RNS Number:0488I
Lafarge
27 February 2003
Full year-end results for year to 31st December 2002
Increase in the operating income by 10%, due to the full effect
of the Blue Circle consolidation and to an improvement in margins.
Slight increase of net income (+2%) before goodwill amortization &
extraordinary provision. Dividend maintained at Euro2.30 per share.
The Board of Directors of Lafarge meeting, chaired by Bertrand Collomb, on
February 26, 2003, closed the accounts for the year ending December 31, 2002.
Consolidated accounts as at December 31, 2002
December 31, 2002 December 31, 2001
Euro Million Euro Million Variation
Sales 14,610 13,698 +7%
Operating income on ordinary activities 2,132 1,934* +10%
Net income, Group share before goodwill
amortization and extraordinary provision 914 892 +2%
Net income, Group share before extraordinary
provision 756 750 +1%
Net income 456 750 -39%
Net income per share in Euro 3.52 5.97 -41%
Cash flow from operations 1,956 1,668 +17%
Group net debt 10,216 11,703 -13%
* Operating income on ordinary activities of equity affiliates is no longer
included in the Group's operating income.
Sales increased by 7%, mainly due to the full consolidation effect of Blue
Circle. Operating income rose by 10% (by 2% excluding foreign exchange, changes
in cement plant depreciation and scope effects), which demonstrates an
improvement of the operating margin.
To be prudent, a provision of Euro300 million has been made to cover the European
Commission decision against our Gypsum activities in Europe, which Lafarge has
appealed against, as well as the risk related to the current German Cartel
authority investigation into the cement industry in Germany.
Net income before goodwill amortization and the extraordinary provision is
slightly up (+2%). Net income per share is down 41% due to the extraordinary
provision charge. Dividend is maintained at Euro2.30 per share.
Cash flow generation from operations increased by 17% to nearly Euro2 billion,
investments amounted to Euro1.5 billion and disposals totaled Euro725 million,
bringing the Group's net debt was down by nearly Euro1.5 billion.
Division highlights:
The Cement Division faced varied market conditions with a global improvement in
operating income and margin and a larger contribution from emerging countries.
Synergies resulting from the acquisition of Blue Circle are on track, but much
of the success has been offset by adverse markets and operations.
In the Aggregates & Concrete Division, the weak market conditions in North
America, mostly in asphalt and paving activities, led to a decline in results
despite the fact that operating income in Western Europe saw some increase.
The results of the Roofing Division were slightly up despite weaker markets in
Germany, due to important restructuring efforts.
The results of the Gypsum Division have greatly improved mainly due to the
increase in price and to the improvement of the operating performance in North
America.
Operating income on ordinary activities as at December 31, 2002
Excluding foreign
December 31, 2002 December 31, 2001 exchange and scope
Euro Million Euro Million Variation effects
Cement 1,606 1,434* +12% +3% (a)
Aggregates and Concrete 336 378* -11% -10%
Roofing 132 128* +3% +4%
Gypsum 51 3* - -
Other 7 -9* - -
TOTAL 2,132 1,934* +10% +2%
* Operating income on ordinary activities of equity affiliates is no longer
included in the Group's operating income.
(a) excluding foreign exchange, changes in cement plant depreciation and scope
effects
OUTLOOK
Bertrand Collomb, Chairman and CEO of the Group said:
"In a mixed economic environment, I am pleased that the Group managed to improve
its operating margin, strongly increase its cash flow generation and reduce its
debt level so significantly. Blue Circle synergies for 2002 have been achieved
and are on track. Whilst their benefit has been partially affected by temporary
difficulties, the underlying potential of this acquisition remains
unquestionable."
"In a context of economic uncertainties for 2003, we will continue to give the
priority to the improvement of our operating results and the strengthening of
our financial structure."
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 Euro14,610 million in 2002. More information is available on:
www.lafarge.com
PRESS CONTACTS: INVESTOR RELATIONS:
Veronique Doux: (+33) 1 44 34 19 47 James Palmer: (+33) 1 44 34 11 26
veronique.doux@lafarge.com james.palmer@lafarge.com
Daniele Daouphars: (+33) 1 44 34 11 51
daniele.daouphars@lafarge.com
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; seasonality 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 Reference Document filed with the French COB under the reference
number D02-162 and updated under the reference number D02-162/A1, and its annual
report on Form 20-F filed with the Securities and Exchange Commission in the
USA. 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.
Practical information:
There will be a French press conference at 09.00 CET at Lafarge (61 rue des
Belles Feuilles - 75016 Paris).
There will be a French language analyst presentation at 11.00 CET at Espace
Charles Louis Havas (136 avenue Charles de Gaulle - 92200 Neuilly). The
presentation document will be in English.
Dial in number: + 33 1 56 38 35 35
Playback number: + 33 1 40 50 20 20 (pin code 7987 #), available during the 5
following days
This presentation (including the slides) will also be available through a
webcast facility on Lafarge website (www.lafarge.com)
There will be an English analyst presentation at 17.00 GMT at City Presentation
Centre, 4 Chiswell Street, EC1 London.
Dial in number from UK: 0 800 279 22 80 (+ 44 208 515 23 06 if you dial in from
outside UK)
Dial in number from US: 1 800 366 39 08 (+ 1 303 205 00 66 if you dial in from
outside UK)
UK playback number: + 44 208 797 2499 (pin code 871445 #)
US playback number: + 1 800 405 22 36 (pin code 525500 #)
(Playback facility available from 27th of February 19.30 CET to 4th of March
18.00 CET)
2002 MANAGEMENT REPORT
SALES PERFORMANCE
The Group's sales recorded a gross increase of 7%, sustained by a 15.9% growth
of the Cement Division's sales. The scope effect of former Blue Circle
operations, consolidated since July 11, 2001, amounts to Euro1,558 million.
