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Pechiney: Annual Results 2002

    PARIS--Jan. 30, 2003--Pechiney (PECH.PA) (PCHO) (SICOVAM:13290) announces a net loss of EUR 50 million in 2002, corresponding to adjusted net income (a) of EUR 211 million, or 2.69 euros per share, down 28% from the previous year. At EUR 407 million, earnings from operations declined 26% and were slightly higher than the estimate of EUR 400 million made last October. The net dividend proposed per common share "A" is unchanged at EUR 1.00.
    Major events in the year

-- Good operating performance in a particularly difficult economic environment. The decline in the price of aluminum, of geographical premiums and in the parity of the U.S. dollar alone explain the decrease in the Group's earnings from operations. Thanks to its operating performance, the Group therefore succeeded in 2002 in offsetting the sharp drop in sales volume in aerospace and packaging, as well as the absence of a recovery in the United States.
-- Pechiney Continuous Improvement System. As of December 31, 2002, cumulated Continuous Improvement Gains are estimated at EUR 130 million, in line with the objective set at the end of 2001.
-- Successful integration of the acquisitions made in 2001: Eurofoil, Soplaril, Tomago.
-- Non-recurring charges of EUR315 million before taxes, mainly linked to assets depreciation and goodwill amortisation, calculated in accordance with the new US GAAP SFAS 142 and SFAS 144 (accounted for under Exceptional Goodwill Amortisation for EUR98m and under Restructuring expense, Other expense/income for the rest).
-- Cash Flow from Operations was higher in 2002, thanks to reduced working capital.
-- Acquisition of Corus' aluminum conversion assets. Preliminary agreement signed on October 23, 2002.
-- AP50 Project. Pechiney signed an energy supply agreement with Eskom (South Africa), achieving a major step forward in its first project to build an aluminum production facility using AP50 technology.
-- New corporate organization in three sectors: Primary Aluminum, Aluminum Conversion and Packaging.
-- Pechiney's divisions will continue to adapt in 2003. These have initiated several restructuring procedures in January, which may lead to a decision, in 2003, to close several production facilities. Should such decisions be made, they could translate, during this fiscal year, into estimated restructuring charges, which could range from EUR50 million to EUR70 million.

    2003 Outlook:

    The year 2003 has begun in an environment marked by major political and economic uncertainty which affects all of our activities, with particular reference to the impact of the very unfavorable trend in the parity of the U.S. dollar and current market conditions. In Aluminum Conversion and Packaging, our sales should, nevertheless, benefit from the end of the destocking phase observed in 2002, with pressure on prices which will remain strong in certain segments. In such an environment, the Group's priority is to continue to achieve the benefits of the Pechiney Continuous Improvement System, in line with the objectives defined a year ago. These efforts will be complemented by the restructuring, and on some occasions the closing, of activities which are unable to demonstrate their viability. These measures, though difficult, are necessary to allow the Group to maintain its competitive position and continue to grow.




Statement of income (French GAAP)
-------------------------------------------------------
Million of euros                     2001       2002 
-------------------------------------------------------
Net sales                            11,054    11,909
Earnings from operations                549       407
Restructuring expense,
 other (expense) income                 (63)     (243)
Financial expense, net                  (68)      (49)
Income tax expense                     (130)      (39)
Equity affiliates                        24         3 
Minority interests                      (28)        0 
Net Income before goodwill              284        79
Goodwill amortisation                   (29)      (31)
 except. Goodwill amortisation          (22)      (98)
Net income                              233       (50) 
Net Income Per share "A" (EUR)         2.92     (0.66)
-------------------------------------------------------
Adjusted Net Income(a)                  297       211
Adj. Net inc. / share(a)
 bef. GW                               4.12      3.11
Adj. net income per 
 share(a)                              3.76      2.69
------------------------------------------------------- 


-------------------------------------------------------
Millions of euros        Q4 2001    Q3 2002   Q4 2002
-------------------------------------------------------
Net sales                 2,679      3,020     2,678
Earnings from operations    104         95        71
Restructuring expense,
 other (expense)
 income                     (35)       (47)     (126)
Financial expense, net      (16)       (16)      (11)
Income tax expense          (16)       (19)       39
Equity affiliates             8          0        (1)
Minority interests           (6)        (3)        3
Net Income before goodwill   39         10       (25)
Goodwill amortisation        (9)        (8)       (7)
 except. Goodwill
 amortisation               (22)       (16)      (50)
Net income                    8        (14)      (82)
Net Income Per share 
 "A" (EUR)                 0.09      (0.18)    (1.06)
--------------------------------------------------------
Adjusted Net Income(a)       53         38        50
Adj. Net inc. / share(a)   
 bef. GW                   0.79       0.59      0.74
Adj. net income per 
 share(a)                  0.68       0.48      0.65
--------------------------------------------------------

(a) Published net income per share restated to reflect the impact,
after taxes, of restructuring expense, other (expense) income and
other non-recurring items.



