PRESS RELEASE
Euronext: LG, NYSE: LR	Paris, July 24, 2003
Lafarge reports first half 2003 sales
• Sales down 11.9% to € 6,350 million from € 7,203 million
• Negative foreign exchange impact due to Euro appreciation: –10.9%
• Slight increase of underlying sales: + 0.8%

Sales as at June 30, 2003 declined 11.9% to € 6,350 million from € 7,203 million at June 30, 2002 largely due to significant foreign currency variations which impacted sales by –10.9%. The net scope effect on sales amounted to –1.8% mainly as a consequence of the divestments realized in 2002. Underlying sales were up +0.8% at the end of June.

Sales in the first half of the year were generally slower in the Northern hemisphere compared to 2002, due to harsh weather conditions during the winter and despite an encouraging pick up in June 2003.

The sales report for each Division, excluding foreign exchange, scope effects, and before inter divisional sales elimination is as follows:

CEMENT: +0.9%

Sales rose 0.9% during the first half (–3.4% in Quarter 1 and +3.0% in Quarter 2).

After the harsh winter experienced in the first quarter and a slow start in April and May, there were some signs of a pick up in activity levels in June. Western Europe recorded stable sales overall by the end of June. Strong growth was seen in Spain, where the construction market continues to boom, and in Greece with record sales in the run up to the Olympic Games. France and the UK saw some recovery in June, but Germany remains poor as a result of the continued low level of prices. After the prolonged harsh winter the start to the North American construction season was delayed by a wet spring. Sales were therefore down in the first half. Pricing in the US showed a modest decline, particularly due to pricing pressure in the South East and North East. Pricing in Canada was however favorable.

Positive sales trends overall were recorded in the rest of the world. Particularly good market conditions allowed strong growth in Romania, Morocco, Jordan, and across Africa. Favorable pricing trends in much of Latin America, South Korea and also India helped offset generally slower volumes. Malaysia recorded some recovery in the second quarter despite continued price pressure. Areas of weakness remain the Philippines, with very low prices, Venezuela where the unstable economic situation has led to a large fall in volumes and Poland, which is still experiencing a depressed construction market.

AGGREGATES & CONCRETE: +1.9%

Sales rose 1.9% during the first half (–0.6% in Quarter 1 and +3.3% in Quarter 2).

Sales rose in Western Europe driven by the UK and Spain. In the UK, the asphalt and paving business benefited from major contracts in progress and concrete sales also showed a good level of growth. Spain continues to have record sales. In France, sales at the end of June were marginally down despite positive pricing trends. In North America, aggregates and concrete sales in the US were held back by poor weather conditions and weak levels of demand. In Canada, where there is a stronger construction market, concrete sales recorded a strong level of sales growth; however, aggregate sales were adversely affected by poor weather conditions in the East and in Alberta.

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ROOFING: –1.7%

Sales declined by 1.7% during the first half (–3.2% in Quarter 1 and –0.6% in Quarter 2).

Sales in Western Europe were down, with the exception of the UK, Italy and Austria. Weaker sales continued in France, Germany, Scandinavia and the Benelux, particularly for concrete tiles. Sales of roofing components decreased slightly. Chimney sales improved marginally. In the United States, sales continued to grow.

GYPSUM: +1.8%

Sales rose 1.8% during the first half (+1.9% in Quarter 1 and +1.6% in Quarter 2).

The increase in sales was due to overall positive growth in Western Europe and Asia, which offset lower sales in Germany, Poland and North America. In North America, volumes were held back by lower commercial construction. Prices have edged up to an average of US$97 per thousand square feet in June.

NEGATIVE FOREIGN EXCHANGE IMPACT OF -10.9% AMOUNTING TO € 791 MILLION

The effect of foreign currency fluctuations on the first half 2003 sales was significant. The strong appreciation of the Euro has had a material translation impact on sales generated in the following currencies: US Dollar (€ 314 million), Pound Sterling (€ 68 million), Canadian Dollar (€ 60 million), Brazilian Real (€ 58 million), and the Malaysian Ringgit (€ 47 million).

