we have strengthened our position in asia half year report holcim 2002

Consolidated netsales of CHF6,441million first half 2001:6,582 felljust short of the strongresultsin the first six monthsof 2001owing to currency movements.Main factorswere theweakness o

We have strengthened our position in As ia.

Half-Year Report 2002

Sales volumes increasedagain in ourthree coresegments cement,aggregatesand ready-mixconcrete Practi-

cally allGroup companies achievedtheir operatingtargets asmeasured in local currency,partly becausethe

selective restructurings ofrecent years havestarted tobearfruit Consolidated netsales of CHF6,441million

(first half 2001:6,582) felljust short of the strongresultsin the first six monthsof 2001owing to currency

movements.Main factorswere theweakness of theUSdollar as wellas theeuro.In addition,a number

oflocalcurrencies in LatinAmerica,the SouthAfrican rand andthe Egyptia

n poundall fellsubstantially

Adjustingforcurrency movements, consolidated sales exceeded the results

in thecorresponding year-back

period,andalso consolidated operatingprofit ofCHF935million (first half 2001:997)compared favorably

with the sameperiodin the previous year.EBITDAat CHF1,706 million(firs

t half 2001:1,789) heldupwell

Cashflow from operatingactivities roseby26.6 percent toCHF781 million(first half 2001:617),which is

agratifyingresult.However,Group netincome afterminorityinterests post

eda dropto CHF292million

in thefirst half of 2002 (first half 2001:397).The reasonforthis is addition

alordinary income Itfell from

CHF102million in thefirst half of 2001to CHF-18 millionin the first half of

2002,largely dueto depreciation

andamortization ofnon-operating assets of CHF63millionrelated to theunresolvedcrisis in Argentina,

lower interestincome owing to market developments andafall in dividendincome from affiliated companies

Developmentsin the economicenvironment in Europedid nothold anysurprises.While building activity

remained brisk in Spain,thecrisis in the German construction industryworsened.Mostcountries in central

andeastern Europereportedsolid demandfor buildingmaterials.Consolidated cement sales anddeliveriesof

aggregates werebothup Onlysales of ready-mixconcrete camein slightlybelowthe figurefor theprevious

year.Operating profitfor Groupregion Europeposted an above-averagegainof 12.3 percentto reachCHF 274

million(first half 2001: 244).This substantial improvement reflects thesuccessof rationalization measures in

theprecedingyears

In thePortland plant,clinker production started onschedule in thesecondquarter of2002.This gradually

removedthe production bottleneck that hadexisted in theUS Midwest fort

he previousyear The

commission-ingphase isnow completed,andthe new plant will havean annual productioncapacity of two milliontonnes

ofcement ayear.Thanksto this modern facility,it will bepossible to closet

he neighboring,cost-intensive

Fort Collinsplant on August 31,2002.Compared with thefirst quarterof 20

02,thedecline incement sales of

Shareholders’ Letter

Key Figures Group Holcim

Holcim UShasslowed, whileall segmentsof theGroup’s Canadi

an company continue tobenefit fromthe

ongoingstrength ofthe local market.However,this is notenoug

h to compensate forthe directandindirect

loss ofearnings andadditional costscaused by thedelaysin bringing the Portlandplant on stream.Withan

operatingprofit of CHF77million(first half 2001: 157),theNorthAmerican region movedback intotheblack in

the first six months of2002, afterpostinga lossin the first quarter

Despite difficult economicconditions, particularly in Argentina,bothsales andearnings in the LatinAmerican

region remained stable.Consolidated deliveries ofcement andclinkeras well assales of ready-mixconcrete

came in marginallybelow theresults forthe first half of2001,while sales of aggregates actuallyrose Wealso

improved ourfinancial position in LatinAmerica Costefficiencie

s andoursolidmarket position managedto

cushion the succession ofhuge devaluations in theArgentine, Venezuelan andBrazilian currenciesand the

depreciation ofthe USdollaragainst the Swissfranc.Operatingprofit ofCHF417 million(first half 2001:425)

in the LatinAmerican region was virtually unchanged.Better operating results in Mexico,Central America,the

