Lafarge SA

Lafarge SA — H1 2007 Earnings Presentation

51 slides from Lafarge SA's earnings presentation, Aug 2, 2007

  1. Slide 1: 2007 Half Year Results

    2007 Half Year Results Photo credit: Agence Interspeed / Beg Imtiaz Alam © Copyright 2006, Lafarge SA August 2nd, 2007 All rights reserved. No part of this document may be reproduced, stored in a retrieval system, translated, or transmitted in any form or by any means, electronic, mechanical, photoc

  2. Slide 2: Disclaimer

    Disclaimer Statements made in this presentation that are not historical facts, including statements regarding our volume and price growth, and our cost and capital expenditure assumptions are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation

  3. Slide 3: 2007 Record Second Quarter

    2007 Record Second Quarter ƒ Sustained organic growth ƒ Resilient North America results ƒ Good underlying trends ƒ Excellence 2008 delivering 3

  4. Slide 4: Key Figures

    Key Figures 6 Months 2nd Quarter €m 2006 (1) 2007 Variation 2006 (1) 2007 Variation Sales 8,054 8,385 + 4% 4,576 4,690 + 2% EBITDA 1,598 1,828 + 14% 1,151 1,253 + 9% Current Operating Income 1,134 1,360 + 20% 916 1,015 + 11% Net income Group share 548 934 + 70% 490 572 + 17% € Earnings per share (2)

  5. Slide 5: Sales up 4%

    Sales up 4% Solid Organic Growth 6 Months 2nd Quarter €m 2006 (1) 2007 Variation 2006 (1) 2007 Variation Cement 4,260 4,568 + 7% 2,430 2,561 + 5% Aggregates & Concrete 2,968 2,997 + 1% 1,728 1,721 - Gypsum 819 814 - 1% 415 405 - 2% Other 7 6 3 3 Total 8,054 8,385 + 4% 4,576 4,690 + 2% + 4% Excluding

  6. Slide 6: Current Operating Income up 20%

    Current Operating Income up 20% Strong Margin Improvement 6 Months 2nd Quarter €m 2006 (1) 2007 Variation 2006 (1) 2007 Variation Cement 871 1,070 + 23% 672 772 + 15% Aggregates & Concrete 188 244 + 30% 206 226 + 10% Gypsum 110 82 - 25% 62 36 - 42% Holding & Other (35) (36) (24) (19) Total 1,134 1,3

  7. Slide 7: Cost of Sales

    Cost of Sales Positive Impact of Excellence 2008 6 Months €m 2006 (1) 2007 Cement 3,320 3,482 Aggregates & Concrete 2,504 2,482 Gypsum 605 632 Total as % of Sales Eliminations & Other (394) (414) 2006 (1) 2007 Total 6,035 6,182 74.9% 73.7% Of which 2nd Quarter 3,222 3,254 + 2% 6,035 6,182 Excluding

  8. Slide 8: Selling and Administrative Expenses

    Selling and Administrative Expenses Tight Cost Control 6 Months €m 2006 (1) 2007 Cement 450 422 Aggregates & Concrete 281 276 Gypsum 115 112 Total as % of Sales Eliminations & Other 39 33 2006 (1) 2007 Total 885 843 11.0% 10.1% Of which 2nd Quarter 438 421 - 5% 885 843 Excluding scope and currency e

  9. Slide 9: Cement

    Cement © Copyright 2006, Lafarge SA 9 Credits: Lafarge Photolibrary, ARR

  10. Slide 10: Cement Highlights

    Cement Highlights Another Quarter of Strong Performance: Current Operating Income Up 23% YTD 6 Months 2nd Quarter MT 2006 2007 Variation 2006 2007 Variation Volumes 62.6 65.7 + 5% 35.9 36.4 + 1% €m Sales (1) 4,641 4,974 + 7% 2,642 2,779 + 5% EBITDA 1,158 1,358 + 17% 817 916 + 12% Current Operating I