    Main trends in 2002

    In 2002, the Group reported a net loss of EUR 50 million, or -0.66 euros per share, compared with net income of EUR 233 million (2.92 euros per share) in 2001. This result includes a significant amount of non-recurring expenses (in large part with no impact on the cash flow) primarily linked to restructuring, exceptional depreciation of assets and amortization of goodwill, calculated in accordance with the new US GAAP SFAS 142 and SFAS 144. At 2.69 euros, adjusted net income per share(1) was down 28% in 2002 from 3.76 euros in 2001.
    In 2002, the Primary Aluminum sector (new organization) was affected by unfavorable market conditions (average realized aluminum price down 8.4% from 2001, fall in geographical premiums, negative trend in the parity of the U.S. dollar vis-a-vis the euro and fall in silicon prices), which had a negative impact of EUR 160 million at the earnings from operations level, which compares to a yearly decrease of EUR 142 million for the sector. Such impact from external factors could therefore only partially be compensated by the progress made otherwise by the sector. Several successes were reported in the sale of technology (winning all the large smelter expansion contracts on the market in 2002), production was increased through, in particular, the acquisition of its additional 15.5% equity interest in the Tomago facility in October 2001, and production costs for the sector were kept unchanged despite several technical incidents during 2002.
    In Europe, the Aluminum Conversion sector demonstrated its ability to maintain earnings from operations in 2002 at the same level as in 2001, in spite of a significant decline in demand in markets linked to investment and a sharp drop in the aerospace sector. This performance was due to the capacity of the Issoire facility to adapt rapidly to the economic downturn, Continuous Improvement Gains that exceeded objectives, and strong operating performance as well as a favorable environment in markets related to consumer goods (can stock, automotive, foil and thin foil). In the United States, the product mix at the Ravenswood facility was adversely affected by the forecast decline in orders from Boeing, the impact of which was not offset by the upswing in shipments of standard rolled products. A major recovery program was launched at the plant in the fall.
    The Packaging sector reported very good performance in terms of cost reduction through the systematic implementation of the Pechiney Continuous Improvement System. This advance was masked by a particularly difficult economic environment in 2002, due to persistent sluggishness in demand in most of its markets, especially for luxury products and cosmetics. Excluding the parity impact, earnings from operations for the sector were at the same level as in 2001, despite very difficult trading conditions.
    Finally, earnings from operations in International Trade totaled a record EUR 73 million, representing an increase of 33%, as a result of active physical trading operations and, to a lesser extent, the consolidation of Pechiney Far East.

    Continuous Improvement

    The year 2002 saw the first benefits from the Pechiney Continuous Improvement System, with cumulated savings, gross of inflation, of EUR 130 million, in line with the objective announced at the beginning of the year.

    2002 Cumulated Continuous Improvement Gains

    The implementation of the Continuous Improvement System and team training produced their first results in terms of safety and the quality of customer service in all sectors. The financial savings exceeded objectives in Packaging and Aluminum Conversion, where the quality of the implementation of the Pechiney Continuous Improvement System confirmed its great potential. In the Primary Aluminum sector, the progress made was somewhat eroded by a number of production incidents.

    Annual shareholders' meeting

    Pechiney's Annual Shareholders' Meeting is scheduled for April 3, 2002. Both an ordinary and extraordinary Shareholders' Meeting are planned. A net dividend of EUR 1.00 per common share "A" and of EUR 1.65 per preferred share "B" has been proposed with payment on May 7, 2003, excluding the corresponding avoir fiscal (applicable French withholding tax).
    French- and English-language versions of the proposed resolutions will be available at www.pechiney.com once an official announcement of the meeting has been published. Note should be made that as a result of a change in French regulation, participating shareholders are authorized, as was not the case in the past, to sell their shares at any time before the shareholders' meeting, regardless of their prior registration to this meeting.




Principal indicators

----------------------------------------------------
                                    2002      2001
----------------------------------------------------
Average euro/U.S. dollar            0.94      0.90
Realised EUR/$ (Primary Al.)        0.93      0.89
LME average price ($/t)            1,365     1,454
Average realized price ($/t)       1,358     1,483
----------------------------------------------------

----------------------------------------------------
                                      T4        T4
                                    2002      2001

----------------------------------------------------
Average euro/U.S. dollar            1.00      0.90
Realised EUR/$ (Primary Al.)        0.98      0.89
LME average price ($/t)            1,359     1,337
Average realized price ($/t)       1,334     1,373
----------------------------------------------------



    Recent developments - fourth quarter

    The fourth quarter of 2002 was mainly marked by the announcement, in October, of a preliminary agreement for the acquisition of Corus' Aluminum Conversion assets. Pechiney hereby implements its strategy of profitable growth in key markets -- aerospace and automotive. The operation, which is subject to the approval of anti-trust authorities and to a favourable end to currently ongoing internal authorization procedures at Corus, will provide Pechiney with many synergies and should be earnings enhancing as of the first year.
    In December 2002, Pechiney also announced a Group reorganization. The Group created an upstream sector -- Primary Aluminum -- which regroups activities in primary aluminum, bauxite-alumina, technology and smelter equipment sales, as well as the Ferroalloys division (PEM). This new sector will be under the responsibility of Jean-Dominique Senard. Aluminum Conversion, which will keep its current structure, will become a separate sector under the management of Pierre Vareille as of July 1, 2003. The Packaging sector, under Christel Bories, remains unchanged. Last but not least, the International Trade division, which cuts across division lines, will be managed separately, overseen by Olivier Mallet, the Group's Chief Financial Officer.




