoing improvement objectives involving their environmental performance. Being a pioneer, VIOHALCO takes part in collective actions in and beyond Greece, such as the Hellenic Federation of Enterprises (SEV) COUNCIL FOR SUSTAINABLE DEVELOPMENT and the regional network of the WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT, which aim to promote the principles of sustainable development as fundamental principles that should govern a responsible corporate operation within the social fabric. In this context, the health and safety of employees, together with the environmentally responsible operation are the benchmark for all the VIOHALCO companies, investing in anti-pollution measures and the relevant technologies. As regards the performance of the markets in which the VIOHALCO companies operate, during the current year, all signs and data, to date, indicate that 2010 will also be a difficult year. The main priorities of the subsidiaries for the current fiscal year include optimum management of working capital, reduction of borrowing, ongoing improvement of the cost base and productivity, as well as the development and promotion of high value added products. The management of VIOHALCO closely monitors the developments in the international metals markets and takes advantage of the competitive advantages of its subsidiaries, in order to take all the necessary steps that will contribute to its overall substantial and sustainable development. Nikolaos M. Stassinopoulos, Chairman of the Board of Directors V I O H A L C O S. A. 5

8 A N N U A L R E P O R T VIOHALCO Activities VIOHALCO is the holding company of the largest Greek metals processing group. Through its subsidiaries, it operates in the sectors of Steel, Copper and Aluminium production, processing and trade, as well as in real estate development. Its main subsidiaries are SIDENOR and CORINTH PIPEWORKS in the Steel sector, HALCOR and HELLENIC CABLES in the Copper sector and ELVAL and ETEM in the Aluminium sector. All the above companies have a strong production base, which includes plants and merchandise warehousing and distribution facilities in Greece, Bulgaria, Romania, United Kingdom, FYROM and Russia. The shares of VIOHALCO and those of the subsidiaries SIDENOR, CORINTH PIPEWORKS, HALCOR, HELLENIC CABLES, ELVAL and ETEM are listed on the Athens Stock Exchange. 6 Subsidiary Structure Aiming at the effective business organization and the maximum possible utilization of synergies among companies, the operations of VIOHALCO and its subsidiaries are split into the following four sectors: 1.Steel sector 2.Copper sector 3.Aluminium sector 4.Real Estate Development Sector The above segregation ensures the conditions for the substantial development of each sector, while also enables the provision of a series of services at central level, by an operational unit, for all companies. These services include, among others, the procurement of raw materials, market research, technical support, foreign exchange risk hedging and legal support. VIOHALCO* STEEL SECTOR Data: 31/12/2009 * Listed on the Athens Stock Exchange COPPER SECTOR ALUMINIUM SECTOR SIDENOR* 69,68% HALCOR* 59,89% ELVAL* 67,79% CORINTH PIPEWORKS* 78,55% SOVEL 62,56% STOMANA INDUSTRY** 100% HELLENIC CABLES* 78,72% ICME ECAB 98,59% SOFIA MED 100% ΕΤΕΜ* 58,78% BRIDGNORTH ALUMINIUM 75% REAL ESTATE DEVELOPEMENT SECTOR NOVAL 100%

9 More than 70% of its consolidated turnover is generated outside Greece 7 International presence The dynamic commercial presence of VIOHALCO companies beyond Greek borders is demonstrated by the fact that more than 70% of the consolidated turnover is generated abroad. This successful international presence is mainly based on the strong established production base in and outside Greece, on the extensive distribution network, the integrated range of product solutions and the top quality of the companies products. Investments A large part of the successful business presence of VIOHALCO is attributed to the strong production base of its companies. In order to maintain this competitive advantage, during VIOHALCO and its subsidiaries, have invested more than Euro 1.4 billion, through extensive investment plans. Amid the main goals of the above plans, feature the improvement of the plants' production capacity and effectiveness, the maintenance of the top quality of the final products, the healthy and safe working environment, the development of new innovative solutions for customers and the environmental protection. V I O H A L C O S. A.

10 A N N U A L R E P O R T

11 9 Total investments of VIOHALCO and its subsidiaries in the fiscal year 2009 amounted to Euro million compared to Euro million in 2008 and they have been allocated to separate activity sectors as follows: Investments in steel activities Investments in copper activities Investments in aluminium activities Investments in real estate activities Investments in other activities Total Euro 45.8 million Euro 29.4 million Euro 47.7 million Euro 4.8 million Euro 5.6 million Euro million Research The Hellenic Metals Research Centre (ELKEME) is an initiative of VIOHALCO and its subsidiaries, which demonstrates their focus on research and innovation. The main scope of the Centre's operations includes the laboratory research of new production methods and testing of end products' performance. The purpose of the Centre is to carry out basic research on advanced plans and techniques with the purpose of improving production processes, as well as identifying and eliminating any failures and deficiencies in the end products. Total investments in ELKEME stand at Euro 3.9 million, while the benefits arising from its operation are multiple and are associated with the manufacture of existing products and the development of new innovative solutions. V I O H A L C O S. A.

12 A N N U A L R E P O R T SIDENOR Group is the largest steel scrap recycler in Greece and also figures among the most important recyclers in the wider area of the Balkans, as it recycles approximately 2 million tons annually.

13 Sustainable Development is a firm commitment VIOHALCO believes that its responsible presence in the social fabric is a fundamental principle of its operation and activity. Given that VIOHALCO and its subsidiaries are active members of the communities in which they operate, they care for the protection of the natural environment by taking adequate steps and applying best practices. VIOHALCO S.A., as a founding member of the SEV Hellenic Federation of Enterprises COUNCIL FOR SUSTAINABLE DEVELOPMENT, has adopted the Code of Principles for Sustainable Development and is committed to the following: 1. To respect the principles of Sustainable Development and incorporate them in its decision-making processes. 2. To promote the adoption of environmentally correct and scientifically well-grounded methods for the planning of its activities. 3. To be oriented to the manufacture of products and the provision of services having positive environmental impacts. 4. To promote the application of production processes focusing on recycling, preservation of natural resources and correct waste management. 5. To train and educate its human resources properly and invest in natural, technological and economic resources, with a view to sustainable development. 6. To promote an ongoing improvement of its performance in the areas of safety & health and environmental protection. 7. To provide correct information on its activities to the authorities and the society in general and pursue honest dialogue with anybody affected by them. 8. To contribute to the social, cultural and overall economic development of the communities living in its operating regions. 9. To adopt the implementation of modern corporate governance systems. 10.To fulfil its legal obligations consistently, in a spirit of transparency and business ethics. Protecting the Environment - Recycling All VIOHALCO subsidiaries consider environmental protection as their primary concern and have incorporated actions for reducing their environmental footprint in their daily operations. Appropriate environmental practice is a fundamental value for VIOHALCO, that supports all the activities of its companies, which take steps to meet modern environmental management standards and thus, operate in line with environmental conscience and responsibility principles. In view of the above, the Environmental Management Systems of most plants of VIOHALCO subsidiaries, have been certified according to the EMAS and ISO standards, whereas relevant certification procedures are under way in the remaining plants. Recycling in the Steel sector SIDENOR Group is the largest steel scrap recycler in Greece and one of the largest in the wider area of the Balkans, as it recycles more than 2 million tons annually. Steel scrap recycling saves approximately 70-75% of the necessary energy and 40% of the water required for steel production from iron ore. Moreover, its subsidiary AEIFOROS S.A. helps further reduce the environmental impact of the plants of the SIDENOR Group and other VIOHALCO companies, by recycling or utilizing the by-products arising from their production process. Recycling in the Copper sector As a sign of its commitment to improve its environmental performance, the HALCOR Group recycles significant quantities of copper scrap annually, in an environmentally friendly manner. In this context, the HALCOR Group companies contribute to the reduction in the emissions of greenhouse gases, since copper recycling helps save more than 75% of the greenhouse gases emissions and more than 85% of the energy required for the production of primary copper. V I O H A L C O S. A. 11

14 A N N U A L R E P O R T All production plants of the HALCOR Group have installed special antipollution technology systems.

