Sales down 8.6% to € 10,281 million from € 11,251 million
Negative foreign exchange impact due to Euro appreciation: -9.5%
Increase of year to date underlying sales: + 3.0%
Strong third quarter underlying sales: + 6.6%
Sales as at September 30, 2003 declined 8.6% to € 10,281 million from € 11,251 million at September 30, 2002 largely due to significant foreign currency variations which impacted sales by -9.5%. The net scope effect on sales amounted to -2.1% mainly as a consequence of the divestments realized in 2002. Underlying sales were up +3.0% at the end of September, following a much improved third quarter during which sales grew by 6.6%. The level of sales at the end of September keeps us on track with our 2003 objective for operating income on ordinary activities.
The sales report for each Division, excluding foreign exchange, scope effects, and before inter divisional sales elimination is as follows:
Sales rose 3.3% during the first nine months (-3.4% in Quarter 1, +3.0% in Quarter 2 and +7.7% in Quarter 3).
The pick up in activity levels observed at the end of June were confirmed during the third quarter with sales rising by 7.7% on the back of a strong rise in volumes sold particularly in emerging markets.
Western Europe recorded a slight increase overall, despite lower sales realized in the third quarter in the UK. These were more than offset by strong sales in Greece. In Germany the severe price erosion experienced over the past year has now stabilized and price increases are being implemented.
After a marked improvement in the third quarter with rising volumes and only a marginal price decline overall, sales in North America now show only a modest decline by the end of September. The contrast remains, however, between Canada and the USA. In Canada we continue to record good levels of growth in both volumes sold and prices compared to the USA, where volumes are down and prices continue to be lower than in 2002 in several markets.
Positive sales trends overall were recorded in the rest of the world. Particularly good market conditions allowed strong growth in Romania, Morocco, Jordan, across much of Africa, South Korea and Chile. Favorable pricing trends in Latin America and India helped offset generally lower volumes. Malaysia continued to recover despite continued price pressure. Areas of weakness remain Poland, which is still experiencing a depressed construction market and Venezuela where the unstable economic situation has led to a large fall in volumes. In the Philippines, where the severe price competition over the last year has resulted in a significant decline in sales, the situation has started to improve with increasing volumes and a rise in prices.
AGGREGATES & CONCRETE: +3.7%
Sales rose 3.7% during the first nine months (-0.6% in Quarter 1, +3.3% in Quarter 2 and +6.5% in Quarter 3).
Sales growth in Western Europe continues to be driven by the UK and Spain. In the UK, the aggregates 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 September were marginally down despite positive pricing trends. In North America, aggregates and concrete sales in the US, having been held back earlier in the year by poor weather conditions and slower construction activity, saw some recovery in the third quarter, particularly in the eastern markets. In Canada, where the construction market has been more robust, concrete sales recorded a strong level of sales growth; however, aggregate sales remain below 2002 due to the very poor first half which was adversely affected by unfavorable weather conditions.
Sales increased by 1.0% during the first nine months (-3.2% in Quarter 1, -0.6% in Quarter 2 and +5.5% in Quarter 3).
Sales in Western Europe were marginally down by the end of September. The UK, Italy, Austria and Eastern Europe continue to record good growth in sales. In Germany sales for the year to date remain down overall, however an improvement was recorded in sales volumes with a stabilization of the pitched roof market over the past few months possibly brought about by an anticipated end to subsidies on new houses. Weaker sales continued in France, Scandinavia and the Benelux, particularly for concrete tiles. Sales of roofing components increased by 3% and chimney sales by 6%.
In the United States, sales continued to grow exploiting the strong housing market.
Sales rose 4.3% during the first nine months (+1.9% in Quarter 1, +1.6% in Quarter 2 and +9.5% in Quarter 3).
The increase in sales was due to overall positive growth in Western Europe with a particularly buoyant market in the UK. In Asia, all markets showed sustained growth. In North America, volumes were held back by lower commercial construction, but prices have edged up to an average of US$100 per thousand square feet in September.
NEGATIVE FOREIGN EXCHANGE IMPACT OF -9.5% AMOUNTING TO € 1,060 MILLION
The effect of foreign currency fluctuations on the first nine months of 2003 sales was significant. The strong appreciation of the Euro had a material translation impact on sales generated in the following currencies: US Dollar (€ 452 million), Pound Sterling (€ 104 million), Canadian Dollar (€ 82 million), Brazilian Real (€ 58 million), and the Malaysian Ringgit (€ 58 million).
SCOPE CHANGES OF -2% AMOUNTING TO € 202 MILLION
Sales in the first nine months from acquisitions amounted to € 180 million. Divestments and the change in the consolidation method for Morocco resulted in a reduction in sales of € 382 million.
|September 30, 2003 - € Million||September 30, 2002 - € Million||Variation||At constant scope and foreign exchange||At constant scope and foreign exchange, before inter divisional sales elimination|
|Aggregate & Concretes||3,341||3,612||-7.5%||+3.8%||+3.7%|
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 full year sales - will be on January 28, 2004 (before the Euronext stock market opens), and not on January 22, 2004 as previously announced.
For release worldwide with simultaneous release in the United States.
Statements made in this press release that are not historical facts, including statements regarding our expected operating income, 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 Commission des Opérations de Bourse and the US Securities and Exchange Commission including its Reference Document COB number D03-0375 as updated on June 5, 2003 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.