Slide 1: 2015 Half-Year Results
© Médiathèque Lafarge - Charles Plumey-Faye - Rudy Ricciotti (architect) 2015 Half-Year Results Jean-Jacques Gauthier France, Marseille – Mucem (Museum of European & Mediterranean Civilizations) July 29, 2015
Slide 2: Disclaimer
Disclaimer This document contains forward-looking trends, targets or objectives, as the case may be, including with respect to plans, initiatives, events, products, solutions and services. Their development and potential do not constitute forecasts regarding results or any other performance indicato
Slide 3: Q2 Highlights
Q2 Highlights Cement volumes down 4% in Q2 in a contrasted environment Solid developments in many countries of Middle East Africa and in North America, despite harsh weather in the US Positive impact of the ramp up of our new plants in Rajasthan and in Russia mitigating lower export sales and impact
Slide 4: Key Figures
Key Figures 6 Months 2nd Quarter 2015 2014 Variation lfl(1) 2015 2014 Variation lfl(1) Volumes Cement (MT) 54.7 57.0 -4% -3% 29.7 31.1 -4% -3% Pure aggregates (MT) 69.7 69.9 - 1% 43.2 43.0 1% 1% Ready-Mix Concrete (Mm3) 12.3 12.8 -4% -4% 6.8 7.1 -3% -4% Sales 6,319 6,000 5% - 3,540 3,367 5% - EBITDA
Slide 5: Operational Review
M. Kadri - CAPA Pictures Copyright: © Library Lafarge Operational Review Algeria, City of Algiers – Building better cities - Notre-Dame d'Afrique cable car
Slide 6: North America
North America Pricing Gains and Canadian Volumes Offset Wet Weather Impact in the US 6 Months 2nd Quarter Volumes 2015 2014 Variation lfl(1) 2015 2014 Variation lfl(1) Cement (MT) 4.8 4.6 4% 2% 3.3 3.1 5% 3% Pure aggregates (MT) 34.0 32.4 5% 8% 23.4 22.1 6% 8% Ready-Mix Concrete (Mm3) 2.4 2.3 2% 5%
Slide 7: Western Europe
Western Europe Strong Cost-Cutting Initiatives Mitigated Lower volumes 6 Months 2nd Quarter Volumes 2015 2014 Variation lfl(1) 2015 2014 Variation lfl(1) Cement (MT) 5.7 5.9 -4% -4% 3.3 3.3 -1% -1% Pure aggregates (MT) 15.6 17.4 -11% -11% 8.5 9.2 -8% -8% Ready-Mix Concrete (Mm3) 3.5 3.7 -8% -8% 1.9
Slide 8: Central and Eastern Europe
Central and Eastern Europe EBITDA Growth Driven by Higher Volumes and Self-Help Measures 6 Months 2nd Quarter Volumes 2015 2014 Variation lfl(1) 2015 2014 Variation lfl(1) Cement (MT) 5.4 5.4 2% 10% 3.6 3.5 4% 12% Pure aggregates (MT) 9.4 9.4 - - 5.8 6.1 -5% -5% Ready-Mix Concrete (Mm3) 1.0 1.0 4% -
Slide 9: Middle East and Africa
Middle East and Africa Solid Performance with Positive Market Trends and Self-Help Measures 6 Months 2nd Quarter Volumes 2015 2014 Variation lfl(1) 2015 2014 Variation lfl(1) (2) (2) Cement (MT) 19.8 21.5 -8% 3% 9.9 11.0 -10% 3% Pure aggregates (MT) 5.2 5.0 5% 5% 2.8 2.6 8% 8% Ready-Mix Concrete (Mm
Slide 10: Latin America
Latin America Adverse Forex and Scope Impact; Challenging Environment in Brazil 6 Months 2nd Quarter Volumes 2015 2014 Variation lfl(1) 2015 2014 Variation lfl(1) Cement (MT) 2.6 3.6 -28% -11% 1.2 1.7 -30% -14% Pure aggregates (MT) 1.3 1.3 1% 1% 0.7 0.7 -2% -2% Ready-Mix Concrete (Mm3) 0.4 0.7 -38%
Slide 11: Asia
Asia Cost Reduction Mitigated Subdued Volumes and Cost Inflation 6 Months 2nd Quarter Volumes 2015 2014 Variation lfl(1) 2015 2014 Variation lfl(1) Cement (MT) 16.4 16.0 2% 4% 8.4 8.5 - 3% Pure aggregates (MT) 4.2 4.4 -4% -4% 2.0 2.3 -9% -9% Ready-Mix Concrete (Mm3) 2.4 2.3 5% 5% 1.2 1.2 2% 2% Sales
