1 2002 Full Year Wednesday, February 26th, 2003 Results .

1

2002 Full Year

Wednesday, February 26th, 2003

Results

www.altadis.com

2

Content

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

3

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: 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.

4

#3 in Western Europe#1 in Spain#2 in France#4 in Germany

Servicing 150,000POS in WesternEurope

#1 Worldwide#1 in the US#1 in Spain#1 in France

102.3 billion cigarettes (**) Euro 7,447 mn (***)3,197 million cigars

Economic SalesEBITDANet Income

Headcount 20,813

Euro 1,689 mn (+4.3%) Euro 755 mn (-3.3%)(+0.9 % ex forex impact)

Euro 741 mn (+23.2%)

Key facts & figuresLogistics 23% (*)

MarketPosition

Volume

Economic Sales(growth)

Group(growth)

Euro 3,182 mn (+ 3.4%)Euro 971 mn (+ 9.5%)Euro 435 mn (+14.5%)

FY 2002

(*) Of Group economic sales (**) Including 7.0 bn licensed to third parties (***) Logistics accounted sales

Cigarette 53% (*) Cigar 24% (*)

5

Economic Sales

Ebitda*

+11.4% +20.1%+ 3.4 % ex perimeter impact

LogisticsCigarCigarette

Q4 highlights : excellent performance of cigarette and logistics, impact of USD weighs on cigar

Total economic sales : Euro 848 mn + 1.7 % + 3.5% ex forex impact

Total Ebitda : Euro 250 mn + 11.2% +12.6% ex forex impact

-14.7%-6.9% ex forex impact

*Cigarette Ebitda 2001 with a one-off negative provision of Euro 7mn for the Byrne directive

56,364,3

Q4´01 Q4´02

42,1 36,5

Q4´01 Q4´02

119,6158,2

Q4´01 Q4´02

172,0206,5

Q4´01 Q4´02

211,6180,6

Q4´01 Q4´02

410,3

457,0

Q4´01 Q4´02

+32.3% -13.3%-1.4% ex forex impact

+14.2%+ 8.9 % ex perimeter impact

6

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

7

Flagship brands Internationalisation

Pricing power

CIGARETTE

53% of Group economic sales59% of Group EbitdaEbitda margin: 33.9% of economic sales (+1.9 points)

8

Cigarette : internationalisation strategy

Capitalise on the Group’s two brands that sell around 20 billioncigarettes 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)

9

483

135

Segments (Euro mn) &Growth 2001-2002

132998

489

+ 7.4%- 1.3%

+1.8%31/12/02

31/12/01

Total: 1,619

Total: 1,689

FortunaGauloises Blondes Gauloises Brunes

Ducados

+ 4.3%

Cigarette : sales growth by 4.3%Major Brands (Euro mn) &

Growth 2001-2002

175 175

181 180

336 340

351 381

355

721

356

688

- 0.4%

+ 8.5%

+1.1%

+ 4.9%

- 0.3%

- 0.4%

31/12/01 31/12/02Blond cigarettes Dark cigarettesRoll-your-own (RYO) and other sales

1,072

10

384 389

247 274

138149

164188

7165

998

1,072 + 7.4%

Blondes grow on all markets, sales up 7.4 %

+ 8.2%

+1.3%

+11.2%7,2

21.811.9

9.7 12.2

Total: 62.9+ 5.5%

+5.4%

- 2.0%

31/12/01

31/12/02

8.6

11.0

6.2

22.3

11.6

+ 10.1%

+ 14.4%

+ 15.7%

+ 13.3%

+9.0%

Value (Euro mn) &Growth 2001-2002

Volumes (bn units)

Spain France Germany Rest of the WorldPoland

Total: 59.6

31/12/01 31/12/02

7.2

11

SpainVolume 22.1 22.1 -0.1%Market share 31.2% 30.2% -0.9

FranceVolume 11.4 12.2 +7.5%Market share 16.2% 17.7% +1.5

GermanyVolume 6.2 7.2 +15.7%Market share 4.2% 4.7% +0.6

AustriaVolume 1.0 1.1 +4.0%Market share 6.3% 7.3% +1.0

Belgium/ LuxemburgVolume 0.6 0.6 +6.7%Market share 3.4% 3.7% + 0.2

PolandVolume 8.6 9.7 +13.3%Market share 11.5% 12.8% +1.3

(Volumes in billion units) *

* Market performance which may differ from sales invoiced to distribution

Good performanceof most blonde market shares

31/12/01 31/12/02 Var.

