Slide 1: 2014 Nine Months Results
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - 2014 Nine Months Results Bruno Lafont and Jean-Jacques Gauthier France, Marseille – Mucem (Museum of European & Mediterranean Civilizations) November 5, 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: Bruno Lafont, Chairman and CEO
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - Bruno Lafont Chairman and CEO France, Marseille – Mucem (Museum of European & Mediterranean Civilizations)
Slide 4: Introduction
Introduction Underlying trends improving progressively Cost reduction and innovation objectives confirmed for Q4 and 2015 Lafarge Holcim planned merger well on track 4
Slide 5: Underlying Trends Improving Progressively
Underlying Trends Improving Progressively Growth to continue in the United States and overall in emerging markets; we will benefit from our well-balanced portfolio of assets Lafarge operates in nine out the ten countries worldwide that will experience GDP growth above 6% between now and 20501
Slide 6: Cost Reduction and Innovation Measures on Track
Cost Reduction and Innovation Measures on Track Objectives for 2014 and 2015 confirmed €600M for 2014 €550M for 2015; €300M from cost cutting and €250M from innovation Action plans implemented On going fuel cost reduction New initiatives continue to be pursued 6
Slide 7: Planned Merger Well On Track
Planned Merger Well On Track All notifications with regulatory authorities completed Divestment process proceeding according to plan Integration Committee at work 7
Slide 8: Jean-Jacques Gauthier, Chief Financial Officer
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - Jean-Jacques Gauthier Chief Financial Officer France, Marseille – Mucem (Museum of European & Mediterranean Civilizations)
Slide 9: Q3 Highlights
Q3 Highlights 2% like for like sales and EBITDA growth Growth continued in the United States and in most countries of Middle East Africa while volumes contracted in Europe with more demanding comparable and after a solid growth in H1 Cement prices were firm sequentially from Q2 to Q3 and are u
Slide 10: Key Figures
Key Figures 9 Months 3rd Quarter 2014 2013 Variation lfl(1) 2014 2013 Variation lfl(1) Volumes Cement (MT) 88.0 85.7 3% 5% 31.0 31.2 -1% 1% Pure aggregates (MT) 120.3 123.2 -2% -1% 50.4 52.5 -4% -4% Ready-Mix Concrete (Mm3) 19.9 20.2 -1% -2% 7.1 7.2 -1% -2% Sales 9,636 9,934 -3% 4% 3,636 3,700 -2% 2
Slide 11: Operational Review
Copyright © LibraryLafarge - Ignus Gerber Operational Review Everyday life in Brazil - urban planning and street atmosphere in Rio de Janeiro
Slide 12: North America
North America Volumes Growth in the US and Pricing Gains 9 Months 3rd Quarter Volumes 2014 2013 Variation lfl(1) 2014 2013 Variation lfl Cement (MT) 8.7 8.4 3% 3% 4.1 4.0 2% 2% Pure aggregates (MT) 62.4 67.6 -8% -4% 30.0 31.5 -5% -4% Ready-Mix Concrete (Mm3) 4.1 4.3 -3% -5% 1.8 1.8 - -2% Sales 2,195
Slide 13: Western Europe
Western Europe Strong Cost-Cutting Initiatives Mitigating Lower volumes 9 Months 3rd Quarter Volumes 2014 2013 Variation lfl(1) 2014 2013 Variation lfl(1) Cement (MT) 8.9 9.1 -2% -2% 3.0 3.2 -6% -6% Pure aggregates (MT) 25.5 26.1 -2% -1% 8.1 9.0 -10% -9% Ready-Mix Concrete (Mm3) 5.5 5.8 -5% -5% 1.8
Slide 14: Central and Eastern Europe
Central and Eastern Europe EBITDA Growth Driven by Cost Containment and Innovation 9 Months 3rd Quarter Volumes 2014 2013 Variation lfl(1) 2014 2013 Variation lfl(1) Cement (MT) 9.3 9.8 -4% 2% 3.9 4.4 -9% -2% Pure aggregates (MT) 16.3 15.1 8% 1% 6.9 7.2 -5% -9% Ready-Mix Concrete (Mm3) 1.5 1.2 33% 3
Slide 15: Middle East and Africa
Middle East and Africa Solid Market Trends and Self-Help Measures strongly Mitigated Iraq 9 Months 3rd Quarter Volumes 2014 2013 Variation lfl (1) 2014 2013 Variation lfl (1) Cement (MT) 31.8 29.6 7% 6% 10.3 10.2 - 5% Pure aggregates (MT) 7.5 6.3 17% 17% 2.5 2.1 15% 15% Ready-Mix Concrete (Mm3) 4.2
Slide 16: Latin America
Latin America Scope Impact; Innovation Offsetting High Cost Inflation and Mild Markets 9 Months 3rd Quarter Volumes 2014 2013 Variation lfl 2014 2013 Variation lfl Cement (MT) 5.6 6.8 -18% -2% 2.0 2.3 -16% -5% Pure aggregates (MT) 2.2 2.0 10% 5% 0.9 0.8 18% 8% Ready-Mix Concrete (Mm3) 1.1 0.9 24% 24
