We aim to help shape the future.

Transcription

1 We aim to help shape the future. First Quarter Interim Report 2002

2 We aim to firmly establish the Holcim brand as a synonym for quality and reliability. This is something we are working on day in, day out, everywhere we operate: across the globe. Our first quarterly report We are pleased to publish this quarterly report, which gives you an account of our business performance in the first three months of This is the first time we have released quarterly results. We decided to take this step mainly in response to a desire among investors and other stakeholders for greater transparency and more timely information. In interpreting the figures shown, it is important to bear in mind that activity in the construction sector is subject to sharp seasonal fluctuations. Consequently, demand for building materials such as cement, aggregates and ready-mix concrete can vary sharply, depending on weather conditions and the climatic situation. This is particularly true for most of Europe and North America. For this reason, we use the quieter winter months as an opportunity to carry out maintenance work that is demanding in terms of labor and other costs. This has direct implications for earnings and cash flow. The first quarter report should therefore be viewed within this context. Finally, the interim financial statements are compiled in accordance with the same accounting and valuation principles as those used for the annual financial statements, i.e. in compliance with International Accounting Standards (IAS). New year gets off to a good start There was little change in the economic environment for most markets in comparison with the previous quarter. The worldwide volume of cement sales was higher than in the very strong first quarter of 2001, partly due to the extended scope of consolidation, while consolidated net sales were unchanged at CHF 2.8 billion despite currency losses. With the exception of North America, all Group regions made a considerable contribution to an encouraging consolidated result in overall terms. Consolidated operating profit fell slightly from CHF 324 million in the previous year to CHF 310 million. The 4 percent decline primarily reflects an absence of volumes due to the production outage at the Holcim US Portland plant as well as the crisis in Argentina. Excluding these factors, operating profit was significantly above the level for the first quarter of Consolidated net income reached CHF 77 million (first quarter 2001: 82), while cash flow from operating activities grew from CHF 74 million to CHF 108 million. The biggest gains of all were in Asia, Eastern Europe and once again Latin America. Rising demand for cement in Europe After a very cold January in many parts of Europe, demand for cement picked up rapidly in February and March and sales developed positively in a majority of cases. Significantly higher delivery volumes were achieved by our Group companies in Central and Eastern Europe, but cement deliveries were also higher in Western Europe. At the same time, there was a slight weakening in the aggregates and concrete business, particularly in Western Europe. Consolidated operating profit for Group region Europe rose by 24 percent to CHF 63 million (first quarter 2001: 51). Shareholders Letter

3 US Portland plant poised to come on stream The essential reinforcing work on the preheater tower at the new Portland plant has been carried out on schedule and production is to be geared up by the middle of the year. This means the US Group company will soon be able to make full use of its nominal capacity once again, thus impacting positively on the earnings situation from the second half of At Holcim US, a decline in sales of around 0.3 million tonnes, mainly due to the production outage at the Portland plant, rising distribution costs and increased write-offs in connection with the closure of the Fort Collins plant hit earnings in Group region North America in the first quarter of 2002, leading to an operating deficit of CHF 48 million (first quarter 2001: -9). Our Canadian Group company St. Lawrence Cement achieved higher sales in all areas as well as improved financial results, although it could not fully compensate the setback at Holcim US. Further improvement in results for Latin America Aside from Argentina, Latin America proved to be very stable in economic terms. Nearly all Group companies achieved a significant increase in deliveries. In particular, Apasco in Mexico made a substantial contribution to the strong performance. In contrast, construction activity came to a virtual standstill in Argentina, with Minetti suffering a 40 percent drop in cement deliveries. The 5 percent improvement in consolidated operating profit to CHF 209 million (first quarter 2001: 199) is due to the healthy profitability of the other Group companies in Latin America. Africa and Middle East maintain their position Cement consumption developed positively in this Group region. Exceptions included the West Africa group of countries as well as Madagascar and La Réunion. We achieved a notable increase in sales across Lebanon, Morocco and Egypt. In overall terms, consolidated operating profit increased by 10 percent to CHF 55 million (first quarter 2001: 50), while the contribution from Holcim Lebanon was above-average. In local currency terms, nearly all Group companies improved their results. Key Figures Group Holcim January March ±% Annual cement production capacity million t Sales of cement and clinker million t Sales of aggregates million t Sales of ready-mix concrete million m Personnel number 51,036 47, Net sales million CHF 2,847 2, Operating profit million CHF EBITDA million CHF Cash flow from operating activities million CHF Group net income before minority interests million CHF Group net income after minority interests million CHF Earnings per dividend-bearing bearer share CHF Earnings per dividend-bearing registered share CHF Shareholders Letter

