Slide 1: 2014 Half-Year Results
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - 2014 Half-Year Results Jean-Jacques Gauthier France, Marseille – Mucem (Museum of European & Mediterranean Civilizations) July 25, 2014
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements. Such forward-looking statements do not constitute forecasts regarding results or any other performance indicator, but rather trends or targets, as the case may be, including with respect to plans, initiatives, events, products, solutions
Slide 3: Q2 Highlights – 1/2
Q2 Highlights – 1/2 Solid organic growth, in a context of adverse exchange rates Cement volumes up 4% like for like Sales up 3% and EBITDA up 9% at constant scope and exchange rates in Q2; fourth consecutive quarter of organic growth Including joint ventures, sales were up 3% and EBITDA up 11% in Q2
Slide 4: Significant Organic Growth
Significant Organic Growth EBITDA Margin Up 140bps, supported by Cost Cutting and Innovation Measures M€ EBITDA margin +140bps 24.3% (82) 22.9% 69 825 Up 9% 812 743 like-for-like EBITDA FX and EBITDA organic EBITDA Q2 2013 scope Q2 2013 LFL growth Q2 2014 4
Slide 5: Q2 Highlights – 2/2
Q2 Highlights – 2/2 Deleveraging actions continued with further divestments secured €1.1Bn of divestments proceeds secured since the beginning of the year, with €0.4Bn received in the first semester Outlook for 2014 unchanged Cement market growth of between 2 to 5 percent in 2014 vs. 2013 Objectives
Slide 6: Key Figures
Key Figures 6 Months 2nd Quarter 2014 2013 Variation lfl(1) 2014 2013 Variation lfl(1) Volumes Cement (MT) 57.0 54.5 5% 7% 31.1 30.6 2% 4% Pure aggregates (MT) 69.9 70.7 -1% 1% 43.0 44.3 -3% -1% Ready-Mix Concrete (Mm3) 12.8 13.0 -1% -2% 7.1 7.2 -2% -4% Sales 6,000 6,234 -4% 6% 3,367 3,559 -5% 3% EB
Slide 7: Operational Review
Copyright © LibraryLafarge - Ignus Gerber Operational Review Everyday life in Brazil - urban planning and street atmosphere in Rio de Janeiro
Slide 8: North America
North America Strong Volumes in the US and Pricing Gains; Significant Cost Savings 6 Months 2nd Quarter Volumes 2014 2013 Variation lfl(1) 2014 2013 Variation lfl Cement (MT) 4.6 4.4 4% 4% 3.1 2.9 6% 6% Pure aggregates (MT) 32.4 36.1 -10% -4% 22.1 24.0 -8% -3% Ready-Mix Concrete (Mm3) 2.3 2.5 -6% -7
Slide 9: Western Europe
Western Europe Strong Cost-Cutting Initiatives Compensating Lower volumes 6 Months 2nd Quarter Volumes 2014 2013 Variation lfl 2014 2013 Variation lfl Cement (MT) 5.9 5.9 - - 3.3 3.5 -4% -4% Pure aggregates (MT) 17.4 17.1 2% 3% 9.2 9.7 -5% -4% Ready-Mix Concrete (Mm3) 3.7 3.8 -2% -3% 1.9 2.0 -8% -9%
Slide 10: Central and Eastern Europe
Central and Eastern Europe EBITDA Growth Driven by A&C Projects and Cost Containment 6 Months 2nd Quarter Volumes 2014 2013 Variation lfl 2014 2013 Variation lfl Cement (MT) 5.4 5.4 - 6% 3.5 3.8 -9% -3% Pure aggregates (MT) 9.4 7.9 20% 9% 6.1 5.5 13% 7% Ready-Mix Concrete (Mm3) 1.0 0.6 61% 61% 0.6 0
Slide 11: Middle East and Africa
Middle East and Africa Strong Performance with Solid Market Trends and Self-Help Measures 6 Months 2nd Quarter Volumes 2014 2013 Variation lfl 2014 2013 Variation lfl (1) (1) Cement (MT) 21.5 19.4 11% 7% 11.0 10.3 7% 2% Pure aggregates (MT) 5.0 4.2 19% 19% 2.6 2.3 14% 14% Ready-Mix Concrete (Mm3) 2.
