Investor Document Agence Rudy Ricciotti Investor Relations Stéphanie Billet Michael Bennett stephanie.billet@lafarge.com michael.bennett@lafarge.com +33 1 44 34 93 71 +33 1 44 34 11 51 France, Marseille Mucem (Museum of European & Mediterranean Civilizations) Analyst Relations Laurence Le Gouguec laurence.legouguec@lafarge.com +33 1 44 34 94 59 May 2014
Médiathèque Lafarge - Ignus Gerber Capturing Growth Through A Well- Balanced Geographic Portfolio Skytrain station - Dubaï, UAE
A Transformed Portfolio Since 2005 Refocusing on our core businesses Breakdown of sales by business 18% 34% 48% 36% <1% 2005 2013 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 2005 2013 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
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 2010-2030 (total: 0.9%) Urban Population Growth CAGR 2010-2030 (total: 1.7%) Working Age Population* Growth CAGR 2011-2030 (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
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
Leverage our Portfolio A Well Balanced Exposure; Organic Development Continues Russia 2.1mT Q2 2014 Brazil 0.5mT Q1 2014 Algeria 0.8mT Q2 2013 Philippines 0.5mT Q2 2013 New clinker line India 2.6mT Q3 2013 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 2014 6
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
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 3 6 20 1990 2000 2013 >30 2017 > 8.5MT of new capacity from mostly brownfield projects Nigeria, Tanzania and Zambia 1.5MT of debottlenecking throughout the region 8
Agence Rudy Ricciotti Extracting the Full Value of our Portfolio Mucem (Museum of European & Mediterranean Civilizations) - Marseille, France
Extracting the Full Value of our Assets for our Shareholders We are focusing on actions within our control Innovation Performance We will continue to apply the utmost discipline in terms of capital allocation We will continue to optimize our portfolio of assets Net debt < 9Bn in 2014 (1) One of our main objectives is to improve return on capital employed Our first step is to be above 8% after tax in 2015 (1) This objective, announced in 2013, was based on figures as reported, ie. before the impact of the application of IFRS 11 on join-ventures. 10
Building on Momentum Initial 2012-2015 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 2015-2016 objective Cost reduction - Performance 250 1,750m Initial target for 2012-2015 490m 80 410 670m 220 450 > 600m >200 >400 +1/3 rd >450 1,300 250 300 300 >950 >1,900 2012 2013 2014 2012-2014 2015 (1) 2016 (1) 2012-2016 (1) Excluding joint-ventures 11
Grow Cash Generation through Innovation Additional EBITDA of > 200M in 2014; 500M in 2015-2016 Provide Differentiating Solutions and Services to Contribute to More Housing More Compact Better Connected More Durable More Beautiful 12
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)
Grow Cash Generation through Innovation Accelerate Time to Market and Focus on New Offers Innovation initiatives > 450M (2012-2014) > 500M (2015-2016) 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
Drive Performance to Reduce Costs Cost Savings of more than 400M in 2014; 600M in 2015-2016 2013 Cash Cost Base: 12.1Bn (1) Other SG&A 0.7 1.3 Split of the cost reduction program by lever SG&A Industrial Fixed Costs 2012-2014 1.3bn 35% 2015-2016 > 0.6bn 30% Raw materials 3.8 2.3 Fixed costs Logistics Plant Efficiency Improvement & C/K 20% 20% Transport 2.0 2.0 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
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
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.
