half year report 2000 holderbank

2000
HALF-YEAR REPORT
Very solid half-year result: In a competi-
tive market environment “Holderbank” has
achieved excellent performance. Based on in-
ternal growth and the full use of fundamental
strengths the Group made great progress in
key operating figures.
HOLDERBANK
The entrance hall of the School of Architecture
in Marne-la-Vallée (France).
1
KEY FIGURES
“Holderbank” Group
First half 2000 1999 ±%
Sales of cement and clinker million t 38.6 35.3 +9.3
Sales of aggregates million t 41.0 40.0 +2.5
Sales of ready-mixed concrete million m
3
11.6 10.4 +11.5
Personnel number 45,089 40,932 +10.2
Net sales million CHF 6,621 5,660 +17.0
Operating profit million CHF 933 749 +24.6
Cash flow from operating activities million CHF 864 483 +78.9
Group net income before
minority interests million CHF 436 391 +11.5
Group net income after
minority interests million CHF 352 311 +13.2
Earnings per dividend-bearing bearer share CHF 47.85 43.95 +8.9
Fully diluted earnings per bearer share CHF 47.17 43.50 +8.4
Fully diluted earnings per registered share CHF 9.43 8.70 +8.4

The current half-year figures confirm “Holderbank’s”
leading position in the cement business. A flexible mar-
ket presence underpinned by continuing Group growth
once again translated into an excellent performance.
Substantially higher margins and a solid cash flow from
operating activities reflect improved results in Europe
and Latin America as well as North America’s consis-
tently strong contribution to profit and higher earnings
in Asia Pacific.
2
CHAIRMAN’S LETTER
Dear shareholders and employees,
Ladies and gentlemen,
Healthy Growth
The Group’s performance for the first
six months of 2000 is very satisfactory
and reflects “Holderbank’s” funda-
mental strengths. One of these is our
presence in more than 70 countries on
five continents – unique in our indus-
try – and our balanced global network
that includes Group companies in
most of the important industrialized
nations and emerging markets. This
solid platform provided the basis for
another period of considerable
growth. Compared with the semi-an-
nual results of twelve months ago,
Group region Latin America in particu-
lar was a crucial factor in the marked

improvement in operating results.
Other Group regions also boosted
their performance yet again. Group re-
gion Asia Pacific produced the largest
percentage increase in sales and oper-
ating profit – due to the first time pro-
portional consolidation of Siam City
Cement in Thailand. Excellent progress
was made in expanding sales and in-
creasing efficiency in Europe. North
America’s performance continued to
be sound. On balance, operating profit
rose 25 percent to CHF 933 million,
and Group net income after minority
interests increased by 13 percent to
CHF 352 million. With improvements in
revenue and a more efficient manage-
ment of net working capital, cash flow
from operating activities soared by 79
percent to CHF 864 million.
Stronger Europe
The overall increase in investment in
public works, the upturn in residential
construction and extremely favourable
building weather at the beginning of
the year all combined to boost demand
in the construction sector. Whereas the
volume of construction in Belgium,
France and Spain continued a pattern
of growth from the two six-month peri-

ods of the previous year, the recovery
in the construction sector in Italy and
Switzerland picked up strength. Posi-
tive developments also gained the up-
per hand in “Holderbank’s” operations
in central and eastern Europe. The out-
look for the second half of 2000 is one
of further solid sales.
Prosperous North America
The economy in North America contin-
ues to expand. In the US construction
industry in particular, excess demand
3
4
and postponed infrastructure projects
continue at a very high level. To meet
market needs, Group companies had to
increase imports of cement and clinker.
Thus, on account of higher distribution
costs, EBIT weakened slightly. This sit-
uation underscores the importance of
capacity replacement and enhance-
ment projects that are in the planning
or construction stages at several loca-
tions. Group region North America will
remain economically strong in the sec-
ond half of the year.
Attractive Latin America
Among the emerging markets, Latin
America again plays a leading eco-

nomic role. Mexico is a prime example
of how the construction industry, in
particular, is benefiting from a solid
business climate. Brazil and Chile
have also made great progress. Even
Ecuador, which was recently shaken by
severe crises, has returned to a growth
path. The economic situation in Ar-
gentina still gives cause for concern.
All Group companies in the region were
able to maintain or expand market
share and in most cases obtain better
prices for their products. Operating re-
sults also reflect the commissioning of
state-of-the-art production plants, the
successful efforts to improve efficiency
and the increased use of alternative
fuels. Assuming that general condi-
tions remain stable, Group region Latin
America should report a sharp im-
provement in earnings for the full 2000
financial year.
Sluggish Development in
Africa Middle East
On the whole, the demand for building
materials in this heterogeneous region
was disappointing. As a result of polit-
ical decisions, demand for cement in
Lebanon fell sharply, and the market in
West Africa was flat, as was the eco-