Sales report by Division, excluding foreign exchange and scope of consolidation
effects:
CEMENT: up 1.2%
Sales of Cement posted a limited increase of 1.2% reflecting a 3.15% drop in
sales in the fourth quarter. Sales rose in Western Europe, in spite of the
decline in the fourth quarter, particularly in Germany where prices have fallen
significantly throughout the year. In Central and Eastern Europe, sales advanced
strongly, noticeably in Romania. In North America, total sales fell, due to a
slowing of demand and bad weather conditions in the fourth quarter. In Latin
America, sales are generally up, despite difficulties in Venezuela, with growth
in Brazil and Chile driven by strong price increases. In the African and Indian
Ocean regions, sales increased in most countries with the exception of Nigeria.
In Asia, sales grew despite a drop in the Philippines, where prices decreased,
and in Malaysia where the construction market was destabilized by workforce
availability problems. Sales were up in the Mediterranean Basin.
AGGREGATES & CONCRETE: down 1.2%
The sales in 2002 were down by 1.2% in comparison with the previous year (down
0.65% in the fourth quarter). Aggregates sales posted a decline of 3.1%, largely
due to North American market trends. Concrete sales increased slightly (0.75%),
with the solid growth in France and a decline in North America.
ROOFING: down 5.9%
Roofing sales were 5.9% lower than in 2001 (down 8% in the fourth quarter).
Sales in Europe declined, particularly in Germany, while they continued to
increase in Asia.
GYPSUM: up 7.2%
The 7.2% increase in sales (up 3.8% in the fourth quarter) is mainly due to
volume and price increases in North America, and to a significant increase in
sales in the Asia Pacific region. In Europe, sales were stable in a mixed
economic environment; weakness in Germany and Poland were offset by increases in
the rest of Europe.
Consolidation effects: up 11.4% (Euro1,493 MILLION)
Acquisitions had a positive impact on sales of Euro1,772 million (primarily
reflecting the full year consolidation of the former Blue Circle operations)
while disposals had a negative impact of Euro160 million. The change in accounting
treatment of Lafarge Morocco, from full consolidation to proportional
consolidation, resulted in a reduction in sales of Euro119 million.
Foreign exchange effect: -4.38% (Euro540 MILLION)
Foreign exchange losses weighed heavily on sales principally in the following
currencies: US and Canadian dollars (Euro272 million), Brazilian real (Euro79 million)
and South African rand (Euro40 million).
OPERATING INCOME ON ORDINARY ACTIVITIES
Operating income rose by 10% to Euro 2,132 million versus Euro 1,934* million as at
December 31, 2001. Operating income rose 2% excluding foreign exchange, cement
depreciation change and scope effects.
By division, operating income in 2002 breaks down as follows:
CEMENT: 75% of total operating income at the end of 2002 Excluding foreign
exchange,
% depreciation change
Euro million Dec 31, 2002 Dec 31, 2001 variance and scope effects
Sales 6,948 5,995 +16% +1.2%
Operating income on
ordinary activities* 1,606 1,434* +12% +3%
* not including equity affiliates
Volumes sold by Lafarge in 2002 totaled 106 MT, up 21% compared to 2001,
reflecting the consolidation of the former Blue Circle operations. Western
Europe remains the Group's largest cement market with 31% of volumes sold,
followed by Asia with 20%.
Operating income on ordinary activities of the Cement division increased by 12%
to Euro1,606 million at the end of 2002 compared to Euro1,434 million at the end of
2001*. At constant scope, depreciation method and exchange rates, operating
income on ordinary activities from our ongoing operations rose by 3%. The impact
of the change in the estimated life of cement plant assets had a favourable
impact of Euro83 million on operating income. The change in the treatment of
Morocco from the global to proportional consolidation method reduced operating
income in the Mediterranean basin by Euro41 million. Currency fluctuations had a
negative impact of 5% being Euro73 million. As a percentage of the division's
sales, operating income on ordinary activities represented 21.4% in 2002,
compared to 21% in 2001**. The after tax return on capital employed amounted to
8.4%.
** 2001 with 12 months BCI, comparable consolidation method for Morocco
(at 50%), and new depreciation and asset life policy.
Western Europe - Operating income: Euro 656 million
(Euro517 million Dec 2001*)
Operating income in Western Europe grew by 27% to Euro656 million. The scope impact
of the former Blue Circle operations in the United Kingdom and Greece
contributed Euro111 million. Operating income at constant scope, depreciation
method and exchange increased by 1.5% compared to 2001 due to margin
improvements in France, Spain and Italy. In Germany, as a direct result of the
economic slowdown and highly competitive pricing situation, operating income
fell to one third of the 2001 level.
North America - Operating income: Euro330 million (Euro350 million Dec 2001*)
Operating income in North America declined by 6% to Euro330 million. Currency
fluctuations had a negative impact on operating income of Euro20 million. The scope
effect of Blue Circle North America amounted to Euro12 million. At constant scope,
depreciation method and exchange operating income in North America was down by
7%.
Emerging Countries - Operating income: Euro 621 million
(Euro 567 million Dec 2001*)
The scope effect of the former Blue Circle operations in Chile, Egypt, Malaysia,
Nigeria, Zimbabwe and the Philippines amounted to Euro 56 million and the negative
foreign exchange impact totaled Euro 52 million.
* In Central and Eastern Europe, operating income rose strongly to Euro86
million.
Operating income on ordinary activities continued to improve with an increase of
39% to Euro86 million. The impact of negative currency fluctuations on the region's
operating income amounted to Euro2 million. Operating income at constant scope,
depreciation method and exchange grew by 21% , with strong growth in Romania
where both margins and operating income grew substantially due to favorable
market conditions coupled with variable cost reductions. Operating income in
Poland increased as operating margins improved due to cost reduction. In the
Czech Republic, a decline in exports to Germany resulted in lower operating
income. Margins improved in Russia and the Ukraine with both countries
increasing their operating income.
* In the Mediterranean Basin, operating income for the region was Euro112
million (Euro125 million end of 2001*).
The operating income from the Mediterranean Basin countries decreased by 10% to
Euro112 million due to the change in accounting treatment of Morocco from global to
proportionate consolidation. Operating income at constant scope, depreciation
method and exchange, and excluding the impact of the Morocco accounting
treatment change grew by 21%. The impact of negative currency fluctuations on
the region's operating income amounted to Euro7 million. Strong growth in income
was realized in Morocco and Jordan due to the favorable market conditions. The
small loss incurred in Turkey in 2001 was reversed to record an operating profit
due to less bad debts. Egypt saw operating income decline in the context of the
poor price trends partly offset by the positive impact on variable costs of the
new production line at Alexandria.
