Shareholders'
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SHAREHOLDERS’ GUIDE Summary 1/ LAFARGE 2/ CORPORATE IN 2011 – page 4 GOVERNANCE – page 14 Lafarge Individual Investor Relations is glad to present you the 2012 shareholders’ guide. The purpose of this guide is to answer your questions 3/ LAFARGE ON THE STOCK 4/ LAFARGE SHAREHOLDERS MARKET – page 18 – page 26 about Lafarge. We hope this guide will meet your expectations and for further information,we recommend that you contact us at toll free number, for calls from France only. 5/ MANAGE YOUR SHARES – page 34 02 I LAFARGE I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 2011 AFARGE IN 1/ L BRUNO LAFONT Chairman and Chief Executive Officer of Lafarge GOVERNANCE Dear shareholders, 2/ CORPORATE In 2011, in a highly contrasting economic environment, we accomplished three major objectives: we met our debt reduction target of 2 billion euros; we refocused on our core businesses of Cement, Aggregates and Concrete; and we undertook a project to profoundly reorganize the Group. Lafarge enters 2012 with caution and determination and concentrates its efforts to maximize its cash-flows and to reduce debt: a 500 million euros cost savings STOCK MARKET program, with a target of at least 400 million euros of savings generated by the end of 3/ LAFARGE ON THE 2012, actions on our sale prices in response to cost inflation, capping our investments at 800 million euros and pressing ahead with our divestment program, which should raise more than 1 billion euros. Reinforced by a new organization, these actions will enable us to reduce our debt substantially in 2012, strengthen our financial structure and differentiate our offer still further to the construction markets. LAFARGE We also maintain our efforts in strengthening the link with our shareholders. 4/ SHAREHOLDERS In 2012, I will personally have the pleasure to meet you during several conferences and we are continuously trying to keep you informed. For instance, this guide is presented this year in a new version. Yours sincerely, 5/ MANAGE YOUR SHARES BRUNO LAFONT Lafarge I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 I 03 LAFARGE IN 2011 Group Profile – 06 Strategy, priorities and commitments – 09 Group Businesses – 10 > Everyday life in China - urban planning and street atmosphere in Shanghai downtown, Lujiazui Central Green park, people walking along a basin. 04 I LAFARGE I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 2011 AFARGE IN 1/ L Lafarge I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 I 05 Lafarge, world leader Lafarge is a world leader in building materials, with top-ranking positions in its Cement, Aggregates & Concrete businesses. With a diversified and balanced geographic portfolio and 68,000 employees in 64 countries, Lafarge is at the heart of global growth supporting developing economies and responding to the tremendous need for housing and infrastructure in emerging countries. % Western Europe 22.5 GROUP North America 20.3 15,284 REVENUES BY GEOGRAPHIC Africa & Middle East 25.5 Sales in 2011 AREA Central & Eastern Europe 8.5 In million euros Latin America 6.8 Asia 16.4 06 I LAFARGE I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 Lafarge – In figures 2011 AFARGE IN 1/ L REVENUES in million euros 2011 15,284 2010 14,834 (4) 2009 15,884 (5) EBITDA (1) in million euros 2011 3,217 2010 3,488 (4) 2009 3,600 (5) CURENT OPERATING INCOME (2) in million euros 2011 2,179 2010 2,393 (4) 2009 2,477 (5) FREE CASH-FLOW (3) in million euros 2011 1,208 2010 1,761 (4) 2009 2,834 (5) GROUP NET DEBT in million euros 2011 11,974 2010 13,993 2009 13,795 NET INCOME GROUP SHARE in million euros 2011 593 2010 827 2009 736 NET EARNINGS PER SHARE in euros 2011 2.07 2010 2.89 2009 2.77 DIVIDEND PER SHARE in euros 2011 0.50 2010 1.00 2009 2.00 (1) Defined as the current operating income before depreciation and amortization on tangible and intangible assets. (2) Defined as operating income before capital gains, impairment, restructuring and others. (3) Defined as net operating cash generated by operations less sustaining capital expenditures. (4) 2010 figures have been restated following the disposal of Gypsum activities. The free cash-flow includes the 338 million euros one-time payment for the Gypsum competition fine. (5) Data published in 2010 for 2009 and not restated following the disposal of Gypsum activities. Lafarge I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 I 07 08 I LAFARGE I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 2011 AFARGE IN Strategy, priorities 1/ L and commitments Our strategy aims at strengthening our position as world leader COMMITMENTS in building materials, in terms of market share, innovation, TO SUSTAINABLE recognition by customers, geographical portfolio, and profitability. DEVELOPMENT Preservation of the Two strategic priorities environment and combating climate change: natural resource • Cement, primarily in emerging markets, where demography and urbanization drive savings, emissions reduction notably CO and biodiversity the needs for housing and infrastructure. 