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2 Contents Page 1. Message from the Chairman of the Board of Directors 3 2. VIOHALCO S.A Steel Operations Copper Operations Aluminium Operations Real Estate Development Operations 59 The wood used to produce pulp for the paper of this document comes from Sustainable Management forests and plantations.

3 A N N U A L R E P O R T 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 fields of Steel and Steel Pipes production, Copper and Titanium-zinc processing, as well as Aluminium and Cables manufacture. The installed production base of the Group outside Greece, includes plants and warehouses in Bulgaria, Romania, the United Kingdom, FYROM and Russia. Over 70% of the consolidated turnover of VIOHALCO is realized in markets outside Greece. The total exports of the companies of VIOHALCO represent approximately 10% of total Greek exports. Through its subsidiary NOVAL, VIOHALCO is also active in real estate development. Amounts in million Euro Turnover Total Assets Earnings before taxes Equity

4 V I O H A L C O S. A.

5 A N N U A L R E P O R T 1. Message from the Chairman of the Board of Directors 2008 was marked with an unprecedented crisis in the international financial system, which had an inevitable impact on the markets and global economy. During most of the year, the prices of metals, oil and natural gas, as well as of raw materials in general, remained dramatically high, having a simultaneous effect on production costs and working capital. On the contrary, in late 2008, the international economic recession forced such prices to much lower levels, while at the same time, global economic development was slowed down, investment in the construction sector and building activity were reduced, all these leading to an inevitable impact on the activity and results of the companies of VIOHALCO. The consolidated turnover of VIOHALCO, in the fiscal year 2008, amounted to Euro 3,764 million, a 2% increase compared to Euro 3,683 million in Earnings before interest, tax, depreciation and amortization (EBITDA) amounted to Euro million, reduced by 53% compared to Euro 394 million in Respectively, the consolidated earnings before taxes, in 2008, dropped significantly, amounting to losses equal to Euro 34.6 million, compared to profits equal to Euro 210 million in Finally, net consolidated earnings after taxes and minority interests, amounted to losses equal to Euro 11.3 million (or Euro per share), compared to profits equal to Euro 83.9 million in 2007 (or Euro per share). The subsidiaries results were adversely affected by the global recession, which in addition to a significant reduction in gross margins, also resulted in a rapid drop in metal prices in the fourth quarter, thus forcing the companies to make a one-off devaluation of inventories, amounting to a total of Euro million, equally charging 2008 results. It should also be noted that the consolidated net debt dropped significantly by Euro 321 million in the fourth quarter, amounting at the end of 2008, to Euro 1,114 million, as a result of the drop in metal prices in the same period and the efforts made by the VIOHALCO companies to optimize their working capital management. As for VIOHALCO S.A., its earnings before taxes in 2008 amounted to Euro 33.2 million, compared to Euro 73.1 million in Finally, its net profits after taxes amounted to Euro 32.1 million (or Euro per share), compared to Euro 71.5 million in 2007 (or Euro per share). The Company s Board of Directors has proposed to the Annual General Meeting of Shareholders a distribution of a dividend amounting to Euro 0.06 per share. The Companies management, responding quickly to international developments, proceeded with an overall reorganization of their strategic plans. However, they have adhered to their main goal of implementing their investment plans. Total investment expenditures of the VIOHALCO subsidiaries reached Euro million in 2008, compared to Euro 216 million in 2007.

6 In the steel sector, the SIDENOR Group increased its sales by 23% as a result of a rise in volumes and selling prices, as well as due to the commencement of the operation of the new rolling mill of the Bulgarian subsidiary STOMANA INDUSTRY. The SIDENOR Group s investment plan, included investments amounting to Euro 73 million, aiming at increasing the productivity and expanding the production capacity of the parent company and its subsidiaries plants. The state-of-the-art new rolling mill of STOMANA INDUSTRY, which started its operation in the first quarter of 2008 and has cost Euro 80 million, is a fundamental part of that plan. With this new unit, the subsidiary s production capacity for long products, increased to 1,000,000 tons annually. In the aluminium sector, the ELVAL Group s sales dropped by 7.9%, due to a significant reduction in the demand for aluminium products in the second half of the year. In 2008, the ELVAL Group spent a total of Euro 73.8 million for the implementation of its investment plan, which focused on upgrading the ELVAL production plant at Oinofyta, upgrading the ETEM plants and installing a new rolling mill for the SYMETAL subsidiary. In the copper and zinc sector, the consolidated turnover of HALCOR dropped by V I O H A L C O S. A.

7 A N N U A L R E P O R T 12.4%, due to the increased ratio of brass products to total sales and a significant drop in the prices of copper and zinc. In 2008, the HALCOR Group continued with the implementation of its investment plan for the upgrade and expansion of its production plants, with the relevant expenditures amounting to a total of Euro 47.1 million; of that amount, Euro 19.8 million were for the parent company s production plant at Oinofyta, Euro 15.1 million for investment at the SOFIA MED subsidiary and Euro 12.2 million were related to investments for HELLENIC CABLES S.A. In the real estate development sector, VIOHALCO continued the commercial development of its fixed assets in Within that framework, the leasing of a property at Kifissos Avenue, Aigaleo, where the second IKEA store in Attica, is already in operation, was completed and construction work is still going on, both on that property and a property at Kifissias Avenue. Finally, a property was purchased in the Municipality of Amarousion, in 2008, as part of these activities. As regards environmental protection, the companies of VIOHALCO proved their strict

8 commitment again, by being very active in copper, aluminium and steel scrap recycling, thus making a significant contribution towards the preservation of energy and natural resources and by developing integrated environmental protection programs, in the production plants of all companies. VIOHALCO is and will always be committed to Sustainable Development and the application of its principles. Contributing to the promotion of Sustainable Development principles, VIOHALCO took part in an initiative of the Hellenic Federation of Enterprises (SEV), which led to the establishment of the SEV COUNCIL FOR SUSTAINABLE DEVELOPMENT, in 2008, which is a member of the WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT. Such fundamental principles as Occupational Safety and Health and Environmental Protection are cornerstones of our operation. Within that framework, the companies of VIOHALCO keep proving their commitment, through ongoing investment in environmental protection plans and health & safety measures for their personnel. Adapting to the new circumstances, resulting from the unprecedented financial crisis, our subsidiaries have placed great emphasis on ensuring an even more effective management of working capital, reducing loans, creating more positive cash flows, V I O H A L C O S. A.

9 A N N U A L R E P O R T improving production cost, developing higher added value products that are subject to low substitution all these in the light of reduced energy costs and interest rates. Taking into account the current unprecedented and highly volatile and adverse conditions, VIOHALCO remains focused on the realization of its strategy and expects reinforcement of its position, once recovery sets and a further penetration not only in markets where it is already active, but also in new ones. Nikolaos M. Stassinopoulos Chairman of the Board of Directors 7

10 VIOHALCO was established in 1937 and its shares have been listed on the Athens Stock Exchange since 1947 VIOHALCO* STEEL SECTOR COPPER SECTOR ALUMINIUM SECTOR SIDENOR* 64,93% HALCOR* 55,59% ELVAL* 65,88% REAL ESTATE DEVELOPEMENT SECTOR NOVAL 100% CORINTH PIPEWORKS* 78,55% SOVEL 62,56% STOMANA INDUSTRY** 100% * Listed on the Athens Stock Exchange **Data: 31/12/2008 HELLENIC CABLES* 78,72% ICME ECAB 98,59% SOFIA MED 100% V I O H A L C O S. A. ΕΤΕΜ* 58,78% BRIDGNORTH ALUMINIUM 100%

