Third quarter + outlook for 2003 1 Third quarter + outlook for 2003 1 Third quarter 2003 The key facts

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    Third quarter + outlook for 2003


    Third quarter 2003

    The key facts at a glance

    Holcim is on track despite subdued demand in some regions and unfavorable exchange rates in most cases. Higher sales in all segments and revenues up in local currency terms. Improved margins and higher consolidated net income on the back of productivity gains and cost savings. Stable results in Europe, unsatisfactory performance in North America, solid income in Latin America and better results in Africa Middle East and Asia Pacific.

    Despite subdued economic environment Holcim remains on track .

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    Third quarter 2003

    Positions in Europe

    Group: Cement plant Grinding plant Terminal Participation: Cement plant

    Cement capacity Group (Europe): 39.9 m t; additionally with partners: 9.9 m t.


    Third quarter 2003

    Slight recovery in the European construction sector in general. Activity remained buoyant in Southern Europe, particularly Spain and Italy. Decline in demand in Germany and Switzerland. Reforming countries of Central and Eastern Europe becoming noticeably stronger. Demand patterns also encourag- ing in the construction markets of Southeast Europe.


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    Third quarter 2003

    Europe: the facts

    Acquisition of Cementos Hispania boosts Holcim Spain and underpins financial results. Buoyant construction activity in Southern and Southeast Europe brings higher sales volume in all three core seg- ments. Difficult sales situation in Germany and declining volume of demand in Switzerland adversely affect results. Operating profit for this Group region increases slightly due to rising performance in Southern and Southeast Europe. Holcim to acquire Rohrbach Zement in first quarter 2004.

    Continued exploitation of synergies will impact positively on our margins over the coming years.


    Third quarter 2003

    Positions in North America

    Cement plant Grinding plant Terminal Cement plant project

    Cement capacity Group (North America): 21.3 m t.

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    Third quarter 2003

    Subdued picture overall for the construction sector on this conti- nent. In Canada, the order situation in the construction sector remained healthy; the weather-related order shortfall at the start of the year has not yet been fully offset. In the US, volumes and prices declined in several market re- gions – such as Colorado and the Southeast of the country.

    North America


    Third quarter 2003

    North America: the facts

    Efficiency-improvement program set in train by new manage- ment is having a positive effect. The Holly Hill plant successfully commissioned by Holcim US at the end of June will contribute to lowering costs. The weak state of the US market adversely affected the result of Holcim US. St. Lawrence Cement benefited from the healthy order situation in Canada, though it was unable to fully offset demand-induced setbacks in the Northeast of the US. Together with the sharp fall in the value of the dollar, oper- ating profit for North America was unsatisfactory in overall terms.

    Programs to reduce costs accorded top priority.

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    Third quarter 2003

    Positions in Latin America

    Group: Cement plant Grinding plant Terminal Participation: Cement plant Grinding plant Terminal

    Cement capacity Group (Latin America): 31.0 m t; additionally with partners: 9.9 m t.


    Third quarter 2003

    Positive and negative develop- ments in Latin America more or less cancel each other out. Brazil continued to prove resistant to crisis. Political instability hampered developments in the Venezuelan economy. The market in Argentina staged an unexpectedly strong recovery, while construction activity also grew in Chile and Mexico.

    Latin America

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    Third quarter 2003

    Latin America: the facts

    Pleasing sales figures for Mexico, the Caribbean and Chile. Marked increase in sales at Minetti in Argentina. Holcim Brazil holds up well in a market that is in need of a fresh boost. Increase in deliveries of cement and ready-mix concrete; fall in demand for aggregates. Major progress on productivity in all areas. Sharp increase in regional operating profit in US dollars despite poorer operating situation in Venezuela. Latin America remains the Group’s strongest region in terms of operating profit.

    Strong presence in key markets gives us optimism.


    Third quarter 2003

    Positions in Africa Middle East

    Cement capacity Group (Africa Middle East): 12.9 m t; additionally with partners: 6.3 m t.

    Group: Cement plant Grinding plant Terminal Participation: Cement plant Grinding plant Terminal

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    Third quarter 2003

    Very positive market develop- ments in Africa. Morocco and South Africa proved to be the main growth drivers. In Lebanon and West Africa the market situation continued to be strained. Despite persistent pressure on prices, the market situation in Egypt has stabilized slightly.

