Investor Document. Investor Relations Stéphanie Billet. Analyst Relations Laurence Le Gouguec

Transcription

1 Investor Document Agence Rudy Ricciotti Investor Relations Stéphanie Billet Michael Bennett France, Marseille Mucem (Museum of European & Mediterranean Civilizations) Analyst Relations Laurence Le Gouguec laurence.legouguec@lafarge.com September 2014

2 Médiathèque Lafarge - Ignus Gerber Capturing Growth Through A Well- Balanced Geographic Portfolio Skytrain station - Dubaï, UAE

3 A Transformed Portfolio Since 2005 Refocusing on our core businesses Breakdown of sales by business 18% 34% 48% 36% <1% Cement Aggregates & concrete Others A strong presence in emerging markets With no single market representing > 5% of sales 64% A geographical portfolio with well-balanced positions Breakdown of 2013 sales by region 20.7 % 17.9 % Western Europe Latin America North America 7.5 % 5.7 % 21.4 % 26.8 % Middle East and Africa Central and Eastern Europe Asia 68 % 32 % 42 % 58 % 71 % of 2013 sales outside Europe Sales in developed markets Sales in emerging markets Note: 2013 data is based on 2013 reported figures before the application of IFRS 11 on joint-ventures. 3

4 Built a Portfolio that will Profit from Long-Term World Macro Trends North America 0.8% 1.0% 0.3% 3.1Bn Western Europe 0.1% 0.4% -0.4% 3.3Bn Central & Eastern Europe -0.3% 0.0% -0.8% 1.1Bn Population Growth CAGR (total: 0.9%) Urban Population Growth CAGR (total: 1.7%) Working Age Population* Growth CAGR (total: 0.8%) Lafarge Group Sales 2013 (total: 15.2Bn) 1.5% 2.0% MENA 1.7% Sub Saharan Africa 2.3% 2.2% 2.7% MEA 4.1Bn North Asia 0.3% 1.9% 0.1% South Asia 1.0% 2.1% 1.3% Asia 2.7Bn 0.9% 1.2% Latin America 1.0% 0.9Bn World construction to remain strong due to fundamental trends in population growth and urbanization More than 75% of our cement capacities are in emerging markets Presence in over 60 countries with no emerging market representing more than 5% of Group sales *Working age population is defined as the population between 15 and 60 Source: Lafarge financial publications & estimates, United Nations, Department of Economic and Social Affairs, Population Division (2012) World Note: 2013 data is based on 2013 reported figures before the application of IFRS 11 on joint-ventures. 4

5 Three Organic Growth Drivers All Levers Will Contribute in 2014 Continuing growth in emerging countries Accelerating growth through innovation Progressive recovery in advanced economies Leverage our portfolio to take full advantage of these drivers 5

6 Leverage our Portfolio A Well Balanced Exposure; Organic Development Continues Russia 2.1mT Q Brazil 0.5mT Q Algeria 0.8mT Q Philippines 0.5mT Q New clinker line India 2.6mT Q Debottlenecking investments Construction growth continues in emerging markets where the underlying demand for our products is very strong We develop our leading positions through selective organic investments 4 million tonnes started in 2013; 2.6 million tonnes to be launched early

7 A Significant Exposure to the North American Rebound A Network of Integrated Positions Across the US and Canada 11 MT of capacity in the United States and 6 MT in Canada Refocus on stronghold positions largely completed 75% utilization rate; significant operating leverage North America 2013 Revenues 3.1Bn Primary exposure to cement in the United States Well positioned to benefit from the housing and commercial segments recovery Development projects at Ravena and Exshaw 7

8 A Proven Track Record in Sub-Saharan Africa > 10MT of Additional Capacity Planned in the Coming 4 Years Sub Saharan Africa 2013 Revenues 1.8Bn Lafarge capacity & development plan > > 8.5MT of new capacity from mostly brownfield projects Nigeria, Tanzania and Zambia 1.5MT of debottlenecking throughout the region 8

9 Agence Rudy Ricciotti Extracting the Full Value of our Portfolio Mucem (Museum of European & Mediterranean Civilizations) - Marseille, France

