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Previous: ALCAN ALUMINIUM LTD /NEW, 8-K/A, EX-99.1, 2000-12-21 |
Next: ALCAN ALUMINIUM LTD /NEW, 8-K/A, EX-99.3, 2000-12-21 |
<PAGE> 1
EXHIBIT NO. 99.2: ALGROUP'S FINANCIAL RESULTS FOR THE SIX MONTH PERIOD
ENDED JUNE 30, 2000
FINANCIAL RESULTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2000
Interim consolidated balance sheets at 31 December 1999 and 30 June 2000
<TABLE>
<CAPTION>
31 DECEMBER 30 JUNE
1999 2000
----------- -------
(unaudited)
(In millions of CHF)
<S> <C> <C>
Assets
Fixed assets
Property, plant and equipment 8,015 8,065
Accumulated depreciation (5,121) (5,185)
Intangible assets and goodwill 282 291
Other noncurrent assets and deferred items 118 104
Investments in affiliates 34 15
Long-term loans and advances 7 6
Total fixed assets 3,335 3,296
Current assets
Inventories, net 1,226 1,276
Trade receivables, net 1,087 1,214
Other receivables, prepaid expenses and accrued income 339 522
Short-term advances 74 27
Cash and cash equivalents 611 501
Total current assets 3,337 3,540
Total assets 6,672 6,836
</TABLE>
See accompanying notes to the interim consolidated financial statements.
53
<PAGE> 2
Interim consolidated balance sheets at 31 December 1999 and 30 June 2000
<TABLE>
<CAPTION>
31 DECEMBER 30 JUNE
1999 2000
----------- -------
(unaudited)
(In millions of CHF)
<S> <C> <C>
Liabilities and shareholders' equity
Share capital 642 679
Consolidated reserves 716 1,466
Total shareholders' equity 1,358 2,145
Minority interests 40 52
Liabilities
Long-term provisions 641 611
Long-term debt:
Bonds 766 460
Due to banks and other financial institutions 322 372
----- -----
Total long-term liabilities 1,729 1,443
===== =====
Current liabilities:
Trade payables 751 720
Other liabilities and deferred items 1,089 1,022
Short-term debt:
Due to banks and other financial institutions 1,705 1,454
----- -----
Total current liabilities 3,545 3,196
----- -----
Total liabilities 5,274 4,639
----- -----
Total liabilities and shareholders' equity 6,672 6,836
===== =====
</TABLE>
See accompanying notes to the interim consolidated financial statements.
54
<PAGE> 3
Interim consolidated income statements
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
30 JUNE 30 JUNE
1999 2000
---------- ----------
(UNAUDITED)
(In millions of CHF)
<S> <C> <C>
Net sales 3,691 4,361
Changes in inventory of work-in-progress and finished goods 23 11
Income from production 3,714 4,372
Material costs (1,827) (2,233)
Energy costs (137) (147)
Personnel expenses (883) (909)
Other operating income and expenses, net (390) (513)
Depreciation and amortization (143) (161)
Operating income 334 409
Amortization of goodwill (8) (10)
Earnings from continuing operations before interest, taxes and minority interest 326 399
Interest income and exchange gains 44 75
Interest expenses and exchange losses (118) (151)
Other income, net 1 1
Income from continuing operations before income taxes and minority interest 253 324
Income taxes (50) (89)
Income attributable to minorities (4) (5)
Income from continuing operations 199 230
Net income from discontinuing operations 139 0
Net income 338 230
Basic earnings per share continuing operations 31.65 --
Diluted earnings per share continuing operations 31.41 --
Basic earnings per share group 53.76 34.76
Diluted earnings per share group 52.43 34.60
</TABLE>
See accompanying notes to the interim consolidated financial statements.