nomic environment in South Africa. By
contrast, the markets for building ma-
terials in Morocco and La Réunion
posted a solid performance. As a re-
sult of stagnant sales and particularly
lower prices in some markets, consoli-
dated operating profit fell. On the
other hand, mention must be made
of the enormous progress achieved
by Alpha in South Africa in its efforts
to focus operations on core busi-
ness. Higher demand has helped to
strengthen the financial situation of
CIOR in Morocco. Despite measures in-
troduced to improve the position of
our Group companies in Lebanon, the
5
financial situation of this Group region
will not improve until further economic
stimuli translate into higher demand.
The Group expects that results in the
second half of the year will be some-
what better.
Southeast Asia on the Verge of a
New Start
The construction sector in most coun-
tries of Southeast Asia has bottomed
out. Yet there were also examples, such
as Vietnam, where demand for building
materials continued to rise. Australia

and New Zealand witnessed little
change in construction volume. The
2000 half-year report mirrors “Holder-
bank’s” increased involvement in this
region in particular. This led to a steep
rise in sales and a substantial increase
in EBIT. We expect that the slow eco-
nomic recovery in the Asian region will
be sustained through the coming
months. Most Group companies should
report improved financial results for
the year.
1999 Results will Be Surpassed
In the absence of fundamental changes
in the macroeconomic environment in
the second half of 2000, the “Holder-
bank” Group will continue to operate
successfully in the market over the
coming months and, assuming that ex-
change rates remain stable, meet fi-
nancial expectations.
Dr. h.c. Thomas Schmidheiny
Chairman and Managing Director
6
BUSINESS REVIEW
Europe
The European economies continued to
improve in the first six months of 2000,
and the construction sector reported
gains across the board. Several Euro-

pean markets enjoyed exceptionally
mild weather conditions in the early
months of the year, which had a posi-
tive influence on sales of cement and
other building materials. An important
source of demand was spending on
public works, in particular infrastruc-
ture. Residential construction – both
single-family and apartment houses –
also contributed to the growth in de-
mand.
In Belgium, France and Spain, con-
struction activity continued at a high
level. As a result, Group companies
Obourg-Origny and HISALBA were able
to increase sales in all divisions. HCB in
Switzerland and Merone in Italy both
reported substantial growth rates in
demand for cement, aggregates and
concrete – unequivocal signs that in
these economies the expansive forces
gained the upper hand. Thanks to the
final stage of construction for Expo
2000 in Hanover, Alsen in Germany op-
erated at high capacity levels. In cen-
tral and eastern Europe positive devel-
opments prevailed. There was a sharp
upturn in construction in Hungary, and,
despite an increase in imports from
Ukraine, our newly formed Pannoncem

group – which consolidated results of
the Hejöcsaba cement plant for the
first time – reported strong sales
growth. Prachovice in the Czech Repub-
lic, Hirocem in Slovakia and Koroma˘cno
in Croatia also posted increases in
sales. In Romania, “Holderbank” ex-
panded its presence by the acquisition
of cement producer Cimus. Owing to
market factors, Beloizvorski Cement in
Bulgaria reported lower sales, the only
company to do so.
Consolidated sales in Europe
First half 2000 ±%
Cement and clinker in million t 12.056 +9.9
Aggregates in million t 23.466 +10.3
Ready-mixed concrete in million m
3
5.981 +12.0
The higher deliveries of cement im-
proved plants’ capacity utilization, and
in isolated cases facilities were run-
ning at the limit of their capacity dur-
ing periods of peak demand. With one
exception, all companies operating in
aggregates were able to boost sales.
Most companies in the concrete sector
experienced equally strong demand,
7
in particular in Switzerland, Italy and

