Financial Results 2Q 2010

The Kleemann Group, as a response to the economic crisis and the reduction of domestic demand, proceeded during the first half of 2010 in establishing a Hong Kong based subsidiary company, opening up new and important markets abroad and increasing its share in the Greek market.

Indeed, the subsidiary in Hong Kong started its operations recently, under the name «HONG KONG ELEVATOR SYSTEMS LIMITED». Its objective is to penetrate in the region of Southeast Asia and Oceania. Furthermore, as a result of the particular emphasis that has been given to development across borders, the company, with a continually growing clientele, is currently activated in 59 countries in comparison to 52 in the corresponding half last year.

Finally, domestic sales have moved faster than expected and also in relation to the overall state of the industry, reflecting an increase of Group's market share in Greece. It must be mentioned that in the European market, the adverse weather conditions had led to a reduction of activity in some countries. However, the intensive promotional activities contributed significantly to the dramatic increase in sales -over 30% - in countries of Central and Eastern Europe.

FINANCIAL RESULTS OF FIRST SEMESTER 2010

Regarding the financial results of the first half of current year, in group level turnover amounted to 44.43 million euros against 47.97 million euros in the corresponding period in 2009, a decrease of 7.4%, while consolidated gross profit decreased by 7.6% from 16.47 million euros to 15.21 million euros. The fact of maintaining the gross margin stable is very positive, given the market conditions and the corresponding pricing policy that is applied. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) declined from 7.72 million euros to 4.87 million euros and profit before tax for the first semester amounted to 3.16 million euros versus 6.05 million euros of the corresponding period of last year, showing a decrease of 47.8%. Finally, earnings after tax and minority interests decreased from 3.77 million euros to 1.05 million euros.

It is noted that the profit after tax of the group is charged with the amount of 0.88 million euros, relating to the special tax imposed on profitable companies under L.3808/2009. In addition, in the current period the group incurred higher provisions for doubtful customers and increased losses due to exchange rate differences. Without these facts, the profits would remain at 2009 levels. Particularly positive is also the fact of maintaining the enhanced cash flows, which is the result of satisfactory profitability and excellent management of the business cycle.

Regarding the markets in which the foreign subsidiaries operate, the Turkish market has an impressive growth (sales growth of 35%), which is reflected in the financial results of Kleemann Asansor. In Serbia and Romania, some signs of slowing down are evident due to the greater effect of the global financial crisis on the economies of these countries. However, the dynamics of these markets remains strong and the group sees signs of growth in the near future.

According to management of the quoted company, the geographic dispersion of sales and the range of products and services offered enable the group to look to the future with optimism.