Slide 12: Latin America
Latin America Strong Forex and Scope Impact; High Cost Inflation Lowered Earnings 6 Months 2nd Quarter Volumes 2014 2013 Variation lfl 2014 2013 Variation lfl Cement (MT) 3.6 4.5 -19% - 1.7 2.3 -23% -5% Pure aggregates (MT) 1.3 1.2 5% 3% 0.7 0.7 -6% -10% Ready-Mix Concrete (Mm3) 0.7 0.6 24% 24% 0.4
Slide 13: Asia
Asia Higher Volumes Mitigated Strong Cost Inflation and Adverse Forex 6 Months 2nd Quarter Volumes 2014 2013 Variation lfl 2014 2013 Variation lfl Cement (MT) 16.0 14.9 7% 7% 8.5 7.8 8% 8% Pure aggregates (MT) 4.4 4.2 4% -1% 2.3 2.1 5% -2% Ready-Mix Concrete (Mm3) 2.3 3.0 -22% -22% 1.2 1.6 -21% -21%
Slide 14: Positive Operational Trends also Prevail in Joint Ventures
Positive Operational Trends also Prevail in Joint Ventures EBITDA margin up 160bps like-for-like including JV Contribution 2nd Quarter including the contribution of Joint ventures the joint-ventures (1) contribution in Q2 (1) 2014 2013 Gross lfl (2) 2014 2013 Pro forma (1) reported Variation Volumes
Slide 15: Net Income
© Rudy Ricciotti - Mario Bellini - Musée du Louvre - Lisa Ricciotti Department of Islam Arts, Musée du Louvre - Paris, France Net Income
Slide 16: Net Income
Net Income 6 Months 2nd Quarter €m 2014 2013 2014 2013 EBITDA 1,155 1,167 812 825 Depreciation (400) (428) (203) (214) Current Operating Income 755 739 609 611 Other income (expenses) (73) (55) (69) (59) Net financial costs (470) (488) (238) (245) Income from JV and associates 30 (11) 41 14 Income t
Slide 17: Cash Flow and Debt Highlights
© Rudy Ricciotti - Mario Bellini - Musée du Louvre - Lisa Ricciotti Cash Flow and Debt Department of Islam Arts, Musée du Louvre - Paris, France Highlights
Slide 18: Cash Flow
Cash Flow 6 Months 2nd Quarter €m 2014 2013 2014 2013 Cash flow from operations 371 419 286 388 Change in working capital (410) (418) (256) (170) Sustaining capex (121) (115) (67) (67) Free cash flow (160) (114) (37) 151 Development investments (1) (322) (371) (138) (146) Divestments (2) 423 162 75
Slide 19: Outlook 2014
© Médiathèque Lafarge Outlook 2014 Canada - Port Mann Bridge with ten lanes of traffic, a cable-stay bridge spanning the Fraser River and connecting the towns of Coquitlam and Surrey
Slide 20: 2014 Outlook – Market Overview
2014 Outlook – Market (1) Overview Cement Volumes (%) Price Highlights Market growth, notably supported by North America 4 to 7 + positive trends in the US residential and commercial sectors Overall stabilization at a low level. Growth Western Europe -2 to 1 =/+ expected in the UK, supported by the
Slide 21: 2014 Outlook – Other Elements
2014 Outlook – Other Elements 2% energy cost inflation (0.3 euro per tonne) Continuous focus on our Cost reduction and Innovation plan: Cost reduction: > €400M Innovation: > €200M Cost of debt (gross): ~6% Tax rate (1): 31% Capital expenditures: €1.1Bn We will continue to pursue further value creati
Slide 22: Conclusion
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - France, Marseille – Mucem (Museum of European & Mediterranean Civilizations) Conclusion
Slide 23: I. Other Information – Outlook 2014 Market Overview
© Médiathèque Lafarge I. Other Information Outlook 2014 – Market Overview Canada - Port Mann Bridge with ten lanes of traffic, a cable-stay bridge spanning the Fraser River and connecting the towns of Coquitlam and Surrey
Slide 24: 2014 Outlook – Market Overview by Country
2014 Outlook – Market (1) overview Cement Market Volumes Market Volumes (%) (%) North America 4 to 7 Middle East and Africa 3 to 6 United States 5 to 8 Algeria 5 to 8 Canada 1 to 4 Egypt 4 to 7 Iraq 5 to 8 (2) Western Europe -2 to 1 Kenya 4 to 7 France -5 to -2 Morocco -3 to 0 United Kingdom 4 to 7
Slide 25: 2014 Outlook – Market Overview: Aggregates and Concrete