Spain.
In Europe, consolidated net sales rose
by 10 percent to CHF 2,656 million
(first half 1999: 2,405), boosting oper-
ating profit by 11 percent to CHF 266
million (first half 1999: 239), despite
unremittingly fierce competition. It is
gratifying to note the progress made by
Group companies in Spain, Switzerland
and Italy. In central and eastern Europe
higher volumes of imports and lower
sales prices affected the operating re-
sults of several Group companies.
Once again, there was very strong de-
mand for the trading services of Span-
ish-based Umar, our international ce-
ment and raw materials trading organi-
zation.
We can reasonably assume that the
economic environment in most Euro-
pean markets will continue along its
stable growth path in the second half of
2000. Although unseasonably mild
weather in the first two months of the
year inflated results in the period un-
der review, “Holderbank” expects that
this Group region will produce a further
improvement in its financial perfor-
mance.
North America

Although there was no denying the first
signs of a modest downturn in the
United States, the economic funda-
mentals in North America are still re-
markably sound. There is mounting ev-
idence that the Fed’s series of interest
rate hikes will engineer a soft landing,
prolonging economic prosperity in the
USA and, indirectly, Canada.
The construction industry in the USA
was running at full capacity and a se-
ries of large projects were postponed
due to bottlenecks in capacity. In
Canada, too, the building industry was
experiencing strong growth. To ensure
that there was no interruption of sup-
ply to customers, both Group compa-
nies were forced to resort to higher im-
ports of cement and clinker. Holnam
(USA) reported growth of 6 percent
in cement sales, and St. Lawrence
(Canada) did even better, increasing
sales by about 10 percent.
Consolidated sales in North America
First half 2000 ±%
Cement and clinker in million t 8.717 +7.6
Aggregates in million t 4.523 +0.6
Ready-mixed concrete in million m
3
0.885 +7.4

8
St. Lawrence subsidiaries active in the
field of aggregates and concrete also
maintained market share. However,
owing to the seven-week strike by dri-
vers of concrete mixers in metropolitan
Toronto in May and June, deliveries
failed to meet targets.
On consolidated sales of CHF 1,368
million (first half 1999: 1,186), the
North American Group companies pro-
duced an operating profit of CHF 163
million (first half 1999: 169). This re-
sult is respectable, especially as the
higher demand for cement could only
be satisfied by low-margin imports.
This also added to distribution costs,
as in the USA in particular cement had
to be transported large distances.
While cement prices stagnated in most
parts of the USA, St. Lawrence in
Canada was able to report a slight im-
provement in sales revenues.
After St. Lawrence completed a granu-
lator and grinding mill for blastfurnace
slag in two different locations in
record time, construction efforts in the
first half of 2000 focused on the pro-
ject for a new cement plant in Green-
port (New York). This technologically

and environmentally state-of-the-art
plant, expected to come on stream in
2003, should lead to a sharp decline in
cement imports. Holnam, too, plans to
renovate and expand its production
plants. In the period under review, a
second kiln line was commissioned in
Texas, and the construction of another
production unit made rapid progress
at the Portland plant in Colorado. The
next expansion project is planned for
South Carolina, where an old wet facil-
ity is to be replaced by a new higher-
capacity plant. These projects will
ensure that “Holderbank” retains its
cost and market leadership in strategi-
cally important regions, but will also
mean higher depreciation and interest
costs.
In the second half of 2000, North Amer-
ica will remain an attractive Group re-
gion for “Holderbank”. St. Lawrence
expects to boost its sales volume and
improve prices in some of its markets.
Holnam forecasts that its results for
2000 will be similar to 1999.
Latin America
In some countries, improvements in
the macroeconomic environment ex-
ceeded expectations in the first half of

2000. Mexico demonstrated its politi-
9
cal maturity in the process of voting in
a new government party. The construc-
tion sector continued to boom. Eco-
nomic growth in the rest of Central
America slowed down slightly, and po-
litical instability in Colombia continued
to have adverse effects on business
conditions. In Venezuela, the economy
still appeared to lack a clear direction.
In Ecuador, gross domestic product
started to rise in the period under re-
view, due to the support of the IMF and
international development banks. As a
result construction activity picked up.
Chile’s economy staged a strong recov-
ery on the back of higher exports and
better economic fundamentals. Devel-
opments in Brazil were also very posi-
tive, as the government managed to
find the right balance between lower
interest rates and flexible exchange
rates while reducing the budget deficit.
Argentina’s construction industry is
still in the midst of a deep recession.
In Mexico, demand for cement contin-
ued to rise strongly. However, the
Group companies in Costa Rica and
Venezuela failed to match the previous