55
<PAGE> 4
Interim consolidated cash flow statements
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
30 JUNE 30 JUNE
1999 2000
---------- ----------
(UNAUDITED)
(In millions of CHF)
<S> <C> <C>
Income from continuing operations 199 230
Depreciation on property, plant and equipment 139 158
Amortization of intangibles 4 3
Amortization of goodwill 8 10
Increase (decrease) in long-term provisions 18 (15)
(Income) from application of the equity method 2 0
(Increase) in net working capital (259) (350)
(Increase) in other prepaids and accruals (27) (126)
Net cash provided by (used in) continuing operations 84 (90)
Net cash provided by discontinuing operations 180 0
Total cash provided by (used in) operating activities 264 (90)
Purchase of property, plant and equipment (173) (185)
Purchase of intangibles (1) (1)
Goodwill from purchase of operations (11) (1)
Sale of investments in affiliates, net 7 7
Purchase of consolidated companies (less cash acquired) 0 (23)
Sale of consolidated companies (less cash disposed) 2 0
Sale of property, plant and equipment 6 14
Sale of other assets 0 2
(Increase) decrease in loans and advances (18) 56
Net cash used in investing activities continuing (188) (131)
Net cash used in investing activities discontinuing (73) 0
Total cash used in investing activities (261) (131)
Increase of capital (in 2000: capital repayment from Lonza) 1 277
Increase (decrease) in debts 241 (162)
Dividends paid (157) 0
Contribution from (distribution to) minority interests (3) 3
Net cash provided by financing activities continuing 82 118
Net cash provided by financing activities discontinuing 3 0
Total cash provided by financing activities 85 118
Translation adjustments (3) (7)
Net increase (decrease) in cash 85 (110)
Cash and cash equivalents at 1 January 360 611
Cash and cash equivalents at 30 June 445 501
</TABLE>
See accompanying notes to the interim consolidated financial statements.
56
<PAGE> 5
Notes to the unaudited interim consolidated financial statements
1 Accounting principles and basis of presentation
The consolidated financial statements are reported in Swiss francs (CHF) and are
based on the accounts of the individual Subsidiaries of algroup at 30 June,
which have been drawn up according to uniform Group accounting principles
consistent with those adopted by algroup in its consolidated financial
statements for the year ended 31 December 1999 and include all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion of
management, necessary for fair presentation of the results of the interim
periods.
The consolidated accounts are rendered in conformity with International
Accounting Standards ("IAS"), published by the International Accounting
Standards Committee ("IASC").
During 1999, the Group adopted estimated useful lives for its operating assets
which more accurately reflect industry practice. The effect of this change
reduced depreciation expense for the six months ended 30 June 1999 by CHF 58
million. The effect of this change on net income of continuing operations for
the six months ended 30 June 1999 was an increase of CHF 42 million.
For comparative purposes, certain prior period amounts were reclassified to
conform with the current period's presentation.
2 Discontinuing operations
The discontinuing operations are comprised of the following:
At the algroup extraordinary shareholders' meeting on 18 October 1999 the
shareholders approved the demerger of the chemical business (composed of two
divisions of the algroup Group, fine chemicals and specialties and intermediates
and additives) and the energy business. The above mentioned activities are
treated as discontinuing operations. The net assets of the chemical business
were deducted from the algroup Group's equity on 1 November 1999. On 1 November
1999, the shares of Lonza Group were listed on the SWX Swiss Exchange and
accordingly the discontinuing operations were included in algroup's consolidated
financial statements for the six-month period ended 30 June 1999. In order to
reflect the debt-free status effective as of 1 July 1999, as stated in the
Separation and Demerger Agreement and related to the above mentioned activities,
all the debt and accordingly the interest positions for the six months ended 30
June 1999 are shown under continuing operations.
The algroup financial statements reflect the net income of discontinuing
operations as a separate item and have been classified in the consolidated
income statement as net income from discontinuing operations.
3 Alcan Exchange Offer
Following discussions with the European commission's Merger Task Force Alcan,
Pechiney and algroup decided on 14 March 2000 to withdraw the Alcan-Pechiney
application from the European Commission process and to terminate the Three-Way
Combination Agreement as it related to Pechiney. The companies concluded that
the divestments which would ultimately be required to meet the objections of the
European Commission would seriously undermine the strategic viability of the
Three-way Combined Company's operations.
On 1 June 2000, Alcan and algroup entered into the Amending Agreement. In the
Amending Agreement the parties agreed that the consideration for the Exchange
Offer shall be amended
57
<PAGE> 6
to 17.1 Alcan Common Shares for one algroup Share. If more than 67% of algroup
Shares are tendered in the Exchange Offer, algroup has agreed to pay a dividend
of CHF 135 per algroup Share and make a capital repayment equal to CHF 90 per
algroup Share to the shareholders of record on the close of business on the
second business day prior to the exchange of shares under the Exchange Offer. If
more than 67% of the algroup Shares are not tendered the capital repayment will
be made on 24 October 2000.