2 protection. • Innovative products and solutions, particularly construction systems, including sustainable construction solutions, which is becoming more prevalent in an increa- Health protection and medical sing number of countries. care for our employees and neighbouring communities. More generally the Group’s social In 2012, three key priorities involvement, as illustrated by the Group’s actions in the economic • Cost reduction acceleration with a 500 million euros cost savings program, out of development of communities which at least 400 million euros of savings to be generated by the end of 2012. living around its sites. • Action on our sale prices in response to cost inflation. • Debt reduction: maximizing cash-flows, capping our investments and divesting for more than 1 billion euros. ❙ > China, South Railway Station, Beijing. Lafarge I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 I 09 > Slovenia, sports hall in Podcetrtek. Cement – World Leader Cement is the principal hydraulic binder. It is the Wherever possible, we use advanced plant principal strength-giving and property controlling designs (such as preheaters to heat raw materials component of concrete. It is a high quality, cost- prior to entering the kiln) and waste materials effective building material that is a key component (e.g. tires, used oils) to curb the use of fossil fuels. of construction projects throughout the world. In 2011, fuel waste materials accounted for close to 14% of our worldwide cement manufacturing Cement is made by extracting, crushing and fuel consumption, with almost two-thirds of our grinding calcium carbonate (limestone), silica cement plants using some form of fuel waste (sand), alumina and iron ore in appropriate materials. ❙ proportions and heating the resulting mixture in a rotary kiln to approximately 1,500°C. This process produces “clinker”, which is then finally ground with gypsum to make cement powder. 10 I LAFARGE I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 2011 AFARGE IN 1/ L Activities: Cement, hydraulic binders and lime for construction, renovation and public works. REVENUES NUMBER in million euros OF PLANTS 33% 9,975 166 CO2 emissions reduction objective per NUMBER ton of cement between OF EMPLOYEES PRESENT IN 1990 and 2020 43,400 58 countries SALES BY GEOGRAPHIC AREA OF DESTINATION % Western Europe 15 Central & Eastern Europe 10 Middle East & Africa 33 North America 11 Latin America 9 Asia 22 Lafarge I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 I 11 > India, view of a road along a lake crossing Arasmeta rehabilitated quarry (Chhattisgarh state). Aggregates & Concrete Nº 2 & Nº 4 Worldwide Aggregates and concrete, like cement, are key Concrete is a mix of aggregates, cement, admix- components of the building industry. tures, and water that hardens to form the world’s Aggregates are used as raw materials for concrete, most used building material. Tensile strength, masonry, asphalt, and other industrial processes, resistance to pressure, durability, set times, ease and as base materials for roads, landfills, and buil- of placing, aesthetics, workability under various dings. The primary aggregates we produce and weather and construction conditions as well as sell are hard rock (usually limestone and gra- environmental impact are the main characteristics nite), but we also produce natural sand and gra- that our customers consider when buying vel. Additionally, depending on the market, we concrete. From the very basic to the cutting edge, process and sell recycled asphalt and concrete. we produce and sell a wide range of concrete and masonry mixes to meet our customers’ diverse needs. ❙ 12 I LAFARGE I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 2011 AFARGE IN 1/ L Activities: Aggregates, ready-mix and precast concrete products, asphalt and paving for engineering structures, roads and buildings. REVENUES NUMBER 392 in million euros OF PLANTS Aggregates industrial 5,227 1,438 sites in the world NUMBER OF EMPLOYEES PRESENT IN 23,200 35 countries SALES BY GEOGRAPHIC AREA OF DESTINATION % Western Europe 36 North America 39 Emerging markets 25 Lafarge I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 I 13 CORPORATE GOVERNANCE Board of directors – 16 Executive committee – 17 > South Africa, Circa (Everard Read) Art Gallery on Jellicoe Avenue, Johannesburg. 14 I LAFARGE I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 GOVERNANCE 2/ CORPORATE Lafarge I INDIVIDUAL SHAREHOLDERS’ GUIDE I 2012 I 15 Michel Rollier*, Michel Bon, Bertrand Collomb*, Baudouin Prot, Philippe Charrier, Jérôme Guiraud*, Ian Gallienne*, Paul Desmarais, Jr.*, Philippe Dauman, Véronique Weill, Nassef Sawiris*, Juan Gallardo, Hélène Ploix, Thierry de Rudder*, Bruno Lafont, Colette Lewiner, Oscar Fanjul Board of directors Appointed by the shareholders, the board of The Board of Directors created 4 Standing Directors determines the Group’s strategy Committees in charge of working and issuing and supervises its implementation. The Board recommendations within their specific scope: of Directors of Lafarge has 17 members (1), of the Audit Committee; the Corporate Governance whom 10 are independent (2). Oscar Fanjul and Nominations Committee; the remuneration holds the position of Vice-President of the Board Committee and the Strategy, Investment and of Directors (Lead Independent Director), which Sustainable Development Committee.