12

0

5

10

15

1991 1996 2002

0

5

10

15

20

1986 1990 1994 1998 2002

Gauloises Blondes:a strategical European brand

Gauloises Blondesin the world (billion units)

Gauloises Blondes abroad

(billion units)

Other markets

France

International

Germany + Austria

13

Gauloises Blondes: + 13.7% in volume 2002

(Volumes in million units)(Sales in million Euro) 1999 2000 2001 2002 CAGR

(99-02)

GermanyVolume 4,416 5,293 5,920 6,912 16.8% 16.1%

Sales 90.87 114.96 132.18 143.80 8.8% 16.5%

AustriaVolume 545 991 1,042 1,084 4.0% 25.8%

Sales 9.15 17.68 19.00 20.57 8.3% 31.0%

Belgium / LuxembourgVolume 500 493 567 605 6.7% 6.6%

Sales 9.35 9.51 11.67 13.93 19.4% 14.2%

Rest of the worldVolume 3,223 4,196 4.576 5,164 12.8% 17.0%

Sales 41.11 56.12 67.07 73.40 9.5% 21.3%

Total (France excluded)Volume 8,684 10,973 12,104 13,765 13.7% 16.6%

Sales 150.48 198.27 229.92 251.71 9.5% 18.7%

Var. %01-02

14

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

15

Leading brand in Spain 24.0 % market share

France: Growth since1994

Italy: successful launchin May 2002

Fortuna: successful launch in Italy

0

20

40

60

80

100

120

mai-02 juin-02 juil-02 août-02 sept-02 oct-02 nov-02 déc-02

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

Sales in million units Market share

0

200

400

600

800

1000

1200

1400

1994 1995 1996 1997 1998 1999 2000 2001 2002

Pack 20 Pack 30

Spain: strong startingpoint

1

2 3

Sal

es in

mill

ion

ciga

rett

es

Sal

es in

mill

ion

ciga

rett

es

Attractive to young adult urban smokers

16

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

17

Marlboro 3.30

Memphis 3.00

Gauloises 3.10

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

Changing pricing environment still leaves Altadis with pricing power

Marlboro 2.50

Fortuna 1.95

Ducados 1.70

Gauloises 2.10

Marlboro 3.37

West 3.16

Gauloises 3.26

West 3.10

Marlboro 3.50

West 3.20 Belga 3.20

Gauloises 3.20

France

Germany*

Austria

Belgium

Marlboro 3.10

MS 2.18

Gauloises 2.50

Italy

Marlboro 7.20Silk cut 7.20Gauloises 7.06

UK

Fortuna 2.00

Retail price in Euro per pack of 20 cigarettes as of February 1st, 2003

Spain

6.5

71.8% 74.5% 72.9% 74.6% 73.0% 76.0% 78.7%

7.2

Generics 2.75

Generics 2,39

3.5

3.0

2.5

2.0

1.5Total taxes

Generics 5.63Marlboro 3.90

Fortuna 3.50Gauloises Dark

3.50

Gauloises 3.50

News 3.40

18

24% of Group economic sales18% of Group EbitdaEbitda margin: 22.7% of economic sales (+2.3 points)

World leadershipEbitda growth of

14% ex USD impact

CIGAR

19

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

20

222 197

323311

197209

3939

Other sales

Cigar:stable sales ex USD impact


Volumes (million units)

-8.9%

- 6.4%

+4.8%

781 755- 3.3% +0.9 % ex USD impact

+ 6.0%

-3.6%

n.s.

