Results as of March 31, 2012

NYSE Euronext Paris: LG
05.04.2012
 
Solid increase in sales and operating results
New organization in place to accelerate growth and reinforce efficiency

 

First-quarter key figures

  • Sales up 5% to €3,353m
  • EBITDA up 8% to €516m
  • Current operating income up 28% to €267m
  • Net income group share improved to €18m (€0.06 per share), excluding restructuring charges

 

Note that first quarter results reflect seasonality, traditionally leading to lower net results relative to other quarters in the year.

Group Highlights

  • Sales increased for the quarter, driven by improved pricing across all product lines and higher cement volumes in emerging markets.
  • EBITDA and current operating income rose in the quarter, driven by higher activity in Middle East and Africa, Asia, Latin America, and North America.
  • The Group achieved €70 million of cost savings and is on track to reach at least €400 million for the year.
  • Net income group share and earnings per share improved when excluding the first quarter 2012 restructuring charges of €94 million taken as part of implementing the cost reduction program.
  • Strong liquidity improved through the extension of a credit facility that brings total undrawn back-up committed facilities to €3.4 billion with an average maturity of about 3 years.
  • The UK Competition Commission approved the proposed joint venture between Lafarge's UK operations and Tarmac, subject to a number of conditions which both parties are confident can be met.
  • The Group implemented its new country-based organization in the first quarter which will accelerate organic growth and innovation as well as reinforce efficiency.

 

Bruno Lafont, Chairman and Chief Executive Officer of Lafarge, said:

"While the first quarter results traditionally represent a small quarter and we remain cautious for the year, the Group was encouraged by the higher revenues and EBITDA growth. We successfully launched our new cost reduction program and it is positive that price actions are taking hold to address cost inflation.

The Group is focused on debt reduction, strict cost discipline, the maximization of its cash flows, and the achievement of at least €1 billion of strategic divestments this year. The management reorganization accelerates the Group's actions towards efficiency and organic growth."

Outlook

Overall the Group continues to see cement demand moving higher and maintains its estimated market growth of between 1 to 4 percent in 2012 versus 2011. 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 increase at a lower rate than in 2011.

Consolidated accounts as of March 31, 2012

The Board of Directors of Lafarge, chaired by Bruno Lafont, met on May 3, 2012 and approved the accounts for the period ended March 31, 2012. 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.






Consolidated financial statements
  First Quarter
  2012 2011 (5) Variation
Gross Like for like
Volumes        
Cement (million tons) 31.3 31.1 1 % 1 %
Aggregates (million tons) 33.2 34.7 -4 % -6 %
RMX concrete (million m3) 7.1 7.6 -7 % -3 %
Results (million euros)        
Sales 3,353 3,206 5 % 5 %
EBITDA (1) 516 479 8 % 6 %
EBITDA margin (%) 15.4 % 14.9 % 50 pb  
Current operating income 267 208 28 % 17 %
Net income group share (2) (44) (29)    
Earnings per share (€) (3) (0.15) (0.10)    
Free cash flow (434) (275)    
Group net debt (4) 12,364 14,240 -13 %  

 

(1) EBITDA is defined as the current operating income before depreciation and amortization on tangible and intangible assets and is a non-GAAP financial measure.
(2) Net income group share includes pre-tax restructuring charges of €94m and €9m for the first quarters 2012 and 2011, respectively (€62m and €5m after tax, respectively).
(3) Basic average number of shares outstanding of 287 million at the end of March 2012 and 286 million at the end of March 2011.
(4) Group net debt slightly increased from December 31, 2011 due to normal seasonal working capital changes.
(5) Figures for 2011, excluding net debt, are restated to reflect the reclassification of the Gypsum activities as discontinued operations.

 

EBITDA results by region (1)





Current operating income by regions
(€m) First quater
  2012 2011 (2) Variation
North America (46) (75) 39 %
Western Europe 94 151 -38 %
Central & Eastern Europe (14) (9) -56 %
Middle East & Africa 315 274 15 %
Latin America 59 53 11 %
Asia 108 85 27 %
TOTAL 516 479 8 %

 

(1) EBITDA is defined as the current operating income before depreciation and amortization on tangible and intangible assets and is a non-GAAP financial measure.
(2) Figures for 2011 are restated to reflect the reclassification of the Gypsum activities as discontinued operations.