* In Latin America, operating income slipped to Euro202 million (Euro205 million
end 2001*).
The operating income from Latin America was slightly down from Euro205 million at
the end of 2001 to Euro202 million at the end of 2002. The scope effect of the
former Blue Circle operations in Chile was Euro22 million of additional operating
income. The negative foreign exchange impact on the region's operating income
amounted to Euro30 million. constant scope, depreciation method and exchange
operating income grew by 5%. Operating income was down in Brazil due to the
foreign exchange impact which offset the improvement in operating income in
reals. The Brumado divestment also impacted operating income. In Venezuela the
local turmoil and bolivar devaluation have resulted in operating income being
down by 21%. A small decline was recorded in Honduras. Both Chile and Mexico
increased their operating income.
* In Africa and the Indian Ocean, operating income increased strongly to Euro118
million (Euro103 million end 2001*).
Operating income on ordinary activities in Sub-Saharan Africa and the Indian
Ocean increased by 15% to Euro118 million. The scope effect of the former Blue
Circle operations in Nigeria and Zimbabwe contributed Euro5 million of additional
operating income. The negative foreign exchange impact on the region's operating
income amounted to Euro10 million. At constant scope, depreciation method and
exchange operating income grew by 22%. Existing operations in Kenya, Cameroon,
South Africa and Uganda all achieved higher operating margins. The operations in
Nigeria however recorded a significant decline in operating income due to a
market decrease and cost and production issues relating to delays with the start
up of the new plant at Ewekoro.
* In Asia, operating income increased sharply to Euro100 million (Euro64 million
end of 2001*).
The Asia Pacific region saw operating income on ordinary activities grow by 56%
to Euro100 million. The scope effect of the former Blue Circle operations in
Malaysia and the Philippines contributed Euro30 million of additional operating
income. The negative foreign exchange impact on the region's operating income
amounted to Euro3 million. At constant scope, depreciation method and exchange
operating income fell by 11%. South Korea delivered a strong growth in operating
income mainly due to the favorable market conditions. India improved operating
income as a consequence of continued production performance improvement.
Operating income in the Philippines was weak due to deterioration in pricing. In
Indonesia a small operating loss was incurred, though much reduced from the loss
incurred in 2001.
AGGREGATES & CONCRETE: 16% of total operating income, end of Dec 2002
Excluding foreign
% exchange and scope
Euro million Dec 31, 2002 Dec 31, 2001 variance effects
Sales 4,768 4,806 - 0.8% -1.2%
Operating income on
ordinary activities 336 378* -11% -10%
* not including equity affiliates
* Aggregates - Operating income: Euro246 million (Euro270 million end of Dec 2001)
* Concrete - Operating income: Euro90 million (Euro108 million end of Dec 2001)
Operating income on ordinary activities of the Aggregates & Concrete division
declined by 11 % between 2001* and 2002, from Euro378 million to Euro336 million. The
scope effect of the former Blue Circle operations was Euro16 million. At constant
scope and exchange rates, operating income on ordinary activities declined by
10%. Currency fluctuations had a negative impact of 4%. As a percentage of the
division's sales, operating income on ordinary activities represented 7% in
2002, compared to 7.9% in 2001. The after tax return on capital employed
amounted to 7.1%. The operating income for aggregates totalled Euro246 million down
9% from Euro270 million in 2001*. While currency fluctuations had a negative impact
of Euro10 million the remainder of the decline was due to the weaker North American
results. The operating income for Concrete totalled Euro90 million down 17% from
Euro108 million in 2001*. Currency fluctuations had a negative impact of Euro4 million
with the remainder of the decline is also due to the weaker North American
results.
Western Europe :
Operating income on ordinary activities grew by 3% to Euro148 million. Operating
income in France was at a similar level to 2001. In the UK operating income grew
as operating margins improved in the concrete activity.
North America:
Operating income on ordinary activities was down by 25% to Euro178 million. The net
scope effect on the operating income from former Blue Circle operations and
divestments was Euro3 million. The impact on operating income of the weakening
dollar against the euro amounted to Euro12 million which is 5%. An important share
of the decline in the operating income is due to a reduction of the Aggregates
and Concrete activity, especially in Ontario. Income drop in Western USA and
specifically in the South-East region due to a weaker market.
Elsewhere in the world, operating income continued to improve up to Euro10 million
from Euro2 million in 2001. In South Africa, operating income continued to grow
strongly and in Turkey, whilst the market remains very unstable and competitive,
the operating loss was reduced significantly.
ROOFING: 6% of total operating income, end of 2002
Excluding foreign
% exchange and scope
Euro million Dec 31, 2002 Dec 31, 2001 variance effects
Sales 1,538 1,585 -3% -5.9%
Operating income on
ordinary activities 132 128* 3% 4%
* not including equity affiliates
The Division's operating income was up 3% to Euro132 million from Euro128 million in
2001* largely as a result of the cost management efforts and extensive
restructuring carried out across the operations, particularly in Germany were
the sales forces of the two leading brands have been combined in 2002. Germany
now accounts for 25% of operating profits, all other European markets for 61%
and non-European operations for 14%. As a percentage of the division's sales,
operating income on ordinary activities represented 8.6% in 2002, compared to
8.1% in 2001. The after tax return on capital employed amounted to 4.2%.
Western Europe:
Operating income in Western Europe rose 6% to Euro103 million. In Germany following
the extensive restructuring the operating income increased from Euro15 million to
Euro33 million in part due to the change in the central cost allocation method
within the Division. The underlying increase in German operating income amounted
to Euro2 million which is 13%, excluding change in cost allocation method. In other
European countries operating income declined from Euro82 million to Euro70 million due
to the same change in cost allocation method. The underlying decrease of Euro2
million which is 2% was a result of weaker markets in France and in the
Netherlands that could not be entirely compensated by the improvement recorded
in Scandinavia and further growth in Italy.
