2002 Full Year
Results
Wednesday, February 26th, 2003
1
www.altadis.com
Content
2
 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
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:
3

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.
Key facts & figures
Cigarette 53% (*)
Cigar 24% (*)
Logistics 23% (*)
Market
Position
#3 in Western Europe
#1 in Spain
#2 in France
#4 in Germany
#1 Worldwide
#1 in the US
#1 in Spain
#1 in France
Servicing 150,000
POS in Western
Europe
Volume
102.3 billion cigarettes (**)
3,197 million cigars
Euro 7,447 mn (***)
Economic
Sales
Euro 1,689 mn (+4.3%)
Euro 755 mn (-3.3%)
Euro 741 mn (+23.2%)
(+0.9 % ex forex impact)
(growth)
FY 2002
Group
(growth)
Economic Sales
EBITDA
Net Income
Headcount
Euro 3,182 mn (+ 3.4%)
Euro 971 mn (+ 9.5%)
Euro 435 mn (+14.5%)
20,813
(*) Of Group economic sales (**) Including 7.0 bn licensed to third parties (***) Logistics accounted sales
4
Q4 highlights : excellent performance of cigarette
and logistics, impact of USD weighs on cigar
Total economic sales :
Euro 848 mn
Cigarette
+11.4%
+ 1.7 %
+ 3.5% ex forex impact
Cigar
-14.7%
Logistics
+20.1%
-6.9% ex forex impact
+ 3.4 % ex perimeter impact
457,0
410,3
Economic
Sales
211,6
Q4´01
Q4´02
+32.3%
Q4´01
180,6
172,0
Q4´02
Q4´01
206,5
Q4´02
-13.3%
+14.2%
-1.4% ex forex impact
+ 8.9 % ex perimeter impact
158,2
Ebitda*
119,6
Q4´01
Q4´02
42,1
36,5
56,3
Q4´01
Q4´02
Q4´01
64,3
Q4´02
*Cigarette Ebitda 2001 with a one-off negative provision of Euro 7mn for the Byrne directive
Total Ebitda :
5
Euro 250 mn
+ 11.2% +12.6% ex forex impact
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
6
CIGARETTE
Flagship brands
Internationalisation
Pricing power
53% of Group economic sales
59% of Group Ebitda
Ebitda margin: 33.9% of economic sales (+1.9 points)
7
Cigarette : internationalisation strategy
 Capitalise on the Group’s two brands that sell around 20 billion
cigarettes 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)
8
Cigarette : sales growth by 4.3%
Segments (Euro mn) &
Growth 2001-2002
Major Brands (Euro mn) &
Growth 2001-2002
31/12/02
688
721
+ 4.9%
+1.8%
135
1,072
Total: 1,689
351
381
+ 8.5%
+ 4.3%
483
- 1.3%
+ 7.4%
+1.1%
336
340
356
355
- 0.4%
181
180
- 0.4%
175
175
- 0.3%
31/12/01
132
998
Total: 1,619
489
Blond cigarettes
Dark cigarettes
Roll-your-own (RYO) and other sales
9
31/12/01
31/12/02
Gauloises Blondes
Gauloises Brunes
Ducados
Fortuna
Blondes grow on all markets, sales up 7.4 %
Value (Euro mn) &
Growth 2001-2002
1,072
+ 7.4%
998
188
+ 14.4%
164
71
Volumes (bn units)
31/12/02
- 2.0%
+9.0%
149
21.8
9.7
12.2
Total: 62.9
+ 10.1%
65
138
11.9
+ 8.2%
+ 13.3%
+ 5.5%
+5.4%
7.2
+ 15.7%
7,2
247
274
+11.2%
31/12/01
22.3
11.0
384
389
+1.3%
Total: 59.6
8.6
11.6
6.2
31/12/01
Spain
10
31/12/02
France
Germany
Poland
Rest of the World
Good performance
of most blonde market shares
(Volumes in billion units) *
31/12/01
31/12/02
Var.
