Euronext: LG, NYSE: LR
- Nine month sales up 5.7% to € 10,870 million
from € 10,281 million in 2003
- Robust year to date like for like sales: + 8.5%
- Solid third quarter like for like sales: + 5.7%
Sales were up 5.7% to € 10,870 million as at September 30, 2004 compared to € 10,281 million in 2003. The net scope effect was 0.9%. Foreign exchange variations impacted sales negatively by 3.7%.
" Our markets remain robust overall and we have recorded a solid level of sales in the third quarter. We reiterate our confidence that the growth of our operating income on ordinary activities for 2004 should exceed 10%, excluding currency fluctuations and barring unusual weather conditions. This should be achieved against a continuing rise in energy costs and the strong performance of our business in the second half of last year, " said Bernard Kasriel, Chief Executive Officer of the Group.
The sales report for each Division, excluding foreign exchange, scope effects, and before inter divisional sales elimination is as follows:
Sales rose 10.1% during the first nine months (+12.9% in Quarter 1, +10.7% in Quarter 2 and +7.8% in Quarter 3).
Cement sales have remained strong overall in the third quarter with continued volume growth compared to 2003, coupled with an improved pricing effect.
Western Europe has continued to record good sales growth though with mixed volume trends. France remains strong, offsetting the sharp decline in Greece, following as expected, the completion of Olympics' related building projects. Pricing was favorable across the region, with steady improvement in Germany and price increases in all other countries except the UK, where prices remained flat.
In North America, sales have grown strongly for the 9 months ending September 30, 2004. As expected, volume growth in the 3rd quarter was lower than in the first six months of the year, due to the comparably weak first half of 2003 and strong second half of 2003. Price increases have been successfully implemented in 2004. Year to date pricing trends are now positive compared to the price erosion experienced in the second half of 2003.
Positive sales trends were recorded in all other regions of the world. In Central and Eastern Europe, sales grew strongly, driven by a favorable market environment in Romania and good volumes in Poland. In the Mediterranean Basin, sales were up in Jordan and Turkey with strong market demand. High levels of growth were seen across Africa, particularly in South Africa and Nigeria. In Latin America, a slight growth in sales was recorded, with a continued improvement in Venezuela offset by lower volumes and prices in Brazil. In Asia, good market conditions allowed for strong growth notably in the Philippines and India. Areas of weakness remain Malaysia and in particular South Korea where deteriorating construction markets have led to a substantial decline in volumes and weaker prices.
AGGREGATES & CONCRETE: +7.2%
Sales rose 7.2% during the first nine months (+11.4% in Quarter 1, +6.0% in Quarter 2 and +5.9% in Quarter 3).
Strong volumes in North America and France coupled with favorable pricing trends continue to drive sales.
In Aggregates, sales rose 6.2% with a strong increase in North America led by Canada and the Eastern United States. In Western Europe the situation was mixed. In particular, the good growth in France continued as markets remained solid, while in the UK, sales were lower due to a decline in infrastructure spending, which mainly affected Asphalt and Paving. Prices continued to show favorable trends compared to 2003.
In Concrete, sales grew by 8.6% with solid demand in France and in North America, although North American volumes in this quarter were slightly below a very strong 3rd quarter in 2003.
Sales increased by 1.2% during the first nine months (6.0% in Quarter 1, 6.0% in Quarter 2 and –6.2% in Quarter 3).
This quarter compares with good sales in 3rd quarter 2003.
In Western Europe, sales of concrete tiles were down and sales of clay tiles were only marginally positive as a result of the continued poor construction market in Germany which more than offset good sales of both concrete and clay tiles in France and clay tiles in the UK.
Sales in the USA continued to be strong, driven by the buoyant housing market.
Sales rose 12.7% during the first nine months (+14.2% in Quarter 1, +13.2% in Quarter 2 and +10.8% in Quarter 3).
In Western Europe, sales growth was driven by good market demand and price increases in France and the UK. In Germany, the market showed signs of stability but prices remained down on 2003.
In the USA, sales continued to grow strongly year to date, largely on the back of significantly higher prices compared to 2003.
In Asia and Australia, sales were flat.
NEGATIVE FOREIGN EXCHANGE IMPACT OF –3.7% AMOUNTING TO € - 344 MILLION
The translation impact of negative foreign currency fluctuations on the nine month sales was generated mostly in the following currencies: US Dollar (€ 179 million), Malaysian Ringgit (€ 26 million), Canadian Dollar (€ 23 million), and the Nigerian Naira (€ 18 million). This was slightly offset by the appreciation of the Pound Sterling (+€ 26 million) and the South African Rand (+€ 13 million).
SCOPE CHANGES OF 0.9% AMOUNTING TO € 108 MILLION
Sales from acquisitions amounted to a positive scope effect of € 293 million, of which € 129 million is due to the increase to 51.17% in our percentage ownership of Lafarge Halla Cement in South Korea, which triggered a change from the proportional to global consolidation method. Aggregates and Concrete acquisitions contributed € 93 million.
The reduction in sales due to negative scope effects totaled € 185 million, primarily as a result of the divestment of our Florida cement operations (€ 55 million), various divestments from the Aggregates and Concrete Division (€ 64 million ) and the disposal of the remaining lime operations in Europe and road markings in the USA (€ 40 million).
|September 30, 2004
|September 30, 2003
|Variation||At constant scope and foreign exchange||At constant scope and foreign exchange, before inter divisional sales elimination|
|Aggregates & Concrete||3,515||3,341||+5.2%||+7.2%||+7.2%|
Lafarge, the world leader in building materials, holds top-ranking positions in all four of its Divisions: Cement, Aggregates & Concrete, Roofing and Gypsum. Lafarge employs 75,000 people in 75 countries and posted sales of € 13.6 billion in 2003.
Lafarge's next financial publication - 2004 Full Year Sales - will be on Thursday 27th January , 2005 (before the Euronext stock market opens.)
For release worldwide with simultaneous release in the United States.
|Press Contacts||Investor Relations|
33-1 44-34-92-32 firstname.lastname@example.org
33-1 44 34 11 26
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 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.
Conference Call on Sales to September 30, 2004
Following the release of Lafarge's sales to September 30, 2004, a conference call will be held on:
October 21, 2004 at 15:30 French time, in English
(14:30 UK time; 09:30AM EDT in North America)
The speakers will be:
Jean-Jacques Gauthier – Executive Vice President, Finance
James Palmer - Vice-President Investor Relations
Danièle Daouphars – Manager Investor Relations
If you wish to participate in the conference call, please dial:
From France: +33 (0)1 70 99 32 98
From UK: +44 208 515 2314
From UK toll free (from UK only): 0800 279 2280
From USA: +1 303 262 2130
From USA toll free: 800 218 0713
Conference call name: “Lafarge”
A replay of the conference call will be available from October 21, 2004 at 7.30 pm French time to October 29, 2004 at 7.30 pm at the following numbers:
From France +33(0) 1 70 99 32 94 Access code: 132744#
From UK +44 208 515 2499 Access code: 614044#
From UK toll free (from UK only): 0 800 026 0020 Access code: 614044#
From USA: +1 303 590 3000 Access code: 11011562#
From USA toll free: 800 405 2236 Access code: 11011562#