Caribbean andChile wereparticularly pleasing

This region’scontribution to theGroup’s results gainedin significance Thefavorable developmentsin the

construction sectorin each ofthese important markets continue

d at asteady pace,andin some cases

evengathered strength Our largerGroupcompanies in Egypt,Morocco andSouthAfricamanaged topost

considerably higher sales,whereas thelevel of new ordersinWe

st Africa, Madagascarand LaRéunion was

unsatisfactory.The earnings trend apparent in thefirst quarter continued intothe next.In the first half

of 2002,operatingprofit in Groupregion AfricaMiddleEast improvedby8.1percent to CHF120million

(first half 2001: 111)

2 Shareholders’ Letter

Economicrecovery in theASEAN region continues tomakegoodprogress.T

hebuilding sector in particularis

expandingrobustly on thebackof strong growth in residential construction

in several countries.Shipments of

cement fromourThaicompany exceeded expectations,andall plants inSaraburiare operatingat full capacity

Sales growth in theregion was bolsteredbythe full consolidation of theIndonesian PTSemen Cibinong, which

we acquiredat the endof2001.The Group’s companyin Australia also managedto increase sales ofcement,

anditsaggregates andready-mix concretesegmentsreported

substantially higher volumes.However,in the

first half of2002, operatingprofit in Groupregion Asia Pacific declined 6.9 percent toCHF81million (first half

2001:87),due to thecost ofintegrating ournewly consolidated Indonesiansubsidiary

In recentmonths,overall economicconditions havedeteriorated perceptibl

y,andsome countrieshave hadto

revise their growth forecasts downwards Despite theprogress made in ouroperationsin the first half of2002,

areconfident about themedium-term outlook.

Dr.WillyKissling Markus Akermann

Chairman ofthe BoardofDirectors a.i.CEO

January–

June2001

±% April–

June2002

April–

June2001

Gross profit 3,10

Distribution andselling expenses (1,42

1) (1,450) (765) (800)Administration expenses (602

) (577) (325) (318)Other depreciation andamortizat

share 7.45 10.38 –28.2

Earningsper dividend-bearing

registered share 1.50 2.11–

28.9Fully diluted earnings perregister

ed share 1.49 2.08–28.4

Consolidated Balance Sheet of Group Holcim

002Unaudit

30.06.2001Unaudit

31.12.2001AuditeCash andcashequivalents 2,81

7 1,108 2,137Marketable securities 90 538 105Accounts receivable 2,58

1 3,192 2,456

5 1,581 1,416Prepaidexpenses andother currentassets 264 318 253

Financial investments 2,37

3 3,082 3,312Property, plant andequipment 14,18

9 14,610 14,235Intangible andother assets 3,07

8 4,177 2,729Other currentliabilities 1,23

Consolidated

5

Statement of Changes in Consolidated Equity of Group Holcim

January–June

Unaudit

2001UnauditAuthorized capitalas at January1 402 377

)

) (188)Group netincome after minorityinterests 292 397Effect of increase in participations (5) (7)

Gain onavailable-for-sale securities 20 0

6 Statement of Changes in Consolidated Equity

Consolidated Cash Flow Statement of Group Holcim

January–June

Unaudit

2001Unaudit

±%

Depreciation and amortization ofoperating asset

Other non-cashitems (10) 49

Changein net working capital (375

Movements of treasury sharesnet (5) (362

)Increase in currentfinancing liabilities 120 309

Proceeds from long-term financing liabilities 1,58

Repayment of long-term financing liabilities (631

) (494)Decrease in marketable securities 4 214

Consolidated ent

7

AsiaPacific

Corpora

te /Eliminati

TotalGroupJanuary–June 200

es

Million t

Productioncapac

itycement 40.337.321.319.532.630.913.112.432.421.1 0 0 139.7 121.2Sales of cement

andclinker 12.512.07.4 7.9 9.1 9.3 5.6 5.611.57.2(2.6)0.143.542.1Sales of aggregat