Spain
Volume
Market share
22.1
31.2%
22.1
30.2%
-0.1%
-0.9
11.4
16.2%
12.2
17.7%
+7.5%
+1.5
6.2
4.2%
7.2
4.7%
+15.7%
+0.6
1.0
6.3%
1.1
7.3%
+4.0%
+1.0
0.6
3.4%
0.6
3.7%
+6.7%
+ 0.2
8.6
11.5%
9.7
12.8%
+13.3%
+1.3
France
Volume
Market share
Germany
Volume
Market share
Austria
Volume
Market share
Belgium/ Luxemburg
Volume
Market share
Poland
Volume
Market share
* Market performance which may differ from sales invoiced to distribution
11
Gauloises Blondes:
a strategical European brand
Gauloises Blondes
in the world
(billion units)
20
15
10
France
5
15
International
0
1986
1990
1994
1998
2002
10
Gauloises Blondes
abroad
(billion units)
Other markets
5
Germany + Austria
0
1991
12
1996
2002
Gauloises Blondes: + 13.7% in volume 2002
2002
Var. %
01-02
5,920
6,912
16.8%
16.1%
114.96
132.18
143.80
8.8%
16.5%
545
9.15
991
17.68
1,042
19.00
1,084
20.57
4.0%
8.3%
25.8%
31.0%
Volume
500
493
567
605
6.7%
6.6%
Sales
9.35
9.51
11.67
13.93
19.4%
14.2%
3,223
41.11
4,196
56.12
4.576
67.07
5,164
73.40
12.8%
9.5%
17.0%
21.3%
8,684
150.48
10,973
198.27
12,104 13,765
229.92 251.71
13.7%
9.5%
16.6%
18.7%
(Volumes in million units)
(Sales in million Euro)
1999
2000
Volume
4,416
5,293
Sales
90.87
2001
CAGR
(99-02)
Germany
Austria
Volume
Sales
Belgium / Luxembourg
Rest of the world
Volume
Sales
Total (France excluded)
Volume
Sales
13
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
14
Fortuna: successful launch in Italy
1
Spain: strong starting
point
 Leading brand in Spain  Attractive to young adult urban smokers
 24.0 % market share
2
3
France: Growth since
1994
Italy: successful launch
in May 2002
120
1400
1,2%
1200
100
1,0%
1000
80
0,8%
800
60
0,6%
600
40
0,4%
20
0,2%
0
0,0%
400
200
0
1994
1995
1996
Pack 20
15
1997
1998
1999
2000
Pack 30
2001
2002
mai-02
juin-02
juil-02
août-02
Sales in million units
sept-02
oct-02
nov-02
Market share
déc-02
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
16
Changing pricing environment still leaves Altadis
with pricing power
Marlboro 7.20
Silk cut 7.20
Gauloises 7.06
7.2
6.5
Marlboro 3.50
3.5
Marlboro 3.30
Marlboro 3.10
3.0
Gauloises 3.10
West 3.10
Memphis 3.00
Austria
2.5
Marlboro
2.50
Gauloises 2.10
2.0
Fortuna 1.95
Ducados 1.70
1.5
Marlboro 3.37
Gauloises 3.26
West 3.16
Gauloises 3.20
West 3.20
Belga 3.20
Marlboro 3.90
Gauloises 3.50
Fortuna 3.50
Gauloises Dark
3.50
News 3.40
Generics 5.63
UK
France
Generics 2.75
Germany*
Gauloises 2.50
Generics 2,39
Belgium
MS 2.18
Fortuna 2.00
Italy
Spain
71.8%
74.5%
72.9%
Total taxes
74.6%
73.0%
76.0%
78.7%
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
17
CIGAR
World leadership
Ebitda growth of
14% ex USD
impact
24% of Group economic sales
18% of Group Ebitda
Ebitda margin: 22.7% of economic sales (+2.3 points)
18
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
19
Cigar:
stable sales ex USD impact
Value (Euro mn) &
Growth 2001-2002
781
39
755
Volumes (million units)
- 3.3%
+0.9 % ex USD impact
39
n.s.
197
209
+ 6.0%
323
311
-3.6%
1,772
31/12/01
31/12/02
31/12/01
31/12/02
1,364
1,277
31/12/01
222
31/12/01
197
Natural
- 6.4%
31/12/02
163
31/12/01
31/12/02
Premium & Habanos (50%)
20
- 11.3%
+4.8%
1,691
148
-8.9%
31/12/02
Mass (Popular + Little)
Other sales
Cigar US: 8.4 % sales growth ex USD impact in the most
profitable cigar market
Value (Euro mn) &
Growth 2001-2002
439
451
182
194
Volumes (million units)
+ 2.8 %
+ 8.4 %
(ex USD impact)
+ 6.7 %
+ 12,6 %
+ 6.3%
1,490
1,584
31/12/01
31/12/02
574
592
31/12/01
31/12/02
(ex USD impact)
257
257
+ 0.0 %
+ 5.4 %
(ex USD impact)
31/12/01
21
31/12/02
Premium & Natural
Mass (Popular + Little)
+ 3.0%
Cuban cigar in difficult environment in 2002
 With the continued poor environment for luxury goods,
Habanos sales went down by 14.9% in dollars
The 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.