10 Extracting the Full Value of our Assets for our Shareholders We are focusing on actions within our control We will continue to apply the utmost discipline in terms of capital allocation One of our main objectives is to improve return on capital employed 10

11 Building on Momentum Initial Plan Accelerated, Will be Completed by 2014; New 2-year Objectives = 2/3 of Initial 4-year Plan Growth through Innovation At least 1,100m New objective Cost reduction - Performance 250 1,750m Initial target for m m > 600m >200 >400 +1/3 rd >450 1, >950 >1, (1) 2016 (1) (1) Excluding joint-ventures 11

12 Grow Cash Generation through Innovation Additional EBITDA of > 200M in 2014; 500M in Provide Differentiating Solutions and Services to Contribute to More Housing More Compact Better Connected More Durable More Beautiful 12

13 DuraBric Cement, Malawi Cement mixed with soil Zlota 44 Tower, Poland The highest housing tower in Europe Mucem, France Jeddah airport, Saudi Arabia 13 Copyright: Library Lafarge - Jacek Kadaj - Orco Property Group - Daniel Libeskind (Architect) Copyright: Library Lafarge - Billy Milimbo (architect/ssb Specialist) Copyright: Library Lafarge - Al Arkan Industrial Supports Company (architect) Copyright: Library Lafarge - Charles Plumey-Faye - Rudy Ricciotti (architect)

14 Grow Cash Generation through Innovation Accelerate Time to Market and Focus on New Offers Innovation initiatives > 450M ( ) > 500M ( ) Products & Solutions Market Segments Services Commercial Excellence Value added concrete New cement products Manufactured sand Oil and Gas Road solutions Recycling Franchising/ Licensing International key accounts Specialty aggregates Construction solutions 30% 40% Affordable housing Sustainable Construction 20% 20% Placing & Finishing Raw materials support to RMX Logistics services 30% 25% Prescriptive selling Sales force effectiveness 20% 15% 14

15 Drive Performance to Reduce Costs Cost Savings of more than 400M in 2014; 600M in Cash Cost Base: 12.1Bn (1) Other SG&A Split of the cost reduction program by lever SG&A Industrial Fixed Costs bn 35% > 0.6bn 30% Raw materials Fixed costs Logistics Plant Efficiency Improvement & C/K 20% 20% Transport Energy Other Variable Costs Solid Fuels & Alternative Fuels Power 20% 25% 25% 25% Variable Costs: 70% & Fixed Costs: 30% (1) 2013 data is based on 2013 reported figures before the application of IFRS 11 on joint-ventures. 15

16 Drive Performance to Optimize Cost of Capex Optimize the Cost of Capex Limit sustaining Capex to < 65% of depreciation in the long term Lower costs of development Capex, leveraging the advantage of debottlenecking and brownfield development Typical structure of a project * Brownfield vs Greenfield * Technical scope represents circa 60% of the total cost of a project A Brownfield is typically 25%-30% less expensive than a Greenfield The rest represents quarry, infrastructure, land, * Cost structure very much depends on the context of each project, and actual cost structure for one specific project can materially differ from the indicative figures provided above 16

17 Médiathèque Lafarge Project of Merger of Equals Between Lafarge and Holcim Everyday life in Brazil - urban planning and street atmosphere in Rio de Janeiro, footing along the length of the port.

18 VISION OF LafargeHolcim CREATING THE MOST ADVANCED GROUP IN THE BUILDING MATERIALS INDUSTRY CREATING THE BEST GROWTH PLATFORM IN THE INDUSTRY POSITIONING OUR BUSINESS TO MEET CHANGING MARKET NEEDS» Driving growth across a truly global and balanced footprint» Enhancing the value proposition to meet changing customer demands» Delivering best-in-class operating performance and returns enhanced by synergies» Addressing the challenges of urbanization» Fundamentally transforming the business» Setting the benchmark on Corporate Social Responsibility including sustainability and climate change mitigation 18

