Shareholders

In 2007, Lafarge demonstrated its ability to accelerate. Several key figures shows it:

• sales: up 4% to €17,614 million,
• current operating income: up 17% to €3,242 million,
• earnings per share: up 41% to €11.05.

In this context, at the next Annual General Meeting, the Board will propose a 33% increase in the dividend, to €4 per share (vs. 2.55 € in 2005).

 

Group highlights of 2007 were as following:

• Announcement of the acquisition of Orascom Cement.
• Continuation of the program to build 45 million tonnes of new cement capacity by 2010.
• Excellent performance of the Cement, Aggregates and Concrete operations in North America, in spite of the slowdown in the US residential market.
• Launch of 2 new value-added concrete products, Extensia™ and Chronolia™.
• Announcement of the "Sustainability Ambitions 2012" plan.

• Divestment of the Roofing Business and of the assets in Central Anatolia, Turkey.

In 2007, the Excellence 2008 strategic plan was achieved with acceleration. Most objectives were exceeded a year early!

• In 2 years:
  • earnings per share have increased by 32% a year on average,
  • operating margin has improved from 15.5% to 18.4%,
  • return on capital employed has increased by 250 basis points to 11%,
  • free cash flow has doubled to reach €1,726 million.
• Cost reduction program was 70% completed at the end of 2007. Cost reduction target will be exceeded and is expected to reach €400 million by the end of 2008 instead of €340 million.
• Safety performance is improved, with the frequency of lost-time incidents halved between the end of 2005 and the end of 2007.

Cement demand worldwide has experienced uninterrupted growth over nearly 20 years, regardless of economic fluctuations. Lafarge is ideally positioned to benefit fully from this growth:

• by building new capacity in fast growing markets,
• and thanks to the acquisition of Orascom Cement.

 

Announced in December 2008, the acquisition of Orascom Cement was finalized on January 2008. Besides, new plants in Northern Iraq (2.9 M. tons of de capacities) and Algeria (2.5 M. tons of capacities) have started-up successfully.

High targets for 2010 are confirmed, with:

• earnings per share of more than €15 (vs. €6.4 at the end of 2005),
• return on capital employed after tax of more than 12% (vs. 8.5% at the end of 2005),
• free cash flow of more than €3.5 billion.

 

Besides, a new cost-cutting reduction plan will be announced later this year for the period 2009-2011.