Bergamo May 11 th Conference call Transition to IFRS

Transcription

1 Bergamo May 11 th 2005 Conference call

2 Preliminaries Italcementi has decided to publish its consolidated interim reports, starting from January 1 st 2005, in compliance with International Financial Reporting Standards (IFRS) A specific document on IFRS transition for each Italcementi (ITC) and Ciments Français (CF) has been presented to their respective Boards of Directors (*) The IFRS transition information of Ciments Français has been audited by the Independent Auditors who gave a positive assurance in their specific report The IFRS transition of Italcementi is presently under review by the Independent Auditors Due to the fact that 2005 financial statements will be prepared based on IFRS standards and interpretations in force at that date, 2004 comparative figures could differ from those given in this presentation This presentation contains certain performance measures that do not represent IFRS definitions, as Operating profit and Net financial debt. These measures cannot be compared with the same previously used by Italcementi and Ciments Français and the same used by other companies * Transition documents with all details figures and explanations are available on and 1

3 Agenda IFRS 2004 Results - Options adopted Changes in key financial figures Conclusions 2

4 First Time Adoption (FTA): standards used 2004 reconciliation statement drawn up in accordance with IFRS 1 (FTA) Adoption of IFRS endorsed by European Commission by the end of 2004 and applicable as of January 1 st 2005 IFRS 2 (Share-based payments): endorsed in February 2005, adoption from January 1 st 2004 IAS (Financial Instruments): Transition date January 1 st

5 Options related to IFRS application (1) IFRS/IAS Option adopted IAS 1 Financial statements presentation Balance sheet - current and non-current assets and current and non-current liabilities separately stated Income statements - expenses analysis based on nature of the expenses Cash-flow - indirect method IAS 2 Inventories cost calculated using the weighted averaged formula IAS 14 Segment reporting primary basis: : by geographical area (based on location of assets) secondary basis: : by business IAS 16 IAS 40 PP&E Investment property valuation subsequent to initial recognition based on cost method 4

6 Options related to IFRS application (2) IFRS/IAS Option adopted IAS 19 Employee benefits "corridor" method (recognition and amortisation of only actuarial l gains and losses in excess of 10% limit of greater of the defined benefit obligation or the fair value of the plan asset) IAS 20 Government Grants accounted as deferred revenues and recognized as income over the period and in the proportion in which depreciation on the related asset is charged IAS 23 Borrowing costs when related to the purchase, construction or production of an asset, booked as an expense in the period in which they are incurred IAS 31 Joint Ventures accounted and presented with proportionate method 5

7 Options related to First Time Adoption (FTA-IFRS 1) Option adopted Employee benefits unrecognised actuarial gains and losses at transition date, fully recognised to shareholders' equity Differences from exchange rate conversion cumulative exchange rate differences for all foreign operations deemed to be equal to zero at FTA date and transferred to retained earnings Business combinations IFRS 3 not applied retrospectively for business combinations occurred before January 1 st 2004 PP&E and Investment Property option of measuring assets at fair value not used 6

8 Agenda IFRS 2004 Results - Options adopted Changes in key financial figures Conclusions 7

9 Impact on Operating Profit EURm CF ITC 2004 Operating profit (Local GAAP) Reclassification: Non recurring items (5.5) (6.8) Goodwill amortisation (45.6) Operating profit (Local GAAP, IFRS format) IAS IAS 16 Goodwill and other intangible amortisation reversal Changes in depreciation, capitalised maintenance and borrowing costs IAS 2 Weighted average cost vs. LIFO IAS 29 Hyperinflationary accounting (5.9) (5.9) Others (1.2) 0.4 Total IFRS impact Operating profit (IFRS)

10 Impact on Net Income EURm CF ITC 2004 Net Income (Local GAAP) IAS 2 Weighted average cost vs. LIFO IAS Goodwill and other intangible amortisation reversal IAS 12 Deferred tax (3.6) (7.7) IAS 16 Component approach and review of useful lives and other related effects IFRS 2 Stock Option (0.5) (1.2) Others (0.1) 1.6 Total IFRS impact Net Income (IFRS)

11 Impact on Shareholders equity Ciments Français (All impacts are net of taxes) EURm Ciments Français Minorities Shareholders equity - Dec 31 st 2004 (Local GAAP) 1, IFRS 3 Business combinations IAS Goodwill amortisation and intangible assets 46.6 (91.5) IAS 29 Hyperinflationary accounting (Turkey) IAS 12 Deferred tax in hyperinflationary economies (Turkey) (21.8) - IAS 16 Property, Plant and Equipment (4.1) (0.3) IAS 37 Provisions (present value) Others (1.6) - Total IFRS impact 33.1 (91.5) Shareholders equity - Dec 31 st 2004 (IFRS before IAS 32-39) 1,

12 Impact on Shareholders equity Italcementi (All impacts are net of taxes) EURm ITC Shareholders equity - Dec 31 st 2004 (Local GAAP) 3,034.4 IAS 2 Weighted average cost vs. LIFO 31.4 IFRS 3 Business combinations IAS Goodwill amortisation and intangible assets 54.0 IAS 19 Change in defined benefits plan calculation (28.1) IAS 29 Hyperinflationary accounting (Turkey) 10.9 IAS 12 Deferred tax in hyperinflationary economies (Turkey) (21.8) IAS 16 Property, Plant and Equipment 4.4 IAS 37 Provisions (present value) 4.2 Others 0.7 Total IFRS impact 55.7 Shareholders equity - Dec 31 st 2004 (IFRS before IAS 32-39) 3,

13 Impact of IAS on Shareholders equity as of January 1 st 2005 EURm CF ITC Shareholders equity - Dec 31 st 2004 (IFRS before IAS 32-39) 2, ,090.1 IAS 32 Treasury shares (28.1) IAS 39 Available for sale investments Derivative instruments (14.2) (15.4) Total IFRS impact Shareholders equity - Jan 1 st 2005 (IFRS) 2, ,

14 Impact on Indebtedness* EURm CF ITC Indebtedness - Dec 31 st 2004 (Local GAAP) 1, ,560.0 IAS 17 Financial leases IAS 27 Change in consolidation area - (0.2) Indebtedness - Dec 31 st 2004 (IFRS before IAS 32-39) 1, ,569.2 IAS 32 Securitization IAS 39 Derivative instruments and underlying debt Total IFRS impact Indebtedness - Jan 1 st 2005 (IFRS) 1, ,737.9 * Including Perpetual Subordinated Notes (TSDI) 13

15 Impact on gearing* 58.4% Ciments Français 48.9% 50.7% Italcementi 51.4% 50.8% 54.6% Dec 31 st 2004 (Local GAAP) Dec 31 st 2004 (IFRS before IAS 32-39) Jan 1 st 2005 (IFRS) * Indebtedness / Shareholders equity 14

16 Agenda IFRS 2004 Results - Options adopted Changes in key financial figures Conclusions 15

17 Conclusions Positive impact on Income Statement (no amortisation/impairment of goodwill) Slight increase in indebtedness Strengthening of shareholders equity Sound financial structure also after IFRS implementation 16

18 Investor relations Contacts Investor Relations Department Via G. Camozzi, Bergamo - Italy Andrea Arrigoni Tel Fax a.arrigoni@italcementi.it Giancarlo Berera Tel Fax g.berera@italcementi.it Fabienne Moreau Tel Fax fmoreau@cimfra.com