North America and other countries:
Operating income was down marginally to Euro29 million from Euro31 million also due to
the same cost allocation change. At constant scope and exchange rate, underlying
operating income was up Euro9 million, excluding change in cost allocation method.
Major contributors were Eastern Europe, Malaysia and North America.
GYPSUM: 2% of total operating income, end of Dec 2002
Excluding foreign
% exchange and scope
Euro million Dec 31, 2002 Dec 31, 2001 variance effects
Sales 1,146 1,072 +6.9% +7.2%
Operating income on
ordinary activities 51 3* n/a n/a
* not including equity affiliates
Operating income on ordinary activities grew strongly after the very poor 2001,
up from Euro3 million * to Euro51 million. This was mainly as a result of reduced
losses in North America, helped by better pricing coupled with our Division wide
performance plans, particularly in the area of purchasing and manufacturing
efficiency, led to improved results. As a percentage of the division's sales,
operating income on ordinary activities represented 4.4% in 2002, compared to
0.3% in 2001. The after tax return on capital employed amounted to 3.6%.
Western Europe:
Operating income on ordinary activities in Western Europe improved strongly to
Euro58 million from Euro44 million including the effect of a change in the central
cost allocation method within the Division. The underlying increase in operating
income amounted to Euro2 million being 5%. France and the UK continued to increase
operating margins through their operating performance plans, however Germany
continued to make losses reflecting the difficult market conditions.
North America:
The operating loss in 2002 was significantly reduced to Euro28 million, compared to
the loss of Euro76 million in 2001. This reduction in losses was due to the
increase in prices and also due to the improvement in production performance
benefiting sales volumes and reducing our cost base. The level of demand for
wallboard remained stable in the year with a sound residential construction
market. At the end of 2002 the decision was taken to mothball the Wilmington
plant in the North East region allowing us to concentrate our production at
lower cost facilities. The mothballing of this plant will save 10 million US
dollars per annum.
Other countries:
Operating income on ordinary activities fell to Euro21 million compared to Euro35
million in 2001. This decline was mainly attributable to Poland where the very
poor market conditions led to a significant increase in losses. Mid-term
prospects remain excellent for this market: a new plant started in the
fourth(th) quarter in Gacki: the previous plant at this site has been closed.
Our operating income in the Asia Pacific region was stable, but with good
performances seen in Australia and continuing benefits of our joint venture in
Asia. In particular, in 2002 the joint venture benefited from the successful
integration of Siam Gypsum Industries, which was acquired in June 2001, and the
construction of a new facility in Korea using equipment transferred from the
Chinese operations following the restructuring of the two businesses in
Shanghai.
OTHER INCOME STATEMENT ITEMS
Non-recurring items: Euro - 309 million (Euro+122 million end of Dec 2001*) * not
including equity affiliates
The significant non recurring charge of Euro525 million results notably from a
provision of Euro300 million taken to cover potential fines. To be prudent, a
provision of Euro300 million has been made to cover the European Commission
decision against our Gypsum activities in Europe, which Lafarge has appealed
against, as well as the risk related to the current German Cartel authority
investigation into the cement industry in Germany. Other non recurring charges
relate to restructuring charges and write offs.
The capital gains on disposals amounted to Euro216 million of which the sale of the
cement operations in Southern Spain, Brazil and South Africa generated a gain of
Euro148 million. The sale of property in Paris generated a gain of Euro51m.
Restructuring and closure charges for our businesses in Germany and Poland
amounted to Euro 69 million. (Roofing Euro39 million, Concrete Euro17million and Gypsum
Euro13 million.) The full cost of the announced closure by the Gypsum division of
the Wilmington, Delaware plant in the USA has been fully charged at Euro27 million.
Other restructuring costs and write offs around the group amounted to Euro 60
million.
Net interest charges: Euro 521 million (Euro544 million end of Dec 2001*), of which
Interest costs on the Group's financing amounted to Euro577 million compared to
Euro559 million in 2001 at an average interest rate of 5.2% at the end of December
2002. Due to extensive plant modernisations underway in 2002 financing costs of
Euro 40 million were capitalised compared to Euro16 million in 2001. Dividends
amounted to Euro14 million, compared to Euro47 million in 2001.
Income tax charge: Euro 448 million (Euro 368 million end of Dec 2001*) The effective
tax rate when compared to 2001 rose to 34.4%. This increase is in part due to
the charge for competition issues which has not been tax effected.
Income from equity affiliates: Euro 33 million (Euro 18 million end of Dec 2001*) The
Cement Division's equity affiliates contributed Euro 49 million, of which Molins
contributed Euro 37 million. The Roofing and Gypsum Divisions' equity affiliates
generated Euro18 million however the Group's share of losses at Carmeuse North
America amounted to Euro28 million.
The share of minority interests in net Group income totaled Euro273 million (Euro270
million end of Dec 2001).
The amortization of goodwill amounted to Euro158 million (Euro142 million end of Dec
2001). The increase is due to the scope effect from the Blue Circle acquisition.
Net income, Group share: Euro 456 million (Euro750 million end of Dec 2001)
Net income per share: Euro 3.52 (Euro5.97 end of Dec 2001)
Proposed Dividend per share : Euro 2.30 (Euro2.30 for 2001)
CASHFLOW STATEMENT
The cash flow from operations totaled Euro1,956 million (Euro1,668 million end of Dec
2001), a significant increase of 17%.
Capital expenditure and Investments totaled Euro 1,513 million (Euro6,073 million end
of Dec 2001) and include:
Sustaining capital expenditure totaled Euro704 million, relating to the recurring
upgrading and modernization of existing industrial operations around the world.
Capital expenditure for organic growth totaled Euro380 million, representing a
number of cement projects such as the new dry line at Kujawy in Poland, Ewekoro
in Nigeria, Tetouan in Morocco. The start-up of new plants went well: Sugar
Creek and Roberta in the USA, Dujiangyan in China.
