BPB was already world number one in the sector

Six months after his taking office, Bruno Lafont, Lafarge CEO, today confirms the shock treatment that he plans to administer the world leader in building materials. His success on the redemption of the Lafarge North America minority leader details the strategic plan announced in February. Its programme, centred on 400 million euros in cost savings to achieve by 2008, illustrates the priority given to profitability. The first arbitration in view affects the roof branch fault of the goal of 350 million gross this year operating surplus, has all chances to leave the fold of the Group and be part of a sale of assets program set at 1 billion.

Lafarge hopes to regain favor with investors disappointed after a wave of intensive acquisitions, illustrated by the acquisition of the British Blue Circle, in 2001. If this period helped pull the group to the rank of world number one in the sector, it left the Fellowship quite cautious, or even concerned with poorly controlled growth. From 2002 to 2005, under-performed by 52.4 title index of its sector.

Today, Bruno Lafont speech should all the more convinced that leader shows his concern for the financial community. It reviews increased its objectives in terms of earnings per share and return on capital and held to the discipline of quarterly results to improve communication. It does not exclude the possibility of share repurchases. Albert brother, first shareholder with 10 of the capital, is also the first affected by the charm offensive.

This morning you submit details of your strategic plan. What are the new elements

In February, six weeks after my duties as General Manager, I announced a strategic plan for Lafarge the undisputed leader in its sector, the best. This plan was based on a transformation of the Organization, greater attention to the shareholders, an acceleration. It included a cost reduction program to improve the margin of the group by 1 point by 2008, a EUR 160 million economy plus 60 million for the roof. After four months of intensive work with our teams, I see this objective on the rise for the porter to 400 million over the same period, particularly through the reorganization of our teams to increase our efficiency, the synergies resulting from the acquisition of the minority of Lafarge North America (LNA) and the centralization of our purchases. We will also increase the generation of cash from our operations. With optimized supply, we can reduce the cost of our industrial investments from 10 to 15. Our plan also comes with divestitures to over $ 1 billion by 2008. Finally, my priorities of development for the years to come, I displayed today that they are clearly in the cement, and first growth such as China, the India or the Russia markets.

How will these measures translate on your financial goals

Return on capital employed (ROCE) of 8.5 in 2005 to reach 10 by end of 2008. And our initial goal of improvement of earnings per share (EPS), of 8 per year on average, now passes to 10.

Six months ago, you mentioned your portfolio analysis to assets that would not respond to the objectives of profitability, the roof could be a part

I fixed the roof activity the objective to reach 350 million euros of gross operating surplus (Ebitda) in 2008, compared to 222 million in 2005. I trust and I am convinced that we do it. But I must admit that the results of this activity have been a matter of concern for the Group and I said that our assets should create value. We are now exploring options, including that of an assignment, if we can get the full value of our assets and maintain a minority stake in the best interest of our shareholders.

This plan does not reflect some "recovery in hand" after a period of somewhat haphazard growth

Lafarge is the group that experienced the most growth in recent years, notably with the acquisition of Blue Circle. These developments have changed the face of the company. The global presence of Lafarge is extended from 30 to 80 countries and enrolment increased from 35,000 to 80,000 people. This forced us to adjust our Organization and our way of working. Today, the group is in running order. We balance our development between internal growth and acquisitions. We must become the best in the sector, and this will result in our results.

This fiscal discipline means the end of the acquisitions

The buyout of minority interests of LNA was sealed off last May and we are proud. A major acquisition is not necessarily the order of the day. Priority is given to cement markets in growth, organic growth and acquisitions, and innovation, particularly in the concrete. But should exclude nothing, our divestment program also gives us the necessary flexibility.

The arrival of Saint-Gobain market after the acquisition of BPB gypsum plate caused you to evolve your strategy

The arrival of Saint-Gobain has not changed the competitive landscape. BPB was already world number one in the sector. On the linkages between the plaster and insulation, if this issue were to arise, we will have all the time to bring the best response.

You also change the way you communicate with shareholders...

Indeed, we will go from the month of November, to quarterly results. It is a constraint, but also an opportunity for improvement of our financial communications. It will also help to develop our culture of results in the management of still more structured way.

Where are your relations with your main shareholder, Albert Frère

Groupe Bruxelles Lambert (GBL) (the holding company of Brother Albert, Editor's note) has, to my knowledge, 10 of the capital of Lafarge. It is for us a significant shareholder and we have regular discussions with this group, as with our other shareholders.

And if he does not share our strategic decisions, I think that anything which promotes heritage society is consistent with its objectives.

Can you give us guidance on the beginning of the year

We will present our first-half results on August 2, but I can already say that the year takes place in accordance with our expectations, even exceed the first five months of the year.