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[March 2009]
Lafarge Achieves Record Operating Results in 2008
Lafarge reported its ‘Excellence 2008 Targets’ exceeded and posted highlights as follows:
-- Sales up 8% to €19.033 billion, up 14% at constant exchange rate
-- Current operating income up 9% to €3.542 billion, up 14% at constant exchange rate
-- Operating margin up 20bp to 18.6%
-- Net income Group Share increased 3% to €1.713 billion excluding one-off items
-- Net earnings per share declined 8% to €8.87 excluding one-off items
-- Free cash flow up 22% to €2.113 billion
-- Net debt at €16.884 billion
-- Dividend of €2 per share, subject to AGM approval
Bruno Lafont, Chairman and CEO of Lafarge, said: "Despite the deterioration of our markets in the fourth quarter, Lafarge achieved a strong operational performance in 2008 and continued to outperform the sector. Our organisation continues to be very proactive and has already implemented forceful actions to manage costs and capital spending, with a strong focus on cash flow generation.
“In the context of an unprecedented financial and economic environment, our objective is to rapidly reduce our debt in 2009. The action plan we are announcing today, comprised of assertive operational measures and a rights issue, is aimed at reducing our debt, strengthening our financial structure, bolstering our sector leadership and positioning the Group to benefit from the recovery. The support of our two largest shareholders is a strong sign of confidence in the strategy and the future of our Group.
“A dividend of €2 per share, representing 25% of our earnings, shows our commitment to our shareholders in the current situation.
“Key demographic indicators and infrastructure needs over the next decade remain very positive for our industry. I am fully convinced that with our sound and highly cash generative business model and our excellent geographical portfolio, Lafarge is ideally positioned to lead our sector in meeting these opportunities."
The company said that the global economic crisis and the high level of uncertainty make forecasting difficult. Government stimulus plans which should help restore confidence and spur growth are very good news and all include large infrastructures projects. They should have a significant impact on most of Lafarge’s markets in 2010 and a more limited one in 2009. For 2009, Lafarge currently expects cement volumes in its markets to be down 0% to 3% overall, with significant declines for developed economies and with slower growth in emerging economies. Volume decreases are expected to put pressure on margins but pricing should remain firm overall. The group’s own actions will contribute to mitigating the impact of lower volumes.
ENDS