Lafarge:Results as of June 30, 2013
Resilient Q2 Results Despite Particularly Adverse Weather Conditions
Net Debt Reduction Objective Confirmed
Performance and Innovation Objectives Confirmed
PARIS -- July 26, 2013
SECOND QUARTER KEY FIGURES
*Sales down 3% to €4,112m *Current operating income down 11% to
(stable like for like) €667m (-4% like for like)
*EBITDA down 8% to €922m *Net result Group share at €201m (€0.70
(-3% like for like) per share), vs. €39m in Q2 2012 (€0.14
FIRST-HALF KEY FIGURES
*Sales down 5% to €7,248m *Current operating income down 22% to
(-2% like for like) €791m (-12% like for like)
*EBITDA down 14% to €1,302m *Net result group share at €84m (€0.29
(-9% like for like) per share), vs. €-21m in H1 2012
(€-0.07 per share)
*Q2 EBITDA showed a good resilience, despite prevailing adverse weather
conditions, notably in North America, the absence of CO sales and
negative impact of foreign exchange.
*Performance and innovation measures generated respectively €100 million
and €60 million additional EBITDA in the quarter. In the first-half, we
have generated a total of €260 million, on track with our plan.
*EBITDA margin excluding CO was stable at constant scope and exchange
rates in the quarter, supported by performance and innovation measures and
price increases which offset the impact of lower volumes and cost
*Net income Group Share in the quarter, at €201 million favorably compares
to €39 million in Q2 2012 which was negatively impacted by exceptional
*Net debt at the end of June decreased €0.7 billion compared to end of June
last year, reflecting the strict control of investments and working
capital optimization which supported the 35% free cash flow increase in
the quarter. With the recently announced divestment of its US gypsum
operations, the Group has secured €1.5billion^1 since the beginning of
2012, of which €0.9 billion will be received in H2.
BRUNO LAFONT, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF LAFARGE, SAID:
“Our results in the second quarter resisted in an environment which was marked
by a conjunction of unfavorable circumstances. We increased prices and
performance and innovation results are in line with our 2013 €650 million
additional EBITDA target.
Taking into account first-half volumes, we foresee a cement demand growth in
our markets of between 0 to 3 percent in 2013, which implies more positive
trends in the second half.
We are fully mobilized to deliver on our strategy which objective is to create
sustainable value for our shareholders. This means focusing on actions within
our control, including through performance and innovation. Creating value also
means we will continue the utmost discipline in terms of capital allocation as
well as pursuing our portfolio optimization. And it starts with strengthening
our financial structure, which means to be back to an investment grade status
as quickly as possible, reducing net debt below €10 billion in 2013 and below
€9 billion in 2014.”
Overall the Group sees cement growth in its markets of between 0 to 3 percent
in 2013 versus 2012, factoring in low volumes in the first-half. 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. Cost inflation will continue, although
at a lower rate than in 2012, benefiting from positive trends in coal and
The Group targets to deliver additional EBITDA of €650 million in the year
through its performance and innovation measures.
Our objective is to reduce net debt to below €10 billion in 2013, and below €9
billion in 2014.
CONSOLIDATED ACCOUNTS AS AT JUNE 30, 2013
The Board of Directors of Lafarge, chaired by Bruno Lafont, met on July 25,
2013 and approved the accounts for the period ended June 30, 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 half-year financial report.
Second Quarter First-Half
2013 2012^(3) Gross Like for 2013 2012^(3) Gross Like for
(million 36.5 38.4 -5% -3% 65.2 69.7 -6% -4%
Aggregates 50.9 51.0 - -1% 83.8 84.2 - -4%
Concrete 8.3 8.6 -4% - 15.0 15.7 -5% -1%
Sales 4,112 4,261 -3% - 7,248 7,614 -5% -2%
EBITDA^(1) 922 1,002 -8% -3% 1,302 1,513 -14% -9%
EBITDA 22.4% 23.5% -110bps 18.0% 19.9% -190bps
Operating 667 750 -11% -4% 791 1,012 -22% -12%
Group 201 39 nm 84 (21) nm
per share 0.70 0.14 nm 0.29 (0.07) nm
Free cash 165 122 35% (132) (312) nm
Net debt 11,881 12,550 -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) Basic average number of shares outstanding of 287.3 million and 287.1
million for second quarter 2013 and 2012, and of 287.2 and 287.1 for the
first-half 2013 and 2012 respectively.