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
GEOGRAPHICAL COMPLEMENTARITY OF PORTFOLIOS Combined sales by region (in billion) Emerging markets Developed markets Total CHF 11.0 / EUR 9.0 # of countries 73 17 90 51% 5.6 49% 5.4 CHF 8.6 / EUR 7.0 CHF 7.0 / EUR 5.7 45% 3.2 Europe 61% 5.2 55% 3.8 North America 39% 3.3 Asia CHF 4.4 / EUR 3.6 15% CHF 5.9 / EUR 4.8 0.9 100% CHF 2.0 / EUR 1.7 2.0 76% 3.3 85% 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) 221 206 427 Aggregates volume sold (mt) 193 155 348 RMC volume sold (mm 3 ) 31 39 70 19
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 Information on the project is available on Lafarge Website: http://lafargeholcim.projet-fusion.com/fr. 20
Agence Rudy Ricciotti France, Marseille Mucem (Museum of European & Mediterranean Civilizations) Conclusion
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 22
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 Strengthening our financial structure with the aim to return to an investment grade profile in 2014 Focus on dividend growth Selectively invest in organic growth in our core markets while continuing to optimize our portfolio of assets to drive step improvement in return on capital 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 Create sustainable value for shareholders 23
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
Médiathèque Lafarge Appendices - Outlook 2014 France Extension to a villa in La Baule Rocheteau-Saillard Architects
2014 Outlook Market * 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 sector =/+ Overall stabilization at a low level. Growth expected in the UK, supported by the residential sector; slight decrease in France Central and Eastern Europe 2 to 5 + Market growth in Poland and Russia Middle East and Africa 4 to 7 + 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; pricing gains everywhere * Market growth forecast at national level Lafarge volumes trends can differ from this outlook 26
2014 Outlook Market (1) overview Cement North America United States (1) Canada Western Europe France United Kingdom (2) Spain Greece Central and Eastern Europe Poland Romania Russia (1) Latin America Brazil Ecuador Market Volumes (%) 4 to 7 5 to 8 2 to 5-2 to 1-5 to -2 4 to 7-3 to 0 0 to 3 2 to 5 3 to 6-1 to 2 5 to 8 2 to 5 2 to 5 2 to 5 Middle East and Africa Algeria Egypt Iraq Kenya Morocco (2) Nigeria South Africa Asia China (1) (2) India (1) Indonesia (1) Malaysia Philippines South Korea Market Volumes (%) 4 to 7 5 to 8 4 to 7 5 to 8 4 to 7 0 to 3 7 to 10 0 to 3 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) UK, Morocco and China are disclosed for information only, and are not included in the market volume ranges by region and worldwide. Indeed, the contributions of these countries are from now included in a separate line in the P&L Income from JV and associates, in accordance with IFRS 11 on joint arrangements. 27
2014 Outlook Market overview Aggregates and Concrete Main markets North America: Market growth, notably supported by positive trends in the US residential sector, 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. 28
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 29
Médiathèque Lafarge - Marc Mimram Bridge Moulay-al-Hassan - Rabat, Morocco Appendices - Key Figures
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-like and EBITDA margin up 130 basis points Cement prices up 2.0% versus last year and up 1.5% compared to Q4 34M adverse impact of destocking in the quarter Adverse exchange rates impacted sales and EBITDA by respectively -8% and -10% Strong improvement in Free cash flow and net debt down 1.3bn compared to last year Announcement of our project of a merger of equals with Holcim to create LafargeHolcim, the most advanced group in the building materials industry (1) Including the contributions of the joint-ventures. Cost-saving and Innovation measures generated 110M incremental EBITDA in Q1 when excluding the JV contribution 31
Significant Organic Growth Positive Impact on EBITDA and EBITDA Margin of Volume Growth Combined with Cost Cutting and Innovation Measures M EBITDA margin 342 (39) (20) 11.7% 283 +130bps 94 (34) Up 60M like-for-like or +21% 13.0% 343 EBITDA Q1 2013 EBITDA Q1 2013 FX and scope one-off One off EBITDA Q1 Q1 2013 LFL LFL Organic organic growth EBITDA Q1 2014 destocking Destocking EBITDA Q1 Effect effect 2014 32