11 A N N U A L R E P O R T. VIOHALCO S.A. Activities VIOHALCO is the holding company of the largest Greek metals processing group. Through its direct or indirect participation in over 90 companies, in Greece and abroad, it operates in the fields of Steel, Copper and Aluminium production and trade, as well as in real estate development. VIOHALCO was established in 1937 and its shares have been listed on the Athens Stock Exchange since 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 substantial production base and an extensive commercial presence and their shares are traded on the Athens Stock Exchange. Through its subsidiary NOVAL, VIOHALCO is also active in real estate development, in an effort to ensure a more effective development of its real estate. Subsidiary Structure At an operational level, the organizational structure of VIOHALCO and its subsidiaries ensures the independent operation of three subgroups of companies, which are active in Steel, Copper and Aluminium processing and trade, with SIDENOR, HALCOR and ELVAL being the respective leaders in their field, whereas the leader in real estate development is NOVAL. In addition, the increased interaction between all companies, allows for the development of meaningful synergies in such areas as the procurement of raw materials, market research, technical support, banking relations, foreign exchange risk hedging and legal support. The above services are provided by an executive team for all VIOHALCO companies. International presence The VIOHALCO subsidiaries activities are marked with a highly extrovert business orientation, with a significant production presence outside Greece. The installed production base of the Group outside Greece includes plants and warehouses in Bulgaria, Romania, the United Kingdom, FYROM and Russia. Through such units, the companies can have direct access to local markets, while at the same time retain a substantial competitive advantage when producing in countries, adjacent to their target markets. 70% of its consolidated turnover is generated outside Greece

12 In addition, the pioneering technological solutions, the high quality characteristics and the expanded and integrated range of products, have laid the foundation for the successful commercial presence of the VIOHALCO companies in over 60 countries, with 70% of their consolidated turnover being generated abroad. Investments With total investments in excess of Euro 1.3 billion in the last ten years, the companies of VIOHALCO have really proved their commitment to the ongoing upgrade and expansion of their production base. The extensive investment plans that have been, or are being, implemented by the companies, ensure a significant advantage at a production level and keep supporting increased production capacity, improvement of productivity and modernization, effective and safe operation, environmental protection, a high quality level and a flexible range of manufactured products. The VIOHALCO subsidiaries spent a total of Euro million for their investment plans in 2008, compared to Euro 216 million in The total investments realized in the fiscal year 2008 are broken down, per activity, as follows: 1 AMOUNTS IN MILLION EURO Investments in Steel activities 78.0 Investments in Copper activities 47.5 Investments in Aluminium activities 83.9 Investments in Real Estate 27.5 Investments in other activities 4.5 Total Research In view of the subsidiaries focus on ongoing technological development, VIOHALCO proceeded with the establishment of the Hellenic Metals Research Center (ELKEME). ELKEME carries out research on new production methods, as well as monitors the performance of end-products. Its staff comprises of highly skilled scientists and its facilities are fully equipped with state-of-the-art research equipment. V I O H A L C O S. A.

13 A N N U A L R E P O R T Total investments implemented in ELKEME, until 2008, have reached almost Euro 3.7 million. Its performance is considered very satisfactory and is fully reflected on the numerous benefits that have arisen, both at the production level, as well as the development of new products. The Environmental Management Systems of most of its plants, are certified according to the EMAS & ΙSO standards, Protecting the Environment - Recycling All VIOHALCO subsidiaries consider environmental protection as a nonnegotiable value and have incorporated actions for reducing their environmental footprint in their operations. In view of the above, the Environmental Management Systems of most plants have been certified according to the EMAS and ISO standards, whereas relevant certification procedures are under way in the rest. whereas relevant certification procedures are under way in the rest of them. 11

14 Recycling Operations in the Steel Products Sector SIDENOR Group is the largest steel scrap recycler in Greece and one of the largest in the Balkans, as it recycles more than 2.4 million tons annually. 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. 1 AEIFOROS recycles the by-products arising from the production process of the SIDENOR Groups companies and other VIOHALCO companies. HALCOR Group companies recycle significant quantities of copper scrap annually, in an environmentally friendly manner. V I O H A L C O S. A. Recycling Operations in the Copper Products Sector As a token of their commitment to improve their environmental performance, the HALCOR Group companies recycle significant quantities of copper scrap annually, in an environmentally friendly manner. Copper recycling helps save 50% of the energy required for the production of primary copper, which results in obvious benefits, related to the reduction of greenhouse gases emitted globally. Furthermore, all production plants use special anti-pollution technology systems to minimize environmentally harmful emissions and the company has developed an extensive plan for monitoring environmental parameters to ensure environmental protection. Recycling Operations in the Aluminium Products Sector ELVAL is one of the largest aluminium recyclers in Greece. Aluminium recycling is hi-

15 A N N U A L R E P O R T ghly environmental-friendly and contributes to a reduction in the emission of greenhouse gases, as it saves 95% of the energy required for the production of primary aluminium. Aiming at applying an integrated and total approach on recycling, ELVAL has set up the Aluminium Can Recycling Center (CANAL S.A.) in Marousi. The Center can accept an annual quantity of 2,800 tons of used aluminium cans, which are processed and then forwarded to the ELVAL plant at Oinofyta for recasting. The center operates as a communication base, where organizations, social groups, schools, enterprises and private persons are informed on the process and benefits of recycling. Aluminium recycling makes a The Aluminium Can Recycling Center (CANAL) can accept 2,800 tons of used aluminium cans per year, which are then processed. 1

16 1 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. ELVAL has developed an extensive and effective environmental management plan, including pollution prevention measures, the setting up of mechanisms for the improvement of existing and the creation of new infrastructure, aimed at preserving natural resources and reducing its environmental impact. V I O H A L C O S. A.

17 A N N U A L R E P O R T Commitment to Sustainable Development VIOHALCO S.A., as a founding member of the SEV COUNCIL FOR SUSTAINABLE DEVELOPMENT, has adopted the Code of Principles for Sustainable Development and is committed to the following: 1. To respect the Sustainable Development principles 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 fulfill its legal obligations consistently, in a spirit of transparency and business ethics. 1

18 1 VIOHALCO Consolidated Key Financials At the end of 2008, the international economic recession caused rapid negative changes in metal prices and put great pressure on the profit margins of the global metals industry. Within that framework, consolidated turnover in 2008 amounted to Euro 3,763 million, a 2.2% increase compared to Euro 3,683 million in Earnings before interest, tax, depreciation and amortization (EBITDA) amounted to Euro million, reduced by 53.6%, compared to Respectively, consolidated earnings before taxes in 2008 dropped significantly, amounting to losses equal to Euro 34.6 million, compared to profits equal to Euro 210 million in Finally, net consolidated earnings after taxes and minority interests amounted to losses equal to Euro 11.3 V I O H A L C O S. A. million Euro Copper Products 29% Consolidated Turnover ,4% ,5% 2,2% 2008 Consolidated Sales Analysis 2008 Other 3% Aluminium Products 23% Steel Products 45%

19 A N N U A L R E P O R T million (or Euro per share), compared to profits equal to Euro 83.9 million in 2007 (or Euro 0.43 per share). It should be noted that the above results, in addition to the significant reduction in gross margins, also include one-off devaluations of the VIOHALCO subsidiaries inventories, amounting to Euro million, due to the drop of metal prices, with an equal sum charged to the 2008 results. It should also be noted that the consolidated net debt dropped by Euro 321 million in the fourth quarter, amounting now to Euro 1,114 million, as a result of the drop of metal prices in the same period and the efforts made by the companies of VIOHALCO to optimize their working capital management. 17