  11. Slide 11: Cement: Western Europe

    Cement: Western Europe Improving Margins 6 Months 2nd Quarter MT 2006 2007 Variation 2006 2007 Variation Volumes (1) 16.5 17.1 + 4% 9.4 9.2 - 2% €m Sales (2) 1,396 1,518 + 9% 775 808 + 4% EBITDA 397 451 + 14% 268 288 + 7% Current Operating Income 316 365 + 16% 228 244 + 7% Operating margin (3) ƒ Imp

  12. Slide 12: Cement: North America

    Cement: North America Strong Results Improvement in a Soft Market 6 Months 2nd Quarter MT 2006 2007 Variation 2006 2007 Variation Volumes (1) 9.5 8.8 - 7% 5.8 5.5 - 5% €m Sales (2) 908 839 - 8% 551 523 - 5% EBITDA 178 192 + 8% 168 179 + 7% Current Operating Income 110 127 + 15% 134 146 + 9% Operatin

  13. Slide 13: Cement: Mediterranean Basin

    Cement: Mediterranean Basin Solid Market Trends in a High Cost Environment 6 Months 2nd Quarter MT 2006 2007 Variation 2006 2007 Variation Volumes (1) 5.8 5.1 - 12% 3.4 2.8 - 18% €m Sales (2) 306 295 - 4% 184 166 - 10% EBITDA 113 107 - 5% 74 67 - 9% Current Operating Income 97 94 - 3% 66 61 - 8% Ope

  14. Slide 14: Cement: Central And Eastern Europe

    Cement: Central And Eastern Europe Strong Market Fundamentals and Solid Performance 6 Months 2nd Quarter MT 2006 2007 Variation 2006 2007 Variation Volumes (1) 5.5 7.1 + 29% 3.9 4.4 + 13% €m Sales (2) 310 501 + 62% 223 317 + 42% EBITDA 97 198 + 104% 98 157 + 60% Current Operating Income 79 180 + 128

  15. Slide 15: Cement: Latin America

    Cement: Latin America Solid Market Trends 6 Months 2nd Quarter MT 2006 2007 Variation 2006 2007 Variation Volumes (1) 3.7 4.2 + 14% 1.9 2.2 + 16% €m Sales (2) 302 329 + 9% 151 168 + 11% EBITDA 79 83 + 5% 38 43 + 13% Current Operating Income 62 65 + 5% 31 34 + 10% Operating margin (3) ƒ Solid volumes

  16. Slide 16: Cement: Sub-Saharan Africa

    Cement: Sub-Saharan Africa Good Market Trends, Cost Reductions but High Cost Inflation 6 Months 2nd Quarter MT 2006 2007 Variation 2006 2007 Variation Volumes (1) 6.6 6.7 + 2% 3.4 3.4 - €m Sales (2) 771 774 - 414 409 - 1% EBITDA 179 170 - 5% 95 92 - 3% Current Operating Income 149 145 - 3% 77 80 + 4

  17. Slide 17: Cement: Asia

    Cement: Asia Continued Results Improvement 6 Months 2nd Quarter MT 2006 2007 Variation 2006 2007 Variation Volumes (1) 15.0 16.7 + 11% 8.1 8.9 + 10% €m Sales (2) 648 718 + 11% 344 388 + 13% EBITDA 115 157 + 37% 76 90 + 18% Current Operating Income 58 94 + 62% 47 59 + 26% Operating margin (3) ƒ Susta

  18. Slide 18: Aggregates & Concrete

    Aggregates & Concrete © Copyright 2006, Lafarge SA 18 Credits: Lafarge Photolibrary, ARR

  19. Slide 19: Aggregates & Concrete Highlights

    Aggregates & Concrete Highlights Sustained Performance: Current Operating Income Up 30% YTD 6 Months 2nd Quarter €m 2006 2007 Variation 2006 2007 Variation Sales (1) 2,973 3,002 + 1% 1,731 1,724 - EBITDA 317 372 + 17% 273 294 + 8% Current Operating Income 188 244 + 30% 206 226 + 10% Operating Income

