Lafarge SA — Q1 2012 Earnings Presentation
41 slides from Lafarge SA's earnings presentation, May 4, 2012
Slide 1: 2012 First Quarter Results
Urban planning and street atmosphere in Shanghai downtown - China Jean-Jacques Gauthier 2012 First Quarter Results May 4, 2012
Slide 2: Disclaimer
Disclaimer This document may contain forward-looking statements. Such forward-looking statements do not constitute forecasts regarding the Company’s results or any other performance indicator, but rather trends or targets, as the case may be. These statements are by their nature subject to risks and
Slide 3: Highlights
Highlights Sales increased, driven by improved pricing and higher cement volumes in emerging markets. EBITDA and current operating income rose, driven by higher activity in Middle East Africa, Asia, Latin America, and North America Achieved €70M of cost savings and on track to reach at least €400M.
Slide 4: Key Figures
Key Figures 1st Quarter 2012 2011 Variation lfl Volumes Cement (MT) 31.3 31.1 1% 1% Pure aggregates (MT) 33.2 34.7 -4% -6% Ready-Mix Concrete (Mm3) 7.1 7.6 -7% -3% Sales 3,353 3,206 5% 5% EBITDA 516 479 8% 6% EBITDA Margin 15.4% 14.9% 50bps Current Operating Income 267 208 28% 17% Net income Group s
Slide 5: Operational Review
Abdoun bridge in Amman - Jordan Operational Review
Slide 6: Overview of EBITDA by Geographical Area
Overview of EBITDA by Geographical Area Higher Pricing and Strong Cost Control Driving Higher Quarterly Results 1st Quarter In million euros 2012 2011 Variation lfl North America (46) (75) 39% 32% Western Europe 94 151 -38% -40% Central and Eastern Europe (14) (9) -56% -13% Middle East and Africa 31
Slide 7: North America
North America Improvement in US Pricing and Strong Cost-cutting 1st Quarter Volumes 2012 2011 Variation lfl Cement (MT) 2.0 2.0 -1% 16% Pure aggregates (MT) 14.1 12.8 10% 9% Ready-Mix Concrete (Mm3) 1.1 1.2 -11% 14% Sales 490 436 12% 18% EBITDA (46) (75) 39% 32% EBITDA Margin nm nm Current Operating
Slide 8: Western Europe
Western Europe Impacted by Unfavorable Weather, Lower Carbon Credit Proceeds, and Challenging Economic Environment 1st Quarter Volumes 2012 2011 Variation lfl Cement (MT) 3.8 4.3 -11% -11% Pure aggregates (MT) 12.0 14.9 -19% -17% Ready-Mix Concrete (Mm3) 2.4 3.1 -21% -16% Sales 753 844 -11% -10% EBI
Slide 9: Central and Eastern Europe
Central and Eastern Europe Stronger Pricing Partially Compensated for Lower Volumes and Higher Cost Inflation 1st Quarter Volumes 2012 2011 Variation lfl Cement (MT) 1.8 1.9 -3% -6% Pure aggregates (MT) 3.1 3.0 - -9% Ready-Mix Concrete (Mm3) 0.2 0.2 -25% -11% Sales 181 179 1% 3% EBITDA (14) (9) -56%
Slide 10: Middle East and Africa
Middle East and Africa Higher Pricing, Increased Volumes and Strong Cost Control Improved Results 1st Quarter Volumes 2012 2011 Variation Lfl Cement (MT) 11.2 11.4 -1% 2% (1) Pure aggregates (MT) 2.0 2.1 -7% -9% Ready-Mix Concrete (Mm3) 1.7 1.3 30% 12% Sales 1,044 975 7% 6% EBITDA 315 274 15% 15% EB
Slide 11: Latin America
Latin America Positive Volumes and Prices Compensated High Cost Inflation and Increased Results 1st Quarter Volumes 2012 2011 Variation Lfl Cement (MT) 2.3 2.0 11% 11% Pure aggregates (MT) 0.6 0.5 33% 33% Ready-Mix Concrete (Mm3) 0.2 0.2 32% 32% Sales 241 209 15% 16% EBITDA 59 53 11% 11% EBITDA Marg
Slide 12: Asia
Asia Significant Price Improvement and Higher Cement Volumes Offset Cost Inflation 1st Quarter Volumes 2012 2011 Variation Lfl Cement (MT) 10.2 9.5 7% 7% Pure aggregates (MT) 1.4 1.4 - -5% Ready-Mix Concrete (Mm3) 1.5 1.6 -6% -6% Sales 644 563 14% 12% EBITDA 108 85 27% 25% EBITDA Margin 16.8% 15.1%
Slide 13: Net Income
The Brook condominium project in North Vancouver, a sustainable construction LEED - Canada Net Income
Slide 14: Net Income
