* Q3 sales 4.24 bln euros vs Thomson Reuters avg 4.28 bln
* Q3 EBITDA 1.01 bln euros vs poll avg 1.05 bln
* Net debt falls to 10.94 bln euros, keeps debt targets
* Eyes at least 1.1 bln euros EBITDA boost over 2015/2016
* Shares rise as much as 3.2 pct
(Adds CEO, analyst, share price)
PARIS, Nov 6 French cement-maker Lafarge
has set a new target to boost core earnings by at
least 1.1 billion euros ($1.5 billion) over 2015 and 2016 partly
through additional cost cuts of 600 million euros.
The group, which is trying to cut debts built up from an
acquisition spree, also confirmed its debt reduction targets for
this year and next as it reported 4 percent like-for-like growth
in third-quarter sales and core profit.
"We have accelerated and will complete our 2012-2015 cost
reduction and innovation plan one year ahead of our initial
objective," Chief Executive Bruno Lafont said on Wednesday.
"Building on this momentum, we today announce new cost reduction
and innovation targets."
The new plans will include 600 million through cost cuts and
500 million from innovation, Lafarge said, split over the two
Lafarge is in the process of selling non-core assets to
focus on cement and concrete. It is also limiting spending,
looking for energy savings and aiming to introduce higher-margin
specialist products, as well as reducing the time it takes to
get them to market.
Shares in Lafarge rose as much as 3.2 percent to a
five-month high. They are up about 13 percent so far this year,
compared with a 21 percent rise in the STOXX Europe 600
construction and materials sector index.
"A new cost programme was expected, but the 1.1 billion
euros planned for 2015/2016 should be well received," Davy
Research analyst Robert Gardiner wrote. "These (measures) are
Lafarge wants to reduce its debt pile - which results mainly
from its 2008 purchase of Egypt's Orascom and has led to "junk"
ratings from credit rating agencies Standard & Poor's and
Moody's - below 10 billion euros this year and 9 billion in
2014. Net debt was 10.94 billion euros as of Sept. 30, down 10
percent from a year ago, it said.
Its efforts to regain its investment grade have been helped
by disposals. "We will continue to divest," Lafont told
analysts, declining to specify which assets. "We have still a
large portfolio of assets."
In the quarter, Lafarge received 900 million euros from
divestments, including the sale of its gypsum operations in the
U.S. for 500 million and cement operations in Ukraine for 100
million, taking the total to 1.7 billion since the start of
In September, Lafarge agreed to sell its cement business in
Honduras to Cementos Argos for 232 million euros. It
has also sold other gypsum operations, as well as U.S. quarries.
Lafarge confirmed its forecast for the cement market to grow
up to 3 percent this year, with stronger trends in the second
half, thanks to a recovery in the United States, growth in most
emerging markets and stabilisation at a low level in Europe.
Lafarge saw like-for-like growth in volumes of cement,
aggregates and ready-mix concrete in the quarter, following
declines in the first six months of the year.
Swiss rival Holcim, the world's biggest cement
maker by market value, said on Tuesday it did not expect 2013
sales volumes to reach last year's levels, partly due to
sluggish demand in the key emerging markets of India, Brazil and
The company posted third-quarter earnings before interest,
tax, depreciation and amortisation (EBITDA) of 1.01 billion
euros on sales of 4.24 billion. This compared with the average
of analyst estimates in a Thomson Reuters I/B/E/S poll of 1.05
billion and 4.28 billion.
Lafarge said its Lafarge Tarmac venture with Anglo American
had appealed against the UK Competition Commission's
move to force it to sell a cement plant to a new entrant to
boost competition as part of an investigation into Britain's
($1 = 0.7421 euros)
(Reporting by James Regan; Additional reporting by Blaise
Robinson and Natalie Huet; Editing by Mark John and Jane