Net Sales (new organization)

--------------------------------------------------------------
Millions of euros                  Q4 2001   Q3 2002   Q4 2002
--------------------------------------------------------------
 Primary Aluminium                     537       468      469
 Aluminium Conversion                  615       612      625
 Packaging                             622       559      554
                                  ----------------------------
                                  ----------------------------
 Net sales from industrial           1,774     1,639    1,648
 operations

 International Trade                   905     1,381    1,030
--------------------------------------------------------------
Total                                2,679     3,020    2,678
--------------------------------------------------------------


--------------------------------------------------------------
Millions of euros                               2001     2002
--------------------------------------------------------------
                                  ----------------------------
 Primary Aluminium                             2,209    1,913
 Aluminium Conversion                          2,676    2,618
 Packaging                                     2,418    2,342
                                           -------------------
                                           -------------------
 Net sales from industrial                     7,303    6,873
 operations

 International Trade                           3,751    5,036
--------------------------------------------------------------
Total                                         11,054   11,909
--------------------------------------------------------------


Earnings from operations (new organization)

--------------------------------------------------------------

Millions of euros                   Q4 2001  Q3 2002  Q4 2002
--------------------------------------------------------------
 Primary Aluminium                       79       70       50
 Aluminium Conversion                   (10)       0        0
 Packaging                               35       32       24
 International Trade                     24       16       20
 Holdings                               (24)     (23)     (23)
--------------------------------------------------------------
Total                                   104       95       71
--------------------------------------------------------------


--------------------------------------------------------------
Millions d'euros                                2001     2002
--------------------------------------------------------------
 Primary Aluminium                               424      282
 Aluminium Conversion                             22       13
 Packaging                                       136      129
 International Trade                              55       73
 Holdings                                        (88)     (90)
--------------------------------------------------------------
Total                                            549      407
--------------------------------------------------------------



    Segment breakdown - fourth quarter

    Consolidated net sales in the fourth quarter were stable at EUR 2,678 million. On a comparable basis, there was a decrease of 9%. This difference was mainly due to the consolidation of Pechiney Far East, an International Trade subsidiary.

    Earnings from operations - fourth quarter

    At EUR 71 million, earnings from operations in the fourth quarter decreased by 32% from the same period in 2001 and by 25% from the previous quarter.
    In comparison with the first nine months of the year, the fourth quarter was marked by the following trends.
    There was an amplification of the negative impact of the rise in the parity of the euro vis-a-vis the U.S. dollar on operating results in the Primary Aluminum sector, while the negative effect of the decline in the price of aluminum, which had begun in the third quarter of 2001, was attenuated.
    In Aluminum Conversion there was a slight upswing in shipments to the aerospace market in Europe.
    In Packaging, a decrease in sales volume was confirmed in plastic packaging with no clear signs of a recovery in beauty and cosmetics markets.

    Primary Aluminum (Aluminum Metal, Bauxite - Alumina and
    Ferroalloys)

    At EUR 50 million, earnings from operations in the fourth quarter of 2002 decreased by 29% from the same period in 2001. Compared to the fourth quarter of 2001, the negative impact from external factors (decline in the parity of the U.S. dollar, aluminium price, geographical premiums, silicon prices) amounted to -EUR 39 million.
    Strong growth in the volume of technology sales (second potline at Mozal and third potline at Hillside) made it possible to offset some of the effects of the difficult economic environment. In addition, except for the PNL plant which has experienced production difficulties due to exceptional weather conditions, all of the Group's aluminum plants posted a satisfactory level of production in the fourth quarter.
    In comparison with the third quarter of 2002, earnings from operations were down 29%, mainly owing to the major decrease in the parity of the U.S. dollar during the period.
    In 2003, while the price of aluminum seems relatively stable, the recent decline in the parity of the U.S. dollar, vis-a-vis the currencies of most of the countries that produce primary aluminum, is likely, if the situation lasts, to have a strong negative impact on results in this sector.

    Aluminum Conversion

    In Aluminum Conversion, earnings from operations in the fourth quarter of 2002 increased by EUR 10 million over the same period in 2001, and were stable compared with the previous quarter.
    Earnings from operations reported by European activities rose from EUR 2 million in the fourth quarter of 2001 to EUR 15 million in the same period in 2002. In the third quarter of 2002, earnings from operations totaled EUR 12 million.
    The increase was mainly due to:

-- the good performance in terms of production costs at all European activities, through the implementation of the Pechiney Continuous Improvement System;
-- the resilience demonstrated by the Issoire plant, which, in a depressed aerospace market, adapted its manufacturing base and production capacity, thereby maintaining its operating result at the level reported in the fourth quarter of 2001;
-- the increase in sales volume in the markets for automotive, heat exchangers and foil and thin foil, with in the last category a major improvement in productivity at the Rugles plant.