19 GEOGRAPHICAL COMPLEMENTARITY OF PORTFOLIOS Combined sales by region (in billion) Emerging markets Developed markets Total CHF 11.0 / EUR 9.0 # of countries % % 5.4 CHF 8.6 / EUR 7.0 CHF 7.0 / EUR % 3.2 Europe 61% % 3.8 North America 39% 3.3 Asia CHF 4.4 / EUR % CHF 5.9 / EUR % CHF 2.0 / EUR % % 5.0 Pacific 24% 1.1 Latin America Global presence of Holcim and Lafarge Holcim sales (CHF) Lafarge sales (CHF) Note: pre-disposals, pre-group elimination, post regional elimination Africa & ME Lafarge Holcim Combined Cement Capacity (mt) Aggregates volume sold (mt) RMC volume sold (mm 3 )

20 POSITIONED FOR SUSTAINABLE AND PROFITABLE GROWTH BEST-IN-CLASS PORTFOLIO: GROWTH, DIVERSIFICATION & BALANCE LEVERAGE BEST PRACTICES INNOVATION ON AN EXPANDED SCALE STRONG FIT FOR SUCCESSFUL INTEGRATION DELIVER ON SYNERGIES SUPERIOR REVENUE GROWTH & SIGNIFICANT OPERATIONAL SYNERGIES» Cross-fertilisation of products & services portfolios» Optimisation of operations / best practices» Cost efficiency and economies of scale ENHANCED CASH FLOW GENERATION & OPTIMISED CAPITAL ALLOCATION» Attractive financing costs and capital structure» Optimised capital expenditures to extract the full value of the new portfolio» Continuous portfolio optimisation» Focus on return on capital» Attractive returns for shareholders 20

21 TRANSACTION CLOSING EXPECTED IN H OUR PLANNED MERGER TO CREATE LAFARGEHOLCIM IS WELL ON TRACK LIST OF PROPOSED ASSET DISPOSALS AS PART OF PLANNED MERGER ANNOUNCED REGULATORY PROCEEDINGS INITIATED IN ALL RELEVANT JURISDICTIONS Information on the project is available on Lafarge Website: 21

22 Agence Rudy Ricciotti France, Marseille Mucem (Museum of European & Mediterranean Civilizations) Conclusion

23 Our Portfolio is Full of Potential Deeply transformed, the Group is stronger today Focused on core businesses and supported by the new organization We have outstanding innovation capabilities Largest network of specialized labs Worldwide brands >150 patent families in the last 10 years Our portfolio of high quality assets is uniquely well spread Presence in over 60 countries with no emerging market representing more than 5% of Group sales Our footprint in fast growing markets provides large headroom for growth with lower capital needs 23

24 Driving Growth and Value Creation We will increasingly benefit from three organic growth drivers This potential will be captured thanks to our competitive edge in innovation and our high-quality well spread portfolio of assets We will continue to apply the utmost discipline in terms of capital allocation We announced the next step of our development with our project to create LafargeHolcim, the most advanced group in building materials, through a merger of equals We are well on track Completion expected in the first half of 2015 Create sustainable value for shareholders 24

25 Médiathèque Lafarge Appendices 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

26 Médiathèque Lafarge Appendices - Outlook 2014 France Extension to a villa in La Baule Rocheteau-Saillard Architects

27 2014 Outlook Market (1) Overview Cement North America 4 to 7 + Western Europe -2 to 1 =/+ Volumes (%) Price Highlights Market growth, notably supported by positive trends in the US residential and commercial sectors Overall stabilization at a low level. Growth expected in the UK, supported by the residential sector; slight decrease in France Central and Eastern Europe 3 to 6 + Market growth in Poland and Russia Middle East and Africa 3 to 6 + Solid market trends across the region Latin America 2 to 5 + Moderate growth in Brazil Asia 2 to 5 + Market growth expected in most markets Overall 2 to 5 + Growth in all regions but Western Europe that should stabilize at low levels (1) Market growth forecast at national level Lafarge volumes trends can differ from this outlook 27

