LAFARGE:Seasonally Low Q1 Impacted by Harsh Weather Conditions
€100M EBITDA Achieved in the Quarter Through Performance and Innovation
Measures, on Track to Achieve Full Year Objective
PARIS -- May 7, 2013
Lafarge (Paris : LG)
FIRST QUARTER KEY FIGURES
*Sales down 6% to €3,136m (-4%
like for like) *Net result group share at €-117m
*EBITDA down 26% to €380m (-19% (€-0.41 per share), vs.
like for like) €-60m in Q1 2012 (€-0.21 per
*Current operating income down 53% share)
(-38% like for like)
Note that first quarter results reflect seasonality. They are not indicative
of full year trends and traditionally lead to lower results relative to other
quarters in the year.
*First quarter results were affected by lower volumes reflecting overall
harsh weather conditions, temporary production limitations in Algeria and
Egypt and two working days less in the quarter representing a third of the
*The Group has continued to successfully implement price increases to
address cost inflation. These actions have gained pace during the quarter
and will fully deliver in the coming months.
*Performance and innovation measures continued to deliver results and
generated respectively €60 million and €40 million EBITDA in the quarter,
despite low volumes. The Group is on track to achieve its target to
generate incremental EBITDA of €650 million from performance and
innovation actions in 2013.
*Net debt at the end of March decreased €0.6 billion compared to Q1 last
year. It moved slightly higher compared to year-end 2012 due to normal
seasonal working capital needs. The Group continues to progress towards
its debt reduction target. With the most recent divestment of our plant in
Ukraine, we have secured €1billion of disposals since January 1^st 2012.
BRUNO LAFONT, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF LAFARGE, SAID:
“The first quarter traditionally represents a small proportion of our results
and is not indicative of full year trends. Our outlook remains unchanged and
we expect to see cement demand growth in our markets of between 1 to 4 percent
We continued to be fully focused on actions within our control. Price
increases have been actively implemented in most markets and we will reap the
full benefit as the year unfolds. Our performance and innovation actions
delivered €100 million EBITDA in the quarter, on track with our 2013 target of
I am confident that by the end of 2014 we will have delivered most of our
2012-2015 plan to generate €1.75billion additional EBITDA through performance
and innovation measures, close to one year ahead of our initial objective. We
will also reduce net debt to below €10 billion as soon as possible in 2013.”
Overall the Group continues to see cement demand increasing for the full year
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 will
benefit 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 targets to reduce net debt to below €10 billion as soon as possible
in 2013. Capital expenditures will be limited initially to €800 million in
2013. While maintaining our debt reduction objective, additional divestments
during the rest of the year may lead to an increase in the capex number.
CONSOLIDATED ACCOUNTS AS AT MARCH 31, 2013
The Board of Directors of Lafarge, chaired by Bruno Lafont, met on May 6, 2013
and approved the accounts for the period ended March 31, 2013. Further to
their limited review of the interim condensed consolidated financial
statements of Lafarge, the auditors have established a report which is
included in the interim financial report.
2013 2012^(3) Gross Like for like^(4)
Cement (million tons) 28.7 31.3 -8% -6%
Pure Aggregates (million tons) 32.9 33.2 -1% -7%
Ready-Mix Concrete (million 6.7 7.1 -6% -3%
Results (million euros)
Sales 3,136 3,353 -6% -4%
EBITDA^(1) 380 511 -26% -19%
EBITDA margin (%) 12.1% 15.2%
Current Operating Income 124 262 -53% -38%
Net income Group share (117) (60) nm
Earnings per share (€)^(2) (0.41) (0.21) nm
Free cash flow^(1) (297) (434) 32%
Net debt 11,812 12,364 -4%
^(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) Basic average number of shares outstanding of 287.1 million and 287.0
million for first quarter 2013 and 2012, respectively.
^(3) Figures have been restated further to the application of IAS19R.
^(4) At constant scope and exchange rates.
