Holcim Ltd Results 2002

19 March 2003

Holcim posts solid operating result in difficult market environment.The Holcim Group achieved its operative targets in 2002. Thanks to a balanced global and regional market presence and consistently pursued efficiency enhancement drives, the CHF 1.903 billion operating profit virtually matched the previous year's level despite heavy currency translation losses. Adjusted for currency effects and changes in the scope of consolidation, internal growth reached a solid 6.8 percent. Special factors led to a 37.7 percent decline in Group net income to CHF 506 million. The Board of Directors will be proposing to the Annual General Meeting that an unchanged dividend be paid.

Sales trends and financial results
Cement and clinker deliveries increased to 90.5 million t (2001: 84.3). Sales of aggregates were lifted to 92.1 million t (2001: 89.5), and ready-mix concrete volumes reached 25.3 million m3 (2001: 25.5).On consolidated net sales of CHF 13.010 billion (2001: 13.644) Holcim achieved an operating EBITDA of CHF 3.341 billion (2001: 3.335), an operating profit of CHF 1.903 billion (2001: 1.945) and a Group net income after minority interests of CHF 506 million (2001: 812). Earnings per dividend-bearing bearer share came to CHF 12.97 (2001: 21.20). Cash flow from operating activities amounted to CHF 2.388 billion, matching the previous year's level (2001: 2.402).

Key influencers
The decline in operating profit is attributable entirely to adverse currency factors. Excluding parity shifts and changes in the scope of consolidation, operating profit increased by 6.8 percent. Group regions Africa Middle East and Asia Pacific exerted a favorable impact on the operating result. Latin America again made a significant contribution to the operating result. The strong decline in Group net income after minority interests is primarily due to a CHF 120 million provision made in connection with a pending legal proceeding in Germany, write-offs of CHF 63 million on decommissioned non-operating facilities in Argentina, a CHF 60 million increase in earnings tax, and write-offs of CHF 31 million on Holcim's investment in Swiss International Airlines.

Investment activity
Net investments in property, plant and equipment were down by CHF 478 million to CHF 1.252 billion. The sharp decline in investments reflects the completion of larger newbuild projects. Investments in existing plants to streamline and improve production and distribution processes as well as in environmental protection and occupational safety amounted to CHF 917 million (2001: 941).

Proposed dividend
The Board of Directors will be proposing to the Annual General Meeting on June 4, 2003 that an unchanged gross dividend of CHF 5.- per bearer share be paid and CHF 1.- per registered share.

Outlook for 2003
Thanks to the restructuring measures implemented, Holcim is well equipped to achieve robust results even if the global economy takes a further turn for the worse. Holcim is resolutely focusing on sustainable efficiency increases, while subscribing to a strategy of selective investment and generating a solid free cash flow.The Board of Directors and Executive Committee are convinced that the Group is ideally positioned to profit to an above-average extent from an economic upswing.

Key figures

Holcim-Group   2002 2001 +/- %
Production capacity cement in m t 141.9 121.2 +17.1
Sales of cement and clinker in m t 90.5 84.3 +7.4
Sales of aggregates in m t 92.1 89.5 +2.9
Sales of ready-mix concrete in m. m3 25.3 25.5 -0.8
Personnel   51 115 47 362 +7.9
Net sales in m CHF 13 010 13 644 -4.6
Operating EBITDA in m CHF 3 341 3 335 +0.2
EBITDA in m CHF 3 399 3 574 -4.9
Operating profit in m CHF 1 903 1 945 -2.2
Group net income before minority interests in m CHF 797 1 031 -22.7
Group net income after minority interests in m CHF 506 812 -37.7
Cash flow from operating activities in m CHF 2 388 2 402 -0.6
Gearing in % 93.9 94.1 -

With majority and minority interests in more than 70 countries on all continents, Holcim is one of the world's leading suppliers of cement, as well as aggregates (gravel and sand), concrete and construction-related services. The Group employs a workforce of some 50,000.

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