Lafarge SA — Q1 2014 Earnings Presentation
47 slides from Lafarge SA's earnings presentation, May 6, 2014
Slide 1: 2014 First Quarter Results
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - 2014 First Quarter Results Jean-Jacques Gauthier France, Marseille – Mucem (Museum of European & Mediterranean Civilizations) May 6, 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: Q1 Highlights
Q1 Highlights Solid volume underlying trends confirming our vision for the year Cement volumes up 11% overall; Market outlook for 2014 confirmed Cost-saving and Innovation measures delivered €125M (1) in Q1, on track with plan, and supported the solid improvement in margins EBITDA up 21% like-for-li
Slide 4: Significant Organic Growth
Significant Organic Growth Positive Impact on EBITDA and EBITDA Margin of Volume Growth Combined with Cost Cutting and Innovation Measures M€ +130bps EBITDA margin 94 (34) 13.0% 342 (39) 343 11.7% (20) 283 Up €60M like-for-like or +21% EBITDAQ1 FX EBITDA FXand and one-off One off EBITDAQ1 Organic EB
Slide 5: Key Figures
Key Figures 1st Quarter 2014 2013 Variation lfl (2) Volumes Cement (MT) 25.9 23.9 8% 11% Pure aggregates (MT) 26.9 26.4 2% 4% Ready-Mix Concrete (Mm3) 5.7 5.8 - -1% Sales 2,633 2,675 -2% 9% EBITDA 343 342 - 21% EBITDA Margin 13.0% 12.8% 20bps 130bps Current Operating Income 146 128 14% 69% Net incom
Slide 6: Operational Review
Copyright © LibraryLafarge - Ignus Gerber Operational Review Everyday life in Brazil - urban planning and street atmosphere in Rio de Janeiro
Slide 7: North America
North America Earnings impacted by Adverse Weather and One-Off Variations 1st Quarter Volumes 2014 2013 Variation lfl Cement (MT) 1.5 1.5 - - Pure aggregates (MT) 10.3 12.1 -15% -7% Ready-Mix Concrete (Mm3) 0.8 1.0 -13% -12% Sales 376 435 -14% -1% EBITDA (62) (13) nm nm EBITDA Margin nm nm Current O
Slide 8: Western Europe
Western Europe Significant Cost Reduction Driving Solid Earnings Improvement 1st Quarter Volumes 2014 2013 Variation lfl Cement (MT) 2.6 2.4 7% 7% Pure aggregates (MT) 8.2 7.4 11% 11% Ready-Mix Concrete (Mm3) 1.8 1.8 5% 5% Sales 503 479 5% 5% EBITDA 39 7 nm nm EBITDA Margin 7.8% 1.5% 630bps Current
Slide 9: Central and Eastern Europe
Central and Eastern Europe Improving Market Trends, Cost Reduction and Mild Weather 1st Quarter Volumes 2014 2013 Variation lfl Cement (MT) 1.9 1.6 19% 27% Pure aggregates (MT) 3.3 2.4 37% 15% Ready-Mix Concrete (Mm3) 0.4 0.2 85% 85% Sales 173 148 17% 30% EBITDA (17) (35) nm nm EBITDA Margin nm nm C
Slide 10: Middle East and Africa
Middle East and Africa Strong Performance with Solid Market Trends and Self-Help Measures 1st Quarter Volumes 2014 2013 Variation lfl (1) Cement (MT) 10.5 9.1 15% 13% Pure aggregates (MT) 2.4 1.9 24% 24% Ready-Mix Concrete (Mm3) 1.3 1.1 12% 8% Sales 893 838 7% 13% EBITDA 250 217 15% 21% EBITDA Margi
Slide 11: Latin America
Latin America Strong Forex and Scope Impact; Higher Sales and Cost-Savings 1st Quarter Volumes 2014 2013 Variation lfl Cement (MT) 1.9 2.2 -15% 6% Pure aggregates (MT) 0.6 0.5 20% 20% Ready-Mix Concrete (Mm3) 0.3 0.3 33% 33% Sales 173 218 -21% 14% EBITDA 38 51 -25% 20% EBITDA Margin 22.0% 23.4% -140
Slide 12: Asia
Asia Higher Volumes Mitigated Strong Cost Inflation and Adverse Forex 1st Quarter Volumes 2014 2013 Variation lfl Cement (MT) 7.5 7.1 7% 7% Pure aggregates (MT) 2.1 2.1 3% -1% Ready-Mix Concrete (Mm3) 1.1 1.4 -24% -24% Sales 515 557 -8% 5% EBITDA 95 115 -17% -4% EBITDA Margin 18.4% 20.6% -220bps -19
Slide 13: 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 1st Quarter including the contribution Joint ventures of the joint-ventures (1) contribution (1) 2014 2013 Gross lfl (2) Pro forma 2014 2013 (1) reported Variation Volumes Cemen
Slide 14: Net Income
Copyright: © Library Lafarge - Thomas Deron Architects Rocheteau - Saillard France – Extension to a villa in La Baule – Rocheteau-Saillard Architects Net Income
