Lafarge reports sales growth for 2011

Global building materials manufacturer Lafarge has reported a +3% increase in sales for the full year 2011, with sales totalling €15.2 billion.

The France-based materials supplier ended the year on a high with a +5% increase in sales for the fourth quarter of 2011, taking sales for the quarter to €3.8 billion.

Operating income also grew in the fourth quarter, due to higher sales volumes, higher pricing, and cost cutting measures. However, for the year, higher cost inflation and the negative impact of foreign exchange lowered overall results.

The company, which embarked on a €500 million cost savings programme in 2011, also successfully achieved a net debt reduction target of €2 billion.

"Additional debt reduction will come in 2012 as the group maximises its operational cash flows. We will drive a €500 million cost reduction programme, implement price actions as a response to cost inflation, further reduce capital expenditures to €800 million, execute strategic divestments of more than €1 billion, and propose a reduction of the dividend to 50 cents per share," said Bruno Lafont, chairman and CEO of Lafarge.

Lafarge sold the majority of its gypsum businesses in 2011, made changes to its management structure, and refocused on its core businesses of cement, aggregates and concrete. As a result, sales for cement increased +3% for the year. Sales for aggregates and concrete also increased +3% for 2011.

Looking ahead, the group sees cement demand moving higher and estimates market growth of +1% to +4% in 2012 versus 2011. This will be largely driven by business from emerging markets.