Slide 1: 2013 Nine Month Results
© Médiathèque Lafarge - Ignus Gerber 2013 Nine Month Results November 6, 2013 Skytrain station - Dubaï, UAE
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: 2013 Nine Month Results – Bruno Lafont
© Médiathèque Lafarge - Ignus Gerber 2013 Nine Month Results Bruno Lafont November 6, 2013 Skytrain station - Dubaï, UAE
Slide 4: Introduction
Introduction Third quarter showing an improving volume environment Continuing growth in emerging countries US recovery materializing Europe stabilizing at a low level Progress on our cost reduction, innovation and net debt objectives on track with plan Confirm 2013 and 2014 objectives New targets an
Slide 5: Building on Momentum
Building on Momentum Initial 2012-2015 Plan Accelerated, Will be Completed by 2014; New 2-year Objectives = 2/3 of Initial 4-year Plan At least €1,100m Growth through Innovation New 2015-2016 objective Cost reduction - Performance 250 300 >950 250 +1/3rd €1,750m >€600m 300 Initial target for 2012-20
Slide 6: Drive Performance to Reduce Costs
Drive Performance to Reduce Costs Master Classical Domains and Seek New Territories 2012 Cash Cost Base: €12.4Bn Split of the cost reduction 2012-2014 2015-2016 program by lever €1.3bn > €0.6bn Other SG&A SG&A 0.6 35% 30% Industrial 1.4 Fixed Costs Logistics Raw 3.8 2.4 Fixed 20% 20% materials costs
Slide 7: Grow Cash Generation through Innovation
Grow Cash Generation through Innovation Accelerate Time to Market and Focus on New Offers CONTRIBUTION BY LEVER 2012-2014 2015-2016 €450M > €500M Products & 30% 40% Solutions Market Segments 20% 20% Services 30% 25% Commercial excellence 20% 15% 7
Slide 8: Driving Growth and Value Creation
Driving Growth and Value Creation Looking ahead, we will benefit from three organic growth drivers: continuing growth in emerging countries, accelerating growth through innovation and progressive recovery in mature markets We will capture this potential thanks to our competitive edge in innovation a
Slide 9: 2013 Nine Month Results – Jean-Jacques Gauthier
© Médiathèque Lafarge - Ignus Gerber 2013 Nine Month Results Jean-Jacques Gauthier November 6, 2013 Skytrain station - Dubaï, UAE
Slide 10: Q3 Highlights
Q3 Highlights 4% like for like EBITDA growth, supported by market recovery in the United States and solid growth in Middle East Africa and Asia Negative impact of foreign exchange rates, driving a 7% adverse non cash translational impact on Q3 EBITDA €28M impact of destocking and absence of CO2 sale
Slide 11: Key Figures
Key Figures 9 Months 3rd Quarter 2013 2012 Variation lfl 2013 2012 Variation lfl Volumes Cement (MT) 101.9 106.3 -4% -2% 36.7 36.6 - 3% Pure aggregates (MT) 143.6 141.2 2% - 59.8 57.0 5% 5% Ready-Mix Concrete (Mm3) 23.2 24.0 -3% -1% 8.2 8.3 -1% 1% Sales 11,484 12,007 -4% - 4,236 4,393 -4% 4% EBITDA
Slide 12: Operational Review
© Agence Rudy Ricciotti Mucem (Museum of European & Mediterranean Civilizations) - Marseille, France Operational Review
Slide 13: Overview of EBITDA by Geographical Area
Overview of EBITDA by Geographical Area 9 Months 3rd Quarter By geographical zone 2013 2012 Variation lfl 2013 2012 Variation lfl North America 417 398 5% 21% 288 270 7% 23% Western Europe (1) 260 401 -35% -33% 110 146 -25% -26% Central & Eastern Europe (1) 151 214 -29% -29% 106 127 -17% -16% Middle
Slide 14: North America
North America Visible Operating Leverage in Q3 as Volumes Recover 9 Months 3rd Quarter Volumes 2013 2012 Variation lfl 2013 2012 Variation lfl Cement (MT) 8.4 9.8 -14% -4% 4.0 4.1 -3% 8% Pure aggregates (MT) 68.8 72.5 -5% 1% 32.0 31.9 - 7% Ready-Mix Concrete (Mm3) 4.7 4.8 -3% 2% 2.0 1.9 2% 7% Sales
Slide 15: Western Europe
Western Europe Cost-Cutting Initiatives in a Challenging Environment 9 Months 3rd Quarter Volumes 2013 2012 Variation lfl 2013 2012 Variation lfl Cement (MT) 10.6 12.5 -15% -3% 3.7 4.2 -11% 3% Pure aggregates (MT) 44.5 38.7 15% -4% 15.4 12.8 21% 3% Ready-Mix Concrete (Mm3) 6.8 7.5 -8% -6% 2.3 2.5 -5
Slide 16: Central and Eastern Europe
Central and Eastern Europe Limited Infrastructure Spending Weighed on Volumes 9 Months 3rd Quarter Volumes 2013 2012 Variation lfl 2013 2012 Variation lfl Cement (MT) 9.8 10.4 -6% -6% 4.4 4.5 -3% -3% Pure aggregates (MT) 15.1 16.6 -9% -9% 7.2 7.5 -3% -4% Ready-Mix Concrete (Mm3) 1.2 1.2 1% 1% 0.6 0.