Acquisitions totaling Euro 429 million, of which :
* Cement:
Beocinska Fabrika Cement (BFC), Serbia for Euro 68 million
Tong Yang, South Korea for Euro 48 million
Tbrovljie, Slovenia for Euro 40 million
Cementia minority shareholders for Euro 49 million
Kedah minority shareholders for Euro 61 million
* Gypsum:
Continental in Newark, USA for Euro30 million.
Disposals of Euro 725 million (Euro1,537 million end of Dec 2001)
This includes the sale of cement plants in Southern Spain for Euro 225 million.
Other divestments included the grinding station at Brumado in Brazil, the
shareholding in Natal Portland Cement in South Africa and concrete product
businesses in Canada, as well as property.
BALANCE SHEET STATEMENT
Total equity as at December 31, 2002 stood at Euro 9,270 billion (Euro 10,596 billion
end of Dec 2001).
The reduction from December 31, 2001, results from the translation effect of
converting foreign currency denominated assets into euros.
Net consolidated debt totaled Euro 10,216 million (Euro 11,703 million end of Dec
2001) down Euro1,487 million from December 31, 2001, including currency
fluctuations of Euro 572 million.
LAFARGE
CONSOLIDATED STATEMENTS OF INCOME
(in million euros, except per share data)
Dec - 02 Dec - 01 Dec - 01
(a) restated Published
SALES 14 610 13 698 13 698
Cost of goods sold (9 734) (9 258) (9 258)
Selling and administrative expenses (1 775) (1 578) (1 578)
GROSS OPERATING INCOME 3 101 2 862 2 862
Depreciation (969) (928) (928)
Share of operating income on ordinary
activities of equity affiliates 0 0 131
OPERATING INCOME ON ORDINARY ACTIVITIES 2 132 1 934 2 065
Gains on disposals, net 216 274 275
Other income (expenses), net (525) (152) (169)
OPERATING INCOME 1 823 2 056 2 171
Financial expenses, net (521) (544) (595)
INCOME BEFORE INCOME TAX, AMORTIZATION OF
GOODWILL AND MINORITY INTERESTS 1 302 1 512 1 576
Income tax (448) (368) (414)
INCOME BEFORE SHARE OF NET INCOME OF EQUITY
AFFILIATES AMORTIZATION OF GOODWILL AND MINORITY
INTERESTS 854 1 144 1 162
Share of net income of equity affiliates 33 18 0
Amortization of goodwill (158) (142) (142)
Minority interests (273) (270) (270)
NET INCOME 456 750 750
EARNINGS PER SHARE ( EUROS) 3,52 5,97 5,97
Average number of outstanding shares
(in thousands) 129 629 125 616 125 616
(a) Restated with the change of presentation of equity affiliates : starting
January 2002, the share of net income of equity affiliates determined in
accordance with consolidation principles is shown in the group consolidated
statement of income on a specific line " Share of net income of equity
affiliates ". Before this change of presentation , the share of net income of
equity affiliates was split between the following lines : "Operating income on
ordinary activities", " Gains on disposals, net", "Other income (expenses),
net", "Financial expenses, net ", and "Income tax"
LAFARGE
CONSOLIDATED BALANCE SHEETS
(in million euros)
Dec - 02 Dec - 01
Goodwill, net 4 633 4 974
Intangible assets, net 2 835 3 225
Property, plant and equipment, net 11 667 13 353
Investments in equity affiliates 652 439
Other investments 462 671
Long term receivables 919 900
Long term assets 21 168 23 562
Inventories, net 1 591 1 776
Accounts receivable-trade, net 1 816 2 230
Other receivables 955 1 133
Cash and cash equivalents 1 109 1 201
Current assets 5 471 6 340
TOTAL ASSETS 26 639 29 902
Common stock 532 521
Additional paid-in capital 4 546 4 324
Retained earnings 3 544 3 389
Cumulative translation adjustments (1 641) (352)
SHAREHOLDERS' EQUITY 6 981 7 882
Minority interests 2 155 2 551
Other equity 134 163
TOTAL EQUITY 9 270 10 596
DEFERRED TAXES 979 937
PROVISIONS 1 922 1 688
LONG-TERM DEBT 10 271 11 041
Accounts payable, trade 1 205 1 467
Other payables 1 938 2 310
Current portion of long-term debt 524 1 350
Short-term bank borrowings 530 513
CURRENT LIABILITIES 4 197 5 640
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 26 639 29 902
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in million euros) Dec - 02 Dec - 01
NET CASH PROVIDED BY OPERATING ACTIVITIES
Net Income 456 750
Adjustments to reconcile net income to net
cash provided by operating
activities
Minority interests 273 270
Depreciation and amortization of goodwill 1 127 1 070
Share of net income of equity affiliates less
dividend received (17) 0
Gains on disposals, net (excluding those of
equity affiliates) (216) (274)
Deferred income taxes and tax provisions 92 (59)
Others, net 241 (89)
Changes in operating working capital items (165) 174
Net cash provided by operating activities 1 791 1 842
NET CASH USED IN INVESTING ACTIVITIES
Capital expenditures (1 149) (1 455)
Investment in consolidated companies (1) (337) (4 537)
Investment in non consolidated companies (27) (81)
Disposals (2) 725 1 537
Net (increase) decrease in long-term receivables 14 (143)
Net cash used in investing activities (774) (4 679)
NET CASH PROVIDED BY FINANCING ACTIVITIES
Proceeds from issuance of common stock 260 1 513
(Increase) decrease in treasury stock (4) -
Increase (decrease) in other equity 0 2
Dividends paid (including those paid to
minority interests in subsidiaries) (388) (337)
Proceeds from long-term debt 642 5 596
Repayment of long-term debt (751) (4 746)
Increase (decrease) in short-term debt (685) 282
Net cash provided by financing activities (926) 2 310
(Decrease) Increase in cash and cash equivalents 91 (527)
