Lafarge: Record Earnings at September 30, 2007

    Strong Growth in Emerging Markets

    Strong Cost Reductions

    Excellence 2008 Targets Will Be Reached

    PARIS, November 8 /CNW/ - The Board of Directors of Lafarge, chaired by
Bruno Lafont, met on November 7, 2007 to approve the accounts for the period
to September 30, 2007.


    -- Sales                         -- Net income Group share
       up 4% to EUR 13,279 million      up 40% to EUR 1,534 million

    -- Current operating income      -- Earnings per share
       up 18% to EUR 2,442 million      up 41% to EUR 8.86


    -- Sales                           -- Net income Group share
       up 5% to EUR 4,894 million         up 9% to EUR 600 million

    -- Current operating income        -- Earnings per share
       up 15% to EUR 1,082 million        up 11% to EUR 3.48



    "The contribution of emerging markets to our earnings has increased
remarkably, with results taking off in Eastern Europe and Asia in particular.
Simultaneously, the Group is posting higher results in North America.

    Our strategic plan is delivering the expected results. We will have
achieved 60% of our 2006-2008 cost reduction target at the end of this year.

    Our Group is in good form to move on to 2008, reach all our targets and
make the difference."


    --  Strong organic growth driven by the dynamism of emerging markets and
positive pricing trends: +8% in sales (+7% in the 3rd quarter); up 22% in
current operating income (+20% in the 3rd quarter).

    --  Strong contribution from emerging markets, which posted an 11%
increase in sales and a 30% increase in current operating income. During the
first nine months of the year, emerging markets accounted for 45% of the
Group's current operating income.

    --  Excellent performance of our Cement and Aggregates & Concrete
operations in North America, in spite of the slowdown in the US residential
market: current operating income was up 21% and 31% respectively in USD over
the first nine months, in spite of lower volumes.

    --  Strong increase in the Group's operating margin: from 16.3% to 18.4%.

    --  Pursuit of the program to construct 45 million tonnes of new cement
capacity, 80% of which is located in emerging markets: progress made with the
building of new plants in Indonesia, China, India, South Africa, Zambia and
Ecuador; launch of the construction of new plants in Uganda, Egypt, China, and

    --  EUR 500 million share buyback program completed through the
acquisition of 4.4 million shares.


    EUR  m                        NINE MONTHS            3RD QUARTER
    ----------------------------------------------- ----------------------
                              2006    2007   Change  2006    2007   Change
    ----------------------------------------------- ----------------------
    Sales                     12,710  13,279    +4%   4,656   4,894    +5%
    ----------------------------------------------- ----------------------
    Current operating income   2,075   2,442   +18%     941   1,082   +15%
    ----------------------------------------------- ----------------------
    Operating margin in %                    +210                   +190
                               16.3%   18.4%   bp     20.2%   22.1%   bp
    ----------------------------------------------- ----------------------
    Net income Group share     1,096   1,534   +40%     548     600    +9%
    ----------------------------------------------- ----------------------
    Earnings per share EUR   6.28EUR 8.86EUR   +41% 3.14EUR 3.48EUR   +11%
    ----------------------------------------------- ----------------------
    Cash flow from             2,150   2,311    +7%     986   1,001    +2%
    ----------------------------------------------- ----------------------
     operations (1)
    ----------------------------------------------- ----------------------

    ----------------------------------------------- ----------------------
    Excluding one-off          2,090   2,440   +17%     926   1,001    +8%
    ----------------------------------------------- ----------------------
    Group net debt            10,261   9,103   -11%       -       -      -
    ----------------------------------------------- ----------------------

    (1) Cash flow from operations includes an exceptional contribution of EUR
129 million to the UK pension fund in Q1 2007 and 60mEUR one-off litigation
settlements in Q3 2006.


    EUR  m                            NINE MONTHS          3RD QUARTER
    -------------------------------------------------   -----------------
                                   2006  2007  Change   2006 2007  Change
    -------------------------------------------------   -----------------
    Cement                         1,546 1,860   +20%    675   790   +17%
    -------------------------------------------------   -----------------
    Aggregates & Concrete            423   531   +26%    235   287   +22%
    -------------------------------------------------   -----------------
    Gypsum                           158    97   -39%     48    15   -69%
    -------------------------------------------------   -----------------
    Other                           (52)  (46)          (17)  (10)
    -------------------------------------------------   -----------------
    TOTAL                          2,075 2,442   +18%    941 1,082   +15%
    -------------------------------------------------   -----------------



    --  Sales up: +7% to EUR 7,744 million in the first nine months; +6% to
EUR 2,770 million in the 3rd quarter.

    --  Current operating income up: +20% to EUR 1,860 million in the first
nine months; +17% to EUR 790 million in the 3rd quarter.

    --  Positive impact of the cost reduction program across all regions.

    --  Very strong increase in operating margin: 24.0% compared to 21.3% for
the same period in 2006.

    --  Positive pricing and volume trends in most of our markets, against a
backdrop of higher energy and transportation costs.