Slide 17: Middle East and Africa
Middle East and Africa Solid Performance with Higher Pricing and Self-Help Measures 9 Months 3rd Quarter Volumes 2013 2012 Variation lfl 2013 2012 Variation lfl Cement (MT) 32.6 34.2 -5% -6% (1) 11.2 10.8 4% 1% (1) Pure aggregates (MT) 6.7 6.6 2% 3% 2.3 2.2 4% 5% Ready-Mix Concrete (Mm3) 5.2 5.2 -1%
Slide 18: Latin America
Latin America Positive Market Trends in a Strong Inflation Environment 9 Months 3rd Quarter Volumes 2013 2012 Variation lfl 2013 2012 Variation lfl Cement (MT) 6.8 6.9 -1% 1% 2.3 2.4 -3% 3% Pure aggregates (MT) 2.0 2.1 -5% -5% 0.8 0.8 -2% -2% Ready-Mix Concrete (Mm3) 0.9 0.8 7% 7% 0.3 0.3 6% 6% Sale
Slide 19: Asia
Asia Positive Market Trends and Earnings Growth; Negative Forex 9 Months 3rd Quarter Volumes 2013 2012 Variation lfl 2013 2012 Variation lfl Cement (MT) 33.7 32.5 3% 3% 11.1 10.6 4% 4% Pure aggregates (MT) 6.5 4.7 37% 36% 2.1 1.8 13% 13% Ready-Mix Concrete (Mm3) 4.4 4.5 -1% 4% 1.3 1.4 -6% -6% Sales
Slide 20: Net Income
© Rudy Ricciotti - Mario Bellini - Musée du Louvre - Lisa Ricciotti Department of Islam Arts, Musée du Louvre - Paris, France Net Income
Slide 21: Net Income
Net Income 9 Months 3rd Quarter €m 2013 2012 2013 2012 EBITDA 2,309 2,579 1,007 1,066 Depreciation (763) (757) (252) (256) Current Operating Income 1,546 1,822 755 810 Other income (expenses) (103) (387) (20) (48) Net financial costs (792) (806) (279) (262) Income from associates 5 11 1 1 Income tax
Slide 22: 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 23: Cash Flow
Cash Flow 9 Months 3rd Quarter €m 2013 2012 2013 2012 Cash flow from operations 1,070 1,323 631 723 Change in working capital (491) (930) (45) (128) Sustaining capex (219) (182) (94) (72) Free cash flow 360 211 492 523 Development investments (1) (544) (3) (308) (143) (3) (120) (3) (3) Divestments (
Slide 24: Outlook 2013
© Médiathèque Lafarge - Marc Mimram Outlook 2013 Bridge Moulay-al-Hassan - Rabat, Morocco
Slide 25: 2013 Outlook – Market Overview
2013 Outlook – Market* Overview Cement Volumes (%) Price Highlights Positive trends in the US residential North America -1 to 2 + sector and in the oil industry in Canada, but adverse weather in H1 limits growth. Markets impacted by austerity measures Western Europe -7 to -4 =/+ and slow economic gr
Slide 26: 2013 Outlook – Other Elements
2013 Outlook – Other Elements 1% energy cost increase (0.2 euro per tonne) Acceleration of our Cost reduction and Innovation plan with: Cost reduction: €450M Innovation: €200M Cost of debt (gross): 6.2% Tax rate: 30% Capital expenditures: €0.9Bn(1) for 2013, net of third-party financing We will cont
Slide 27: Conclusion
© Médiathèque Lafarge - Ignus Gerber Skytrain station - Dubaï, UAE Conclusion
Slide 28: I. Other Information – Outlook 2013 Market Overview
© Médiathèque Lafarge - Marc Mimram I. Other Information Outlook 2013 – Market Overview Bridge Moulay-al-Hassan - Rabat, Morocco
Slide 29: 2013 Outlook – Market overview