Sales development and financial results

Lafarge experienced higher sales volumes for cement, while aggregates and concrete sales volumes declined in the quarter. For cement, sales volumes increased 1%, reflecting volume improvements in Middle East and Africa, Latin America, and Asia. Aggregates sales volumes declined by 4% and concrete volumes declined by 7%, reflecting the impact of severe cold weather on construction in Western and Eastern Europe compared to last year.

Consolidated sales moved higher, up 5%, supported by increased prices across all of our product lines and favorable cement volumes in the majority of our regions.

EBITDA improved for the quarter, up 8%. Significant improvement in North America and double digit EBITDA increases in Middle East and Africa, Latin America, and Asia supported the higher growth. Declines occurred in Western and Eastern Europe due to the impact of poor weather conditions on construction in February, €23 million lower proceeds from the sale of carbon credits, and a challenging economic environment in Spain and Greece. Overall, cost reduction actions contributed €70 million to the results in the first quarter.

Net Income Group Share declined to (€44) million primarily due to €94 million of pre-tax restructuring charges taken as part of the implementation of the Group's 500 million euros cost savings program.

Net debt declined by €1.9 billion relative to last year and moved slightly higher compared to year-end 2011 due to normal seasonal working capital needs.

Investments, divestments and Liquidity

Investments totaled €188 million for the quarter, down from €293 million in 2011.

  • Sustaining capital expenditures remained stable at €51 million.
  • Internal development capital expenditures and acquisitions declined from €243 million in 2011 to €137 million in 2012.

Lafarge received €71 million in cash for divestments in the quarter, including sales of minority stakes, and plans to divest more than €1 billion in 2012.

As of March 31, 2012, the Group had €3.4 billion in undrawn committed credit lines, with an average maturity that was extended to about 3 years, in addition to €2.6 billion of cash on hand.

 

Additional information

The analyst presentation of results and the quarterly financial report, including the interim management report, the condensed consolidated financial statements and the notes are available on this website.

Practical information: 

There will be an analyst conference call at 9:00 CET, on May 4, 2012 hosted by Jean-Jacques Gauthier, Chief Financial Officer. The presentation will be made in English with slides that can be downloaded from this website.

The presentation may be followed via a live web cast on the Lafarge website as well as via teleconference:
- Dial in (France): +33(0)1 70 99 42 86
- 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 the 11th of May 2012 midnight at the following numbers:
- France playback number: +33 (0)1 74 20 28 00 (pin code: 4465037#)
- UK or International playback number: +44 (0)20 7111 1244 (pin code: 4465037#)
- US playback number: +1 347 366 9565 (pin code: 4465037#)

Lafarge's next financial publication - 2nd Quarter 2012 results - will be on July 27, 2012
(before the NYSE Euronext Paris stock market opens).

 

Notes to editors

Located in 64 countries with 68,000 employees, Lafarge is a world leader in building materials, with top-ranking positions in its Cement, Aggregates & Concrete businesses. In 2011, Lafarge posted sales of 15.3 billion euros.

For the second year in a row, Lafarge ranked amongst the top-10 of 500 companies evaluated by the "Carbon Disclosure Project" in recognition of their strategy and actions against global warming. 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.

This release may contain forward-looking statements. Such forward-looking statements do not constitute forecasts regarding the Company's results or any other performance indicator, but rather trends or targets, as the case may be. These statements are by their nature subject to risks and uncertainties as described in the Company's annual report available on its Internet website (www.lafarge.com). These statements do not reflect future performance of the Company, which may materially differ. The Company does not undertake to provide updates of these statements.

More comprehensive information about Lafarge may be obtained on its Internet website (www.lafarge.com), under Regulated Information.
This document does not constitute an offer to sell, or a solicitation of an offer to buy Lafarge shares.

 

Documents

  • The press release (pdf, 91.69 KB)
  • The financial report (pdf, 950.35 KB)
  • The slides for the analyst presentation (pdf, 1.54 MB)