REGISTRATION DOCUMENT LAFARGE 2012 LAFARGE PROFILE 44 SOCIAL and ENVIRONMENTAL RESPONSIBILITY 4.1 Introduction
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ANNUAL REPORT REGISTRATION DOCUMENT LAFARGE 2012 LAFARGE PROFILE 44 SOCIAL AND ENVIRONMENTAL RESPONSIBILITY 4.1 Introduction .......................................................... 112 11 4.2 Building Communities ........................................... 116 4.3 Building Sustainably ............................................. 124 GROUP 4.4 Building the Circular Economy ............................. 126 PRESENTATION 4.5 Key Performance Indicators ................................ 136 1.1 Lafarge presentation .............................................. 10 1.2 Strategy ................................................................... 12 1.3 Overview of markets and customers ...................... 25 1.4 Overview of operations ........................................... 27 55 RISKS AND CONTROL 5.1 Risk factors ........................................................... 144 5.2 Internal control procedures ................................. 159 22 5.3 Auditing matters ................................................... 163 OPERATING AND FINANCIAL REVIEW AND PROSPECTS 2.1 Overview .................................................................. 44 2.2 Accounting policies and defi nitions ....................... 45 2.3 Results of operations for the years ended December 31, 2012 and 2011 ...................... 49 2.4 Liquidity and capital resources .............................. 58 66 SHAREHOLDERS, SHARE CAPITAL AND ADDITIONAL INFORMATION 6.1 Shareholders......................................................... 166 33 6.2 Share capital and additional information ............ 172 CORPORATE GOVERNANCE AND COMPENSATION CERTIFICATION ................................ 185 3.1 Board of Directors - Corporate Offi cers ................. 65 3.2 Board and Committee rules and practices ............ 82 3.3 Executive Offi cers ................................................... 91 3.4 Compensation and benefi ts .................................... 93 3.5 Long-term incentives (stock options and performance share plans) .................. 99 3.6 Share ownership ................................................... 108 3.7 Implementation of the principle FF “Comply or Explain” of the Afep-Medef Code ...... 109 FINANCIAL STATEMENTS .................... F1 APPENDIX ........................................ 291 CROSS-REFERENCE TABLES ........... 309 GLOSSARY ........................................ 313 This Registration Document was fi led in the French language with the Autorité des marchés financiers on April 3 , 2013 in accordance with article 212-13 of its General Regulations. It may be used to support a fi nancial transaction if accompanied by an information memorandum (note d’opération) approved by the AMF. It has been prepared by the issuer and is the responsibility of the person whose signature appears herein. This document is a translation of the original French document and is provided for information purposes only. In all matters of interpretation of information, views or opinions expressed therein, the original French version takes precedence over this translation. EDITORIAL BY BRUNO LAFONT EDITORIAL BY BRUNO LAFONT • Chairman and Chief Executive Offi cer • 2012 proved to be a milestone We met our target of €410 million cost year for Lafarge. savings for the year 2012 . Meanwhile, We have carried out an in-depth our innovation measures – which have transformation which is now starting to involved products, construction solutions bear fruit. In spite of a tough economic and services – have generated €80 million climate in Europe, our total sales rose by of additional EBITDA. 3.5%, our EBITDA by 7% and our current Thanks to this excellent performance, we operating income by 12%. Excluding one- are contempla ting delivering on our plan off elements relating to the sale of our by the end of 2014, a year ahead of our Gypsum assets, net income Group share original objective. was 70% higher, at €772 million. In parallel, we have continued with the We owe these results fi rst and foremost reduction of our net debt. It fell by €700 to the excellent geographic spread of million during the year to €11.3 billion our portfolio, with a strong presence in (compared to €17 billion four years ago), emerging countries, which accounted for 15, 816 and we are very confi dent in our ability 59% of our revenues in 2012 and 68% of revenues to bring it below €10 billion as early as our EBITDA. in m illion euros possible in 2013. It results also from our strategy, wich Taking advantage of the impulse given in includes: 2012, the quality of our employees in all d parts of the world and of our portfolio of a new organization, which is more 6 5 , 0 0 0 assets, we are on track to accelerate the efficient and is firmly focused on our employees dynamic of change and to increase the markets and our customers, sales, results, return on capital employed d a n action plan for 2012-2015, and cash fl ows of the Group. My priority is launched in June, which aims to to create value for the shareholders. generate an additional €1.75 billion of EBITDA through a vast cost- 64 cutting program and a new policy on countries innovation. 