Lafarge: Results for the First Half at June 30, 2007



    Record First Half with Earnings up Sharply in the Second Quarter

    PARIS, August 2 /CNW/ - The Board of Directors of Lafarge, chaired by
Bruno Lafont, met on August 1st 2007 to approve the accounts for the half year
ending June 30 2007.

    KEY FIGURES UP IN H1

    
    -- Sales                            -- Net income Group share
       up 4% to EUR 8,385 million          up 70% to EUR 934 million

    -- Current operating income         -- Earnings per share
       up 20% to EUR 1,360 million         up 71% to EUR 5.38
    ----------------------------------------------------------------------
    

    FURTHER GROWTH IN Q2

    
    -- Sales                            -- Net income Group share
       up 2% to EUR 4,690 million          up 17% to EUR 572 million

    -- Current operating income         -- Earnings per share
       up 11% to EUR 1,015 million         up 18% to EUR 3.31
    ----------------------------------------------------------------------
    

    GROUP HIGHLIGHTS IN H1 2007

    --  Record first half

    
            -- Strong organic growth: sales up 6% in second quarter and 8%
               in first half at constant scope and exchange rates.

            -- Cost reductions implemented throughout the Group, in line
               with our Excellence 2008 program.

            -- Current operating income in our North American Cement and
               Aggregates & Concrete businesses is up 21% in the first
               half.

            -- Operating margin is up 210 basis points in first half.

            -- Cash flow from operations increases by 19% in the second
               quarter and 13% in the first half (+24% excluding
               one-offs).

            -- Exchange rate fluctuations are significant: at constant
               exchange rates, current operating income is up 15% in the
               second quarter and up 24% in the first half.

            -- Excluding capital gains on Roofing and Turkey disposals,
               earnings per share is up 23% in the first half and 18% in
               the second quarter.
    

    --  Divestment of the Roofing business and of our activities in Central
Anatolia, Turkey.

    --  Share buy-back of 1.8% of the Group's capital.

    --  Launch of two new value-added concrete products, Extensia and
Chronolia, in France, the UK and North America.

    --  Announcement of our "Sustainability Ambitions 2012", our road-map
towards sustainable leadership.

    --  Appointment of new Group Executive Committee.

    BRUNO LAFONT, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF LAFARGE, COMMENTED:

    "The increase in our earnings in the first half reflects the structural
improvement in our operations and the cost reductions implemented throughout
the Group. Our margins are up sharply. The quality of the results of our North
American operations in the current market environment is worth highlighting.
We are confident for the second half of the year."

    CONSOLIDATED FINANCIAL STATEMENTS AT JUNE 30, 2007

    
    In M EUR                         6 MONTHS                 Q2
    ------------------------------------------------ ---------------------
                               2006  2007  Variation 2006  2007  Variation
    ------------------------------------------------ ---------------------
    Sales                     8,054  8,385   + 4%    4,576 4,690   + 2%
    ------------------------------------------------ ---------------------
    Current operating income  1,134  1,360   + 20%    916  1,015   + 11%
    ------------------------------------------------ ---------------------
    Net income Group share     548    934    + 70%    490   572    + 17%
    ------------------------------------------------ ---------------------
    Earnings per share in EUR 3.14   5.38            2.81  3.31
                               EUR    EUR    + 71%    EUR   EUR    + 18%
    ------------------------------------------------ ---------------------
    Cash flow from
    operations                1,164  1,310   + 13%    926  1,102   + 19%

    Excluding
    exceptionals(1)           1,164  1,439   + 24%    926  1,102   +19%
    ------------------------------------------------ ---------------------
    Group net debt            10,610 9,445   - 11%
    ------------------------------------------------ ---------------------
    

    (1) Cash flow from operations for the first quarter of 2007 includes an
exceptional contribution of EUR 129 million to the UK pension fund.

    CURRENT OPERATING INCOME AT JUNE 30, 2007

    
    In M EUR                          6 MONTHS                 Q2
    ------------------------------------------------- --------------------
                                2006  2007  Variation 2006 2007  Variation
    ------------------------------------------------- --------------------
    Cement                       871  1,070   + 23%   672   772    + 15%
    ------------------------------------------------- --------------------
    Aggregates & Concrete        188   244    + 30%   206   226    + 10%
    ------------------------------------------------- --------------------
    Gypsum                       110   82     - 25%    62   36     - 42%
    ------------------------------------------------- --------------------
    Other                       (35)  (36)            (24) (19)
    ------------------------------------------------- --------------------
    TOTAL                       1,134 1,360   + 20%   916  1,015   + 11%
    ------------------------------------------------- --------------------
    

    H1 2007 HIGHLIGHTS BY BUSINESS

    CEMENT

    --  Sales up: + 5% to EUR 2,779 million in the second quarter; +7% to EUR
4,974 million in the first half.

    --  Current operating income up: +15% in the second quarter; +23% in the
first half.

    --  Strong improvement in operating margin: 21.5% compared to 18.8% in
the first half of 2006.

    --  Positive trends in most of our markets.

    --  Higher earnings in North America, in spite of the impact of the
residential market slowdown.

    --  Strong increase in earnings in Central and Eastern Europe, and in
Asia.

    --  Sustained price increases, against a background of higher energy and
transportation costs.

    AGGREGATES & CONCRETE

    --  Sales stable at EUR 1,724 million in the second quarter; up 1% to EUR
3,002 million in the first half.

    --  Current operating income up: +10% in the second quarter; +30% in the
first half.

    --  Improvement in operating margin, to 8.1% compared to 6.3% in the
first half of 2006.