    In the United States, the net operating loss reported by the Ravenswood plant went from EUR 12 million in the fourth quarter of 2001 to EUR 15 million in the same period in 2002. In the third quarter of 2002, the net operating loss stood at EUR 12 million. This trend was due to the accounting in the fourth quarter of non-recurring expenses, in particular linked to impairment of inventories. A major plan targeting industrial and commercial recovery was launched in September 2002. It was followed in December by an agreement with the local union to re-negotiate the current labor contract for two years until mid-2005.
    In 2003, the sector is expected to improve its performance significantly. In Europe, it will benefit from an upturn in aerospace shipments as can be seen from orders booked at the end of 2002. In the United States, the profitability of the Ravenswood plant should improve, without, however, breaking-even in 2003 under current market conditions.

    Packaging

    In Packaging, earnings from operations totaled EUR 24 million in the fourth quarter of 2002, compared with EUR 35 million in the same period in 2001, and EUR 129 million in 2002 versus EUR 136 million in 2001, down 5%.
    The different activities in the Packaging sector reported very contrasting results in 2002.
    Despite the negative impact of reduced sales volume, the Plastic Packaging division reported a 36% increase in earnings from operations in 2002. This performance was mainly linked to the successful, systematic implementation of the Pechiney Continuous Improvement System, to the successful integration of Soplaril and to a positive scissors effect between selling prices and raw materials costs in the first half of 2002. In the fourth quarter, the decline in sales volume tended to gain ground in this market, which came on top of a rise in resin prices.
    The divisions serving cosmetics -- Cebal -- and luxury goods -- Techpack International -- were affected by a sharp drop in sales volume (especially in luxury markets), which was partly due to strong destocking by clients and led to a decline in selling prices during the second half. These factors could not be fully offset by the good performances achieved through Pechiney's Continuous Improvement System. Earnings from operations in these activities therefore decreased significantly in 2002.
    In the fourth quarter, in the beauty-cosmetics segment, the sector maintained sales volume at a level comparable with the already weak volumes reported in the same period in 2001.
    In 2003, while awaiting market recovery and in an economic environment which remains difficult at the beginning of the year, the Packaging sector should continue to benefit from the positive impact on earnings from operations of the Pechiney Continuous Improvement System and the restructuring measures under way at Techpack International.

    International Trade

    The year 2002 was particularly satisfactory for this division, which reported a 33% rise in earnings from operations to EUR 73 million.
    This performance was due to strong growth in results in all physical trading segments, and, to a lesser extent, to the results of Pechiney Far East (consolidated in January 2002), which considerably offset the lackluster economic environment in which the network of distribution and sales agencies operated.

    Other statement of income items

    Net financial expense totaled EUR 11 million in the fourth quarter and EUR 49 million for the whole year, down EUR 19 million from 2001. This reduction of financial expense mainly reflected a sharp decline in interest rates in the United States and Europe.
    Current and deferred income taxes in the period represented a tax asset of EUR 39 million, compared with a liability of EUR 16 million in 2001. In 2002, the effective tax rate was 34%, significantly less than the Group's forecasts.
    Finally, in the fourth quarter, the Group recorded EUR 126 million in restructuring charges, other exceptional depreciation of fixed assets and investments and other (expense) income, of which EUR 114 million represented non-recurring charges and EUR 50 million exceptional amortization of goodwill.
    The majority of these non-recurring expenses concerned cosmetics and luxury packaging, and represented depreciation of fixed assets and restructuring at Cebal and Techpack International (TPI), as well as additional exceptional amortization of goodwill at TPI in the amount of EUR 43 million. The other non-recurring items concerned the Aluminum Conversion sector (mainly Ravenswood) and the Primary Aluminum sector. At all of the manufacturing facilities in which the absence of adequate prospects of profitability led to exceptional depreciation of fixed assets, the Group announced the launch of labor consultation procedures related to proposed recovery plans.

    Amortization of goodwill

    In addition to the exceptional amortization of goodwill described above, in the amount of EUR 50 million, the Group continues to amortize its goodwill regularly according to French accounting principles. A recurring expense of EUR 7 million was, therefore, recorded in the fourth quarter of 2002, bringing the total recurring expense for 2002 to EUR 31 million.

    Cash Flow

    Cash flow from operations was higher in 2002 than in 2001 thanks to improved working capital requirement.

    Balance sheet items

    As of December 31, 2002, net indebtedness totaled EUR 1,437 million. Compared with shareholders' equity and minority interests of EUR 3,163 million, the debt-to-equity ratio was 0.45, compared with 0.42 as of December 31, 2001.
    As of December 31, 2002, the total number of outstanding shares was 82,513,683, of which 4,716,938 were owned by the Company (treasury stock). In the fourth quarter, 382,700 shares were bought by Pechiney, bringing the total number of shares bought in 2002 to 1,162,274.




---------------------------------------------------------------------
Calendar
---------------------------------------------------------------------
Shareholders' Meeting 2002:                 April 3, 2003
--------------------------
Next consensus survey:                      March 24, 2003
---------------------
First quarter results:                      April 29, 2003
---------------------
Payment of dividend:                        May 7, 2003
-------------------
Pechiney Investor Day (London):             June 17, 2003
---------------------------------------------------------------------


    Certain statements in this press release that describe Pechiney's intentions, expectations or projections may constitute forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Pechiney's actual results, performance or achievement to be materially different from its intentions, expectations or projections. The forward-looking statements in this press release speak only as of its date and Pechiney undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.




