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A
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B
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C
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D
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E
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F
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I
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L
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M
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N
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O
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P
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R
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S
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T
A
- Administered registered account
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These shares are registered with the company but held by a banker or stockbroker. The shareholder is known to the company but their financial advisor remains their main point of contact.
- Allotment or distribution of bonus shares
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An operation by which shareholders receive free shares in a quantity proportional to the number of shares they already hold. This operation increases the share capital by incorporating reserves. It does not change the "worth" of the company but serves to divide the worth by a greater number of shares. After a bonus share distribution, the company has a higher number of shares, each of which has a lower unitary value.
By reducing the unitary value of the shares, a bonus share distribution makes it easier to buy and sell shares and often results in improved liquidity.
B
- Bearer shares account
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Bearer accounts are held with a bank or stockbroker. The shareholder is not known to the company, unless the company requests an identifiable bearer security.
- Bond
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A bond is a negotiable security that represents a share in a loan issued by a company. The return (interest) on a bond is fixed and does not depend on the results of the company.
C
- CAC 40
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The CAC 40 (Cotation Assistée en Continu) is the main index on the Paris stock exchange. It tracks the value of the 40 most active shares.
In theory, these shares, from companies in a variety of business sectors, reflect the global trend of major French companies. The list is regularly reviewed to ensure it remains representative.
- Cash flow
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Cash flow is a company's net profit after tax, amortisations and provisions. It represents the company's capacity for self-financing during the financial year, before any eventual profit distribution.
- Cash flow from operations to net debt ratio
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This ratio is calculated by dividing the cash flow from operations by the net debt. This ratio is useful to investors as it assesses a company's financial strength.
- Company net income
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The company net income is the income of the Group's parent company. This is the income used by the General Meeting to set the dividend.
- Consolidated net income
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Consolidated net income is the net income generated by all the companies in a Group (including subsidiaries). It reflects the economic reality of the Group's activities.
- Consolidation
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Consolidation allows the financial situation of a group of companies, for example a parent company and its subsidiaries, to be presented as if they formed a single entity. All companies which have exclusive control of or exert a significant influence over other companies are obliged to present consolidated accounts.
- Corporate governance
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Corporate governance rules, both legislated and internal, structure the way in which a company conducts its operations. They are designed to guarantee transparency, accountability and ethics in business.
- Creation of value
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Value is created when a company's investments earn more than the profitability level which was defined by its investors.
D
- Deferred Payment Service DPS
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The DPS system makes it possible to buy or sell shares without an immediate outlay of cash. Shares can be bought or sold, without spending money or holding the securities, in order to earn the difference between the purchase price and the sale price. There is a charge for this service (anticipated payment commission).
- Direct registered account
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These shares are held directly with the company. The company delegates the management of registered accounts to a bank, which becomes the main point of contact for the shareholder.
- Dividend
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Dividends reward providers of equity (shareholders). They are generally distributed from the net profit at the end of the financial year.
E
- Earnings Before Income and Tax (EBIT)
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EBIT refers to the increase in wealth created by a company's industrial and commercial activity.
Unlike EBITDA (earnings before interest, tax, depreciation and amortisation), which is based on the operational cycle, EBIT takes account of the investment process in the form of amortisation and provisions. EBIT calculations do not include financial products and charges, exceptional products and charges, employee profit sharing and income tax.
- Economic Value Added (EVA)
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EVA is a way of measuring value creation. It is calculated by multiplying the capital employed by the difference between the economic profit after tax and the weighted average cost of capital.
F
- Financial participation
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Participation occurs when a company owns a fraction of between 10 and 50% of the capital of another company.
- Free cash flow
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Free cash flow is defined as the net operating cash generated by continuing operations less sustaining capital expenditures.
I
- Internal control
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Internal control is a system aimed at providing reasonable assurance that:
- the financial information is reliable,
- legal regulations and internal rules are procedures are respected,
- the company's main processes operate efficiently.