Slide 15: Net Income
Net Income Net Result up circa €30m excluding net Gains on Divestments 1st Quarter €m 2014 2013 EBITDA 343 342 Depreciation (197) (214) Current Operating Income 146 128 Other income (expenses) (4) 4 Net financial costs (232) (243) Income from JV and associates (11) (25) (2) Income taxes (4) 32 Incom
Slide 16: Cash Flow and Debt
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - Cash Flow and Debt France, Jean Bouin Stadium in Paris, a Ductal project designed by Rudy Ricciotti, architect Highlights
Slide 17: Cash Flow
Cash Flow Robust Performance Mitigating the Seasonality of our Cash Flows 1st Quarter €m 2014 2013 Cash flow from operations 85 31 Change in working capital (154) (248) Sustaining capex (54) (48) Free cash flow (123) (265) Development investments (1) (184) (225) Divestments (2) 348 115 Cash flow aft
Slide 18: 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 19: 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 20: 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 21: Conclusion
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - France, Marseille – Mucem (Museum of European & Mediterranean Civilizations) Conclusion
Slide 22: 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 23: 2014 Outlook – Market overview
2014 Outlook – Market (1) overview Cement Market Volumes Market Volumes (%) (%) North America 4 to 7 Middle East and Africa 4 to 7 United States (1) 5 to 8 Algeria 5 to 8 Canada 2 to 5 Egypt 4 to 7 Iraq 5 to 8 Western Europe -2 to 1 Kenya 4 to 7 France -5 to -2 Morocco (2) 0 to 3 United Kingdom (2)
Slide 24: 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 25: 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 26: Sales by Geographical Area
Sales by Geographical Area Scope and Foreign Exchange Effects 1st Quarter In million euros 2014 2013 Variation Scope FX effect lfl North America 376 435 -14% -3% -10% -1% Western Europe 503 479 5% - - 5% Central and 173 148 17% -6% -7% 30% Eastern Europe Middle East and 893 838 7% - -6% 13% Africa L
Slide 27: EBITDA by Geographical Area
EBITDA by Geographical Area Scope and Foreign Exchange Effects 1st Quarter Impact of In million euros 2014 2013 Variation Scope FX effect lfl one-off (1) North America (62) (13) nm nm nm nm nm Western Europe 39 7 nm nm nm - nm Central and (17) (35) nm nm nm - nm Eastern Europe Middle East and 250 21
Slide 28: Information per Activity
© Médiathèque Lafarge II. Other information Information per Activity Everyday life in Brazil - urban planning and street atmosphere in Rio de Janeiro
Slide 29: Cement
Cement 1st Quarter 2014 2013 Variation lfl (1) Volumes Cement (MT) 25.9 23.9 8% 11% Sales (€m) 1,983 1,986 - 11% EBITDA 364 369 -1% 15% EBITDA Margin 18.4% 18.6% -20bps 70bps By geographical zone Sales Q1 EBITDA Q1 2014 2014 Total 1,983 364 North America 169 (24) Western Europe 266 23 Central and Ea
Slide 30: Aggregates and Concrete
Aggregates and Concrete 1st Quarter 2014 2013 Variation lfl(1) Volumes Pure Aggregates (MT) 26.9 26.4 2% 4% Volumes Ready-Mix (Mm3) 5.7 5.8 - -1% Sales (€m) 772 805 -4% 4% Out of which Pure aggregates 315 318 -1% 8% Out of which Ready-Mix 483 510 -5% 1% EBITDA (19) (23) 17% 22% Out of which Pure agg
Slide 31: Aggregates and other related activities
Aggregates and other related activities 1st Quarter 2014 2013 Variation lfl (1) Volumes Pure Aggregates (MT) 26.9 26.4 2% 4% Sales (€m) 334 339 -1% 8% EBITDA (17) (28) 39% 39% EBITDA Margin nm nm By geographical zone Sales Q1 EBITDA Q1 2014 2014 Total 334 (17) Out of which Pure aggregates 315 (8) No
Slide 32: Ready-Mix and Concrete Products
Ready-Mix and Concrete Products 1st Quarter 2014 2013 Variation lfl (1) Volumes Ready-Mix (Mm3) 5.7 5.8 - -1% Sales (€m) 502 532 -6% 1% EBITDA (2) 5 nm nm EBITDA Margin nm 0.9% By geographical zone Sales Q1 EBITDA Q1 2014 2014 Total 502 (2) Out of which Ready-Mix 483 (3) North America 104 (11) Weste