Net Income 1st Quarter €m 2012 2011 EBITDA 516 479 Depreciation (249) (271) Current Operating Income 267 208 Other income (expenses) (73) (27) Finance costs, net (238) (184) Income from associates 4 (4) Income taxes 25 3 Income from discontinued operations 3 10 Non-controlling interests (32) (35) Ne
Slide 15: Cash Flow and Debt
North America, Grand Rapids Art Museum (GRAM), Grand Rapids, Michigan First newly built Art Museum to achieve the LEED Gold status Highlights Cash Flow and Debt
Slide 16: Cash Flow
Cash Flow 1st Quarter €m 2012 2011 Cash flow from operations 188 202 Change in working capital (571) (427) Sustaining capex (51) (50) Free cash flow (434) (275) Development investments (1) (137) (243) Divestments (2) 71 11 Cash flow after investments (500) (507) Dividends (14) (26) Equity issuance (
Slide 17: Strong Liquidity Backed by Well Balanced Committed Credit Lines
Strong Liquidity Backed by Well Balanced Committed Credit Lines 2015 and €bn, as at March 31, 2012 Amount 2012 2013 2014 after Syndicated committed credit lines 1.2 - - - 1.2 Bilateral committed credit lines 2.2 - 0.4 0.7 1.1 Cash and cash equivalent 2.6 Total sources of liquidity 6.0 Credit line dr
Slide 18: Outlook 2012
North America, Grand Rapids Art Museum (GRAM), Grand Rapids, Michigan First newly built Art Museum to achieve the LEED Gold status Outlook 2012
Slide 19: 2012 Outlook – Market Overview
2012 Outlook – Market* Overview Cement Volumes (%) Price Highlights North America -1 to 2% + Slow recovery from low level France and UK slightly decreasing, Western Europe -9 to -6% + Spain and Greece impacted by austerity measures Central and Eastern Europe 3 to 6% + Solid market trends in most cou
Slide 20: 2012 Outlook – Other Elements
2012 Outlook – Other Elements 7% energy cost increase (+1 euro per tonne) Cost savings of at least €400m in 2012 Cost of debt (gross): 6.4% Tax rate: 28% Capital expenditures: ~€0.8 Bn 20
Slide 21: Conclusion
North America, Grand Rapids Art Museum (GRAM), Grand Rapids, Michigan First newly built Art Museum to achieve the LEED Gold status Conclusion
Slide 22: Other Information: Outlook 2012 – Market Overview
North America, Grand Rapids Art Museum (GRAM), Grand Rapids, Michigan First newly built Art Museum to achieve the LEED Gold status I. Other Information Outlook 2012 – Market Overview
Slide 23: 2012 Outlook – Market overview
2012 Outlook – Market (1) overview Cement Market Volumes Market Volumes (%) (%) North America -1 to 2 Middle East and Africa 4 to 7 United States -1 to 2 Algeria 7 to 10 Canada -1 to 2 Egypt -3 to 0 Iraq 12 to 15 Western Europe -9 to -6 Kenya 5 to 8 France -4 to -1 Morocco 3 to 6 United Kingdom -5 t
Slide 24: 2012 Outlook – Market overview: Aggregates & Concrete
2012 Outlook – Market overview Aggregates & Concrete Main markets Mature markets: subdued market volume growth in North America, while most Western Europe markets likely to be impacted by austerity measures and slower economic growth. Emerging markets: volume growth expected in most countries. Price
Slide 25: Information per Activity
The Lille Metropolitan Museum of Modern Art, Contemporary Art and Art Brut. Manuelle Gautrand architect, a Ductal project II. Other information Information per Activity
Slide 26: Cement
Cement 1st Quarter 2012 2011 Variation lfl Volumes Cement (MT) 31.3 31.1 1% 1% Sales (€m) (1) 2,448 2,300 6% 7% EBITDA Margin 21.0% 20.4% 1st Quarter By geographical zone 2012 2011 Variation lfl Sales (1) 2,448 2,300 6% 7% North America 216 200 8% 17% Western Europe 393 429 -8% -9% Central and Easte
Slide 27: Aggregates and Concrete
Aggregates and Concrete 1st Quarter 2012 2011 Variation lfl Volumes Pure Aggregates (MT) 33.2 34.7 -4% -6% Volumes Ready-Mix (Mm3) 7.1 7.6 -7% -3% Sales (€m) (1) 1,028 1,026 - 1% EBITDA (17) 1 nm nm EBITDA Margin nm nm (1) Before elimination of inter divisional sales 27
Slide 28: Aggregates and other related activities
