The company says its current operating income is down 7% to €755 million up 5% like-for-like.
Over the nine-month period sales were down 4% to €11,484 million (stable like-for-like); EBITDA is down 10% to €2,309 million (-3% like-for-like) and current operating income is down 15% to €1,546 million (-5% like-for-like)
Volume trends improved month after month in the third-quarter, sustained by ongoing growth in most emerging markets; the recovery in the United States, and Europe stabilising at a low level, says Lafarge.
On the other hand, the third-quarter was marked by adverse exchange rates which had a negative impact of 7% on both sales and EBITDA (respectively €-286 million and €-67 million in the quarter).
“Q3 EBITDA grew 4% at constant scope and exchange rates, benefiting notably from a solid performance in North America, Middle East/Africa and Asia. EBITDA margins improved 50 basis points on a like-for-like basis and excluding CO2, supported by higher volumes, firm prices and the acceleration of cost reductions and innovation measures which generated respectively €130 million and €80 million additional EBITDA in the quarter.”
The company says that in the first nine months, these measures have generated a total of €470 million (€290 million from cost reductions and €180 million from innovation measures), and the group is on track with its plan.
Net debt at the end of September, at €10.9 billion, was reduced by €1.3 billion compared to end of September last year and by €0.9 billion in the quarter, notably thanks to divestments made at attractive multiples.
The group has confirmed 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.
It has announced new objectives beyond 2014 and plans to generate at least €1.1 billion of additional EBITDA from its actions in 2015-2016, of which €600 million from cost reductions and €500 million from innovation.
Bruno Lafont, chairman and CEO of Lafarge, said: “With improving volume trends and despite the adverse effect of exchange rates, we continued to progress in the third-quarter on our strategic action plan.
“Combined with the utmost discipline in terms of capital allocation, our measures will drive the strengthening of our financial structure so as to return to an investment grade status as soon as possible, reducing net debt below €10 billion in 2013 and below €9 billion in 2014.
“Looking ahead, we will benefit from three organic growth drivers: continuing growth in emerging countries, accelerating growth through innovation and progressive recovery in mature markets. We will capture this potential thanks to our high-quality and well spread portfolio of assets and to our competitive edge in innovation which ensures the development of a value-added offer of products and services to address the evolving needs of our customers.
“All our measures strive towards growth in sales, cash flows and returns and our priority is to create sustainable value for our shareholders.”
Overall, Lafarge sees cement growth in its markets of between 0-3% in 2013 versus 2012. This implies better trends in H2 compared to H1 as market recovery is becoming evident in the United States, growth in most emerging markets continues and Europe is showing stabilisation at a low level.
Higher pricing is expected for the year. Cost inflation continues, although at a lower rate than in 2012, benefiting from positive trends in coal and pet coke prices and reduced general inflation in developed countries.
The group targets to deliver additional EBITDA of €650 million in 2013 through its cost reduction and innovation measures.
