Slight increase of net income (+2%) before goodwill amortization & extraordinary provision. Dividend maintained at €2.30 per share.
The Board of Directors of Lafarge meeting, chaired by Bertrand Collomb, on February 26, 2003, closed the accounts for the year ending December 31, 2002.
December 31, 2002
December 31, 2001
|Operating income on ordinary activities||2,132||1,934*||+10%|
|Net income, Group share before goodwill amortization and extraordinary provision||914||892||+2%|
|Net income, Group share before extraordinary provision||756||750||+1%|
|Net income per share in €||3.52||5.97||-41%|
|Cash flow from operations||1,956||1,668||+17%|
|Group net debt||10,216||11,703||-13%|
* Operating income on ordinary activities of equity affiliates is no longer included in the Group's operating income.
Sales increased by 7%, mainly due to the full consolidation effect of Blue Circle. Operating income rose by 10% (by 2% excluding foreign exchange, changes in cement plant depreciation and scope effects), which demonstrates an improvement of the operating margin.
To be prudent, a provision of €300 million has been made to cover the European Commission decision against our Gypsum activities in Europe, which Lafarge has appealed against, as well as the risk related to the current German Cartel authority investigation into the cement industry in Germany.
Net income before goodwill amortization and the extraordinary provision is slightly up (+2%). Net income per share is down 41% due to the extraordinary provision charge. Dividend is maintained at €2.30 per share.
Cash flow generation from operations increased by 17% to nearly €2 billion, investments amounted to €1.5 billion and disposals totaled €725 million, bringing the Group's net debt was down by nearly €1.5 billion.
The Cement Division faced varied market conditions with a global improvement in operating income and margin and a larger contribution from emerging countries.
Synergies resulting from the acquisition of Blue Circle are on track, but much of the success has been offset by adverse markets and operations.
In the Aggregates & Concrete Division, the weak market conditions in North America, mostly in asphalt and paving activities, led to a decline in results despite the fact that operating income in Western Europe saw some increase.
The results of the Roofing Division were slightly up despite weaker markets in Germany, due to important restructuring efforts.
The results of the Gypsum Division have greatly improved mainly due to the increase in price and to the improvement of the operating performance in North America.
December 31, 2002
December 31, 2001
|Variation||Excluding foreign exchange and scope effects|
|Aggregates and Concrete||336||378*||-11%||-10%|
* Operating income on ordinary activities of equity affiliates is no longer included in the Group's operating income. (a) excluding foreign exchange, changes in cement plant depreciation and scope effects
Bertrand Collomb, Chairman and CEO of the Group said:
"In a mixed economic environment, I am pleased that the Group managed to improve its operating margin, strongly increase its cash flow generation and reduce its debt level so significantly. Blue Circle synergies for 2002 have been achieved and are on track. Whilst their benefit has been partially affected by temporary difficulties, the underlying potential of this acquisition remains unquestionable."
"In a context of economic uncertainties for 2003, we will continue to give the priority to the improvement of our operating results and the strengthening of our financial structure."
Lafarge is the world leader in building materials, and employs 77,000 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 €14,610 million in 2002.
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; 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; 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 Reference Document filed with the French COB under the reference number D02-162 and updated under the reference number D02-162/A1, and its annual report 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.