half-year sales volumes. Venezuelan-
based Caribe was hit particularly hard
by high exchange rates, which consid-
erably weakened the competitiveness
of cement producers in the export mar-
kets. In Colombia, cement deliveries of
Boyacá posted only a marginal decline,
and both La Cemento Nacional in
Ecuador and Cemento Polpaico in Chile
benefited from the upturn in the
construction sector. Cement sales re-
mained high in the markets supplied by
“Holdercim” Brasil. Difficult economic
conditions in Argentina were responsi-
ble for a drop in sales of about 20 per-
cent at Minetti. On balance, consoli-
dated sales of cement and clinker in
Group region Latin America almost
matched the 9.4 million tonnes of the
previous six-month period.
Consolidated sales in Latin America
First half 2000 ±%
Cement and clinker in million t 9.353
–
0.8
Aggregates in million t 6.203 +15.2
Ready-mixed concrete in million m
3
3.307 +10.0
Some of the companies active in

the field of aggregates reported
sharp increases in sales. The greatest
gains were achieved in Chile, followed
by Venezuela, Brazil and Ecuador.
Ready-mixed concrete sales increased
strongly at “Holdercim” Brasil and
more moderately at our companies in
10
Ecuador, Mexico and Chile. In Colom-
bia, by contrast, deliveries dipped
slightly due to market factors.
Although there was little change in the
scope of consolidation, consolidated
net sales were up by 29 percent at CHF
1,741 million (first half 1999: 1,352).
Operating profit rose by a dispropor-
tionate margin to CHF 395 million (first
half 1999: 254). Apart from better
prices, larger sales volumes, and a
stronger dollar, factors such as tighter
cost controls and further progress in
rationalization were responsible for
this success.
Cemento Polpaico posted a marked in-
crease in earnings due to the replace-
ment of an older production line at the
Cerro Blanco plant by a new grinding
mill in Concepción. While Minetti’s re-
sults were disappointing, it was possi-
ble to cushion some of the effects of

the contraction in sales volume by ex-
ploiting the synergies of last year’s
merger and cutting costs in all divi-
sions. The Group companies in Brazil,
Colombia and Ecuador posted substan-
tially improved results. Even in Mexico,
where the construction sector was al-
ready booming in 1999, Apasco was
able to record another sharp increase
in net income. “Holderbank” strength-
ened its position in Latin America by
acquiring a stake in Cementos Pro-
greso in Guatemala and commissioning
on schedule a clinker grinding station
at Campana, close to the major Buenos
Aires market. Apasco will be doubling
capacity at its Ramos Arizpe plant to
2.5 million tonnes at very low invest-
ment costs.
If economic fundamentals remain in-
tact, and the region is spared further
large currency shocks, our Group com-
panies – with the exception of those in
Argentina and Venezuela – expect to re-
port sharply higher earnings for the
2000 financial year.
Africa Middle East
Economic developments in the differ-
ent countries of this Group region gen-
erally matched expectations.

Building activity in Morocco recovered
gradually. In West Africa, the volume
of business remained fairly stable.
In Nigeria, where Umar acquired a 40
percent interest in a leading cement
importer, impressive quantities of im-
ports were sold. By contrast, the West
African grinding stations suffered
sales losses in the face of economic
and political uncertainties. The eco-
nomic environment in South Africa
was generally static. Although the
government is once again investing
greater resources in its residential
construction program, it is too early to
speak of a recovery in the construction
sector. New tourism projects in La
Réunion provided positive stimuli. The
difficult political situation in Lebanon
had a very negative effect on construc-
tion activity, and demand for cement
plummeted by 21 percent.
Consolidated sales in Africa Middle East
First half 2000 ±%
Cement and clinker in million t 3.587 +0.4
Aggregates in million t 4.787
–
30.2
Ready-mixed concrete in million m
3

0.802
–
4.5
With little change in the scope of con-
solidation, sales of cement and clinker
in Group region Africa Middle East
stagnated at about 3.6 million tonnes.
CIOR in Morocco and “Holdercim”
Océan Indien in La Réunion posted sig-
nificantly higher volumes. Once again,
Alpha in South Africa sold more than
1.4 million tonnes of cement. Due to
strong exports of cement and clinker,
11
Ciments Libanais was able to limit its
drop in sales to about 3 percent.
Sales in the aggregates sector plunged
by 30 percent owing to developments
in our Lebanese quarries, which oper-
ate in a fiercely competitive and declin-
ing market. Alpha, by contrast, boosted
output to approximately 3.3 million
tonnes.
Both CIOR and “Holdercim” Océan In-
dien increased sales of ready-mixed
concrete. However, due to the collapse
of demand in Lebanon and the sluggish
business environment in South Africa,
consolidated sales slipped overall.
Consolidated net sales rose by about 4

