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

Transcription

1 Médiathèque Lafarge - Ignus Gerber Investor Relations Stéphanie Billet Michael Bennett stephanie.billet@lafarge.com michael.bennett@lafarge.com Investor Document Analyst Relations Laurence Le Gouguec laurence.legouguec@lafarge.com Skytrain station - Dubaï, UAE May 2013

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

3 A Transformed Portfolio Since 2005 Internal development of 40MT over strengthened local positions in growth markets Entered new high growth, profitable markets in Middle East Africa in 2008 Exited non-core positions Refocused on Cement and A&C Split of Sales by Market and by Division Sales ( 14.5Bn) and 2012 Sales ( 15.8Bn) 32% 59% 9% 9% 48% 34% 68% 41% 34% 66% Split of 2005 Sales by Market Split of 2012 Sales by Market Split of 2005 Sales by Division Split of 2012 Sales by Division Emerging Markets Mature Markets Cement Aggregates and Concrete Gypsum Roofing Other 3

4 Built a Portfolio that will Profit from Long-Term World Macro Trends North America 0.8% 1.0% 0.3% 3.4Bn Western Europe 0.1% 0.4% -0.4% 3.2Bn Central & Eastern Europe -0.3% 0.0% -0.8% 1.2Bn Population Growth CAGR (total: 0.9%) Urban Population Growth CAGR (total: 1.7%) Working Age Population* Growth CAGR (total: 0.8%) Lafarge Group Sales 2012 (total: 15.8Bn) 1.5% 2.0% MENA 1.7% Sub Saharan Africa 2.3% 2.2% 2.7% MEA 4.3Bn North Asia 0.3% 1.9% 0.1% South Asia 1.0% 2.1% 1.3% Asia 2.7Bn Latin America 0.9% 1.2% 1.0% 1.0Bn 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 World Market Cement Demand Expected to Grow 4.7% CAGR through 2015 *Working age population is defined as the population between 15 and 60 Source: Lafarge annual report 2012, United Nations, Department of Economic and Social Affairs, Population Division (2012) - World 4

5 Our Portfolio is Full of Potential With a footprint turned to emerging markets, the Group will benefit from a superior growth potential 5.0 Mature 4.5 Markets % Average World GDP Growth Average Lafarge Portfolio GDP Growth Source: IMF World Economic Outlook Our portfolio of high quality assets is uniquely diversified Presence in 64 countries with no emerging market representing more than 5% of Group sales Completed developments in the last years in fast growing markets, provide large headroom for growth with lower Capex needs 5

6 Agence Rudy Ricciotti Mucem (Museum of European & Mediterranean Civilizations) - Marseille, France Extracting More Value from the Current Asset Base

7 Extracting the Full Value of our Assets for Our Shareholders Drive Performance and Innovation actions for 1,750M of EBITDA from 2012 to 2014 Apply strict allocation of funds First reinforce the financial structure Net Debt < 10Bn as soon as possible in 2013 Next focus on dividend growth and Capex Extract the most value from a portfolio weighted for growth 7

8 Lafarge s Priorities Grow Cash Generation through Innovation Extract more value from existing market positions Address customer needs to confront today s challenges New innovative products New construction solutions Higher level of services New innovation function to accelerate initiatives for deeper penetration into existing markets Actions to generate 450M EBITDA from 2012 to 2014 In Dharavi, one of the slums of Mumbai, India, a million people live in shacks made of corrugated metal and other recovered materials. To give these people a minimum level of comfort, Lafarge has undertaken a project of transforming existing inadequate homes into houses that can provide better protection during the monsoon season. 8

9 Innovation Ready to Deliver 200M Contribution to EBITDA for 2013 Implementation of the plan is gaining pace and first results were seen, with 80M of EBITDA in 2012 The stage is set for 2013 and we will benefit from actions launched over 2012 Market Segments Specialty cements Commercial Excellence Services Le Louvre, Paris Tracking and bonus systems are in place SPLIT OF INNOVATION CONTRIBUTION BY LEVER 2013 obj 200M Products & Solutions Market Segments Services Commercial excellence ~30% ~20% ~30% ~20% Jean Bouin Stadium, Paris 9