                               Appendix

        Comparison with American accounting standards (US GAAP)

Statement of Income Q4 2002

Millions of euros                  French   FAS 133   FAS 142  US GAAP
                                     GAAP    Impact    Impact
------------------------------------------ --------- --------- -------
Net Sales                           2,678         1         -   2,679
------------------------------------------ --------- --------- -------
Earnings from operations               71         5         -      76
------------------------------------------ --------- --------- -------
Restructuring expense, other
 (expense) income                    (126)        -         -    (126)
                                 --------- --------- --------- -------
Income from operations                (55)        5         -     (50)
Financial expense, net                (11)       (3)        -     (14)
Income tax benefit (expense)           39         -         -      39
Equity in net earnings of
 affiliates                            (1)        2         -       1
Minority interests                      3         -         -       3
Goodwill amortisation                  (7)        -         7       0
Exceptional Goodwill amortisation     (50)        -       (10)    (60)
------------------------------------------ --------- --------- -------
Net Income                            (82)        4        (3)    (81)
------------------------------------------ --------- --------- -------

Statement of Income FY 2002

Millions of euros                  French   FAS 133   FAS 142  US GAAP
                                     GAAP    Impact    Impact
------------------------------------------ --------- --------- -------
Net Sales                          11,909         9         -  11,918
------------------------------------------ --------- --------- -------
Earnings from operations              407        16         -     423
------------------------------------------ --------- --------- -------
Restructuring expense, other
 (expense) income                    (243)        -         -    (243)
                                 --------- --------- --------- -------
Income from operations                164        16         -     180
Financial expense, net                (49)       (1)        -     (50)
Income tax benefit (expense)          (39)       (5)        -     (44)
Equity in net earnings of
 affiliates                             3        15         -      18
Minority interests                      0         -         -       0
Goodwill amortisation                 (31)        -        31       0
Exceptional Goodwill amortisation     (98)        -        21     (77)
Effect of change in accounting
 principle                              -         -       (31)    (31)
------------------------------------------ --------- --------- -------
Net Income                            (50)       25        21      (4)
------------------------------------------ --------- --------- -------

Balance Sheet as of 31/12/2002

Millions of euros                            French   US GAAP  US GAAP
                                               GAAP    Impact
---------------------------------------------------- --------- -------
Long-term assets                              4,840       (62)  4,778
Current assets                                3,394       202   3,596
                                           --------- --------- -------
Total assets                                  8,234       140   8,374
Shareholder's equity                          3,014      (105)  2,909
Minority Interests                              149         -     149
Long-term liabilities                         2,802        45   2,847
Current liabilities                           2,269       200   2,469
                                           --------- --------- -------
Total liabilities and Shareholder's equity    8,234       140   8,374
---------------------------------------------------- --------- -------



    The accounting principles applied by the Group in the preparation of its financial statements differ in certain points from generally accepted accounting principles in the United States. The impact of these differences is presented in the accompanying tables and explained below.

    Accounting for derivatives and hedging operations

    Pechiney's financial statements prepared in accordance with US GAAP comply with SFAS 133, which requires that derivative instruments (foreign exchange, interest rates, commodities) be recognised as assets or liabilities and measured at fair value. This standard also sets the criteria for hedge accounting.
    The application of these criteria means that certain hedging activities, which are efficient from an economic point of view, are no longer recognised as hedging activities. As a result, gains and losses resulting from the mark to market of certain hedging instruments are to be recorded in net income or in equity, with no recognition of the inverse effect of the mark to market of the hedged items.
    For this reason, the impact of this standard on results varies according to market conditions and is difficult to forecast. The application of SFAS 133 generated a net accounting gain (with no impact on cash flow) of EUR 4 million in the fourth quarter of 2002 and of EUR 25 million for the year 2002.

    Amortisation of goodwill

    Pechiney's financial statements prepared in accordance with US GAAP comply with SFAS 142, which requires that goodwill be no longer amortised, but be regularly tested for impairment.
    The application of SFAS 142 led to the cancellation of the recurring amortization charge recorded in the French GAAP financial statements. Impairment tests resulted in the recording of goodwill write-downs amounting to EUR 31 million recorded as effect of changes in accounting principles at January 1, 2002 and relating to the year 2002. These write-downs are also recorded in the French GAAP financial statements, but for lower amounts, due to the recording of recurring goodwill amortization under French GAAP.
    Differences in the balance sheet included the impact of SFAS 133 and SFAS 142 (respectively increase in shareholders' equity of EUR 15 millions and EUR 21 million) and a EUR 141 million reduction in shareholders' equity due to the different way additional pension liabilities are recorded.