20 Consolidated Key Financials (amounts in Euro thousand) Turnover 3,274,356 3,683,329 3,763,456 Gross profit 501, , ,397 Earnings before interest, taxes, depreciation and amortization 404, , ,527 Earnings before interest and taxes 281, ,956 49,238 Profits/Losses before taxes 226, ,950-34,582 Profits/Losses after taxes and minority interest 113,153 83,958-11,307 Financials Development (%) Turnover 40.4% 12.5% 2.2% Gross profit 63.3% 0.0% -36.7% Earnings before interest, taxes, depreciation and amortization 84.6% -2.7% -53.6% Earnings before interest and taxes 173.3% -5.1% -81.6% Profits/Losses before taxes 282.1% -7.5% n/a Profits/Losses after taxes and minority interest 459.6% -25.8% n/a Amounts in million Euro 600 Consolidated Financial Results Profit Margins V I O H A L C O S. A Earnings before taxes & minority rights Earnings before taxes Earnings before taxes & interest Profits before interest & taxes / (EBIT) Turnover % 7% 9% 12% 15% 2% 6% 7% 11% 14% Earnings after taxes and minority rights Earnings before taxes Earnings before interest & taxes Earnings before interest, taxes & depreciation (EBITDA) Gross profit 1% % 8%

21 A N N U A L R E P O R T Profit Margins (%) Gross profit 15.3% 13.6% 8.4% Earnings before interest, taxes, depreciation and amortization 12.4% 10.7% 4.8% Earnings before interest and taxes 8.6% 7.2% 1.3% Profits/Losses before taxes 6.9% 5.7% n/a Profits/Losses after taxes and minority interest 3.5% 2.3% n/a Consolidated Balance Sheet Data (amounts in Euro thousand) ASSETS Non-current assets 1,832,241 1,918,949 2,011,568 Inventories 842, , ,329 Trade and other receivables 763, , ,493 Other assets 278, , ,716 TOTAL ASSETS 3,716,604 4,014,417 3,873,106 EQUITY AND LIABILITIES Long term liabilities 1,102,235 1,105, ,760 Short term banking liabilities 445, , ,666 Other short term liabilities 391, , ,024 TOTAL LIABILITIES 1,939,663 2,038,880 2,104,450 Shareholders equity 1,089,111 1,228,470 1,168,349 Minority Interest 687, , ,306 TOTAL EQUITY 1,776,941 1,975,536 1,768,655 TOTAL EQUITY AND LIABILITIES 3,716,604 4,014,417 3,873,106 Consolidated Cash Flows (amounts in Euro thousand) Operating Activities 95, , ,651 Investment Activities 4,353-92, ,605 Financing Activities 50,127 71,892-79,972 Total Cash flows 150,395 91,896-86,927 Cash & cash equivalents, beginning of period 83, , ,606 Cash & cash equivalents, end of period 233, , ,679 1

22 Group 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.) % 6.4% 4.2% -0.6% Return on assets (R.O.A.) % 3.0% 2.1% -0.3% 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: 20 NIKOLAOS STASSINOPOULOS IOANNIS FIKIORIS EVANGELOS MOUSTAKAS ZACHARIAS CHATZIPANAGIOTOU GEORGIOS GONDIKAS ATHANASIOS PAPASPIROU CHARALAMBOS METAXOPOULOS GEORGE ROSENFELD JEAN-PIERRE DE LAUNOIT V I O H A L C O S. A. CHAIRMAN / EXECUTIVE MEMBER VICE CHAIRMAN / NON EXECUTIVE MEMBER EXECUTIVE MEMBER INDEPENDENT NON EXECUTIVE MEMBER INDEPENDENT NON EXECUTIVE MEMBER NON EXECUTIVE MEMBER NON EXECUTIVE MEMBER NON EXECUTIVE MEMBER NON EXECUTIVE MEMBER

23 A N N U A L R E P O R T. Steel Operations SIDENOR Activities The SIDENOR Group is VIOHALCO s production, processing and trade arm for steel products. Through an extensive production base with plants in Greece and abroad, the SIDENOR Group offers a complete range of products including, among other things, concrete reinforcing steel, mesh products, steel tubes, hollow structural sections, wires and welding electrodes. The Group s main areas of activity are outlined below: Mini-mills; Pipes, Tubes and Hollow Sections; Downstream operations and Sales and Distribution. SIDENOR shares have been traded on the Athens Stock Exchange since Products By focusing on the development and marketing of pioneering products with top quality characteristics, the SIDENOR Group has a complete range of products, which meet even the strictest specifications of its customers, both in Greece and abroad. 1

24 V I O H A L C O S. A.

25 A N N U A L R E P O R T SIDENOR products and those of its subsidiaries can be classified into the following major categories: Integrated SD Reinforcing System: Merchant bars: Wire Rod: Steel Pipes Hollow Structural Sections (HSS): Hot Rolled Flat Products: Other products: SD Concrete Reinforcing Steel, SD Stirrup Reinforcing Mesh, SIDEFIT Special Mesh, SD Wire Mesh, SIDEFOR Prefabricated Stirrup Cages, INOMIX Steel Fibers, Lattice Girders. Hot-Rolled Square Bars, Hot-Rolled Flat Bars of rectangular cross-section, Hot-Rolled Round Bars of circular crosssection, Hot-Rolled Equal Angle Bars with round edge, I-section Beams (IPE), UPN Channels SIDENOR s wire rod meets all low-carbon wire production needs. Steel Pipes of Medium and Large Diameter, Steel Pipes of Small Diameter, Steel Pipes for Construction Purposes Hollow Structural Sections (HSS). Steel Sheets or Plates. Double-Twist Hexagonal Mesh Wire Products (galvanized and black), Welding Products, Special Steels, Steel Balls, Special Profiles, Metallurgical Byproducts Processing. Production Facilities With a strong production base, which includes plants in Thessaloniki, Almyros, Kilkis, Halkida, Thiva, Thisvi, Pernik in Bulgaria, Nikolic in FYROM and Polevskoy in Russia, the SIDENOR Group is one of the largest steel products manufacturers in Southeast Europe. At the same time, the fully vertical structure of the Group s production activities, guarantees total control of the top quality of the products and ensures an important competitive advantage at a cost level. The new state-of-the-art long products mill of STOMANA INDUSTRY began its operation in Pernik in 2008, increasing the annual long products production SIDEFOR products include prefabricated 3D elements (cages) used as transverse reinforcement in columns, beams and walls.

26 Categories Units Products Production capacity Meltshops SIDENOR, SOVEL, STOMANA INDUSTRY billets, slabs, blooms tons. * Long Products Rolling Mills Line Pipe and Hollow Structural Sections Production SIDENOR, SOVEL, STOMANA INDUSTRY, DOJRAN STEEL CORINTH PIPEWORKS, ΖΑΟ ΤΜΚ CPW, SOVEL, VΕΤ, PROSAL, PROSAL TUBES concrete reinforcing SD bars, hot rolled products, wire mesh and reinforcement steel cages, merchant bars, wire rod line pipes for oil, gas, natural gas, water and construction, hollow structural sections for constructions tons* approx tons Plate Mill STOMANA INDUSTRY, SOVEL plates tons Downstream Operations ERLIKON, SOVEL, DEPAL, ETAL, AEIFOROS, TEPROSTEEL wire products, concrete reinforcing mesh, concrete reinforcing steel fibers, recycling plant for steel byproducts, cold finishing plant for production of special and bright steels tons * After the completion of already announced investments capacity of STOMANA INDUSTRY to 1,000,000 tons. Furthermore, in the SOVEL plant in Almyros, Magnesia, an investment plan is in progress, for the installation of a new stateof-the-art Compact Mill for steel long products. Upon completion, the above investment will increase the long products production capacity by 300,000 tons annually. Investments Having made the modernization and expansion of its production plants, a major parameter of its growth strategy, the SIDENOR Group has successfully implemented an extensive investment plan, amounting to more than Euro 607 million in the period In 2008, the Group s total investments reached almost Euro 73 million and were aimed mainly at increasing the production capacity of the plants, developing new production methods, further reducing costs and enhancing production efficiency, as well as V I O H A L C O S. A.