Slide 33: Sales variances for a selection of countries
© Médiathèque Lafarge II. Other information Sales variances for a selection of countries Everyday life in Brazil - urban planning and street atmosphere in Rio de Janeiro
Slide 34: 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 March 31, 2014 North America -0.5% 0.8% 0.3% United States -0.2% 0.5% 0.3% Canada -0.7% 0.7% 0.0% Western Europe 7.4% -1.7% 5.7% France -1.6% -1.0% -2.6% Sp
Slide 35: 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 March 31, 2014 Pure Aggregates 3.9% 4.3% 8.2% France 11.2% 0.1% 11.3% Poland 34.5% 11.9% 46.4% United States -12.6% 4.9% -7.7% Canada -3.3% 8.1% 4.8% So
Slide 36: Income statement
Copyright: © Library Lafarge - Thomas Deron Architects Rocheteau - Saillard VI. Other Information Income statement France – Extension to a villa in La Baule – Rocheteau-Saillard Architects
Slide 37: Other Income (Expenses)
Other Income (Expenses) 1st Quarter €m 2014 2013 Net gains (losses) on disposals 26 45 Impairment of assets (6) (12) Restructuring (11) (17) Others (13) (12) Total (4) 4 37
Slide 38: Finance Costs and Average Interest Rate
Finance Costs and Average Interest Rate 1st Quarter €m 2014 2013 Financial charges on net debt (190) (189) Foreign exchange (2) (15) Net interest cost related to pensions, bank commissions, amortization of debt issuance costs and (40) (39) other financial costs Total (232) (243) March 31, 2014 Decem
Slide 39: Statement of Financial Position & Cash Flow Statement
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - VI. Other Information Statement of Financial Position & Cash Flow Statement France, Jean Bouin Stadium in Paris, a Ductal project designed by Rudy Ricciotti, architect
Slide 40: Statement of Financial position
Statement of Financial position March Dec. March Dec. €m €m 31, 2014 31, 2013 31, 2014 31, 2013 Capital Employed 26,775 27,073 Equity 15,987 16,285 Out of which: Out of which: Goodwill 10,984 11,027 Equity attributable to the Prop, plant & equip. 11,864 12,049 owners of the parent 14,244 14,555 comp
Slide 41: Investments and Divestments
Investments and Divestments 1st Quarter €m 2014 2013 Sustaining capital expenditures (54) (48) Development capital expenditures (135) (217) Acquisitions (1) (49) (8) Capital expenditures (238) (273) Divestments (2) 348 115 (1) Including net debt acquired and the acquisitions of ownership interests w
Slide 42: Balanced Debt Maturity Schedule
Balanced Debt Maturity Schedule Average maturity of gross debt is 4 years and 1 month As at March 31, 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 1
Slide 43: Gross Debt by Currency and by Source of Financing
Gross Debt (1) by Currency and by Source of Financing As at March 31, 2014 Split by source of financing Split by currency 9% 13% 5% 8% 9% 77% 79% Debentures EUR USD Notes / private placements GBP Other Banks and other Total Gross Debt (1): €12.9Bn (1) Excluding puts on shares and derivatives instrum
Slide 44: Strong Liquidity Backed by Well Balanced Committed Credit Lines
Strong Liquidity Backed by Well Balanced Committed Credit Lines Lafarge SA committed credit lines of 3.4 billion euros with average maturity of 2.5 years €bn, as at March 31, 2014 Amount 2014 2015 2016 2017 2018 Syndicated committed credit lines 1.2 - 1.2 - - - Bilateral committed credit lines 2.2 -
Slide 45: IFRS 11 on Joint Arrangements - Main Impacts
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 46: IFRS 11 - New Accounting Standard on Joint Arrangements
IFRS 11 - New Accounting Standard on Joint Arrangements 1st Quarter, after Joint ventures 1st Quarter before IFRS 11 application contribution IFRS 11 application Q1 2014 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Q1 2013 reported restated Pro forma (1) reported Volumes Cement (MT) 25.9 23.9 5.1 4.8 31.0 28.7 P
Slide 47: 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