                               Appendix
                               PECHINEY
                   Consolidated Statement of Income

French GAAP
---------------------------------------------------------- -----------
(in millions of euros)                               2002        2001
---------------------------------------------------------- -----------
Net sales                                          11,909      11,054
Other operating revenues                              144         150
Cost of goods sold (excluding depreciation)       (10,611)     (9,615)
Selling, general and administrative expense          (610)       (615)
Research and development expense                      (90)        (97)
Amortisation (excluding goodwill)                    (335)       (328)
                                            -------------- -----------
Earnings from operations                              407         549
Restructuring expense and Long-lived assets
 writedowns                                          (145)        (75)
Other (expense) income                                (98)         12

Income from operations                                164         486
                                            -------------- -----------
Financial expense, net                                (49)        (68)

Income before income taxes                            115         418
                                            -------------- -----------
Income tax benefit (expense)                          (39)       (130)

Income from consolidated companies                     76         288
                                            -------------- -----------
Equity in net earnings of affiliates                    3          24
Minority interests                                      0         (28)

Net Income before goodwill                             79         284
                                            -------------- -----------
Goodwill amortisation                                 (31)        (29)
Exceptional Goodwill amortisation                     (98)        (22)
---------------------------------------------------------- -----------
Net Income                                            (50)        233
---------------------------------------------------------- -----------
Net Income per share "A" (EUR)                      (0,66)       2,92
---------------------------------------------------------- -----------
(a) Computed on the average number of "A" and "B" shares, i.e.
    78,520,814 for the year 2002 (excluding treasury shares).
    1,162,274 were repurchased during 2002.

Adjusted Net Income per share Calculation
----------------------------------------------------------------------
- Adjusted net Income(b)                              211         297
- Adjusted net Income per share (EUR)                2,69        3,76
---------------------------------------------------------- -----------
(b) Published net income per share restated to reflect the impact,
    after taxes, of restructuring expense, other (expense) income and
    other non recurring items.


                  Consolidated Statement of Cash Flow
---------------------------------------------------------- -----------
(in millions of euros)                               2002        2001
---------------------------------------------------------- -----------
Resources from Operations                             740         750

Change in working capital requirements                168          24
Utilisation of provisions and other                  (279)       (197)
                                             ------------- -----------
Cash provided by Operations                           629         577
Capital expenditures                                 (479)       (389)
Financial investments                                 (63)       (582)
Divestitures and other                                  5          54
                                             ------------- -----------
Net Cash-flow                                          92        (340)
Dividends paid                                       (122)       (134)
Purchase of treasury shares                           (40)        (60)
Increase in capital                                    36(c)        1
---------------------------------------------------------- -----------
Increase (decrease) in Cash                           (34)       (533)
---------------------------------------------------------- -----------
(c) Including EUR 35 million linked to the increase in capital
    reserved to employees in January 2002.



                               Appendix
                               PECHINEY
                  Consolidated Statement of Income(d)

French GAAP
----------------------------------------------------------------------
                                                      2001
----------------------------------------------------------------------
(in millions of euros)                     Q1      Q2      Q3      Q4
---------------------------------------------- ------- ------- -------
Net sales                               2,817   2,806   2,752   2,679
Other operating revenues                   43      38      29      40
Cost of goods sold (excluding
 depreciation)                         (2,443) (2,448) (2,393) (2,331)
Selling, general and administrative
 expense                                 (147)   (150)   (146)   (172)
Research and development expense          (24)    (22)    (24)    (27)
Amortisation (excluding goodwill)         (80)    (82)    (81)    (85)
                                      -------- ------- ------- -------
Earnings from operations                  166     142     137     104
Restructuring expense and Long-lived
 assets writedowns                          0      (7)    (57)    (11)
Other (expense) income                      8     (14)     42     (24)
                                      -------- ------- ------- -------
Income from operations                    174     121     122      69
Financial expense, net                    (16)    (17)    (19)    (16)
                                      -------- ------- ------- -------
Income before income taxes                158     104     103      53
Income tax benefit (expense)              (48)    (27)    (39)    (16)

Income from consolidated companies        110      77      64      37
Equity in net earnings of affiliates        1      10       5       8
Minority interests                         (9)     (7)     (6)     (6)

Net Income before goodwill                102      80      63      39
Goodwill amortisation                      (6)     (7)     (7)     (9)
Exceptional Goodwill amortisation           -       -       -     (22)

Net Income                                 96      73      56       8
---------------------------------------------- ------- ------- -------
(d) Amortization of goodwill, previously recorded in operating income,
    is now presented before net income. The 2001 quarterly accounts
    were therefore restated.

               Adjusted Net Income per share Calculation
----------------------------------------------------------------------
 - Adjusted net Income(e)                  91      87      66      53
 - Adjusted net Income per share (EUR)   1.15    1.09    0.84    0.68
---------------------------------------------- ------- ------- -------
(e) Published net income per share restated to reflect the impact,
    after taxes, of restructuring expense, other (expense) income and
    other non recurring items.

              Earnings from operations (new organization)
----------------------------------------------------------------------
                                                       2001
----------------------------------------------------------------------
                                            Q1      Q2      Q3      Q4
---------------------------------------------- ------- ------- -------
Primary Aluminium                         137      95     113      79
Aluminium Conversion                        9      20       3     (10)
Packaging                                  32      37      32      35
International Trade                        10      11      10      24
Holdings                                  (22)    (21)    (21)    (24)
                                      -------- ------- ------- -------
Total                                     166     142     137     104

Total EBITDA (f)                          246     224     218     189
---------------------------------------------- ------- ------- -------
Consolidated primary Aluminium Prod.
 (kt)                                     197     200     202     221
Average realised LME price ($/t)(g)     1,550   1,543   1,481   1,373
Realised EUR /$ - Primary Aluminium      0.90    0.90    0.88    0.89
---------------------------------------------- ------- ------- -------
Average euro/U.S. dollar                 0.92    0.87    0.89    0.90
---------------------------------------------- ------- ------- -------
(f) Earnings from operations before depreciation.