SCOPE CHANGES OF -1.8% AMOUNTING TO € 110 MILLION

Sales in the first half from acquisitions amounted to € 114 million. Divestments and a change in the consolidation method of Morocco resulted in a reduction in sales of € 224 million.

CONSOLIDATED SALES AS AT JUNE 30, 2003

June 30, 2003 € Million

June 30, 2002 € Million

Variation

At constant scope and foreign exchange

At constant scope and foreign exchange, before inter divisional sales elimination

Cement

3,031

3,551

–14.6%

+0.2%

+0.9%

Aggregates & Concrete

1,980

2,218

–10.7%

+2%

+1.9%

Roofing

679

722

–6.0%

–1.7%

–1.7%

Gypsum

593

604

–1.7%

+1.5%

+1.8%

Others

67

108

–38%

+12.5%

+12.5%

TOTAL

6,350

7,203

–11.9%

+0.8%

NA

Lafarge is the world leader in building materials, and employs 77,000 people in 75 countries. The Group holds top-ranking positions in all four of its Divisions: Cement, Aggregates & Concrete, Roofing and Gypsum. Lafarge posted sales of €14.6 billion in 2002. More information is available on: www.lafarge.com

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Lafarge’s next financial publication – 2003 half year results – will be on September 4 2003 (before the Euronext stock market opens).

For release worldwide with contemporaneous release in the United States.

PRESS CONTACTS:	INVESTOR RELATIONS:
Véronique Doux : 33-1 44-34-19-47 veronique.doux@lafarge.com	James Palmer : 33-1 44-34-11-26 james.palmer@lafarge.com
Brunswick Stéphanie Tessier  33-1 53-96-83-79 stessier@brunswickgroup.com	Danièle Daouphars : 33-1 44-34-11-51 daniele.daouphars@lafarge.com

 

Statements made in this press release that are not historical facts 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 Reference Document COB number R03-0375 and on Form 20-F filed with the Securities and Exchange Commission in the USA. 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.

2003: First Half Sales Conference Call Following the release of Lafarge’s first half sales, a conference call will be held on: July 24th, 2003 at 15:30 French time, in English (14:30 UK time; 09:30AM EDT in North America) The speakers will be: Jean-Jacques Gauthier – Chief Financial Officer James Palmer – Vice-President Investor Relations Danièle Daouphars – Investor Relations If you wish to participate in the conference call, please dial: From France +33 (0) 1 70 99 32 98 From UK +44 208 515 23 03 From USA +1 303 205 00 33 From USA toll free +1 800 257 70 63 Conference call name: “Lafarge” A replay of the conference call will be available from July 24th until August 4th at the following numbers: From France +33 (0) 170 99 32 95 Access code: 13995# From UK +44 208 79724 99 Access code: 921065# From USA toll free +1 800 405 2236 Access code: 546465#

 

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Consolidated Figures
Sales
(Millions of euros)												2003S1			2002S1			03/02
By geographical zone of destination
			Western Europe									2,852			3,019			–6	%
			Central and Eastern Europe									291			262			11	%
			Emerging Mediterranean									251			333			–25	%
			North America									1,601			1,999			–20	%
			Latin America & the Caribbean									297			403			–26	%
			Sub Saharan Africa/Indian Ocean/Others									429			449			–4	%
			Asia /Pacific									629			738			–15	%
By business line
			Cement									3,031			3,551			–15	%
			Aggregates & Concrete									1,980			2,218			–11	%
			Roofing									679			722			–6	%
			Gypsum									593			604			–2	%
			Others									67			108			–38	%
			Total									6,350			7,203			–12	%

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Cement
Volumes by destination (adjusted for the contributions of our proportionaly consolidated subsidaries)
(millions of tonnes)									2003S1			2002S1 (1)			03/02
		Western Europe							15.2			16.5			–8	%
		Central and Eastern Europe							3.6			3.0			20	%
		Emerging Mediterranean							4.8			5.1			–6	%
		North America							7.7			8.0			–4	%
		Latin America & the Caribbean							3.0			3.4			–12	%
		Sub Saharan Africa/ Indian Ocean							5.3			5.0			7	%
		Asia/Pacific							11.3			10.6			7	%
		Total							50.9			51.6			–1	%