27 A N N U A L R E P O R T expanding the Group s range of products, with new pioneering high added value products. Key Financials The financial results of the SIDENOR Group were affected in 2008 and in the last quarter of the year in particular, by the consequences of the international financial crisis, which led to a reduction in investment in construction and a drop of metal prices globally. In view of the above, the consolidated turnover amounted to Euro 1,713 million, compared to 1,390 million in 2007, a 23.3% increase, due to the increase in volumes and selling prices and the operation of the new rolling mill of STOMANA INDUSTRY, which started operations in mid The Group s earnings before interest, tax, depreciation and amortization (EBITDA) amounted to Euro 140 million in 2008, compared to Euro million in 2007 and the net consolidated earnings after taxes and minority interests amounted to Euro 29.3 million, compared to Euro 91.6 million in The above decrease in the consolidated results was attributed to the sudden drop in the prices of steel and scrap, in the last quarter of the year, which caused a significant reduction in profit margins and forced the Group to devaluate its inventories at the end of the year, by Euro 60.3 million. million Euro Consolidated Turnover ,3% ,2% ,3% 2008

28 Consolidated Key Financials (amounts in Euro thousand) Turnover 1,228,121 1,390,039 1,713,441 Gross profit 290, , ,357 Earnings before interest, taxes, depreciation and amortization 219, , ,971 Earnings before interest and taxes 169, ,791 81,703 Earnings before taxes 144, ,507 47,414 Earnings after taxes and minority interests 108,180 91,638 29,260 Financials Development (%) Turnover 28.3% 13.2% 23.3% Gross profit 68.4% -0.3% -15.8% Earnings before interest, taxes, depreciation and amortization 117.2% -3.2% -34.2% Earnings before interest and taxes 218.7% -5.3% -49.2% Earnings before taxes 366.2% -3.9% -65.8% Earnings after taxes and minority interests 564.1% -15.3% -68.1% Group Profit Margins Gross profit 23.7% 20.9% 14.3% Earnings before interest, taxes, depreciation and amortization 17.9% 15.3% 8.2% Earnings before interest and taxes 13.8% 11.6% 4.8% Earnings before taxes 11.7% 10.0% 2.8% Earnings after taxes and minority interests 8.8% 6.6% 1.7% V I O H A L C O S. A.

29 A N N U A L R E P O R T Consolidated Balance Sheet Data (amounts in Euro thousand) ASSETS Fixed assets and investments 780, , ,894 Inventories 301, , ,395 Trade and other receivables 137, , ,877 Other assets 176, , ,076 TOTAL ASSETS 1,396,501 1,544,295 1,615,242 EQUITY AND LIABILITIES Long term liabilities 426, , ,691 Short term banking liabilities 149, , ,288 Other short term liabilities 202, , ,502 TOTAL LIABILITIES 778, , ,481 Share Capital 39,363 39,413 39,413 Other items of shareholders equity 450, , ,827 Total shareholders equity 489, , ,240 Minority interest 128, , ,521 TOTAL EQUITY 617, , ,761 TOTAL EQUITY AND LIABILITIES 1,396,501 1,544,295 1,615,242 Strategy The main pillars of the SIDENOR Group s strategy are: Further reinforcing the Group s position in the Greek market, by maintaining cost at competitive levels and by developing new, innovative products with high added value and profit margins. Further reinforcing the Group s presence in the geographical region of Southeast Europe, by developing the investments in STOMANA INDUSTRY in Bulgaria and DOJRAN STEEL in F.Y.R.O.M. The main objectives of these investments are productivity increase, production cost decrease and guaranteed high quality. Strenghtening the competitive market position of CORINTH PIPEWORKS in the international energy markets, by reinforcing its presence in the geographical markets of Western Europe, Middle East, North Africa, North America and Russia. Further expanding the Group s exporting character, both through the Group s sales and distribution network and the development of new trade partnerships. 7

30 Applying advanced tools of administrative and commercial support methods, incorporating in the Group s daily operation modern administrative information systems, modern goal setting and staff evaluation systems. Maintaining the Group s focus on the training and development of its human resources. Focusing on protecting the environment, by adopting policies and practices that limit, as much as possible, the Group s environmental footprint. CORINTH PIPEWORKS Activities CORINTH PIPEWORKS was incorporated in 1969 and has been a member of the SIDENOR Group since Its main activities include the production of top quality steel pipes used to transmit oil and natural gas, as well as the production of hollow structural sections (HSS) for the construction sector. The products of CORINTH PIPEWORKS address a quite demanding list of customers, including some of the largest oil and natural gas companies in the world, such as Chevron, BP, 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. V I O H A L C O S. A.

31 A N N U A L R E P O R T The company s shares have been listed on the Athens Stock Exchange since Products CORINTH PIPEWORKS produces: Line pipes used to transmit natural gas and oil, as well as steel pipes used to transmit and distribute water to centers of consumption. Casing pipes used for extracting oil and natural gas. Hollow structural sections (HSS), widely used in the construction sector and especially in metal constructions. They are traded under the SD trademark. Furthermore, CORINTH PIPEWORKS provides a range of services, which include, among other things, the 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 to approved sub-contractors, as well as combined transportation of pipes. Production Facilities CORINTH PIPEWORKS Group has two main production facilities in Thisvi, Viotia and Polevskoy, Russia.

32 Thisvi Plant (Greece) The Group s main production plant is located in the Industrial Area of Thisvi, in the Prefecture of Viotia. It was constructed in 2002 and is considered one of the most modern and efficient pipe production plants, worldwide. DIA.VI.PE.THI.V. is responsible for the management of the Industrial Area of Thisvi. The production plant has a total surface of 497,000 square metres (49.7 hectares), of which 83 are covered, while its total annual production capacity is 775,000 tonnes. One of the most significant competitive advantages of Thisvi, is its strategically selected location, close to a port, where there are three loading/unloading docks. The facility s proximity to the port, ensures fast delivery of raw materials and dispatch of finished products, as well as low transportation cost. Polevskoy Plant (Russia) Through its 100% subsidiary HUMBEL LTD, in 2007, CORINTH PIPEWORKS established the joint venture ZAO TMK-CPW company with TMK, the biggest pipe manufacturer in Russia and among the three biggest globally. The plant produces ERW pipes up to 21 diameter V I O H A L C O S. A.

33 A N N U A L R E P O R T and has internal and external coating facilities. The ZAO TMK-CPW joint venture plant is located in the town of Polevskoy in the Seversky region and operates as a production unit of STW (Seversky Tube Works), a subsidiary of TMK. The plant s total annual capacity is 200,000 tonnes. Investments In 2008, CORINTH PIPEWORKS completed an investement in the large diameter Helical Submerged Arc Welded (HSAW) production unit, increasing its annual capacity by 25%, to 375,000 tonnes. At the same time, the upgrade of the ERW/HFI production line from 24 to 26 is in progress; upon its completion, CORINTH PIPEWORKS will offer the widest range of such products worldwide (O.D. up to 26 from steel API to X80). euro Million Consolidated Turnover ,7% 11,9% 22,4% Key Financials The consolidated turnover, in 2008, amounted to Euro million, compared to Euro million in 2007, increased by 7.7%. The consolidated earnings before interest, tax, depreciation and amortization (EBITDA) dropped by 45.5% amounting to Euro 31.2 million, compared to Euro 57.2 million in the respective period, last year. Finally, earnings after taxes and minority interest amounted to Euro 8.9 million, compared to Euro 34 million in The reduction in the Group s operating profits was due to the following: The Euro revaluation against the dollar, reaching decade highs, in the first half of the year, when large projects were awarded to the company, by customers in the USA and the Middle East. The low level of utilization of the ERW/HFI unit in the same period, due to a delay in the award of certain large projects in the Middle East. The fact that CORINTH PIPEWORKS, as part of its financial risk hedging policy, had locked the prices of raw materials and a significant part of freight, upon award of certain projects and was unable to take advantage of the sudden price correction in the international steel and marine transport markets, in the second half of