2013 Outlook – Market (1) overview Cement Market Volumes Market Volumes (%) (%) North America -1 to 2 Middle East and Africa 3 to 6 United States (1) 0 to 3 Algeria 7 to 10 Canada -4 to -1 Egypt -3 to 0 Iraq 7 to 10 Western Europe -7 to -4 Kenya 4 to 7 France -7 to -4 Morocco -6 to -3 United Kingdom
Slide 30: 2013 Outlook – Market overview: Aggregates and Concrete
2013 Outlook – Market overview Aggregates and Concrete Main markets Mature markets: market growth in North America supported by positive trends in the residential sector in the US and in the oil industry in Canada, while most Western Europe markets are expected to be impacted by austerity measures a
Slide 31: II. Other information – Scope and Foreign Exchange Effects
© Agence Rudy Ricciotti II. Other information Scope and Foreign Exchange Effects Mucem (Museum of European & Mediterranean Civilizations) - Marseille, France
Slide 32: Sales by Geographical Area
Sales by Geographical Area Scope and Foreign Exchange Effects 9 Months In million euros 2013 2012 Variation Scope FX effect lfl North America 2,370 2,551 -7% -7% -4% 4% Western Europe 2,454 2,433 1% 5% - -4% Central and Eastern Europe 887 989 -10% - -1% -9% Middle East and Africa 3,032 3,266 -7% - -
Slide 33: EBITDA by Geographical Area
EBITDA by Geographical Area Scope and Foreign Exchange Effects 9 Months In million euros 2013 2012 Variation Scope FX effect lfl North America 417 398 5% -11% -5% 21% Western Europe (1) 260 401 -35% -2% - -33% Central and Eastern Europe (1) 151 214 -29% - - -29% Middle East and Africa 856 947 -10% -
Slide 34: II. Other information – Information per Activity
© Agence Rudy Ricciotti II. Other information Information per Activity Mucem (Museum of European & Mediterranean Civilizations) - Marseille, France
Slide 35: Cement
Cement 9 Months 3rd Quarter 2013 2012 Variation lfl 2013 2012 Variation lfl Volumes Cement (MT) 101.9 106.3 -4% -2% 36.7 36.6 - 3% EBITDA Margin 25.4% 26.6% -120bps flat (1) 28.9% 29.4% -50bps 60bps (1) 9 Months 3rd Quarter By geographical zone 2013 2012 Variation lfl 2013 2012 Variation lfl Sales 7
Slide 36: Aggregates and Concrete
Aggregates and Concrete 9 Months 3rd Quarter 2013 2012 Variation lfl 2013 2012 Variation lfl Volumes Pure Aggregates (MT) 143.6 141.2 2% - 59.8 57.0 5% 5% Volumes Ready-Mix (Mm3) 23.2 24.0 -3% -1% 8.2 8.3 -1% 1% Sales (€m) 4,116 4,051 2% 2% 1,632 1,601 2% 5% EBITDA 324 336 -4% -1% 210 202 4% 7% EBIT
Slide 37: Aggregates and Other Related Activities
Aggregates and Other Related Activities 9 Months 3rd Quarter 2013 2012 Variation 2013 2012 Variation EBITDA Margin 10.4% 11.2% -80bps 16.8% 16.9% -10bps 9 Months 3rd Quarter By geographical zone 2013 2012 Variation lfl 2013 2012 Variation lfl Sales 2,256 2,099 7% 1% 961 900 7% 6% Out of which Pure a
Slide 38: Ready-Mix Concrete and Concrete Products
Ready-Mix Concrete and Concrete Products 9 Months 3rd Quarter 2013 2012 Variation 2012 Variation l EBITDA Margin 4.1% 4.5% -40bps 6.3% 6.2% 10bps 9 Months 3rd Quarter By geographical zone 2013 2012 Variation lfl 2013 2012 Variation lfl Sales 2,153 2,243 -4% 3% 781 812 -4% 5% Out of which ready-mix c
