Annual Report 2011 - Analist.be

C.1. Net earnings from associated and consolidated operating companiesIn EUR million 2011 2010Variation2011-2010Lafarge 124.6 174.1 (49.5)Imerys 142.2 74.1 68.1ECP I & II (10.1) 14.0 (24.1)Operating subsidiaries of ECP III (1.0) (1.9) 0.9Total 255.7 260.3 (4.6)Lafarge“Note: sales and current operating income are restated for2011 and 2010 to reflect the reclassification of the “Gypsum”activities to “discontinued operations”, in accordance withIFRS 5.The year 2011 featured markets with healthy overall trendsin most emerging countries, while developed marketsdemonstrated sharper contrasts. Nigeria, Algeria, China orPoland each registered a strong sales increase in the order of20%, whereas sales in Egypt fell by approximately 30%. In thedeveloped countries, volumes improved in France, the UnitedKingdom and Canada and were stable in the United States,while the group’s activities in Greece and Spain continued toexperience difficult economic circumstances. Cement pricesincreased by 1% compared to their level in 2010’s fourthquarter and prices in the Concrete & Aggregates businessdivision generally improved.In these circumstances, consolidated sales in 2011, ofEUR 15,284 million, increased by 3% (5% at comparable groupstructure and exchange rates), and 5% in the fourth quarter(7% at comparable group structure and exchange rates).Current operating income, of EUR 2,179 million, droppedby 9% (- 9% at comparable group structure and exchangerates), as volumes and cost-cutting measures only partiallycompensated the impact of high costs inflation. A significantimprovement was nevertheless observed during the fourthquarter, with a 3% increase in current operating income (1%at comparable group structure and exchange rates) due to thecombined effect of higher prices, higher volumes and steppedupcost-cutting measures.For the fiscal year, net result, group’s share, stood atEUR 593 million compared to EUR 827 million in 2010. In 2011,the group had a one-off net gain of EUR 466 million resultingprimarily from the capital gain on the disposal of its Gypsumactivities in Europe, Latin America, Asia and Australia; a capitalgain of EUR 161 million on the disposal of Cimpor shares hadbeen realized the previous year; net earnings for 2011 werealso impacted by a goodwill write-off of EUR 285 million,mainly related to Greece.The group actively pursued the implementation of its debtreduction plan, bringing net debt down by EUR 2 billionduring the year while improving further its strong liquidity.On 31 December 2011, the group had EUR 4 billion inconfirmed undrawn credit lines and EUR 3.2 billion in cash.The group also confirmed that it had exceeded its costcuttingobjectives by EUR 200 million for 2011, achievingEUR 250 million of savings in structural costs during the year.It has already announced a new EUR 500 million cost-cuttingprogramme, of which EUR 400 million are expected to beachieved in 2012. The group will introduce in 2012 its newcountry-based organisation to accelerate its development.Based on a stable stake of 21%, Lafarge contributedEUR 125 million to GBL’s result for 2011, compared toEUR 174 million in 2010.Imerys“In 2011, Imerys’ end markets held well overall comparedto 2010, a year of sharp upturn and inventory rebuilding.Signs of economic slowdown that appeared in the summercreated a more contrasting environment in the fourth quarterbut only had a tangible effect on the Paper business. Demandremained firm in most emerging markets. Currencies were veryvolatile in 2011 and prices of certain raw materials rose.The acquisition of the group Luzenac, world leader in talcprocessing with turnover of USD 395 million in 2010, wasclosed on 1 August 2011. Since then, Luzenac has beenfully consolidated. This transaction was settled in cash foran enterprise value of USD 340 million (EUR 232 million),i.e. an EBITDA multiple in line with the ratios historically paidby Imerys. Based on current market conditions, the projectshould create value from 2013 on, with a return on capitalemployed higher than the group’s cost of capital.On 20 September 2011, Imerys inaugurated a ceramicproppants plant in Andersonville (Georgia, United States).Proppants are essential products in the fast-growing nonconventionaloil and gas field sector, for which the group hasdeveloped innovative offerings and holds several patents. Thenew plant, which represents an investment of USD 60 million,uses the infrastructure and mineral reserves of the existingsite and came fully on line at the end of 2011; its production,expected to exceed 100,000 tonnes a year, is delivered undermulti-annual contracts.Annual Report 2011 17