22
Cigar Europe: impact of depressed Spanish sales
Value (Euro mn) &
Growth 2001-2002
150
139
Volumes (million units)
31/12/02
- 7.3%
Total: 857
506
98
85
351
- 12.2%
-13.0%
31/12/01
Total: 976
52
54
31/12/01
31/12/02
+3.2%
544
Spain
23
France
432
LOGISTICS
Improved
efficiency
for tobacco,
strong growth
for general
logistics
23% of Group economic sales
24% of Group Ebitda
Ebitda margin: 31.2% of economic sales (-3.0 points)
24
Logistics strategy: widened application
of 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 applied
to non-tobacco goods
 Aim at niche logitics markets with higher than average margins
25
Tobacco logistics: economic sales up 4.0 %
Number of points of sales
Economic sales (in million Euro)
31/12/01
31/12/02
Growth
Spain and Portugal
161.7
166.6
+ 3.0 %
France
172.2
172.3
+ 0.1 %
-7.3
0.9
326.6
339.8
Adjustments
TOTAL
26
50,000
+ 4.0%
General logistics:
Burgal acquisition pushes sales growth to 45.9 %
Number of points of sales
Economic sales (in million Euro)
150,000
31/12/01
31/12/02
Growth
Spain and Portugal
138.6
242.7
+ 75.1 %
France
136.1
158.2
+16.2 %
274.7
400.9
TOTAL
+ 45.9 %
+ 10.6 %
ex Burgal
27
General logistics: channels and products
As a percentage of total General logistics economic sales
CHANNELS
Clients
Books and
Bakeries
Tobacconists
Gas stations
for logistic
stationery
and others
32%
4%
35%
shops 25%
4%
PRODUCT LINES
Logistic
services
35%
28
Books and
magazines
22 %
Telephony
15 %
Food
8%
Stationery
4%
Tobacco
related
4%
Misc.
12 %
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 acquisition
will 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
29
FINANCIALS
30
How we improved our profitability in 2002
2002 vs. 2001
(Euro mn)
Organic: + 49
 Prices, contrasted volume
and mix changes
Perimeter: + 100
Economic sales : +105
 Mainly Burgal acquisition
Foreign exchange: - 35
 Unfavorable Dollar evolution
Others: - 9
 Prices, mix, costs control
 Restructuring and synergies
 Mainly Burgal acquisition
 Unfavorable Dollar evolution
Organic : + 35
Restructuring and synergies: + 47
Perimeter: + 13
Foreign exchange: - 8
Others: - 2
31
Ebitda: +85
Exposure to the US dollar is limited
A
Activity in Euroland
Activity in US dollar zone
USD - 200 mn net exposure
(net purchases, lead time > 12 months)
USD + 170 mn net exposure
(contribution to Group Ebitda)
US Dollar impact on P&L is close to balance over two years
B
ALTADIS IS THE SOLE EURO DENOMINATED
TOBACCO STOCK
32
Ebitda margin is up 1.7 point to 30.5 %
2001 vs 2002
Cigarette + 10.3 %
(Euro mn)
Economic Sales
+ 3.4 %
572
519
EBITDA
+ 9.5%
3,182
887
Operating Costs
+ 0.9 %
2,190
2,211
971
EBITDA breakdown
3,077
Cigar + 7.6 % +13.7 ex
forex impact
160
172
Logistics + 12.5%
206
231
Other and
adjustments n/s
3
-4
33
Sales up 4.3 % from 1,619
to 1,689
Ebitda margin up 1.9 pt to 33.9 %
Price increases (Spain, France)
Volume growth
Restructuring positive effect
Increased A&P
Sales down - 3.3 % from
781 to 755
Ebitda margin up 2.3 pt to 22.7 %
US Sales up
Dollar negative effect
Cuban cigar and Spanish market
depressed
Restructuring positive effect
Sales up 23.2 % from 601
to 741
Ebitda margin down 3 pt to 31.2 %
Dilution due to acquisitions
Organic growth
Markets evolutions
Cost optimisation
Closure of Viaplus
EBITDA Full Year 2002:
971.1 million Euros (+ 9.5%)
2001
Economic sales
3,076.9
3,182.1
+ 3.4 %
886.6
971.1
+ 9.5 %
769.6
859.5
+11.7 %
729.8
810.5
+11.1 %
(44.6)
(90.8)
16.6
5.6
(36.8)
(94.5)
26.6
(32.1)
- 17.5 %
+ 4.0 %
+ 60.0 %
n.s.
