A record 2007 First Quarter
Following the divestment of our Roofing business effective March 1, 2007, and in accordance with IFRS principles, 2007 and 2006 operating results are presented excluding Roofing.
INCREASE IN KEY FIGURES
- Sales up 6% to €3,695 million
- Current operating income up 58% to €345 million
- Sustained organic growth up 11% in sales, up 64% in current operating income
- Net income Group share up €304 million to €362 million
- Earnings per share up €1.74 to €2.07
GROUP HIGHLIGHTS FOR THE FIRST QUARTER OF 2007
- An excellent quarter, which benefited from the implementation of our Excellence 2008 plan and strong momentum in our markets.
- North American results showing slight improvement, in spite of the decrease in volumes.
- Net income up sharply due to continued strong operating results and the positive impact of divesting the Roofing business and our cement, aggregates and concrete business in Central Anatolia in Turkey.
- Launch of the share buyback program, with €336 million already invested.
BRUNO LAFONT, CHIEF EXECUTIVE OFFICER OF LAFARGE, DECLARED:
"Our first quarter results show the vitality of our organic growth. Our North American operations are withstanding well the decline in volumes and the cost reduction dynamic can be seen across the Group. This good start to 2007 augurs well for the rest of the year."
CONSOLIDATED FINANCIAL STATEMENTS AT MARCH 31, 2007
|€ m||First quarter|
|Current operating income||218||345||+ 58%|
|Net income Group share||58||362|
|Earnings per share in €||0.33||2.07|
|Cash flow from operations||238||208(1)|
|(1) Excluding exceptionals||238||337|
|Group net debt||7,650||8,440|
(1) Cash flow from operations for the first quarter of 2007 includes an exceptional contribution of €129 million to the UK pension fund.
CURRENT OPERATING INCOME AT MARCH 31, 2007
|€ m||First quarter|
|Aggregates & Concrete||(18)||18||-|
FIRST QUARTER 2007 HIGHLIGHTS BY BUSINESS
- Sales up 10% to €2,195 million
- Current operating income up 50% to €298 million
Sustained growth in sales with favorable volume trends in most of our markets.
Drop in volumes in North America due to a slowdown in the residential sector and weather conditions. The decline, partly due to a high 2006 comparison basis, was partially offset by price increases.
Current operating income up sharply in the first quarter, reflecting good operating efficiency coupled with tight cost control, with positive market conditions particularly in Europe, Africa and Asia.
In North America, improvement in current operating income despite a decline in volumes, thanks to our actions to increase prices and reduce costs.
- Launch of the construction of new production capacities in India (Sonadih), Ecuador, Morocco (Tetouan) and Indonesia.
Aggregates & Concrete
- Sales up 3% to €1,278 million
- Current operating income up sharply to €18 million
- Favorable trends overall in our markets, particularly in France and emerging countries, with the exception of North America.
- Strong increase in current operating income due to price rises and tight cost control.
- Continued increase in contribution from value-added concrete products.
- Third acquisitions in the Chicago area in aggregates, to consolidate our local position.
- Sales up 1% to €415 million.
- Current operating income down 4% to €46 million.
- Sustained momentum in our markets and our businesses in Western Europe, Eastern Europe and Asia offset the impact of a slowdown in the residential sector in North America.
- Launch of construction work on two new plasterboard production plants in China and India.
OUTLOOK FOR 2007
- Good first quarter trends confirm our positive view overall of our markets for 2007.
- In Cement, we anticipate strong demand and prices overall. In North America, we anticipate a slight slowdown in our markets.
- In Aggregates & Concrete, we expect another year of growth in 2007, with strong growth in emerging markets in particular.
- In Gypsum, 2007 should be favorable in terms of volumes and prices in Western and Eastern Europe, but with a slowdown in the residential sector in North America.
- After increases in energy and logistics costs in recent years, we expect further increases in 2007.
- The cost-cutting plans launched in all our activities and countries as part of Excellence 2008 should generate significant cost reductions in 2007.
- Our annual results should continue to improve in 2007.
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 71,000 employees in over 70 countries, Lafarge posted sales of Euros 17 billion in 2006.
Lafarge has been committed to sustainable development for many years, pursuing a strategy that combines industrial know-how with performance, value creation, respect for employees and local cultures, environmental protection and the conservation of natural resources and energy. Lafarge is the only company in the construction materials sector to be listed in the 2007 ‘100 Global Most Sustainable Corporations in the World'. To make advances in building materials, Lafarge places the customer at the heart of its concerns. It offers the construction industry and the general public innovative solutions bringing greater safety, comfort and quality to their everyday surroundings.
Statements made in this press release that are not historical facts, including statements regarding our expectations on market trends, price increases, energy costs, cost reduction and growth in our results, 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.