34 Consolidated Key Financials (amounts in Euro thousand) Turnover 319, , ,123 Gross profit 73,786 84,626 72,561 Earnings before interest, taxes, depreciation and amortization 41,281 57,226 31,177 Earnings before interest and taxes 30,257 45,990 20,181 Earnings before taxes 19,449 40,101 15,838 Earnings after taxes and minority interests 36,424 33,971 8,859 Financials Evolution (%) Turnover 22.4% 11.9% 7.7% Gross profit 32.8% 14.7% -14.3% Earnings before interest, taxes, depreciation and amortization 102.4% 38.6% -45.5% Earnings before interest and taxes 242.9% 52.0% -56.1% Earnings before taxes n/a 106.2% -60.5% Earnings after taxes and minority interests n/a -6.7% -73.9% Profit Margins (%) Gross profit 23.1% 23.7% 18.8% Earnings before interest, taxes, depreciation and amortization 12.9% 16.0% 8.1% Earnings before interest and taxes 9.5% 12.9% 5.2% Earnings before taxes 6.1% 11.2% 4.1% Earnings after taxes and minority interests 11.4% 9.5% 2.3% Consolidated Balance Sheet Data ASSETS Fixed assets 192, , ,413 Inventories 56,984 95, ,338 Trade and other receivables 64,337 64,961 90,777 Other assets 3,202 2,587 3,374 Cash and cash equivalents 8,366 11,592 19,405 TOTAL ASSETS 325, , ,307 EQUITY AND LIABILITIES Long term loan liabilities 87,247 65,579 7,500 Other long term liabilities 8,024 6,823 5,356 Short term loan liabilities 31,819 31,671 62,929 Other short term liabilities 104, , ,820 TOTAL LIABILITIES 231, , ,604 Total company shareholders equity 92, , ,703 Minority Interest 1, TOTAL EQUITY 93, , ,703 TOTAL EQUITY AND LIABILITIES 325, , ,307 V I O H A L C O S. A.

35 A N N U A L R E P O R T Strategy The end of 2008 signaled the completion of a four-year cycle of favorable conditions in the international markets and especially in energy. The main characteristic, in the international business environment, as it emerges in the beginning of 2009, is the deterioration of macroeconomics and the increased protectionism in international trade, which is expected to become even more intense, if the current financial situation does not change soon. With regard to the markets where the Group operates, a postponement in the implementation of most energy projects is expected for 2010 and 2011, due to the recession and the sharp fall in gas and oil prices. However, low steel prices and freight rates, as well as the intensifying competition, create favorable conditions for energy companies with adequate liquidity or high creditworthiness, to continue their investment programs. Moreover, the unstable geopolitical environment, in areas with strategic importance for the transmission of natural gas, has intensified the need to diversify, both in terms of gas sources and transit pipelines, opening the way for new energy projects. In this context, the main strategic goals for the CORINTH PIPEWORKS Group are as follows: Further reduction in operating costs, aiming at improving the Group s competitiveness. Increase of its presence in the markets of Europe, North Africa and the Middle East. Increase of the range of products, aiming at strengthening the Group s presence on a commercial level, through new solutions, with high added value for the customer. Maintainance of the current financial structure. Focus on innovation and quality, aiming at turning the Group into a strategic partner, regarding the implementation of complex projects in the energy market.

36 . Copper Operations HALCOR Activities The HALCOR Group represents VIOHALCO s production and trade arm for copper products. It includes 18 companies, with 9 production units in Greece, Bulgaria and Romania, which produce copper, copper alloy, titanium-zinc rolled and extruded products and cables. HALCOR is the sole producer of copper tubes and zinc rolled products in Greece. The HALCOR Group also includes the HELLENIC CABLES Group companies, which are active in the manufacture of cables, winding wires, conductors and insulating rubber or plastic compounds, using three production plants in Greece and one in Romania. The products of HELLENIC CABLES are sold in the market under the trade mark CABLEL. HALCOR shares have been listed on the Athens Stock Exchange since Products The products of the HALCOR Group are broken down into six main categories: 1. Copper Products: Tubes, Sheets, Strips, Circles, Flat Bars, Bars, Ø8mm Wire, Enamelled Wires and Conductors 2. Brass Products: Tubes, Sheets, Strips, Circles, Flat Bars, Bars 3. Zinc Products: Sheets, Strips 4. Special Alloy Products: Slabs, Strips, Circles, Blanks 5. Power and Telecommunication Cables 6. Plastic and Rubber Compounds V I O H A L C O S. A.

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

38 The raw material used in production comes mainly from Bulgaria, Chile and Kazakhstan based on annual or spot contracts. At the same time, the Group is methodically developing an expanded network for the collection and storage of copper scrap, both in Greece and in the wider Balkan region. Production Facilities The extensive production network of the HALCOR Group includes nine production plants in Greece, Bulgaria and Romania: Production Location Total Built Production Products Unit Surface Area Capacity (sq.m.) (sq.m.) (tons/year) 1. HALCOR Casting Plant Oinofyta 49,556 11, ,000 Semi-finished products (billets and slabs) and Ø8mm Wire 2. HALCOR Copper Tubes Plant Oinofyta 198,061 67,414 70,000 Copper tubes for heating, water supply ACR, natural gas, etc. 3. HALCOR Zinc Extruded Oinofyta 57,980 23,120 25,000 Finished products Products Plant 4. HALCOR Titanium-Zinc Rolled Athens 62,266 37,647 20,000 Rolled products Products Plant 5. HALCOR Copper Processing Sofia 250, , ,000 Manufacture of Plant SOFIA MED (Bulgaria) copper and copper alloy products 6. HELLENIC CABLES Power and Thiva 175,082 38,265 55,000 Power cables of an operating Fiber optic Cables Plant voltage up to 400kV, telecommunication cables (copper / fiber optic) 7. HELLENIC CABLES Livadia 121,818 14,048 14,000 Enamelled wires Copper Conductors and and copper wires Enamelled WiresPlant 8. HELLENIC CABLES Plastic and Oinofyta 22,032 6,444 24,000 Rubber and plastic Rubber Compounds Plant compounds for the supply of the cable production lines and other uses 9. ICME ECAB Cables Bucharest 268,000 70,000 45,000 Indoor installation Plant (Romania) cables, power, control, industrial use and external installation cables, with reduced fire propagation features, fire resistant V I O H A L C O S. A.