Slide 12: Contribution of the Joint-Ventures
Contribution of the Joint-Ventures Positive Trends in the UK Offset Slowdown in China 2nd Quarter including the contribution of Joint ventures the joint-ventures (1) contribution in Q2 (1) 2015 2014 Gross lfl (2) 2015 2014 Pro forma (1) Pro forma (1) Variation Volumes Cement (MT) 35.7 37.3 -4% -3% 6
Slide 13: Net Income
©Iwan Baan 2014 France, Paris – Fondation Louis Vuitton Net Income
Slide 14: Net Income
Net Income Net Income Impacted by Significant One-Time Elements 6 Months 2nd Quarter €m 2015 2014 2015 2014 EBITDA 1,223 1,155 820 812 Depreciation (410) (400) (212) (203) Current Operating Income 813 755 608 609 Other income (expenses) (762) (73) (656) (69) Net financial costs (423) (470) (233) (23
Slide 15: Cash Flow and Debt Highlights
T. Campagne - CAPA Pictures - Jean-Paul Viguier (architect) Copyright: © Library Lafarge Cash Flow and Debt Highlights France, City of Lyon – Lyon Confluence district, in the Lyon former Docks district. Shopping center designed by architect Jean-Paul Viguier. Lafarge concrete has been used for the e
Slide 16: Cash Flow
Cash Flow Solid CFFO Improvement Mitigated Earlier Dividend Payment 6 Months 2nd Quarter €m 2015 2014 2015 2014 CFFO excluding merger costs 495 388 355 303 Merger Costs (122) (17) (104) (17) Change in working capital (387) (410) (183) (256) Sustaining capex (141) (121) (82) (67) Free cash flow (155)
Slide 17: Outlook 2015
© Lafarge Medialibrary - Ron Saari Outlook 2015 United States - Elmwood, New Jersey – Refurbishment in Ductal, the ultra-high performance concrete of Lafarge, of the Pulaski Skyway Bridge carrying a four-lane freeway over the Passaic and Hackensack rivers linking Jersey City to Newark airport.
Slide 18: 2015 Outlook – Market Overview
2015 Outlook – Market (1) Overview Cement Volumes (%) Price Highlights Market growth, notably supported by North America 3 to 6 + positive trends in the US residential and commercial sectors Improvement expected in UK and Spain; Western Europe -1 to 2 =/+ decrease in France and Greece Market growth
Slide 19: 2015 Outlook – Other Elements
2015 Outlook – Other Elements Stand alone 2015 EBITDA and Net Debt guidance discontinued as no longer relevant -1% for energy cost inflation (-0.1 euro per tonne), reflecting a drop in fuel prices (petcoke and coal), partly compensated by increases in power in regulated markets Continuous focus on o
Slide 20: Conclusion
Philippines – Affordable Housing Conclusion
Slide 21: Other Information: Outlook 2015 – Market Overview
© Lafarge Medialibrary - Ron Saari I. Other Information Outlook 2015 – Market Overview United States - Elmwood, New Jersey – Refurbishment in Ductal, the ultra-high performance concrete of Lafarge, of the Pulaski Skyway Bridge carrying a four-lane freeway over the Passaic and Hackensack rivers linki
Slide 22: 2015 Outlook – Market overview
2015 Outlook – Market (1) overview Cement Market Volumes Market Volumes (%) (%) North America 3 to 6 Middle East and Africa 3 to 6 United States 5 to 8 Algeria 3 to 6 Canada -1 to 2 Egypt 4 to 7 Kenya 8 to 11 Western Europe -1 to 2 Morocco -1 to 2 France -5 to -2 Nigeria 0 to 3 United Kingdom 5 to 8
Slide 23: 2015 Outlook – Market overview: Aggregates and Concrete
