Lafarge's turnover declined by 3.9 per cent to EUR15,198m in 2013, having increased by 3.5 per cent in 2012.

The EBITDA came down by 9.4 per cent to EUR3102m and the trading profit fell by 14 per cent to EUR2,075m as carbon credits dropped by 85.9 per cent from EUR99m to EUR14m. Net financial charges, which had been rising in recent years, declined by 4.9 per cent to EUR1041m, while other charges were 88.9 per cent lower at EUR55m, resulting in a pre-tax profit 20.2 per cent higher at EUR998m. The net attributable profit, after a further 10.3 per cent reduction in the tax charge and a 4.2 per cent lower minorities charge, jumped by 64.7 per cent to EUR601m.

Net debt at the end of December was 8.7 per cent lower at EUR10,330m, giving a gearing level of 62.6 per cent, or 71 per cent excluding minorities. After a period of declining, capital expenditure rose by 38.4 per cent last year to EUR1,046m and a further EUR25m was spent on acquisitions.

Cement shipments declined by 3.1 per cent to 136.8Mt and the turnover from came down by 6.8 per cent to EUR10,333m and the EBITDA by 10.7 per cent to EUR2,665m, with the margin deteriorating from 26.9 per cent to 25.8 per cent, roughly where it had been the year before. Turnover in aggregates and concrete was 1.9 per cent ahead at EUR5,469m but the EBITDA eased by 3.1 per cent to EUR464m. Aggregates deliveries were 2.1 per cent higher at 192.8Mt and generated a turnover 8.6 per cent higher at EUR3,015m, but the EBITDA eased by 1.5 per cent to EUR329m. Ready-mixed concrete deliveries were 3.5 per cent lower at 30.7Mm³, with the turnover being off by 4.8 per cent to EUR2834m and EBITDA declined by 6.9 per cent to EUR135m. 

Europe
Lafarge's European turnover declined by 1.1 per cent to EUR4,401m and the EBITDA fell by 27.3 per cent to EUR555m. Cement deliveries were 10.5 per cent lower at 26.5Mt, but aggregates shipments did improve by 9.4 per cent to 80.1Mt while ready-mixed concrete deliveries declined by 5.3 per cent to 10.7Mm³. The EUR85m reduction in carbon credits also had a negative effect on the results. French cement volumes declined by 3.2 per cent, while aggregates volumes came off by 3.4 per cent and ready-mixed concrete volumes 4.1 per cent lower.

The British volumes were affected by changes to the sphere of consolidation, notably the Tarmac joint venture, and cement shipments rose by 10.8 per cent, aggregates volume by 19.1 per cent and ready-mixed concrete deliveries jumped by 44.7 per cent, reflecting Tarmac's strong position here. Cement and clinker deliveries in Spain were stable thanks to higher clinker exports. In Greece shipments declined by 8.3 per cent, the slowest rate of decline in five years.

Central and Eastern European cement volumes were off by some six per cent to 12.5Mt. The important Polish market showed a 4.6 per cent volume reduction for the year, but the fourth quarter registered a 10 per cent improvement. In Romania cement shipments cement dropped by 16.1 per cent as spending on the infrastructure was cut back. Continued production problems at one of the Russian plants and increased competition led to Russian cement shipments being 5.7 per cent lower.

North America
North American turnover fell by 7.1 per cent to EUR3137m, largely reflecting disposals and at the underlying level there was a five per cent improvement. EBITDA was just 0.4 per cent ahead at EUR560m, as the prior year had a EUR24m one-off pensions gain.

Cement shipments did decline by 11.7 per cent to 11.3Mt as disposals and bad weather in the first half depressed volumes. Underlying cement volumes declined by 2.7 per cent in the USA and by 2.4 per cent in Canada, where the weakness in Québec was not fully offset by the strength in Western Canada. The cement business generated a turnover 9.5 per cent lower at EUR1,255m but the EBITDA improved by 3.2 per cent to EUR290m.

North American aggregates turnover declined by 6.8 per cent to EUR1,038m and the EBITDA was 6.4 per cent lower at EUR147m, with shipments being off by 5.1 per cent at 92.3 tonnes. Aggregates shipments declined by 2.2 per cent in the USA, but improved by three per cent in Canada. In ready-mixed concrete, turnover eased by two per cent to EUR806m while the EBITDA was four per cent lower at EUR49m with deliveries being some four per cent lower at 6.2Mm³. Underlying concrete volumes edged ahead by 0.6 per cent in the USA and improved by 1.5 per cent in Canada.