percent to CHF 493 million (first half
1999: 473). At operating level, results
varied considerably. CIOR, Alpha and
“Holdercim” Océan Indien improved
EBIT, whereas our Group companies in
Lebanon recorded losses in the first six
months of 2000 on account of the drop
in demand. The unexpectedly severe
recession in Lebanon forced “Holder-
bank” to introduce a restructuring pro-
gram to its Lebanese operations.
Against this background, operating
profit in Group region Africa Middle
12
East fell to CHF 30 million (first half
1999: 43).
At the beginning of 2000, “Holder-
bank” and a group of partners took
the decision to build a cement grinding
station in the future port of Gaza
(Palestine).
CIOR, Alpha and “Holdercim” Océan In-
dien should produce impressive finan-
cial results in the second half of 2000
as well. The only cause of uncertainty
in this Group region is our Lebanese
operation. The cost-cutting measures
will have the desired effect, but a turn-
around in the construction market is
needed to improve financial results sig-

nificantly.
Asia Pacific
Although the Asian crisis is now a thing
of the past, the huge economic setback
has left its mark on the countries af-
fected. The construction industry suf-
fered under the excess supply in the
market for commercial buildings and
the hesitancy of the public sector to
invest in infrastructure. Demand for
building materials stabilized at the
1999 level, which can be interpreted as
a success. There was little change in
the construction volume in Australia
and New Zealand.
In the period under review, there were
substantial changes in the scope of
consolidation. The results of Siam City
Cement, the second biggest cement
producer in Thailand, were consoli-
dated proportionally for the first time.
Group financial statements also in-
clude the results of Garadagh in Azer-
baijan, while no longer containing the
contribution of Alsons’ Kiwalan plant in
the Philippines, which was sold in the
second half of 1999.
Consolidated deliveries of cement and
clinker rose by 85 percent to just under
6 million tonnes. The positive devel-

opment can be attributed primarily
to Siam City Cement, as well as to
Morning Star (Vietnam), Puttalam (Sri
Lanka), Tenggara (Malaysia) and Mil-
burn (New Zealand). In the Philippines,
Alsons maintained its sales volume.
Cement deliveries slipped slightly at
Queensland Cement (Australia).
Only a few companies in this Group re-
gion are active in the aggregates seg-
ment. Their number has been swelled
by a quarry operation in Sri Lanka.
13
In most Asian markets only moderate
economic recovery in the construction
sector is expected in the coming
months. Still, various rationalization
measures adopted by individual com-
panies will contribute to an improve-
ment in the financial results. The mar-
ket situation in Australia and New
Zealand is unlikely to show any signifi-
cant change.
Whereas Queensland Cement posted
higher sales revenue, Alsons and Mil-
burn reported lower sales. All compa-
nies increased deliveries of ready-
mixed concrete. The strong percentage
rise, however, is largely a reflection of
the first-time consolidation of the re-

sults of Siam City Cement.
Consolidated sales in Asia Pacific
First half 2000 ±%
Cement and clinker in million t 5.986 +85.0
Aggregates in million t 1.986
–
0.5
Ready-mixed concrete in million m
3
0.643 +52.4
Net sales rose by an impressive 54
percent to CHF 606 million (first half
1999: 393). Overall, this expansion in
sales mirrors the inclusion of Siam City
Cement (CHF 167 million) and higher
prices and volumes in several markets.
The rise in EBIT is particularly impres-
sive: it increased to CHF 79 million
(first half 1999: 44). The operating
results were also positively influenced
by progress in production and ra-
tionalization at Group companies in
Vietnam and the Philippines. In Sri
Lanka and to a lesser extent in Aus-
tralia and New Zealand operating
profit slipped slightly on account of
market factors.
14
HALF-YEAR RESULTS
Consolidated statement of income “Holderbank” first half