39 A N N U A L R E P O R T Investments The HALCOR Group continued the implementation of its investment plan unabated in 2008, by investing Euro 47.1 million, for the upgrade of its production facilities. The main driver behind such investments and the common aim of all relevant efforts was to maintain the Group s competitive advantage at the production level, through an improvement of the operating efficiency of its units and the expansion of their production capacity. The overall 2008 investment plan was the following: Investments amounting to Euro 19.8 million were realized in the parent company s plants, at Oinofyta, focusing mainly on the tubes plant. Investments amounting to Euro 15.1 million were realised for the upgrade of the SOFIA MED plant in Bulgaria. Investments amounting to Euro 9.5 million were realized in the HELLENIC CABLES plant. Investments amounting to Euro 2.7 million were realized in the ICME ECAB cable plant in Romania. Key Financials The consolidated turnover dropped by 12.4%, in 2008, amounting to Euro 1,200 million, compared to Euro 1,370 million in The above decrease was caused by the increased ratio of brass products to total sales, in conjunction with a significant drop in the prices of copper and zinc. 7

40 At volume level, the sales dropped slightly by 2.5%, with the sales of cables representing 34% of total sales, the sales of tubes representing 27%, rolled products representing 18%, brass bars representing 13% and copper flat bars representing 8%. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) amounted to Euro 4 million in 2008, compared to Euro 86 million in 2007 and earnings after taxes and minority interests amounted to losses equal to Euro 48.2 million, compared to profits equal to Euro euro million million in The decrease was caused by the one-off devaluation made by the Group, amounting to Euro 78.6 million, due to the unprecedented and rapid drop of copper and zinc prices, the high prices of other production factors, the increased financial costs and the dysfunction of domestic ports Consolidated Turnover ,2% ,9% ,4% Consolidated Key Financials (amounts in Euro thousand) Turnover 1,246,578 1,369,617 1,200,295 Gross profit 118, ,587 19,885 Earnings before interest, taxes, depreciation and amortization 95,287 85,775 3,613 Profits/Losses before interest and taxes 72,677 62,691-20,930 Profits/Losses before taxes 51,887 33,310-56,375 Profits/Losses after taxes and minority interest 35,955 20,022-48,224 Financials Development (%) Turnover 75.1% 9.9% -12.4% Gross profit 93.6% -10.9% -81.2% Earnings before interest, taxes, depreciation and amortization 100.2% -10.0% -95.8% Profits/Losses before interest and taxes 178.2% -13.7% n/a Profits/Losses before taxes 314.9% -35.8% n/a Profits/Losses after taxes and minority interest 930.1% -44.3% n/a Profit Margins (%) Gross profit 9.5% 7.7% 1.7% Earnings before interest, taxes, depreciation and amortization 7.6% 6.3% 0.3% Profits/Losses before interest and taxes 5.8% 4.6% n/a Profits/Losses before taxes 4.2% 2.4% n/a Profits/Losses after taxes and minority interest 2.9% 1.5% n/a V I O H A L C O S. A.

41 A N N U A L R E P O R T Consolidated Balance Sheet Data ASSETS Fixed assets 321, , ,521 Inventories 252, , ,261 Trade and other receivables 296, , ,398 Cash and cash equivalents 29,261 41,597 58,971 Other assets 7,658 1,707 11,402 TOTAL ASSETS 906, , ,553 EQUITY AND LIABILITIES Share Capital 38,486 38,486 38,486 Other items of shareholders equity 200, , ,369 Minority interest 24,624 27,779 25,657 TOTAL EQUITY 263, , ,513 Long term Liabilities Long term loans 311, , ,128 Other long term liabilities 39,666 39,101 25,107 TOTAL LONG TERM LIABILITIES 351, , ,235 Short term Liabilities Short term loans 191, , ,437 Other short term liabilities 100,868 95,962 96,368 TOTAL SHORT TERM LIABILITIES 292, , ,805 TOTAL EQUITY AND LIABILITIES 906, , ,553 Strategy By integrating in its practice the act local, think global philosophy, the HALCOR Group has defined the following strategic development axes: Ongoing upgrading of the Group s production base, through the implementation of extensive investment plans. Further improvement of production cost. Increase of the Group s shares in the Greek market and expansion of its commercial presence in Southeast Europe. Enhance the leading market role of the Group through the development of new, pioneering products which ensure high added value for its customers. Continuous efforts to ensure the quality of manufactured products. Protection and respect for the natural and social environment, with practical recognition of the Group s social responsibility. Ensuring a safe and efficient working environment, which will allow and encourage employees to advance and prosper along with the company.

42 HELLENIC CABLES Activities HELLENIC CABLES operates four production plants in Greece and Romania, manufacturing all types of cables, enamelled wires and rubber or plastic insulating compounds. HELLENIC CABLES was established in 1973, is a member of the HALCOR Group and its shares have been listed on the Athens Stock Exchange since Products HELLENIC CABLES produces power cables, aerial copper and aluminium conductors, telecommunication cables (copper and fiber optic), enamelled wires, as well as plastic and rubber compounds. It is the sole manufacturer of enamelled wires in Greece and since 2008, has expanded its range, to include ultra high voltage cables, up to 400kV and Cat. 7 data transmission cables. The products of HELLENIC CABLES are sold in the market under the trade mark CABLEL. The main types of products manufactured by HELLENIC CABLES are: Indoor installation cables Control cables Cables for industrial use and external installations Marine and offshore cables with increased fire resistance features V I O H A L C O S. A.

43 A N N U A L R E P O R T 1

44 Power cables with operating voltages up to 400kV Low smoke and fume, halogen-free cables with reduced fire propagation features Copper, aluminium and ACSR conductors Enamelled wires Telecommunication cables Fiber optic cables Special cables Plastic and rubber insulating compounds Production Facilities The established production base of the HELLENIC CABLES Group includes plants in Thiva, Livadia, Oinofyta and Romania. The basic raw materials used by the above plants are copper, aluminium, steel wires and plastic or rubber materials for cable insulation and coating. Some of the raw materials are supplied to HELLENIC CABLES by the parent company HALCOR. HELLENIC CABLES Power and Telecommunication Cables Plant (Thiva) The Thiva plant produces control cables, internal installation cables, low smoke and fume cables with reduced fire propagation features, marine and offshore cables with increased fire resistance, as well as cables of an operating voltage of up to 400kV. The V I O H A L C O S. A.

45 A N N U A L R E P O R T factory has a built-up area of 38,265 square meters and is built in a 175,082 square meter plot of land, whereas its total production capacity is 55,000 tons annually. HELLENIC CABLES Copper Wires and Enamelled Wires Plant (Livadia) The Livadia plant produces enamelled wires for electric motors and transformers, as well as copper wires for groundings and can making. The annual production capacity of the plant is 14,000 tons and the total built-up area of the factory is 14,048 square meters. HELLENIC CABLES Plastic and Rubber Compounds Plant (Oinofyta) The Oinofyta compounds plant produces rubber and plastic compounds necessary for the supply of insulation, filling and shielding production lines for finished cables. The built-up area of the factory is 6,444 square meters and its annual production capacity is 24,000 tons. Part of the plant s products are supplied to HALCOR, to be used in the production of Ecutherm and Cusmart copper tubes. ICME ECAB Cable Plant (Romania) ICME ECAB produces cables for internal and external installations, energy, control and industrial uses, cables with low smoke and fume, reduced fire propagation and fire resistant features, copper and aluminium conductors, mine cables, marine cables,

46 special requirements cables, telecommunication cables, signaling, remote control and data transmission cables, as well as plastic and rubber compounds. The annual production capacity of the plant is 45,000 tons and the total area of the plant is almost 70,000 square meters. 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 medium, high and ultra high voltage cables and will increase the production capacity of the plants substantially. Within this framework, a total of Euro 12 million was spent in 2008 Euro 9.5 million was spent by the parent company and the rest was spent by its subsidiaries. Key Financials The consolidated turnover dropped by 11.8% in 2008 amounting to Euro million, compared to Euro million in 2007, due to the drop of product prices and the reduction in the volume of sales, resulting from the declining activity in the construction sector. The Group s earnings before interest, million Euro Consolidated Turnover ,5% ,5% ,8% V I O H A L C O S. A. tax, depreciation and amortization (EBITDA) amounted to Euro 14.4 million, compared to Euro 34.9 million in 2007 and the consolidated earnings after taxes and minority interests amounted to losses equal to Euro 963 thousand, compared to profits equal to Euro 16 million. The above drop was due, among other things, to the one-off devaluation of the Group s inventories, by Euro 13.1 million, caused by the rapid and unprecedented drop of the price of copper.