Alcan is expected to launch a public Exchange Offer to algroup shareholders for
all registered shares in algroup. The tendering of the Exchange Offer is
scheduled for the end of August and it is expected that the transaction will be
concluded by the end of October 2000. The Exchange Offer is regarded as having
succeeded if more than 67% of algroup Shares are exchanged for Alcan Shares.
4 Changes in shareholders' equity
<TABLE>
<CAPTION>
30 JUNE 1999 30 JUNE 2000
------------ ------------
(In millions of CHF)
<S> <C> <C>
BEGINNING OF PERIOD 3,101 1,358
Issuance of Shares upon bond conversion 0 312
Net income 338 230
Dividend (157) 0
Translation differences 107 (32)
Capital Repayment from Lonza 0 277
----- -----
END OF PERIOD 3,389 2,145
===== =====
</TABLE>
In the six months ended 30 June 2000 conversion rights were exercised on 365,917
registered shares with a par value of approximately CHF 36.5 million, of these a
total of 350 registered shares through the conversion rights related to the
2 1/4% 1995-2002 convertible bond issue, and 365,567 registered shares through
the conversion rights related to the 2% 1996-2001 convertible bond issue.
Due to the termination of the Three-way Combination Agreement with Alcan and
Pechiney, U.S.$ 167 million was paid from Lonza Group to algroup in the six
months ended 30 June 2000 in accordance with Combination Agreement.
5 Exchange rates
<TABLE>
<CAPTION>
INCOME STATEMENT
BALANCE SHEET HALF YEAR
RATE CHF AVERAGE RATE CHF
----------------------- ---------------------
31.12.99 30.06.00 1999 2000
-------- -------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
USA Dollar 1 1.59 1.62 1.47 1.65
Canada Dollar 1 1.09 1.09 0.99 1.12
Australia Dollar 1 1.04 0.97 0.95 1.00
Great Britain Pound Sterling 1 2.58 2.45 2.38 2.59
Germany Mark 100 82.02 79.70 81.80 81.06
France Franc 100 24.45 23.76 24.39 24.17
Italy Lira 100 0.082 0.080 0.083 0.081
</TABLE>
58
<PAGE> 7
6. Segment data
<TABLE>
<CAPTION>
30 JUNE 1999 30 JUNE 2000
------------------------ ------------------------
SALES BY DIVISION IN MILLIONS OF CHF % IN MILLIONS OF CHF %
----------------- ------------------ ---- ------------------ ---
<S> <C> <C> <C> <C>
Primary materials and fabricated products 1 512 41 1 850 42
Packaging 1 689 46 1 872 43
Holding and others 4 0 3 0
------ --- ----- ---
SUBTOTAL 3 205 87 3 725 85
Trading 486 13 636 15
----- --- ----- ---
TOTAL 3 691 100 4 361 100
===== === ===== ===
</TABLE>
<TABLE>
<CAPTION>
30 JUNE 1999 30 JUNE 2000
---------------------- ------------------------
OPERATING INCOME BY DIVISION IN MILLIONS OF CHF % IN MILLIONS OF CHF %
---------------------------- ------------------ ---- ------------------ ----
<S> <C> <C> <C> <C>
Primary materials and fabricated products 189 57 239 58
Packaging 165 49 167 41
Holding and others (20) (6) 3 1
--- --- --- ---
SUBTOTAL 334 100 409 100
Trading 0 0 0 0
--- --- --- ---
TOTAL 334 100 409 100
=== === === ===
</TABLE>
<TABLE>
<CAPTION>
30 JUNE 1999 30 JUNE 2000
---------------------- ------------------------
DEPRECIATION & AMORTISATION BY IN MILLIONS OF CHF % IN MILLIONS OF CHF %
DIVISION ------------------ ---- ------------------ -----
------------------------------
<S> <C> <C> <C> <C>
Primary materials and fabricated products 66 46 72 45
Packaging 76 53 89 55
Holding and others 1 1 0 0
--- --- --- ---
TOTAL 143 100 161 100
=== === === ===
</TABLE>
59
<PAGE> 8
<TABLE>
<CAPTION>
30 JUNE 1999 30 JUNE 2000
--------------------------- --------------------------
INVESTMENTS IN PROPERTY, PLANT BY DIVISION IN MILLIONS OF CHF % IN MILLIONS OF CHF %
------------------- ---- ------------------ -----
<S> <C> <C> <C> <C>
Primary materials and fabricated products 90 52 81 44
Packaging 82 47 104 56
Holding and others 1 1 0 0
--- --- --- ---
TOTAL 173 100 185 100
=== === === ===
</TABLE>
<TABLE>
<CAPTION>
PERSONNEL BY PRODUCTION AREA 30 JUNE 1999 % 30 JUNE 2000 %
------------ ---- ------------ ----
<S> <C> <C> <C> <C>
Switzerland 3,190 13 3,203 14
EU 12,235 51 12,009 52
