Lafarge first quarter 2004 sales

28 April 2004
  • Sales rise 7.1% with increases in all divisions
  • Strong like-for-like sales growth of 11.7%

Euronext: LG, NYSE: LR

Sales were up 7.1% to € 2,881 million as at March 31, 2004 compared to weak first quarter 2003 sales of € 2,691 million. The net scope effect was 0.8%. Negative foreign exchange variations impacted sales by 5.4%.

“We are pleased with this good start to the year, with increases in sales across all divisions. This level of activity is consistent with our expectation of robust growth in our operating income on ordinary activities for 2004, excluding currency fluctuations” said Bernard Kasriel, Chief Executive Officer of the Group.

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

CEMENT: +12.9%
In Western Europe, France and Greece led the way with strong growth in domestic sales. Spain and Germany rose slightly with price rises offsetting some volume decline. The UK encountered somewhat difficult market conditions with moderate price pressure.

Sales in North America grew strongly compared to a very poor first quarter 2003. Favorable weather and strong demand in all regions generated high volume growth. Prices were slightly below those of the first quarter 2003.

Strong sales growth was recorded in the majority of other countries. Of particular note were Poland, Romania, Turkey, Jordan, Egypt, Venezuela, Nigeria, South Africa, the Philippines and India. Poor weather impacted Brazilian volumes.

In Western Europe sales recovered strongly driven by higher aggregates and concrete volumes and prices in France and to a lesser degree in the UK.
In North America, strong aggregates volumes and prices and strong concrete volumes particularly in Western Canada and Eastern USA fueled a significant improvement in sales.

ROOFING: +6.0%
In Western Europe volumes for both concrete and clay tiles grew with the exception of Germany.
In the USA, sales continued to grow driven by the strength of the housing market.
Chimney sales rose significantly.

GYPSUM: +14.2%
In Western Europe, sales growth was strong, driven by a buoyant UK market and increasing prices in France, but partially offset by continued price pressure in Germany.

In the USA, sales grew significantly with continued strong demand from residential construction and a large price improvement. The average price in the quarter increased to $112 per thousand square feet.

In Asia and Australia, sales continued to grow favorably.

Major foreign currency translation impacts on sales were generated in the following currencies: US Dollar (€ 57 million), Malaysian Ringgit (€ 12 million), and the Nigerian Naira (€ 8 million).

Sales from acquisitions amounted to a positive scope effect of € 70 million largely due to the increase in our percentage ownership of Lafarge Halla Cement to 50.1%, triggering a change in accounting treatment, from the proportional to global method. This change led to an increase in sales of € 39 million. The reduction in sales due to negative scope totaled € 45 million primarily as a result of the divestment of our Florida cement operations in 2003 amounting to € 23 million.

Consolidated sales as of 31 March 2004
March 31, 2004
€ Million
March 31, 2003
€ Million
Variation At constant scope and foreign exchange At constant scope and foreign exchange, before inter divisional sales elimination
Cement 1,390 1,299 +7.0% +12.8% +12.9%
Aggregates & Concrete 854 795 +7.4% +11.2% +11.4%
Roofing 289 279 +3.5% +6.0% +6.0%
Gypsum 332 295 +12.5% +13.9% +14.2%
Others 16 23 -30.4% +7.0%
TOTAL 2,881 2,691 +7.1% +11.7% NA

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 75,000 people in 75 countries and posted sales of €13.6 billion in 2003.

Lafarge's annual general meeting of shareholders will be held on May 25, 2004.
Lafarge's next financial publication - 2004 half year sales - will be on July 22, 2004 (before the Euronext stock market opens.)

For release worldwide with simultaneous release in the United States.

Press Contacts Investor Relations
Stéphanie Tessier
33-1 44-34-92-32
James Palmer
33-1 44 34 11 26
Philippe Hardouin
33-1 44-34-11-71
Danièle Daouphars
33-1 44 34 11 51

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 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.

Conference Call on First Quarter Sales to March 31, 2004
Following the release of Lafarge's sales to March 31, 2004, a conference call will be held on:
April 28th, 2004 at 15:30 French time, in English
(14:30 UK time; 09:30AM EDT in North America)
The speakers will be:
Jean-Jacques Gauthier – Executive Vice President, Finance
James Palmer - Vice-President Investor Relations
Danièle Daouphars – Manager Investor Relations

If you wish to participate in the conference call, please dial:
From France +33 (0) 1 56 38 35 35
From UK +44 (0) 20 8515 2313
From USA +1 303 262 2175
From USA toll free +1 800 366 74 49
Conference call name: “Lafarge”

A replay of the conference call will be available from April 28th, 2004 at 7.30 pm French time to May 6th, 2004 at 7.30 pm at the following numbers:
From France +33 (0) 1 70 99 32 94 Access code: 132466#
From UK +44 (0) 20 8797 2499 Access code: 984446#
From USA +1 303 590 3000 Access code: 576245#

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