Euronext: LG, NYSE: LR
Sales were up 2.2% to € 2,945 million as at March 31, 2005 compared to first quarter 2004 sales of € 2,881 million. The net scope effect was at 1.1%. Foreign exchange variations impacted sales by -0.8%.
"The underlying favorable trends in many of our markets have allowed for positive pricing. Volumes were held back this year compared to the first quarter of 2004 due to harsher winter weather, but this is quite usual given the seasonality of our business" said Jean-Jacques Gauthier, Executive Vice President, Finance, he added "this first quarter volume trend does not alter our view for the year for which we expect overall favorable market conditions."
The sales report for each division, excluding foreign exchange, scope effects, and before inter divisional sales elimination is as follows:
In Western Europe price increases were realized in many countries and in particular in Germany and the UK. However sales were down due to lower volumes sold, essentially being the result of the winter weather across the region, which was more harsh than in the first quarter of 2004 as well as fewer working days. Greece continued to slow as expected compared to the high levels of demand in the run up to the Olympic Games.
North American sales have continued to strengthen in a favorable demand environment. Higher volumes and prices were seen across much of the United States, where strong demand levels were recorded in markets not impacted by unfavorable weather. Average prices increased in both the United States and Canada. The full impact of these price increases will continue throughout the year and a further price increase has been announced for the United States from July.
Despite further strong growth in Romania, sales in Eastern Europe were down, due to lower volumes in Poland and Russia.
Strong sales growth was recorded in the Mediterranean Basin where Jordan's strong construction sector continued its momentum. In Egypt prices continued to increase.
In Africa, sales grew strongly with favorable pricing trends in most countries and strong volumes in Kenya.
In Asia, India continued to enjoy strong volume growth and whilst prices continued to rise in the Philippines compared to 2004, slower construction led to reduced volumes. In Malaysia prices suffered in a difficult competitive environment, and in South Korea the depressed construction market drove volumes and prices lower.
In Latin America, Brazil experienced lower prices due to keen competition and some decline in volumes. Venezuela continued to show good improvement and Chile remained sound.
AGGREGATES & CONCRETE: +4.5%
In Aggregates, the first quarter of 2005 continues to show positive trends in many markets. Although Western European sales were down due to the poorer winter weather than in 2004, good increases in prices were achieved offsetting much of the volume decline. Good volume trends were seen in Aggregates across much of North America together with favorable pricing. Other countries saw generally strong levels of volume growth. Ready-mixed concrete volumes and prices in Western Europe experienced favorable trends. Volumes were however down in North America, largely due to the more difficult weather conditions seen in Canada compared to 2004, nevertheless prices were up, reflecting good pricing performance in all markets.
Much of the decline in sales comes from Germany, where volumes were significantly lower due to a weaker market compared to the start of 2004. In this environment, prices came under further pressure. Elsewhere in Western Europe the bad winter weather affected volumes in many countries, but pricing trends were favorable. Buoyant housing market conditions continued to drive sales growth in the United States.
The growth was largely driven by significantly higher prices in North America, where volumes also continued to grow. Sales in Western Europe were flat as the 2005 winter weather conditions impacted volumes, however, there were favorable pricing trends. In Asia sales declined as a result of weaker volumes in South Korea coupled with some price competition, and in Australia the market continued to soften.
NEGATIVE FOREIGN EXCHANGE IMPACT OF -0.8% AMOUNTING TO € 21 MILLION
The negative foreign currency translation impact on sales was generated essentially from the decline in the US Dollar (- €19 million) versus the euro.
SCOPE CHANGES OF +1.1% AMOUNTING TO € 32 MILLION
Sales from acquisitions amounted to a positive scope effect of € 57 million largely due to the acquisition of Cementos Selva Alegre in Ecuador in December 2004, to the acquisition of Hupfer Holdings in France (May 2004) and to the acquisition of the assets of The Concrete Company in the United States ( April 2004). The reduction in sales due to negative scope effect totaled € 25 million.
|March 31, 2005
|March 31, 2004
|Variation||At constant scope and foreign exchange||At constant scope and foreign exchange, before inter divisional sales elimination|
|Aggregates & Concrete||908||854||+6.3%||+4.6%||+4.5%|
IFRS: PUBLICATION OF ADDITIONNAL INFORMATION FOR 2004
Further to the publication on February 24, 2005 of the 2004 financial statements in IFRS, the 2004 Business Segment and Geographical Area Information restated in IFRS is now available, together with the financial statements to June 30, 2004 restated in IFRS.
Lafarge's annual general meeting of shareholders will be held on May 25, 2005.
Lafarge's next financial publication - 2005 half year sales - will be on July 28, 2005 (before the Euronext stock market opens).
Lafarge, the world leader in building materials, holds top-ranking positions in all four of its Divisions: Cement, Aggregates & Concrete, Roofing and Gypsum. Lafarge employs 77,000 people in 75 countries and posted sales of €14.4 billion in 2004.
For release worldwide with simultaneous release in the United States.
33-1 44-34-92-32 firstname.lastname@example.org
Statements made in this press release that are not historical facts, are forward-looking statements made pursuant to the safe harbor 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; seasonal nature of the Company's operations; levels of construction spending in major markets; supply/demand structure of the industry; competition from new or existing competitors; unfavorable 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 public filings with the French Autorité des Marchés Financiers and the US Securities and Exchange Commission including its Reference Document and annual report on Form 20-F. 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.
Conference Call on First Quarter Sales to March 31, 2005
Following the release of Lafarge's sales to March 31, 2005, a conference call will be held on:
May 4th, 2005 at 15:30 French time, in English
(14:30 UK time; 09:30AM EDT in North America)
The speakers will be:
Jean-Jacques Gauthier – Executive Vice President, Finance
James Palmer - Vice-President Investor Relations
Danièle Daouphars – Manager Investor Relations
If you wish to participate in the conference call, please dial:
From France +33 (0)1 56 38 35 10
From UK +44 (0) 207 190 1596
From USA +1 (0) 720 356 7409
From USA toll free (US only) 0 888 595 4228
Conference call name: “Lafarge”
A replay of the conference call will be available from May 4th, 2004 at 7.30 pm French time to May 11th, 2005 at 7.30 pm at the following numbers:
From France +33(0)1 70 99 32 94Access code: 133141#
From UK +44 208 515 2499Access code: 446999#
From USA +1 (0) 303 590 3010Access code: 11029407#
From USA toll free (US only) Access code: 11029407#