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Half-year results 2000: Higher margins and full-year growth

September 07, 2000

Glaris


"Holderbank" Financière Glaris Ltd. ("Holderbank") can look back on a very successful first half-year. Consolidated net sales increased by 17.0 percent to CHF 6621 million. Operating profit was up 24.6 percent to CHF 933 million, with Group region Latin America a key contributor to this significant rise. Group net income after minority interests improved 13.2 percent to CHF 352 million. Earnings per dividend-bearing bearer share came to CHF 47.85 (+8.9 percent). Cash flow from operating activities rose markedly to CHF 864 million (first half 1999: 483). In contrast to the first six months of 1999, currency fluctuations left a sizeable impression on the income statement. The robust US dollar had an especially significant impact, lifting consolidated net sales 7.5 percent and EBIT 9.3 percent. The stronger focus on core business cement led to higher margins. An EBIT margin of 14.1 percent (first half 1999: 13.2 percent) was recorded.

In the absence of fundamental changes in the macroeconomic environment in the second half of 2000, the "Holderbank" Group will continue to operate successfully in its markets over the coming months and, assuming that exchange rates remain stable, meet financial expectations.

The period under review saw a number of changes in the scope of consolidation. The one with the most significant impact was the first time proportional consolidation of Siam City Cement (Thailand). The company reported EBIT of CHF 76 million on sales of CHF 334 million, of which 50 percent have been included in the Group's results for the first half of 2000. Other new additions to the scope of consolidation were the Hejöcsaba plant (Hungary), Cimus (Romania) and Garadagh Cement (Azerbaijan). All business segments witnessed increases in sales volumes. Cement and clinker deliveries rose 9.3 percent, aggregate shipments 2.5 percent, and sales of ready-mixed concrete 11.5 percent.

The solid financial result reflects not only higher sales but also efficiency improvements and, in some cases, better prices. A geographic breakdown of operating profit (EBIT) shows an increase in Europe to CHF 266 million (first half 1999: 239), in Latin America to CHF 395 (first half 1999: 254) and in Asia Pacific to CHF 79 million (first half 1999: 44). Group region North America's EBIT was still considerable; however, it declined to CHF 163 million (first half 1999: 169). Difficult market conditions, especially in Lebanon, were responsible for the significantly lower operating profit of CHF 30 million (first half 1999: 43) in Group region Africa Middle East.

Investments by "Holderbank" in the first six months of 2000 amounted to CHF 1267 million (first half 1999: 963). Totaling CHF 599 million (first half 1999: 497), financial investments were channeled into acquiring a stake in Cementos Progreso (Guatemala) and increasing holdings in various companies - in particular, Egyptian Cement (Egypt). The remaining CHF 668 million (first half 1999: 466) was invested chiefly in projects to expand and maintain productive capacity and secure competitiveness.

With majority and minority interests in 70 countries on all continents, "Holderbank" is one of the world's leading suppliers of cement, as well as aggregates (gravel and sand), concrete and construction-related services.

Media conference: 7 September 2000 (today), 9 a.m. to around 10.30 a.m., Hotel Savoy, Zurich.