  20. Slide 20: Pure Aggregates

    Pure Aggregates Solid Pricing and Good Cost Control 6 Months 2nd Quarter MT 2006 2007 Variation 2006 2007 Variation Volumes 118.6 118.7 - 71.8 70.5 - 2% €m Sales (1) 1,118 1,161 + 4% 670 681 + 2% EBITDA 203 226 + 11% 169 178 + 5% Current Operating Income 120 141 + 18% 125 132 + 6% Operating margin (

  21. Slide 21: ReadyMix

    ReadyMix Value Added Products Contribution and Good Cost Control 6 Months 2nd Quarter Mm3 2006 2007 Variation 2006 2007 Variation Volumes 21.2 20.9 - 1% 11.8 11.1 - 6% €m Sales (1) 1,649 1,688 + 2% 908 907 - EBITDA 115 139 + 21% 80 91 + 14% Current Operating Income 83 108 + 30% 64 75 + 17% Operating

  22. Slide 22: Gypsum

    Gypsum © Copyright 2006, Lafarge SA 22 Credits: Lafarge Photolibrary, ARR

  23. Slide 23: Gypsum

    Gypsum Impact of US Slowdown, Improved Results Elsewhere 6 Months 2nd Quarter Mm² 2006 2007 Variation 2006 2007 Variation Volumes 354 362 + 2% 179 182 + 2% €m Sales (1) 830 826 - 420 411 - 2% EBITDA 144 117 - 19% 78 54 - 31% Current Operating Income 110 82 - 25% 62 36 - 42% Operating Income 112 80 6

  24. Slide 24: Net Income

    Net Income © Copyright 2006, Lafarge SA Credits: Lafarge Photolibrary, ARR

  25. Slide 25: Net Income

    Net Income Strong Operating Results, Tax Optimization and Assets Disposal 6 Months 2nd Quarter €m 2006 (1) 2007 2006 (1) 2007 Current Operating Income 1,134 1,360 916 1,015 Other income (expenses) (47) 82 (35) (26) Finance costs (187) (244) (80) (96) Income from associates 18 27 9 15 Income taxes (2

  26. Slide 26: Other Income (Expenses)

    Other Income (Expenses) Gain on Disposal in Turkey 6 Months 2nd Quarter €m 2006 (1) 2007 2006 (1) 2007 Net gains (losses) on disposals (2) 164 1 16 Impairment of assets - (6) - (3) Restructuring (13) (17) (12) (12) Others (32) (59) (24) (27) Total (47) 82 (35) (26) 26 (1) As presented this year, wit

  27. Slide 27: Finance Costs

    Finance Costs Impact of LNA’s Minorities Interests Acquisition Partly Offset by the Effect of the Disposal of the Roofing Division 6 Months 2nd Quarter €m 2006 (1) 2007 2006 (1) 2007 Financial charges on net debt (231) (257) (131) (128) Foreign exchange (15) 1 2 8 Others 59 (2) 12 49 (2) 24 Total (1

  28. Slide 28: Income Taxes

    Income Taxes Favorable Taxation of Gains on Disposals 6 Months Normalized tax rate 30% Taxation of gain on disposal (3)% Others (2)% Effective tax rate 2007 25% 28

  29. Slide 29: Earnings Per Share

    Earnings Per Share Continuing Sharp Rise € 6 Months 2nd Quarter Earnings per share 2006 3.14 2.81 COI improvement after tax 0.71 0.42 Lafarge North America minorities buy-out -0.07 0.12 After tax gains on disposal in Turkey 0.80 - Impact of discontinued operations 0.76 -0.08 Heracles 26% stake purch

  30. Slide 30: Cash Flow Statement & Balance Sheet Highlights

    Cash Flow Statement & Balance Sheet Highlights © Copyright 2006, Lafarge SA 30 Credits: Lafarge Photolibrary, ARR