2014 Outlook – Market overview Aggregates and Concrete Main markets North America: Market growth, notably supported by positive trends in the US residential and commercial sectors, and some projects in Canada. Western Europe: Overall stabilization at a low level. Growth expected in the UK, supported
Slide 26: II. Other Information – Scope and Foreign Exchange Effects
Copyright © LibraryLafarge - Ignus Gerber II. Other information Scope and Foreign Exchange Effects Everyday life in Brazil - urban planning and street atmosphere in Rio de Janeiro
Slide 27: Sales by Geographical Area
Sales by Geographical Area Scope and Foreign Exchange Effects 6 Months In million euros 2014 2013 Variation Scope FX effect lfl North America 1,132 1,229 -8% -2% -10% 4% Western Europe 1,079 1,101 -2% - - -2% Central and Eastern Europe 489 488 - -6% -6% 12% Middle East and Africa 1,854 1,800 3% - -7
Slide 28: EBITDA by Geographical Area
EBITDA by Geographical Area Scope and Foreign Exchange Effects 6 Months Impact of In million euros 2014 2013 Variation Scope FX effect lfl one-off (1) North America 115 126 -9% -4% -13% -22% 30% Western Europe 146 119 23% - - - 23% Central and Eastern Europe 71 45 58% 5% -4% - 57% Middle East and Af
Slide 29: II. Other Information – Information per Activity
© Agence Rudy Ricciotti II. Other information Information per Activity Mucem (Museum of European & Mediterranean Civilizations) - Marseille, France
Slide 30: Cement
Cement 6 Months 2nd Quarter 2014 2013 Variation lfl (1) 2014 2013 Variation lfl (1) Volumes Cement (MT) 57.0 54.5 5% 7% 31.1 30.6 2% 4% Sales (€m) 4,399 4,517 -3% 7% 2,416 2,531 -5% 5% EBITDA 1,051 1,074 -2% 11% 687 705 -3% 8% EBITDA Margin 23.9% 23.8% 10bps 70bps 28.4% 27.9% 50bps 90bps By geograph
Slide 31: Aggregates and Concrete
Aggregates and Concrete 6 Months 2nd Quarter 2014 2013 Variation lfl(1) 2014 2013 Variation lfl(1) Volumes Pure Aggregates (MT) 69.9 70.7 -1% 1% 43.0 44.3 -3% -1% Volumes Ready-Mix (Mm3) 12.8 13.0 -1% -2% 7.1 7.2 -2% -4% Sales (€m) 1,887 1,987 -5% 2% 1,115 1,182 -6% 1% Out of which Pure aggregates 8
Slide 32: Aggregates and other related activities
Aggregates and other related activities 6 Months 2nd Quarter 2014 2013 Variation lfl (1) 2014 2013 Variation lfl (1) Sales (€m) 887 928 -4% 5% 553 589 -6% 3% EBITDA 79 58 36% 60% 96 86 12% 24% EBITDA Margin 8.9% 6.2% 270bps 17.4% 14.6% 280bps By geographical zone Sales 6M EBITDA 6M 2014 2014 Total 8
Slide 33: Ready-Mix and Concrete Products
Ready-Mix and Concrete Products 6 Months 2nd Quarter 2014 2013 Variation lfl (1) 2014 2013 Variation lfl (1) Sales (€m) 1,150 1,214 -5% - 648 682 -5% - EBITDA 31 44 -30% -21% 33 39 -15% -8% EBITDA Margin 3.0% 3.6% -60bps 5.1% 5.7% -60bps By geographical zone Sales 6M EBITDA 6M 2014 2014 Total 1,150
Slide 34: II. Other Information – Sales variances for a selection of countries
© Agence Rudy Ricciotti II. Other information Sales variances for a selection of countries Mucem (Museum of European & Mediterranean Civilizations) - Marseille, France
Slide 35: YTD Like-for-Like Sales Variance – Cement
YTD Like-for-Like Sales Variance – Cement Analysis by Region and Major Volume effect Other effects (1) Activity variation vs. 2013 Market as at June 30, 2014 North America 4.0% 1.1% 5.1% United States 6.1% 3.2% 9.3% Canada 1.1% 0.2% 1.3% Western Europe 0.3% -1.3% -1.0% France -5.0%(2) -0.7%(2) -5.7%
Slide 36: YTD Like-for-Like Sales Variance – Aggregates and Concrete
YTD Like-for-Like Sales Variance Aggregates and Concrete Analysis by Major Market Volume effect Other effects (1) Activity variation vs. 2013 as at June 30, 2014 Pure Aggregates 0.9% 4.2% 5.1% France 2.0% -1.1% 0.9% Poland 18.4% 3.4% 21.8% United States -3.9% 5.7% 1.8% Canada -3.6% 8.3% 4.7% South A
Slide 37: VI. Other Information – Income statement