15 In parallel with its recycling operations, the Centre operates as a communication base, where organizations, social groups, schools, enterprises and people from the community are informed on the process, value and benefits of recycling. Concurrently, all production plants of the Group use special anti-pollution technology systems to minimize environmentally harmful emissions. Furthermore, the company has developed an extensive plan for monitoring environmental parameters to ensure environmental protection. Recycling in the Aluminium sector Harmonious coexistence of its operations with the environment is a non-negotiable value for ELVAL, which supports it in practice and is one of the largest aluminium recyclers in Greece. Aluminium recycling is highly environmental-friendly and contributes to a considerable reduction in the emission of greenhouse gases, as it saves 95% of the energy required for the production of primary aluminium. In the context of its recycling-oriented policy, in 2004 ELVAL set up the Aluminium Can Recycling Centre (CANAL S.A.) in Maroussi. The Centre can accept an annual quantity of 2,800 tons of used aluminium cans, which are processed and packaged and then forwarded to the ELVAL plant at Oinofyta for remelting. In parallel with its recycling operations, the Centre operates as a communications base, where organizations, social groups, schools, enterprises and people from the community are informed on the process, value and benefits of recycling. Aluminium recycling makes a substantial contribution towards the preservation of natural resources and the state-of-the-art methods used in production, ensure that recycling is accompanied by suitable environmental protection measures, as well as that the quality level of the aluminium produced is the same as that of primary aluminium. In view of the foregoing, ELVAL remains focused on the implementation of the environmental management plan it has adopted, including pollution prevention measures, modern anti-pollution equipment and new infrastructure, aimed at improving its environmental performance. V I O H A L C O S. A. 13

16 A N N U A L R E P O R T VIOHALCO Consolidated Financials The financial results of VIOHALCO for the fiscal year 2009, have been adversely affected by the international financial crisis, which continued affecting the global economy and especially the construction and public infrastructure sectors. The foregoing resulted in the volume of sales and the prices of final products being reduced, which had a negative effect on consolidated earnings. The companies of VIOHALCO set as their main priorities to reduce production costs, manage effectively working capital and reduce borrowing costs, while also developing and promoting higher value added products. In this context, the consolidated turnover of VIOHALCO, in the fiscal year 2009, amounted to Euro 2,298 million, a 38.9% decrease compared to Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to Euro 90.9 million compared to Euro million, while net consolidated earnings after taxes and minority interests amounted to losses equal to Euro 76.7 million compared to losses equal to Euro 11.3 million in the fiscal year In addition, consolidated earnings were charged with the Extraordinary Contribution of Social Responsibility under Law 3808/2009, which was equal to Euro 11.1 million. Euro million Consolidated turnover ,5% 2,2% ,9%

17 Consolidated Sales Analysis Other Copper Products 26% 4% 30% Aluminium Products 41% Steel Products Consolidated Financial Results (amounts in Euro thousand) Turnover 3,683,329 3,763,456 2,297,719 Gross profit 501, , ,299 Earnings before interest, taxes, depreciation and amortization 393, ,527 90,994 Earnings before interest and taxes 266,956 49,238-44,663 Profits/Losses before taxes 209,950-34,582-89,932 Profits/Losses after taxes and minority rights 83,958-11,307-76, Financials Development (%) Turnover 12.5% 2.2% -38.9% Gross profit 0.0% -36.7% -40.4% Earnings before interest, taxes, depreciation and amortization -2.7% -53.6% -50.1% Earnings before interest and taxes -5.1% -81.6% n/a Profits/Losses before taxes -7.5% n/a n/a Profits/Losses after taxes and minority rights -25.8% n/a n/a Profit Margins (%) Gross profit 13.6% 8.4% 8.2% Earnings before interest, taxes, depreciation and amortization 10.7% 4.8% 4.0% Earnings before interest and taxes 7.2% 1.3% n/a Profits/Losses before taxes 5.7% n/a n/a Profits/Losses after taxes and minority rights 2.3% n/a n/a V I O H A L C O S. A.

18 A N N U A L R E P O R T Consolidated Key Financials Earnings after taxes and minority rights (EATAM) Earnings before tax (EBT) Earning before interest and taxes (EBIT) Earning before interest, taxes, depreciation & amortisation (EBITDA) Gross profit Profit Margins 13,6% 16 10,7% 8,4% 8,2% 7,2% 5,7% 4,8% 4,0% 2,3% 1,3% Earnings after taxes and minority rights (EATAM) Earnings before tax (EBT) Earning before interest and taxes (EBIT) Earning before interest, taxes, depreciation & amortisation (EBITDA) Gross profit Consolidated Statement of Financial Position (amounts in Euro thousand) 31/12/ /12/ /12/2009 ASSETS Non-current assets 1,918,949 2,011,568 2,037,497 Inventories 976, , ,603 Trade and other receivables 770, , ,790 Other current assets 349, , ,616 TOTAL ASSETS 4,014,417 3,873,106 3,383,506 EQUITY & LIABILITIES Long-term liabilities 1,105, , ,027 Short-term bank liabilities 553, , ,527 Other short-term liabilities 379, , ,449 TOTAL LIABILITIES (a) 2,038,880 2,104,450 1,703,003 Equity of the Company s shareholders (b) 1,228,470 1,168,349 1,144,037 Minority Interest (c) 747, , ,466 TOTAL EQUITY (d) = (b)+(c) 1,975,536 1,768,655 1,680,503 TOTAL EQUITY & LIABILITIES (e) = (a) + (d) 4,014,417 3,873,106 3,383,506

19 Consolidated Cash flows (amounts in Euro thousand) Operating Cash flows 112, , ,044 Investment Cash flows -92, , ,953 Financing Cash flows 71,893-79, ,057 Total Cash flows 91,897-86, ,966 Cash & cash equivalents, beginning of period 233, , ,679 Cash & cash equivalents, end of period 325, , ,713 Consolidated Financial Ratios LIQUIDITY General liquidity Times Special liquidity Times ACTIVITY Asset Turnover Ratio Days Accounts Receivable turnover ratio Days Accounts Payable turnover ratio Days VIABILITY Coverage of Financial Expenses Times Debt/Equity Times RETURN Return on equity (R.O.E.) % 4.2% -0.6% -4.6% Return on assets (R.O.A.) % 2.1% -0.3% -2.3% Dividend per share Euro , Number of shares: 199,474,091 Share Symbols: ΒΙΟΧΚ (ΧΑ) VIO.AT (REUTERS) BIOX GR (BLOOMBERG) VIOHALCO Board of Directors The VIOHALCO Board of Directors comprises of the following members: NIKOLAOS STASSINOPOULOS Chairman/ Executive member IOANNIS FIKIORIS Vice-chairman/ Non-executive member GEORGIOS GONTIKAS Independent non-executive member CHARALAMBOS METAXOPOULOS Non-executive member EVANGELOS MOUSTAKAS Executive member ZACHARIAS CHATZIPANAGIOTOU Independent non-executive member ATHANASIOS PAPASPIROU Non-executive member GEORGE ROSENFELD Non-executive member JEAN-PIERRE DE LAUNOIT Non-executive member V I O H A L C O S. A.

