Strong growth in first half 2002 results

Euronext: LG
NYSE: LR

09.05.2002
 
Operating income on ordinary activities: +43% Net income: +20% Net income per share: +15%

  • Lafarge posts strong growth of its results, thanks to improved operational performance of all its activities and to the successful integration of Blue Circle,

    Synergies resulting from the integration of Blue Circle in the first half allow the Group to confirm its 2002 target

    The current disposal program allows the Group to confirm its goal to divest over €700 million for the 2002 financial year.

    The Board of Directors of Lafarge, chaired by Bertrand Collomb, meeting on September 4, 2002, closed the accounts for the half year ending June 30, 2002.


Consolidated financial statements as of 30 June 2002
  June 30, 2002
€ Million
June 30, 2001
€ Million
Variation
Sales 7,203 5,578 +29%
Operating income on ordinary activities 868* 606* +43%
Net income, Group share
- Before Goodwill
368 291 +26%
Net income, Group share
- After Goodwill
291 242 +20%
Net income per share in € 2.27 1.97 +15%

 

* Operating income on ordinary activities of equity affiliates is no longer included in the Group's operating income. Operating income on ordinary activities prior to changes in the presentation of equity affiliates amounts to €945 million (first half 2002) against €675 million (first half 2001).

Sharp rise of operating income on ordinary activities (up 43%) totaling €868 million from €606 million on June 30, 2001

Operating income on ordinary activities rose 12%, excluding foreign exchange and scope effects.

Cement Division: Recorded further good results (up 39% and up 6% excluding foreign exchange and scope effects), thanks to the effectiveness of its performance improvement programs and favorable market trends in most European and emerging countries, despite a less favorable situation in North America and Germany.

Aggregates and Concrete Division: Posted improved results (up 18% and up 1% excluding foreign exchange and scope effects) thanks to the positive contribution of former Blue Circle operations and good performance in Europe.

Roofing Division: Results improved (up 14% and up 9% excluding foreign exchange and scope effects) following vigorous restructuring in Germany which is reflected in improved operational performance despite a further decline in the market.

Gypsum Division: Operating income amounted to €39 million, a turnaround compared to the first half of 2001 where a loss of €1 million was recorded. This improvement resulted from higher sales prices and improved industrial performance in North America. Strong growth was also recorded in Asia.

Operating income on ordinary activities as at June 30, 2002


Current operating income as of 30 June 2002
  June 30, 2002
€ Million
June 30, 2001
€ Million
Variation Excluding foreign exchange and scope effects
Cement 686 492 +39% +6%
Aggregates and Concrete 85 72 +18% +1%
Roofing 50 44 +14% +9%
Gypsum 39 -1 - -
Other 8 -1 - -
TOTAL 868* 606* +43% +12%

 

* Operating income on ordinary activities of equity affiliates is no longer included in the Group's operating income. Operating income on ordinary activities prior to changes in the presentation of equity affiliates amounts to €945 million (first half 2002) against €675 million (first half 2001).

The synergies expected from the acquisition of Blue Circle amounted to €51 million for the first half of 2002. These synergies arise mainly from the closure of the London head office and from the integration of the teams in North America and the Philippines. In addition, the first benefits of the introduction of performance improvement programs across the former Blue Circle operations are being seen.

Continuation of rigorous management of investments and disposal of non strategic assets

As of June 30, 2002, disposals totaled €214 million (€82 million in 2001). They mainly involve the sale of a grinding station in Brazil and of concrete products businesses in Canada.

Meanwhile, investments amounted to €738 million. These include acquisitions to the tune of €230 million, investments for organic growth totaling €202 million and sustaining investments amounting to €306 million.

Outlook for the second half of 2002 and for 2003
During the Board meeting, Bertrand Collomb, Chairman and CEO of the Group, commented on the results:

 

"These good first half results, achieved in a mixed economic environment, reflect the strong performance momentum of our Group.

The contribution of Blue Circle synergies to the Group's results for the first half of 2002 means that we can confirm the figure of €107 million as the minimum contribution for the whole of 2002.

We are planning to invest some €1,600 million and to pursue our disposal program of more than €700 million of non strategic assets in 2002, to meet by the end of 2003 the Group's financial structure objectives."

Bertrand Collomb concluded : "Despite the weakness in certain markets and barring a reversal of current trends, I am confident of good growth in the 2002 results."

Contacts
Press Contacts Investor Relations
Denis Boulet
Tél : 33-1 44 34 94 14
denis.boulet@lafarge.com
James Palmer
Tél : 33-1 44 34 11 26
james.palmer@lafarge.com
Véronique Doux
Tél : 33-1 44 34 19 47
veronique.doux@lafarge.com
Danièle Daouphars
Tél : 33-1 44 34 11 51
daniele.daouphars@lafarge.com

Statements made in this press release that are not historical facts 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; seasonality 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 Reference Document filed with the French COB under the reference number D02-162 and updated under the reference number D02-162/A1, and its annual report on Form 20-F filed with the Securities and Exchange Commission in the USA. 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.

 
  • The press release (pdf, 25.68 KB)
  • The management report (pdf, 237.43 KB)