Latin America
Latin American turnover was reduced by 9.6 per cent to EUR869m, reflecting the sale of the Honduras operations and the devaluation of the Brazilian currency. The effect on the EBITDA was somewhat greater, with an 18.9 per cent reduction to EUR240m. Cement accounted for 87.3 per cent of turnover and 95.8 per cent of EBITDA. Cement deliveries were 4.4 per cent lower at 8.8Mt, with aggregates shipments being about two per cent higher at 2.8Mt while ready-mixed concrete deliveries rose by around 10 per cent to 1.2Mm³.

Brazilian cement deliveries eased by 0.4 per cent but Lafarge is expecting volume growth of 2 per cent to 5 per cent in 2014. In Ecuador, sales improved by 12.4 per cent as volumes increased by 8.8 per cent, while in Honduras turnover increased by 6.4 per cent, but volumes eased by 0.9 per cent. 

Middle East & Africa
The turnover in the Middle East and Africa came off by 5.1 per cent per cent to EUR4,067m and the EBITDA declined 7.2 per cent to EUR1,153m. In cement, turnover decreased by 5.3 per cent to EUR3,541m, or 87.1 per cent of the total while the EBITDA declined by 7.9 per cent to EUR1,111m, with cement deliveries being 1.8 per cent lower at 44.4Mt. Aggregates shipments, on the other hand, increased by around 4 per cent lower to 8.9Mt, while ready-mixed concrete deliveries eased by one per cent to 6.9Mm³.

Egypt, where Holcim holds a sizeable minority in the Lafarge subsidiary, volumes dropped by 22.1 per cent, largely because of problems with gas supplies. Increased use is being made of alternative fuels and permission is being sought to import pet coke. Algerian volumes were 0.7 per cent higher, while turnover rose by 8.9 per cent. Morocco experienced a 6.1 per cent reduction in cement volumes in an increasingly competitive market, but other factors were positive leading to a 0.8 per cent improvement in sales. Irak's volumes rose by 6.4 per cent, but competitive pressures led to lower prices, with overall turnover being off by 4.8 per cent.

Nigerian turnover rose by 9.8 per cent while volumes increased by 14.8 per cent still being helped by the maturing of the new 2.2Mt per annum works competed in 2011. In Kenya, volumes came off by 5.1 per cent after the double-digit rise in the previous year, while in South Africa, volumes improved by 0.7 per cent in cement but rose 7.0 per cent in aggregates and by 14.2 per cent in ready-mixed concrete

Asia
Asian group turnover eased by 0.8 per cent to EUR2724m, but in cement the reduction was a mere 0.1 per cent reduction to EUR2454m. EBITDA improved by 5.3 per cent to EUR594m for the group and by five per cent to EUR590m for cement.

Cement shipments improved by 3.4 per cent to 45.8Mt and aggregates shipments showed another strong increase, rising by 31.8 per cent to 8.7Mt. Ready-mixed concrete deliveries declined again, being some four per cent lower at 5.7Mm³ as Indian shipments dropped by a further 11.4 per cent, having come down by 7.7 per cent in the previous year.

In cement, volumes grew by 8.6 per cent in the Philippines, by 4.5 per cent in South Korea, by 2.8 per cent in China, by two per cent in Indonesia, by 1.5 per cent in India and by 0.5 per cent Malaysia.

2014 market outlook
Lafarge sees overall cement market growth of 2-5 per cent in 2014. In the US the company envisages growth of 4-7 per cent. Stabilisation is expected in Europe at a low level, with the UK being buoyed by the domestic residential sector but slight decreases are forecast for France.  Solid trends are expected across the Middle East and Africa region with growth of 4-7 per cent anticipated, while in both the Latin America and Asia group regions it sees a potential 2-5 per cent advance.

Investing in faster growing markets
The company said it will continue to invest in faster-growing markets to increase output and remove supply bottlenecks. In 2013 the group started 4Mta of new capacity, comprising 1.3Mta through debottlenecking projects in the Philippines, Algeria and Brazil and a 2.6Mta plant in Rajasthan, India, which was recently commissioned and started operations in October. Another 2.6Mta of capacity will come on-stream early this year with further debottlenecking in Brazil and the start-up of the company’s new 2.1Mta plant in Kaluga, Russia.

Sub-Saharan Africa remains a key focus as Lafarge plans to increase capacity in the region by more than 10Mta in the coming four years from 20Mta presently. Plans include 8.5Mta of brownfield capacity, notably in Nigeria, Tanzania and Zambia, while some 1.5Mta of debottlenecking will be carried out across the region as the group seeks to unleash the full potential in this part of its portfolio.