20 18

21 3. Steel Operations SIDENOR Activities The SIDENOR Group is VIOHALCO s production, processing and trade arm for steel products. With the establishment of VIOHALCO-SANITAS in 1962 as a starting-point and following its successful performance, SIDENOR has evolved into a multinational Group of companies including 36 subsidiaries and affiliated companies and a strong established production base, including plants in Greece, Bulgaria, Russia and FYROM. The operating activities of SIDENOR and its subsidiaries are vertically integrated and split into the following main areas: Mini-mills Pipes, Tubes and Hollow Sections Downstream operations and Sales and Distribution SIDENOR shares have been traded on the Athens Stock Exchange since 1994, in the Big Capitalization category. Products SIDENOR products and those of its subsidiaries can be classified into the following major categories: SD Integrated Reinforcing System: Merchant bars: Wire rod Double Twist Hexagonal mesh Welding electrodes and wires Wires Steel Pipes Hollow Structural Sections (HSS) Hot-rolled flat products Other products: SD Concrete Reinforcing Steel, SD Stirrup Reinforcing Mesh, SD cut-to-lengths rebars, SIDEFIT Special Mesh, SD Wire Mesh, SIDEFOR Prefabricated Stirrup Cages, INOMIX Steel Fibres, Lattice Girders Hot-Rolled Square Bars, Hot-Rolled Flat Bars of rectangular cross-section, Hot-Rolled Round Bars of circular cross-section, Equal angle Hot-Rolled bars, I-section Beams (IPE), UPN Channels SIDENOR offers a variety of wire rod qualities SAE 1006, 1008, 1010, RSt37-2 which meet all the needs of the low carbon wire drawing industry. Weaving mesh in rolls, gabions and sack gabions The welding electrodes are produced with the know-how of international firm OERLIKON. Galvanized and black Galvanized and black, for networks, construction, scaffolding etc. The range includes circular, rectangular and square structural sections with dimensions up to 500x500x20mm Steel Sheets or Plates Special Steels, Steel Balls, Special Profiles, Steel Profiles, Metallurgical By-products Processing, Slabs, Billets, Blooms etc V I O H A L C O S. A. 19

22 A N N U A L R E P O R T

23 Manufacturing facilities 14 production units operate in the context of activities of the SIDENOR Group: Company Location Scope of activity 1. SIDENOR Thessaloniki, Billets, SD concrete reinforcing steel, SD wire mesh, SIDEFOR prefabricated Greece stirrup cages, merchant bars, wire rod 2. SOVEL Almyros, Billets, SD concrete reinforcing steel, SIDEFOR prefabricated stirrup cages, Greece SD stirrup reinforcement mesh, SIDEFIT special mesh, Hollow structural sections and pipes for construction and networks purposes 3. STOMANA INDUSTRY Pernik, Bulgaria SD Concrete reinforcing steel, Wire mesh, steel plates, merchant bars, grinding balls, slabs as well as continuous casting semi-finished products (billets and blooms) 4. CORINTH PIPEWORKS Thisvi, Greece Steel pipes for the transport of oil and natural gas as well as hollow structural sections for construction purposes 5. ΖΑΟ ΤΜΚ - CPW Polevskoy, Russia Pipes and hollow structural sections 6. AEIFOROS & AEIFOROS Thessaloniki & Antiskid slag, blasting abrasives, graded mill scale, plaster base and BULGARIA Almyros, Greece non-ferrous metals (from vehicle and domestic appliance recycling) Pernik, Bulgaria 7. DEPAL Thessaloniki, Greece Wire mesh 8. ERLIKON Kilkis, Greece Welding electrodes and a series of wires and fencing mesh 9. BET Halkida, Greece Steel Pipes 10. ETAL Kilkis, Greece Steel fibers for concrete reinforcing 11. PROSAL/ PROSALTUBES Pernik, Bulgaria Thin Wall Tubes 12. TEPROSTEEL Pernik, Bulgaria Bars of circular cross-section 13. DOJRAN STEEL Nikolic, FYROM Concrete reinforcing products 14. DOMOPLEX Nicosia, Cyprus Concrete reinforcing mesh and wire mesh In order to take advantage of the synergies developed among the subsidiaries and aiming to secure a substantive competitive advantage at cost level, the SIDENOR Group has organized its production activities as follows: Category Units Products Annual production output Production of liquid steel SIDENOR, SOVEL, Billets, slabs, blooms 3,600,000 tons* STOMANA INDUSTRY Production of long SIDENOR, SOVEL, STOMANA Concrete reinforcing steel in bars 3,200,000 tons* products INDUSTRY, DOJRAN STEEL & coils, merchant bars, wire rod Production of pipes CORINTH PIPEWORKS, ΖΑΟ Pipes for oil, natural gas, water 970,000 tons and hollow sections ΤΜΚ CPW, SOVEL, ΒΕΤ, PROSAL, networks, hollow structural PROSAL TUBES sections and tubes for construction purposes Production of plate products STOMANA INDUSTRY, SOVEL Steel sheets, iron strips 400,000 tons Final processing ERLIKON, SOVEL, DEPAL, ETAL, Concrete reinforcing steel fibers, Around 560,000 tons of steel products AEIFOROS, TEPROSTEEL, wire mesh, steel cages, electrodes, DOMOPLEX * Following completion of announced investments wire products, high-accuracy special steels Investments The SIDENOR Group proves its focus on continuous upgrade of its production facilities by implementing a long-term investment plan, the expenses of which over have exceeded Euro 650 million. V I O H A L C O S. A. 21

24 A N N U A L R E P O R T

25 The main goals of the Group s investment plan include, among others, the expansion of its plants production capacity, the improvement of their operational efficiency, the expansion of the distribution network and the development of new innovative products of high added value. As regards the fiscal year 2009, the investment expenses of the SIDENOR Group amounted to Euro 45 million. Financials The financials of the SIDENOR Group were considerably affected in 2009 by the financial crisis. Lower private building activity and the delay in the implementation of major infrastructure projects entailed declining volumes of sales, which led to reduced turnover and to squeezed profitability margins for the SIDENOR Group, followed by the low selling prices of steel products. More specifically, the consolidated turnover stood at Euro 938 million compared to Euro Euro million ,713.4 million in 2008, reduced by 45.3%. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to profits equal to Euro 22.3 million compared to Euro 140 million in 2008, while net consolidated earnings after taxes and minority interest stood at losses equal to Euro 71.3 million compared to profits of Euro 29.3 million in The above financial results are marked by the adverse circumstances that prevailed in the domestic and international market and also by the clear orientation of the management to keep operating costs at competitive levels and adapt production activity to the new circumstances of demand. At the same time, the main concern was to reduce overheads and boost the liquidity of the Group ,2% Turnover ,3% ,3% 23 Consolidated Financial Results (amounts in Euro thousand) Turnover 1,390,039 1,713, ,994 Gross profit 290, ,357 92,365 Earnings before interest, taxes, depreciation and amortization 212, ,971 22,263 Earnings/Losses before interest and taxes 160,791 81,703-36,826 Profits/Losses before taxes 138,507 47,414-58,835 Profits/Losses after taxes and minority rights 91,638 29,260-71,325 V I O H A L C O S. A.

