2002 full year
DESCRIPTION
2002 Full Year. Results. Wednesday, February 26th, 2003. www.altadis.com. Content. Key facts & figurespage 4 Restructuring & synergiespage 6 Cigarettepage 7 Cigarpage 18 Logisticspage 24 Financialspage 30 Conclusion page 37 Appendicespage 41. - PowerPoint PPT PresentationTRANSCRIPT
1
2002 Full Year
Wednesday, February 26th, 2003
Results
www.altadis.com
2
Content
Key facts & figures page 4
Restructuring & synergies page 6
Cigarette page 7
Cigar page 18
Logistics page 24
Financials page 30
Conclusion page 37
Appendices page 41
3
Altadis meets its 2002 profitability target, with an Ebitda growth of 9.5%
Fourth quarter has grown still faster than the beginning of the year.
The pattern of activity has continued in Q4, at a higher level of performance.
Full year 2002: Economic sales up by 3.4% to Euro 3,182 million.
Ebitda up by 9.5% to Euro 971 million.
Net result up by 14.5% to Euro 435 million.
4
#3 in Western Europe#1 in Spain#2 in France#4 in Germany
Servicing 150,000POS in WesternEurope
#1 Worldwide#1 in the US#1 in Spain#1 in France
102.3 billion cigarettes (**) Euro 7,447 mn (***)3,197 million cigars
Economic SalesEBITDANet Income
Headcount 20,813
Euro 1,689 mn (+4.3%) Euro 755 mn (-3.3%)(+0.9 % ex forex impact)
Euro 741 mn (+23.2%)
Key facts & figuresLogistics 23% (*)
MarketPosition
Volume
Economic Sales(growth)
Group(growth)
Euro 3,182 mn (+ 3.4%)Euro 971 mn (+ 9.5%)Euro 435 mn (+14.5%)
FY 2002
(*) Of Group economic sales (**) Including 7.0 bn licensed to third parties (***) Logistics accounted sales
Cigarette 53% (*) Cigar 24% (*)
5
Economic Sales
Ebitda*
+11.4% +20.1%+ 3.4 % ex perimeter impact
LogisticsCigarCigarette
Q4 highlights : excellent performance of cigarette and logistics, impact of USD weighs on cigar
Total economic sales : Euro 848 mn + 1.7 % + 3.5% ex forex impact
Total Ebitda : Euro 250 mn + 11.2% +12.6% ex forex impact
-14.7%-6.9% ex forex impact
*Cigarette Ebitda 2001 with a one-off negative provision of Euro 7mn for the Byrne directive
56,364,3
Q4´01 Q4´02
42,1 36,5
Q4´01 Q4´02
119,6158,2
Q4´01 Q4´02
172,0206,5
Q4´01 Q4´02
211,6180,6
Q4´01 Q4´02
410,3
457,0
Q4´01 Q4´02
+32.3% -13.3%-1.4% ex forex impact
+14.2%+ 8.9 % ex perimeter impact
6
Heading to Euro 164 million from cost optimisations in 2003
Restructuring: recurrent benefits of Euro 83 million in 2003 Implementation of the major restructuring in Spain, conducted during 2001
and 2002 is over. Headcount reduction has been around 1,900. Total recurrent benefit of Euro 83 mn onwards
(2001: 24; 2002 : 52; 2003e: 83)
Synergies: recurrent benefits of Euro 81 million in 2003 Total estimated recurrent benefits of Euro 81 mn from 2003 onwards
(2000: 33; 2001: 48; 2002: 67; 2003e: 81) Estimates fall within the range initially forecasted 2000 - 2001: Merged US companies, procurement, sales forces, optimisation
of structures 2002 - 2003: IT systems, further benefits from procurement, further
optimisation of structures
7
Flagship brands Internationalisation
Pricing power
CIGARETTE
53% of Group economic sales59% of Group EbitdaEbitda margin: 33.9% of economic sales (+1.9 points)
8
Cigarette : internationalisation strategy
Capitalise on the Group’s two brands that sell around 20 billioncigarettes a year
Globalisation of Gauloises Blondes in the sub-premium segment