L
- Limit orders
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A "limit" order means that a buyer does not wish to pay more than the stated price for the shares in question and a seller does not want to sell below the stated price. These orders protect against market fluctuations but involve a risk of non-execution.
M
- Market capitalisation
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The market capitalisation of a company is the amount that it is worth on the stock market. Market capitalisation is calculated by multiplying the number of shares in the stock capital by their market value (share price).
- Market orders
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A "market" order contains no indication of a price and can only be completely filled (that is, it cannot be split). In exchange, these orders take priority over other types of orders. They are used to trade securities in very liquid markets. The person placing the order is sure of buying or selling the securities, but takes a risk as to the price of execution.
N
- Net debt
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Net debt, or net financial debt, is the difference between a company's financial debt and its available cash and financial investments. It represents the company's net situation with regard to third parties and excluding operational cycles.
- Net debt-to-equity ratio
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This ratio is calculated by dividing the amount of the net debt by the total equity as set out in the consolidated balance sheet. This ratio is useful to investors as it assesses a company's financial strength.
- Net profit
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A company's net profit is the part of the operating income that can be distributed to shareholders once the State and any creditors have been paid. Net profit can be paid out as dividends or put in reserve (thus increasing the company's equity).
- Net profit per share
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Net profit is the increase or decrease in a company's value over the period in question. It represents the part of the income that can be repaid to shareholders once the State and any creditors have been paid.
The net profit per share is calculated by dividing the Group's net consolidated profit (after deduction of minority interests) by the number of shares in circulation after the deduction of shares held by the Group (self control).
O
- Operating cash flow
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Operating cash flow, or cash flow from operations, (after interests and income tax paid) is the net cash provided by operating activities from continuing operations, before changes in operating working capital items, excluding financial expenses and income taxes.
- Operating margin
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Operating margin is the ratio between operating profit and income.
- Orders “at best”
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An order "at best" contains no indication of a price and is executed at the price determined by the order book. They may be only partially filled. Any surplus is treated as a ‘limit' order. This type of order is usual for very liquid shares that need to be bought or sold quickly.
P
- Par value
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This is the value used to express a company's capital in shares. A company's share capital is the par value multiplied by the number of shares.
The par value does not represent the "true value" of the share, which is the market price.
R
- Return on capital employed
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The return on capital employed ROCE is calculated by comparing net income and long term debt to equity.
- Return on capital employed after tax
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This non-GAAP measure is calculated by dividing the sum of current operating income after tax and income from associates by the average of capital employed at the end of the current and prior year. It is one of the key profitability measures used by a company and division management for each division.
S
- SBF 250
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The SBF 250 index tracks the average prices of the 250 most active stocks on the Paris stock exchange. It is used to perform long term analysis.
- Sales
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Sales represent the total amount of product sold. Sales depend on 3 factors: the volume (quantity sold), the price (inflation, exchange rates) and changes to scope.
- Sarbanes-Oxley Act
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The Sarbanes-Oxley Act was adopted by the American Congress in July 2002. It is designed to reinforce the responsibility of company directors with regard to internal controls and external reporting.
- Share
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A share is a negotiable security issued by a company that represents a portion of that company's capital stock. The company's capital is divided into a certain number of shares, each with the same par value.
- Share price
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The share price is the price at which shares are exchanged on the stock market. Company evaluation methods, based on expected company performance, are used to calculate the theoretical share price. However, the share price, which is subject to the laws of supply and demand, can vary from this theoretical value and be affected by events outside the company. The share price can be checked every day in:
- "La Cote Officielle" or other specialised newspapers,
- the "Lafarge shares" section of this website.
- Shareholders’ meetings
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An Ordinary General Meeting relates to the general management of the company: approval of financial statements, distribution of dividends, appointment and removal of administrators.
An Extraordinary General Meeting takes decisions that relate to the modification of bylaws, capital increases, mergers, asset contributions, separations and share issues. They can be convened at any time.
A Combined General Meeting occurs when both Ordinary and Extraordinary General Meetings are held on the same date.
