Lafarge releases its results for 3Q13

Highlights

• Volume trends improved month after month in 3Q13, sustained by ongoing growth in most emerging markets. However, 3Q13 saw adverse exchange rates, which had a negative impact of 7% on both EBITDA and sales.
• EBITDA in 3Q13 grew 4% at constant scope and exchange rates and EBITDA margins improved 50 basis points on a like-for-like basis, supported by higher volumes, firm prices and the acceleration of cost reductions and innovation measures. In the first nine months these measures have generated €470 million.
• Net debt at the end of September, at €10.9 billion, was reduced by €1.3 billion compared to 2012 and by €0.9 billion in the quarter. This was notably due to divestments made at attractive multiples.
• Lafarge confirms its objective to deliver its 2012 – 2015 plan by the end of 2014, with at least €600 million of EBITDA coming from cost reduction and innovation measures in 2014.
• The company has announced new objectives beyond 2014, planning to generate at least €1.1 billion of additional EBITDA from its actions in 2015 – 2016.

3Q13 key figures

• Consolidated sales are down 4% to €4236 million and up 4% on a like-for-like basis.
• EBITDA decreased by 6% to €1007 million and up 4% on a like-for-like basis.
• Current operating income fell by 7% to €755 million, but increased by 5% on a like-for-like basis.
• Net result Group share is up 38% to €308 million (€1.06/share).

Nine month key figures

• Sales are down 4% to €11 484 million and stable on a like-for-like basis.
• EBITDA fell by 10% to €2309 million and decreased by 3% on a like-for-like basis.
• Current operating income fell by 15% to €1546 million and decreased by 5% on a like-for-like basis.
• Net result Group share is up 38% to €388 million (€1.35/share).

Outlook

Lafarge has seen cement growth in its markets of between 0 – 3% in 2013 compared to 2012. This suggests better trends in 2H13 compared to 1H13 as market recovery is becoming evident in the USA, growth in most emerging markets continues and Europe is showing stabilisation at a low level. Higher pricing is expected for the year and cost inflation continues, although at a lower rate than 2012. Lafarge aims to deliver additional EBITDA of €650 million in 2013 through cost reduction and innovation measures. The objective is to reduce net debt to below €10 billion in 2013, and below €9 billion in 2014.

Bruno Lafont, Chairman and Chief Executive Officer of Lafarge, commented on the results. “Looking ahead, we will benefit from three organic growth drivers: continuing growth in existing countries, accelerating growth through innovation and progressive recovery in mature markets,” said Lafont. “All our measures strive towards growth in sales, cash flows and returns and our priority is to create sustainable value for our shareholders.”

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldcement.com/europe-cis/06112013/lafarge_release_its_results_for_3q13_380/