- Successful acquisition and integration of Blue Circle
- Growth in sales of 12%, with Blue Circle consolidated with effect from July 11, 2001
- Strong progress reported by the Cement Division in terms of both volumes (+30%) and operating income (+29%)
The Board of Directors of Lafarge met on February 27, 2002, under the chairmanship of Bertrand Collomb, to close the accounts for the year ending December 31, 2001.
Acquisition of Blue Circle and increase in sales in an environment of generally favourable construction markets
The acquisition of Blue Circle Industries Plc became effective on July 11, 2001 and the integration process was successfully completed on schedule at the end of 2001.
The Group's sales for the 2001 financial year stood at €13,698 million, an increase of 12% and of 3% on a like-for-like basis. This growth – which only takes account of Blue Circle sales with effect from July 11, 2001, amounting to €1,554 million – reflects generally favourable construction markets and demonstrates the benefits derived by the Group from the worldwide geographical spread of its operations. This is mostly reflected by the very strong growth in results from emerging markets.
The expansion of markets in Asia and in certain European countries coupled with the stability of the North American market enabled the Group to absorb the impact of a notable decline in some markets as well as the continuing decline of the German market.
Sound performance by the Cement Division and confirmation of the potential of synergies arising from the Blue Circle acquisition
The Cement Division reported a substantial rise in volumes, which totalled 88 million tonnes (including 17 million tonnes of Blue Circle), a growth of 30% by comparison with the previous year.
The Division's margins showed an improvement on a like-for-like basis, and operating income from ordinary activities rose by 29%, to €1,507 million.
A comparison between the sound performance of the Cement Division and the performance of former Blue Circle operations, which encountered production issues in 2001, confirms the prospects for improved margins as well as the synergies which have been announced.
Contrasting results of other Divisions
The Aggregates & Concrete Division recorded a 23% increase in operating income from ordinary activities, primarily due the successful integration of recent acquisitions in North America. The results of the Roofing Division were down 35%, largely owing to the persistent difficulties of the construction market conditions in Germany. The sharp drop in the results posted by the Gypsum Division is to a large extent explained by the continued fall in wallboard prices in the United States. Nevertheless a certain improvement in prices was seen during the last few months of 2001.
Net Income per share
Net income per share is diluted by the rights issue of 14 million new shares in February 2001. While the results of former Blue Circle operations were only consolidated with effect from July 11, 2001.
Increase of dividend
The board decided to recommend to increase the dividend by 4.5% to 2.3 euros per share (excluding tax credit).
|In millions of euros||December 31, 2001||December 31, 2000||% change|
|Gross operating income||2,862||2,592||+ 10%|
|Operating income on ordinary activities||2,065||1,905||+ 8%|
|Net income before goodwill||892||846||+ 5%|
|Net income||750||726||+ 3%|
|Net income per share (€)||6.0||6.8||- 12%|
|Proposed dividend (€)||2.30||2.20||+ 4.5%|
2002 has begun in a context of economic uncertainty, although no departure from our market trends experienced in 2001 has been observed.
The Group will benefit in 2002 from the result of our efforts to improve our operational performance and from the synergies anticipated from the integration of Blue Circle, in a context of rigorous financial management in line with our commitments.
Lafarge is the world leader in building materials, and employs 83,000 people in 75 countries. The Group holds top-ranking positions in all four of its Divisions: Cement, Aggregates & Concrete, Roofing and Gypsum. Lafarge posted sales of €13,698 million in 2001.
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Statements made in this press release that are not historical facts are forward-looking statements made pursuant to the safe harbour 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; unfavourable 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 COB number R01-049 and 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.