Rest of Europe 997 5 972 4
------ --- ------ ---
Europe 16,422 69 16,184 70
North America 6,460 27 5,920 26
Other areas 938 4 954 4
------ --- ------ ---
TOTAL 23,820 100 23,058 100
====== === ====== ===
</TABLE>
<TABLE>
<CAPTION>
PERSONNEL BY DIVISION 30 JUNE 1999 % 30 JUNE 2000 %
------------ ---- ------------ ----
<S> <C> <C> <C> <C>
Primary materials and fabricated products 9,698 41 9,828 43
Packaging 13,974 59 13,101 57
Holding and others 148 - 129 -
------ --- ----- ---
TOTAL 23,820 100 23,058 100
====== === ====== ===
</TABLE>
60
<PAGE> 9
7. Reconciliation
Significant Differences Between International Accounting Standards and Generally
Accepted Accounting Principles in the United States and Canada.
The algroup unaudited interim consolidated financial statements have been
prepared in accordance with International Accounting Standards (IAS) of the
International Accounting Standards Committee (IASC) which differ in certain
significant respects from generally accepted accounting principles in the United
States (U.S. GAAP) and Canada (Canadian GAAP). The significant differences that
affect the consolidated net income and shareholders' equity are set out below.
U.S. and Canadian GAAP have been applied on a basis consistent with that of the
consolidated financial statements for the year ended December 31, 1999.
Reconciliation of net income to U.S. GAAP
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
--------------
1999 2000
----- -----
(In millions of CHF)
unaudited
<S> <C> <C>
Net income as reported in the unaudited interim
consolidated income statements in accordance with IAS 338 230
Adjustments required to conform with U.S. GAAP:
Goodwill amortization (12) (11)
Capitalized interest 6 --
Inventories 8 (2)
Debt issue costs (1) --
Fixed assets (82) 3
Pensions 14 3
Derivatives (94) 81
Accruals 13 4
Restructuring provisions (14) (1)
Other 2 (3)
Tax effect of U.S. GAAP adjustments 33 (35)
----- -----
Net income in accordance with U.S. GAAP 211 269
===== =====
Continuing operations 84 269
Discontinued operations 127 --
===== =====
Basic earnings per share in accordance with U.S. GAAP: CHF CHF
Continuing operations 13.36 40.65
Discontinued operations 20.20 --
----- -----
Net income 33.56 40.65
===== =====
Diluted earnings per share in accordance with U.S. GAAP: CHF CHF
Continuing operations 14.02 39.80
Discontinued operations 19.20 --
----- -----
Net income 33.22 39.80
===== =====
</TABLE>
61
<PAGE> 10
Reconciliation of net income to Canadian GAAP
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
----------------
1999 2000
------- ------
(In millions of CHF)
unaudited
<S> <C> <C>
Net income as reported in the consolidated income
statements in accordance with IAS 338 230
Adjustments required to conform with Canadian GAAP:
Goodwill amortization and impairment (12) (11)
Capitalized interest 6 --
Inventories (2) (1)
Debt issue costs (1) --
Fixed assets 7 3
Pensions 14 3
Derivatives (94) (12)
Accruals 13 4
Restructuring provisions (14) (1)
Other 2 (3)
Tax effect of Canadian GAAP adjustments 16 (10)
----- -----
Net income in accordance with Canadian GAAP 273 202
===== =====
Continuing operations 128 202
Discontinued operations 145 --
===== =====
Basic earnings per share in accordance with
Canadian GAAP: CHF CHF
Continuing operations 20.36 30.52
Discontinued operations 23.06 --
----- -----
Net income 43.42 30.52
===== =====
Fully diluted earnings per share in accordance
with Canadian GAAP: CHF CHF
Continuing operations 20.67 30.27
Discontinued operations 21.93 --
----- -----
Net income 42.60 30.27
===== =====
</TABLE>
62
<PAGE> 11
Reconciliation of shareholders' equity to U.S. and Canadian GAAP
<TABLE>
<CAPTION>
DECEMBER 31, 1999 JUNE 30, 2000
-------------------- --------------------
US CANADIAN US CANADIAN
GAAP GAAP GAAP GAAP
----- --------- ----- ---------
(In millions of CHF) (In millions of CHF)
unaudited unaudited
<S> <C> <C> <C> <C>
Shareholders' equity as reported in the unaudited interim consolidated