616.6
673.6
+ 9.2 %
(206.1)
(30.2)
(196.8)
(41.6)
- 4.5 %
+ 37.7 %
EBITDA
EBITA
Operating Income
Financial Results
Goodwill Amortisation
Associates
Extraordinary Results
Earnings Before Tax
Corporate Income Tax
Minority Interests
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 %
* : Average number of shares = average of (total number of shares - treasury stock )
34
2002
01-02
Growth
(Euro mn)
Sizeable and recurrent cash flow
(Euro mn)
Operating flow (Ebitda + Var. WCR)
2002
713
792
Corporate tax payment
(101)
(260)
Restructuring cash out
(277)
(103)
Cash flow from operating activities
335
429
Investment cash out
(130)
(275)
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)
(128)
(176)
Initial net financial position
(807)
(948)
Net cash change
(128)
(176)
(13)
33
(948)
(1,091)
Divestment cash in
Net change in cash and cash equivalent
Effect of exchange rate fluctuations on banking debt
Final net financial position
35
2001
Balance Sheet
Assets
(Euro mn)
8,304*
Fixed
Assets
8,270
2,141
2,123
Liabilities
& Shareholders’ Equity
8,304*
8,270
Shareholders’
Equity
Provisions**
Goodwill
Current
Assets
Cash +
Short Term
Financial
Investments
1,366
3,659
540
405
1,180
3,730
1,138
1,237
31/12/01
30/09/02
Net financial position
1,547
1,400
Current
Liabilities
&
Others
4,131
Financial
Debt***
2,086
2,328
31/12/01
30/09/02
948
*Including the restatement of the securitisation (reintegration of Euro 537 mn)
* *Provisions + Badwill + Minorities
*** Long term + Short term
36
4,137
1,091
Equity
Fixed assets :
+ tobacconist terms
- disposals
Current assets :
Price increases
Perimeter impact
Financial debt:
Includes Securitisation
Limited increase
of net debt
CONCLUSION
37
Outlook and Strategy
OUTLOOK:
 Positive level of activity in our three business units
 2003 foreseen with significant profitability growth
STRATEGY:
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
38
Value for shareholders
 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
39
40
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
41
Corporate Calendar - Contacts
CALENDAR
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
Closed periods start one month ahead of publications.
CONTACTS
42
Stanislas VRLA
Pedro ALONSO DE OZALLA
Vice President Investor Relations
Deputy
Telephone : 33 1 44 97 62 21
Fax : 33 1 44 97 66 27
E-mail : stanislas.vrla@altadis.com
Telephone : 34 91 360 92 47
Fax : 34 91 360 92 91
E-mail : paozalla@altadis.com
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
43
Factories in Spain and France
by the end of 2002
Cantabria
Logroño
Tarragona
Le Havre
Palazuelo
Lille
Metz
Morlaix *
Strasbourg
Nantes
Alicante
Sevilla
Cádiz
Riom
Tonneins
* cigar workshop
Cigarette factories (7)
44
Cigar factories (3)
Pipe tobacco & RYO factories (1)
Processing plants (4)
Altadis cigarette sales by segments & markets
31/12/01
31/12/02
Var. %
SALES BY SEGMENTS (bn units)
Blond
Dark
RYO
Total
59.6
32.0
3.9
95.5
MAJOR BRANDS (bn units)
Gauloises Blondes 17,3
Fortuna
19,2
Blond
36,6
Ducados
15.2
Gauloises dark
9.8
Dark
25,0
45
62.9
28.6
3.8
95.3
+5.5%
-10.6%
-4.3%
-0.3%
31/12/01
31/12/02
SALES BY MARKETS (bn units)
Spain
39.7
37.8
France
27.5
26.1
Rest of Europe
22.3
24.0
Rest of the World
6.0
7.4
Total
95.5
95.3
Var. %
-4.6%
-5.1%
+7.2%
+21.7%
-0.3%
SALES BY MARKETS (Euro mn)
18,9
19,0
37,9
14.1
8.5
22,5
+8,7%
-1,0%
+3,6%
-7.5%
-13.5%
-9,8%
Spain
France
Rest of Europe
Rest of the World
Other Sales
Total
587
544
330
87
71
1,619
591
572
354
106
65
1,688
+0.6%
+5.1%
+7.3%
+22.2%
n.s.