10 Lafarge s Priorities Grow Cash Generation Through Performance Extract more value from existing plants Build on significant accomplishments and learning from previous successes Accelerate initiatives with new performance function Increase cost savings to generate 1,300M EBITDA from 2012 to 2014 Drive higher output from existing plants for an additional 13-15MT Achieve less intensive Capex spending levels Ductal, ultra-high performance fiber-reinforced concrete 10

11 Using All Levers to Drive Cost Reduction Increasing Share of Emerging Markets 2012 Cash Cost Base: 12.4Bn Other SG&A Split of the 1.3Bn cost reduction program by lever SG&A Industrial Fixed Costs ~40% Raw materials Fixed costs Logistics Plant Efficiency Improvement ~30% C/K Transport Energy Solid fuels Alternative Fuels ~30% Power 11

12 Accelerate Cost Savings 450M Contribution to EBITDA for 2013 Visible impact of Group reorganization SG&A / Sales declined 70bps to 9.0% Full year impact of 2012 measures going into 2013 SPLIT OF COST REDUCTIONS BY LEVER M 57% SG&A IndustrialFixed Costs 2013 obj 450M ~40% Utmost reactivity on energy Reaping benefit of lower petcoke prices Leveraging our Power Platform Optimizing production output in growing markets 16% 27% Logistics Plant Efficiency C/K Solid fuels Alternative Fuels Power ~30% ~30% Ewekoro II, Nigeria 12

13 Extract the Maximum Output from our Existing Plants Achieving Best Plant Performance RF * 92.9 % 94.5% 96% Plants with RF * >96% 22% 51% 75% * RF = kiln reliability factor Continuously improving our cement to clinker ratio Cement/Clinker Ratio MT Additional output in areas where needed Performing Teams are the Key Success Factor 13

14 Lowering Capital Expenditure Optimize the Cost of Capex Drive a step change for sustaining Capex, overall limited to around 65% of depreciation in the long term Lower costs of development Capex, leveraging the advantage of 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 14

15 Conclusion Rudy Ricciotti - Mario Bellini - Musée du Louvre - Lisa Ricciotti Department of Islam Arts, Musée du Louvre - Paris, France

16 Proactive Management Delivering Results We are in the right growth locations We are accelerating actions to extract the most value Innovation to penetrate markets more deeply with a strong benefit to prices and margins Actions driving at least 200M EBITDA in 2013 Performance to drive higher cost savings and productivity, and lower our future Capex Actions driving 450M EBITDA in 2013 We will do it with a much stronger financial structure Net debt below 10Bn as soon as possible in 2013 CFFO/Net Debt of 28% to 30% no later than in

17 Driving Growth and Value Creation Deeply transformed, the Group is stronger today Focused on core businesses Turned to emerging markets and geographically uniquely diversified Supported by the new organization We accelerate and expect to deliver most of our objective of 1.75Bn additional EBITDA through Performance and Innovation actions by the end of 2014, one year ahead of our initial objective Looking beyond 2014, we have an outstanding potential to grow our revenues, earnings and cash flows We have strong positions which we will develop, selectively investing in our core markets Innovation and Performance are differentiating pillars to sustain growth Our portfolio is full of potential and we will drive growth and value creation for our shareholders 17

18 Médiathèque Lafarge - Marc Mimram Bridge Moulay-al-Hassan - Rabat, Morocco Appendices

19 Médiathèque Lafarge - Marc Mimram Bridge Moulay-al-Hassan - Rabat, Morocco Appendices - Outlook 2013

20 2013 Outlook Market * Overview Cement Volumes (%) Price Highlights North America 3 to 6 + Western Europe -9 to -5 +/= Central and Eastern Europe -1 to 2 + Middle East and Africa 4 to 7 + Latin America 4 to 7 + Asia 3 to 6 + Market growth supported by positive trends in the US residential sector and in the oil industry in Canada Markets expected to be impacted by austerity measures and slow economic growth Contrasted trends, with Poland down while most other markets should grow Solid market growth expected in most emerging markets Overall 1 to 4 + Growth in all regions outside Europe, with pricing gains everywhere * Market growth forecast at national level Lafarge volumes trends can differ from this outlook 20

