- Solid operational performance in a challenging environment
- Very strong net debt reduction: €3.2 billion (-30.9%)
- Present market trends and continued performance improvement allow us to anticipate a robust growth in our operating income on ordinary activities in 2004, before currency fluctuations
The Board of Directors of Lafarge, chaired by Bertrand Collomb, meeting on February 25, 2004, closed the accounts for the year ending December 31, 2003.
- Underlying sales: +4.6%
- Operating income on ordinary activities:
- - Up +6.9% on a like-for-like basis excluding €99 million incremental pension costs
- Up +1.7% on a like-for-like basis
- Negative currency fluctuation impact: -8.6% (-€185 million)
- Operating income on ordinary activities down -9.3%
- Substantial improvement of the financial structure:
- - Net debt down: €3.2 billion to €7.1 billion in 2003 from €10.2 billion in 2002
- Net debt reduction amounts to €1.2 billion, excluding the impact of currency fluctuations and of the rights issue
- Cash flow from operations to net debt ratio improves to 25.5% in 2003 from 19.1% in 2002
- Net income per share: +39.8%
- Dividend maintained at €2.30 per share, subject to Annual General Meeting's approval
Bernard Kasriel, Chief Executive Officer of Lafarge, said:
“In 2003, in a challenging environment, the Group has once again demonstrated its solid performance. We anticipate a gradual improvement in our markets in 2004, without predicting its precise timing and pace. In this context, our continuous performance improvement allows us to expect a robust growth in our operating income on ordinary activities in 2004, before currency fluctuation impact.”
|€ Million||December 31, 2003||December 31, 2002||Variation|
|Operating income on ordinary activities||1,934||2,132||-9.3%|
|Net income Group share||728||456||+59.6%|
|Net income per share (in €)||4.92||3.52||+39.8%|
|Cash flow from operations||1,799||1,956||-8%|
Group and Divisions in 2003:
On a like for like basis, Group sales increased by 4.6%. This organic growth confirms the Group's potential. The operating income on ordinary activities has been negatively affected by a strong currency impact in 2003 (-€185m), by anticipated incremental pensions costs (-€99m) and by a negative scope effect (-€46m). Excluding these items, operating income on ordinary activities increased by 6.9%. The net income Group share was €728m versus €456m in 2002, a year affected by an exceptional provision of €300m.
The Cement Division recorded, in contrasting markets, a 4.6% increase in volumes and a 4% increase of its operating income on ordinary activities on a like-for-like basis. The operating margin was almost unchanged at 21.2% versus 21.4% in 2002. Excluding the unfavorable and exceptional impact of the two price wars in Germany and in the Philippines and of incremental pension costs, the operating margin would be 22%. The contribution from emerging countries continued to grow, reaching 42% of the Division's operating income in 2003 versus 39% in 2002.
Some Blue Circle markets have faced difficult conditions in 2003. Additional synergies resulting from the acquisition of Blue Circle have been achieved as expected.
In the Aggregates and Concrete Division, the drop seen in Aggregates in several North American markets along with the exit cost of a paving activity in the US and the decline of the French market have impacted results. They were down 9.3% on a like-for-like basis, despite further performance improvement in Concrete operations. The operating margin was reduced to 6.3%, or 6.7% excluding the impact of incremental pension costs versus 7% in 2002.
The Roofing Division delivered a strong operating income on ordinary activities growth, with a 14.4% increase on a like-for-like basis driven by performance improvement. Margins were up 0.8 percentage point to 9.4% in 2003 versus 8.6% in 2002. Extensive restructuring of our operations since 1999, particularly in Germany, delivered satisfactory results despite a still difficult German market in 2003.
The Gypsum Division recorded strong growth, with like-for-like operating income on ordinary activities up 55.8% and an operating margin for the Division of 7% in 2003 versus 4.4% in 2002. All regions improved operating results despite a strong increase in gas prices. The United States in particular reported a good operational performance of its two large manufacturing facilities as well as an appreciable price increase.
