HeidelbergCement eliminates balance sheet risks

As part of the pre-audit of the 2004 annual accounts, the Managing Board in close cooperation with the auditor, the auditing company Ernst & Young, Stuttgart/Germany, has decided on a thorough revaluation of balance sheet items, which will lead to one-time extraordinary charges in the region of up to EUR 700 million.

Most of the extraordinary charges are due to the revaluation of goodwill for the Western Europe and Northern Europe regions, as well as for Indocement. Other significant amounts result from the laying of restructuring provisions for the Belgian-Dutch cement business and valuation adjustments for deferred tax assets.

The impairment test, to be carried out for the first time following the discontinuation of ordinary depreciation, leads to a correction in the amounts recognised on the balance sheet. The valuation of Indocement takes into account the risk of an investment in Indonesia. In view of the restructuring in the Benelux countries, HeidelbergCement lays the foundation for a dramatic improvement of the cost structure in this region. The impairment of deferred tax assets takes place as a result of the decreased possibility of using the losses carried forward, due to the change in the German tax laws.

The extraordinary charges are mainly non-cash items. They will result in a loss for the Group for the 2004 financial year. The Managing Board and Supervisory Board will make a decision regarding the proposed dividend for the HeidelbergCement AG at a later date. On the basis of a risk-free balance sheet and strengthened unimpaired goodwill, the whole package puts HeidelbergCement in a position to consistently take advantage of attractive growth opportunities in the future.

Operating activities developed within expectations in the fourth quarter. The company will announce details of the development of sales volumes and turnover on 22 February 2005. The 2004 annual accounts will be published on 23 March 2005 on the occasion of the press conference on annual accounts.