- 11.3%

Mass (Popular + Little)NaturalPremium & Habanos (50%)

31/12/01 31/12/02

31/12/01 31/12/02

31/12/01 31/12/02

31/12/01 31/12/02

31/12/01 31/12/02

21



257 257

182 194

451

+ 6.7 %+ 12,6 %

(ex USD impact)

+ 0.0 %+ 5.4 %

(ex USD impact)

439

+ 2.8 %+ 8.4 %

(ex USD impact)

+ 6.3%

+ 3.0%

Cigar US: 8.4 % sales growth ex USD impact in the most profitable cigar market

31/12/01 31/12/02

31/12/01 31/12/02

31/12/01 31/12/02

31/12/02Premium & Natural Mass (Popular + Little)

22

Cuban cigar in difficult environment in 2002

With the continued poor environment for luxury goods, Habanos sales went down by 14.9% in dollarsThe 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.

23

432544

+3.2%

-13.0%

- 7.3%

Cigar Europe: impact of depressed Spanish sales

Total: 976

Total: 857- 12.2%

FranceSpain

54

98 85

52

351506

31/12/02

31/12/01

150139

31/12/01 31/12/02



24

23% of Group economic sales24% of Group EbitdaEbitda margin: 31.2% of economic sales (-3.0 points)

Improved efficiency

for tobacco,strong growth

for general logistics

LOGISTICS

25

Logistics strategy: widened applicationof 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 appliedto non-tobacco goods

Aim at niche logitics markets with higher than average margins

26

Growth

Tobacco logistics: economic sales up 4.0 %

Economic sales (in million Euro) 31/12/0231/12/01

Number of points of sales 50,000

Spain and Portugal 161.7 166.6 + 3.0 %

France 172.2 172.3 + 0.1 %

Adjustments -7.3 0.9

TOTAL 326.6 339.8 + 4.0%

27

Growth

General logistics:Burgal acquisition pushes sales growth to 45.9 %

Economic sales (in million Euro) 31/12/0231/12/01

Number of points of sales 150,000

Spain and Portugal 138.6 242.7 + 75.1 %

France 136.1 158.2 +16.2 %

TOTAL 274.7 400.9 + 45.9 %

+ 10.6 %ex Burgal

28

General logistics: channels and productsAs a percentage of total General logistics economic sales

CHANNELS

PRODUCT LINES

Logisticservices

35%

Books andmagazines

22 %

Telephony 15 %

Food 8 %

Stationery4 %

Tobaccorelated

4 %

Misc.12 %

Clientsfor logistic

35%

Tobacconists32%

Books andstationeryshops 25%

Gas stations 4%

Bakeriesand others

4%

29

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 acquisitionwill 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

30

FINANCIALS

31

Foreign exchange: - 35

Perimeter: + 100

Others: - 9

Others: - 2

Restructuring and synergies: + 47

Perimeter: + 13

Economic sales : +105

Ebitda: +85

How we improved our profitability in 2002

Organic: + 49

Foreign exchange: - 8

Prices, contrasted volumeand mix changes

Mainly Burgal acquisition

Unfavorable Dollar evolution

Restructuring and synergies

Unfavorable Dollar evolution

Mainly Burgal acquisition

Organic : + 35 Prices, mix, costs control

2002 vs. 2001(Euro mn)

32

Activity in Euroland

USD - 200 mn net exposure(net purchases, lead time > 12 months)

Activity in US dollar zone

USD + 170 mn net exposure (contribution to Group Ebitda)

ALTADIS IS THE SOLE EURO DENOMINATEDTOBACCO STOCK

Exposure to the US dollar is limited

US Dollar impact on P&L is close to balance over two years

A

B

33

Ebitda margin is up 1.7 point to 30.5 %

Logistics + 12.5%

Cigar + 7.6 % +13.7 ex forex impact

Cigarette + 10.3 %

EBITDA+ 9.5%

Operating Costs+ 0.9 %

Economic Sales+ 3.4 %

Ebitda margin up 1.9 pt to 33.9 %Price increases (Spain, France)Volume growthRestructuring positive effectIncreased A&P

Ebitda margin down 3 pt to 31.2 %Dilution due to acquisitionsOrganic growthMarkets evolutionsCost optimisation

Ebitda margin up 2.3 pt to 22.7 %US Sales upDollar negative effectCuban cigar and Spanish marketdepressedRestructuring positive effect

EB

ITD

A b

reak

dow

n

Sales up 4.3 % from 1,619to 1,689

Sales down - 3.3 % from781 to 755

Sales up 23.2 % from 601to 741

Other and adjustments n/s

2001 vs 2002(Euro mn)

