The Board of Directors of Lafarge met on Tuesday, March 9, 1999 under the chairmanship of Bertrand Collomb, to close the accounts for the 1998 financial year.
Sales rose by 53% in 1998 to FRF 64.3 billion (9,802 million euros), particularly as a result of the integration of Redland operations.
Net operating income stood at FRF 9,164 million, or 1,397 million euros, an increase of 63%. This improvement, which was felt in all the Group's business areas, chiefly reflects:
- a higher level of business in Western Europe (except for Germany) and Latin America,
- an excellent economic climate in North America,
- a favorable context for prices.
Net income, Group share totaled FRF 3,059 million (466 million euros), a rise of 26%. Net earnings per share were up 19% at FRF 32.30, or 4.93 euros.
At the Annual General Meeting of Shareholders on May 27, an increase in dividend from FRF 11 to FRF 12 (1.83 euros) per share (to which the French tax credit should be added) will be proposed. Shareholders will have the right to take their dividend in cash or in the form of shares.
For the first time, shareholders who have retained registered shares for two years will be entitled to have their dividend raised by 10%.
SUCCESSFUL INTEGRATION OF REDLAND
Apart from the strong operating results it posted, another highlight of the year for Lafarge was the successful integration of Redland (FRF 20 billion, or 3 billion euros, of sales; over 18,000 employees). In a period of six months, the Group determined strategies and action programs and put Lafarge organizations and policies into place.
As forecast, the acquisition of Redland has already created a highly positive impact on Group results.
PROMISING STRATEGIC developments
Looking beyond Redland, Lafarge continued to strengthen its worldwide positions in 1998. Taking advantage of the Asian crisis in particular, the Group was able to seize new opportunities for development, carrying out about FRF 12.2 billion (1.9 billion euros) of investments throughout the financial year.
In each of its divisions, Lafarge reinforced its positions:
- Cement: acquisitions in Honduras, South Africa and the Philippines, interests purchased in Italy, the United States and Jordan, and acquisition of several industrial assets in Germany.
- Aggregates & Concrete: acquisitions in North America and South Africa, joint-venture agreement in China.
- Roofing: purchase of minority interests in Brazil, South Africa and Malaysia.
- Gypsum: acquisitions in South Korea, where Lafarge has become leader on the gypsum wallboard market.
- Specialty Products: in the United States, developments in lime and in the road marking sector.
PROSPECTS FOR 1999
In spite of the uncertainties affecting the global financial and economic situation, 1999 has begun auspiciously. Trends are positive in Europe and North America, where three-quarters of the Group's business is located.
Following the substantial developments occurring in 1998, the Group (which has now implemented a new organization with five divisions: Cement, Aggregates & Concrete, Roofing, Gypsum and Specialty Products) will concentrate on integrating its acquisitions, lowering its costs and boosting its performance.
Chairman and Chief Executive Bertrand Collomb commented: "1998 was a very good year for Lafarge and 1999 should prove to be another year of progress."
|Million Francs||Million Euros||Million Francs||%|
|Cash flow from operations||8,862||1,351||6,126||+ 45%|
|Net operating income||9,164||1,397||5,630||+ 63%|
|Net income, Group share||3,059||466||2,432||+ 26%|
|Net earnings per share||32.3||4.93||27.2||+ 19%|
|Net dividend per share||12.0||1.83||11.0||+ 9%|