4 Asia Pacific gaining in importance The Group region Asia Pacific gained significantly in importance with the first-time consolidation of PT Semen Cibinong in Indonesia. The Group companies were buoyed by a recovery in the construction sector. They consistently achieved higher cement deliveries, with the exception of Holcim in Sri Lanka. Output of aggregates and ready-mix concrete also grew, primarily due to new business opportunities in Indonesia. The financial results of the Group region underwent a substantial improvement. Consolidated operating profit rose by 10 percent to CHF 34 million (first quarter 2001: 31). Promising outlook for the year 2002 The overall financial results achieved in the first quarter of 2002 are encouraging. We expect commissioning of production at the new Portland plant to bring about an improvement in results for Holcim US from the second half of 2002 onwards. The situation in Argentina will remain difficult. However, our global presence in all relevant markets will once again balance out any regional fluctuations. Given the solid basis and an upturn in construction activity in Thailand and Vietnam, prospects remain generally healthy. In Europe, the economic skies are slowly clearing except in Germany and in Asia there is a noticeable rise in demand for cement. We anticipate that the results for the previous year will be matched in the financial year 2002 and even exceeded if market conditions remain favorable and exchange rates stable. Dr. h.c. Thomas Schmidheiny Chairman of the Board of Directors Markus Akermann CEO Shareholders Konzernabschluss Letter 3

5 Consolidated Statement of Income of Group Holcim January March ±% Million CHF Unaudited Unaudited Net sales 2,8472, Production cost of goods sold (1,533) (1,570) Gross profit 1,314 1, Distribution and selling expenses (656) (650) Administration expenses (277) (259) Other depreciation and amortization (71) (60) Operating profit Additional ordinary income EBIT Financial expenses (128) (173) Group net income before taxes Income taxes (67) (64) Group net income before minority interests Minority interests (52) (38) Group net income after minority interests CHF Earnings per dividend-bearing bearer share Fully diluted earnings per bearer share Earnings per dividend-bearing registered share Fully diluted earnings per registered share Consolidated Statement of Income

6 Consolidated Balance Sheet of Group Holcim Million CHF Unaudited Unaudited Audited Cash and cash equivalents 1,920 1,184 2,137 Marketable securities Accounts receivable 2,583 2,662 2,456 Inventories 1,445 1,574 1,416 Prepaid expenses and other current assets Total current assets 6,415 6,731 6,367 Financial investments 2,433 2,350 3,312 Property, plant and equipment 15,635 14,114 14,235 Intangible and other assets 3,200 3,099 3,130 Total long-term assets 21,268 19,563 20,677 Total assets 27,683 26,294 27,044 Trade accounts payable 1,022 1,050 1,187 Current financing liabilities 2,656 3,538 2,729 Other current liabilities 1,236 1,462 1,342 Total short-term liabilities 4,914 6,050 5,258 Long-term financing liabilities 9,900 8,535 9,281 Deferred taxes 1,191 1,249 1,213 Long-term provisions 1, Total long-term liabilities 12,134 10,745 11,403 Total liabilities 17,048 16,795 16,661 Interests of minority shareholders 2,848 2,064 2,741 Authorized capital Reserves 7,385 7,058 7,240 Total shareholders equity 7,787 7,435 7,642 Total liabilities and shareholders equity 27,683 26,294 27,044 Consolidated Balance Sheet 5

7 Statement of Changes in Consolidated Equity of Group Holcim January March Million CHF Unaudited Unaudited Authorized capital as at January Capital paid-in 0 0 Authorized capital (A) Reserves Capital surplus as at January 1 2,570 1,945 Capital paid-in 0 0 Capital surplus (B1) 2,570 1,945 Retained earnings as at January 1 4,665 4,703 Change in treasury shares 2 3 Profit distribution 0 0 Group net income after minority interests Effect of increase in participations (6) 0 Gain on cash flow hedges 10 0 Gain on available-for-sale securities 5 0 Retained earnings (B2) 4,753 4,788 Currency translation adjustments as at January Currency translation adjustments Currency translation adjustments (B3) Total reserves (B1+B2+B3) 7,385 7,058 Total shareholders equity (A+B1+B2+B3) 7,787 7,435 6 Statement of Changes in Consolidated Equity