Aggregates and other related activities 1st Quarter 2012 2011 Variation lfl Volumes Pure Aggregates (MT) 33.2 34.7 -4% -6% Sales (€m) 470 453 4% 1% EBITDA Margin nm nm 1st Quarter By geographical zone 2012 2011 Variation lfl Sales 470 453 4% 1% Out of which Pure aggregates 421 401 5% 1% North Americ
Slide 29: Ready-Mix and Concrete Products
Ready-Mix and Concrete Products 1st Quarter 2012 2011 Variation lfl Volumes Ready-Mix (Mm3) 7.1 7.6 -7% -3% Sales (€m) 637 655 -3% 1% EBITDA Margin 0.6% 1.5% 1st Quarter By geographical zone 2012 2011 Variation lfl Sales 637 655 -3% 1% Out of which Ready-Mix 614 635 -3% 0% North America 135 134 1% 1
Slide 30: Sales variances for a selection of countries
The Lille Metropolitan Museum of Modern Art, Contemporary Art and Art Brut. Manuelle Gautrand architect, a Ductal project III. Other Information Sales variances for a selection of countries
Slide 31: YTD Like for Like Sales Variance – Cement
YTD Like for Like Sales Variance (1) – Cement Analysis by Region and in Major Markets as at Activity variation Volume effect Other effects (2) March 31, 2012 vs. 2011 North America 16.4% 0.9% 17.3% United States 19.0% 5.4% 24.4% Canada 12.5% -1.6% 10.9% Western Europe -11.6% 2.1%(3) -9.5% France -6.
Slide 32: YTD Like for Like Sales Variance – Aggregates and Concrete
YTD Like for Like Sales Variance (1) Aggregates and Concrete Analysis by Region and in Major Markets Activity variation Volume effect Other effects (2) as at March 31, 2012 vs. 2011 Pure Aggregates -5.5% 6.8% 1.3% France -13.2% 4.4% -8.8% United Kingdom -14.0% 8.4% -5.6% Poland -34.0% 7.8% -26.2% Un
Slide 33: Income statement
The Brook condominium project in North Vancouver, a sustainable construction LEED - Canada IV. Other Information Income statement
Slide 34: Other Income (Expenses)
Other Income (Expenses) 1st Quarter €m 2012 2011 Net gains (losses) on disposals 37 5 Impairment of assets (4) (12) Restructuring (94) (9) Others (12) (11) Total (73) (27) 34
Slide 35: Finance Costs and average interest rate
Finance Costs and average interest rate 1st Quarter €m 2012 2011 Financial charges on net debt (214) (204) Foreign exchange 3 34 Others (27) (14) Total (238) (184) March 31, 2012 December 31, 2011 Average interest rate Interest rate Interest rate Spot Average Spot Average Total gross debt (1) €14.8B
Slide 36: Statement of Financial Position & Cash Flow Statement
in North Vancouver, a sustainable construction The Brook condominium project V. Other Information LEED - Canada Statement of Financial Position (1) & Cash Flow Statement (1) Former Balance sheet
Slide 37: Statement of Financial position
Statement of Financial position March Dec. March Dec. €m €m 31, 2012 31, 2011 31, 2012 31, 2011 Capital Employed 29,844 29,942 Equity 17,928 18,201 Out of which: Out of which: Goodwill 12,589 12,701 16,004 Shareholders’ equity 15,775 Prop, plant & equip. 15,274 15,542 2,197 Non controlling 2,153 Wor
Slide 38: Investments and Divestments
Investments and Divestments 1st Quarter €m 2012 2011 Sustaining capital expenditures (51) (50) Development capital expenditures (124) (189) Acquisitions (1) (13) (54) Capital expenditure (188) (293) Divestments (2) 71 11 (1) Including debt acquired and the acquisitions of ownership interests with no
Slide 39: Balanced Debt Maturity Schedule
Balanced Debt Maturity Schedule Lafarge SA Commercial paper & ST borrowings Lafarge SA Bonds & other MLT instruments Subsidiaries debt instruments Orascom acquisition facility (drawings) Securitization programs at March 31, 2012 (€m) (1) 2 400 2 200 2 000 1 800 1 600 1 400 1 200 1 000 800 600 400 20
Slide 40: Gross Debt by Currency and by Source of Financing
Gross Debt (1) by Currency and by Source of Financing as at March 31, 2012 Split by currency Split by source of financing CNY Other €bn 0.6 GBP €bn 0.9 4% Banks €bn 0.7 6% and others 5% 25% USD €bn 3.7 €bn 1,9 Commercial 13% paper 1% €bn 0.1 Notes / Debentures Private 69% placements €bn 10.3 EUR 5%
Slide 41: 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