47 A N N U A L R E P O R T Consolidated Key Financials (amounts in Euro thousand) Turnover 321, , ,335 Gross profit 35,714 40,732 21,304 Earnings before interest, taxes, depreciation and amortization 28,460 34,876 14,402 Earnings before interest and taxes 21,246 27,421 7,256 Profits/Losses before taxes 18,138 20,372-1,761 Profits/Losses after taxes and minority interest 14,935 15, Financials Development (%) Turnover 60.5% 26.5% -11.8% Gross profit 80.9% 14.1% -47.7% Earnings before interest, taxes, depreciation and amortization 120.7% 22.5% -58.7% Earnings before interest and taxes 250.9% 29.1% -73.5% Profits/Losses before taxes 337.1% 12.3% n/a Profits/Losses after taxes and minority interest 399.5% 7.1% n/a Profit Margins Gross profit 11.1% 10.0% 5.9% Earnings before interest, taxes, depreciation and amortization 8.9% 8.6% 4.0% Earnings before interest and taxes 6.6% 6.7% 2.0% Profits/Losses before taxes 5.6% 5.0% n/a Profits/Losses after taxes and minority interest 4.6% 3.9% n/a Consolidated Balance Sheet Data ASSETS Fixed assets 95,009 94,877 96,052 Inventories 71,619 89,735 64,688 Trade and other receivables 99, ,674 71,991 Other assets 4,582 5,932 12,388 TOTAL ASSETS 270, , ,119 LIABILITIES Long term liabilities 80,813 97,472 67,374 Short term banking liabilities 49,489 48,717 45,450 Other short term liabilities 35,303 34,181 25,872 TOTAL LIABILITIES 165, , ,695 Share Capital 103, , ,640 Minority Interest TOTAL EQUITY 104, , ,424 TOTAL EQUITY AND LIABILITIES 270, , ,119

48 Strategy In view of the new circumstances arising in the construction, energy and telecommunications sectors, the management of the HELLENIC CABLES Group has set the following strategic priorities for its mid- and long-term development: Improve liquidity through reduced borrowing, conservative cash planning and retention of adequate available cash, enabling the company to cope with the adversities prevailing in financial markets and even take advantage of possible opportunities. Improve the competitiveness of the Group, through minimizing costs, enhancing productivity and ensuring a more rational management of inventories and working capital. Utilize new investments through focusing on high added value products, such as high & ultra-high voltage cables, which are less vulnerable to current economic developments. Expand in sectors and markets that are less affected by the crisis. Focus on human resources and the principles and values of corporate social responsibility. V I O H A L C O S. A.

49 A N N U A L R E P O R T. Aluminium Operations ELVAL Activities The ELVAL Group is the aluminium products manufacturing, processing and trading branch of VIOHALCO. ELVAL started its activity in 1973 and its current production base, including 10 plants in Greece, Bulgaria and the United Kingdom, has made it one of the leading aluminium rolled and extruded products industries in the world. 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 tobacco and food packaging. BRIDGNORTH ALUMUNIUM: Production of lithography coils. ELVAL shares have been listed on the Athens Stock Exchange since Products The ELVAL Group produces aluminium rolled and extruded products, offering a wide 7

50 V I O H A L C O S. A.

51 A N N U A L R E P O R T range of products, from aluminium foil for domestic use and aluminium strips and sheets for beverage and food cans, to architectural and industrial profiles. In 2008, sales of rolled products represented 90% of the consolidated turnover. The products of the ELVAL Group are broken down into the following groups: Rolled products Products for the construction industry Rigid packaging products Flexible packaging products Products for the transport industry Lithography coils Etalbond composite panels Extruded products Architectural aluminium profiles Industrial aluminium profiles Production Facilities The ELVAL Group has an extensive production base, including 8 plants in Greece and 2 in the United Kingdom and Bulgaria: ELVAL Group Factories Location Company Products Manufactured 1. Oinofyta (Greece) ELVAL Aluminium rolling 2. Magoula (Greece) ΕΤΕΜ Aluminium extrusion 3. Bridgnorth (United Kingdom) BRIDGNORTH Aluminium rolling Lithography Coils 4. Thiva (Greece) ELVAL COLOUR Aluminium strip coating 5. Mandra (Greece) SYMETAL Paper coating of aluminium 6. Oinofyta (Greece) SYMETAL Foil Production 7. Agios Thomas (Greece) ANOXAL Aluminium Casting 8. Agios Thomas (Greece) ETALBOND Manufacture of composite aluminium panels 9. Sofia (Bulgaria) STEELMET Aluminium extrusion 10. Nea Artaki (Greece) VIOMAL Extruded finished products

52 Investments The Group spent Euro 73.8 million in 2008 for the upgrade and expansion of its production plants Euro 27 million was spent by the parent company and the rest was spent by its subsidiaries. More specifically, Euro 15 million was spent on the upgrade of the ELVAL plant at Oinofyta and Euro 10.3 million was spent on the upgrade of the production plants of the ETEM subsidiary. Furthermore, SYMETAL spent Euro 15 million on the implementation of its investment plan, pertaining mainly to the installation of a new rolling mill in the company s Oinofyta plant. Finally, the STEELMET subsidiary spent Euro 11.8 million on the construction of new storage facilities, a plastic profiles manufacturing plant and an office building. Key Financials The Group s activities were deeply affected by the adverse global financial circumstances prevailing throughout In the first half of the year, oil prices, as well as raw material prices in general, remained high, whereas the second half saw a reduction in the demand for aluminium products, profit margins and raw material prices. V I O H A L C O S. A. million Euro Consolidated Turnover ,8% ,9% 902-7,9%

53 A N N U A L R E P O R T Within this framework, the consolidated turnover amounted to Euro million, compared to Euro million in 2007, reduced by 7.9%. The Group s earnings before interest, tax, depreciation and amortization (EBITDA) amounted to Euro 32.6 million, compared to Euro 85.6 million in 2007 and the net earnings after taxes and minority interests amounted to losses equal to Euro 8.9 million, compared to profits equal to Euro 21.7 million in It should be noted that the rapid drop of aluminium prices, at the end of the year, forced the Group to proceed to a one-off devaluation of its inventories, by Euro 20.3 million. Consolidated Key Financials (amounts in Euro thousand) Turnover 859, , ,460 Gross profit 76,617 90,181 42,444 Earnings before interest, taxes, depreciation and amortization 84,213 87,561 33,666 Earnings before interest and taxes 37,404 41,302-11,252 Earnings before taxes 29,668 30,892-29,203 Earnings after taxes and minority interests 20,735 21,675-8,852 Financials Development (%) Turnover 21.8% 13.9% -7.9% Gross profit 18.3% 17.7% -52.9% Earnings before interest, taxes, depreciation and amortization 25.9% 4.0% -61.6% Earnings before interest and taxes 55.6% 10.4% n/a Earnings before taxes 85.6% 4.1% n/a Earnings after taxes and minority interests 108.7% 4.5% n/a Profit Margins Gross profit 8.9% 9.2% 4.7% Earnings before interest, taxes, depreciation and amortization 9.8% 8.9% 3.7% Earnings before interest and taxes 4.4% 4.2% n/a Earnings before taxes 3.5% 3.2% n/a Earnings after taxes and minority interests 2.4% 2.2% n/a 1

