Lafarge: Results as of December 31, 2012

  Lafarge:Results as of December 31, 2012




Business Wire

PARIS -- February 20, 2013

Regulatory News:

Lafarge (Paris:LG):


  *Sales stable at €3,809m          *Net income Group share increased
  *EBITDA up 7% to €856m           to €100m (versus a loss of € 3m in
  *Current operating income           2011), or €0.34 per share
    up 12% to €603m


  *Sales up 3.5% to                *Net income Group share reached
    €15,816m                          €432m, or €1.50 per share.
  *EBITDA up 7% to €3,450m           Excluding one-off items^1, net
  *Current operating              income group share increased 70% to
    income up 12% to                  €772m, or €2.69 per share
    €2,440m                         *Dividend of €1 per share, subject
                                      to AGM approval


  *Sales increased 3.5% year-to-date, driven by successful price actions
    across all product lines to respond to cost inflation and by growth in
    emerging markets.
  *The Group delivered on its cost savings target, achieving €410 million in
    the year; innovation plan roll out is gaining pace and actions generated
    €80 million of EBITDA in 2012.
  *EBITDA and current operating income rose 7% and 12% respectively in the
    periods presented despite the continued slowdown in Europe. Operations
    outside of Europe generated more than 75% of the Group’s EBITDA and rose
    17% in the quarter and 19% year-to-date. Group EBITDA margin improved 130
    basis points in both periods when excluding carbon credit sales.
  *Net income Group share reached €432 million for the year, down 27% mainly
    because of the one-time €466million gain related to gypsum divestments in
    2011. Excluding one-offs items^1, net income Group share improved 70%
    year-to-date to €772 million.
  *Net debt declined €0.9 billion in the fourth quarter, dropping to €11.3
    billion. The Group has secured close to €900million of divestments, of
    which €474 million were received in 2012, and will shortly exceed its
    objective of securing €1 billion.


“We have delivered on our objectives for 2012 and our results grew for the
fifth consecutive quarter, driven by strong operational performance and growth
in emerging markets which generated close to 60% of our sales.

We are progressing fast and I am convinced that we will deliver most of our
2012-2015 plan to generate €1.75billion additional EBITDA through cost
reduction and innovation measures by the end of 2014, close to one year ahead
of our initial objective. We target to deliver €650 million additional EBITDA
from these measures in 2013.

Whilst we adopt a cautious stance on the current market environment, our
actions will drive net debt reduction to below €10 billion as soon as possible
in 2013.

Going forward we will continue to extract the full potential of our uniquely
diversified portfolio of high quality assets, selectively investing in organic
growth in our core markets. All our actions strive towards growth in sales,
earnings, return on capital employed and cash flows and my priority is to
maximize value creation for our shareholders".

^1 Asset impairment in Q2 2012 on Greece and in Q4 2011 on Western Europe and
the Emirates, restructuring charges, and one-time gains in 2011 on Gypsum


Overall the Group sees cement demand moving higher and estimates market growth
of between 1 to 4 percent in 2013 versus 2012. Emerging markets continue to be
the main driver of demand and Lafarge benefits from its well-balanced
geographic spread of high quality assets.

We expect higher pricing for the year and that cost inflation will continue,
although at a slightly lower rate than in 2012.

The Group maintains its target of reducing net debt to below €10 billion as
soon as possible in 2013. Capital expenditures will be limited initially to
€800 million in 2013. Additional divestments beyond the current target of
€1billion since the beginning of 2012 may lead to an increase of this
expenditures level while maintaining our debt reduction objective.


The Board of Directors of Lafarge, chaired by Bruno Lafont, met on February
19, 2013 and approved the accounts for the year ended December 31, 2012. The
auditors have completed their audit on the consolidated financial statements.
Their report is in the process of being issued.

