Lafarge: Third-Quarter Results at September 30, 2006.Strong Earnings Growth over the First Nine Months of the Year Further Improvement During the Third Quarter in Spite of High Comparatives Confirmation of Favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. Trends for 2006 PARIS Paris, in Greek mythology Paris or Alexander, in Greek mythology, son of Priam and Hecuba and brother of Hector. Because it was prophesied that he would cause the destruction of Troy, Paris was abandoned on Mt. -- Lafarge: STRONG INCREASE OF KEY FIGURES FOR THE FIRST NINE MONTHS * Sales up 18% * Current operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. up 29% * Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses up 50% * Earnings per share up 39% to e1/46.28 FURTHER IMPROVEMENT DURING THE THIRD QUARTER IN SPITE OF HIGH COMPARATIVES * Sales up 12% * Current operating income up 18% * Cash flow from operations up 44% * Earnings per share up 30% GROUP HIGHLIGHTS FOR THE FIRST NINE MONTHS * Strong earnings growth in all our businesses over the first nine months. * Strong organic growth (+14% in sales and +28% in current operating income), fueled by the Group's solid positions. * Price increases in excess of cost increases, resulting from vigorous efforts at local level in all our activities. * Continued control of our costs. * Improvement in Group operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: (15.7% compared with 14.3% in 2005) visible across all our businesses. * Strong increase in earnings per share (+39%). * Strong increase in cash flow from operations (+50%) and in free cash flow, up from e1/4243 million to e1/4811 million * Reorganization in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and implementation of the synergies. * Acceleration of our capacity expansion program to respond to market growth, consolidate our positions and move into new markets. BRUNO LAFONT, CHIEF EXECUTIVE OFFICER OF LAFARGE, STATED: "These very good results demonstrate the Group's ability to reap the benefits of its great potential around the globe. We are looking ahead to 2007 with confidence." [TABLE OMITTED] [TABLE OMITTED] OUTLOOK FOR 2006 * We expect our markets to remain favorable, despite the slowdown in certain North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. markets. Price increases should exceed cost increases overall over the year. Continuing rises in energy and transportation costs should be mitigated by the impact of our cost-reduction programs. * The growth in our operating income is expected to continue during the final quarter of 2006, albeit at a more moderate pace owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de the very strong level of activity recorded during the fourth quarter of 2005. NINE-MONTH HIGHLIGHTS BY BUSINESS Cement * Sales up 18.4% to e1/47,262 million (up 12.2% to e1/42,621 million in the third quarter) * Current operating income up 23.4% to e1/41,546 million (up 12.3% to e1/4675 million in the third quarter) * Increase in operating margin to 21.3%, compared to 20.4% for the same period in 2005 * Favorable volume trends on the back of growth in most of our markets * Significant price increases implemented successfully in most of our markets in an environment marked by a steep increase in energy and transportation costs * Acceleration of our capacity expansion program in growth markets. Aggregates and Concrete * Sales up 22.8% to e1/44,827 million (up 16.3% to e1/41,854 million in the third quarter) * Current operating income up 47.9% to e1/4423 million (up 32.0% to e1/4235 million in the third quarter) * Increase in operating margin to 8.8%, compared to 7.3% in 2005 * Favorable conditions in most of our markets * Significant price increases introduced successfully in an environment marked by a steep rise in costs * Selective acquisitions in Arizona and the Chicago region to consolidate our positions in aggregates * Stronger contribution from value-added concrete products: volumes posted by the Agilia[R] range (self-placing and self-leveling concrete) grew by 37% during the first nine months of the year. Roofing * Sales up 7.4% to e1/41,190 million (up 8.7% to e1/4464 million in the third quarter) * Current operating income up 31.5% to e1/496 million (up 20.4% to e1/459 million in the third quarter) * Increase in operating margin to 8.1%, compared to 6.6% in the same period of 2005 * Germany showing signs of recovery in the 3rd quarter. * The turnaround plan is being implemented vigorously and making rapid progress * Selective acquisitions in North America and Europe to consolidate our positions. Gypsum gypsum (jĭp`səm), mineral composed of calcium sulfate (calcium, sulfur, and oxygen) with two molecules of water, CaSO4·2H2O. It is the most common sulfate mineral, occurring in many places in a variety of forms. * Sales up 12.4% to e1/41,229 million (up 8.4% to e1/4399 million in the third quarter) * Current operating income up 39.8% to e1/4158 million (up 41.2% to e1/448 million in the third quarter) * Increase in operating margin to 12.9%, compared to 10.3% in 2005 * Inauguration INAUGURATION. This word was applied by the Romans to the ceremony of dedicating some temple, or raising some man to the priesthood, after the augurs had been consulted. It was afterwards applied to the installation (q.v. of a new production line in Morocco Morocco, country, Africa Morocco (mərŏk`ō), officially Kingdom of Morocco, kingdom (2005 est. pop. 32,726,000), 171,834 sq mi (445,050 sq km), NW Africa. * Successful start-up of the Buchanan plant near New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of following modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, and a doubling of capacity, thereby strengthening Lafarge's position as a high-quality and low-cost producer in each of its North American markets. Note to Editors: Lafarge is the world leader in building materials Building materials used in the construction industry to create . These categories of materials and products are used by and construction project managers to specify the materials and methods used for . , with top-ranking positions in all four of its businesses: Cement, Aggregates & Concrete, Roofing and Gypsum. With 80,000 employees in 76 countries, Lafarge posted sales of Euros 16 billion in 2005. Lafarge has been committed to sustainable development Sustainable development is a socio-ecological process characterized by the fulfilment of human needs while maintaining the quality of the natural environment indefinitely. The linkage between environment and development was globally recognized in 1980, when the International Union for many years, pursuing a strategy that combines industrial know-how with performance, value creation, respect for employees and local cultures, environmental protection and the conservation of natural resources conservation of natural resources, the wise use of the earth's resources by humanity. The term conservation came into use in the late 19th cent. and referred to the management, mainly for economic reasons, of such valuable natural resources as timber, fish, and energy. Lafarge is the only company in the construction materials sector to be listed in the 2006 '100 Global Most Sustainable Corporations in the World'. To make advances in building materials, Lafarge places the customer at the heart of its concerns. It offers the construction industry and the general public innovative solutions bringing greater safety, comfort and quality to their everyday surroundings. Additional information is available on the web site at www.lafarge.com. Practical information Following the release of Lafarge's Results at September 30, 2006, there will be an analyst presentation at 11.00 CET at Lafarge Headquarters (61 rue des Belles Feuilles, 75016 Paris). The presentation will be made in English with simultaneous French translation and may be followed via a live web cast on the Lafarge website (www.lafarge.com) as well as via teleconference: - Dial in (France): +33 (0)1 70 99 43 00 - US Toll free: +1 718 354 1390 - International dial in number: +44(0)20 7806 1966 Conference call name: "Lafarge" Please note that in addition to the web cast replay, a conference call playback will be available from November 9, 2006, 19.30CET, to November 18, 2006 online through www.lafarge.com or at the following numbers: - France playback number: +33 (0)1 71 23 02 48 (pin code: 8358564) - US toll free number: +1 718 354 1112 (pin code: 8358564) - International dial in number: +44 (0)20 7806 1970 (pin code: 8358564) Statements made in this press release that are not historical facts, including statements regarding our expectations on market trends, price increases, energy costs, cost reduction and growth in our results, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. 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 Construction Spending An economic indicator that measures the amount of spending towards new construction. Released monthly by the U.S. Department of Commerce's Census Bureau, it looks at residential and non-residential construction in the private sector, and state and federal at 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 Autorite des Marches 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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