Algol Group´s two-sided financial year in 2008

The Algol Group´s financial year in 2008 was two-sided like the economic trend
in general. The Group´s performance in the first half of the year continued to
be stimulated by the economic boom that industry had enjoyed for a long time.
By the end of the year the global financial crisis that had developed with such
speed and strength had reversed the economic trend also within the Algol
Group´s home markets. Algol´s total sales and the operational result improved,
but the overall result decreased from last year due to write-offs in the
consolidated financial statements. The solidity of the Algol Group remains
strong.

Net sales for the Algol Group amounted to EUR 204.4 million and total sales to
EUR 259.5 million. The Group´s solidity was over 53 percent.

Algol Chemicals, which operates in nine countries, performed quite
satisfactorily on the whole, although the effects of the economic crisis
managed to exacerbate local diofferences within its markets by the end of the
year. The company continued to focus on improving its logistics networks and
warehousing activities. The practical actions entailed by the European Union´s
REACH chemicals industry legistlation also remained central.

Algol Technics reported an excellent improvement in all its business areas. The
company´s order book was still very strong at the beginning of the new
financial perios, at which time industry´s investment demand began to wane
considerably. Special focus areas of the company included developing its
business models and honing its service packages based on customer advantage.

Algol Pharma´s sales increased, but its operational result fell short of the
target. This was explained by the negative price trend of key products, changes
to representation agreements and the slower than expected development of new
markets. The company reorganised its operations and lightened its organisation.
The company also continued to establish new partnerships, expand its product
assortment and improve its logistics solutions.

Going into 2009 the speed and strength of the global economic downturn have led
to a recession whose duration and severity are hard to forecast despite
large-scale international stimulation packages. Although Finland´s situation is
relatively stable compared to other countries, the current global recession is
exceptionally far reaching and complex. The operations of the Algol Group and
its customers are being impacted by drastically decreasing volumes of total
output and exports, tightening terms for corporate financing and lower
investment levels. Algol is monitoring the situation and is ready to react
flexibly to changes in the business environment.

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