The Other line was mainly impacted by an increase in pension costs not directly allocated to the Divisions.
|€ Million||December 31, 2003||December 31, 2002||Variation||Excluding foreign exchange and scope effects|
|Aggregates and Concrete||283||336||-15.8%||-9.3%|
Lafarge is the world leader in building materials, and employs 75,000 people in 75 countries. The Group holds top-ranking positions in all four of its Divisions: Cement, Aggregates & Concrete, Roofing and Gypsum.
An interview with Bernard Kasriel, Chief Executive Officer, will be available in video, audio and text from 7.30am CET on www.lafarge.com (see below) and www.cantos.com.
Lafarge's next financial publication - 2004 first quarter sales - will be on 28 April, 2004 (before the Euronext stock market opens), and not on April 22nd, 2004 as previously announced.
For release worldwide with simultaneous release in the United States.
|Press Contacts||Investor Relations|
33-1 44 34 11 26
|Brunswick Stéphanie Tessier 33-1 53-96-83-79 firstname.lastname@example.org||Danièle Daouphars
33-1 44 34 11 51
Statements made in this press release that are not historical facts, including statements regarding our expected operating income, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions ("Factors"), which are difficult to predict. Some of the Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: the cyclical nature of the Company's business; national and regional economic conditions in the countries in which the Group does business; currency fluctuations; seasonal nature of the Company's operations; levels of construction spending in major markets; supply/demand structure of the industry; competition from new or existing competitors; unfavorable weather conditions during peak construction periods; changes in and implementation of environmental and other governmental regulations; our ability to successfully identify, complete and efficiently integrate acquisitions; our ability to successfully penetrate new markets; and other Factors disclosed in the Company's public filings with the French Autorité des Marchés Financiers and the US Securities and Exchange Commission including its Reference Document number D03-0375 as updated on June 5, 2003 and November 17, 2003 and annual report on Form 20-F. In general, the Company is subject to the risks and uncertainties of the construction industry and of doing business throughout the world. The forward-looking statements are made as of this date and the Company undertakes no obligation to update them, whether as a result of new information, future events or otherwise.
There will be a French press conference at 09:00 am CET at the Pavillon Gabriel (5, avenue Gabriel-75 008 Paris).
There will be a French language analyst presentation at 11:00 am CET at the Pavillon Gabriel (5, avenue Gabriel 75008 Paris). The presentation document will be in English, the presentation will be in French and there will be a live translation into English. This presentation (including the slides) will also be available through a web cast facility on Lafarge website (www.lafarge.com) or at the following numbers:
- Dial in from France: +33 1 56 38 35 08
- Dial in from the UK: +44 (0)20 8515 2306
- Dial in from the US: +1 303 262 2140
- Toll free from the US: +800 257 7063
Playback will be available online through Lafarge website www.lafarge.com (during 6 months) or by phone (from February 26, 2004 2:00 pm CET to March 4, 2004 2:00 pm CET) at the following numbers:
- France playback number: +33 1 70 99 32 94 (pin code 132352 #)
- UK playback number: +44 (0) 20 8797 2499 (pin code 970821 #)
- US toll free number (from the US only): +800 405 2236 (pin code 569878 #)
There will be an English analyst presentation at 5:00pm GMT at the Lincoln Center (18 Lincoln's Inn Fields, London, WC2A 3ED). This presentation (including the slides) will also be available through a web cast facility on Lafarge website (www.lafarge.com) or at the following numbers:
- Dial in number from the UK: +44 (0)20 8400 6303
- Dial in number from the US: +1 303 262 2211
- Toll free (from the US only): +800 218 8862
Playback facility will be available online through Lafarge website www.lafarge.com (during 6 months) or by phone (from February 26, 2004 10:00 pm CET to March 4, 2004 10:00 pm CET) at the following numbers:
UK playback number: +44 20 8797 2499 (code 970850 #)
US playback Toll free (from the US only): +800 405 2236 (code 569900 #)