+4.3%
Spanish and French total cigarette markets:
value growth despite volume decrease
(Volumes in billion units,
value in million Euros)
31/12/01
31/12/02
Var. %
SPANISH TOTAL MARKET
Volumes
Value
Blond
71.0
73.1
+3.0%
Dark
19.7
18.1
-8.4%
Total
90.8
91.2
+0.5%
Blond
1,376
1,452
+5.5%
Dark
225
223
-1.2%
Total
1,601
1,675
+4.6%
70.2
13.2
69.1
11.4
-1.5%
-13.5%
RYO
7.1
7.0
-1.8%
Total
90.5
87.5
-3.3%
Blond
1,736
1,824
+5.1%
Dark
251
251
+0.2%
RYO
128
138
+8.0%
Total
2,115
2,213
+4.7%
FRENCH TOTAL MARKET
Volumes
Value
Blond
Dark
Notes : Value figures are distribution fees deducted. RYO sales in Spain are negligible
46
Dark cigarettes sales:
Prices offset most of volume decrease
Value (Euro mn) &
Growth 2001-2002
489
34
483
30
Volumes (bn units)
-1.3%
-12.1%
31/12/02
Total: 28.6
-14.8%
1.3
-10.6%
15.8
254
253
-0.3%
-8.0%
11.5
-13.6%
31/12/01
Total: 32.0
1.5
201
200
-0.8%
13.3
31/12/01
Spain
47
31/12/02
France
International
17.2
Roll-your-own sales
Value (Euro mn) &
Growth 2001-2002
Volumes (bn units)
31/12/02
69
Total: 3.8
+12.6%
62
- 4.3%
23
+42.7%
16
1.2
2.3
+ 4.6%
-8.5%
0.2
- 3.1%
Total: 3.9
31/12/01
43
44
+2.3%
2.6
3
3
31/12/01
31/12/02
Spain
48
France
1.2
+2.8%
0.2
International
EU tax regulation:
no adverse effect for Altadis
SITUATION AS OF FEBRUARY 2003
SPAIN
MPPC*
(Fortuna)
Retail prices (Euro)
FRANCE
Marlboro
MPPC*
(Marlboro)
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
EU regulation
 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 supported
by 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)
*MPPC: Most popular price category
49
Altadis cigar sales per markets: stable sales ex
USD impact
Value (Euro mn) & Growth 2001-2002
-3.3%
781
755
(+ 0.9% ex USD impact)
39
24
52
98
439
50
85
-13.0%
104
31/12/01
USA
22
54
n.s.
-9,4%
+3.3%
451
129
Habanos (50%)
39
+2.8%
(+8.8% ex USD impact)
-19.4%
(-14.9% ex USD impact)
31/12/02
Spain
France
Export
Other sales
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
51
Litigation risk is limited
ALTADIS SITUATION:

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
KEY FACTORS AND PARTICULARLY THE ABSENCE OF :
 class actions
 punitive damages
 contingency fees
 popular juries
are fundamentally distinguishing Europe and the US, thus conducing
to a totally different type and level of risk
52
Quarterly data 2002
ECONOMIC SALES 2002
(Figures in million Euros)
Q1
Q2
Q3
Q4
Cigarette
Cigar
Logistics
Others and adjustments
374.4
173.5
156.1
1.8
438.3
201.3
194.1
-0.8
419.1
199.8
184.0
-7.1
457.0
180.6
206.5
3.5
Total705.8
833.0
795.6
847.5
3,182.1
Q1
Q2
Q3
Q4
Cigarette
Cigar
Logistics
Others and adjustments
119.3
35.4
50.5
5.0
143.0
48.3
57.4
-1.6
151.1
51.6
58.9
2.0
158.2
36.5
64.3
-8.8
Total210.2
247.1
263.5
250.2
971.1
Full
1,688.8
755.2
740.7
-2.6
EBITDA 2002
(Figures in million Euros)
53
Full
571.7
171.8
231.1
-3.5