Closure of Viaplus

3,182

572

519

34

EBITDA Full Year 2002: 971.1 million Euros (+ 9.5%)

200201-02

Growth

Economic sales 3,076.9 3,182.1 + 3.4 %

EBITDA 886.6 971.1 + 9.5 %EBITA 769.6 859.5 +11.7 %

Operating Income 729.8 810.5 +11.1 %Financial Results (44.6) (36.8) - 17.5 % Goodwill Amortisation (90.8) (94.5) + 4.0 %Associates 16.6 26.6 + 60.0 %Extraordinary Results 5.6 (32.1) n.s.

Earnings Before Tax 616.6 673.6 + 9.2 %Corporate Income Tax (206.1) (196.8) - 4.5 %Minority Interests (30.2) (41.6) + 37.7 %

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 %

2001

* : Average number of shares = average of (total number of shares - treasury stock )

(Euro mn)

35

Sizeable and recurrent cash flow

2002

Operating flow (Ebitda + Var. WCR) 713 792

Corporate tax payment (101) (260)

Restructuring cash out (277) (103)

Cash flow from operating activities 335 429Investment cash out (130) (275)

Divestment cash in 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)

Net change in cash and cash equivalent (128) (176) Initial net financial position (807) (948)

Net cash change (128) (176)

Effect of exchange rate fluctuations on banking debt (13) 33

Final net financial position (948) (1,091)

2001(Euro mn)

36

1,138 1,237

3,659 3,730

1,366 1,180

2,1232,141

2,086 2,328

4,1374,131

540 405

1,547 1,400

Balance Sheet

8,304* 8,304* 8,2708,270

Goodwill

FixedAssets

Shareholders’Equity

Provisions**

FinancialDebt***

CurrentLiabilities

&Others

CurrentAssets

Cash + Short Term

FinancialInvestments

31/12/01 30/09/02 31/12/01 30/09/02

Fixed assets :+ tobacconist terms- disposals

Current assets :Price increasesPerimeter impact

Financial debt:Includes Securitisation

Limited increaseof net debt

Equity

Net financial position 948 1,091

* *Provisions + Badwill + Minorities *** Long term + Short term

Assets Liabilities & Shareholders’ Equity

*Including the restatement of the securitisation (reintegration of Euro 537 mn)

(Euro mn)

37

CONCLUSION

38

Outlook and Strategy

Positive level of activity in our three business units

2003 foreseen with significant profitability growth

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

OUTLOOK:

STRATEGY:

39

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

Value for shareholders

41

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

42

Closed periods start one month ahead of publications.

Corporate Calendar - ContactsCALENDAR

CONTACTS

Telephone : 33 1 44 97 62 21Fax : 33 1 44 97 66 27E-mail : [email protected]

Telephone : 34 91 360 92 47Fax : 34 91 360 92 91E-mail : [email protected]

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

Pedro ALONSO DE OZALLADeputy

Stanislas VRLAVice President Investor Relations

43

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

44

Factories in Spain and France by the end of 2002

Logroño

Palazuelo

AlicanteSevilla

Tarragona

Cantabria

Cádiz

Morlaix *

Nantes

Tonneins

Metz

Lille

Strasbourg

* cigar workshop

Le Havre

Riom

Cigarette factories (7) Cigar factories (3) Pipe tobacco & RYO factories (1) Processing plants (4)

45

Altadis cigarette sales by segments & markets

SALES BY SEGMENTS (bn units)

Blond 59.6 62.9 +5.5%Dark 32.0 28.6 -10.6%RYO 3.9 3.8 -4.3%Total 95.5 95.3 -0.3%

MAJOR BRANDS (bn units)Gauloises Blondes 17,3 18,9 +8,7%Fortuna 19,2 19,0 -1,0%Blond 36,6 37,9 +3,6%Ducados 15.2 14.1 -7.5%Gauloises dark 9.8 8.5 -13.5%Dark 25,0 22,5 -9,8%

31/12/01 31/12/02 Var. %

SALES BY MARKETS (bn units)Spain 39.7 37.8 -4.6%France 27.5 26.1 -5.1%Rest of Europe 22.3 24.0 +7.2%Rest of the World 6.0 7.4 +21.7%Total 95.5 95.3 -0.3%