28 2014 Outlook Market (1) overview Cement North America United States Canada Western Europe France United Kingdom Spain Greece Central and Eastern Europe Poland Romania Russia Latin America Brazil Ecuador Market Volumes (%) 4 to 7 5 to 8 1 to 4-2 to 1-5 to -2 4 to 7-3 to 0 7 to 10 3 to 6 5 to 8-1 to 2 5 to 8 2 to 5 2 to 5 2 to 5 Middle East and Africa Algeria Egypt Iraq Kenya Morocco Nigeria South Africa Asia China India Indonesia Malaysia Philippines South Korea Market Volumes (%) 3 to 6 5 to 8 4 to 7 5 to 8 (2) 4 to 7-3 to 0 7 to 10-2 to 1 2 to 5 2 to 5 3 to 6 2 to 5 2 to 5 7 to 10-3 to 0 Overall 2 to 5 (1) Market growth forecast at national level except for United States, Russia, China, India and Indonesia for which only relevant markets are considered (2) Underlying market trend 28

29 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 by the residential sector; slight decrease in France Emerging markets: Market growth expected in most markets Prices Price improvement expected for both Pure Aggregates and Ready-Mix concrete. 29

30 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 creative divestments (1) Excluding one-off effects 30

31 Médiathèque Lafarge - Marc Mimram Bridge Moulay-al-Hassan - Rabat, Morocco Appendices - Key Figures

32 Q2 Highlights 1/2 Solid organic growth, in a context of adverse exchange rates Cement volumes up 4% like for like Sales up 3% and EBITDA up 9% at constant scope and exchange rates in Q2; fourth consecutive quarter of organic growth Including joint ventures, sales were up 3% and EBITDA up 11% in Q2 at constant scope and exchange rates Cost-saving and Innovation measures delivered 165M (1) in Q2, on track with plan EBITDA margin is up 140bps on a like for like basis and up 90bps on a gross basis, supported by cost cutting, innovation and price increases Cement prices are up 2.2% over Q and sequentially up 1.4% over Q1 (1) Including the contributions of the joint-ventures. Cost-saving and Innovation measures generated respectively 95M and 45M incremental EBITDA in Q2 when excluding the JV contribution 32

33 Significant Organic Growth EBITDA Margin Up 140bps, supported by Cost Cutting and Innovation Measures M EBITDA margin (82) 22.9% +140bps % Up 9% like-for-like 812 EBITDA Q FX and scope EBITDA Q LFL organic growth EBITDA Q

34 Q2 Highlights 2/2 Deleveraging actions continued with further divestments secured 1.1Bn of divestments proceeds secured since the beginning of the year, with 0.4Bn received in the first semester Outlook for 2014 unchanged Cement market growth of between 2 to 5 percent in 2014 vs Objectives confirmed We are on track with the planned merger to create LafargeHolcim A further step with the announcement of a list of proposed asset disposals 34

35 Key Figures 6 Months 2 nd Quarter Variation lfl (1) Variation lfl (1) Volumes Cement (MT) % 7% % 4% Pure aggregates (MT) % 1% % -1% Ready-Mix Concrete (Mm 3 ) % -2% % -4% Sales 6,000 6,234-4% 6% 3,367 3,559-5% 3% EBITDA 1,155 1,167-1% 13% % 9% EBITDA Margin 19.3% 18.7% 60bps 130bps 24.1% 23.2% 90bps 140bps Current Operating Income % 20% % Net income Group share (2) % % Earnings per share (in ) % % Free cash flow (160) (114) nm (37) 151 nm Net debt 10,104 11,243-10% (1) At constant scope and exchange rates, and excluding a 20m one-time gain recorded in Q in North America (2) Net income attributable to the owners of the parent company 35

36 Sales by Geographical Area Scope and Foreign Exchange Effects 12 Months In million euros Variation Scope FX effect lfl North America 3,137 3,375-7% -7% -5% 5% Western Europe 3,256 3,181 2% 5% - -3% Central and Eastern Europe 1,145 1,270-10% -1% -1% -8% Middle East and Africa 4,067 4,283-5% - -7% 2% Latin America % -4% -11% 5% Asia 2,724 2,746-1% - -6% 5% TOTAL 15,198 15, % -0.4% -5.1% 1.6% 36