54 Consolidated Balance Sheet Data (amounts in Euro thousand) ASSETS Fixed assets 508, , ,233 Inventories 261, , ,658 Trade and other receivables 216, , ,104 Other assets 5,402 3,803 11,739 Cash and cash equivalents 27,485 28,509 12,325 TOTAL ASSETS 1,018,524 1,043,103 1,017,058 EQUITY AND LIABILITIES Long term loan liabilities 192, , ,973 Other long-term liabilities 77,221 82,555 62,481 Short term loan liabilities 83, , ,189 Other short term liabilities 98, , ,770 TOTAL LIABILITIES 451, , ,413 Total shareholders equity 520, , ,166 Minority interest 46,531 45,927 39,479 TOTAL EQUITY 567, , ,645 TOTAL EQUITY AND LIABILITIES 1,018,524 1,043,103 1,017,058 Strategy Following are the main strategic priorities of the ELVAL Group: Ongoing effort to improve efficiency and increase the production capacity of the Group s industrial plants, through continuous upgrading of equipment. Expansion of the Group s portfolio of products and addition of new high added value products. Reinforcement of its presence in the European heat exchanger market, through the AFSEL subsidiary, which was established in cooperation with FURUKAWA SKY ALUMINUM. Further improvement of product quality, through partnerships with large European research centers and the long-term technical agreement concluded with FURUKAWA SKY ALUMINUM. Reduction of the production cycle of the Group s factories, through the use of new production planning software. Geographical expansion of the Group s activities in the wider region of Southeast Europe. Reinforcement and reorganization of the ETEM distribution network in Greece and expansion of its presence in North Africa, through the new investment in Libya. Further increase in the activity of BRIDGNORTH ALUMINIUM, by supporting the migration of its customers from analogue to digital printing technology. V I O H A L C O S. A.

55 A N N U A L R E P O R T ΕΤΕΜ Activities ETEM belongs to the ELVAL Group of companies and produces architectural aluminium profiles, extruded products used as feed materials in other industries, as well as composite aluminium panels (ΕΤALBOND ). The ETEM Group of companies has aluminium extrusion plants in Magoula, Attica and in Sofia, Bulgaria, as well as a casting house at Oinofyta, Viotia. It is one of the leading aluminium profile producers in Greece and is present in over 40 countries. ETEM shares have been listed on the Athens Stock Exchange since Products The ETEM 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.

56 V I O H A L C O S. A.

57 A N N U A L R E P O R T Production Facilities ΕΤΕΜ Aluminium Extrusion Plant (Magoula, Attica) The ΕΤΕΜ aluminium extrusion plant at Magoula produces aluminium profiles and components for doors, windows and facades, insulated (thermo-break) and other systems, which are powder-coated or anodized. It also manufactures aluminium bars of different cross-sections and alloys, as well as special aluminium profiles for the automotive industry. The plant has an annual production capacity of 25,000 tons and includes three extrusion lines, a state-of-the-art vertical powder coating plant, a horizontal powder coating 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. ETALBOND Composite Panel Production Plant (Agios Thomas, Viotia) Three units that produce ETALBOND composite panels are established at Agios Thomas, Viotia, which following the separation of the ETALBOND operations from ETEM, now belong to the subsidiary ETALBOND S.A. COMPOSITE ALUMINIUM PANELS. The plant s total annual production capacity reaches 5,000,000 square meters. The plant manufactures EBALBOND and ETALBONLIGHT composite panels, which are made from aluminium and feature an intermediate layer of polyethylene.

58 STEELMET Aluminium Extrusion Plant (Sofia, Bulgaria) The STEELMET production plant in Sofia, Bulgaria produces industrial and architectural aluminium profiles. Its production facilities include: Three extrusion lines of an extrusion force of 1,500, 1,500 and 1,650 tons. One state-of-the-art vertical powder coating plant. One horizontal powder coating plant for wood-like surfaces. Two insulated (thermo-break) aluminium systems production lines. Investments The Group spent Euro 5.2 million, in 2008, on the upgrade of the production plant of the ETEM parent company at Oinofyta and a total of Euro 11.1 million was spent on the construction of new storage areas, a plastic profiles production unit and an office building for the STEELMET subsidiary in Bulgaria. Key Financials The consolidated turnover in 2008 amounted to Euro million, compared to Euro 169 million in 2007, reduced by 6.1%, due to the significant drop of construction activity, caused by the economic recession. The consolidated earnings before interest, tax, depreciation and amortization (EBITDA) amounted to losses equal to Euro 3 million, compared to profits equal to Euro 15.6 million in 2007 and the consolidated earnings after taxes and minority interests, for the period, amounted to losses equal to Euro 15.7 million, compared to profits equal to Euro 1.1 million in It should be noted that the consolidated financial figures include also a devaluation of inventories, fixed assets and doubtful receivables amounting to Euro 10.8 million. V I O H A L C O S. A. million Euro Consolidated Turnover ,2% 40,4% -6,1%

59 A N N U A L R E P O R T Consolidated Key Financials (amounts in Euro thousand) Turnover 153, , ,717 Gross profit 28,050 30,102 16,190 Earnings before interest, taxes, depreciation and amortization 16,256 15,574-2,976 Profits/Losses before interest and taxes 8,896 7,990-10,753 Profits/Losses before taxes 6,066 2,566-18,357 Profits/Losses after taxes and minority interest 4,007 1,105-15,673 Financials Development (%) Turnover 40.4% 10.2% -6.1% Gross profit 16.1% 7.3% -46.2% Earnings before interest, taxes, depreciation and amortization 21.8% -4.2% n/a Profits/Losses before interest and taxes 23.3% -10.2% n/a Profits/Losses before taxes 13.2% -57.7% n/a Profits/Losses after taxes and minority interest 5.4% -70.8% n/a Profit Margins (%) Gross profit 18.3% 17.8% 10.2% Earnings before interest, taxes, depreciation and amortization 10.6% 9.2% n/a Profits/Losses before interest and taxes 5.8% 4.7% n/a Profits/Losses before taxes 4.0% 1.5% n/a Profits/Losses after taxes and minority interest 2.6% 0.7% n/a 7

60 Consolidated Balance Sheet Data (amounts in Euro thousand) ASSETS Fixed assets 102, , ,540 Inventories 52,667 67,914 58,297 Trade and other receivables 58,428 61,517 56,420 Other assets 5,538 5,429 4,372 TOTAL ASSETS 219, , ,629 LIABILITIES Long term liabilities 65,794 81,204 71,918 Short term banking liabilities 30,974 41,324 58,282 Other short term liabilities 26,022 24,444 29,736 TOTAL LIABILITIES 122, , ,937 Share Capital 9,303 9,303 9,303 Other items of shareholders equity 87,085 85,645 69,125 Total shareholders equity 96,388 94,948 78,428 Minority interest TOTAL EQUITY 96,388 95,233 78,693 TOTAL EQUITY AND LIABILITIES 219, , ,629 Strategy Following are the main strategic goals of ETEM within the framework of the overall strategic development of the ELVAL Group: Geographical development and expansion of the company s activities in Southeast Europe. Successful entry and establishment of the company s commercial and production presence in N. Africa, through the new ETEM investment in Libya. Enriching the company s product mix. Reorganisation of the company s distribution network. V I O H A L C O S. A.

61 A N N U A L R E P O R T. Real Estate Development Operations Aiming at an extensive utilization of its real estate, VIOHALCO continued in 2008 the active management of its portfolio of commercial and industrial real estate, which includes: An office complex at Kifissias Avenue. An office complex at Ethnikis Antistaseos Avenue, Halandri. An office building at Agiou Konstantinou Street. Properties at Piraeus Street. A hotel at Karaiskaki square (leased to a large travel group). Fifty-acre plot of land at Stylida, Fthiotida. A shopping center at Kifissos Avenue, Aigaleo (including a property leased to IKEA). In 2008, the leasing of the property at Kifissos Avenue, Aigaleo, was completed, while at the same time, construction work in the remaining part of the property shopping center continued. Furthermore, construction is under way in the office complex at Kifissias Avenue and a new property was purchased in the Municipality of Amarousion, at the end of the year.