8 Consolidated Cash Flow Statement of Group Holcim January March ±% Million CHF Unaudited Unaudited Operating profit Depreciation and amortization of operating assets Other non-cash items (54) 50 Change in net working capital (284) (448) Cash generated from operations Additional ordinary income Interest paid (149) (138) Income taxes paid (92) (62) Cash flow from operating activities (A) Investments in property, plant and equipment net (232) (354) Financial investments net (153) (184) Cash flow from investing activities (B) (385) (538) Dividends paid (5) (7) Movements of treasury shares net 2 3 (De)Increase in current financing liabilities (37) 32 Proceeds from long-term financing liabilities Repayment of long-term financing liabilities(178) (408) Increase in marketable securities (51) (215) Cash flow from financing activities (C) Decrease in cash and cash equivalents (A+B+C) (223) (407) Cash and cash equivalents as at January 1 2,1371,536 Decrease in cash and cash equivalents (223) (407) Effects of exchange rate movements 6 55 Cash and cash equivalents as at March 31 1,920 1,184 Consolidated Cash Flow Statement 7

9 1 Basis of Preparation The unaudited consolidated first quarter interim financial statements (hereafter interim financial statements ) are prepared in accordance with IAS 34 Interim Financial Reporting. The accounting policies used in the preparation of the interim financial statements are consistent with those used in the consolidated financial statements for the year ended December 31, 2001 (hereafter the annual financial statements ). The presentation of the interim financial statements is consistent with the annual financial statements. The interim financial statements should be read in conjunction with the annual financial statements as they provide an update of previously reported information. The preparation of interim financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and disclosure of contingent liabilities at the date of the interim financial statements. If in the future such estimates and assumptions, which are based on management s best judgment at the date of the interim financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate during the period in which the circumstances change. There were no significant changes in accounting policies or estimates or in any provisions or impairment charges from those disclosed in the annual financial statements. 2 Changes in the Scope of Consolidation and Other Significant Acquisitions The following significant changes were made during the three months to March 31, 2002: PT Semen Cibinong Tbk. (Indonesia) was fully consolidated from January 1, 2002 onwards. It was accounted for as a financial investment at December 31, 2001 because control was not effectively transferred to the Holcim Group at that date. 3 Segment Information Information by region Europe North Latin Africa Asia Corporate / Total America America Middle East Pacific Eliminations Group January March Million CHF Net sales (60) (58) 2,847 2,863 Operating profit (48) (9) (3) Notes to the Consolidated Financial Statements

10 4 Contingent Liabilities In the ordinary course of business, the Group is involved in lawsuits, claims, investigations and proceedings, including product liability, commercial, environmental and health and safety matters. No significant changes in the Group s contingent liabilities have occurred since the last annual financial statements. 5 Post-Balance Sheet Events There were no significant post-balance sheet events. 6 Principal Exchange Rates Income statement Balance sheet Average exchange rates in CHF Closing exchange rates in CHF January March ±% EUR USD CAD ZAR AUD NZD Notes to the Consolidated Financial Statements 9

11 Holcim securities The shares are listed on SWX Swiss Exchange. The bearer share has security code No and qualifies for Swiss market index SMI and is traded on virt-x. The registered share has security number and is traded on SWX. The bearer share is also traded on the Frankfurt Stock Exchange and in the form of ADRs in the US. Telekurs lists the bearer share under the code HOL and the registered share under HOLN. The corresponding codes under Bloomberg are HOL VX and HOLN SW, while Reuters uses the abbreviations HOLZ.S and HOLZn.S. Every share, regardless of whether bearer or registered, carries one voting right. The market capitalization of Holcim Ltd amounted to approximately CHF 15 billion at March 31, Cautionary statement regarding forward-looking statements This document may contain certain forward-looking statements relating to the future Group s business, development and economic performance. Such statements may be subject to a number of risks, uncertainties and other important factors, such as but not limited to (1) competitive pressures; (2) legislative and regulatory developments; (3) global, macro-economic and political trends; (4) fluctuations in currency exchange rates and general financial market conditions; (5) delay or inability in obtaining approvals from authorities; (6) technical developments; (7) litigation; (8) adverse publicity and news coverage, which could cause actual development and results to differ materially from the statements made in this document. Holcim assumes no obligation to update or alter forwardlooking statements whether as a result of new information, future events or otherwise. Financial Reporting Calendar General Meeting of Shareholders May 24, 2002 Dividend payment May 29, 2002 First half 2002 results August 29, 2002 Third quarter 2002 results conference for press and analysts November 7, annual results conference for press and analysts March 19,

12 Holcim Ltd Zürcherstrasse 156 CH-8645 Jona/Switzerland Phone Fax Corporate Communications Roland Walker Phone Fax Investor Relations Bernhard A. Fuchs Phone Fax

13 Holcim Ltd Zürcherstrasse 156 CH-8645 Jona/Switzerland Phone Fax