Gross Margin % is calculated as gross profit divided by its revenue. Lafarge's Gross Profit for the
three
months ended in Jun. 2015 was €924 Mil. Lafarge's Revenue for the
three
months ended in Jun. 2015 was €3,540 Mil. Therefore, Lafarge's Gross Margin % for the quarter that ended in Jun. 2015 was 26.10%.
Warning Sign:
Lafarge SA gross margin has been in long term decline. The average rate of decline per year is -2.4%.
The historical rank and industry rank for Lafarge's Gross Margin % or its related term are showing as below:
XPAR:LGNV'
s Gross Margin % Range Over the Past 10 Years
Min: 23.4 Med: 26.35 Max: 27.9
Current: 23.77
During the past 13 years, the highestGross Margin % of Lafarge was 27.90%. The lowest was 23.40%. And the median was 26.35%.
XPAR:LGNV's Gross Margin % is not ranked
in the Building Materials industry.
Industry Median: 25.355
vs XPAR:LGNV: 23.77
Lafarge had a gross margin of 26.10% for the quarter that ended in Jun. 2015 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Lafarge was -2.40% per year.
Lafarge Gross Margin % Historical Data
The historical data trend for Lafarge's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Lafarge's Gross Margin %
For the Building Materials subindustry, Lafarge's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Lafarge's Gross Margin % Distribution in the Building Materials Industry
For the Building Materials industry and Basic Materials sector, Lafarge's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Lafarge's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Lafarge (XPAR:LGNV) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Lafarge had a gross margin of 26.10% for the quarter that ended in Jun. 2015 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Lafarge Gross Margin % Related Terms
Thank you for viewing the detailed overview of Lafarge's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Lafarge SA is a French limited liability company governed by French law and was founded in France in 1833 and was incorporated in 1884 under the name "J. et A. Pavin de Lafarge". The Company provides building materials. It is engaged in producing & selling cement, aggregates and ready-mix concrete, mostly under the "Lafarge" brand name. Its building products and solutions are used to construct and renovate homes, buildings and infrastructures. At year-end 2013, Company cement production operated, in 56 countries, 113 cement plants and 42 grinding plants, with an annual production capacity of 221 million tons. It also manages cement trading activities. The Company aggregates and concrete are used as raw materials for concrete, masonry, asphalt, and other industrial processes, and as base materials for roads, landï¬lls, and building. As of December 31, 2013, Company had approximately 437 production facilities for aggregates in 23 countries. The Company's Ready-mix concrete had 1,026 concrete plants in 33 countries as of December 31, 2014. The Company also produces asphalt in North America and the United Kingdom, and sells either as a stand-alone product, or in conjunction with contracted paving. The Company operates in Western Europe, North America, Central & Eastern Europe, Middle East & Africa, and Asia.
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