Key Figures 12 Months 1st Quarter Volumes 2013 2012 Variation lfl (1) 2014 2013 Variation lfl (1) Cement (MT) 136.8 141.1-3% - 25.9 23.9 8% 11% Pure aggregates (MT) 192.8 188.3 2% - 26.9 26.4 2% 4% Ready-Mix Concrete (Mm 3 ) 30.7 31.8-3% -1% 5.7 5.8 - -1% Sales 15,198 15,816-4% 2% 2,633 2,675-2% 9% EBITDA 3,102 3,423-9% 2% 343 342-21% EBITDA Margin 20.4% 21.6% -120bps 10bps 13.0% 12.8% 20bps 130bps Current Operating Income 2,075 2,413-14% 3% 146 128 14% 69% Net income Group share 601 365 65% (135) (117) nm Earnings per share (in ) 2.09 1.27 65% (0.47) (0.41) nm Net dividend (in ) 1.00 1.00 Free cash flow 864 884-2% (123) (265) 54% Net debt 10,330 11,317-9% (1) At constant scope and exchange rates, and excluding CO2 and one-time gains ( 20m one-time gain recorded in Q1 2013 in North America) 33
Sales by Geographical Area Scope and Foreign Exchange Effects 12 Months In million euros 2013 2012 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 869 961-10% -4% -11% 5% Asia 2,724 2,746-1% - -6% 5% TOTAL 15,198 15,816-3.9% -0.4% -5.1% 1.6% 34
EBITDA by Geographical Area Scope and Foreign Exchange Effects In million euros 12 Months 2013 2012 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 560 558 - -10% -7% 17% -1% 18% Western Europe 354 507-30% -4% - -26% -10% -16% Central and Eastern Europe 201 256-21% - - -21% -7% -14% Middle East and Africa 1,153 1,242-7% - -7% - - - Latin America 240 296-19% -4% -9% -6% -5% -1% Asia 594 564 5% - -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) 35
YTD Like-for-Like Sales Variance Cement Analysis by Region and Major Market as at March 31, 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. 2013-0.5% -0.2% -0.7% 7.4% -1.6% 14.4% 26.4% 27.0% 49.8% 37.4% -2.6% 12.6% 24.1% 17.1% 12.5% 10.3% 11.9% -9.0% 5.7% 6.3% 3.2% 7.3% 23.7% 10.0% 0.4% 1.5% -2.1% 0.8% 0.5% 0.7% -1.7% -1.0% -8.1% 18.6% 1.3% -2.0% -4.2% 6.1% 1.2% (2) 9.1% 11.9% -9.6% -5.2% 0.7% 3.3% 4.6% 5.6% 1.8% 1.7% -8.9% (3) 1.7% 12.2% 1.6% 0.5% Cement domestic markets 9.8% 0.9% 10.7% 0.3% 0.3% 0.0% 5.7% -2.6% 6.3% 45.0% 28.3% 47.8% 33.2% 3.5% 13.8% 33.2% 29.0% 2.9% 5.1% 12.6% -5.7% 10.3% 11.9% 5.0% 9.0% 14.8% 11.7% 12.6% 3.1% -1.6% Main Joint ventures UK Morocco China (disclosed for information and not included in the regional sub-totals disclosed above 5.5% -0.9% -3.5% 4.4% 3.6% -0.6% 4.6% 0.9% 3.0% (1) Other effects: including price effects, product and customer mix effects (2) Pure price effect up 3% (3) Impacted by geographical mix prices in East down 3% Pure price: +2.0% Geo mix: -1.1% 36
YTD Like-for-Like Sales Variance Aggregates and Concrete Analysis by Major Market as at March 31, 2014 Volume effect Other effects (1) Activity variation vs. 2013 Pure Aggregates France Poland United States Canada South Africa 3.9% 11.2% 34.5% -12.6% -3.3% 18.0% 4.3% 0.1% 11.9% 4.9% 8.1% 1.8% 8.2% 11.3% 46.4% -7.7% 4.8% 19.8% JV - United Kingdom (2) 8.8% 2.2% 11.0% Ready-mix Concrete France United States Canada South Africa India -0.6% -0.9% -14.9% -10.4% -12.1% -23.8% 1.4% -0.2% 4.6% -1.1% 9.8% 2.9% 0.8% -1.1% -10.3% -11.5% -2.3% -20.9% JV United Kingdom 11.5% 1.7% 13.2% (1) Other effects: including price effects, product and customer mix effects (2) All aggregates products Note : the contribution of the joint-ventures are disclosed for information and are not included in the totals disclosed 37
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. 2012 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 Q4 2012 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% 38
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. 2012 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 39