  31. Slide 31: Cash Flow

    Cash Flow Impacted by Disposals, Acquisitions and Share Buy Back 6 Months 2nd Quarter €m 2006 (1) 2007 2006 (1) 2007 Cash flow from operations 1,164 1,310 926 1,102 Out of which: Exceptional contribution to UK pension fund - (129) - - Change in working capital (638) (845) (346) (616) Sustaining cape

  32. Slide 32: Investments and Divestments

    Investments and Divestments 6 Months 2nd Quarter €m 2006 (1) 2007 2006 (1) 2007 Sustaining capital expenditures 417 389 227 223 Development capital expenditures 213 336 118 200 Acquisitions 3,061 877 2,952 507 Capital expenditure 3,691 1,602 3,297 930 Divestments 96 2,387 73 42 (1) As presented this

  33. Slide 33: Balance Sheet

    Balance Sheet December June December June €m €m 31, 2006 (1) 30, 2007 31, 2006 (1) 30, 2007 Capital Employed 21,390 22,674 Equity 11,694 11,732 Out of which: Out of which: Goodwill 7,511 7,604 Shareholders’ equity 10,314 10,585 Prop, plant & equip. 11,183 11,499 Minority Interests 1,380 1,147 Workin

  34. Slide 34: Outlook 2007

    Outlook 2007 © Copyright 2006, Lafarge SA 34 Credits: Lafarge Photolibrary, ARR

  35. Slide 35: 2007 Outlook Market Overview

    2007 Outlook Market * Overview Volumes (%) Price Highlights Western Europe 0 to 2 + Moderate growth across countries North America -2 to -4 + Impact of residential Mediterranean Basin 6 to 8 + Solid, notably in Morocco and Egypt Central and Eastern Europe 10 to 15 +/++ Strong overall Latin America 4

  36. Slide 36: 2007 Outlook - Other Elements

    2007 Outlook - Other Elements COST FACTORS OTHER FACTORS ƒ Cost of debt (gross): 6% ƒ Price increases exceeding cost factor increases ƒ Tax rate: < 30% ƒ Energy input cost impact - ƒ Capital expenditures: Cement: 1€/tonne - Sustaining 1 bn€ - Internal Development > 1 bn€ 36

  37. Slide 37: Appendices

    Appendices Photo credit: Agence Interspeed / Beg Imtiaz Alam © Copyright 2006, Lafarge SA All rights reserved. No part of this document may be reproduced, stored in a retrieval system, translated, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwi

  38. Slide 38: 2007 Market Overview

    2007 Market Overview Photo credit: Agence Interspeed / Beg Imtiaz Alam © Copyright 2006, Lafarge SA All rights reserved. No part of this document may be reproduced, stored in a retrieval system, translated, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording,

  39. Slide 39: 2007 Outlook update – Market Overview: Western Europe

    2007 Outlook update – Market * Overview Western Europe Volumes (%) Price Cement • France 1 to 3 + • Spain 2 to 3 + • UK 2 to 3 + • Germany 1 to 2 + • Greece -2 to +2 + Aggregates & Concrete • Aggregates: Some market growth in the second half with positive pricing trends • ReadyMix: Moderate market g

  40. Slide 40: 2007 Outlook update – Market Overview: North America

    2007 Outlook update – Market * Overview North America Volumes (%) Price Cement -2 to -4 + Aggregates & Concrete • Aggregates: Positive pricing trends, moderate decline in volumes in the second half. Stronger market demand in some markets partly compensating for residential market declines in others

  41. Slide 41: 2007 Outlook update - Market Overview: Mediterranean Basin

    2007 Outlook update - Market * Overview Mediterranean Basin Volumes (%) Price • Turkey 4 to 6 ++ • Morocco 10 to 15 + • Jordan 0 to -3 + • Egypt 8 to 10 =/+ 41 * Market growth forecast at national level