 

Sales after elimination of inter divisional sales by geographical zone of destination
(Millions of euros)												2003S1			2002S1			03/02
		Western Europe										1,049			1,160			–10	%
		Central and Eastern Europe										171			151			13	%
		Emerging Mediterranean										207			274			–24	%
		North America										587			756			–22	%
		Latin America & the Caribbean										202			282			–28	%
		Sub Saharan Africa/Indian ocean/Others										363			395			–8	%
		Asia/Pacific										452			533			–15	%
		Total consolidated sales										3,031			3,551			–15	%

 

Sales before elimination of inter divisional sales by origin																				Like
(Millions of euros)											2003S1			2002S1			03/02			for like
		Western Europe									1,175			1,276			–8	%
		Central and Eastern Europe									179			156			15	%
		Emerging Mediterranean									189			267			–29	%
		North America									661			839			–21	%
		Latin America & the Caribbean									226			315			–28	%
		Sub Saharan Africa/Indian ocean/Others									420			431			–3	%
		Asia/Pacific									444			540			–18	%
		Total before elimination of inter-divisional sales									3,294			3,824			–14	%		0.9	%
		Total consolidated sales									3,031			3,551			–15	%		0.2	%
(1) The 2002 figures were restated after reallocation of trading activities

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Aggregates & Concrete
Volumes by destination (adjusted for the contributions of our proportionaly consolidated subsidiaries)
Pure aggregates before elimination with asphalt & Paving
(millions of tonnes)											2003S1			2002S1			03/02
		Western Europe									37.2			36.1			3	%
		North America									45.9			47.5			–3	%
		Other countries									8.2			7.9			4	%
		Total									91.3			91.5			0	%

 

Concrete
(millions of cbm)												2003S1			2002S1			03/02
		Western Europe										7.1			7.5			–6	%
		North America										4.7			4.9			–4	%
		Other countries										4.6			5.0			–8	%
		Total										16.4			17.4			–6	%

 

Sales after elimination of inter divisional sales by geographical zone of destination
(Millions of euros)											2003S1			2002S1			03/02
		Aggregates & related products									834			917			–9	%
		Ready-mix concrete & concrete products									1,146			1,301			–12	%
		Total Aggregates & Concrete									1,980			2,218			–11	%
		of which   Western Europe									920			930			–1	%
		“        North America									834			1,020			–18	%
		“        Other countries									226			268			–16	%

 

Sales before elimination of inter divisional sales by origin																				Like
(Millions of euros)											2003S1			2002S1			03/02			for like
		Aggregates & related products									842			925			–9	%
		Ready-mix concrete & concrete products									1,147			1,303			–12	%
		Total Aggregates & Concrete (bef elim of intra-comp. sales)									1,989			2,228			–11	%
		of which   Western Europe									926			937			–1	%
		“        North America									836			1,023			–18	%
		“        other countries									227			268			–15	%
		Total Aggregates & Concrete (consolidated)									1,980			2,218			–11	%		2.0	%

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Roofing
Volumes by destination (adjusted for the contributions of our proportionally consolidated subsidiaries)
												2003S1			2002S1			03/02
Concrete roof tiles				(millions of sSm)
			Western Europe									32.0			32.3			–1	%
			North America									9.3			8.9			4	%
			other countries									16.3			18.1			–10	%
Clay roof tiles
			Western Europe	(millions of sSm)								11.1			11.1			0	%
Chimneys				(miiliers de kms)								1,269			1,278			–1	%
Sales (after elimination of intra-divisional sales by origin)																					Like
(Millions of Euros)												2003S1			2002S1			03/02			for Like
			Total									679			722			–6	%		–1.7	%
			of which concrete roof tiles	Western Europe								245			254			–4	%
			”	North America								50			59			–15	%
				Other countries								49			60			–18	%
			of which clay roof tiles									121			121			0	%
			of which chimneys (1)									78			79			0	%
			of which other roofing products									136			149			–9	%
(1) Including the “other roofing products“ of the Chimney business.