Slide 39: 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 40: 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. 2012 Market as at Sept. 30, 2013 North America -4.4% 6.5% 2.1% United States -5.5% 5.0% -0.5% Canada -2.8% 5.9% 3.1% Western Europe -3.5% -2.0% -5.5% France -2.6% -2.3%(2) -4
Slide 41: 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. 2012 as at Sept. 30, 2013 Pure Aggregates -0.2% 0.3% 0.1% France -3.1% 1.1% -2.0% United Kingdom 11.9% -1.9% 10.0% Poland -10.7% -7.8% -18.5% United States 0.5% 0.
Slide 42: 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 43: Other Income (Expenses)
Other Income (Expenses) 9 Months 3rd Quarter €m 2013 2012 2013 2012 Net gains (losses) on disposals 91 41 45 (3) Impairment of assets (55) (183) (27) (13) Restructuring (103) (164) (27) (16) Others (36) (81) (11) (16) Total (103) (387) (20) (48) 43
Slide 44: Finance Costs and Average Interest Rate
Finance Costs and Average Interest Rate 9 Months 3rd Quarter €m 2013 2012 2013 2012 Financial charges on net debt (617) (663) (206) (226) Foreign exchange (65) (19) (36) 6 Others (110) (124) (37) (42) Total (792) (806) (279) (262) September 30, 2013 December 31, 2012 Average interest rate Interest r
Slide 45: 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 46: Statement of Financial position
Statement of Financial position Sept. Dec. Sept. Dec. €m €m 30, 2013 31, 2012 30, 2013 31, 2012 Capital Employed 28,921 28,657 Equity 16,666 17,748 Out of which: Out of which: Goodwill 11,765 12,184 Equity attributable to 15,010 14,992 the owners of the 14,639 15,666 Prop, plant & equip. 953 391 par
Slide 47: Investments and Divestments
Investments and Divestments 9 Months 3rd Quarter €m 2013 2012 2013 2012 Sustaining capital expenditures (219) (182) (94) (72) Development capital expenditures (524) (3) (305) (142) (3) (104) Acquisitions (1) (20) (3) (1) (16) Capital expenditures (763) (3) (490) (237) (3) (192) Divestments (2) 1,048
Slide 48: Balanced Debt Maturity Schedule
Balanced Debt Maturity Schedule Average maturity of gross debt is 4 years and 2 months As at September 30, 2013 (1) In million euros 2400 Lafarge SA Commercial Paper and ST borrowings 2200 Lafarge SA Bonds & other MLT instruments 2000 Subsidiaries debt instruments 1800 Securitization programs 1600 1
Slide 49: Gross Debt by Currency and by Source of Financing
Gross Debt (1) by Currency and by Source of Financing As at September 30, 2013 Split by source of financing Split by currency 8% 17% 4% 5% 1% 7% 9% 75% 74% Debentures EUR USD Notes / private placements GBP CNY Commercial paper Other Banks and other Total Gross Debt (1): €14.4 Bn (1) Excluding puts o
Slide 50: Strong Liquidity Backed by Well Balanced Committed Credit Lines
Strong Liquidity Backed by Well Balanced Committed Credit Lines Lafarge SA committed credit lines of 3.5 billion euros with average maturity of 2.2 years €bn, as at September 30, 2013 Amount 2013 2014 2015 2016 2017 2018 Syndicated committed credit lines 1.2 - - 1.2 - - - Bilateral committed credit
Slide 51: 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