Slide 17: Asia
Asia Higher Volumes Mitigated Strong Cost Inflation 9 Months 3rd Quarter Volumes 2014 2013 Variation lfl 2014 2013 Variation lfl Cement (MT) 23.7 22.0 7% 7% 7.7 7.1 8% 8% Pure aggregates (MT) 6.4 6.1 5% -1% 2.0 1.9 8% - Ready-Mix Concrete (Mm3) 3.5 4.2 -17% -17% 1.2 1.2 -4% -4% Sales 1,648 1,664 -1%
Slide 18: Positive Operational Trends also Prevail in Joint Ventures
Positive Operational Trends also Prevail in Joint Ventures Margin up 100bps, Reflecting Synergies and Market Recovery in the UK 3rd Quarter including the contribution of Joint ventures the joint-ventures (1) contribution in Q3 (1) 2014 2013 Gross lfl 2014 2013 Pro forma (1) reported Variation Volume
Slide 19: Net Income
© Rudy Ricciotti - Mario Bellini - Musée du Louvre - Lisa Ricciotti Department of Islam Arts, Musée du Louvre - Paris, France Net Income
Slide 20: Net Income
Net Income 9 Months 3rd Quarter €m 2014 2013 2014 2013 EBITDA 2,042 2,087 887 920 Depreciation (611) (638) (211) (210) Current Operating Income 1,431 1,449 676 710 Other income (expenses) (157) (72) (84) (17) Net financial costs (701) (751) (231) (263) Income from JV and associates 63 3 33 14 Income
Slide 21: 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 22: Cash Flow
Cash Flow 9 Months 3rd Quarter €m 2014 2013 2014 2013 Cash flow from operations 855 996 484 577 Change in working capital (436) (462) (26) (44) Sustaining capex (219) (198) (98) (83) Free cash flow 200 336 360 450 Development investments (1) (558) (512) (236) (141) Divestments (2) 524 1,029 101 867
Slide 23: 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 24: 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 25: 2014 Outlook – Other Elements
2014 Outlook – Other Elements 2% energy cost inflation (0.3 euro per tonne), mostly due to power in regulated markets 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
Slide 26: Conclusion
Charles Plumey-Faye - Rudy Ricciotti (architect) Copyright: © Library Lafarge - France, Marseille – Mucem (Museum of European & Mediterranean Civilizations) Conclusion
Slide 27: 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 28: 2014 Outlook – Market overview
2014 Outlook – Market (1) overview Cement Market Volumes Market Volumes (%) (%) North America 4 to 7 Middle East and Africa 3 to 6 (2) United States 5 to 8 Algeria 5 to 8 Canada 1 to 4 Egypt 4 to 7 Kenya 4 to 7 Western Europe -2 to 1 Morocco -3 to 0 France -5 to -2 Nigeria 7 to 10 (3) United Kingdom
Slide 29: 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. Western Europe: Overall stabilization at a low level. Growth expected in the UK, supported by the residential sec
Slide 30: II. 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 31: Sales by Geographical Area
Sales by Geographical Area Scope and Foreign Exchange Effects 9 Months In million euros 2014 2013 Variation Scope FX effect lfl North America 2,195 2,317 -5% -1% -7% 3% Western Europe 1,603 1,672 -4% - - -4% Central and Eastern Europe 838 887 -6% -6% -5% 5% Middle East and Africa 2,803 2,717 3% - -5
Slide 32: EBITDA by Geographical Area
EBITDA by Geographical Area Scope and Foreign Exchange Effects 9 Months Impact of In million euros 2014 2013 Variation Scope FX effect lfl(1) one-off (1) North America 399 412 -3% -3% -9% -5% 14% Western Europe 240 195 23% -1% - 14% 10% Central and Eastern Europe 176 151 17% -3% -4% 2% 22% Middle Ea
Slide 33: II. Information per Activity
© Agence Rudy Ricciotti II. Other information Information per Activity Mucem (Museum of European & Mediterranean Civilizations) - Marseille, France
Slide 34: Cement
Cement 9 Months 3rd Quarter 2014 2013 Variation lfl (1) 2014 2013 Variation lfl (1) Sales (€m) 6,903 7,049 -2% 5% 2,504 2,532 -1% 2% EBITDA 1,787 1,822 -2% 8% 736 748 -2% 3% EBITDA Margin 25.9% 25.8% 10bps 50bps 29.4% 29.5% -10bps 40bps By geographical zone Sales 9M EBITDA 9M 2014 2014 Total 6,903 1
Slide 35: Aggregates and Concrete
Aggregates and Concrete 9 Months 3rd Quarter 2014 2013 Variation lfl(1) 2014 2013 Variation lfl(1) Sales (€m) 3,187 3,331 -4% 1% 1,300 1,344 -3% - Out of which Pure aggregates 1,389 1,447 -4% 3% 582 606 -4% - Out of which Ready-Mix 1,742 1,815 -4% -1% 644 656 -2% -2% EBITDA 279 291 -4% 6% 169 189 -1