Net effect of foreign currency translation on cash
and cash equivalents (183) (12)
Cash and cash equivalents at beginning of year 1 201 1 740
Cash and cash equivalents at end of year 1 109 1 201
(1) Net of cash and cash equivalents of
companies acquired - 256
(2) Net of cash and cash equivalents of
companies disposed 1 2
LAFARGE
Consolidated Figures
Sales
(Millions of euros) 2002FY 2001FY 02/01
By geographical zone of destination
Western Europe 6 005 5 490 9%
North America 4 405 4 431 -1%
Central and Eastern Europe 661 514 29%
Emerging Mediterranean 562 637 -12%
Asia /Pacific 1 388 1 100 26%
Latin America & the Caribbean 720 760 -5%
Sub Saharan Africa/Indian Ocean/Others 869 766 13%
By business line
Cement 6 948 5 995 16%
Aggregates & Concrete 4 768 4 806 -1%
Roofing 1 538 1 585 -3%
Gypsum 1 146 1 072 7%
Others 210 240 -12%
Total 14 610 13 698 7%
Operating income on ordinary activities
(Millions of euros) 2002FY 2001FY 2001FY 02/01
restated published restated
Western Europe 980 802 892 22%
North America 479 515 506 -7%
Central and Eastern Europe 86 71 71 21%
Emerging Mediterranean 111 113 116 -2%
Asia/Pacific 138 104 106 33%
Latin America & the Caribbean 205 208 246 -1%
Sub Saharan Africa/Indian Ocean/Others 133 123 130 8%
Divisional overheads -2 -2
By business line
Cement 1606 1434 1 507 12%
Aggregates & Concrete 336 378 381 -11%
Roofing 132 128 142 3%
Gypsum 51 3 9 -
Others 7 -9 26 -
Total Operating income on ordinary activities 2132 1934 2 065 10%
2001 Restated: adjusted for share of equity affiliates
The geographical split of the total 83 million euros 2002 impact of new assets
life in cement is given in appendix ( as well as change in consolidation
method for Morrocco)
LAFARGE
Cement
Volumes by destination (adjusted for the contributions of our proportionally
consolidated subsidiaries)
(millions of tonnes) 2002FY 2001FY 02/01
published restated
Western Europe 32,8 26,0 26%
North America 17,5 16,0 9%
Central and Eastern Europe 8,1 6,2 31%
Emerging Mediterranean 9,5 11,4 -16%
Asia/Pacific 21,1 14,4 47%
Latin America & the Caribbean 6,5 6,4 1%
Sub Saharan Africa/ Indian Ocean 10,2 7,2 42%
Total 105,7 87,6 21%
Sales after elimination of intra company transactions / by geographical zone of
destination
(Millions of euros) 2002FY 2001FY 02/01
published restated
Western Europe 2 274 1 725 32%
North America 1 579 1 469 7%
Central and Eastern Europe 401 301 33%
Emerging Mediterranean 455 550 -17%
Asia/Pacific 981 753 30%
Latin America & the Caribbean 502 547 -8%
Sub Saharan Africa/Indian ocean/Others 756 650 16%
Total consolidated sales 6 948 5 995 16%
Sales by origin
(Millions of euros) 2002FY 2001FY 02/01
published restated
Western Europe 2 492 1 917 30%
North America 1 770 1 662 6%
Central and Eastern Europe 413 319 29%
Emerging Mediterranean 443 542 -18%
Asia/Pacific 980 709 38%
Latin America & the Caribbean 553 576 -4%
Sub Saharan Africa/Indian ocean/Others 869 768 13%
Total before elimination of intra-company sales 7 520 6 493 16%
Total consolidated sales 6 948 5 995 16%
Operating income on ordinary activities
(Millions of euros) 2002FY 2001FY 2001FY 02/01
restated published restated
Western Europe 656 517 544 27%
North America 330 350 351 -6%
Central and Eastern Europe 86 62 62 39%
Emerging Mediterranean 112 125 125 -10%
Asia/Pacific 100 64 64 56%
Latin America & the Caribbean 202 205 243 -1%
Sub Saharan Africa/Indian ocean/Others 120 111 118 8%
Divisional overheads
Total 1606 1434 1 507 12%
2001 Restated: adjusted for share of equity affiliates
The geographical split of the total 83 million euros 2002 impact of new assets
life in cement is given in appendix ( as well as change in consolidation
method for Morrocco)
LAFARGE
Aggregates & Concrete
Volumes by destination (adjusted for the contributions of our proportionally
consolidated subsidiaries)
Aggregates 2002FY 2001FY 02/01
(millions of tonnes) published restated
Western Europe 71,7 76,0 -6%
North America 117,9 116,1 2%
Other countries 17,3 16,7 3%
Total 206,9 208,8 -1%
Concrete 2002FY 2001FY 02/01
(millions of cbm) published restated
Western Europe 14,8 14,6 1%
North America 10,7 10,2 5%
Other countries 9,9 7,6 31%
Total 35,4 32,4 9%
Sales after elimination of intra company transactions / by geographical zone of
destination
(Millions of euros) 2002FY 2001FY 02/01
published restated
Aggregates & related products 2 196 2 325 -6%
Ready-mix concrete & concrete products 2 572 2 481 4%
Total Aggregates & Concrete 4 768 4 806 -1%
of which Western Europe 1 856 1 770 5%
" North America 2 405 2 594 -7%
" Other countries 507 442 15%
Sales by origin
(Millions of euros) 2002FY 2001FY 02/01
published restated
Aggregates & related products 2 213 2 341 -5%
Ready-mix concrete & concrete products 2 574 2 483 4%
Total Aggregates & Concrete
(bef elim of intra-comp. sales) 4 787 4 824 -1%
of which Western Europe 1 868 1 783 5%
" North America 2 410 2 597 -7%
" other countries 509 444 15%
Total Aggregates & Concrete (consolidated) 4 768 4 806 -1%
Operating income on ordinary activities
(Millions of euros) 2002FY 2001FY 2001FY 02/01
restated published restated
Aggregates & related products 246 270 270 -9%
Ready-mix concrete & concrete products 90 108 111 -17%
Total Aggregates & Concrete 336 378 381 -11%
of which Western Europe 148 144 144 3%
" North America 178 237 237 -25%
" other countries 10 2 5
Divisional overheads -5 -5
2001 Restated: adjusted for share of equity affiliates