37 EBITDA by Geographical Area Scope and Foreign Exchange Effects In million euros 12 Months Variation Scope FX effect Variation at constant scope and exchange rates Impact of lower carbon credit sales and and one offs Like for like variation (1) North America % -7% 17% -1% 18% Western Europe % -4% - -26% -10% -16% Central and Eastern Europe % % -7% -14% Middle East and Africa 1,153 1,242-7% - -7% Latin America % -4% -9% -6% -5% -1% Asia % - -8% 13% - 13% TOTAL 3,102 3,423-9% -2% -6% -1% -3% 2% (1) At constant scope and exchange rates, and excluding the impact of carbon credit sales and one-off items (North America: 24m in Q4 12 and 20m in Q1 13 and LATAM: 15m in Q4 12) 37

38 YTD Like-for-Like Sales Variance Cement Analysis by Region and Major Market as at June 30, 2014 North America United States Canada Western Europe France Spain Greece Central and Eastern Europe Poland Romania Russia Middle East and Africa Algeria Egypt Iraq Kenya Nigeria South Africa Latin America Brazil Ecuador Asia India Indonesia Malaysia Philippines South Korea Volume effect Other effects (1) Activity variation vs % 6.1% 1.1% 0.3% -5.0% (2) 0.5% 11.7% 6.0% 11.4% 6.2% 3.8% 6.8% 10.1% 19.5% 5.0% 5.3% 5.1% -8.5% 0.2% 0.3% -0.2% 7.8% 33.0% -2.0% -1.0% 2.8% -3.1% 1.1% 3.2% 0.2% -1.3% -0.7% (2) -4.8% 8.0% 1.8% 2.6% -3.0% 3.7% 3.1% 5.5% 18.6% -9.4% -2.3% 4.5% 2.5% 4.1% 4.9% 1.4% 1.2% -12.1% (3) 4.8% 9.2% 0.7% 1.9% Cement domestic markets 5.6% 1.4% 7.0% Main Joint ventures UK Morocco China (disclosed for information and not included in the regional sub-totals disclosed above 4.9% 3.8% -4.4% 3.6% 4.9% -0.7% 5.1% 9.3% 1.3% -1.0% -5.7% -4.3% 19.7% 7.8% 14.0% 3.2% 7.5% 9.9% 15.6% 38.1% -4.4% 3.0% 9.6% -6.0% 4.3% 5.2% 1.2% 9.0% 20.9% 2.8% 8.2% 3.5% -1.2% 9.0% -0,8% 4.2% (1) Other effects: including price effects, product and customer mix effects (2) Lime, grey and white cement (3) Impacted by geographical mix prices in East down 6% Pure price: +2.1% Geo mix and other effects: -0.7% 38

39 YTD Like-for-Like Sales Variance Aggregates and Concrete Analysis by Major Market as at June 30, 2014 Volume effect Other effects (1) Activity variation vs Pure Aggregates France Poland United States Canada South Africa 0.9% 2.0% 18.4% -3.9% -3.6% 8.8% 4.2% -1.1% 3.4% 5.7% 8.3% 4.8% 5.1% 0.9% 21.8% 1.8% 4.7% 13.6% JV - United Kingdom (2) 7.0% 2.2% 9.2% Ready-mix Concrete France United States Canada South Africa India -2.4% -5.8% -9.0% -5.9% -9.7% -19.5% 2.2% 0.1% 4.7% 2.9% 6.6% 3.5% -0.2% -5.7% -4.3% -3.0% -3.1% -16.0% JV United Kingdom 10.8% 5.0% 15.8% (1) Other effects: including price effects, product and customer mix effects (2) All aggregates products NB : the contribution of the joint-ventures are disclosed for information and are not included in the totals disclosed 39

