PARIS, Nov. 7, 2001 (PRIMEZONE) -- Consolidated net sales of Usinor (PSE:USI) for the third quarter of 2001 amounted to 3.277 million euros, compared to 3.651 million for the third quarter of 2000, or a 10.3% decrease on a comparable basis.

For the first nine months of 2001, consolidated net sales amounted to 11.142 million euros, compared with 11.761 million for the same period of 2000, or a 5.6% decrease on a comparable basis.

 in euro millions                3rd Qtr.   3rd Qtr.    Change on a
                                  2000       2001     comparable basis
 
 Flat Carbon Steels               2.198      1.86          -14.8%
 Processing and Distribution      1.069       877           -7.8%
 Stainless Steels, Alloys and 
  Specialty Plates                  832       742          -10.3%
 Other activities                   134        81          -31.4%
 Intra-Group sales                 -582      -291             --
 
 Usinor                           3.651     3.277          -10.8%

The strong variation of net sales in the Flat Carbon Steels business for the third quarter of 2001 compared to the third quarter of 2000 confirms, beyond the traditional seasonal slow down, the decline in industrial activity. The reduction in shipped tons (-5.5%) reflects a pronounced contraction of demand in most sectors (automotive, general industry and packaging). As it occurred during the second quarter of 2001, when average selling prices were already lower than those registered during the same period of 2000, the third quarter sees a continuous erosion in selling prices (-9.8%).

The Processing and Distribution business registers a 3.4% decrease in volumes. Average selling prices decrease by 4.8% as a result of strong reductions in the Tubes and Distribution activities only partially offset by the positive effect of an improved mix in Construction.

Stainless Steels, Alloys and Specialty Steels register a 1.9% reduction in volumes mainly due to a sharp drop of volumes for long products and plates. Average selling prices decline by 8.5%, driven by a situation of over-capacity and unfavorable evolution of nickel price, which has lost more than 30% since the second half of 2000.

For Stainless Steels, the activity should remain weak in Europe, the strong decline of nickel prices are encouraging a wait-and-see attitude from clients and compromising a rebalancing of prices. Demand and prices remain stable in North America, while selling prices in Asia could again be under pressure through the pursuit of destocking.

In an environment of negative anticipations, the Flat Carbon Steels division increases production cuts to better adjust to demand. During the second half of 2001, production should be reduced by 10% compared to last year during the same period. These installation stoppages could be extended beyond year-end if apparent demand does not show some signs of recovery.

Otherwise, large efforts in the management of working capital requirements, more specifically through inventory reduction, are paying off. Coupled with the slow down of the activity, they will lead to an improvement of some 600 million euros for the full year.

This news release contains forward-looking statements that involve a number of risks and uncertainties. These statements are based on current expectations whereas actual results may differ.