Million CHF 2000 1999 ±%
Net sales 6,621 5,660 +17.0
Cost of products and services sold (3,979)(3,419)
Gross profit 2,642 2,241 +17.9
Distribution and selling expenses (1,097)(946)
Administrative expenses (489)(428)
Other depreciation and amortization (123)(118)
Operating profit 933 749 +24.6
Additional ordinary income 119 105
Financial expenses (366)(272)
Group net income before taxes 686 582 +17.9
Income taxes (250)(191)
Group net income before minority interests 436 391 +11.5
Minority interests (84)(80)
Group net income after minority interests 352 311 +13.2
CHF
Earnings per dividend-bearing bearer share 47.85 43.95 +8.9
Fully diluted earnings per bearer share 47.17 43.50 +8.4
15
Consolidated balance sheet “Holderbank”
Million CHF 30.06.00 31.12.99
Cash and cash equivalents 2,015 1,623
Accounts receivable 2,559 2,296
Inventories 1,384 1,419
Prepaid expenses and other current assets 271 163
Total current assets 6,229 5,501
Financial investments 1,915 1,997
Property, plant and equipment 12,612 11,747
Intangible and other assets 2,689 2,457
Total long-term assets 17,216 16,201

Total assets 23,445 21,702
Trade accounts payable 999 997
Current financing liabilities 2,630 1,982
Other current liabilities 1,302 1,188
Total short-term liabilities 4,931 4,167
Long-term financing liabilities 7,946 7,272
Long-term provisions 2,015 2,031
Total long-term liabilities 9,961 9,303
Total liabilities 14,892 13,470
Interests of minority shareholders 1,952 1,802
Authorized capital 377 377
Reserves 6,224 6,053
Total shareholders’ equity 6,601 6,430
Total liabilities and shareholders’ equity 23,445 21,702
16
Statement of changes in consolidated equity “Holderbank”
Million CHF 30.06.00 31.12.99
Authorized capital 377 363
Capital paid-in 014
Authorized capital 377 377
Reserves
Capital surplus 1,945 1,559
Capital paid-in 0 361
Shareholders’ equity – convertible bond 025
Capital surplus 1,945 1,945
Retained earnings 3,917 3,373
Change in treasury shares (47)(54)
Profit distribution (162)(142)
Group net income after minority interests 352 795
Effect of increase in participation (19) (55)

Retained earnings 4,041 3,917
Currency translation adjustments 191 (302)
Change in currency translation adjustments 47 493
Currency translation adjustments 238 191
Total reserves 6,224 6,053
Total shareholders’ equity 6,601 6,430
17
Consolidated cash flow statement “Holderbank” first half
Million CHF 2000 1999 ±%
Operating profit 933 749 +24.6
Depreciation and amortization of operating assets 648 571
Other non-cash items 10 15
Change in net current assets (198)(451)
Cash generated from operations 1,393 884 +57.6
Additional ordinary income 80 83
Interest paid (322)(279)
Income taxes paid (287)(205)
Cash flow from operating activities A 864 483 +78.9
Investments in property, plant and equipment net (668)(466)
Financial investments net (599)(497)
Cash flow from investing activities B (1,267)(963)+31.6
Dividends paid (257)(158)
Other financing activities 1,042 1,149
Cash flow from financing activities C 785 991
–
20.8
Increase in cash and cash equivalents (A + B + C) 382 511
Cash and cash equivalents as at January 1 1,623 854
Increase in cash and cash equivalents 382 511
Effects of exchange rate movements 10 41

Cash and cash equivalents as at June 30 2,015 1,406
18
FINANCIAL REPORT
General
The consolidated half-year report has
been prepared in accordance with
International Accounting Standards
(IAS). The principles for preparing
these accounts are described in detail
in the 1999 annual report. The figures
presented in this half-year report are
not audited.
Scope of Consolidation
During the reporting period a number
of changes in the scope of consolida-
tion occurred. The most significant
change is the first time consolidation of
Siam City Cement Public Company Lim-
ited (Thailand) using the proportional
consolidation method. Other new addi-
tions to the scope of consolidation are
Hirostavbet s.r.o (Slovakia), the Hejöc-
saba plant and Hejöbeton Kft. (Hun-
gary), United Quarries Ltd. (Bulgaria),
Garadagh Cement J.S.C. (Azerbaijan),
Cimus SA (Romania) and African Port-
land Cement Ltd. (South Africa). Di-
vestments included Amstutz AG and
Sibag AG in Switzerland. In Germany,
the Alsen AG subsidiary AB Umwelt-

technik GmbH was sold. Group com-
pany Ceva Prachovice a.s. (Czech Re-
public) disposed of its subsidiary
Vápenka Prachovice s.r.o. In addition
Société Jamil Kahi & Companies
S.A.R.L. (Lebanon) as well as Naga
Cement Ltd. (Cambodia) were decon-
solidated.
Foreign Currencies
The increase in value of the USD and
other important foreign currencies of
up to 14% against the average CHF dur-
ing the period had a significant impact
on the consolidated income statement
and the consolidated result for the first
half-year 2000. However, the closing
exchange rate of the most important
foreign currencies had, overall, no
material impact on the balance sheet.
19
Average exchange rate in CHF (statement of income)
First half 2000 1999 ±%
1 EUR 1.59 1.60
–
0.6
1 USD 1.66 1.47 +12.9
1 CAD 1.13 0.99 +14.1
1 ZAR 0.25 0.24 +4.2
1 AUD 1.01 0.95 +6.3
1 NZD 0.80 0.79 +1.3