40 YTD Like-for-Like Sales Variance Cement Analysis by Region and Major Market as at Dec. 31, 2013 Volume effect Other effects (1) Activity variation vs North America United States Canada Western Europe France United Kingdom Spain Greece Central and Eastern Europe Poland Romania Russia Middle East and Africa Algeria Egypt Iraq Kenya Morocco Nigeria South Africa Latin America Brazil Ecuador Asia China India Indonesia Malaysia Philippines South Korea -2.6% -2.7% -2.4% -2.7% -3.3% (2) 10.8% 0.0% -8.3% -5.2% -4.6% -16.1% -5.7% -4.2% 0.7% -22.1% 6.4% -5.1% -6.1% 14.8% 0.7% 1.0% -0.4% 8.8% 3.2% 2.8% 1.5% 2.0% 0.5% 8.6% 4.5% 5.7% 5.1% 5.3% -2.2% -0.9% (2) -4.9% -13.5% (3) -2.4% -0.8% 0.0% 0.5% -4.0% 6.0% (4) 8.2% 14.3% -11.2% 0.4% 6.9% -5.0% 3.7% 2.0% 2.9% 3.6% 3.1% 2.4% 2.9% -4.9% -4.2% (2) 5.9% -13.5% -10.7% -6.0% -4.6% -15.6% -9.7% Cement domestic markets -1.1% 2.3% 1.2% 2.1% -0.5% 3.9% 3.0% 0.1% 6.7% 1.6% 1.8% 8.9% -7.8% -4.8% -4.7% 0.8% 9.8% 4.4% 3.0% 2.5% 12.4% 5.3% 2.3% 5.4% 5.0% 0.6% 15.3% 6.1% (1) Other effects: including price effects, product and customer mix effects (2) Grey cement only - price variation: up 1.4% sequentially from Q in France (3) Spain volumes and prices strongly impacted by a higher proportion of clinker sales (4) Out of which pure price effect : 2.5% 40

41 YTD Like-for-Like Sales Variance Aggregates and Concrete Analysis by Major Market as at Dec. 31, 2013 Volume effect Other effects (1) Activity variation vs Pure Aggregates France United Kingdom Poland United States Canada South Africa 0.4% -3.4% 19.1% -9.4% 0.6% 1.5% 7.0% 0.5% 1.7% -11.5% -4.1% 1.3% 2.9% 3.1% 0.9% -1.7% 7.6% -13.5% 1.9% 4.4% 10.1% Ready-mix Concrete France United Kingdom United States Canada South Africa India -0.9% -4.1% 44.7% -2.2% 3.0% 14.2% -11.4% 3.4% 1.3% -6.1% 4.9% 6.2% 10.0% 4.1% 2.5% -2.8% 38.6% 2.7% 9.2% 24.2% -7.3% (1) Other effects: including price effects, product and customer mix effects 41

42 Cash Flow 6 Months 2 nd Quarter m Cash flow from operations Change in working capital Sustaining capex 371 (410) (121) 419 (418) (115) 286 (256) (67) 388 (170) (67) Free cash flow (160) (114) (37) 151 Development investments (1) Divestments (2) (322) 423 (371) 162 (138) 75 (146) 47 Cash flow after investments (59) (323) (100) 52 Dividends Equity issuance (repurchase) Currency fluctuation impact Change in fair value Others (52) (7) (35) (42) (63) (130) 2 4 (31) (55) (41) 6 (1) (51) 34 (58) 2 31 (51) (15) Net debt reduction (increase) (258) (533) (153) (39) Net debt at the beginning of period 9,846 10,710 9,951 11,204 Net debt at period end 10,104 11,243 10,104 11,243 (1) Including net debt acquired and the acquisitions of ownership interests with no gain of control. The acquisitions of ownership interests with no gain of control were negligible in H and in H1 2013, excluding puts, already recorded as debt, exercised in the period ( 11m put exercised in the second quarter 2014) (2) Including net debt disposed of, and the disposals of ownership interests with no loss of control. 42

43 Statement of Financial position m June 30, 2014 Dec. 31, 2013 m June 30, 2014 Dec. 31, 2013 Capital Employed 27,105 27,073 Equity 16,133 16,285 Out of which: Goodwill 11,041 11,027 Out of which: Prop, plant & equip. Intangible assets 11, , Equity attributable to the owners of the parent company 14,361 14,555 Investments in JV and associates 3,088 3,174 Non controlling interests 1,772 1,730 Working Capital Net debt 10,104 9,846 Financial assets Total 27,870 27,740 Provisions 1,633 1,609 Total 27,870 27,740 43

44 Balanced Debt Maturity Schedule Average maturity of gross debt is 4 years and 1 month As at June 30, 2014 (1) In million euros Lafarge SA Commercial Paper and ST borrowings Lafarge SA Bonds & other MLT instruments Subsidiaries debt instruments Securitization programs After 2020 (1) Excluding puts on shares and derivatives instruments 44

