2005 first half sales rise 6.3% to € 7,220 million on positive pricing trends in many markets

28 July 2005

Sales were up 6.3% to € 7,220 million as at June 30, 2005 compared to first half 2004 sales of € 6,794 million. The net scope effect was at 0.9%. Foreign exchange variations impacted sales by -0.6%. Like for like sales rose by 6.0% for the first six months of the year and by 9.0% in the second quarter.

"As we anticipated, the strong level of sales in the first half results from overall favorable market conditions and from successful price increase implementation in most markets. Our previously stated expectation of a 6 to 8% like for like growth of our operating income on ordinary activities for 2005 remains unchanged, in the context of a few difficult markets and higher energy and transportation costs" said Jean-Jacques Gauthier, Chief Financial Officer and Executive Vice President.

The sales report for each division, excluding foreign exchange, scope effects, and before inter divisional sales elimination is as follows:

CEMENT: +6.5% (+2.1% in Quarter 1, +9.9% in Quarter 2).

Cement sales grew 6.5% with a very good second quarter. Volumes in 2005 were in line with the strong level achieved in the first half of 2004. Year on year price growth was significant in an environment of higher energy and transportation costs compared to the same period last year.

In Western Europe sales were slightly up overall with good growth in France and Spain. Noticeable price improvements were experienced in Germany and the UK. The favorable pricing trends across much of the region offset the significantly lower volumes in Germany and Greece.

North America posted strong sales, with sustained volume growth and strong price increases throughout the first half.

Sales in Eastern Europe grew in the first six months after a particularly weak first quarter. Romania, Serbia and Russia continue to see robust sales. The construction market in Poland remains uncertain with volumes down on 2004 levels.

Strong sales growth was recorded in the Mediterranean Basin particularly in Jordan, Turkey, Egypt and with an improving trend in Morocco.

In Africa, sales benefit from favorable volume and pricing trends across the region.

In Asia, construction markets remain very mixed across the region. Volumes grew in India and Malaysia but remained weak in South Korea in a context of depressed demand, and saw a decline in the Philippines. The decline in sales is essentially due to the severe price competition experienced in Malaysia and South Korea in the first half. Prices continued to improve in the Philippines.

In Latin America, sales were slightly down as severe price competition caused a sharp fall in Brazil. Venezuela continued to show good improvement.

AGGREGATES & CONCRETE: +9.8% (+4.5% in Quarter 1, +13.6% in Quarter 2)

The strong 9.8% growth in Aggregates and Concrete has been driven by solid pricing gains in a context of rising costs throughout most markets and good volumes, particularly in the second quarter.

Aggregates sales were particularly strong in North America, driven by favorable volumes and prices. In Western Europe, sales are up as a result of good pricing trends, although volumes remain down after the weak, weather impacted, first quarter and a decline of the UK market. Good market conditions were seen in the main other markets. Sales were up strongly in the Asphalt and Paving activity, driven by North America.

In Concrete, sales increased strongly in Western Europe due to good pricing trends and very good volumes in most markets. In North America good price and product mix improvements more than offset the slight weather related decline in volumes. In most other countries, sales increased strongly.

ROOFING: -5.9% (-9.1% in Quarter 1, -3.8% in Quarter 2)

In Western Europe, in comparison to a very strong first half 2004, sales are down in many countries, with a severe drop in both volumes and prices in Germany. Good housing market conditions continued to drive sales growth in the United States.

GYPSUM: +7.1% (+4.5% in Quarter 1, +9.7% in Quarter 2)

The increase in sales was largely driven by favorable market conditions in North America, with higher prices and good volume growth. Sales in Western Europe were up with generally favorable markets. In Asia sales declined as a result of a weaker market in South Korea coupled with some price competition.


The negative foreign currency translation impact on sales was limited, generated essentially from the decline in the US Dollar (- €53 million) versus the euro, partly offset by the appreciation of several other currencies.


Sales from acquisitions amounted to a positive scope effect of € 115 million largely due to the acquisition of Cementos Selva Alegre in Ecuador in December 2004, of Hupfer Holdings in France (May 2004) and of the assets of The Concrete Company in the United States (April 2004). The negative scope effect totaled € 53 million.

Consolidated sales as of 30 June 2005
  June 30, 2005
€ Million
June 30, 2004
€ Million
Variation At constant scope and foreign exchange At constant scope and foreign exchange, before inter divisional sales elimination
Cement 3,482 3,275 +6.3% +6.1% +6.5%
Aggregates & Concrete 2,329 2,097 +11.1% +9.8% +9.8%
Roofing 681 711 -4.2% -5.9% -5.9%
Gypsum 717 676 +6.1% +6.3% +7.1%
Others 11 35 -68.6% +15.4%  
TOTAL 7,220 6,794 +6.3% +6.0% NA

Lafarge's next financial publication - 2005 half year results - will be on September 8, 2005 (before the Euronext stock market opens).

Lafarge, the world leader in building materials, holds top-ranking positions in all four of its Divisions: Cement, Aggregates & Concrete, Roofing and Gypsum. Lafarge employs 77,000 people in 75 countries and posted sales of €14.4 billion in 2004.

For release worldwide with simultaneous 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 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.

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