The Board of Directors of Lafarge met on Thursday, March 9, 2000, under the chairmanship of Bertrand Collomb, to close the accounts for the 1999 financial year.
Sales rose by 7.4% to €10,528 million, chiefly as a result of the integration of recent acquisitions and higher volumes in industrialized countries.
Operating income on ordinary activities stood at €1,630 million, an increase of 17%. All five of the Group's Divisions reported improved income. Particular features include:
- increased business in Spain, France and Western Europe in general;
- a context of growth and higher prices in North America;
- early signs of recovery in Asia, principally in South Korea.
Net earnings Group share totaled €614 million (a rise of 32%). Net earnings per share were up 26% at €6.20.
At the Annual General Meeting of Shareholders on May 25, an increase in dividend from €1.83 to €2.05 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.
IMPROVED FINANCIAL RESULTS IN ALL FIVE DIVISIONS
In 1999, the Group's five Divisions all reported improved results, and extended their international development:
The Cement Division (Operating income on ordinary activities: €938 million, up 15%) enjoyed high growth in sales in France and in Spain and posted record results in North America, in a favorable context as far as both demand and prices were concerned. In Newly Industrialized Countries, the Division achieved good results in Poland and Jordan.
In Egypt, Lafarge and Titan jointly acquired a controlling interest in the Beni Suef cement plant, whose capacity will be doubled in 2002. Lafarge and Blue Circle Industries also acquired a majority stake in Hima Cement, the largest cement producer in Uganda. The Group entered India, launching the Lafarge Cement brand in the eastern part of the country. In Mexico, Lafarge purchased Cementos Portland Blanco de Mexico (CPBM). Lafarge negotiated the agreement in 1999 which recently saw it become the principal shareholder of RH Cement in South Korea.
The Aggregates and Concrete Division (Operating income on ordinary activities: €249 million, up 7%) achieved improved profitability as a result of higher margins generated by better market conditions in industrialized countries. The Division enjoyed a very good year in France, thanks to synergies with Redland taking full effect and the success of a concrete performance improvement program.
In North America, Lafarge carried out several medium-size acquisitions in aggregates and asphalt, involving strong synergies with existing operations.
The Roofing Division (Operating income on ordinary activities: €248 million, up 5%) reported steady progress in Europe, and benefited from the positive effects of its cost-cutting plans. Lafarge pressed ahead with the development of business in the United States and the Newly Industrialized Countries, and continued the development of business in roofing accessories and chimneys throughout Europe.
Late in the year, Lafarge took 100% control of all its Roofing activities, acquiring all shares owned by minority shareholders of Lafarge Braas GmbH.
The Gypsum Division (Operating income on ordinary activities: €124 million, up 59%) increased its volumes in all countries, particularly in North America and Asia, with a successful first year of operations in South Korea.
In 1999, the Division increased its stake in Pioneer Plasterboard, a subsidiary specializing in the production and marketing of gypsum wallboard in Australia, to 100%.
The Specialty Products Division (Operating income on ordinary activities: €115 million, up 47%) saw improvements in each of its businesses, whether relating to the industry or to the construction sector. Substantial progress was achieved by construction materials businesses, in which the Division's objective is to become a world leader.
Lafarge Mortiers acquired the Argentine company Klaukol, making it one of the leaders in the country's mortars market.
PROSPECTS FOR 2000
In the perspective of the acquisition of Blue Circle Industries PLC, Lafarge will experience another major stage in its development in 2000, which will establish it as the world's leading cement producer.
Following a process that the Group has already successfully applied on a number of occasions, notably during the successful integration of Redland, the priority in 2000 will consist in the rapid, harmonious and efficient integration of Blue Circle activities, implementing the synergies and opportunities for delivering value generated by this acquisition.
Overall, market trends are expected to be positive, with improvements forecast in regions of the globe that experienced unfavorable conditions in 1999.
Bertrand Collomb commented: "1999 proved to be an excellent year for Lafarge, confirming the Group's capacity to combine improved profitability with worldwide development. The Blue Circle operation and a highly favorable economic climate look like making 2000 yet another year of progress for the Group."
|Operating income on ordinary activities||1,630||1,397||+17%|
|Net earnings Group share||614||466||+32%|
|Cash flow from operations||1,495||1,282||+17%|
|Net earnings per share||6.20||4.93||+26%|
|Net dividend per share||2.05||1.83||+12%|