Jul 12 2006
Building on the presentation of 23 February 2006, Lafarge has unveiled its detailed strategic plan, called “Excellence 2008”. This plan confirms the group’s determination to be the best in its sector, focused on its
strengths, committed to realising its ambitions and benefiting from a more efficient organisation.
The key points of this plan are as follows:
- An accountable and mobilised management team and organisation, with a performance-based culture.
- A programme to reduce costs by €400 million by 2008.
- The generation of €1.5 billion in additional cash flow over the next three years.
- A strategy of profitable growth, focused on Cement activity in fast-growing markets and on innovation in Concrete.
- The possible divestment of the Roofing business.
- A renewed commitment to the group’s values, with priority given to employee safety, corporate governance and sustainable development.
As part of this plan, Lafarge Group is raising its targets to the following: average annual EPS growth of 10% by 2008; ROCE of 10% by year-end 2008, up from 8.5% at year-end 2005.
Bruno Lafont, CEO of Lafarge, stated: “Since the announcement of the Group’s strategic plan on 23 February, we have carried out a full review of our performance plans and assets, in concert with our entire organization. We have also rapidly completed the acquisition of the minority interests of Lafarge North America, which will simplify our processes and increase value creation.
"The “Excellence 2008” plan that we are presenting today combines our values, the interests of our shareholders and our clear leadership ambition.
"Our main growth vector in the coming years will clearly be our Cement business, in particular in fast-growing markets. We will accomplish this through balancing our growth between the construction of new plants and
acquisitions, building on the positions that we have built up in recent years. We will do this in strict compliance with our EPS and ROCE targets, while maintaining a strong financial structure.
"The divestment of our Roofing business is under consideration, on the condition that we can obtain the full valuation of our assets and maintain a minority interest in this activity, while acting in the best interests of
our shareholders.”
Lafarge is the world leader in building materials, with top-ranking positions in all four of its businesses: Cement, Aggregates & Concrete, Roofing and Gypsum. With 80,000 employees in 76 countries, Lafarge posted sales of 16 billion euro in 2005.