Annual Report 2007

15 Ž E L E Z I A R N E P O D B R E Z O V Á 2 0 0 7 REPORT BY THE BOARD OF DIRECTORS Estimate of contribution to the production of selected products in the EU in 2007 Development of geographical structure Steel seamless precision cold drawn tubes Steel seamless cold drawn tubes other than for precision application Steel seamless hot rolled tubes up to diameter 168,3 mm Železiarne Podbrezová EU producers 92% 8% 92% 8% 93% 7% Sales in SKK million 2003 2004 2005 2006 2007 Slovak Republic 669 819 1 039 1 103 1 074 Czech Republic 1 285 1 641 1 779 2 044 2 007 EU countries 1 544 3 269 4 106 4 156 4 989 Other European countries 1 183 204 248 367 195 Other export 300 373 575 524 375 Total sale 4 981 6 306 7 747 8 194 8 639 The historically highest sales of products, works and services, resulted from a successful commercial policy. We took full advantage of the continuing worldwide boom in metallurgy to the benefit of our Company. The positive impact of the acceleration of sales prices of steel products continued throughout 2007and as such significantly eliminated losses caused by the strengthening of the Slovak currency. It appears that the most significant instruments to eliminate the exchange rate losses incurred on receivables denominated in foreign currencies were foreign currency derivative contracts, the gain on which totalled SKK 333.8 million in 2007 representing 3.9% of total sales. In 2007, products of Železiarne Podbrezová a.s. were purchased by customers in 39 countries. The geographical structure of sales did not change fundamentally in 2007, with the dominant market segment still being EU countries in the following order: the Czech Republic, Germany, Poland, Italy and Hungary.