Cash Flow Robust Performance Mitigating the Seasonality of our Cash Flows 12 Months 1 st Quarter m 2013 2012 2013 2012 Cash flow from operations Change in working capital Sustaining capex 1,291 (36) (391) 1,580 (304) (392) 85 (154) (54) 31 (248) (48) Free cash flow 864 884 (123) (265) Development investments (1) Divestments (2) (678) 1,283 (425) 474 (184) 348 (225) 115 Cash flow after investments 1,469 933 41 (375) (3) (3) Dividends Equity issuance (repurchase) Currency fluctuation impact Change in fair value Others (507) 3 4 25 (7) (299) 9 24 (9) (1) (11) (13) (34) 9 (97) (72) - (27) 20 (40) Net debt reduction (increase) 987 657 (105) (494) Net debt at the beginning of period 11,317 11,974 9,846 10,710 Net debt at period end 10,330 11,317 9,951 11,204 (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 represented 2m in FY 2013 and 60m in FY 2012, excluding puts, already recorded as debt, exercised in the period (excluding a 28m put exercised in the second quarter 2012, and a 59m put exercised in the fourth quarter 2012). (2) Including net debt disposed of, and the disposals of ownership interests with no loss of control (3) The 0.2 billion euros of capital injection in 2013 of our new partner in India to finance new projects is included in the divestments, and the development investments include the related CAPEX 40
Statement of Financial position m Dec. 31, 2013 Dec. 31, 2012 m Dec. 31, 2013 Dec. 31, 2012 Capital Employed 28,085 28,657 Equity 16,506 17,748 Out of which: Goodwill Prop, plant & equip. Working Capital Other 11,612 14,752 504 1,217 12,184 14,992 391 1,090 Out of which: Equity attributable to the owners of the parent company Non controlling interests 14,555 1,951 15,666 2,082 Financial assets 656 698 Net assets held for sale (1) - 1,892 Net debt 10,330 11,317 Provisions 1,905 2,182 Total 28,741 31,247 Total 28,741 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. In addition, in 2012, the net assets held for sales also comprised the Gypsum activities in North America, as discontinued operations. They were divested in the course of the third quarter 2013. 41
Balanced Debt Maturity Schedule Average maturity of gross debt is 4 years and 1 month 2200 2000 1800 1600 1400 1200 1000 800 600 400 200 As at March 31, 2014 (1) In million euros Lafarge SA Commercial Paper and ST borrowings Lafarge SA Bonds & other MLT instruments Subsidiaries debt instruments Securitization programs 0 2014 2015 2016 2017 2018 2019 2020 After 2020 (1) Excluding puts on shares and derivatives instruments 42
Gross Debt (1) by Currency and by Source of Financing As at March 31, 2014 Split by source of financing Split by currency 13% 5% 9% 8% 9% 79% 77% Debentures Notes / private placements Banks and other EUR GBP USD Other Total Gross Debt (1) : 12.9Bn (1) Excluding puts on shares and derivatives instruments: 0.1Bn as at March 31, 2014 43
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 2.2-0.3 0.5 0.7 0.7 Cash and cash equivalent 3.0 Total sources of liquidity 6.4 Short- term debt and short-term portion of long-term debt (2.4) Credit line drawn as of March 31, 2014 - Total Available liquidity 4.0 44
Médiathèque Lafarge - Ignus Gerber Appendices - Other Highlights Portfolio France, Jean Bouin Stadium in Paris, a Ductal project designed by Rudy Ricciotti, architect
Built a Portfolio that will Profit from Cement Demand Growth Western Europe 0.8% -1.5% 3.3Bn 45% 2.4% Real GDP Growth CAGR 2013-2015 Cement Demand Growth CAGR 2012-2015 Lafarge Group Sales 2013 (total: 15.2Bn) Cement Utilization Rate 2012 (includes mothballed capacity) 6.2% 3.1Bn North America 72% 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 86% 2.7Bn Asia 73% 3.1% 4.9% 0.9Bn 79% 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 2013-2015 (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. 46
Built the Highest EBITDA Margin Returns in the Sector 28 12-month rolling EBITDA Margin Lafarge vs sector best and worst levels (% of sales) 26 24 22 20 18 65 bp Lafarge Sector Max Sector Min 16 14 530bp 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 Source: Lafarge estimates based on company quarterly reports 47
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
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 49
A History of Turning Research into Profits Self-leveling concrete Fast setting concrete Concrete without joints Insulating concrete Ultra-high performance 50
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 51
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% 2007 2008 2009 2010 2011 2012 2013 52
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 53
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 (www.lafarge.com) 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 (www.lafarge.com), 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. 54