The impact of change in consolidation method for Morrocco is given in appendix
LAFARGE
Roofing
Volumes by destination (adjusted for the contributions of our proportionally
consolidated subsidiaries
2002FY 2001FY 02/01
published restated
Concrete roof tiles (millions of sqm)
Europe 74,9 79,6 -6%
North America 18,6 20,4 -9%
other countries 33,8 31,6 7%
Clay roof tiles
Europe (millions of sqm) 23,8 25,8 -8%
Chimneys (million of kms) 2 715 2 823 -4%
Sales by origin (after elimination of intra-company sales)
(Millions of Euros) 2002FY 2001FY 02/01
published
Total 1 538 1 585 -3%
of which concrete roof tiles Europe 575 625 -8%
" North America 118 128 -8%
Other countries 99 103 -4%
of which clay roof tiles 255 271 -6%
of which chimneys 153 169 -9%
of which other roofing products 338 289 17%
Operating income on ordinary activities
(Millions of euros) 2002FY 2001FY 2001FY 02/01
restated published restated
Total 132 128 142 3%
Europe 114 105 117 9%
of which Germany a) 33 15 15
of which other countries a) 81 90 102
Others a) 18 23 25
2001 Restated: adjusted for share of equity affiliates
a) including change in cost allocation method
LAFARGE
Gypsum
Volumes of gypsum wallboard (adjusted for the contributions of our proportionally
consolidated
(millions of sqm) 2002FY 2001FY 02/01
Total 560 509 10%
Sales by origin
(after elimination of intra-company sales)
(Millions of euros) 2002FY 2001FY 02/01
Total 1 146 1 072 7%
of which Europe 674 680 -1%
of which North America 245 169 45%
of which other countries 227 223 2%
Operating income on ordinary activities
(Millions of euros) 2002FY 2001FY 2001FY 02/01
restated restated
Total 51 3 9
of which Western Europe a) 59 44 53 34%
of which North America a) -28 -76 -79 63%
of which other countries a) 20 32 32 -38%
Divisional overheads a) 3 3
2001 Restated: adjusted for share of equity affiliates
a) including change in cost allocation method
LAFARGE
Others
Sales by origin
(after elimination of intra-company sales)
(Millions of euros) 2002FY 2001FY 02/01
Materis 0 0
Others 210 240 -13%
Total 210 240 -13%
Operating income on ordinary activities
(Millions of euros) 2002FY 2001FY 2001FY 02/01
restated restated
Materis 0 42
Others 7 -9 -16
Total 7 -9 26
2001: Restated: adjusted for share of equity affiliates
LAFARGE
BCI total contribution
Sales
(Millions of euros) 2002FY 2001FY 02/01
proforma
By geographical zone of destination
Western Europe 1 070 1 047 2%
North America 753 953 -21%
Central and Eastern Europe 10 11 -9%
Emerging Mediterranean 27 39 -31%
Asia /Pacific 544 576 -6%
Latin America & the Caribbean 199 181 10%
Sub Saharan Africa/Indian Ocean/Others 265 342 -23%
By business line
Cement 2 240 2 430 -8%
Aggregates & Concrete 602 699 -14%
Roofing 0
Gypsum 0
Others 26 20 30%
Total 2 868 3 149 -9%
Estimated effect of exBCI units on Lafarge Group Operating
Income on Ordinary Activities
(Millions of euros) 2002FY* 2002FY 2001FY 02/01
proforma
Western Europe 235 225 186 26%
North America 89 84 123 -28%
Central and Eastern Europe
Emerging Mediterranean
Asia/Pacific 72 69 55 31%
Latin America & the Caribbean 42 40 25 68%
Sub Saharan Africa/Indian Ocean/Others 17 14 34 -50%
Divisional overheads 8
By business line
Cement 418 406 377 11%
Aggregates & Concrete 29 26 49 -41%
Roofing 0
Gypsum 0
Others 8 8 -3
Total Operating income on ordinary activities 455 440 423 8%
*:calculated at 2001 exchange rate
LAFARGE
BCI contribution Cement
Volumes by destination (adjusted for the contributions of our proportionally
consolidated subsidiaries)
(millions of tonnes) 2002FY 2001FY 02/01
proforma
Western Europe 13,2 13,4 -1%
North America 4,9 5,7 -14%
Central and Eastern Europe 0,3 0,4 -25%
Emerging Mediterranean 0,6 0,9 -33%
Asia/Pacific 8,9 9,1 -2%
Latin America & the Caribbean 1,3 1,3 0%
Sub Saharan Africa/ Indian Ocean 4 2,5 60%
Total 33,2 33,3 0%
Sales after elimination of intra company transactions / by geographical zone of
destination
(Millions of euros) 2002FY 2001FY 02/01
proforma
Western Europe 986 966 2%
North America 441 537 -18%
Central and Eastern Europe 10 11 -9%
Emerging Mediterranean 26 39 -33%
Asia/Pacific 432 470 -8%
Latin America & the Caribbean 80 66 21%
Sub Saharan Africa/Indian ocean/Others 265 342 -23%
Total consolidated sales 2 240 2 430 -8%
Estimated effect of exBCI units on Lafarge Group Operating
Income on Ordinary Activities
(Millions of euros) 2002FY* 2002FY 2001FY 02/01
proforma
Western Europe 225 223 184 22%
North America 68 65 82 -17%
Central and Eastern Europe 0
Emerging Mediterranean 0
Asia/Pacific 72 69 57 26%
Latin America & the Caribbean 37 35 20 85%
Sub Saharan Africa/Indian ocean/Others 16 14 34 -53%
Total 418 406 377 11%
*:calculated at 2001 exchange rate
LAFARGE
BCI contribution Aggregates & Concrete
Volumes by destination (adjusted for the contributions of our
proportionally consolidated subsidiaries)
Aggregates 2002FY 2001FY 02/01
(millions of tonnes) proforma
Western Europe 0,2 0,2 0%
North America 10,1 11,7 -14%
Other countries 2,3 2,4 -4%
Total 12,6 14,3 -12%
Concrete 2002FY 2001FY 02/01
(millions of cbm) proforma
Western Europe 1,4 1,4 0%
North America 2,3 2,6 -12%
Other countries 4,9 4,5 9%
Total 8,6 8,5 1%
Sales after elimination of intra company transactions / by geographical zone of
destination
(Millions of euros) 2002FY 2001FY 02/01
proforma
Aggregates & related products 69 82 -16%
Ready-mix concrete & concrete products 533 617 -14%