Regional development of Fortuna in the medium-value segment(Spain, France, Italy, Portugal)
Tactical use of strong local brands (News, Nobel, Fox, Spike, Fine, Gitanes, …)
Cash cow strategy vis-à-vis dark cigarettes (Gauloises dark, Ducados)
9
483
135
Segments (Euro mn) &Growth 2001-2002
132998
489
+ 7.4%- 1.3%
+1.8%31/12/02
31/12/01
Total: 1,619
Total: 1,689
FortunaGauloises Blondes Gauloises Brunes
Ducados
+ 4.3%
Cigarette : sales growth by 4.3%Major Brands (Euro mn) &
Growth 2001-2002
175 175
181 180
336 340
351 381
355
721
356
688
- 0.4%
+ 8.5%
+1.1%
+ 4.9%
- 0.3%
- 0.4%
31/12/01 31/12/02Blond cigarettes Dark cigarettesRoll-your-own (RYO) and other sales
1,072
10
384 389
247 274
138149
164188
7165
998
1,072 + 7.4%
Blondes grow on all markets, sales up 7.4 %
+ 8.2%
+1.3%
+11.2%7,2
21.811.9
9.7 12.2
Total: 62.9+ 5.5%
+5.4%
- 2.0%
31/12/01
31/12/02
8.6
11.0
6.2
22.3
11.6
+ 10.1%
+ 14.4%
+ 15.7%
+ 13.3%
+9.0%
Value (Euro mn) &Growth 2001-2002
Volumes (bn units)
Spain France Germany Rest of the WorldPoland
Total: 59.6
31/12/01 31/12/02
7.2
11
SpainVolume 22.1 22.1 -0.1%Market share 31.2% 30.2% -0.9
FranceVolume 11.4 12.2 +7.5%Market share 16.2% 17.7% +1.5
GermanyVolume 6.2 7.2 +15.7%Market share 4.2% 4.7% +0.6
AustriaVolume 1.0 1.1 +4.0%Market share 6.3% 7.3% +1.0
Belgium/ LuxemburgVolume 0.6 0.6 +6.7%Market share 3.4% 3.7% + 0.2
PolandVolume 8.6 9.7 +13.3%Market share 11.5% 12.8% +1.3
(Volumes in billion units) *
* Market performance which may differ from sales invoiced to distribution
Good performanceof most blonde market shares
31/12/01 31/12/02 Var.
12
0
5
10
15
1991 1996 2002
0
5
10
15
20
1986 1990 1994 1998 2002
Gauloises Blondes:a strategical European brand
Gauloises Blondesin the world (billion units)
Gauloises Blondes abroad
(billion units)
Other markets
France
International
Germany + Austria
13
Gauloises Blondes: + 13.7% in volume 2002
(Volumes in million units)(Sales in million Euro) 1999 2000 2001 2002 CAGR
(99-02)
GermanyVolume 4,416 5,293 5,920 6,912 16.8% 16.1%
Sales 90.87 114.96 132.18 143.80 8.8% 16.5%
AustriaVolume 545 991 1,042 1,084 4.0% 25.8%
Sales 9.15 17.68 19.00 20.57 8.3% 31.0%
Belgium / LuxembourgVolume 500 493 567 605 6.7% 6.6%
Sales 9.35 9.51 11.67 13.93 19.4% 14.2%
Rest of the worldVolume 3,223 4,196 4.576 5,164 12.8% 17.0%
Sales 41.11 56.12 67.07 73.40 9.5% 21.3%
Total (France excluded)Volume 8,684 10,973 12,104 13,765 13.7% 16.6%
Sales 150.48 198.27 229.92 251.71 9.5% 18.7%
Var. %01-02
14
Gauloises Blondes:intrinsic value, successful mix
Immediate recognition, wide awareness, differentiating strength of the name
Logo symbolising freedom together with courage and independence
« Liberté toujours » (Liberty forever) brand foundation
Sub-premium pricing
Design aiming at aesthetics and originality
Targeting in priority mature markets where the brand and mix have more appeal
Consistent communication
15
Leading brand in Spain 24.0 % market share
France: Growth since1994
Italy: successful launchin May 2002
Fortuna: successful launch in Italy
0
20
40
60
80
100
120
mai-02 juin-02 juil-02 août-02 sept-02 oct-02 nov-02 déc-02
0,0%
0,2%
0,4%
0,6%
0,8%
1,0%
1,2%
Sales in million units Market share
0
200
400
600
800
1000
1200
1400
1994 1995 1996 1997 1998 1999 2000 2001 2002
Pack 20 Pack 30
