Solid performance in a challenging business environment
Date 11/05/2010
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WebcastCommunicationsChristel des Royeries
Claire
Mathieu
Investor relationsJay Bachmann
Danièle Daouphars
Laurence Le Gouguec Tools
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Consolidated accounts
The Board of Directors of Lafarge, chaired by Bruno Lafont, met on November 4, 2010 and approved the consolidated financial statements for the period ended September 30, 2010.
| (€m) | Third quarter | Year-to-date | ||||
|---|---|---|---|---|---|---|
| 2009 | 2010 | Variation | 2009 | 2010 | Variation | |
| Sales | 4,252 | 4,498 | 6% (-2% like for like) |
12,243 | 12,210 | - (-4% like for like) |
| Current operating income | 852 | 839 | -2% (-10% like for like) |
1,983 | 1,911 | -4% (-10% like for like) |
| Operating margin (%) | 20.0% | 18.7% | -130 bps | 16.2% | 15.7% | -50 bps |
| Net income Group share | 404 | 372 | -8% | 774 | 765 | -1% |
| Net income Group share - Excluding one-off items (1) | 404 |
371 |
-8% |
731 |
604 |
-17% |
| Net earnings per share (€) (2) | €1.42 | €1.30 | -8% | €2.99 | €2.67 | -11% |
| Net earnings per share (€) (2) - Excluding one-off items (1)(2) | €1.42 |
€1.30 |
-8% |
€2.82 |
€2.11 |
-25% |
| Free cash flow (3) |
836 | 812 | -3% | 1,711 | 1,303 | -24% |
| Group net debt | - | - | - | 14,613 | 14,660 | - |
(1) Excluding net capital gains on sale of Cimpor investment in 2010 and adjustment of legal provision for the German cement case in Q2 2009.
(2) Basic average number of shares increased in April 2009 due to the rights issue completed by the Group. Basic average number of shares outstanding of 285.0M and 258.9M for the third quarter and year-to-date 2009, respectively, compared to 286.1M for both the third quarter and year-to-date 2010.
(3) Free cash flow excluding the €338M one-time payment for the Gypsum competition fine paid in the third quarter 2010.
Current operating income
| (€m) | Third quarter | Year-to-date | ||||
|---|---|---|---|---|---|---|
| 2009 | 2010 | Variation | 2009 | 2010 | Variation | |
| Cement | 746 | 702 | -6% | 1,836 | 1,727 | -6% |
| Aggregates & Concrete | 116 | 140 | 21% | 147 | 163 | 11% |
| Gypsum | 10 | 14 | 40% | 42 | 48 | 14% |
| Other | (20) | (17) | - | (42) | (27) | - |
| TOTAL | 852 | 839 | -2% | 1,983 | 1,911 | -4% |
Highlights by business
Cement
- Sales were up 5% in the quarter and down 1% year-to-date, reflecting the impact of lower volumes being offset by the stronger benefit of foreign exchange.
- Volume declines were -5% in the quarter and -6% year-to-date, with volume growth in North America and Latin America helping to partially offset declines in other regions.
- Pricing remained solid overall.
- Cost reduction program strongly benefited all regions.
- Current operating income down 6% in the quarter and year-to-date due to lower overall volumes and higher energy costs.
Aggregates & Concrete
- Sales moved up 7% in the quarter with volume growth for aggregates and slower rates of volume decline in the ready mix concrete business and were down 2% year-to-date.
- EBITDA margins improved both year-to-date and in the quarter.
- Current operating income grew 21% in the quarter and 11% year-to-date, reflecting the impact of improved sales, favorable foreign exchange, and strong cost reduction measures.
Gypsum
- Sales were up 8% in the quarter and up 5% year-to-date as volume growth compensated for lower pricing.
- Current operating income was slightly higher for the quarter and year-to-date as market activity stabilized.
Investments, divestments and liquidity
- Investments totaled €1 billion year-to-date 2010, compared to €1.2 billion year-to-date 2009.
- Sustaining capital expenditures decreased by 7% to €186 million in 2010.
- Internal development capital expenditures were down 14% to €795 million in 2010.
- Acquisitions were €35 million in 2010, down from last year.
- Year-to-date, Lafarge received €286 million in cash for divestments and in total has secured over €350 million to date, in line with our target of at least €500 million by year-end.
- As of September 30, 2010, the Group had €3.8 billion in committed credit lines with an average maturity of 3 years in addition to €2.4bn of cash on hand. There are no financial covenants on debt at the Lafarge SA level.
Additional information
Practical information:
There will be an analyst presentation at 11:00 am local time at Lafarge Headquarters, 61 rue des Belles Feuilles, 75016 Paris. The presentation will be made in English with simultaneous French translation based on slides that can be downloaded from this website.
The presentation may be followed via a live web cast on the Lafarge website as well as via teleconference:
- France dial in number: +33 (0)1 70 99 42 87
- US dial in number: +1 212 444 0895
- International dial in number: +44 (0)20 7138 0844
Please note that a conference call playback will be available from November 5, 2010 to November 15, 2010 online through this website or at the following numbers:
- France playback number: +33 (0) 1 74 20 28 00 (code: 9863745#)
- US playback number: +1 347 366 9565 (code: 9863745#)
- International playback number: +44 (0) 207 111 1244 (code: 9863745#)
Notes to editors
Lafarge is the world leader in building materials, with top-ranking positions in all of its businesses: Cement, Aggregates & Concrete and Gypsum. With more than 78,000 employees in 78 countries, Lafarge posted sales of Euros 15.9 billion in 2009.
In 2010 and for the sixth year in a row, Lafarge was listed in the ‘Global 100 Most Sustainable Corporations in the World'. With the world's leading building materials research facility, Lafarge places innovation at the heart of its priorities, working for sustainable construction and architectural creativity.
This release may contain forward-looking statements. Such forward-looking statements do not constitute forecasts regarding the Company's results or any other performance indicator, but rather trends or targets, as the case may be. These statements are by their nature subject to risks and uncertainties as described in the Company's annual report available on its Internet website (www.lafarge.com). These statements do not reflect future performance of the Company, which may materially differ. The Company does not undertake to provide updates of these statements.
More comprehensive information about Lafarge may be obtained on its Internet website (www.lafarge.com), under Regulated Information.