Total Aggregates & Concrete 602 699 -14%
of which Western Europe 73 81 -10%
" North America 312 416 -25%
" Other countries 217 202 7%
Estimated effect of exBCI units on Lafarge Group Operating
Income on Ordinary Activities
(Millions of euros) 2002FY* 2002FY 2001FY 02/01
proforma
Aggregates & related products 19 17 21 -10%
Ready-mix concrete & concrete products 10 9 28 -64%
Total Aggregates & Concrete 29 26 49 -41%
of which Western Europe 2 2 4 -50%
" North America 22 19 41 -46%
" other countries 5 5 4 25%
Divisional overheads
*:calculated at 2001 exchange rate
LAFARGE
BCI contribution Others
Sales by origin
(after elimination of intra-company sales)
(Millions of euros) 2002FY 2001FY 02/01
proforma
Others 26 20 30%
Estimated effect of exBCI units on Lafarge
Group Operating
Income on Ordinary Activities
(Millions of euros) 2002FY* 2002FY 2001FY 02/01
proforma
Others 8 8 -3 -
Classified in Western Europe in the geographical analysis
*:calculated at 2001 exchange rate
Reconciliation of FY2001 results for former Blue Circle Operations
FY
2001
Eurom
annual report + analysts schedules 2001 485
Divested businesses -5
Change in depreciation -22
Changes following due diligence -1
Reclassification of equity earnings 2
Overhead allocation by Lafarge & LNA 14
Lime disposal 1
Pension profit -38
Trading -10
properties -3
Net Contribution to the group 423
LAFARGE
Group figures: impact of changes in methods
Operating income on ordinary activities restated for equity consolidated
affiliates
(Millions of euros) 2001FY Equity affiliates 2001FY
restated Published
for equity affiliates
Western Europe 802 90 892
North America 515 -9 506
Central and Eastern Europe 71 71
Emerging Mediterranean 113 3 116
Asia/Pacific 104 2 106
Latin America / Caribbean 208 38 246
Sub Saharan Africa/Indian Ocean/Others 123 7 130
Divisional overheads -2 -2
By business line
Cement 1434 73 1 507
Aggregates & Concrete 378 3 381
Roofing 128 14 142
Gypsum 3 6 9
Others -9 35 26
Total Operating income on
ordinary activities 1 934 131 2 065
Operating income on ordinary activities: impact of change in depreciation life
of cement assets and change
in consolidation method for Morrocco 2002 impact Morocco
(Millions of euros) of cement consolidated
new assets life proportionally
Western Europe -29
North America -21
Central and Eastern Europe -6
Emerging Mediterranean -12 42
Asia/Pacific -9
Latin America / Caribbean -3
Sub Saharan Africa/Indian Ocean/Others -3
Divisional overheads
By business line
Cement -83 41
Aggregates & Concrete 1
Roofing
Gypsum
Others
Total Operating income on ordinary activities -83 42
LAFARGE
Cement: impact of changes in methods
Operating income on ordinary activities restated for equity consolidated
affiliates
(Millions of euros) 2001FY restated Equity affiliates 2001FY
for equity affiliates
Western Europe 517 27 544
North America 350 1 351
Central and Eastern Europe 62 62
Emerging Mediterranean 125 125
Asia/Pacific 64 64
Latin America & the Caribbean 205 38 243
Sub Saharan Africa/Indian ocean/Others 111 7 118
Divisional overheads
Total 1 434 73 1 507
Operating income on ordinary activities: impact of change in depreciation life
of cement assets and change in
consolidation method for Morrocco 2002 impact Morocco
(Millions of euros) of cement consolidated
new assets life proportionally
Western Europe -29
North America -21
Central and Eastern Europe -6
Emerging Mediterranean -12 41
Asia/Pacific -9
Latin America & the Caribbean -3
Sub Saharan Africa/Indian ocean/Others -3
Divisional overheads
Total -83 41
LAFARGE
Aggregates & Concrete: impact of changes in methods
Operating income on ordinary activities restated for equity consolidated
affiliates
(Millions of euros) 2001FY restated Equity affiliates 2001FY
for equity affiliates
Aggregates & related products 270 0 270
Ready-mix concrete & concrete products 108 3 111
Total Aggregates & Concrete 378 3 381
of which Western Europe 144 144
" North America 237 237
" other countries 2 3 5
Divisional overhead -5 -5
Operating income on ordinary activities: impact of change in
consolidation method for Morrocco Morocco
(Millions of euros) consolidated
proportionally
Aggregates & related products
Ready-mix concrete & concrete products 1
Total Aggregates & Concrete 1
of which Western Europe
" North America
" other countries 1
Divisional overhead
LAFARGE
Roofing: impact of changes in methods
Operating income on ordinary activities restated for equity consolidated
affiliates
(Millions of euros) 2001FY restated Equity affiliates 2001FY
for equity affiliates
Total 128 14 142
Europe 105 12 117
of which Germany 15 15
other countries 90 12 102
Others 23 2 25
LAFARGE
Gypsum: impact of changes in methods
Operating income on ordinary activities restated for equity consolidated
affiliates
(Millions of euros) 2001FY restated Equity affiliates 2001FY
for equity affiliates
Total 3 6 9
of which Western Europe 44 9 53
of which North America -76 -3 -79
of which other countries 32 32
Divisional overheads 3 3
LAFARGE
Others: impact of changes in methods
Operating income on ordinary activities restated for equity consolidated
affiliates
(Millions of euros) 2001FY restated Equity affiliates 2001FY
for equity affiliates
Materis 42 42
Others -9 -7 -16
Total -9 35 26
This information is provided by RNS
The company news service from the London Stock Exchange
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