Closing exchange rate in CHF (balance sheet) 30.06.00 31.12.99 ±%
1 EUR 1.56 1.60
–
2.5
1 USD 1.63 1.55 +5.2
1 CAD 1.10 1.05 +4.8
1 ZAR 0.24 0.26
–
7.7
1 AUD 0.98 1.02
–
3.9
1 NZD 0.77 0.82
–
6.1
Production Capacity and Sales
The annual cement production capacity
increased by 13.1 million tonnes or
14.6% to 102.6 million tonnes (first
half 1999: 89.5). This increase is
largely a result of the changes in the
scope of consolidation. Siam City Ce-
ment Public Company Limited (Thai-
land) alone added 7.4 million tonnes.
Further capacity enhancements and
technical improvements in various
plants added to the increase as well.
Cement and clinker sales increased by
9.3% or 3.3 million tonnes to 38.6 mil-
lion tonnes (first half 1999: 35.3), due

again mainly to the first time consoli-
dation of Siam City Cement Public Com-
pany Limited (Thailand), which added
2.5 million tonnes. The remaining 0.8
million tonnes reflect the favourable
market conditions in Europe, North
America and Mexico.
In the aggregates segment sales vol-
umes increased by 2.5% or 1.0 million
tonnes to 41.0 million tonnes (first half
1999: 40.0), mainly as a result of
changes in the scope of consolidation.
United Quarries Ltd. in Bulgaria and
Carrière Bourgogne Sud in France
added 0.7 million tonnes and 0.6 mil-
lion tonnes respectively. A slight de-
crease occurred with the deconsolida-
tion of Société Jamil Kahi & Companies
S.A.R.L. in Lebanon.
Volumes in concrete increased by
11.5% to 11.6 million m
3
(first half
1999: 10.4). Of this increase 0.8 mil-
lion m
3
is attributable to higher sales
in Europe, Mexico and Brazil. The
changes in the scope of consolidation
added 0.4 million m

3
.
Net Sales
Net sales increased by CHF 961 million
to CHF 6,621 million. Increases in price
and volume amounting to CHF 318 mil-
lion were the result of the economic
recovery in Europe and Latin America.
In Group region Latin America the
biggest improvements in sales were
contributed by Apasco S.A. de C.V.
(Mexico) and “Holdercim” Brasil S.A.
(Brazil). Changes in the scope of con-
solidation contributed an increase in
sales of CHF 221 million mainly from
Group region Asia Pacific, where Siam
City Cement Public Company Limited
(Thailand) was consolidated for the
first time. Exchange rate fluctuations
had a positive impact of CHF 422 mil-
lion and are attributable to the strong
USD.
The ongoing efforts of focusing on
core business activities led to a further
strengthening of the cement and
clinker segment. As a percentage of net
sales this segment witnessed an in-
crease of 0.6 percentage points to
61.1% (first half 1999: 60.5%). The in-
crease largely mirrors the change in the

scope of consolidation. The percentage
of net sales attributable to the aggre-
gates / concrete segment decreased
slightly to 21.5% (first half 1999:
21.6%). As a result of divestments the
percentage of net sales attributable to
other products / services decreased to
17.4% (first half 1999: 17.9%). The
change is partly due to the sale of com-
panies in the business of waste man-
agement / recycling in Switzerland.
Operating Profit (EBIT)
Operating profit improved by CHF 184
million or 24.6% to CHF 933 million
(first half 1999: 749) due to more
favourable market conditions and a
reduction in excess capacities. Price,
cost and volume changes contributed
CHF 83 million, currency fluctuations
20
CHF 70 million and changes in the
scope of consolidation CHF 31 million.
The EBIT margin improved in all seg-
ments, rising to 14.1% (first half 1999:
13.2%). However, within the regions,
there is a more diverse picture. Whilst
the EBIT margin for Latin America and
Asia Pacific increased 3.9 percentage
points and 1.8 percentage points re-
spectively, North America and Africa

