The economic crisis in Greece and measures taken within the context of the Program of support for the Greek economy from the European Union and the International Monetary Fund have significantly influenced consumption in most categories of goods, including household products that the company trades. In addition, draft law proposed for the management of promotional activities for the products influenced noticeably the B2B activity of the company.

The aforementioned factors led to a significant restriction of sales of all companies of the Group (with the exception of the subsidiary in Romania). In addition, the subsidiary company in Hungary was consolidated for just three months as it was then sold. Finally, there was a decrease in sales on the back of the downsizing of the retail network in the context of its streamlining. On this basis, sales of the group reached the amount of ?43.21 million versus €57.72 million in the corresponding period of 2009, showing decline of 25.14%, while sales of the parent company declined by 27.10% to €37.6 million.

The Groups Management has strived to cut costs adjusting the operations of companies in the new market conditions, limiting at the same time to the minimum possible level the negative effects on employment of staff. The main interventions that contributed to the reduction of total expenses relate to the renegotiation of rental agreements and other contracts with suppliers to achieve better terms, the streamlining of the retail network, the improvement of internal procedures and reducing in the corresponding expenses and lastly the integration of the Athens and Thessaloniki warehouses at Oinofyta. Now our network across Greece is being served exclusively by our storage and distribution center at Oinofyta achieving significant synergies at cost level as well as improvement in the quality of service for our customers

Adverse market conditions, restructuring costs, significant provisions, as well as the loss from the sale of the participation in Hungary have led to significant losses in results both at parent and at Group level. In particular, parent pre-tax loss amounted to €11.1 million from €1.1 million in 2009. At Group level, the corresponding losses reached €8.7 million versus €2.0 million in 2009. Most of these losses are non-recurring and relate to restructuring costs, previous years write-downs of the Subsidiaries, which were reflected in the consolidated financial statements of the previous years, and provisions. Moreover, an important part of these costs was non-cash and this is also reflected in the fact that, despite the level of the losses there has not been significant increase in the loans of the Group

The Companys Management focused in 2010 on its re-organization, merging its subsidiaries OMNISHOP and EXCEL, divesting the subsidiary in Hungary, re-evaluating its retail network and merging its warehouses at the premises of Oinofyta. Almost all of the cost of reorganization was recorded in 2010. The Managements goal is to enable the Company at net basis, starting from 2011 to cease any activity which was not sufficiently profitable and to focus on areas of healthy growth. In this context, it has proceeded to the acquisition of the brand name Ionia, it continues to invest in its subsidiary in Romania which returned to profitability recording 34% increase in sales, it pursues the development of its exports sector and aims to enrich its product range with significant new representations.

Taking into account the situation in Greece, the Management of the Group is particularly carefully planning the next steps which will ensure that the company recovers and maintains its leading position and will lay the solid foundations for the medium-term growth of company financials.

The Management
30 March 2011