EBITDA (*) RESULTS BY REGION
(€m) First Quarter
2013 2012 Variation
North America (12) (42) 71%
Western Europe 5 82 -94%
Central and Eastern Europe (35) (14) nm
Middle East and Africa 246 317 -22%
Latin America 51 59 -14%
Asia 125 109 15%
TOTAL 380 511 -26%
^(*) EBITDA is defined as the current operating income before depreciation and
amortization on tangible and intangible assets and is a non-GAAP financial
SALES DEVELOPMENT AND FINANCIAL RESULTS
Volumes for our activities declined in the quarter, notably affected by a
particularly long winter in Europe and North America, a high comparable in Q1
2012 and two trading days less on average. A 10-day production interruption in
Algeria in March, now solved, and gas shortage in Egypt, against which
solutions are actively developed, added to the overall impact.
Consolidated sales were down 4% at constant scope and exchange rates, as
increased prices across all of our product lines to address cost inflation
partly offset the declines in volumes.
At constant scope and exchange rates, EBITDA declined by 19% with performance
and innovation actions and improved pricing mitigating the impact of lower
volumes and cost inflation. No carbon credit sales in Q1 2013, while we had
CO proceeds of €22 million in Q1 2012, was offset by a one-time €20 million
gain linked to management’s decision to review pension commitments in North
Net loss Group Share in the quarter, at (€117) million reflects the marked
seasonality of our volumes.
Net debt declined by €0.6 billion relative to Q1 last year but was slightly
higher compared to year-end 2012 due to normal seasonal working capital needs.
DIVESTMENTS AND INVESTMENTS
Lafarge received €132 million in cash for divestments in the quarter,
including partial proceeds from the sale of assets in the UK and aggregates
quarries in Georgia in the United States. With the Ukraine divestment
announced on April 26, we have secured €1 billion of divestments since January
1^st 2012, of which €600 million have been received to date. The remainder, or
€400 million, will contribute to further debt reduction in 2013 and we will
continue to pursue further value creative divestments.
Investments totaled €296 million for the quarter.
*Sustaining capital expenditures remained stable at €53 million.
*Development investments amounted to €243 million in the first quarter of
2013, representing investments in our on-going new cement plants projects
in Russia and India as well as our fast-return new grinding capacities in
the Philippines, Algeria and Brazil.
Going forward, we plan to continue to seize growth opportunities of our
uniquely diversified portfolio, selectively investing in our core markets.
This will include further debottlenecking or brownfield projects in emerging
markets such as in India or Iraq as well as investments in North America to
fully benefit from the upturn in this market, with notably the expansion
project of our Exshaw plant near Calgary and the renovation of our Ravena
plant in northeast US which supplies the New York market.
The analyst presentation of results and the quarterly financial report,
including the interim management report and the condensed consolidated
financial statements are available on the Lafarge Website: www.lafarge.com
There will be an analyst conference call at 9:00 CET, on May 7, 2013 hosted by
Jean-Jacques Gauthier, Chief Financial Officer. The presentation will be made
in English with slides that can be downloaded from the Lafarge website
The presentation may be followed via an audiocast 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 3140 8286
- Dial in (US): +1646 254 3365
Please note that in addition to the web cast replay, a conference call
playback will be available until May 15, 2013 midnight at the following
- France playback number: +33 (0)1 74 20 28 00 (pin code: 2841601#)
- UK or International playback number: +44 (0)20 3427 0598 (pin code:
- US playback number: +1347366 9565 (pin code: 2841601#)
Lafarge’s next financial publication – 2nd Quarter 2013 results – will be on
July 26, 2013 (before the NYSE Euronext Paris stock market opens).
NOTES TO EDITORS
A world leader in building materials, Lafarge employs 65,000 people in 64
countries, and posted sales of €15.8 billion in 2012. As a top-ranking player
in its Cement, Aggregates and Concrete businesses, it contributes to the
construction of cities around the world, through its innovative solutions
providing them with more housing and making them more compact, more durable,
more beautiful, and better connected. With the world’s leading building
materials research facility, Lafarge places innovation at the heart of its
priorities in order to contribute to more sustainable construction and to
better serve architectural creativity. 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. More information is available on Lafarge's website: www.lafarge.com
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 (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.
Christel des Royeries: +33 (0)1 44 34 19 47
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