Spain: strong startingpoint
1
2 3
Sal
es in
mill
ion
ciga
rett
es
Sal
es in
mill
ion
ciga
rett
es
Attractive to young adult urban smokers
16
Fortuna: potential for growth
Capitalise on Spanish and Latin roots: both universal and aspirational
Strong potential versus international brands with weaker image and versus local mainstream brands that are seldom aspirational
Medium-value priced
Attractive value-added offer for the core target: 18/25 years old, urban male/female
17
Marlboro 3.30
Memphis 3.00
Gauloises 3.10
Total taxes (excise tax + VAT) on retail price, for MPPC - Most popular price category* Retail price for packs of 20 cigarettes. For 19 cigarettes (which is the standard) prices are respectively 3.20, 3.10, 3.00 and 2.60 Euros
Changing pricing environment still leaves Altadis with pricing power
Marlboro 2.50
Fortuna 1.95
Ducados 1.70
Gauloises 2.10
Marlboro 3.37
West 3.16
Gauloises 3.26
West 3.10
Marlboro 3.50
West 3.20 Belga 3.20
Gauloises 3.20
France
Germany*
Austria
Belgium
Marlboro 3.10
MS 2.18
Gauloises 2.50
Italy
Marlboro 7.20Silk cut 7.20Gauloises 7.06
UK
Fortuna 2.00
Retail price in Euro per pack of 20 cigarettes as of February 1st, 2003
Spain
6.5
71.8% 74.5% 72.9% 74.6% 73.0% 76.0% 78.7%
7.2
Generics 2.75
Generics 2,39
3.5
3.0
2.5
2.0
1.5Total taxes
Generics 5.63Marlboro 3.90
Fortuna 3.50Gauloises Dark
3.50
Gauloises 3.50
News 3.40
18
24% of Group economic sales18% of Group EbitdaEbitda margin: 22.7% of economic sales (+2.3 points)
World leadershipEbitda growth of
14% ex USD impact
CIGAR
19
Cigar: leadership strategy
Reinforce the lead of the market in the US, with the corresponding
ability to take the initiative with respect to product innovation and
pricing
Further expand the prestige of Cuban cigar, taking advantage
of the high potential of the best brands in the world
Tie together top positions (US, Cuban brands, Spain and France)
to develop a worldwide presence including unexplored markets
Strong focus on the cost side and margin rates
20
222 197
323311
197209
3939
Other sales
Cigar:stable sales ex USD impact
Value (Euro mn) &Growth 2001-2002
Volumes (million units)
-8.9%
- 6.4%
+4.8%
781 755- 3.3% +0.9 % ex USD impact
+ 6.0%
-3.6%
n.s.
- 11.3%
Mass (Popular + Little)NaturalPremium & Habanos (50%)
31/12/01 31/12/02
31/12/01 31/12/02
31/12/01 31/12/02
31/12/01 31/12/02
31/12/01 31/12/02
21
Value (Euro mn) &Growth 2001-2002
Volumes (million units)
257 257
182 194
451
+ 6.7 %+ 12,6 %
(ex USD impact)
+ 0.0 %+ 5.4 %
(ex USD impact)
439
+ 2.8 %+ 8.4 %
(ex USD impact)
+ 6.3%
+ 3.0%
Cigar US: 8.4 % sales growth ex USD impact in the most profitable cigar market
31/12/01 31/12/02
31/12/01 31/12/02
31/12/01 31/12/02
31/12/02Premium & Natural Mass (Popular + Little)
22
Cuban cigar in difficult environment in 2002
With the continued poor environment for luxury goods, Habanos sales went down by 14.9% in dollarsThe evolution of the sales to the different markets has been much better as we have reduced inventories at distributor level
Positive launching of mini Cubanos, Cohiba, Partagás, Montecristo, with sales (*) close to 14 million cigars
Improved margins: growth of EBITDA margin by nearly 5 points
(*) Figures refer to Altadis consolidated 50 %. For the mini Cubanos, total Habanos sales were 28, so 14 for Altadis.