(g) Average actual selling price of a metric ton of primary aluminium
    (excluding premiums) negotiated by the Group during the period.


----------------------------------------------------------------------
                                                      2002
----------------------------------------------------------------------
(in millions of euros)                     Q1      Q2      Q3      Q4
---------------------------------------------- ------- ------- -------
Net sales                               2,814   3,397   3,020   2,678
Other operating revenues                   30      41      35      38
Cost of goods sold (excluding
 depreciation)                         (2,473) (3,042) (2,717) (2,379)
Selling, general and administrative
 expense                                 (153)   (152)   (142)   (163)
Research and development expense          (24)    (20)    (22)    (24)
Amortisation (excluding goodwill)         (90)    (87)    (79)    (79)
                                      -------- ------- ------- -------
Earnings from operations                  104     137      95      71
Restructuring expense and Long-lived
 assets writedowns                        (10)    (43)     (7)    (85)
Other (expense) income                     (6)    (11)    (40)    (41)
                                      -------- ------- ------- -------
Income from operations                     88      83      48     (55)
Financial expense, net                    (11)    (11)    (16)    (11)
                                      -------- ------- ------- -------
Income before income taxes                 77      72      32     (66)
Income tax benefit (expense)              (28)    (31)    (19)     39

Income from consolidated companies         49      41      13     (27)
Equity in net earnings of affiliates        1       3       0      (1)
Minority interests                         (4)      4      (3)      3

Net Income before goodwill                 46      48      10     (25)
Goodwill amortisation                      (9)     (8)     (8)     (7)
Exceptional Goodwill amortisation           -     (31)    (16)    (50)

Net Income                                 37       9     (14)    (82)
---------------------------------------------- ------- ------- -------
(d) Amortization of goodwill, previously recorded in operating income,
    is now presented before net income. The 2001 quarterly accounts
    were therefore restated.

              Adjusted Net Income per share Calculation
----------------------------------------------------------------------
 - Adjusted net Income(e)                  49      74      38      50
 - Adjusted net Income per share (EUR)   0.62    0.94    0.48    0.65
---------------------------------------------- ------- ---------------
(e) Published net income per share restated to reflect the impact,
    after taxes, of restructuring expense, other (expense) income and
    other non recurring items.

              Earnings from operations (new organization)
----------------------------------------------------------------------
                                                      2002
----------------------------------------------------------------------
                                            Q1      Q2      Q3     Q4
---------------------------------------------- ------- ---------------
Primary Aluminium                          69      93      70      50
Aluminium Conversion                        4       9       0       0
Packaging                                  33      40      32      24
International Trade                        19      18      16      20
Holdings                                  (21)    (23)    (23)    (23)
                                      -------- ------- -------- ------
Total                                     104     137      95      71
Total EBITDA (f)                          194     224     174     150
---------------------------------------------- ------- -------- ------
Consolidated primary Aluminium Prod.
 (kt)                                     215     219     221     222
Average realised LME price ($/t)(g)     1,354   1,385   1,360   1,334
Realised EUR /$ - Primary Aluminium      0.88    0.90    0.95    0.98
---------------------------------------------- ------- -------- ------
Average euro/U.S. dollar                 0.88    0.92    0.98    1.00
---------------------------------------------- ------- -------- ------
(f) Earnings from operations before depreciation.

(g) Average actual selling price of a metric ton of primary aluminium
    (excluding premiums) negotiated by the Group during the period.



                               Appendix
                      Consolidated Balance Sheet
French GAAP
                                                   As of       As of
(in millions of euros)                          31/12/2002  31/12/2001
----------------------------------------------------------------------
ASSETS

Long-term assets
Property, plant and equipment, net                  2,832       2,997
Goodwill, net                                         637         860
Other intangible assets, net                          163         145
Investments in equity affiliates                      285         297
Long-term investments                                 139         141
Deferred income taxes                                 505         335
Other long-term assets                                279         256
                                             -------------------------
                                                    4,840       5,031
Current assets
Inventories, net                                    1,525       1,601
Accounts receivable - Trade                         1,281       1,466
Deferred income taxes                                  51          60
Prepaid expenses                                       72          71
Other receivables                                      29          20
Marketable securities                                 153         113
Cash                                                  283         321
                                             -------------------------
                                                    3,394       3,652
----------------------------------------------------------------------
Total assets                                        8,234       8,683
----------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY

Shareholder's equity

Capital stock
- Common shares "A"                                 1,242       1,229
- Preferred shares "B"                                 16          16
Treasury shares                                      (180)       (140)
Share premium                                         790         767
Retained earnings                                   1,297       1,473
Cumulative translation adjustement                   (151)         50

                                                    3,014       3,395

Minority interests                                    149         169

Long-term liabilities

Deferred income taxes                                 195         173
Other long-term liabilities                         1,142       1,129
                                             -------------------------
                                                    1,337       1,302

Long-term debt                                      1,465         971

Current liabilities

Accounts payable - Trade                            1,456       1,504
Accrued liabilities                                   376         375
Other payables                                          8          18
Current portion of long-term debt                      39          37
Short-term bank loans                                 390         912
                                             -------------------------
                                                    2,269       2,846
----------------------------------------------------------------------
Total liabilities and shareholders' equity          8,234       8,683
----------------------------------------------------------------------
Net Debt                                            1,437       1,484