21 2013 Outlook Market (1) overview Cement North America United States (1) Canada Western Europe France United Kingdom Spain Greece Central and Eastern Europe Poland Romania Russia (1) Latin America Brazil Ecuador Market Volumes (%) 3 to 6 4 to 7 0 to 3-9 to -5-9 to -6-5 to to to to 2-9 to -6 1 to 4 5 to 8 4 to 7 5 to 8 2 to 5 Middle East and Africa Algeria Egypt Iraq Kenya Morocco Nigeria South Africa Asia China (1) India (1) Indonesia (1) Malaysia Philippines South Korea Market Volumes (%) 4 to 7 7 to 10 2 to 5 7 to 10 4 to 7 0 to 3 10 to 13 2 to 5 3 to 6 4 to 7 4 to 7 5 to 8 1 to 4 6 to 9-1 to 2 Overall 1 to 4 (1) Market growth forecast at national level except for United States, Russia, China, India and Indonesia for which only relevant markets are considered 21

22 2013 Outlook Market overview Aggregates and Concrete Main markets Mature markets: market growth in North America supported by positive trends in the residential sector in the US and in the oil industry in Canada, while most Western Europe markets are expected to be impacted by austerity measures and slower economic growth. Emerging markets: market volume growth expected in most countries. Prices Price improvement expected for both Pure Aggregates and Ready-Mix concrete. 22

23 2013 Outlook Other Elements 4% energy cost increase (+0.6 euro per tonne) Acceleration of our Performance and Innovation plan with: Performance: 450M Innovation: 200M Cost of debt (gross): 6.4% Tax rate: 30% Capital expenditures: ~ 0.8Bn initially Additional divestments beyond the current target of 1Bn since the beginning of 2012 may lead to an increase of this expenditures level 23

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

25 Highlights Full Year 2012 Continuing positive pricing trends and cost reduction actions drove operating results growth The Group delivered on its cost savings target with 410M achieved for the year, 120M in the fourth quarter; innovation actions generated 80M of EBITDA in the year EBITDA increased 7% despite slowdown in Europe. Excluding Europe, EBITDA increased 17% in Q4 and 19% YTD EBITDA margins improved steadily, up 130 basis point in Q4 and YTD when excluding carbon credit sales Net earnings reached 432M, improving 70% excluding one off items (1) Net debt decreased 0.9Bn in Q4 and 0.7Bn YTD 25

26 Full Year Key Figures 12 Months Volumes Variation lfl Cement (MT) % -2% Pure aggregates (MT) % -3% Ready-Mix Concrete (Mm 3 ) % -2% Sales 15,816 15,284 3% 2% EBITDA 3,450 3,217 7% 4% EBITDA Margin 21.8% 21.0% 80bps Current Operating Income 2,440 2,179 12% 7% Net income Group share (1) % Excluding one-off items (2) % Earnings per share (in ) % Net Dividend (in ) (3) % Free cash flow 884 1,208-27% Net debt 11,317 11,974-5% (1) Net income attributable to the owners of the parent company (2) Asset impairment in Q on Greece and in Q on Western Europe and the Emirates, restructuring charges and one-time gains in 2011 on Gypsum divestments (3) Subject to the approval of the Annual General Meeting 26

27 Full Year Sales and EBITDA by Geographic Area Scope and Foreign Exchange Effects 12 Months In million euros Variation lfl SALES 15,816 15,284 3% 2% North America 3,375 3,110 9% 8% Western Europe 3,181 3,477-9% -9% Central and East Europe 1,270 1,293-2% -4% Middle East and Africa 4,283 4,092 5% 2% Latin America % 10% Asia 2,746 2,407 14% 10% EBITDA 3,450 3,217 7% 4% North America % 16% Western Europe (1) % -19% Central and East Europe (1) % -22% Middle East and Africa 1,235 1,131 9% 6% Latin America % 22% Asia % 31% (1) Impacted by sales of carbon credits: FY 2012 versus FY 2011 Western Europe: 63 million euros lower proceeds Central and Eastern Europe: 15 million euros lower proceeds Group: 78 million euros lower proceeds 27