SALES BY MARKETS (Euro mn)Spain 587 591 +0.6%France 544 572 +5.1%Rest of Europe 330 354 +7.3%Rest of the World 87 106 +22.2%Other Sales 71 65 n.s.Total 1,619 1,688 +4.3%

31/12/01 31/12/02 Var. %

46

Spanish and French total cigarette markets: value growth despite volume decrease

31/12/01 31/12/02 Var. %

Notes : Value figures are distribution fees deducted. RYO sales in Spain are negligible

SPANISH TOTAL MARKETVolumes Blond 71.0 73.1 +3.0%

Dark 19.7 18.1 -8.4%

Total 90.8 91.2 +0.5%

Value Blond 1,376 1,452 +5.5%

Dark 225 223 -1.2%

Total 1,601 1,675 +4.6%

FRENCH TOTAL MARKETVolumes Blond 70.2 69.1 -1.5%

Dark 13.2 11.4 -13.5%

RYO 7.1 7.0 -1.8%

Total 90.5 87.5 -3.3%

Value Blond 1,736 1,824 +5.1%

Dark 251 251 +0.2%

RYO 128 138 +8.0%

Total 2,115 2,213 +4.7%

(Volumes in billion units,value in million Euros)

47

-12.1%

-0.8%

-0.3%

Dark cigarettes sales:Prices offset most of volume decrease

-1.3%

31/12/01 31/12/02

489 483

1.3

31/12/02

31/12/01

Spain France International

201 200

254 253

3034

17.21.5

13.3

Total: 28.6

-10.6%-14.8%

-8.0%

-13.6%

Total: 32.0

11.5

15.8


Volumes (bn units)

48

+42.7%

+2.8%

+2.3%

Roll-your-own sales

+12.6%

31/12/01 31/12/02

62

69

1.22.3

0.2

31/12/02

31/12/01

3 3

43 44

1623

1.22.6

0.2

Total: 3.8

- 4.3%

- 3.1%

+ 4.6%

-8.5%

Total: 3.9


Volumes (bn units)

Spain France International

49

EU tax regulation: no adverse effect for Altadis

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 supportedby 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)

Retail prices (Euro) 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

SPAIN FRANCE

MPPC* (Marlboro)

MarlboroMPPC* (Fortuna)

SITUATION AS OF FEBRUARY 2003

EU regulation

*MPPC: Most popular price category

50

Altadis cigar sales per markets: stable sales ex USD impact

ExportFrance

31/12/01 31/12/02

781 755

SpainUSAHabanos (50%)

Value (Euro mn) & Growth 2001-2002

-13.0%

Other sales

+2.8% (+8.8% ex USD impact)

+3.3%-9,4%

-19.4%(-14.9% ex USD impact)

n.s.

-3.3% (+ 0.9% ex USD impact)

51

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

52

ALTADIS SITUATION:

KEY FACTORS AND PARTICULARLY THE ABSENCE OF :

Litigation risk is limited

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

are fundamentally distinguishing Europe and the US, thus conducing to a totally different type and level of risk

class actions punitive damages contingency fees popular juries

53

Quarterly data 2002

Cigarette 374.4 438.3 419.1 457.0 1,688.8Cigar 173.5 201.3 199.8 180.6 755.2Logistics 156.1 194.1 184.0 206.5 740.7Others and adjustments 1.8 -0.8 -7.1 3.5 -2.6

Total 705.8 833.0 795.6 847.5 3,182.1

Cigarette 119.3 143.0 151.1 158.2 571.7Cigar 35.4 48.3 51.6 36.5 171.8Logistics 50.5 57.4 58.9 64.3 231.1Others and adjustments 5.0 -1.6 2.0 -8.8 -3.5

Total 210.2 247.1 263.5 250.2 971.1

(Figures in million Euros)ECONOMIC SALES 2002

(Figures in million Euros)EBITDA 2002

Q1 Q2 Q3 Q4 Full

Q1 Q2 Q3 Q4 Full

1 2002 Full Year Wednesday, February 26th, 2003 Results .

Documents

Transcript of 1 2002 Full Year Wednesday, February 26th, 2003 Results .