23
432544
+3.2%
-13.0%
- 7.3%
Cigar Europe: impact of depressed Spanish sales
Total: 976
Total: 857- 12.2%
FranceSpain
54
98 85
52
351506
31/12/02
31/12/01
150139
31/12/01 31/12/02
Value (Euro mn) &Growth 2001-2002
Volumes (million units)
24
23% of Group economic sales24% of Group EbitdaEbitda margin: 31.2% of economic sales (-3.0 points)
Improved efficiency
for tobacco,strong growth
for general logistics
LOGISTICS
25
Logistics strategy: widened applicationof a unique expertise
Keep the lead of tobacco goods distribution in Spain and France while optimising the cost structure
Further develop the expertise now successfully appliedto non-tobacco goods
Aim at niche logitics markets with higher than average margins
26
Growth
Tobacco logistics: economic sales up 4.0 %
Economic sales (in million Euro) 31/12/0231/12/01
Number of points of sales 50,000
Spain and Portugal 161.7 166.6 + 3.0 %
France 172.2 172.3 + 0.1 %
Adjustments -7.3 0.9
TOTAL 326.6 339.8 + 4.0%
27
Growth
General logistics:Burgal acquisition pushes sales growth to 45.9 %
Economic sales (in million Euro) 31/12/0231/12/01
Number of points of sales 150,000
Spain and Portugal 138.6 242.7 + 75.1 %
France 136.1 158.2 +16.2 %
TOTAL 274.7 400.9 + 45.9 %
+ 10.6 %ex Burgal
28
General logistics: channels and productsAs a percentage of total General logistics economic sales
CHANNELS
PRODUCT LINES
Logisticservices
35%
Books andmagazines
22 %
Telephony 15 %
Food 8 %
Stationery4 %
Tobaccorelated
4 %
Misc.12 %
Clientsfor logistic
35%
Tobacconists32%
Books andstationeryshops 25%
Gas stations 4%
Bakeriesand others
4%
29
The Burgal group and Transportes Alameda
Burgal Group Economic sales: Euro 97.4 mn (since March 2002)
Euro 115 mn proforma 12 months (+10.6% vs.01) Business lines:
NACEX opened 12 new franchises on 2002, reaching 249, investing Euros 4.8 mn in its new platform in Madrid
Intregra2: Succesful implementation of a new service
Integra2-Farma, deliveries to hospitals before 10:00
«Transportes Alameda» recent acquisitionwill bring benefits
Main player in parcel transport under controlled temperature Larger portfolio and exposure to the pharmaceutical sector Additional growth in the Madrid area Synergies from combining loads and deliveries between
Madrid and Barcelona
30
FINANCIALS
31
Foreign exchange: - 35
Perimeter: + 100
Others: - 9
Others: - 2
Restructuring and synergies: + 47
Perimeter: + 13
Economic sales : +105
Ebitda: +85
How we improved our profitability in 2002
Organic: + 49
Foreign exchange: - 8
Prices, contrasted volumeand mix changes
Mainly Burgal acquisition
Unfavorable Dollar evolution
Restructuring and synergies
Unfavorable Dollar evolution
Mainly Burgal acquisition
Organic : + 35 Prices, mix, costs control
2002 vs. 2001(Euro mn)
32
Activity in Euroland
USD - 200 mn net exposure(net purchases, lead time > 12 months)
Activity in US dollar zone
USD + 170 mn net exposure (contribution to Group Ebitda)
ALTADIS IS THE SOLE EURO DENOMINATEDTOBACCO STOCK
Exposure to the US dollar is limited
US Dollar impact on P&L is close to balance over two years
A
B
33
Ebitda margin is up 1.7 point to 30.5 %
Logistics + 12.5%
Cigar + 7.6 % +13.7 ex forex impact
Cigarette + 10.3 %
EBITDA+ 9.5%
Operating Costs+ 0.9 %
Economic Sales+ 3.4 %
Ebitda margin up 1.9 pt to 33.9 %Price increases (Spain, France)Volume growthRestructuring positive effectIncreased A&P
Ebitda margin down 3 pt to 31.2 %Dilution due to acquisitionsOrganic growthMarkets evolutionsCost optimisation
Ebitda margin up 2.3 pt to 22.7 %US Sales upDollar negative effectCuban cigar and Spanish marketdepressedRestructuring positive effect
EB
ITD
A b
reak
dow
n
Sales up 4.3 % from 1,619to 1,689
Sales down - 3.3 % from781 to 755
Sales up 23.2 % from 601to 741
Other and adjustments n/s
2001 vs 2002(Euro mn)
Closure of Viaplus
3,182
572
519
34
EBITDA Full Year 2002: 971.1 million Euros (+ 9.5%)
200201-02
Growth
Economic sales 3,076.9 3,182.1 + 3.4 %
EBITDA 886.6 971.1 + 9.5 %EBITA 769.6 859.5 +11.7 %
Operating Income 729.8 810.5 +11.1 %Financial Results (44.6) (36.8) - 17.5 % Goodwill Amortisation (90.8) (94.5) + 4.0 %Associates 16.6 26.6 + 60.0 %Extraordinary Results 5.6 (32.1) n.s.