28 Q1 Highlights Q1 results impacted by a particularly marked seasonality on volumes Volumes affected by a strongly adverse weather, fewer trading days and temporary production limitations in Egypt and Algeria Q1 traditionally represents a small proportion of our volumes and results and is not indicative of the rest of the year Cement prices are up 2.5% sequentially and vs. last year Price increases to cover cost inflation have been implemented throughout Q1 in all product lines and will fully deliver in the coming quarters Performance and Innovation measures delivered 100M in Q1 The Group launched its new tagline Building better cities which will provide further support to the Innovation momentum 28

29 Q1 Key Figures 1 st Quarter Variation lfl Volumes Cement (MT) % -6% Pure aggregates (MT) % -7% Ready-Mix Concrete (Mm 3 ) % -3% Sales 3,136 3,353-6% -4% EBITDA % -19% EBITDA Margin 12.1% 15.2% Current Operating Income % -38% Net income Group share (1) (117) (60) nm Earnings per share (in ) (0.41) (0.21) nm Free cash flow (297) (434) 32% Net debt 11,812 12,364-4% (1) Net income attributable to the owners of the parent company 29

30 Q1 Sales and EBITDA by Geographical Area Scope and Foreign Exchange Effects 1 st Quarter In million euros Variation Scope FX effect lfl SALES 3,136 3, % % -3.8% North America % -5% -1% -3% Western Europe % +5% - -11% Central and Eastern Europe % % Middle East and Africa 940 1,044-10% - -5% -5% Latin America % - -10% - Asia % -1% -2% 8% EBITDA % -3% -4% -19% North America (12) (42) 71% -2% - 73% Western Europe (1) % -6% - -88% Central and Eastern Europe (35) (14) nm nm nm nm Middle East and Africa % - -3% -19% Latin America % - -7% -7% Asia % - -4% 19% 30

31 YTD Like-for-Like Sales Variance Cement Analysis by Region and Major Market as at March 31, 2013 Volume effect Other effects (1) Activity variation vs North America United States Canada -16.6% -27.0% -2.3% 9.5% (2) 7.9% 3.4% -7.1% -19.1% 1.1% Western Europe France United Kingdom Spain Greece -12.2% -7.8% 2.5% -24.7% -27.2% -1.3% -2.1% (3) -9.5% (3) -6.3% (3) -2.2% -13.5% -9.9% -7.0% -31.0% -29.4% Central and Eastern Europe Poland Romania Russia -14.4% -31.9% -10.2% -19.4% -0.2% -0.1% 1.1% -2.1% -14.6% -32.0% -9.1% -21.5% Middle East and Africa Algeria Egypt Iraq Kenya Morocco Nigeria South Africa -13.2% -10.4% -30.7% 2.9% -15.7% -20.1% 5.2% -4.6% 7.6% (4) 7.5% 11.6% -6.4% 2.5% 2.2% -2.1% 2.8% -5.6% -2.9% -19.1% -3.5% -13.2% -17.9% 3.1% -1.8% Latin America Brazil Ecuador -3.9% -7.0% 1.5% 2.8% 4.2% 3.0% -1.1% -2.8% 4.5% Asia China India Indonesia Malaysia Philippines South Korea 2.9% 5.0% 2.7% 1.8% 4.1% 7.8% -2.3% 3.7% -3.7% 11.6% 5.5% -7.4% 14.0% 3.3% 6.6% 1.3% 14.3% 7.3% -3.3% 21.8% 1.0% Cement domestic markets -7.0% 3.0% -4.0% (1) Other effects: including price effects, product and customer mix effects (2) Out of which pure price effect: 6% (3) Grey cement price variation: up 2% sequentially from Q in France and in Spain down 3% Q1 13 on Q1 12 in the UK (4) Out of which pure price effect : 3% 31

32 YTD Like-for-Like Sales Variance Aggregates and Concrete Analysis by Major Market as at March 31, 2013 Volume effect Other effects (1) Activity variation vs Pure Aggregates France United Kingdom Poland United States Canada South Africa -7.2% -10.8% -0.7% -32.1% -5.0% -8.8% 2.3% 0.3% 1.3% -3.2% -14.4% 3.7% 1.7% 3.6% -6.9% -9.5% -3.9% -46.5% -1.3% -7.1% 5.9% Ready-mix Concrete France United Kingdom United States Canada South Africa India -2.9% -8.5% 25.9% -2.3% 3.6% 22.4% -4.1% 3.4% 2.3% -4.7% 5.3% 8.5% -0.1% 5.9% 0.5% -6.2% 21.2% 3.0% 12.1% 22.3% 1.8% (1) Other effects: including price effects, product and customer mix effects 32