1, 570 production sites Lafarge - Registration Document 2012 • 1 LAFARGE PROFILE GO VERNANCE BOARD OF DIRECTORS Front , from left to right : Paul Desmarais, Véronique Weill, Hélène Ploix, Bruno Lafont (Chairman and Chief Executive Offi cer ), Colette Lewiner, Philippe Dauman. Back , from left to right : Gérard Lamarche, Baudoin Prot, Philippe Charrier, Michel Bon, Nassef Sawiris, Ian Gallienne, Oscar Fanjul (Vice-Chairman of the Board of Directors), Jérôme Guiraud, Juan Gallardo, Michel Rollier. EXE CUTIVE COMMITEE Jean-Jacques Gauthier, Thomas Farrell, Christian Herrault, Jean-Carlos Angulo, Eric Olsen, Gérard Kuperfarb, Bruno Lafont, Alexandra Rocca, Jean Desazars de Montgailhard, Guillaume Roux. 2 • Lafarge - Registration Document 2012 LAFARGE PROFILE LAFARGE WORLDWIDE (D ecember 31, 2012) Western Europe North America Central and Eastern Europe Middle East and Africa Latin America Asia World map of L afarge’s presence as of De cember 31, 2012 (plants an d sales offi ces). KEY FIGURES BY GE OGRAPHIC AREA (D ecember 31, 2012) REVENU ES EMPLOYEE S Asia 17.4% Western Europe Western Europe Asia 20.1% 17.8% 23.0% Latin America 6.1% Latin America 4.1% Central North America and Eastern Europe 13.7% Central North America 8.0% 21.3% and Eastern Europe 10.9% Middle East and Africa Middle East 30.5% and Africa 27.1% Lafarge - Registration Document 2012 • 3 LAFARGE PROFILE WORLD LEADER IN CEMENT (December 31, 2012) 10,373 revenues million euros 41,200 employees KEY FIGURES BY ACTIVITIES 58 countries REVENUES Other 0.6% 161 production sites Aggregates and concrete 33.8% Cement AGGREGATES AND CONCRETE 65.6% No.2 ET No.4 WORLDWIDE (December 31, 2012) 5,353 revenues EMPLOYEES million euros Other 21,800 2.0% employees Aggregates and concrete 36 33.9% countries Cement 1,395 64.1% production sites 4 • Lafarge - Registration Document 2012 LAFARGE PROFILE IN FIGURES REVENUES (in M€) 2012 15,816 Revenues increased 3.5% in 2012, driven 2011 15,284 by price increases and growth in emerging 2010 14,834 (2) markets. EBITDA (1) (in M€) 2012 3,450 The Group strongly improved its operational 2011 3,217 performance in 2012. 2010 3,488 (2) OPERATING INCOME BEFORE CAPITAL GAINS, IMPAIRMENTS, RESTRUCTURING AND OTHERS (in M€) 2012 2,440 Cost savings of 410 million euros strongly 2011 2,179 contributed to the improvement of the current 2010 2,393 (2) operating income. FREE CASH-FLOW (1) (in M€) The Group pursued its actions to maximize the free 2012 884 cash flow. The decrease observed in 2012 reflects 2011 1,208 the payment of non-recurring restructuring charges in 2010 1,761 (2) the context of the implementation of the cost-saving program and a temporary increase in inventories. GROUP NET DEBT (1) (in M€) 2012 11,317 Net debt has been reduced by 2.7 billion euros 2011 11,974 in two years, to 11.3 billion euros. Lafarge will reduce its net debt to below 10 billion euros as 2010 13,993 soon as possible in 2013. NET INCOME GROUP SHARE (in M€) 2012 432 Net income Group share was 432 million euros 2011 593 in 2012. 2010 827 (2) NET INCOME GROUP SHARE (3) BEFORE NON-RECURRING ITEMS (in M€) In 2011 and 2012, net income Group share 2012 772 included significant non-recurring items. 2011 454 Restated for such items, Net income Group share 2010 755 was 772 million euros, up 70% from 2011 and reflecting the improvement in operating results. NET EARNING PER SHARE (in €) 2012 1. 50 2011 2.07 2010 2.89 (2) NET EARNING PER SHARE BEFORE NON-RECURRING ITEMS (3) (in €) 2012 2.68 2011 1.59 2010 2.64 DIVIDEND PER SHARE (in €) 2012 1.00 A dividend of 1.00 euro per share proposed at 2011 0.50 the shareholders meeting on May 7, 2013. 2010 1.00 (1) See Section 2.2 (Accounting policies and defi nitions). (2) 2010 fi gures have been restated following the disposal of the Gypsum division as mentioned in Note 3 (Signifi cant events of the period) to the consolidated fi nancial statements. (3) 406 million euros pre-tax for impairments of Greek assets and restructuring charges in 2012; in 2011, 346 million euros for impairment charges in Western Europe and the United Arab Emirates and restructuring charges more than offset by one-time gains of 466 million euros related to Gypsum divestments. Lafarge - Registration Document 2012 • 5 LAFARGE PROFILE Selected Financial Data SELECTED FINANCIAL DATA Following European Regulation no. 1606/2002 issued on July 19, The tables below show selected consolidated fi nancial data