(€m)                FOURTH QUARTER                             YEAR-TO-DATE
                                    Variation                                Variation
                   2012   2011     Gross    Like for       2012    2011    Gross   Like for
                                                like^(4)                                  like^(4)
(million            34.8   36.5     -5%      -4%            141.1   145.3   -3%     -2%
(million            47.1   49.1     -4%      -5%            188.3   192.7   -2%     -3%
RMX Concrete        7.8    8.3      -5%      -3%            31.8    33.8    -6%     -2%
(million m^3)
Sales               3,809  3,813    -        -1%            15,816  15,284  3%      2%
EBITDA ^(1)         856    798      7%       5%             3,450   3,217   7%      4%
EBITDA margin       22.5%  20.9%    +160bps                21.8%   21.0%   +80bps  
operating           603    538      12%      9%             2,440   2,179   12%     7%
Net income
Group share         100    (3)                             432     593     -27%   
Net income
before              130    (109)                            772     453     70%
Earnings per
share (€)           €0.34  €(0.01)                          €1.50   €2.07   -28%
Earnings per
share before        €0.45  €(0.38)                          €2.69   €1.58   70%
Free cash           673    701      -4%                      884     1,208   -27%
flow ^(1)
Group net                                                      11,317  11,974  -5%

^(1) EBITDA is defined as the current operating income before depreciation and
amortization on tangible and intangible assets and free cash flow is the net
cash generated or used in continuing operating activities less sustaining
capital expenditures. They are both non-GAAP financial measures.

^(2) Net income group share includes pre-tax restructuring charges of €40m and
€41m for fourth quarter 2012 and 2011, respectively; €406m for impairment of
Greek assets and pre-tax restructuring charges year-to-date 2012, €346m for
impairment charges in Western Europe and the Emirates and restructuring
charges offset by one-time gains of €466m related to gypsum divestments
year-to-date 2011.

^(3) Basic average number of shares outstanding of 287.1 million and 287.0
million for fourth quarter 2012 and 2011, respectively, and 287.1million and
286.5 million year-to-date 2012 and 2011, respectively.

^(4) At constant scope and exchange rates.


(€m)               FOURTH QUARTER             YEAR-TO-DATE
                     2012  2011  Variation       2012   2011   Variation
North America         163   140   16%             546    431    27%
Western Europe        118   147   -20%            556    669    -17%
Central &             41    56    -27%            255    329    -22%
Eastern Europe
Middle East &         293   266   10%             1,235  1,131  9%
Latin America         85    66    29%             296    246    20%
Asia                  156   123   27%             562    411    37%
TOTAL                 856   798   7%              3,450  3,217  7%

^(*) EBITDA is defined as the current operating income before depreciation and
amortization on tangible and intangible assets and is a non-GAAP financial


Sales volumes declined year-to-date, affected by the construction slowdown in
Europe. However, solid domestic growth in Asia, Latin America and most
countries of Middle East Africa largely mitigated this decline. In the fourth
quarter, unfavorable weather conditions in the northern hemisphere, notably in
the United States and in Central and Eastern Europe, weighed on volume trends.

Consolidated sales moved higher, up 3.5% year-to-date, supported by successful
price actions to respond to cost inflation across all our product lines,
higher cement volumes in Latin America and Asia, and favorable foreign
exchange effects.

EBITDA improved 7% for both periods presented, supported by growth in Middle
East & Africa, Latin America, Asia, and North America and favorable foreign
exchange. Declines occurred in Western and Central & Eastern Europe due to the
impact of poor weather conditions in the first and fourth quarters, €78
million of lower proceeds from the sale of carbon credits year-to-date
compared to last year, and a challenging economic environment.

The Group continued to implement its performance and innovation  measures;
cost reduction actions contributed €410 million and innovation generated €80
million to year-to-date results.

Net income Group share declined, reflecting mostly a higher base comparison
due to the one-off gains recorded in 2011 on the gypsum divestments. Excluding
one-off items^1, net income Group share improved 70% year-to-date to €772

At €11.3 billion, net debt declined by €0.9 billion in the quarter and €0.7
billion compared to December 2011.