Slide 36: Aggregates and other related activities
Aggregates and other related activities 9 Months 3rd Quarter 2014 2013 Variation lfl (1) 2014 2013 Variation lfl (1) Sales (€m) 1,597 1,677 -5% 3% 710 749 -5% - EBITDA 208 198 5% 16% 129 140 -8% 1% EBITDA Margin 13.0% 11.8% 120bps 18.2% 18.7% -50bps By geographical zone Sales 9M EBITDA 9M 2014 2014
Slide 37: Ready-Mix and Concrete Products
Ready-Mix and Concrete Products 9 Months 3rd Quarter 2014 2013 Variation lfl (1) 2014 2013 Variation lfl (1) Sales (€m) 1,836 1,908 -4% - 686 694 -1% -1% EBITDA 71 93 -24% -16% 40 49 -18% -12% EBITDA Margin 3.9% 4.9% -100bps 5.8% 7.1% -130bps By geographical zone Sales 9M EBITDA 9M 2014 2014 Total 1
Slide 38: II. 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 39: 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 September 30, 2014 North America 3.2% 1.1% 4.3% United States 5.5% 3.9% 9.4% Canada 0.0% -0.4% -0.4% Western Europe -2.1% -1.4% -3.5% France -6,2%(2) -1.4%(
Slide 40: 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 September 30, 2014 Pure Aggregates -1.3% 4.4% 3.1% France -2.4% 0.4% -2.0% Poland 6.1% 0.5% 6.6% United States 0.2% 7.1% 7.3% Canada -4.5% 7.3% 2.8% Sou
Slide 41: VI. 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 42: Other Income (Expenses)
Other Income (Expenses) 9 Months 3rd Quarter €m 2014 2013 2014 2013 Net gains (losses) on disposals 33 91 - 45 Impairment of assets (19) (50) (13) (28) Restructuring (59) (80) (16) (23) Merger-related costs (47) - (30) - Others (65) (33) (25) (11) Total (157) (72) (84) (17) 42
Slide 43: Finance Costs and Average Interest Rate
Finance Costs and Average Interest Rate 9 Months 3rd Quarter €m 2014 2013 2014 2013 Financial charges on net debt (562) (578) (182) (192) Foreign exchange (21) (63) (10) (33) Others (118) (110) (39) (38) Total (701) (751) (231) (263) September 30, 2014 December 31, 2013 Average interest rate Interes
Slide 44: VI. 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 45: Statement of Financial position
Statement of Financial position Sept. Dec. Sept. Dec. €m €m 30, 2014 31, 2013 30, 2014 31, 2013 Capital Employed 28,493 27,073 Equity 17,455 16,285 Out of which: Out of which: Goodwill 11,558 11,027 Equity attributable to the Prop, plant & equip. 12,381 12,049 owners of the parent 15,589 14,555 comp
Slide 46: Investments and Divestments
Investments and Divestments 9 Months 3rd Quarter €m 2014 2013 2014 2013 Sustaining capital expenditures (219) (198) (98) (83) Development capital expenditures (398) (479) (135) (127) Acquisitions (1) (160) (33) (101) (14) Capital expenditures (777) (710) (334) (224) Divestments (2) 524 1,029 101 867
Slide 47: Balanced Debt Maturity Schedule
Balanced Debt Maturity Schedule Average maturity of gross debt is 4 years and 2 months As at September 30, 2014 (1) In million euros 2200 Lafarge SA short-term borrowings 2000 Lafarge SA Bonds & other MLT instruments 1800 Subsidiaries debt instruments Securitization programs 1600 1400 1200 1000 800
Slide 48: Gross Debt by Currency and by Source of Financing
Gross Debt (1) by Currency and by Source of Financing As at September 30, 2014 Split by source of financing Split by currency (2) 10% 23% 5% 13% 8% 69% 72% Debentures EUR USD Notes / private placements GBP Other Banks and other Total Gross Debt (1): € 12.7Bn (1) Excluding puts on shares and derivati
Slide 49: 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 September 30, 2014 Amount 2014 2015 2016 2017 2018 Syndicated committed credit lines 1.5 - - - 1.5 - Bilateral committed credit lines 1
Slide 50: VII. 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 51: IFRS 11 - New Accounting Standard on Joint Arrangements
IFRS 11 - New Accounting Standard on Joint Arrangements 9 Months, after Joint ventures 9 Months before IFRS IFRS 11 application contribution 11 application 9M 2014 9M 2013 9M 2014 9M 2013 9M 2014 9M 2013 reported restated Pro forma (1) reported Volumes Cement (MT) 88.0 85.7 16.8 16.2 104.8 101.9 Pur
Slide 52: 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