45 Gross Debt (1) by Currency and by Source of Financing As at June 30, 2014 Split by source of financing Split by currency 17% 6% 10% 8% 9% 75% 75% Debentures Notes / private placements Banks and other Total Gross Debt (1) : 12.4Bn EUR GBP USD Other (1) Excluding puts on shares and derivatives instruments 45

46 Strong Liquidity Backed by Well Balanced Committed Credit Lines Lafarge SA committed credit lines of 3.0 billion euros with average maturity of 3.1 years bn, as at June 30, 2014 Amount Syndicated committed credit lines Bilateral committed credit lines Cash and cash equivalent 2.3 Total sources of liquidity 5.3 Short- term debt and short-term portion of long-term debt (2.4) Credit line drawn as of June 30, Overnight debt and commercial papers (1) (0.1) Total Available liquidity 2.8 (1) Classified as long-term in the Group s Statement of Financial Position, as they can be refinanced on a medium and long-term basis through the committed credit lines. 46

47 Médiathèque Lafarge - Ignus Gerber Appendices - Other Highlights Portfolio France, Jean Bouin Stadium in Paris, a Ductal project designed by Rudy Ricciotti, architect

48 Built a Portfolio that will Profit from Cement Demand Growth Western Europe 0.8% -1.5% 3.3Bn 61% 2.4% Real GDP Growth CAGR Cement Demand Growth CAGR Lafarge Group Sales 2013 (total: 15.2Bn) Cement Utilization Rate 2013 (includes mothballed capacity) 6.2% 3.1Bn North America 75% Latin America 2.8% MENA 3.4% 6.3% Subsaharan Africa 5.5% 10.4% Central & Eastern Europe 5.3% 1.1Bn 53% North Asia 4.6% 4.0% South Asia MEA 5.2% 6.9% 4.0Bn 74% 2.7Bn Asia 71% 3.1% 4.9% 0.9Bn 89% Sources: IMF World Economic Outlook October 2013, Lafarge Supply/Demand Projections Note: North East Asia includes China, Hong Kong, Taiwan, Japan and Korea. South Asia includes rest of Asia (excl. Middle East) *Assumes total GDP growth of 3.5% CAGR per IMF over (3 years) and no world economic shocks. Global growth rate is calculated at PPP weights Note: 2013 data is based on 2013 reported figures before the application of IFRS 11 on joint-ventures. 48

49 Built the Highest EBITDA Margin Returns in the Sector month rolling EBITDA Margin Lafarge vs sector best and worst levels (% of sales) bp Lafarge Sector Max Sector Min bp 12 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Source: Lafarge estimates based on company quarterly reports 49

50 Médiathèque Lafarge Appendices - Other Highlights Performance & Innovation 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

51 The Worldwide R&D Network is in Place An international network of over 1,000 people worldwide More than 30 partnerships with Suppliers and Universities around the world 51

52 A History of Turning Research into Profits Self-leveling concrete Fast setting concrete Concrete without joints Insulating concrete Ultra-high performance 52

53 Cost Reduction Action Plans are in Motion Doubling lower cost alternative fuel (AF) usage to 30% by 2015 Switching between lower cost conventional fuels More AF releases mill capacity to handle lower grade (lower cost) fuels Burning flexibility to switch between lower cost fuels Optimizing other variable costs Power costs, with new expertise Mining costs Procurement Increasing industrial fixed costs savings Structural changes in countries with low utilization rates Plant productivity through leaner / multi sites organization Maintenance: increased purchasing leverage for spare parts and refining predictive maintenance Sub-contractor optimization Higher productivity and logistics savings Increase of cement clinker ratio Optimization of distribution network Lower SG&A 53

54 Reduced Maintenance Capex has not Impacted Plant Reliability Structural change in plant network over past eight years Strict target setting and monitoring of plants Strict Sustaining Index (SSI) drives best in class maintenance practices Best plants in line with SSI objective spend on average 17% less More efficient sourcing Use experience of sourcing parts from low cost Chinese or Indian suppliers Sourcing platform launched in China to insure proper expediting and quality control (17 years of experience in China) Burning Reliability Factor 96% 95% 94% 93% 92% 91% 90%