    --  Strong contribution from emerging markets, with a 28% increase in
current operating income over the period, primarily driven by Eastern Europe
and Asia. At September 30, emerging markets represented 52% of the Cement
business's earnings (i.e. close to EUR 1 billion).

    --  14% increase in current operating income at our operations in North
America, in spite of the decline in the residential market. The increase came
to 21% in USD, reflecting the positive effects of the streamlining of our
organization following the buyout of the minority interests, the
implementation of the cost reduction plan and lower imports. The operating
margin in North America is up 360 basis points to 20.8%.


    --  Sales up: +3% to EUR 4,966 million in the first nine months; +6% to
EUR 1,964 million in the 3rd quarter.

    --  Current operating income up: +26% to EUR 531 million in the first
nine months; +22% to EUR 287 million in the 3rd quarter.

    --  Positive impact of the cost reduction program.

    --  Strong increase in operating margin, to 10.7% from 8.8% over the same
period of 2006.

    --  Favorable pricing trends.

    --  Strong increase of 48% in the contribution made by emerging markets
to the current operating income of the Aggregates & Concrete business, driven
by the solid performance posted in Central and Eastern Europe and in South
Africa. Emerging markets represented 20% of the business's earnings.

    --  Higher contribution from value-added concrete products, which
accounted for 20% of volumes, compared to 18% over the same period in 2006.

    --  In spite of a decline in volumes in the United States, the current
operating income posted in North America increased by 31% in USD, reflecting
the solid pricing environment and the impact of the cost reduction program.


    --  Sales down: -2% to EUR 1,208 million in the first nine months; -4% to
EUR 382 million in the 3rd quarter.

    --  Current operating income down: -39% to EUR 97 million in the first
nine months; -69% to EUR 15 million in the 3rd quarter.

    --  Decrease in operating margin, to 8% from 12.9% over the same period
in 2006 owing to the slowdown in the US residential market.

    --  The other markets posted a solid improvement, with current operating
income moving up 23% over the period, driven in particular by strong
performance in Western and Central Europe.


    --  Lafarge has launched the construction of a new production line at its
Hima cement plant in Uganda. This project, which represents a total investment
of around EUR 77 million, will increase the plant's capacity from 350,000
tonnes to 830,000 tonnes. The new line will start up in the first quarter of

    --  In Egypt, the Group has received the authorization to build a new
production line of 1.3 million tonnes per year. This project, which is being
carried out as a joint venture with Titan, represents an investment of around
EUR 75 million for Lafarge.

    --  Lafarge announces the launch of a project to modernize its Joppa
(Illinois) cement plant in the United States. This 2 million tonne plant,
which will start up at the end of 2010, is part of the Group's major emphasis
on cost reductions and should generate an additional $75M in Ebitda per year.
This modernization will also help to enhance the plant's environmental
performance significantly in terms of alternative fuels and emission control.
The project represents an investment of around EUR 285 million.

    OUTLOOK FOR 2007

    --  The trends observed in the first 9 months confirm our positive
outlook for 2007.

    --  The fundamentals of our industry are good and Lafarge is well armed
to make the difference in 2008.

    --  We should exceed the objectives of an average annual increase in
earnings per share of 10% between 2005 and 2008 and an improvement in ROCE to
10% by 2008


    Lafarge is the world leader in building materials, with top-ranking
positions in all of its businesses: Cement, Aggregates & Concrete and Gypsum.
With 71,000 employees in over 70 countries, Lafarge posted sales of EUR 17
billion and net income of EUR 1.4 billion in 2006.

    Lafarge is the only company in the construction materials sector to be
listed in the 2007 '100 Global Most Sustainable Corporations in the World'.
Lafarge has been committed to sustainable development 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 and energy. 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.

    For further information, please visit the Group's web site at:

    Practical information:

    There will be an analyst presentation at 9:00 local time at Lafarge
     Headquarters, 61 rue des Belles Feuilles, 75016 Paris. The
     presentation will be made in English with simultaneous French
     translation based on slides that can be downloaded from the Lafarge
     website (

    The presentation may be followed via a live web cast on the Lafarge
     website as well as via teleconference:
    - Dial in number (France): +33 (0)1 70 99 43 03
    - US dial in number: +1 718 354 1390
    - International dial in number: +44 (0)20 7806 1968

    Please note that in addition to the web cast replay, a conference call
     playback will be available from November 8, 2007 to November 16th,
     2007 online through or at the following numbers:
    - France playback number: +33 (0)1 71 23 02 48 (code: 4410493#)
    - US playback number: +1 718 354 1112 (code: 4410493#)
    - International playback number: +44 (0)20 7806 1970 (code: 4410493#)

    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 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;
seasonal nature 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 public filings with the
French Autorite des Marches Financiers. 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.

For further information:

For further information: Lafarge COMMUNICATIONS: Stephanie Tessier,
+33(1) 44 34 92 32 or Lucy Saint-Antonin, +33(1)
44 34 19 47 or Claire Mathieu, +33(1) 44 34 18
18 or INVESTOR RELATIONS: Yvon Brindamour, +33 (1)
44 34 11 26 or Daniele Daouphars, +33 (1) 44 34 11
51 or Stephanie Billet, +33 (1) 44 34 94 59

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