Investments totaled €817 million for year-to-date 2012, down from €1.2 billion
in 2011.

  *Sustaining capital expenditure was stable, at €392 million versus €389
    million in 2011.
  *Internal development capital expenditure and acquisitions declined to €425
    million in 2012 from €810 million in 2011.

Lafarge received €474 million in cash from divestments through 2012, including
sales of minority stakes and the divestment of assets in Missouri and Oklahoma
(USA). Close to €900 million of divestments have been secured to date.

As at December 31, 2012, the Group had €3.4 billion in undrawn committed
credit lines, with an average maturity of 2.5 years, in addition to €2.7
billion of cash on hand. Liquidity was further improved in the year through
the issuance of €815 million mid-term bonds with no financial covenants and
rates below 6 percent.

^1 Asset impairment in Q2 2012 on Greece and in Q4 2011 on Western Europe and
the Emirates, restructuring charges, and one-time gains in 2011 on Gypsum


The analyst presentation of results and the financial report for the fourth
quarter ended December 31, 2012, including the management report and
consolidated financial statements (to the exception of the notes) are
available on the Lafarge

Practical information:

The annual results presentations will be hosted by Bruno Lafont, Chairman and
CEO and Jean-Jacques Gauthier, Chief Financial Officer.

There will be an analyst presentation at 9:00 AM CET at the Pavillon Gabriel,
5 avenue Gabriel, 75008 Paris. The presentation will be made in English with
slides that can be downloaded from the Lafarge website (

The presentation may be followed via a live audio cast on the Lafarge website
as well as via teleconference:
- Dial in (France): +33 (0)1 70 48 01 66
- Dial in (UK or International): +44 (0)20 3364 5381
- Dial in (US): +1 646 254 3388

Please note that in addition to the web cast replay, a conference call
playback will be available until the 27^th of February 2013 midnight at the
following numbers:
- France playback number: +33 (0)1 74 20 28 00 (pin code: 7135431#)
- UK or International playback number: +44 (0)20 3427 0598 (code: 4066080#)
- US playback number: +1 347 366 9565 (code: 4066080#)

A press conference will be held at 11:00 AM CET at the Pavillon Gabriel, 5
avenue Gabriel, 75008 Paris.

The presentation will be made in French with simultaneous English translation,
available on-site or by phone:
- From France: +33 (1) 70 91 86 60
- From UK: +44 (0)20 7136 20 55

In addition, a conference call playback will be available until the 27^th of
February 2013 midnight:
- France playback number: +33 (0)1 74 20 28 00 (pin code: 92 93244)
- UK playback number: +44 (0)20 3427 0598 (pin code: 14 56 212)

Lafarge’s next financial publication – 1^st Quarter 2013 results – will be on
May 7, 2013
(before the NYSE Euronext Paris stock market opens).


Located in 64 countries with 65,000 employees, Lafarge is a world leader in
building materials, with top-ranking positions in its Cement, Aggregates &
Concrete businesses. In 2012, Lafarge posted sales of 15.8billion euros.

Since 2010, the Lafarge Group has been part of the Dow Jones Sustainability
World Index, the first global sustainability benchmark, in recognition of its
sustainable development actions. With the world’s leading building materials
research facility, Lafarge places innovation at the heart of its priorities,
working for sustainable construction and architectural creativity.

Additional information is available on the website at

Important disclaimer - forward-looking statements:

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.


Christel des Royeries: + 33(0) 1 44 34 19 47
Mélanie Coviaux : +33(0) 1 44 34 18 18
Caroline Winkler: +33(0) 1 44 34 11 70
Stéphanie Billet: +33 (0) 1 44 34 93 71
Michael Bennett: +33 (0) 1 44 34 11 51
Laurence Le Gouguec: +33 (0) 1 44 34 94 59
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