  42. Slide 42: 2007 Outlook update - Market Overview: Central and Eastern Europe

    2007 Outlook update - Market * Overview Central and Eastern Europe Volumes (%) Price Cement • Poland 15 to 20 ++ • Romania 15 to 20 + • Russia 10 to 15 ++ • Serbia 10 to 15 + Aggregates & Concrete • Strong volume growth with positive pricing trends Gypsum • Poland: Positive market environment 42 * M

  43. Slide 43: 2007 Outlook update - Market Overview: Latin America

    2007 Outlook update - Market * Overview Latin America Volumes (%) Price • Brazil 4 to 6 = • Venezuela 15 to 20 =/+ • Chile 1 to 3 = • Honduras 4 to 6 + • Ecuador 4 to 6 + 43 * Market growth forecast at national level

  44. Slide 44: 2007 Outlook update - Market Overview: Sub Saharan Africa

    2007 Outlook update - Market * Overview Sub Saharan Africa Volumes (%) Price • South Africa 8 to 10 ++ • Nigeria 6 to 8 + • Kenya 10 to 15 + 44 * Market growth forecast at national level

  45. Slide 45: 2007 Outlook update – Market Overview: Asia

    2007 Outlook update – Market * Overview Asia Volumes (%) Price • South Korea 0 to 2 = • Malaysia -2 to +2 ++ • Philippines 5 to 10 + • India 6 to 8 + • China 8 to 10 + 45 * Market growth forecast at national level

  46. Slide 46: Additional Information

    Additional Information Photo credit: Agence Interspeed / Beg Imtiaz Alam Continuing operations © Copyright 2006, Lafarge SA All rights reserved. No part of this document may be reproduced, stored in a retrieval system, translated, or transmitted in any form or by any means, electronic, mechanical, p

  47. Slide 47: Consolidated Sales by Geographical Zone

    Consolidated Sales by Geographical Zone for continuing operations By geographical 6 Months 2nd Quarter zone of destination 2006 (1) 2007 2006 (1) 2007 Sales (million of €) 8,054 8,385 4,576 4,690 Western Europe 2,963 3,181 1,604 1,673 North America 2,296 2,068 1,411 1,297 Mediterranean Basin 390 361

  48. Slide 48: Aggregates & Concrete: Additional Information by Geographical Zone

    Aggregates & Concrete: Additional Information by Geographical Zone 6 Months 2nd Quarter Var like f/ Var like f/ 2006 2007 2006 2007 like like Volumes Pure Aggregates (millions of tonnes) 118.6 118.7 -3.2% 71.8 70.5 -5.1% Of which Western Europe 43.4 43.0 23.5 22.6 North America 61.6 59.1 39.6 38.4 O

  49. Slide 49: Gypsum: Additional Information by Geographical Zone

    Gypsum: Additional Information by Geographical Zone 6 Months 2nd Quarter Var like f/ Var like f/ 2006 2007 2006 2007 like like Volumes Total Boards (millions of m²) 354 362 2.4% 179 182 2.1% Sales (1) (millions of €) Total Gypsum 830 826 2.1% 420 411 -0.3% Of which Western Europe 439 473 220 235 Nor

  50. Slide 50: YTD Sales at June 30, 2007 - Cement

    YTD Sales at June 30, 2007 - Cement Like for Like Sales Variance Analysis by Region and in Major Markets* Activity variation Cement Volume effect Other effects** vs. 2006 Western Europe 2.5% 6.0% 8.5% France 0.7% 4.0% 4.7% United Kingdom 7.6% 7.4% 15.0% Spain -3.9% 7.4% 3.5% Germany 10.4% 12.6% 23.0

  51. Slide 51: YTD Sales at June 30, 2007 – Aggregates & Concrete and Gypsum

    YTD Sales at June 30, 2007 – Aggregates & Concrete and Gypsum Like for Like Sales Variance Analysis by Region and in Major Markets* Activity variation Aggregates & Concrete Volume effect Other effects** vs. 2006 Pure Aggregates -3.2% 8.7% 5.5% France -0.6% 4.7% 4.1% United Kingdom -0.4% 4.4% 4.0% No

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