Shareholder's equity + Minority interests           3,163       3,564

Gearing                                              0,45        0,42
----------------------------------------------------------------------



                               Appendix
                               PECHINEY
                   Consolidated Statement of Income

US GAAP
----------------------------------------------------------------------
(in millions of euros)                              2002        2001
----------------------------------------------------------------------
Net sales                                          11,918      11,043
Other operating revenues                              145         150
Cost of goods sold (excluding depreciation)       (10,605)     (9,649)
Selling, general and administrative expense          (610)       (616)
Research and development expense                      (90)        (97)
Amortisation (excluding goodwill)                    (335)       (328)
                                             -------------------------
Earnings from operations                              423         503

Restructuring expense and Long-lived assets
 writedown                                           (145)        (75)
Other (expense) income                                (98)         12
                                             -------------------------
Income from operations                                180         440
Financial expense, net                                (50)        (70)
                                             -------------------------
Income before income taxes                            130         370
Income tax benefit (expense)                          (44)       (113)
                                             -------------------------
Income from consolidated companies                     86         257
Equity in net earnings of affiliates                   18          24
Minority interests                                      0         (28)
                                             -------------------------
Net Income before goodwill and effect of
 change in accounting principle                       104         253
Goodwill amortisation                                   -         (26)
Exceptional Goodwill amortisation                     (77)        (22)

Net Income before effect of change in
 accounting principle                                  27         205
Effect of change in accounting principle              (31)        (11)
                                             -------------------------
Net Income                                             (4)        194
----------------------------------------------------------------------
Net Income per share "A" (EUR)                      (0.07)       2.43
----------------------------------------------------------------------
(h) Computed on the average number of "A" and "B" shares, i.e.
    78,520,814 for the year 2002 (excluding treasury shares).

Adjusted Net Income per share Calculation
----------------------------------------------------------------------
 - Adjusted net Income(i)                             268         258
 - Adjusted net Income per share (EUR)               3.42        3.26
----------------------------------------------------------------------
(i) Published net income per share restated to reflect the impact,
    after taxes, of restructuring expense, other (expense) income and
    other non recurring items.

                  Consolidated Statement of Cash Flow
----------------------------------------------------------------------
(in millions of euros)                               2002        2001
----------------------------------------------------------------------
Resources from Operations                             755         704
Change in working capital requirements                154          46
Utilisation of provisions and other                  (280)       (173)
                                             -------------------------
Cash provided by Operations                           629         577
Capital expenditures                                 (479)       (389)
Financial investments                                 (63)       (582)
Divestitures and other                                  5          54
                                             -------------------------
Net Cash-flow                                          92        (340)
Dividends paid                                       (122)       (134)
Purchase of treasury shares                           (40)        (60)
Increase in capital                                    36(j)        1
----------------------------------------------------------------------
Increase (decrease) in Cash                           (34)       (533)
----------------------------------------------------------------------
(j) Including EUR 35 million linked to the increase in capital
    reserved to employees in January 2002.



                               Appendix
                      Consolidated Balance Sheet
US GAAP
                                                   As of      As of
(in millions of euros)                          31/12/2002  31/12/2001
----------------------------------------------------------------------
ASSETS

Current assets
Cash                                                  283         321
Marketable securities                                 153         113
Other receivables                                      11          20
Prepaid expenses                                      309         205
Deferred income taxes                                  47          69
Accounts receivable - Trade                         1,269       1,444
Inventories, net                                    1,524       1,601
                                             -------------------------
                                                    3,596       3,773
Long-term assets
Other long-term assets                                201         206
Deferred income taxes                                 499         339
Long-term investments                                 139         141
Investments in equity affiliates                      285         280
Other intangible assets, net                          163         145
Goodwill, net                                         659         864
Property, plant and equipment, net                  2,832       2,997
                                             -------------------------
                                                    4,778       4,972
----------------------------------------------------------------------
Total assets                                        8,374       8,745
----------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY

Short term debt
Short term bank loans                                 392         912
Current portion of long term debt                      39          37
Other payables                                          8          15
Accrued liabilities                                   579         516
Accounts payable - Trade                            1,451       1,505
                                             -------------------------
                                                    2,469       2,985

Other long term liabilities                            45          81

Long term Debt                                      1,465         971

Long term Liabilities

Other long term liabilities                         1,142       1,129
Deferred income taxes                                 195         173
                                             -------------------------
                                                    1,337       1,302

Minority Interests                                    149         169

Shareholder's equity

Fair value of derivative instruments                   33           2
Cumulative translation adjustment                    (151)         54
Additional minimum pension liability                 (141)       (121)
Retained earnings                                   1,300       1,430
Share premium                                         790         767
Treasury shares                                      (180)       (140)
Capital stock                                       1,258       1,245
- Common shares "A"                                 1,242       1,229
- Preferred shares "B"                                 16          16
                                             -------------------------
                                                    2,909       3,237
----------------------------------------------------------------------
Total liabilities and shareholders' equity          8,374       8,745
----------------------------------------------------------------------