- Sales down 11.9% to € 6,350 million from € 7,203 million
- Negative foreign exchange impact due to Euro appreciation: -10.9%
- Slight increase of underlying sales: + 0.8%
Sales as at June 30, 2003 declined 11.9% to € 6,350 million from € 7,203 million at June 30, 2002 largely due to significant foreign currency variations which impacted sales by -10.9%. The net scope effect on sales amounted to -1.8% mainly as a consequence of the divestments realized in 2002.
Underlying sales were up +0.8% at the end of June.
Sales in the first half of the year were generally slower in the Northern hemisphere compared to 2002, due to harsh weather conditions during the winter and despite an encouraging pick up in June 2003.
The sales report for each Division, excluding foreign exchange, scope effects, and before inter divisional sales elimination is as follows:
Sales rose 0.9% during the first half (-3.4% in Quarter 1 and +3.0% in Quarter 2).
After the harsh winter experienced in the first quarter and a slow start in April and May, there were some signs of a pick up in activity levels in June. Western Europe recorded stable sales overall by the end of June. Strong growth was seen in Spain, where the construction market continues to boom, and in Greece with record sales in the run up to the Olympic Games. France and the UK saw some recovery in June, but Germany remains poor as a result of the continued low level of prices. After the prolonged harsh winter the start to the North American construction season was delayed by a wet spring. Sales were therefore down in the first half. Pricing in the US showed a modest decline, particularly due to pricing pressure in the South East and North East. Pricing in Canada was however favorable.
Positive sales trends overall were recorded in the rest of the world. Particularly good market conditions allowed strong growth in Romania, Morocco, Jordan, and across Africa. Favorable pricing trends in much of Latin America, South Korea and also India helped offset generally slower volumes. Malaysia recorded some recovery in the second quarter despite continued price pressure. Areas of weakness remain the Philippines, with very low prices, Venezuela where the unstable economic situation has led to a large fall in volumes and Poland, which is still experiencing a depressed construction market.
AGGREGATES & CONCRETE: +1.9%
Sales rose 1.9% during the first half (-0.6% in Quarter 1 and +3.3% in Quarter 2).
Sales rose in Western Europe driven by the UK and Spain. In the UK, the asphalt and paving business benefited from major contracts in progress and concrete sales also showed a good level of growth. Spain continues to have record sales. In France, sales at the end of June were marginally down despite positive pricing trends. In North America, aggregates and concrete sales in the US were held back by poor weather conditions and weak levels of demand. In Canada, where there is a stronger construction market, concrete sales recorded a strong level of sales growth; however, aggregate sales were adversely affected by poor weather conditions in the East and in Alberta.
Sales declined by 1.7% during the first half (-3.2% in Quarter 1 and -0.6% in Quarter 2).
Sales in Western Europe were down, with the exception of the UK, Italy and Austria. Weaker sales continued in France, Germany, Scandinavia and the Benelux, particularly for concrete tiles. Sales of roofing components decreased slightly. Chimney sales improved marginally.
In the United States, sales continued to grow.
Sales rose 1.8% during the first half (+1.9% in Quarter 1 and +1.6% in Quarter 2).
The increase in sales was due to overall positive growth in Western Europe and Asia, which offset lower sales in Germany, Poland and North America. In North America, volumes were held back by lower commercial construction. Prices have edged up to an average of US$97 per thousand square feet in June.
NEGATIVE FOREIGN EXCHANGE IMPACT OF -10.9% AMOUNTING TO € 791 MILLION
The effect of foreign currency fluctuations on the first half 2003 sales was significant. The strong appreciation of the Euro has had a material translation impact on sales generated in the following currencies: US Dollar (€ 314 million), Pound Sterling (€ 68 million), Canadian Dollar (€ 60 million), Brazilian Real (€ 58 million), and the Malaysian Ringgit (€ 47 million).
SCOPE CHANGES OF -1.8% AMOUNTING TO € 110 MILLION
Sales in the first half from acquisitions amounted to € 114 million. Divestments and a change in the consolidation method of Morocco resulted in a reduction in sales of € 224 million.
CONSOLIDATED SALES AS AT JUNE 30, 2003
June 30, 2003
June 30, 2002
|Variation||At constant scope and foreign exchange||At constant scope and foreign exchange, before inter divisional sales elimination|
|Aggregates & Concrete||1,98||2,218||-10.7%||2%||+1.9%|
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 €14.6 billion in 2002.
Lafarge's next financial publication - 2003 half year results - will be on September 4 2003 (before the Euronext stock market opens).
For release worldwide with contemporaneous release in the United States.
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 Reference Document COB number R03-0375 and 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.