Lafarge 2004 First Half Sales Sales Rise 7%, With Increases in All Divisions PARIS, July 22 /PRNewswire-FirstCall/ -- Lafarge (Euronext: LG, NYSE: LR) Sales were up 7% to EUR 6794 million as at June 30, 2004 compared to first half 2003 sales of EUR 6350 million. The net scope effect was 0.7%. Negative foreign exchange variations impacted sales by 3.8%. "We are pleased to report the solid level of sales achieved in the first half. Continued improvement was experienced in all divisions, with more normal weather conditions in the first months of 2004 and a good second quarter. This strong first half sales performance confirms our expectation of robust growth in our operating income on ordinary activities for 2004 excluding currency fluctuations" said Bernard Kasriel, Chief Executive Officer of the Group. The sales report for each division, excluding foreign exchange, scope effects, and before inter divisional sales elimination is as follows: Cement: + 11.7% Sales rose 11.7% for the first half of 2004 (+12.9% in Quarter 1, +10.7% in Quarter 2). In Western Europe, strong sales were seen in France where both the housing market and local public works are showing good levels of activity. In Germany, where the construction market remains weak, prices are progressively improving from the low levels of 2003. Favourable price trends in Spain helped offset weather related volume weakness. In Greece, prices continue to improve, with volume trends now showing a slowdown in demand following the completion of construction projects for the Olympics. In the UK sales are slightly down, with weaker commercial and infrastructure spending. In North America, the strength of sales growth in the first half has been widespread due to strong demand and more normal weather conditions. Price trends are now positive with successful price increases in the majority of our markets. Strong sales growth was recorded in many other regions: - In Central Europe, there was a notable recovery in Poland, where the construction industry is showing signs of improvement after three years of decline, despite lower average prices ; growth in Romania and Russia continued; - In the Mediterranean Basin, particularly in Jordan and Turkey, and across Africa, especially in Nigeria, South Africa and Kenya, high levels of growth were seen; - In Asia, with strong increases in volumes and prices in India and a clear recovery in prices in the Philippines, solid growth in sales was recorded. In Malaysia however, the temporary shortage of steel slowed construction, leading to slightly reduced sales. In South Korea, sales declined due to a slowdown in house building and infrastructure spending. In Latin America, slight sales growth was recorded with a significant improvement in Venezuela offset by lower volumes in Brazil. Aggregates & Concrete: +8.1% Sales rose 8.1% for the first half of 2004 (+11.4% in Quarter 1, +6,0% in Quarter 2). The robust growth reflects primarily a strong increase in volumes in both activities, driven by overall favourable weather conditions and well-oriented markets in North America, France and emerging countries. In Aggregates, sales rose 7% in the first half, with a strong increase in North America and a contrasted situation in Western Europe. In particular, sales were lower in the UK due to a decline in infrastructure spending, affecting mainly the Asphalt and Paving activity. Strong market conditions were experienced in emerging countries. In concrete, sales rose 9,5% in the first half, driven by a strong growth in North America, continued improvement in Western Europe except in the UK, and good market conditions in all emerging countries with the exception of Brazil. Pricing is up in most regions. Roofing: +6.0% Sales rose 6.0% for the first half of 2004 (+6.0% in Quarter 1, +6.0% in Quarter 2). In Western Europe sales rose overall with good clay and concrete volumes, particularly in France and the UK, with the exception of concrete tiles in Germany where the construction market remains depressed. In the USA, sales continued to grow driven by the strength of the housing market. The sales of roofing components and chimneys continued to grow strongly. Gypsum: +13.7% Sales rose 13.7% for the first half of 2004 (+14.2% in Quarter 1, +13.2% in Quarter 2). In Western Europe, sales growth was strong, helped by a strong pricing environment in France and a buoyant UK market. In Germany whilst volumes improved, sales suffered from a competitive pricing environment. In the USA, sales grew significantly with strong demand from residential construction and prices continuing to improve. In Asia and Australia, sales continued to grow favourably. Negative foreign exchange impact of -3.8% amounting to EUR -217 million Foreign currency negative translation impacts on sales were generated mostly in the following currencies: US Dollar (EUR 110 million), Malaysian Ringgit (EUR 18 million), and the Nigerian Naira (EUR 13 million), partly offset by the appreciation of the Pound Sterling (+EUR 12 million). Scope changes of +0.7% amounting to EUR 55 million Sales from acquisitions amounted to a positive scope effect of EUR 175 million of which EUR 90 million is due to the increase to 51.17% in our percentage ownership of Lafarge Halla Cement, which triggered a change in accounting treatment from the proportional to global consolidation method. The reduction in sales due to negative scope effects totalled EUR 120 million, primarily as a result of the divestment of our Florida cement operations in 2003 amounting to EUR 45 million and of a number of smaller activities. Consolidated Sales as at June 30, 2004 June 30, 2004 June 30, 2003 Variation At constant At constant EUR Million EUR Million scope and scope and foreign foreign exchange exchange, before inter divisional sales elimination Cement 3,275 3,031 +8.1% +11.9% +11.7% Aggregates 2,097 1,980 +5.9% +8.1% +8.1% & Concrete Roofing 711 679 +4.7% +6.0% +6.0% Gypsum 676 593 +14% +14.2% +13.7% Others 35 67 -47.8% -7.8% TOTAL 6,794 6,350 +7.0% +10.1% NA Lafarge, the world leader in building materials, holds top-ranking positions in all four of its Divisions: Cement, Aggregates & Concrete, Roofing and Gypsum. Lafarge employs 75,000 people in 75 countries and posted sales of EUR13.6 billion in 2003. Additional information is available on the web site at http://www.lafarge.com/. Lafarge's next financial publication - 2004 half year results - will be on September 9, 2004 (before the Euronext stock market opens.) For release worldwide with simultaneous release in the United States. Statements made in this press release that are not historical facts, including statements regarding our expected operating income, 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; unfavourable 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. Conference Call on First Half Sales to June 30, 2004 Following the release of Lafarge's sales to June 30, 2004, a conference call will be held on: July 22, 2004 at 15:30 French time, in English (14:30 UK time; 09:30AM EDT in North America) The speakers will be: Jean-Jacques Gauthier - Executive Vice President, Finance James Palmer - Vice-President Investor Relations Daniele Daouphars - Manager Investor Relations If you wish to participate in the conference call, please dial: From France: +33-1-70-99-32-98 From UK : +44 208 515 2302 From UK toll free (from UK only): 0 800 358 2343 From USA: +1 303 262 2175 From USA toll free: 800 240 5318 Conference call name: "Lafarge" A replay of the conference call will be available from July 22, 2004 at 7.30 pm French time to July 30, 2004 at 7.30 pm at the following numbers: From France +33-1-70-99-32-94 Access code: 132607# From UK +44-208-515-2499 Access code: 997066# From UK toll free (from UK only): 0 800-026-0020 Access code: 997066# From USA: +1-303-590-3000 Access code: 11002293# From USA toll free: +800-405-2236 Access code: 11002293# DATASOURCE: Lafarge CONTACT: Communications: Stephanie Tessier: +33-1-44-34-92-32, , Philippe Hardouin: +33-1-44-34-11-71, . Investor relations: James Palmer: +33-1-44-34-92-93, , Daniele Daouphars: +33-1-44-34-92-93,

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