Athens, 26/03/2013

Heracles Group Announces 2012 Results

Results reflect the deep recession in the domestic construction activity for the fourth consecutive year  

Heracles Group of Companies announced today sales of 228.16 million Euros for 2012, decreasing by 17.8% compared to 277.51 million Euros in 2011. Sales of the Company were at 201.77 million Euros, decreasing by 15.7% compared to 239.40 million Euros in 2011.

The Group's earnings before taxes, interest, depreciation and amortization (EBITDA) in 2012 was negative amounting to 49.26 million Euros, compared with negative EBITDA of 5.42 million Euros in 2011. The Company's EBITDA in 2012 was negative amounting to 54.73 million Euros compared with negative EBITDA of 3.10 million Euros in 2011.  

The Group presented in 2012 losses after taxes of 76.50 million Euros, increasing by 36.9% compared with 55.86 million Euros losses after taxes in 2011. In 2012, the Company presented losses after taxes of 76.38 million Euros, increasing by 65% compared with 46.28 million Euros losses in 2011.

The Group's investments in 2012 amounted to 5.44 million Euros compared to 12.63 million Euros in 2011 and focused on the Group's strategic priorities of promoting health and safety, upgrading environmental performance, and improving production efficiency.

The decrease in the Group and the Company sales in 2012 reflects the deep recession in the domestic market of private construction activity, for a fourth consecutive year, as well as the substantial suspension of the construction activity in public and co-financed infrastructure.

In 2012, the Group and the Company continued and intensified their exporting activity and the relentless implementation of the ongoing program for the drastic reduction of operating costs and increase of productivity, through the optimization of production, supply chain and administrative processes. The significant reduction of fixed cost and the significant increase of exports have partially offset the effects of the domestic market deterioration, but could not address the structural production overcapacity issue.

In this context, Heracles GCCo, following a decision of the Company's Board of Directors, announced on 26/03/2013 the reorganization of its cement production structure. The aim of the reorganization is to address effectively the impact of the recession in the construction sector, to support the company's viability and to ensure conditions for the business development of the Heracles Group, both in domestic and export markets.

The new structure comprises cement production by theVolosand Milaki plants, leveraging their competitive advantages, particularly their port facilities, to serve the domestic market and to enhance the company's export presence in the wider Mediterranean region. The operation of Halkis plant is ceased permanently.

With the new operational structure the company emphasizes on and leverages the competencies of the Heracles two production facilities and supply chain, increases its productivity by 30%, ensures its viability and addresses the challenges of the future, strengthening and establishing its position as an export power for the Mediterranean region.

The production reorganization is estimated to have nonrecurring negative impact of €57 million on the 2013 financial results of the Heracles Company and the consolidated financial results of Heracles Group of Companies, due to asset impairment, the cost of redundancy payments for staff, rehabilitation and restoration costs for the Halkis site. Regarding the coming years, it is estimated a positive impact of €18 million per year and increase of productivity.