26 A N N U A L R E P O R T Development of figures (%) Turnover 13.2% 23.3% -45.3% Gross profit -0.3% -15.8% -62.2% Earnings before interest, taxes, depreciation and amortization -3,2% -34,2% -84,1% Earnings/Losses before interest and taxes -5.3% -49.2% n/a Profits/Losses before taxes -3.9% -65.8% n/a Profits/Losses after taxes and minority rights -15.3% -68.1% n/a Group Profit Margins n/a n/a n/a Profit Margins Gross profit 20.9% 14.3% 9.8% Earnings before interest, taxes, depreciation and amortization 15.3% 8.2% 2.4% Earnings before interest and taxes 11.6% 4.8% n/a Profits before tax 10.0% 2.8% n/a Earnings after taxes and minority rights 6.6% 1.7% n/a

27 Consolidated Statement of Financial Position (amounts in Euro thousand) ASSETS Fixed assets and investments 823, , ,008 Inventories 390, , ,675 Trade and other receivables 139, , ,220 Other current assets 191, , ,077 TOTAL ASSETS 1,544,295 1,615,242 1,307,981 EQUITY & LIABILITIES Long-term liabilities 417, , ,271 Short-term bank liabilities 199, , ,653 Other short-term liabilities 205, , ,246 TOTAL LIABILITIES 822, , ,171 Share Capital 39,413 39,413 39,460 Other equity items of Company s shareholders 535, , ,239 Total company shareholders equity 574, , ,699 Minority Interest 146, , ,111 TOTAL EQUITY 721, , ,810 TOTAL LIABILITIES AND EQUITY 1,544,295 1,615,242 1,307,981 Strategy The main strategic pillars of the SIDENOR Group s medium- and long-term development planning are: Further reinforcing the Group s market shares in the Greek market, by continuously improving the cost base and by developing new, innovative solutions to enrich the range of SIDENOR products with high added value for end-customers. Further reinforcing the Group s market share in the geographical region of Southeast Europe, by further utilizing the production plants in Bulgaria and FYROM and the Danube-based port facilities of the Group. Strengthening the position of CORINTH PIPEWORKS in the energy project markets, by reinforcing its presence in the geographical markets of Western Europe, Middle East, North Africa, North America and Russia. Boosting sales outside Greece through the existing commercial network and the development of commercial partnerships. Applying and using advanced tools and methods of administrative and commercial support, which will improve the Group s operating efficiency. Maintaining the Group s focus on the ongoing and extensive training of its human resources. Focusing on limiting the Group s environmental footprint, through initiatives and practices contributing to substantive environmental protection. V I O H A L C O S. A. 25

28 A N N U A L R E P O R T

29 CORINTH PIPEWORKS Activities The CORINTH PIPEWORKS Group engages in steel pipe production of medium and large diameter for the transmission of oil, natural gas and water, as well as in the production of hollow sections for the construction and building sectors. Having the top quality of the Group s products, as its main competitive advantage, CORINTH PIPEWORKS meets the needs of the largest oil and natural gas companies internationally. Among its clientele there are Chevron, BP, Greek Public Natural Gas Corporation, National Iranian Gas Company, Enagas, Gaz de France, Transgas, REPSOL YPF, BG, National Grid, Sonatrach, SCOP Iraq, Spectra Energy, Energy Transfer, STEG, Panhandle Energy, Enbridge, Cheniere Energy, Talisman, PDO and Oman Gas Company. CORINTH PIPEWORKS shares have been listed on the Athens Stock Exchange since 1998, while the SIDENOR Group is the majority shareholder of the company since Products The plants of CORINTH PIPEWORKS in Greece and Russia manufacture: Line pipes used to transmit natural gas, oil and water. Casing pipes used for extracting oil and natural gas; Hollow structural sections (HSS), widely used in the construction sector and especially in steel structures. CORINTH PIPEWORKS takes advantage of the synergies developed within the SIDENOR Group and distributes the HSS manufactured under the SD trademark, in conjunction with the relevant product range of SIDENOR. At the same time, CORINTH PIPEWORKS provides its customers with high added value services such as: Interior and exterior coating of pipes produced by other pipe manufacturers; Storage of pipes; Procurement of pipes or assignment of pipe coating outside its product range; Combined transportation of pipes (ship loading, sea transport, unloading and overland transport) Production Facilities The CORINTH PIPEWORKS Group has two production facilities in Thisvi industrial zone, Viotia, Greece and Polevskoy in Seversky area, Russia. V I O H A L C O S. A. 27

30 A N N U A L R E P O R T

31 Thisvi Plant (Greece) The plant in Thisvi operates in the production of pipes for the energy industry and of hollow sections for the construction sector with a total annual production capacity of 775,000 tons. It is considered one of the most modern steel pipe production plants worldwide and its production equipment is sourced from major and acknowledged international firms. One of the most significant competitive advantages of the plant is its strategically selected location in the Industrial Zone of Thisvi, at a 2km distance from a port, where there are three docks, which ensure competitive transportation costs and fast delivery of raw materials and dispatch of finished products. Polevskoy Plant (Russia) The plant of CORINTH PIPEWORKS in Polevskoy, Russia is operating in the production of high frequency welded pipes and of hollow structural sections (following completion of the relevant investment), with a total annual production capacity of 200,000 tons. The plant started operating in 2007, in the context of the joint venture ZAO TMK-CPW established by CORINTH PIPEWORKS (through its 100% subsidiary HUMBEL LTD which controls 49% of the joint venture) and TMK, the largest pipe manufacturer in Russia and among the three biggest globally. Investments Being focused on maintaining its competitive advantage at the level of production facilities, the CORINTH PIPEWORKS Group has undertaken a series of investments aiming to upgrade its plants and enrich its product base. In this context, the upgrade works of the ERW/HFIW production line from 24 to 26 were completed, thus enabling the Group to offer a wider range of medium diameter pipes. Financials The difficulties in the financing of major energy projects and the reduced demand for oil and natural gas, due to the international financial recession, affected the activity of the CORINTH PIPEWORKS Group. Specifically in 2009, the consolidated turnover of CORINTH PIPEWORKS stood at Euro million compared to Euro million in 2008, Turnover i.e. a 26% decrease. However, the Group took advantage of the opportunities arisen in its core markets, thus attaining a considerable improvement of its organic profitability. The correction of steel and plastics international prices, the drop in freight rates and further improvement of the production plants' output, led to increased gross profits of the Group by 9.8%, which amounted to Euro 79.6 million compared to Euro 72.6 million in Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 31.8%, amounting to Euro 41.1 million compared to Euro 31.2 million in Finally, the Group s earnings after taxes and minority interests increased by 128.5% and amounted to Euro 20.2 million (Euro per share) compared to Euro 8.9 million (Euro 0.071) last year. V I O H A L C O S. A. 29

32 A N N U A L R E P O R T Consolidated Financial Results (amounts in Euro thousand) Turnover 357, , ,172 Gross profit 84,626 72,561 79,644 Earnings before interest, taxes, depreciation and amortization 57,226 31,177 41,088 Earnings before interest and taxes 45,990 20,181 29,905 Profits before tax 40,101 15,838 28,084 Earnings after taxes and minority rights 33,971 8,859 20,241 Development of figures (%) Turnover 11.9% 7.7% -26.0% Gross profit 14.7% -14.3% 9.8% Earnings before interest, taxes, depreciation and amortization 38.6% -45.5% 31.8% Earnings before interest and taxes 52.0% -56.1% 48.2% Profits before tax 106.2% -60.5% 77.3% Earnings after taxes and minority rights -6.7% -73.9% 128.5% 30 Profit Margins Gross profit 23.7% 18.8% 27.9% Earnings before interest, taxes, depreciation and amortization 16.0% 8.1% 14.4% Earnings before interest and taxes 12.9% 5.2% 10.5% Profits before tax 11.2% 4.1% 9.8% Earnings after taxes and minority rights 9.5% 2.3% 7.1% Consolidated Statement of Financial Position (amounts in Euro thousand) ASSETS Fixed assets 163, , ,846 Inventories 95, ,338 56,071 Trade and other receivables 64,961 90,777 43,052 Other current assets 2,587 3, Cash and cash equivalents 11,592 19,405 12,409 TOTAL ASSETS 338, , ,175 EQUITY & LIABILITIES Long-term loan liabilities 65,579 7,500 24,219 Other long-term liabilities 6,823 5,356 16,440 Short-term loan liabilities 31,671 62,929 27,314 Other short-term liabilities 111, ,820 43,643 TOTAL LIABILITIES 215, , ,616 Total company shareholders equity 123, , ,559 Minority Interest TOTAL EQUITY 123, , ,559 TOTAL LIABILITIES AND EQUITY 338, , ,175