    --  Positive pricing trends.

    --  Increased contribution from value-added concrete products.

    GYPSUM

    --  Sales stable at EUR 826 million in the first half.

    --  Current operating income and operating margin down, due to
residential market slowdown in North America.

    --  Strong increase in results in all other markets.

    CAPITAL EXPENDITURE AND DISPOSALS IN THE FIRST HALF OF 2007

    --  In the first half, investments mainly concerned the following
operations:

    
            -- Development capital expenditure, to increase production
               capacity, totaled EUR 336 million in the first half (EUR
               213 million in the first half of 2006). These investments
               are part of our program to build 45 million tons of cement
               production capacity, and include the reconstruction of our
               Aceh plant in Indonesia, as well as the construction of new
               production lines in Zambia, China, India, Ecuador and South
               Africa. They also include new plasterboard production lines
               at Silver Grove (U.S.) and in the United Kingdom, as well
               as several debottlenecking investments at our Cement
               operations in France, Spain and Nigeria.

            -- Sustaining capital expenditure totaled EUR 389 million in
               the first half (EUR 417 million in the first half of 2006).

            -- Acquisitions totaled EUR 877 million (EUR 3,061 million in
               the first half of 2006). They include the purchase of a 26%
               stake in Heracles, in Greece, for EUR 322 million, rising
               the Group's stake to 79.17%; a 35% interest in the new
               entity Lafarge Roofing for EUR 217 million; the acquisition
               of aggregates activities in the Chicago region; and the
               acquisition of Cimpor shares on the market for a total of
               EUR 150 million. As at 31 July 2007, Lafarge holds a 17%
               stake in Cimpor.
    

    --  Disposals mainly related to the sale of our Roofing business to PAI
Partners and the sale of our Cement, Aggregates & Concrete business in Central
Anatolia, Turkey.

    OUTLOOK FOR 2007

    --  The positive trends observed in the first half confirm our positive
market outlook for 2007, with strong growth expected in emerging markets.

    
            -- In the Cement business, we anticipate strong demand and
               high prices on the whole, in spite of a slowdown in market
               conditions in North America.

            -- We expect another year of growth for our Aggregates &
               Concrete business in 2007, with particularly strong
               performance in emerging markets.

            -- For the Gypsum business, 2007 should be a good year in
               Western and Eastern Europe and in Asia, in terms of both
               volumes and prices. Our North American operations should,
               however, be strongly impacted by the residential market
               slowdown.
    

    --  Energy and transport costs are expected to be higher in 2007.

    --  The action plans developed to reduce costs in all our businesses and
all countries as part of our "Excellence 2008" strategic plan should generate
substantial cost savings in 2007.

    OSCAR FANJUL APPOINTED NON EXECUTIVE VICE CHAIRMAN OF THE LAFARGE BOARD
OF DIRECTORS

    The Board of Directors of Lafarge, at a meeting on August 1st chaired by
Bruno Lafont, appointed Oscar Fanjul as non-executive Vice Chairman of the
Board.

    Oscar Fanjul, 57, has been an independent member of the Lafarge Board
since 2005. He was founding Chairman and CEO of Repsol YPF, the Spanish energy
group, from 1985 to 1996. He is now Honorary Chairman of Repsol. He is also a
director of the boards of Areva, Marsh & McLennan and the London Stock
Exchange.

    BRUNO LAFONT, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF LAFARGE, STATED:

    "I am delighted that Oscar Fanjul has agreed to bring his experience and
remarkable skills to foster continuous improvement in the governance of our
Board of Directors."

    NOTES TO EDITORS

    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 Euros 17
billion and net income of Euros 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.

    Additional information is available on the web site at www.lafarge.com.

    
    Practical information:

    Analysts & Investors conference call on Second Quarter Results to
    June 30, 2007

    Following the release of Lafarge's Second Quarter Results to June
    30, 2007, a conference call will be held on:
    August 2nd, 2007 at 02:00 PM CET, in English (01:00 PM UK time; 08:00
    AM EDT in North America), hosted by Jean-Jacques Gauthier,
    Chief Financial Officer

    If you wish to participate in the conference call, please dial:
    From France: +33 (0)1 70 99 42 97
    UK and International dial in number: +44(0)20 7806 1968
    From USA, toll free (US only): +1718 354 1391
    Conference call name: "Lafarge"

    Please note that a playback will be available:
    online through www.lafarge.com one hour after the end of the
    conference call, or
    by phone, from August 2nd, 2007 at 17:30 CET, to August 10th, 2007
    at 00:00 AM CET at the following numbers:
    From France: +33 (0)1 71 23 02 48
    UK and International dial in number: +44 (0)20 7806 1970
    From USA, toll free (US only): +1 718 354 1112
    Pin code for all numbers: 2761428#
    

    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 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.




For further information:

For further information: Lafarge Communications: Stephanie Tessier, 011
33 1 44 34 92 32 Stephanie.tessier@lafarge.com or Lucy Wadge / Saint-Antonin,
011 33 1 44 34 19 47 Lucy.saint-antonin@lafarge.com or Claire Mathieu, 011 33
1 44 34 18 18 Claire.mathieu@lafarge.com or Investor Relations: Yvon
Brindamour, 011 33 1 44 34 11 26 Yvon.brindamour@lafarge.com or Daniele
Daouphars, 011 33 1 44 34 11 51 Daniele.daouphars@lafarge.com or Stephanie
Billet, 011 33 1 44 34 94 59 Stephanie.billet@lafarge.com

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