2015 Outlook – Market overview Aggregates and Concrete Main markets North America: Market growth, notably supported by positive trends in the US residential and commercial sectors. Western Europe: Overall stabilization at a low level. Growth expected in the UK, supported by the residential sector; d
Slide 24: Scope and Foreign Exchange Effects
T. Campagne - CAPA Pictures - Jean-Paul Viguier (architect) Copyright: © Library Lafarge II. Other information Scope and Foreign Exchange Effects France, City of Lyon – Lyon Confluence district, in the Lyon former Docks district. Shopping center designed by architect Jean-Paul Viguier. Lafarge concr
Slide 25: Sales by Geographical Area
Sales by Geographical Area Scope and Foreign Exchange Effects 6 Months In million euros 2015 2014 Variation Scope FX effect lfl(1) North America 1,340 1,132 18% -3% 15% 6% Western Europe 1,015 1,079 -6% 1% - -7% Central and Eastern Europe 458 489 -6% -4% -5% 3% Middle East and Africa 1,975 1,854 7%
Slide 26: EBITDA by Geographical Area
EBITDA by Geographical Area Scope and Foreign Exchange Effects 6 Months Impact of In million euros 2015 2014 Variation Scope FX effect lfl (1) one-off (1) North America 170 115 48% -5% 17% - 36% Western Europe 153 146 5% 2% - 10% -7% Central and Eastern Europe 76 71 7% -5% - - 12% Middle East and Af
Slide 27: Information per Activity
© Lafarge Medialibrary - II. Other information A. Esiebo - CAPA Pictures Information per Activity Nigeria, City of Lagos
Slide 28: Cement
Cement 6 Months 2nd Quarter 2015 2014 Variation 2015 2014 Variation Volumes Cement (MT) 54.7 57.0 -4% 29.7 31.1 -4% EBITDA Margin 24.5% 23.9% 60bps 27.8% 28.4% -60bps 6 Months 2nd Quarter By geographical zone 2015 2014 Variation 2015 2014 Variation Sales 4,631 4,399 5% 2,528 2,416 5% North America 6
Slide 29: Aggregates and Concrete
Aggregates and Concrete 6 Months 2nd Quarter 2015 2014 Variation 2015 2014 Variation Sales (€m) 1,958 1,887 4% 1,169 1,115 5% EBITDA 107 110 -3% 130 129 1% EBITDA Margin 5.5% 5.8% -30bps 11.1% 11.6% -50bps 29
Slide 30: Aggregates and Other Related Activities
Aggregates and Other Related Activities 6 Months 2nd Quarter 2015 2014 Variation 2015 2014 Variation EBITDA Margin 8.5% 8.9% -40bps 16.3% 17.4% -110bps 6 Months 2nd Quarter By geographical zone 2015 2014 Variation 2015 2014 Variation Sales 926 887 4% 588 553 6% Out of which Pure aggregates 838 807 4
Slide 31: Ready-Mix Concrete and Concrete Products
Ready-Mix Concrete and Concrete Products 6 Months 2nd Quarter 2015 2014 Variation 2015 2014 Variation EBITDA Margin 2.4% 2.7% -30bps 5.1% 5.1% - 6 Months 2nd Quarter By geographical zone 2015 2014 Variation 2015 2014 Variation Sales 1,184 1,150 3% 670 648 3% Out of which ready-mix concrete 1,125 1,0
Slide 32: Sales variances for a selection of countries
© Lafarge Medialibrary - A. Esiebo - CAPA II. Other information Pictures Sales variances for a selection of countries Nigeria, City of Lagos
Slide 33: 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. 2014 Market as at June 30, 2015 North America 2.3% 2.6% 4.9% United States -0.4% 6.9% 6.5% Canada 5.9% -2.5% 3.4% Western Europe -4.9% -2.1% -7.0% France -6.7%(2) -1.9%(2) -8
Slide 34: 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. 2014 as at June 30, 2015 Pure Aggregates 1.0% -1.4% -0.8% -0.4% France -14.1% 4.6% -13.9% -9.5% Poland -1.5% -2.7% -1.6% -4.2% United States 12.6% -1.7% 6.0% 10.9%
Slide 35: Income statement