33 Strategy The fact that that the global economy seems, slowly but steadily, to emerge out of the recession that broke out in 2009, will contribute to the recovery of demand for energy and thus, to new energy infrastructure projects. Energy companies worldwide, following their two-year absence from investments and supported by the stabilization of oil prices, seem to revise their investment plans upwards. Finally, it seems that the company s competitive position, will be considerably improved, given the rise of the US dollar in relation to the Euro in major markets, such as those of the USA and Middle East. 31 In this context, the main strategic pillars for the CORINTH PIPEWORKS Group are as follows: Reduction of operating costs, aiming at improving the Group s competitiveness; Ongoing optimization of production plants' output Increase of the Group s presence in the markets of Europe, North Africa and the Middle East. Increase of the product range, aiming at strengthening the Group s presence, at the commercial level, through innovative solutions with high added value for customers. Maintenance of the current financial structure. V I O H A L C O S. A.

34 A N N U A L R E P O R T

35 4. Copper Operations HALCOR Activities HALCOR represents VIOHALCO s production and trade arm for copper products. The HALCOR Group includes 18 companies, with nine production plants in Greece, Bulgaria and Romania, which produce copper and copper alloy rolled and extruded products. HALCOR is the sole producer of copper tubes and titanium-zinc rolled products in Greece. The HALCOR Group also includes HELLENIC CABLES and its subsidiaries, which are active in the manufacture of cables, enamelled wires, conductors and insulating rubber or plastic compounds. The shares of both the parent company HALCOR and the subsidiary HELLENIC CABLES are listed on the Athens Stock Exchange. Products The plants of the HALCOR Group manufacture the following five core product categories: 1. Copper Products: tubes, sheets, strips, circles, flat bars, bars, Ø8mm wire 2. Brass Products: tubes, sheets, strips, circles, flat bars, bars 3. Titanium-Zinc Products: sheets, strips 4. Special alloy products: slabs, strips, circles, blanks 5. Power and telecommunication cables as well as plastic and rubber compounds The raw materials used in the HALCOR production plants come mainly from Bulgaria, Chile and Kazakhstan. At the same time, the Group has an extensive network for the collection and storage of copper scrap, both in Greece and in the wider Balkan region. The products of the HALCOR Group are distributed through an extensive distribution network, which features 10 warehousing units in the Balkans, two in Germany and one in Italy. V I O H A L C O S. A. 33

36 A N N U A L R E P O R T

37 Production Facilities The production facilities of the HALCOR Group are one of its main competitive advantages. At the end of 2009, the Group's industrial base included nine plants in Greece, Bulgaria and Romania. Production unit Location Total Building Production Scope of surface (sq.m.) area (sq.m.) capacity production (tons/year) 1. HALCOR Casting plant Oinofyta, 51,213 11, ,000 Semi-finished products, Greece (billets and slabs), Ø8mm wire 2. HALCOR Copper tubes plant Oinofyta, 198,061 67,414 75,000 Copper tubes for heating, Greece water supply, cooling, natural gas transport, AC and industrial use 3. HALCOR Brass rods Oinofyta, 57,980 23,120 40,000 Finished brass products (rods, and tubes extrusion plant Greece profiles, wires and tubes) 4. HALCOR Titanium zinc Athens, 60,048 37,427 20,000 Titanium-zinc rolled products rolling plant Greece 5. SOFIA MED Copper Sofia, Rolled copper, brass and processing plant Bulgaria special alloy products, copper extruded products 6. HELLENIC CABLES Thiva, ,265 55,000 Control and internal installation Power cables and Greece cables, ship cables and power cables fiber optic plant 7. HELLENIC CABLES Livadia, 121,818 14,048 14,000 Grounding, aerial conductors and Copper conductors Greece enamelled wires and enamelled wires plant 8. HELLENIC CABLES Plastic Oinofyta, 22,032 6,444 24,000 Plastic and rubber compounds for and rubber compounds Greece the supply of the insulation, filling plant and sheathing lines for cables 9. ICME ECAB Cable Bucharest, 268,000 70,000 45,000 Internal installation, energy, Romania plant control, industrial use and external use cables, fire-retardant, fire-resistant cables and also plastic and rubber compounds 35 Investments In the fiscal year 2009, the HALCOR Group continued the implementation of its strategic plan for the upgrade and expansion of its production base, in the context of which the Group has made investments totalling Euro 340 million during More specifically, the total investment expenditures of the fiscal year 2009 stood at Euro 28.8 million and were allocated as follows: Investments amounting to Euro 10 million were realized in the HALCOR Tubes plant at Oinofyta Investments amounting to Euro 6.4 million were made in the SOFIA MED plant in Sofia, Bulgaria. Investments amounting to Euro 10.8 million were realized in the HELLENIC CABLES plants. Investments amounting to Euro 1.6 million were realized in the ICME ECAB production plant in Bucharest, Romania. V I O H A L C O S. A.

38 A N N U A L R E P O R T

39 Financials The 26.7% decrease in the total volume of sales Turnover and the reduced metal prices compared to 2008 led to a 43.4% drop of the consolidated turnover Euro million of HALCOR. Specifically, the Group s sales stood at Euro 679 million compared to Euro 1,200 million ,9% ,4% 800 considerably and favoured cables versus brass 600 in The mix of sales volume changed ,4% extruded products. In more detail, the sales of cables represented 42% of the total turnover, the sales of tubes represented 26%, rolled products represented 18%, brass bars represented 7% and copper bus bars represented 7% Despite the particularly adverse financial environment and considerable decline of the volume of sales, the HALCOR Group managed to restrain its losses. The Group s gross profit stood at Euro 32.1 million compared to Euro 19.9 million in In 2009, consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to Euro 20.4 million compared to Euro 3.6 million over the respective last-year period, while in 2009 earnings after taxes and minority interests amounted to losses equal to Euro 19.4 million compared to losses equal to Euro 48.2 million in the fiscal year Consolidated Financial Results (amounts in Euro thousand) Turnover 1,369,617 1,200, ,059 Gross profit 105,587 19,885 32,127 Earnings before interest, taxes, depreciation and amortization 85,775 3,613 20,365 Earnings/Losses before interest and taxes 62,691-20,930-5,782 Profits/Losses before taxes 33,310-56,375-22,056 Profits/Losses after taxes and minority rights 20,022-48,224-19, Development of figures (%) Turnover 9.9% -12.4% -43.4% Gross profit -10.9% -81.2% 61.6% Earnings before interest, taxes, depreciation and amortization -10.0% -95.8% 463.6% Earnings/Losses before interest and taxes -13.7% n/a n/a Profits/Losses before taxes -35.8% n/a n/a Profits/Losses after taxes and minority rights -44.3% n/a n/a V I O H A L C O S. A.