balance sheets in accordance with IAS 1,358 1,358 2,145 2,145
Adjustments required to conform with U.S. and Canadian GAAP:
Goodwill:
Cost 582 582 563 563
Amortization (368) (368) (369) (369)
Capitalized interest 24 24 24 24
Inventories 1 (1) (1) (1)
Debt issue costs 2 2 -- --
Fixed assets (71) (12) (68) (10)
Pensions 85 85 88 88
Derivatives (264) (15) (183) (27)
Accruals 9 9 13 13
Restructuring provisions -- 6 (2) 5
Other (14) (14) (16) (15)
Tax effect of U.S. and Canadian GAAP adjustments 67 (14) 32 (26)
----- ----- ----- -----
Shareholders' equity in accordance with U.S. and Canadian GAAP 1,411 1,642 2,226 2,390
===== ===== ===== =====
</TABLE>
Comprehensive Income
Beginning in 1998, U.S. GAAP requires the disclosure of comprehensive income
which, for the Group, is net income increased or decreased for translation
differences as presented in the notes to Group's interim consolidated financial
statements. The following presents the Group's comprehensive income based upon
IAS for each the six months ended June 30, 2000 and 1999.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
--------------------
1999 2000
---- ----
(In millions of CHF)
<S> <C> <C>
Net income in accordance with IAS 338 230
Other comprehensive income:
Currency translation adjustment 107 (32)
--- ---
Comprehensive income 445 198
=== ===
</TABLE>
63
<PAGE> 12
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(in U.S. dollars except where otherwise stated)
1. BASIS OF PRESENTATION
These unaudited pro forma combined financial statements have been prepared to
reflect the combination of Alcan Aluminium Limited ("Alcan") and Alusuisse Group
Ltd. ("algroup") using the purchase method and certain reorganizational events
relating to algroup occurring prior to the combination.
These unaudited pro forma combined financial statements have been prepared using
Canadian GAAP, which is similar, in all material respects, to U.S. GAAP except
as noted in Note 6.
The unaudited pro forma combined financial statements are based on the following
events which occurred prior to the combination:
o Conversion of algroup's convertible debt into algroup common shares
prior to the combination.
o All of the outstanding shares of algroup are exchanged into Alcan
Common Shares, virtually all of which were tendered at the date of
combination, October 17, 2000, with the remainder to be exchanged or
purchased as permitted under Swiss law which Alcan is currently
undertaking.
o On October 18, 1999, at an extraordinary shareholders' meeting, the
shareholders of algroup approved the demerger of the chemical and
energy division. The demerger occurred on November 1, 1999. The
operations of the chemical and energy division were treated as
discontinued operations in algroup's 1999 consolidated financial
statements and consequently are not included in the unaudited pro
forma combined statement of income for the year ended December 31,
1999. Also, these unaudited pro forma combined financial statements
include the cash contribution of $234 million made by algroup to the
chemical and energy division pursuant to the algroup chemicals
demerger agreement.
o A repayment of capital of CHF 90 per share for every share of algroup
totaling $375 million, which was approved by the algroup shareholders
on July 17, 2000. The amount was paid on October 13, 2000.
o The repayment of $167 million owed to algroup by Lonza Group Ltd.
pursuant to the algroup chemicals demerger agreement. The amount was
paid to algroup in June 2000.
o The payment of a special dividend of CHF 135 per share for every share
of algroup totaling $562 million, which was approved by the algroup
shareholders on July 17, 2000. The amount was paid on October 13,
2000.
The unaudited pro forma combined financial statements have been adjusted to
record the impact of businesses to be disposed of pursuant to the European
Commission's decision to authorize the combination. See Note 5.
68
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