es 23.222.16.1 5.4 6.3 6.1 4.3 4.3 2.4 2.1 0 0 42.340.0Million m3

Sales of

ready-mix concrete 5.8 6.1 1.1 1.1 3.6 3.6 0.7 0.7 1.0 0.7 0 0 12.212.2

1 Basis of Preparation

Theunaudited consolidated second q

uarter interim financial

statements (hereafter‘interim financ

ial statements’)are

pre-paredin accordancewith IAS34 Inter

imFinancial Reporting

Theaccounting policies usedin the pr

eparationof the interim

financial statements and thepresent

ationare consistent with

thoseusedin the consolidated financ

ial statements forthe

yearendedDecember 31,2001 (here

after‘annual financial

statements’).The interim financial st

atements should beread

in conjunctionwith theannual financ

ial statements as they

providean updateof previously repor

disclosureof contingent liabilities at t

hedateofthe interimfinancial statements.If in thefuture suchestimatesand

assumptions,which arebased onmanagement’sbest judg-

mentat thedateof theinterim financial statements, deviate

from the actual circumstances,the originalestimates and

assumptionswill bemodified asappropriate during theperiod

in which thecircumstances change

There werenosignificant changesin accounting policies

or estimatesor in anyprovisionsor impairment charges

fromthosedisclosed in theannual financial statements

2 Changes in the Scope of Consolidation and Other Significant Acquisiti ons

Thefollowing significant changes weremade during thesixmonths to June30,2002:

PTSemen CibinongTbk.(Indonesia) was fullyconsolidatedfromJanuary1,2002 onwards.Itwas accounted foras afinan-cialinvestment at December 31,2001 becausecontrol wasnoteffectively transferred to theHolcim Groupat that date

The reduction in financial income is due to losses on the sal

Depreciation and amortization ofnon-operating assets (68) (9)

Foreign exchangegain (loss) net 38 (5)

Financial expenses capitalized 14 21

amortization of non-operating assets” includes depreciation

n

thelower interest ratelevel.The posi

tion“Depreciation and andassetsamortizationin Argentina.of non-operating

exchangerates and thegenerally lower interestrate level

Foreignexchangegain net derivedmainly fromLatin American

currencies

Notes Financial

9

10 Principal Exchange Rates

IncomestatementAverageexchange rates

BalanceheetClosingexchange200

In theordinary courseof business,the Groupisinvolved in

lawsuits,claims,investigations andproceedings,including

product liability,commercial, environmentaland health and

safetymatters No significant changesin the Group’s

contin-gentliabilities haveoccurred sincethe last annual financial

statements

9 Post-Balance Sheet Events

There werenosignificant post-balance sheetevents

Theshares are listedon SWX SwissE

xchange.The bearer share

hassecurity code No.1221406andqu

alifies forSwiss market

index SMIandistraded onvirt-x.The

registeredshare has

security number1221405 andistrad

edon SWX.Thebearer

shareis also tradedonthe Frankfurt

StockExchangeandin

theform of ADRsin theUS Telekursli

sts thebearer share

underthe codeHOL and theregistere

d shareunder HOLN

andeconomicperformance

Suchstatements may besubject toa

numberof risks,

uncer-taintiesandother important factors,

suchas but notlimited

to(1) competitive pressures;(2)legis

lative andregulatory

developments;(3)global,

macro-economicandpolitical trends;

(4)fluctuations in currency exchange

rates andgeneral

finan-The correspondingcodes underBloomberg areHOLVXand

HOLN SW,while Reutersuses theabbreviationsHOLZ.S

andHOLZn.S Everyshare,regardless

of whetherbearer orregistered,carries onevoting right T

(7)litigation;(8) adverse publicity an

d news coverage,whichcouldcause actual development andresults to differmate-

rially fromthe statements madein th

Financial Reporting Calendar

Third quarter 2002 results conference for press and analysts November 7, 2002

2002 annual results conference for press and analysts March 19, 2003

First quarter 2003 results May 13, 2003

General Meeting of Shareholders June 04, 2003

Dividend payment June 10, 2003

First half 2003 results August 28, 2003

Third quarter2003 results November 12,2003

11

Phone+4158858 8710

Fax+4158 8588719

communications@holcim.comInvestor Relations

BernhardA Fuchs

Phone+4158858 8720

Fax+4158 8588669

investor.relations@holcim.com