Middle East saw a decrease of 2.3 per-
centage points and 3.1 percentage
points respectively. Group region Eu-
rope remained stable with only a slight
increase of 0.1 percentage points.
Group Net Income
Group net income before minority inter-
ests increased by CHF 45 million or
11.5% to CHF 436 million (first half
1999: 391). This increase was mainly
Net sales per region
First half 2000 1999 ±%
Million CHF
Europe 2,656 2,405 +10.4
North America 1,368 1,186 +15.3
Latin America 1,741 1,352 +28.8
Africa Middle East 493 473 +4.2
Asia Pacific 606 393 +54.2
Inter-segment sales (243)(149)+63.1
Total 6,621 5,660 +17.0
21
Net sales per segment
First half 2000 1999 ±%
Million CHF
Cement / Clinker 4,570 3,848 +18.8
Aggregates / Concrete 1,612 1,375 +17.2
Other products / Services 1,302 1,136 +14.6
Inter-segment sales (863) (699) +23.5
Total 6,621 5,660 +17.0
22

Operating profit per region
First half 2000 1999 ±%
Million CHF
Europe 266 239 +11.3
North America 163 169
–
3.6
Latin America 395 254 +55.5
Africa Middle East 30 43
–
30.2
Asia Pacific 79 44 +79.5
Total 933 749 +24.6
Operating profit per segment
First half 2000 1999 ±%
Million CHF
Cement / Clinker 851 709 +20.0
Aggregates / Concrete 72 54 +33.3
Other products / Services 10 (14)
Total 933 749 +24.6
due to stronger results in Group regions
Europe and Latin America as well as
overall positive currency fluctuations.
Group net income after minority inter-
ests improved by 13.2% or CHF 41 mil-
lion. The total represents 80.7% (first
half 1999: 79.5%) of Group net income
before minority interests.
Earnings per dividend-bearing bearer
share increased by 8.9% to CHF 47.85

(first half 1999: 43.95).
Balance Sheet and Balance Sheet
Structure
The consolidated shareholders’ equity
increased by 2.7% to CHF 6,601 million
(December 31, 1999: 6,430). This de-
velopment is related to higher net in-
come as well as positive currency im-
pacts of CHF 47 million.
Group net financial debt increased by
12.2% to CHF 8,561 million (December
31, 1999: 7,631). This increase of CHF
930 million is attributable to the capi-
23
tal needs resulting from investments
for expansion in property, plant and
equipment as well as from financial in-
vestments. The change in currency ex-
change rates had an impact of CHF 48
million. As a consequence, gearing (net
financial debt as a percentage of share-
holders’ equity including minority in-
terests) increased to 100.1% (June 30,
1999: 97.7%, December 31, 1999:
92.7%).
Cash Flow from Operating Activities
Cash flow from operating activities in-
creased by an encouraging CHF 381
million to CHF 864 million (first half
1999: 483). CHF 287 million resulted

from a more efficient management of
net working capital. The effects of ex-
change rate variation accounted for
CHF 62 million, and CHF 32 million was
due to changes in the scope of consol-
idation. A regional analysis of the
movements in cash flow from operating
activities shows higher contributions
in all Group regions, with Latin America
displaying the highest growth.
The 78.9% increase in cash flow from
operating activities more than offsets
the CHF 125 million rise in financial and
tax expenses. The higher financial ex-
penses reflect increased indebtedness
related to new investments in emerging
markets that have not yet been consol-
idated. Tax payments were higher be-
cause various Group companies have
used up their deductible tax loss carry-
forwards.
Investment Activities
In the first half-year 2000 total invest-
ments reached CHF 1,267 million (first
half 1999: 963), an increase of CHF 304
million or 31.6%. These investments
include net capital expenditures on
property, plant and equipment of CHF
668 million, of which net investments
to maintain production capacity and

secure competitiveness amounted to
CHF 342 million (first half 1999: 203) or
5.2% (first half 1999: 3.6%) of net
sales. Investments in expanding prop-
erty, plant and equipment increased by
24.0% to CHF 326 million (first half
1999: 263). This increase is mainly ex-
plained by expansion projects in Group
companies Holnam Inc. (USA) and St.
Lawrence Cement Inc. (Canada).
Financial investments increased by CHF
102 million or 20.5% to CHF 599 mil-
lion. The investments mainly comprise
increased participations in strategic