33 Cash Flow 1 st Quarter 12 Months m Cash flow from operations Change in working capital Sustaining capex 48 (292) (53) 188 (571) (51) 1,580 (304) (392) 1, (389) Free cash flow (297) (434) 884 1,208 Development investments (1) Divestments (2) (243) 132 (137) 71 (425) 474 (810) 2,226 Cash flow after investments (408) (500) 933 2,624 Dividends Equity issuance (repurchase) Currency fluctuation impact Change in fair value Others (73) - (27) 20 (7) (14) (299) 9 24 (9) (1) (487) 18 (120) (51) 135 Net debt reduction (increase) (495) (390) 657 2,119 Net debt at the beginning of period Impact of discontinued operations reclassifications 11,317-11,974-11,974-13,993 (100) Net debt at period end 11,812 12,364 11,317 11,974 (1) Including net debt acquired and the acquisitions of ownership interests with no gain of control. (2) Including net debt disposed of, and the disposals of ownership interests with no loss of control. 33

34 Statement of Financial position m March 31, 2013 Dec. 31, 2012 m March 31, 2013 Dec. 31, 2012 Capital Employed 30,723 28,657 Equity 17,797 17,748 Out of which: Goodwill Prop, plant & equip. Working Capital Other 12,596 16, ,103 12,184 14, ,090 Out of which: Equity attributable to the owners of the parent company Non controlling interests 15,758 2,039 15,666 2,082 Financial assets Net assets held for sale (1) 417 1,892 Net debt 11,812 11,317 Provisions 2,263 2,182 Total 31,872 31,247 Total 31,872 31,247 (1) Following the announcement on February 18, 2011 of the agreement between Lafarge and Anglo American plc to combine their cement, aggregates, ready-mixed concrete, and asphalt & contracting businesses in the United Kingdom, and in accordance with IFRS 5, Lafarge UK s assets and liabilities to be contributed to this joint venture have been grouped in the consolidated statement of financial position on the lines Assets held for sale and Liabilities associated with assets held for sale, respectively. The completion of this transaction was announced on January 7, 2013, and assets and liabilities of the joint-venture were proportionately consolidated thereon. Additionally, following its intentions regarding the divestment of its Gypsum activities in North America, the Group presents them as discontinued operations. 34

35 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, 2013 Amount Syndicated committed credit lines Bilateral committed credit lines Cash and cash equivalent 2.7 Total sources of liquidity 6.1 Short- term debt and short-term portion of longterm debt (2.5) Credit line drawn as of March 31, 2013 (1) (0.2) Overnights debt and commercial papers (1) (0.5) Total Available liquidity 2.9 (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. 35

36 Balanced Debt Maturity Schedule Average maturity of gross debt is 3 years and 11 months As at March 31, 2013 (1) In million euros Lafarge SA Commercial Paper and ST borrowings (2) Lafarge SA Bonds & other MLT instruments Subsidiaries debt instruments Securitization programs After 2020 (1) Excluding puts on shares and derivatives instruments (2) Including 200m of drawings on MT committed credit lines 36

37 Gross Debt (1) by Currency and by Source of Financing As at March 31, 2013 Split by source of financing Split by currency 21% 4% 7% 5% 1% 7% 13% 71% 71% Debentures Notes / private placements Commercial paper Banks and other EUR GBP Other USD CNY Total Gross Debt (1) : 14.5Bn (1) Excluding puts on shares and derivatives instruments 37