55 Copyright: Library Lafarge - Charles Plumey-Faye - Rudy Ricciotti (architect) Appendices - Other Information List of Proposed Asset Disposals as Part of Planned LafargeHolcim Merger 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

56 List of Proposed Asset Disposals as Part of Planned LafargeHolcim Merger Austria: Lafarge s Mannersdorf cement plant France: Holcim s assets in metropolitan France, except for its Altkirch cement plant and aggregates and readymix sites in the Haut-Rhin market; Lafarge s assets on Reunion island, except for its shareholding in Ciments de Bourbon Germany: Lafarge s assets Hungary: Holcim s operating assets Romania: Lafarge s assets Serbia: Holcim s assets the UK: Lafarge Tarmac assets with the possible exception of one cement plant Canada: Holcim s assets Mauritius: Holcim s assets The Philippines: the associated companies of Lafarge and Holcim (Lafarge Republic Inc. LRI and Holcim Philippines Inc.) are exploring the combination of their businesses other than LRI s Bulacan, Norzagaray, and Iligan plants which are considered to be divested as part of such combination Brazil: Lafarge s Matozinhos cement plant, Lafarge s Arcos Jazida cement plant, Holcim s Cantagalo cement plant, Lafarge s Arcos Cidade cement grinding station, Lafarge s Santa Luzia cement grinding station and Holcim s Pouso Alegre readymix plant Both companies will continue to consider whether divestments would be necessary where there might be overlaps or depending on regulatory requirements 56

57 IFRS 11 - New Accounting Standard on Joint Arrangements Volumes 6 Months, after IFRS 11 application H reported H restated Joint ventures contribution H H Months before IFRS 11 application H H Pro forma (1) reported Cement (MT) Pure aggregates (MT) Ready-Mix Concrete (Mm 3 ) Sales 6,000 6,234 1,084 1,014 7,084 7,248 EBITDA 1,155 1, ,328 1,302 EBITDA Margin 19.3% 18.7% 16.0% 13.3% 18.7% 18.0% Current Operating Income Net income Group share (2) Earnings per share (in ) Cash Flow from operations Net debt 10,104 11, ,666 11,881 (1) Calculated on the basis of the accounting principles prevailing as at December 31, 2013 (i.e. applying the proportionate consolidation method for the joint-ventures) (2) Net income attributable to the owners of the parent company 57

58 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 Sales by Region EBITDA Current Operating Income Net income, Group share Free Cash Flow Like-for-Like variation Strict Working Capital Strict Working Capital in days sales Volumes are shown by origin Group Sales by Region are disclosed after eliminations of inter regional sales and are shown by origin. Sales for each activity are disclosed by origin, and before elimination of inter regional/business line sales. Current Operating Income before depreciation and amortization on tangible and intangible assets EBITDA Margin = EBITDA / Sales Operating Income before capital gains, impairment, restructuring and other Net income attributable to the owners of the parent company Net operating cash generated or used by operations less sustaining capital expenditures Variation at constant scope and exchange rates Trade receivables plus inventories less trade payables Strict Working Capital end of N * 90 days Sales of the last quarter 58

59 Important 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 and services, their development and potential. Although Lafarge believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions as at the time of publishing this document, investors are cautioned that these statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are difficult to predict and generally beyond the control of Lafarge, including but not limited to the risks described in the Lafarge s annual report available on its Internet website ( and uncertainties related to the market conditions and the implementation of our plans. Accordingly, we caution you against relying on forward looking statements. Lafarge does not undertake to provide updates of these forward-looking statements. More comprehensive information about Lafarge may be obtained on its Internet website ( including under Regulated Information section. This document does not constitute an offer to sell, or a solicitation of an offer to buy Lafarge shares. In order to have comparative information for 2013, and accordance with IFRS, 2012 figures have been restated to reflect the application of the amendments of IAS 19. In order to have comparative information and in accordance with IFRS, 2013 figures have been restated to reflect the application of the new accounting standard on joint arrangements (IFRS 11) applicable as at January 1, 2014 when shown against 2014 figures. 59