© Rudy Ricciotti - Mario Bellini - Musée du Louvre - Lisa Ricciotti VI. Other Information Income statement Department of Islam Arts, Musée du Louvre - Paris, France
Slide 38: Other Income (Expenses)
Other Income (Expenses) 6 Months 2nd Quarter €m 2014 2013 2014 2013 Net gains (losses) on disposals 33 46 7 1 Impairment of assets (6) (22) - (10) Restructuring (43) (57) (32) (40) Others (57) (22) (44) (10) Total (73) (55) (69) (59) 38
Slide 39: Finance Costs and Average Interest Rate
Finance Costs and Average Interest Rate 6 Months 2nd Quarter €m 2014 2013 2014 2013 Financial charges on net debt (380) (386) (190) (197) Foreign exchange (11) (30) (9) (15) Others (79) (72) (39) (33) Total (470) (488) (238) (245) June 30, 2014 December 31, 2013 Average interest rate Interest rate I
Slide 40: VI. Other Information – Statement of Financial Position & Cash Flow Statement
© Rudy Ricciotti - Mario Bellini - Musée du Louvre - Lisa Ricciotti VI. Other Information Statement of Financial Position & Cash Flow Statement Department of Islam Arts, Musée du Louvre - Paris, France
Slide 41: Statement of Financial position
Statement of Financial position June Dec. June Dec. €m €m 30, 2014 31, 2013 30, 2014 31, 2013 Capital Employed 27,105 27,073 Equity 16,133 16,285 Out of which: Out of which: Goodwill 11,041 11,027 Equity attributable to the Prop, plant & equip. 11,952 12,049 owners of the parent 14,361 14,555 compan
Slide 42: Investments and Divestments
Investments and Divestments 6 Months 2nd Quarter €m 2014 2013 2014 2013 Sustaining capital expenditures (121) (115) (67) (67) Development capital expenditures (263) (352) (128) (135) Acquisitions (1) (59) (19) (10) (11) Capital expenditures (443) (486) (205) (213) Divestments (2) 423 162 75 47 (1) I
Slide 43: Balanced Debt Maturity Schedule
Balanced Debt Maturity Schedule Average maturity of gross debt is 4 years and 1 month As at June 30, 2014 (1) In million euros 2200 Lafarge SA Commercial Paper and ST borrowings 2000 Lafarge SA Bonds & other MLT instruments 1800 Subsidiaries debt instruments Securitization programs 1600 1400 1200 10
Slide 44: Gross Debt by Currency and by Source of Financing
Gross Debt (1) by Currency and by Source of Financing As at June 30, 2014 Split by source of financing Split by currency 10% 17% 6% 8% 9% 75% 75% Debentures EUR USD Notes / private placements GBP Other Banks and other Total Gross Debt (1): € 12.4Bn (1) Excluding puts on shares and derivatives instru
Slide 45: Strong Liquidity Backed by Well Balanced Committed Credit Lines
Strong Liquidity Backed by Well Balanced Committed Credit Lines Lafarge SA committed credit lines of 3.0 billion euros with average maturity of 3.1 years €bn, as at June 30, 2014 Amount 2014 2015 2016 2017 2018 Syndicated committed credit lines 1.5 - - - 1.5 - Bilateral committed credit lines 1.5 -
Slide 46: VII. Other Information – IFRS 11 on Joint Arrangements
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - VII. Other Information IFRS 11 on Joint Arrangements - Main Impacts on Group Key Figures France, Jean Bouin Stadium in Paris, a Ductal project designed by Rudy Ricciotti, architect
Slide 47: IFRS 11 - New Accounting Standard on Joint Arrangements
IFRS 11 - New Accounting Standard on Joint Arrangements 6 Months, after Joint ventures 6 Months before IFRS IFRS 11 application contribution 11 application H1 2014 H1 2013 H1 2014 H1 2013 H1 2014 H1 2013 reported restated Pro forma (1) reported Volumes Cement (MT) 57.0 54.5 11.3 10.7 68.3 65.2 Pure
Slide 48: Key definitions
Key definitions Amounts are generally given in million euros, and exceptions are mentioned. Variations are calculated based on amounts that include decimals, and may therefore not be totally consistent when calculated based on rounded disclosed figures. Volumes Volumes are shown by origin Group Sale