40 A N N U A L R E P O R T Profit Margins Gross profit 7.7% 1.7% 4.7% Earnings before interest, taxes, depreciation and amortization 6.3% 0.3% 3.0% Earnings/Losses before interest and taxes 4.6% n/a n/a Profits/Losses before taxes 2.4% n/a n/a Profits/Losses after taxes and minority rights 1.5% n/a n/a Consolidated Statement of Financial Position (amounts in Euro thousand) ASSETS Fixed assets 330, , ,717 Inventories 283, , ,408 Trade receivables 284, , ,512 Cash and cash equivalents 41,597 58,971 17,753 Other assets 1,707 11,402 1,920 TOTAL ASSETS 941, , ,310 EQUITY & LIABILITIES Share Capital 38,486 38,486 38,486 Other equity items of Company s shareholders 199, , ,878 Minority Interest 27,779 25,657 24,511 TOTAL EQUITY 265, , ,875 LONG-TERM LIABILITIES: Long-term loans 321, , ,732 Other long-term liabilities 39,101 25,107 22,403 TOTAL LONG-TERM LIABILITIES 360, , Short-term liabilities: Short-term loans 219, , ,670 Other short-term liabilities 95,962 96,368 75,630 TOTAL SHORT-TERM LIABILITIES 315, , ,300 TOTAL LIABILITIES AND EQUITY 941, , ,310

41 Strategy By integrating in its practice the act local, think global philosophy, the HALCOR Group implements its development plan in line with the following strategic priorities: Development of new innovative, high added value products aiming at further strengthening the Group's commercial presence. Further decrease of production cost and improvement of operating efficiency, by containing fixed costs, adopting automation systems, improving the return rate, optimizing production planning, turning to higher added value products and consuming more scrap. Creation of strategic alliances with international firms, in order to expand the Group's presence beyond Greek borders. Further development of synergies among the Group s subsidiaries at both the production and commercial levels. Maintenance of the leading position in Greece and Southeast Europe. Strengthening the Group s position in the EU markets. Manufacture of top quality finished products. Protection and respect for the natural and social environment. Ensuring a safe and efficient working environment, which will allow and motivate employees, to advance and progress along with the Group. V I O H A L C O S. A. 39

42 A N N U A L R E P O R T

43 HELLENIC CABLES Activities The HELLENIC CABLES Group is active in the manufacture of cables, enamelled wires and insulating rubber or plastic compounds, utilizing three production plants in Greece and one in Romania. The products of HELLENIC CABLES are distributed under the CABLEL trademark and the company is the sole manufacturer of enamelled wires in Greece. The shares of HELLENIC CABLES have been listed on the Athens Stock Exchange since Products The companies of the HELLENIC CABLES Group produce power cables, aerial copper and aluminium conductors, telecommunication cables (copper and fibre optic), enamelled wires, as well as plastic and rubber compounds. Since 2008, the Group has expanded its production to include extra-high voltage cables of up to 400kV and data transmission cables (Cat. 7). More specifically, the product ranges of the HELLENIC CABLES Group are the following: Indoor installation cables Control cables Cables for industrial use and external installations Marine and offshore cables with increased fire resistance Power cables with operating voltages of up to 400kV Low smoke and fume, halogen-free cables with reduced fire propagation Copper, aluminium, ACSR conductors Enamelled wires Telecommunication cables Optic fiber cables Special cables Plastic and rubber insulating compounds 41 Production Facilities The production base of the HELLENIC CABLES Group includes the following plants: Electrical Cables and Optical Fibers Cables Plant (Thiva, Greece) In the electrical cables and optical fibres cables plant in Thiva control cables, internal installation cables, low smoke and fume, halogen-free cables with reduced fire propagation features, marine and offshore cables with increased fire resistance, power cables with operating voltage over 1kV and power cables of an operating voltage of up to 1kV are produced using copper, aluminium, steel wires and plastic or rubber compounds as raw materials. The plant occupies a total surface area of 175,082 square meters, of which 38,265 square meters are covered, whereas its total production capacity is 55,000 tons annually. Some of the raw materials are supplied to HELLENIC CABLES by the parent company HALCOR. The production process of the plant is certified according to the ISO 9001 and ISO standards. HELLENIC CABLES Copper Conductors and Enamelled Wires Plant (Livadia, Greece) In the Livadia plant enamelled wires for electric motors and transformers, as well as copper wires for groundings and can making are produced. The plant occupies a total surface area of 121,818 square meters, of which 14,048 square meters are covered, whereas its total production V I O H A L C O S. A.

44 A N N U A L R E P O R T

45 capacity is 14,000 tons annually. The production process of the plant is certified according to the ISO 9001 standard. HELLENIC CABLES Plastic and Rubber Compounds Plant (Oinofyta, Greece) In the Oinofyta plant rubber and plastic compounds necessary for the supply of insulation, filling and shielding production lines for finished cables are produced. Part of the plant s products is supplied to HALCOR, to be used in the production of Ecutherm and Cusmart copper tubes. The plant occupies a total surface area of 22,032 square meters, of which 6,444 square meters are covered, and its annual production capacity is 24,000 tons. The production process of the plant is certified according to the ISO 9001 standard. Cable Plant (ICME ECAB, Bucharest, Romania) The ICME ECAB cable production plant is established in Bucharest and produces cables for internal installations, energy, control, industrial uses and external installations, cables with reduced fire propagation, fire resistant and halogen-free, copper and aluminium conductors, mine cables, marine, special requirement cables, telecommunication cables, optical fibre cables, signalling, remote control and data transmission cables, as well as plastic and rubber compounds. The annual production capacity of the unit is 45,000 tons. The plant occupies a total surface area of 268,000 square meters, of which 70,000 square meters are covered. The production process of the plant is certified according to the ISO 9001 and ISO standards. Investments The HELLENIC CABLES Group is implementing a very ambitious long term investment plan amounting to Euro 50 million, which will lay the foundation for the production of high added value products, such as high and ultra high voltage cables and will increase the production capacity of the plants substantially. Within this framework, a total of Euro 12.4 million were spent in 2009, of which Euro 10.8 million were spent by the parent company in Greece. Financials The reduced value of basic metals, the change in the product mix which favoured aluminium cables against copper cables, which have a higher value, together with the decrease of cables intended for the construction sector and of winding Turnover wires led to a 33% reduction in the turnover of the million Euro HELLENIC CABLES Group. Specifically, in 2009 the consolidated sales stood at Euro 242 million ,5% compared to Euro 358 million in ,8% The Group s earnings before interest, taxes, ,6% 150 depreciation and amortization (EBITDA) amounted 100 to Euro 11.1 million compared to Euro 14.4 million in , while consolidated earnings after taxes and minority interests amounted to losses equal to Euro 1.2 million compared to losses equal to Euro 963 thousand. V I O H A L C O S. A. 43