Earnings Before Tax 616.6 673.6 + 9.2 %Corporate Income Tax (206.1) (196.8) - 4.5 %Minority Interests (30.2) (41.6) + 37.7 %
Net Income Group Share 380.2 435.2 + 14.5 % EPS (in eurocents) 1.255 1.462 + 16.5 %
Average number of shares (million)* 303.1 297.8 - 1.7 %
2001
* : Average number of shares = average of (total number of shares - treasury stock )
(Euro mn)
35
Sizeable and recurrent cash flow
2002
Operating flow (Ebitda + Var. WCR) 713 792
Corporate tax payment (101) (260)
Restructuring cash out (277) (103)
Cash flow from operating activities 335 429Investment cash out (130) (275)
Divestment cash in 82 93
Cash flow from investing activities (48) (182)
Financial interest payment (39) (36)
Net dividends (183) (200)
Purchase of shares (of Group companies) (193) (188)
Cash flow from financing activities (415) (423)
Net change in cash and cash equivalent (128) (176) Initial net financial position (807) (948)
Net cash change (128) (176)
Effect of exchange rate fluctuations on banking debt (13) 33
Final net financial position (948) (1,091)
2001(Euro mn)
36
1,138 1,237
3,659 3,730
1,366 1,180
2,1232,141
2,086 2,328
4,1374,131
540 405
1,547 1,400
Balance Sheet
8,304* 8,304* 8,2708,270
Goodwill
FixedAssets
Shareholders’Equity
Provisions**
FinancialDebt***
CurrentLiabilities
&Others
CurrentAssets
Cash + Short Term
FinancialInvestments
31/12/01 30/09/02 31/12/01 30/09/02
Fixed assets :+ tobacconist terms- disposals
Current assets :Price increasesPerimeter impact
Financial debt:Includes Securitisation
Limited increaseof net debt
Equity
Net financial position 948 1,091
* *Provisions + Badwill + Minorities *** Long term + Short term
Assets Liabilities & Shareholders’ Equity
*Including the restatement of the securitisation (reintegration of Euro 537 mn)
(Euro mn)
37
CONCLUSION
38
Outlook and Strategy
Positive level of activity in our three business units
2003 foreseen with significant profitability growth
Altadis is committed to maximising value for its shareholders and pursue a profitable growth strategy in each of its three core businesses: cigarette, cigar and logistics
Cigarette: accelerate internationalisation
Cigar: make the best of the world leadership
Logistics: expand general logistics, optimise tobacco
Carefully review acquisition opportunities
Pursue with cost control enhancement
Optimise financial structure and debt management
OUTLOOK:
STRATEGY:
39
Growth story, at top and bottom line
Transparency and relevant information provided to the market
Dividend policy: policy is to increase regularly the dividend with a 50% reference pay-out ratio (70 Eurocents to be paid in 1st half 2003, out of which 31 Eurocents as interim dividend on March 24th)
Room for improved leverage
Share buy back of Group companies shares and cancellation, AGM authorised 5%
Potential for acquisitions : expertise and financing capacity for acquisitions of strategic and value-creation importance
Value for shareholders
40
41
Appendices
Corporate calendar - Contacts Corporate governance Factories in Spain and France by the end of 2002 Altadis cigarette sales by segment & markets Spanish & French Total cigarette markets Dark cigarettes sales Roll-your-own sales EU tax regulation Altadis cigar sales per market Limites off-balance sheet contingencies Litigation risk is limited Quarterly Data 2002 - Q1, Q2 , Q3 & Q4
42
Closed periods start one month ahead of publications.