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Gypsum
Volumes of gypsum wallboard (adjusted for the contributions of our proportionally consolidated subsidiaries)
(millions of sSm)												2003S1			2002S1			03/02
Total												307			284			8	%
Sales (after elimination of intra-divisional sales by origin)																					Like
(Millions of euros)												2003S1			2002S1			03/02			for like
		Total										593			604			–2	%		1.5	%
		of which Western Europe										354			336			8	%
		of which North America										107			135			–21	%
		of which other countries										132			133			–1	%

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Sales variance analysis by region and in major domestic markets.*
				Volume effect %			Price, product, customer & other mix effect %			Activity variation vs 2002 %
CEMENT
Western Europe				2.2			–0.4			1.7
	France			–3.5			4.1			0.5
	UK			0.7			0.1			0.8
	Spain			9.6			1.9			11.4
	Germany			16.2			–35.9			–19.7
	Greece			4.1			4			8.1
Central Europe				–1.5			4.2			2.6
	Poland			–12.5			–0.3			–12.8
	Romania			0.6			19.6			20.2
Mediterranean Basin				1.8			3.8			5.6
	Turkey			–2			0.1			–1.9
	Morocco			10.5			3.1			13.6
	Jordan			–0.5			5.9			5.4
	Egypt			1.5			–4.4			–2.8
North America				–4.7			0.4			–4.3
							0
South America, Caraibs				–5.7			7.2			1.5
	Brazil			–2.7			25.6			22.8
	Venezuela			–36.3			27.9			–8.5
	Chile			–1.4			9.3			8
Africa, Indian ocean				–0.4			10.4			10.1
	Kenya			3.1			5.3			8.4
	Nigeria			–0.8			9.8			9
	South Africa			–8.9			14			5.1
Asia, Middle East				4.1			–4.3			–0.2
	Malaysia			2.6			–6			–3.4
	Philippines			8.2			–25.1			–16.8
	India			–7.8			10.5			2.7
	South Korea			0.1			7.1			7.2
Total CEMENT				0.2			0.6			0.9
AGGREGATES
	France			–2.9			1.7			–1.3
	UK (Pure Aggregates) (1)			0.8			8.3			9.1
	North America (Pure Aggregates)			–4.4			3.3			–1.1
Total Aggregates				–1.4			3.3			1.8
READYMIX
	France			–3.8			4.2			0.4
	UK			6.4			6.9			13.3
	North America			–2.4			2.4			0
Total Readymix				–2			4.4			2.4
(1) UK sales impacted by aggregates levy. Price effect without aggregates levy was 4%.
* Variance on like for like sales before elimination of sales between Divisions

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Sales variance analysis by region and in major markets.*
				Volume effect %			Price, product, customer & other mix effect %			Activity variation vs 2002 %
ROOFING
Western Europe Concrete T&F				–2.8			–0.4			–3.1
Western Europe Clay T&F				–0.8			–0.2			–1
	UK						0
	Concrete			4.4			3			7.4
	Clay			–6.1			7.4			1.3
	France
	Concrete			–9.9			0.9			–9
	Clay			–6.1			5			–1.1
	Germany
	Concrete			–6.9			–2.5			–9.4
	Clay			7.6			–6.1			1.5
United States (Concrete)				4			0.5			4.4
Chimneys				–1.1			1.3			0.2
Accessories							–1.7			–1.7
TOTAL ROOFING										–1.7
GYPSUM
BOARDS
Western Europe				–2.4			5.8			3.3
North America				–6.4			0.6			–5.9
Asia / Pacific				11.1			–0.8			10.3
TOTAL GYPSUM				–0.6			2.1			1.5
* Variance on like for like sales before elimination of sales between Divisions

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date July 24, 2003		Lafarge
		(Registrant)
	By:	/s/ Jean-Pierre Cloiseau
	Name:	Jean-Pierre Cloiseau
	Title:	Senior Vice President, Finance

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