46 A N N U A L R E P O R T Consolidated Financial Results (amounts in Euro thousand) Turnover 406, , ,636 Gross profit 40,732 21,304 18,679 Earnings before interest, taxes, depreciation and amortization 34,876 14,402 11,066 Earnings before interest and taxes 27,421 7,256 3,751 Profits/Losses before taxes 20,372-1, Profits/Losses after taxes and minority rights 15, ,218 Development of figures (%) Turnover 26.5% -11.8% -32.6% Gross profit 14.1% -47.7% -12.3% Earnings before interest, taxes, depreciation and amortization 22.5% -58.7% -23.2% Earnings before interest and taxes 29.1% -73.5% -48.3% Profits/Losses before taxes 12.3% n/a n/a Profits/Losses after taxes and minority rights 7.1% n/a n/a Profit Margins Gross profit 10.0% 5.9% 7.7% Earnings before interest, taxes, depreciation and amortization 8.6% 4.0% 4.6% Earnings before interest and taxes 6.7% 2.0% 1.6% Profits/Losses before taxes 5.0% n/a n/a Profits/Losses after taxes and minority rights 3.9% n/a n/a Consolidated Statement of Financial Position (amounts in Euro thousand) ASSETS Fixed assets 94,877 96,052 97,439 Inventories 89,735 64,688 59,763 Trade and other short-term receivables 105,674 71,991 63,916 Other current assets 5,932 12,388 13,019 TOTAL ASSETS 296, , ,137 LIABILITIES Long-term liabilities 97,472 67,374 54,263 Short-term bank liabilities 48,717 45,450 45,935 Other short-term liabilities 34,181 25,872 29,344 TOTAL LIABILITIES (a) 180, , ,542 Equity of the Company s shareholders (b) 114, , ,854 Minority Interest (c) TOTAL EQUITY (d) = (b)+(c) 115, , ,595 TOTAL LIABILITIES (e) = (a) + (d) 296, , ,137

47 Strategy In view of the substantive development of the Group s activities, the long-term business planning of HELLENIC CABLES is based on the following core strategic pillars: Focus on the Group s export activities, laying emphasis on geographical markets, marked by focusing investments in energy and telecommunications networks, as well as renewable energy sources. Improving liquidity, through restriction of working capital, conservative cash planning, enabling the Group to take advantage of future business opportunities and strengthen its financial structure. Improving the competitiveness of the Group, through minimizing costs, ensuring a more rigorous management of inventories and enhancing productivity and production flexibility. Utilizing new investments in the production of high added value products, such as high & extra-high voltage cables, which are less vulnerable to negative effects of the current economic environment. Focus on human resources and Corporate Social Responsibility. V I O H A L C O S. A. 45

48 A N N U A L R E P O R T

49 5. Aluminium Operations ELVAL Activities The ELVAL Group is the aluminium product manufacturing, processing and trading branch of VIOHALCO. ELVAL started its production activity in 1973 and following its development spanning over forty years, it has turned into a multinational aluminium Group including 11 subsidiaries, 10 plants in Greece, Bulgaria and the United Kingdom and considerable export activity, which in the fiscal year 2009 accounted for 83% of its total sales. Following are the main subsidiaries of the ELVAL Group: ETEM: Production of aluminium profiles for industrial and architectural applications. SYMETAL: Production of aluminium foil and paper-coated foil for food and cigarette packaging. Its customers include Greek tobacco and food companies. BRIDGNORTH ALUMINIUM: Its main product product is lithography strips intended for the production of lithography plates used in offset printing. Its customers include major multinational industrial companies. The shares of ELVAL have been listed on the Athens Stock Exchange since Products The plants of the ELVAL Group manufacture a series of products ranging from shading systems, aluminium foil and parts for vehicle chassis to lithography strips and beverage cans. 47 The products of the ELVAL Group are broken down into the following categories: Rolled products Products for the construction industry (building facade, roofs & side panels, window rolling shutters and garage doors). Rigid packaging products (beverage cans, tops and screwed lids). Flexible packaging products (domestic use aluminium foil, cigarette packaging, liquids, foodstuffs and medication packaging). Products for the transport industry (aluminium products for the shipbuilding and auto industry). Lithography strips (strips for the production of lithography plates for the printing industry) Etalbond composite panels (building façade and side panels). Extruded products Architectural aluminium profiles (aluminium systems for doors & windows, rolling shutters and blinds) Industrial aluminium profiles (special-application profiles). V I O H A L C O S. A.

50 A N N U A L R E P O R T

51 Production Facilities The established production base of the Group includes the following plants: Location Company Scope of activity Oinofyta (Greece) ELVAL Aluminium rolling Magoula (Greece) ETEM Aluminium extrusion Bridgnorth (UK) BRIDGNORTH ALUMINIUM Aluminium rolling Lithography strips Thiva (Greece) ELVAL COLOUR Aluminium strip coating Mandra (Greece) SYMETAL Paper coating of aluminium Oinofyta (Greece) SYMETAL Foil Production Agios Thomas (Greece) ANOXAL Foundry Agios Thomas (Greece) ELVAL COLOUR (ETALBOND) Manufacture of composite aluminium panels Sofia (Bulgaria) STEELMET Aluminium extrusion Nea Artaki (Greece) VIOMAL Rolling shutters and venetian blinds Investments Underlining its determination on maintaining its competitive advantage at the level of production and efficiency, the ELVAL Group has implemented during an extensive investment plan totalling around Euro 486 million. As regards the fiscal year 2009, the total investment expenditures of the ELVAL Group amounted to Euro 51 million, of which Euro 21 million concerned the plant at Oinofyta, Euro 9.2 million was spent on the plants of the ETEM Group and Euro 12.7 million concerned the investment plan of the subsidiary SYMETAL. Financials Turnover The drop in the volume of sales and the lower Euro million selling prices which were also affected by the low levels of aluminium prices, led to a 24% decrease ,9% 800-7,9% of the consolidated turnover, from Euro million in 2008 to Euro 690 million. At the results level, in 2009, the Group s gross profit stood at Euro 51.5 million compared to Euro ,5% million over the respective last-year period, registering a 21.3% improvement. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to Euro 43.5 million, i.e. a 33.7% increase, while the Group s earnings after taxes and minority interests amounted to losses equal to Euro 6.4 million compared to losses equal to Euro 8.9 million over the respective last-year period. V I O H A L C O S. A. 49

52 A N N U A L R E P O R T

53 Consolidated Financial Results (amounts in Euro thousand) Turnover 979, , ,186 Gross profit 90,181 42,444 51,493 Earnings before interest, taxes, depreciation and amortization 85,576 32,561 43,535 Earnings/Losses before interest and taxes 40,402-11, Profits/Losses before taxes 30,892-29,203-8,094 Profits/Losses after taxes and minority rights 21,675-8,852-6,440 Development of figures (%) Turnover 13.9% -7.9% -23.5% Gross profit 17.7% -52.9% 21.3% Earnings before interest, taxes, depreciation and amortization 5.0% -62.0% 33.7% Earnings/Losses before interest and taxes 13.4% % 105% Profits/Losses before taxes 4.1% % 72.3% Profits/Losses after taxes and minority rights 4.5% % 27.2% Profit Margins Gross profit 9.2% 4.7% 7.5% Earnings before interest, taxes, depreciation and amortization 8.7% 3.6% 6.3% Earnings/Losses before interest and taxes 4.1% n/a 0.1% Profits/Losses before taxes 3.2% n/a n/a Profits/Losses after taxes and minority rights 2.2% n/a n/a 51 Consolidated Statement of Financial Position (amounts in Euro thousand) ASSETS Fixed assets 508, , ,496 Inventories 267, , ,517 Trade and other receivables 234, , ,981 Other assets 3,803 11,739 11,259 Cash and cash equivalents 28,509 12,325 22,130 TOTAL ASSETS 1,043,103 1,017, ,382 EQUITY & LIABILITIES Long-term loan liabilities 181, , ,241 Other long-term liabilities 82,555 62,481 66,361 Short-term loan liabilities 110, , ,645 Other short-term liabilities 100, , ,742 TOTAL LIABILITIES 475, , ,990 Total company shareholders equity 521, , ,870 Minority Interest 45,927 39,479 47,522 TOTAL EQUITY 567, , ,393 TOTAL LIABILITIES AND EQUITY 1,043,103 1,017, ,382 V I O H A L C O S. A.