Corporate Calendar - ContactsCALENDAR
CONTACTS
Telephone : 33 1 44 97 62 21Fax : 33 1 44 97 66 27E-mail : [email protected]
Telephone : 34 91 360 92 47Fax : 34 91 360 92 91E-mail : [email protected]
March 24th, 2003 Interim dividend payment
May 14th, 2003 2003 Q1 Results
May 2003 Annual Report
June 10th, 2003 AGM
June 2003 Complementary dividend payment
September 1st, 2003 2003 H1 Results
November 17th, 2003 2003 Q3 Results
February 2004 2003 FY Results
Pedro ALONSO DE OZALLADeputy
Stanislas VRLAVice President Investor Relations
43
Corporate governance
From the creation of Altadis Audit committee Compensation committee Internal ethical guidelines
Auditors: Altadis, Altadis USA, Logista : Deloitte & Touche Seita: Mazars et Guérard, BFA (Ernst and Young)
Full year accounts are audited, interim accounts are reviewed
Rated by Moody’s at A3 and by Standard & Poors at A-
IFRS (International Financial Reporting Standards) project launched for application from December 31st, 2004 onwards
44
Factories in Spain and France by the end of 2002
Logroño
Palazuelo
AlicanteSevilla
Tarragona
Cantabria
Cádiz
Morlaix *
Nantes
Tonneins
Metz
Lille
Strasbourg
* cigar workshop
Le Havre
Riom
Cigarette factories (7) Cigar factories (3) Pipe tobacco & RYO factories (1) Processing plants (4)
45
Altadis cigarette sales by segments & markets
SALES BY SEGMENTS (bn units)
Blond 59.6 62.9 +5.5%Dark 32.0 28.6 -10.6%RYO 3.9 3.8 -4.3%Total 95.5 95.3 -0.3%
MAJOR BRANDS (bn units)Gauloises Blondes 17,3 18,9 +8,7%Fortuna 19,2 19,0 -1,0%Blond 36,6 37,9 +3,6%Ducados 15.2 14.1 -7.5%Gauloises dark 9.8 8.5 -13.5%Dark 25,0 22,5 -9,8%
31/12/01 31/12/02 Var. %
SALES BY MARKETS (bn units)Spain 39.7 37.8 -4.6%France 27.5 26.1 -5.1%Rest of Europe 22.3 24.0 +7.2%Rest of the World 6.0 7.4 +21.7%Total 95.5 95.3 -0.3%
SALES BY MARKETS (Euro mn)Spain 587 591 +0.6%France 544 572 +5.1%Rest of Europe 330 354 +7.3%Rest of the World 87 106 +22.2%Other Sales 71 65 n.s.Total 1,619 1,688 +4.3%
31/12/01 31/12/02 Var. %
46
Spanish and French total cigarette markets: value growth despite volume decrease
31/12/01 31/12/02 Var. %
Notes : Value figures are distribution fees deducted. RYO sales in Spain are negligible
SPANISH TOTAL MARKETVolumes Blond 71.0 73.1 +3.0%
Dark 19.7 18.1 -8.4%
Total 90.8 91.2 +0.5%
Value Blond 1,376 1,452 +5.5%
Dark 225 223 -1.2%
Total 1,601 1,675 +4.6%
FRENCH TOTAL MARKETVolumes Blond 70.2 69.1 -1.5%
Dark 13.2 11.4 -13.5%
RYO 7.1 7.0 -1.8%
Total 90.5 87.5 -3.3%
Value Blond 1,736 1,824 +5.1%
Dark 251 251 +0.2%
RYO 128 138 +8.0%
Total 2,115 2,213 +4.7%
(Volumes in billion units,value in million Euros)
47
-12.1%
-0.8%
-0.3%
Dark cigarettes sales:Prices offset most of volume decrease
-1.3%
31/12/01 31/12/02
489 483
1.3
31/12/02
31/12/01
Spain France International
201 200
254 253
3034
17.21.5
13.3
Total: 28.6
-10.6%-14.8%
-8.0%
-13.6%
Total: 32.0
11.5
15.8
Value (Euro mn) &Growth 2001-2002
Volumes (bn units)
48
+42.7%
+2.8%
+2.3%
Roll-your-own sales
+12.6%
31/12/01 31/12/02
62
69
1.22.3
0.2
31/12/02
31/12/01
3 3
43 44
1623
1.22.6