^(3) 2012 figures have been restated further to the application of IAS19R.
^(4) At constant scope and exchange rates.
EBITDA (*) RESULTS BY REGION
(€m) Second Quarter First-Half
2013 2012 Gross for 2013 2012 Gross for
North America 141 170 -17% -8% 129 128 1% 17%
Western Europe 145 173 -16% -14% 150 255 -41% -38%
Central and 80 101 -21% -21% 45 87 -48% -48%
Middle East and 304 329 -8% -1% 550 646 -15% -10%
Latin America 71 70 1% 7% 122 129 -5% 1%
Asia 181 159 14% 16% 306 268 14% 17%
TOTAL 922 1,002 -8% -3% 1,302 1,513 -14% -9%
^(*) EBITDA is defined as the current operating income before depreciation and
amortization on tangible and intangible assets and is a non-GAAP financial
^(1) At constant scope and exchange rates.
SALES DEVELOPMENT AND FINANCIAL RESULTS
Volumes declined in the second quarter, affected by a high comparable in 2012
and continuing adverse weather. Temporary fuel shortage in Egypt also put some
pressure on volumes.
Consolidated sales decreased 3% in the second quarter affected by adverse
foreign exchange. At constant scope and exchange rates they were stable, as
increased prices across all of our product lines to address cost inflation
offset the impact of lower volumes.
At constant scope and exchange rates, EBITDA declined by 3% with performance
and innovation actions almost offsetting the impact of lower volumes and the
absence of carbon credit sales in Q2 2013 (vs. CO proceeds of €24 million
in Q2 2012).
Net income Group Share in the quarter, at €201 million favorably compares to
€39 million in Q2 2012, negatively impacted by a pre-tax impairment of €200
million recorded on Greek assets.
Net debt declined by €0.7 billion relative to the end of June last year.
Compared to year-end 2012, the increase has been strictly limited despite
usual impact of seasonality. This reflects strict capex discipline, actions on
working capital optimization and divestments.
DIVESTMENTS AND INVESTMENTS
Lafarge received €49 million in cash for divestments in the quarter. With the
most recent divestments announced, the Group has secured €1.5 billion^1 of
divestments since January 1^st 2012, of which €655 million have been received
to date. The remainder will contribute to further debt reduction in 2013 and
we will continue to pursue further value creative divestments in 2013.
Investments totaled €230 million for the quarter.
*Sustaining capital expenditures remained strictly constrained at €72
*Development investments amounted to €158 million in the second quarter of
2013, including mainly investments in our on-going new cement plant
projects in Russia and India and in our plants of Exshaw and Ravena in
Going forward, the Group plans to continue to seize growth opportunities of
our uniquely diversified portfolio, selectively investing in its core markets.
The analyst presentation of results and the half-year 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 July 26, 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 76 77 22 27
- Dial in (UK or International): +44(0)20 3427 1905
- Dial in (US): +1646 254 3366
Please note that in addition to the web cast replay, a conference call
playback will be available until August 2, 2013 midnight at the following
- France playback number: +33 (0)1 74 20 28 00 (pin code: 2958760#)
- UK or International playback number: +44 (0)20 3427 0598 (pin code:
- US playback number: +1347366 9565 (pin code: 2958760#)
Lafarge’s next financial publication – 3rd Quarter 2013 results – will be on
November 6, 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.
^1 Excluding €0.2bn capital injection of our new partner in India, as
announced in May 2013
Christel des Royeries, +33 (0)1 44 34 19 47
Anne Plaisance, +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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