Lafarge achieves record operating results in 2008

• 
• 28th March 2009
• Materials Handling
 

The Board of Directors of Lafarge, chaired by Bruno Lafont, met on February 19, 2009 to approve the accounts for the financial year ended December 31, 2008 and the 2009 action plan to strengthen financial profile, and to call for an EGM on March 31st.

FULL YEAR KEY FIGURES: CURRENT OPERATING INCOME UP 9% AND FREE CASH FLOW INCREASED 22%

• Sales up 8% to €19,033 million up, 14% at constant exchange rate
• Current operating income up 9% to €3,542 million, up 14% at constant exchange rate
  
• Operating margin up 20bp to 18.6%
• Net income Group Share increased 3% to €1,713 million excluding one-off items (1)
  
• Net earnings per share declined 8% to €8.87 excluding one-off items (1)
  
• Free cash flow up 22% to €2,113 million
• Net debt at €16,884 million
• Dividend of €2 per share, subject to AGM approval

(1) Excluding the impact in 2007 of the disposal of the Roofing business and our Cement and Aggregates & Concrete operations in Central Anatolia, Turkey, and in 2008 the disposal of the Lafarge Titan joint venture in Egypt, the Gypsum legal provision adjustment and goodwill write-off.

FOURTH QUARTER KEY FIGURES: LOWER VOLUMES, FREE CASH FLOW INCREASED 18%

• Sales up 7% to €4,647 million, up 11% at constant exchange rate
• Current operating income down 6% to €753 million, down 3% at constant exchange rate
• €250 million goodwill write-off
• Net income Group share declined 25% to €293 million excluding one-off items(1)
  
• Net earnings per share down 34% to €1.50 excluding one-off items(1)
• Free cash flow up 18% to €1,022 million
• Net debt down €900 million in the quarter

Bruno Lafont, Chairman and Chief Executive Officer 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 organization 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."

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