press release holcim ltd new year gets off to a good start

Corporate Communications

Holcim Ltd
Zürcherstrasse 156
CH-8645 Jona/Switzerland


Phone +41 58 858 87 10
Fax +41 58 858 87 19

Press Release
Holcim Ltd: New year gets off to a good start

Jona, May 23, 2002 – There was little change in Holcim Ltd's economic environ-
ment 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 Holcim 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 pro-
duction 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 2001. 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 Holcim 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).

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 2002. 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). The 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.

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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. Holcim
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.

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 improve-
ment. 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, the Group's 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. Holcim
anticipates 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.

Holcim Ltd's first quarterly report
This is the first time Holcim Ltd has released quarterly results. The step has been
taken 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

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North America. For this reason, the "quieter" winter months are used 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).

Key Figures
Group Holcim First Quarter 2002 2001 +/-%
Annual cement production capacity million t 135.7 121.2 +12.0
Sales of cement and clinker million t 19.1 18.1 +5.5
Sales of aggregates million t 19.7 18.9 +4.2
Sales of ready-mix concrete million m
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5.5 5.6 -1.8
Personnel number 51,036 47,923 +6.5
Net sales million CHF 2,847 2,863 -0.6
Operating profit million CHF 310 324 -4.3

EBITDA million CHF 683 691 -1.2
Cash flow from operating activities million CHF 108 74 +45.9
Group net income before minority interests million CHF 129 120 +7.5
Group net income after minority interests million CHF 77 82 -6.1
Earnings per dividend-bearing bearer share CHF 1.97 2.18 -9.6
Earnings per dividend-bearing registered share CHF 0.39 0.44 -11.4

With majority and minority interests in over 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.