The Board of Directors of Lafarge met on September 6, 2000 under the chairmanship of Bertrand Collomb, to close the accounts for the half year ending June 30, 2000.
Consolidated sales totaled € 5,656 million, a gross increase of 16,3% by comparison with the first half of 1999. Without changes in scope and foreign exchange effects, the underlying activity grew by 7.1%.
Operating income on ordinary activities amounted to € 787 million, an increase of 26% on the first half of 1999: Cement: € 458 million (+31%), Aggregates & Concrete: € 90 million (+22%), Roofing: € 97 million (+18%), Gypsum: € 57 million (-16%) and Specialty Products: € 78 million (+47%).
By broad geographical zones, the operating income evolved as follows:
- Western Europe: +13%. The excellent progress in the results in France, where the full effects of the economic growth were felt and the continued strong performance in Spain. The results were effected by a disappointing first half in Germany where the Eastern economy continued to decline.
- North America: +25%. Demand remained at a high level for cement and aggregates and concrete; the results of these activities progressed significantly in the first half of the year. The Gypsum activities declined in the first half compared to 1999 due partly to the sharp increase in raw material prices and partly costs related to the start-up of the new plant in Kentucky.
- Emerging countries and Eastern Europe: +75%. The main factor contributing to the increase was the rise in results in Morocco, in South Africa and to a lesser extent the Philippines. The very significant improvement in the results from Brazil are also worthy of note as well as the consolidation of recent acquisitions, in particular South Korea and India. However, Turkey continued to experience very difficult market conditions.
The net charge for non recurring items was € 17 million and included the cost associated with the offer for Blue Circle Industries PLC, offset by capital gains on the sale of certain financial investments.
Net income, Group share totaled € 250 million, an increase of 26% by comparison with the first six months of 1999 on a like for like basis*.
Net earnings per share for the period stood at € 2.35, a rise of 15% compared with the first half of 1999*.
Since the beginning of the year, Lafarge has acquired or developed new positions in each of its Division:
-Cement: Lafarge became in January the principal shareholder of Halla Cement in South Korea. The Group's presence in India was also realised at the beginning of the year (Tisco Cement).
-Aggregates & Concrete: in the United-States, the Group strengthened its position in the Great Lakes region with the acquisition of Presque Isle, one the largest quarries with an annual capacity of 8 million tonnes.
-Roofing: in Germany, Lafarge acquired a majority holding in Tonindustrie Heisterholz, hence becoming the largest producer of clay tiles.
-Gypsum: in Asia, the joint venture Lafarge/Boral becomes leader in the wallboard markets in South Korea, China, Malaysia, Indonesia and in the Philippines.
-Specialty Products: the Group has increased its presence in Italy (paints) and United States (mortars).
The outlook for the second half of the year is equally favourable. Within Europe, the markets have positive trends with the exception of Germany. The outlook for North America remains positive for Cement and Aggregates & Concrete, however more difficult for Gypsum. Emerging markets continue to show positive trends overall.
According to Bertrand Collomb, Chairman and Chief Executive Officer of Lafarge, "with the development of our markets, our performance and our recent acquisitions, all the circumstances are set for the year 2000 to be another year of progress for Lafarge".
|Operating income on ordinary activities||787||623||26%|
|Net income, Group share||250||199||26%|
|Cash flow from operations||755||671||13%|
|Net earnings per share||€2.35||€2.04*||15%|
* The half year results for 1999 have been restated to reflect the new accounting treatment for deferred tax as required by French law.