T. Campagne - CAPA Pictures - Jean-Paul Viguier (architect) Copyright: © Library Lafarge VI. Other Information France, City of Lyon – Lyon Confluence district, in the Lyon former Docks district. Shopping center designed Income statement by architect Jean-Paul Viguier. Lafarge concrete has been used
Slide 36: Other Income (Expenses)
Other Income (Expenses) 6 Months 2nd Quarter €m 2015 2014 2015 2014 Net gains (losses) on disposals 30 33 28 7 Impairment of assets (542) (6) (515) - Merger-related costs (132) (17) (94) (17) Restructuring costs (72) (43) (51) (32) Others (46) (40) (24) (27) Total (762) (73) (656) (69) 36
Slide 37: Finance Costs and Average Interest Rate
Finance Costs and Average Interest Rate 6 Months 2nd Quarter €m 2015 2014 2015 2014 Financial charges on net debt (356) (380) (182) (190) Foreign exchange (5) (11) (24) (9) Others (62) (79) (27) (39) Total (423) (470) (233) (238) June 30, 2015 December 31, 2014 Average interest rate Interest rate In
Slide 38: Statement of Financial Position & Cash Flow Statement
© Lafarge Medialibrary - Ronnel Cuison VI. Other Information Statement of Financial Position & Cash Flow Statement Philippines - Affordable housing, colored houses in the village of Iliga
Slide 39: Statement of Financial position
Statement of Financial position June 30, Dec. June 30, Dec. €m €m 2015 31, 2014 2015 31, 2014 Capital Employed 24,577 27,403 Equity 16,888 17,289 Out of which: Out of which: Goodwill 10,618 11,360 Equity attributable to the Prop, plant & equip. 11,059 12,052 owners of the parent 15,132 15,453 compan
Slide 40: Investments and Divestments
Investments and Divestments 6 Months 2nd Quarter €m 2015 2014 2015 2014 Sustaining capital expenditures (141) (121) (82) (67) Development capital expenditures (342) (263) (166) (128) Acquisitions (1) (73) (59) (14) (10) Capital expenditures (556) (443) (262) (205) Divestments (2) 269 423 232 75 (1)
Slide 41: Balanced Debt Maturity Schedule
Balanced Debt Maturity Schedule Average maturity of gross debt is 3 years and 8 months As at June 30, 2015 (1) In million euros 3000 Lafarge SA short-term borrowings 2800 Lafarge SA Bonds & other MLT instruments 2600 Subsidiaries debt instruments 2400 Securitization programs 2200 2000 1800 1600 1400
Slide 42: Gross Debt by Currency and by Source of Financing
Gross Debt (1) by Currency and by Source of Financing As at June 30, 2015 Split by source of financing (2) Split by currency (2) 14% 10% 6% 9% 12% 72% 77% EUR USD Debentures Notes / private placements Banks GBP Other Total Gross Debt (1): € 12.2Bn (1) Excluding puts on shares and derivatives instrum
Slide 43: 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 2.9 years €bn, as at June 30, 2015 Amount 2015 2016 2017 2018 Syndicated committed credit lines 1.5 - - - 1.5 Bilateral committed credit lines 1.5 - - 0.5 1
Slide 44: IFRS 11 on Joint Arrangements - Main Impacts
© Lafarge Medialibrary - Ronnel Cuison VII. Other Information IFRS 11 on Joint Arrangements - Main Impacts on Group Key Figures Philippines - Affordable housing, colored houses in the village of Iliga
Slide 45: 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 11 application contribution IFRS 11 application H1 2015 H1 2014 H1 2015 H1 2014 H1 2015 H1 2014 (1) reported reported Pro forma Pro forma (1) Volumes Cement (MT) 54.7 57.0 10.7 11.3 65.4 68.3
Slide 46: 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