54 A N N U A L R E P O R T

55 53 Strategy Following are the main strategic priorities of the ELVAL Group: Implementation of investment plans aiming to increase the capacity and efficiency of the Group s plants. Expansion of the Group s portfolio of products and addition of new, innovative, top-quality products and emphasis on high added value products for customers. Further improvement of product quality, by acquiring the relevant know-how through partnerships with large European research centres and the long-term technical agreement concluded with FURUKAWA SKY ALUMINUM. Reduction of the production cycle of the Group s plants, through the installation and adoption of new production planning software. Maintenance of the Group s dynamic presence in all the geographical regions in which it operates. Further expansion of the activity of BRIDGNORTH ALUMINIUM by supporting the migration of its customers from analogue to digital printing technology. Reinforcement of ETEM at commercial level by strengthening and reorganizing its distribution network. Concrete focus on the health and safety of employees in production plants and on environmental protection through new investments. V I O H A L C O S. A.

56 A N N U A L R E P O R T ETEM 54 Activities ETEM belongs to the ELVAL Group of companies and produces architectural and industrial aluminium profiles, extruded products used as feed materials in other industries, as well as composite aluminium panels (ΕΤALBOND ). The ETEM Group is one of the largest aluminium profile producers in Greece, while also carrying on considerable activities beyond Greek borders. The Group s production base includes plants in Magoula, Attica and in Agios Thomas, Viotia, Greece as well as in Sofia, Bulgaria. ETEM shares have been listed on the Athens Stock Exchange since Products The ETEM Group range of products is broken down into the following categories: Custom-made profiles for general applications. Hard alloy machining bars and standardized profiles for industrial applications. Industrial profiles for applications in the automotive industry. Industrial profiles for truck and bus bodies and frames. Industrial profile systems for road signs and other types of signs. Special profiles for architectural applications. Production Facilities ETEM Plant (Magoula, Attica) The ΕΤΕΜ industrial plant at Magoula produces aluminium profiles and components for doors, windows and facades, insulated (thermo-break) and other systems. It also manufactures aluminium bars of different cross-sections and alloys, as well as special aluminium profiles for the automotive industry. The plant s annual production capacity is 25,000 tons. The plant at Magoula operates 3 extrusion press lines (extrusion force of 2,200, 2,500 and 5,000 tons), with a state-of-the-art vertical powder coating plant, a horizontal powder coating

57 plant for wood-like surfaces and a thermo-break aluminium systems production line. The total surface area of its facilities is 73,000 square meters, 27,000 square meters being built-up. ELVAL COLOUR (ETALBOND) Plant (Agios Thomas, Viotia, Greece) Three units that produce ETALBOND composite panels are established at Agios Thomas, Viotia, which produce composite aluminium panels with an intermediate layer of polyethylene. The plant s total annual production capacity reaches 5,000,000 square meters. STEELMET Plant (Sofia, Bulgaria) The STEELMET production plant in Bulgaria produces industrial and architectural aluminium profiles. Its production facilities include: 3 extrusion lines of an extrusion power of 1,500, 1,500 and 1,650 tons. 1 state-of-the-art vertical powder coating plant. 1 horizontal powder coating plant for wood-like surfaces. 2 insulated (thermo-break) aluminium systems production lines. The total surface area of its facilities is 131,000 square meters, 40,000 square meters being built-up. Investments In the fiscal year 2009, total investments of the ETEM Group stood at Euro 9.2 million, of which Euro 2.7 million concerned the parent company, Euro 2.9 million the subsidiary STEELMET and Euro 2.4 million concerned QUANTUM. Financials The financials of the ETEM Group were affected by the international financial crisis in 2009 too. In this context, in the fiscal year 2009 the Turnover Euro million consolidated sales of ETEM amounted to Euro million, compared to Euro million in 2008, i.e. 10,2% 140-6,1% a 34.9% decrease Consolidated earnings before interest, taxes, 80-34,9% depreciation and amortization (EBITDA) amounted to profits equal to Euro 1 million compared to losses 20 0 equal to Euro 3 million n 2008, while consolidated earnings after taxes and minority interests of the period amounted to losses equal to Euro 13.1 million compared to losses equal to Euro 15.7 million in Consolidated Financial Results (amounts in Euro thousand) Turnover 169, , ,325 Gross profit 30,102 16,190 19,605 Earnings before interest, taxes, depreciation and amortization 15,574-2,976 1,030 Earnings/Losses before interest and taxes 7,990-10,753-6,076 Profits/Losses before taxes 2,566-18,357-12,057 Profits/Losses after taxes and minority rights 1,169-15,653-13,019 V I O H A L C O S. A. 55

58 A N N U A L R E P O R T

59 Development of figures (%) Turnover 10.2% -6.1% -34.9% Gross profit 7.3% -46.2% 21.1% Earnings before interest, taxes, depreciation and amortization -4.2% n/a n/a Earnings/Losses before interest and taxes -10.2% n/a n/a Profits/Losses before taxes -57.7% n/a n/a Profits/Losses after taxes and minority rights -70.8% n/a n/a Consolidated Statement of Financial Position (amounts in Euro thousand) ASSETS Fixed assets 107, , ,487 Inventories 67,914 58,297 46,327 Trade and other receivables 61,517 56,420 45,210 Other Assets 5,429 4,372 3,096 TOTAL ASSETS 242, , ,120 LIABILITIES Long-term liabilities 81,204 71,918 52,321 Short-term bank liabilities 41,324 58,282 67,353 Other short-term liabilities 24,444 29,735 21,632 TOTAL LIABILITIES (a) 146, , ,306 Share Capital 9,303 9,303 9,303 Other equity items of Company s shareholders 85,645 69,125 56,077 Total company shareholders equity 94,948 78,428 65,380 Minority Interest (c) TOTAL EQUITY (d) = (b)+(c) 95,233 78,693 65,814 TOTAL LIABILITIES (e) = (a) + (d) 242, , ,120 Strategy The development goals of the ETEM Group are based on the following strategic priorities: Geographical development and expansion of the company s activities beyond Greek borders. Enriching the company's product mix with new, innovative, high added value solutions. Reorganisation of the company s distribution network. V I O H A L C O S. A. 57

60 A N N U A L R E P O R T

61 6. Real Estate Development Operations Aiming at a substantial utilization of its extensive real estate, VIOHALCO and its subsidiaries have undertaken the overall management of the relevant assets. In early 2010, the main commercial and industrial properties included in the portfolio of VIOHALCO and its subsidiaries were the following: Property Location Real estate condition Hotel Karaiskaki Square, Athens Completed IKEA store & shopping centre 96, Kifissos Av., Aigaleo IKEA completed building The shopping centre s building is under construction Industrial buildings, warehouses, offices 252, Pireos St., Tavros Completed Industrial buildings & offices (BIC) Oinofyta Completed Old facilities CORINTH PIPEWORKS Corinth Completed Office complex 115, Kifissias Av., Athens Under construction Office complex 57, Ethnikis Antistasseos St., Halandri Completed Office complex 33, Amarousiou-Halandriou Av., Marousi Completed Office complex 29, Apostolopoulou St., Halandri Under construction In addition, the above portfolio includes, among others, land over 50 acres in Stylida, Prefecture of Fthiotida and a series of office complexes and warehouses in Athens, Thessaloniki, Piraeus, Aspropyrgos and Iraklio, Crete. In the fiscal year 2009, construction on the property at Kifissos Avenue, Aigaleo, continued, a part of which has already been leased to IKEA, while work at the office complex located at Kifissias Avenue, Athens, has reached the final stage of completion. V I O H A L C O S. A. 59