0.2
Total: 3.8
- 4.3%
- 3.1%
+ 4.6%
-8.5%
Total: 3.9
Value (Euro mn) &Growth 2001-2002
Volumes (bn units)
Spain France International
49
EU tax regulation: no adverse effect for Altadis
Minimum excise tax per 1,000 cigarettes on MPPC: Euro 60 (July 2002, January 2005 in Spain) and Euro 64 (July 2006, January 2008 in Spain)
Altadis intended price policy is in harmony with and supportedby this new EU requirement
Spain:• Euro 60 requires an average 3.3 % yearly increase of MPPC* (Fortuna)
from 2003 & 2004• Euro 64 requires an average 2.4 % yearly increase from 2005 to 2007
No impact elsewhere (France, Germany)
Retail prices (Euro) 1.95 2.50 3.90
Excise tax (% of retail price) 58.01% 57.13% 58.99%
Tax (Euro / 1,000 cigarettes) 56.56 71.41 115.03
SPAIN FRANCE
MPPC* (Marlboro)
MarlboroMPPC* (Fortuna)
SITUATION AS OF FEBRUARY 2003
EU regulation
*MPPC: Most popular price category
50
Altadis cigar sales per markets: stable sales ex USD impact
ExportFrance
31/12/01 31/12/02
781 755
SpainUSAHabanos (50%)
Value (Euro mn) & Growth 2001-2002
-13.0%
Other sales
+2.8% (+8.8% ex USD impact)
+3.3%-9,4%
-19.4%(-14.9% ex USD impact)
n.s.
-3.3% (+ 0.9% ex USD impact)
51
Limited off-balance sheet contingencies
Equity swap for stock-options plans for Euro 160 million
Interest rate swap for Euro 697 million at 3.44 % (2003)
Interest rate hedge for USD 84 million at 1.73 % (2003)
Comfort letter for a Euro 120 million bank loan to Habanos, 50 % of which is currently in Altadis balance sheet
Currently, no material leasing agreements. Leasing to be signed for the Madrid head office.
Long term rental contracts for Paris head office
Most pension schemes are contribution based
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ALTADIS SITUATION:
KEY FACTORS AND PARTICULARLY THE ABSENCE OF :
Litigation risk is limited
Ongoing cases: Six individuals + 4 associations of persons with laryngectomy + Andalusian Local Government in Spain
Nine favourable rulings, and no final adverse decision
In the case by the Andalusian Local Government, the Court has dismissed competence of the Civil Court (turning the case to the administrative jurisdiction)
Favourable decisions are often very clear-cut decision like in the Gourlain case in September 2001 or, more recently, in the Loupias case
are fundamentally distinguishing Europe and the US, thus conducing to a totally different type and level of risk
class actions punitive damages contingency fees popular juries
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Quarterly data 2002
Cigarette 374.4 438.3 419.1 457.0 1,688.8Cigar 173.5 201.3 199.8 180.6 755.2Logistics 156.1 194.1 184.0 206.5 740.7Others and adjustments 1.8 -0.8 -7.1 3.5 -2.6
Total 705.8 833.0 795.6 847.5 3,182.1
Cigarette 119.3 143.0 151.1 158.2 571.7Cigar 35.4 48.3 51.6 36.5 171.8Logistics 50.5 57.4 58.9 64.3 231.1Others and adjustments 5.0 -1.6 2.0 -8.8 -3.5
Total 210.2 247.1 263.5 250.2 971.1
(Figures in million Euros)ECONOMIC SALES 2002
(Figures in million Euros)EBITDA 2002
Q1 Q2 Q3 Q4 Full
Q1 Q2 Q3 Q4 Full