    Africa Middle East


    Third quarter 2003

    Africa Middle East: the facts

    Significant increase in volumes in core segments of cement and ready-mix concrete; fall in the case of aggregates. Higher cement deliveries in Egypt, Madagascar, La Réunion and Morocco in particular. Regional uncertainties hit performance of group West Africa. Good results in South Africa and Morocco leading to higher operating profit in this Group region. Holcim Lebanon acquiring grinding facility in northern Cyprus.

    From a Group perspective, this region has gained further significance .

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    Third quarter 2003

    Positions in Asia Pacific

    Group: Cement plant Grinding plant Important terminal Grinding plant project Participation: Cement plant Grinding plant Important terminal

    Cement capacity Group (Asia Pacific): 36.0 m t; additionally with partners: 14.6 m t.


    Third quarter 2003

    Further increase in construction activity in this Group region. In Vietnam, Malaysia and New Zealand, cement demand remain- ed very impressive. Volume increases also achieved in the Philippines, Thailand and Indonesia. The potential demand in housing construction and the infrastructure sector remains huge.

    Asia Pacific

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    Third quarter 2003

    Asia Pacific: the facts

    Slightly higher cement sales in the Philippines almost entirely due to consolidation changes. Successful integration of PT Semen Cibinong in Indonesia and correspondingly improvement in financial results. Substantially higher operating profit also being generated by the Group companies in Thailand, Australia and New Zealand. The plants in Vietnam are operating at full capacity due to high demand; expansion of cement capacity in Ho Chi Minh City proceeding in line with schedule. Operating profit for Group region Asia Pacific grew markedly despite negative exchange rate fluctuations.

    This Group region continues to offer enormous future potential for the construction industry.


    Third quarter 2003

    The Group is strengthening market integration and building a new, cross-border cluster .

    Strategic transactions strengthen core business

    Cement Australia was included in the consolidated accounts for the first time in the third quarter. It is the market leader on that continent and benefits from optimal distribution channels. The bleak order situation in Germany and Switzerland is resulting in capacity adjustments. The Geisingen plant in southern Germany and Morbio grinding facility in Ticino/ Switzerland are to close. Eternit AG, based in Niederurnen, has been sold and is no longer consolidated. BA Holding AG of Baar is to continue using the Eternit brand name. These transactions will mean a total charge of CHF 40 million to the consolidated accounts for fourth quarter 2003.

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    Third quarter 2003

    Key financial figures Full Year

    2002 2002 2003 in CHF in loc. curr.

    Net sales 13'010 9'928 9'395 -5.4% 1.1%

    Operating profit 1'903 1'559 1'550 -0.6% 8.1%

    Operating EBITDA 3'341 2'616 2'537 -3.0% 5.2%

    EBITDA 3'399 2'719 2'597 -4.5% 3.0% Group net income after minority interests 506 514 518 0.8% 8.2% Cash flow from operating activities 2'388 1'732 1'527 -11.8% -4.9%

    EPS in CHF 2.59 2.63 2.65 0.8% 8.4%

    Cash EPS in CHF 4.14 3.76 3.81 1.3% 7.7%

    +/-Million CHF 9 Months


    Third quarter 2003

    Major changes in the scope of consolidation

    Effective as at Cementcapacity

    + Novi Popovac, Serbia April 15, 2002 1.4 million t

    + Union Cement, Philippines, from proportionate to full consolidation October 1, 2002 + 2.4 million t

    + Cementos Hispania, Spain January 1, 2003 0.8 million t

    + Proportionate consolidation of Cement Australia (integration of Queensland Cement) June 1, 2003 –

    – Baubedarf, Switzerland October 1, 2002 –

    +/– Various smaller companies

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    Third quarter 2003

    Exchange rates Statement of income average exchange rates in CHF 9M 01 9M 02 9M 03 +/- 1 EUR 1.52 1.47 1.51 2.7%

    1 USD 1.70 1.59 1.36 -14.5%

    1 African Basket (EGP, ZAR, MAD) 1) 1.29 1.00 1.02 2.0%

    1 Asian Basket (AUD, NZD, THB, PHP) 1) 1.03 1.00 0.93 -7.0%

    Balance sheet exchan