38 Médiathèque Lafarge - Marc Mimram Appendices - Other Highlights Portfolio Bridge Moulay-al-Hassan - Rabat, Morocco

39 Built a Portfolio that will Profit from Cement Demand Growth Western Europe 0.6% -1.5% 3.2Bn 45% 2.2% Real GDP Growth CAGR Cement Demand Growth CAGR Lafarge Group Sales 2012 (total: 15.8Bn) Cement Utilization Rate 2012 (includes mothballed capacity) 3.8% North America 6.2% 3.4Bn 72% Latin America 4.9% 1.0Bn 79% 2.8% MENA 4.3% 6.3% Subsaharan Africa 5.5% 10.4% Central & Eastern Europe 5.3% 1.2Bn 53% North Asia 5.2% 4.0% South Asia MEA 5.4% 6.9% 4.3Bn 86% 2.7Bn Asia 73% World Market Cement Demand Expected to Grow 4.7% CAGR through 2015 * Sources: IMF World Economic Outlook 2012, 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 world growth of 3.4% CAGR per IMF and no world economic shocks 39

40 Built the Highest EBITDA Margin Returns in the Sector month rolling EBITDA Margin Lafarge vs sector best and worst levels (% of sales) Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 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 Q bp Q bp Lafarge Sector Max Sector Min Source: Lafarge estimates based on companies Quarterly Reports 40

41 A Leadership Position in Middle East & Africa Highest Population Growth CAGR : 2.1% Highest Urban Population Growth CAGR : 2.1% Highest Working Age Population* Growth CAGR : 2.3% The region with the highest population growth, urban population growth and working age population growth Strong and diverse presence across the African continent Presence spread over 25 countries; top 5 countries represent only 55% of the Region s sales 2012 Revenues Cement Demand Market Growth (CAGR) Cement kg/capita MENA 2.0Bn 6.0% 6.1% 655 Sub Sahara 2.2Bn 8.5% 10.9% 104 A huge growth potential and a diversified footprint 41

42 Médiathèque Lafarge - Marc Mimram Appendices - Other Highlights Performance & Innovation Bridge Moulay-al-Hassan - Rabat, Morocco

43 Lafarge s Priorities Grow Cash Generation through Innovation Innovation initiatives EBITDA Products & Solutions Value added concrete New cement products Manufactured sand Specialty aggregates Construction solutions ~ 135M Market Segments Oil and Gas Road solutions Affordable housing Sustainable Construction ~ 110M Services Recycling Franchising/ Licensing Placing & Finishing Raw materials support to RMX Logistics services ~ 135M Commercial excellence International key accounts Prescriptive selling Time-to-market ~ 70M TOTAL 450M 43

44 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 Montreal Lafarge Research Center Vienna Lyon Beijing Algiers Cairo Mumbai Chongqing Kuala Lumpur Rio de Janeiro 3 Technical centers and 4 satellite locations 3 Construction Development laboratories +2 to open in 2013 ( > 10 by 2015) +50 concrete labs, located in most our countries 44

45 A History of Turning Research into Profits Self-leveling concrete Fast setting concrete Concrete without joints Insulating concrete Ultra-high performance 45

46 Accelerate Cost Savings to 1.3bn in 3 years starting from 2012 Cumulative cost-cutting effort (in M ) ,120 1,530 2, Bn cumulative cost-cutting effort in 3 years, from 2012 to // The success and learning of past cost reduction programs provide building blocks for further savings New performance organization puts focus on high impact areas to accelerate reductions (1) Initial objective announced in June 2012 was to deliver 1.3Bn over Given accelerated momentum, the Group announced in February 2013 that the objective would be mostly completed by the end of

47 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 power costs, with new expertise 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 47

48 Reduced Maintenance Capex has not Impacted Plant Reliability Structural Change in Plant Network over Past Six 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%

49 Driving a Step Change for Sustaining Capex Structural Change in Plant Network over the Past Six Years Average age of the plant down 27% Average age of plants (years) Natural evolution Gain through revamping / acquisitions More plants located in emerging markets where costs are lower Average size of our plants increased from 1.1Mt to 1.35Mt between 2005 and 2011 Dry lines represent 96% in 2011, versus 91% in

50 Driving a Step Change for Sustaining Capex Sustaining Capex, in per ton/m 3 produced & sold Stabilized Cement Aggregates Ready-Mix Concrete Limited catch-up necessary over 2013 to 2015 For Cement, long-term target of 2.5 /t of production is a relevant basis to support our business Overall, around 65% of Depreciation 50

51 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 51

52 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