* Expects cement market to grow 2-5 pct this year
* 2013 EBITDA down 9 pct to 3.1 bln eur
* Aims debt below 10 bln eur, investment grade by year-end
* 2013 sales -4 pct to 15.2 bln eur, 2 pct organic growth
* Lafarge shares rise 3 percent in morning trade
(Adds regional growth forecasts, analyst comment, shares)
By Natalie Huet
PARIS, Feb 19 French cement maker Lafarge
stuck to its cost savings and debt reduction targets
on Wednesday, betting on continued growth in emerging markets, a
recovery in North America and stabilisation in Europe.
A strong euro and volatile currencies in emerging markets
slashed nearly 6 percentage points off sales and profit growth
last year, but the group said its geographic spread and solid
underlying demand for cement, driven by urbanisation, would help
counterbalance that impact this year.
According to MSCI data, Lafarge is the French blue-chip
company with the highest exposure to emerging markets. These
account for close to 60 percent of its sales, chiefly in the
Middle East and Africa, where political instability and volatile
currencies can crimp revenue.
Shares in Lafarge were 3.1 percent higher at 54.24 euros at
0913 GMT, outperforming a flat STOXX Europe 600 construction and
materials sector index. Rival Holcim, which
will release results on Feb 26, was little changed.
"Fourth-quarter results are slightly below expectations, hit
by the currency effect, but guidance sounds reassuring," wrote
Natixis analysts, who have a "buy" recommendation on the stock.
Lafarge expects the cement market to expand between 2 and 5
percent this year, led by 4 to 7 percent growth in North
America, Middle East and Africa. It said it planned to expand
existing production capacity in Sub-Saharan Africa, mainly
Nigeria, Tanzania and Zambia, to address rising demand.
"Cement is a product of first necessity," Chief Executive
Bruno Lafont told reporters. "I'm very confident in how things
are going in emerging markets," he added, noting that
demographics and urbanisation trends supported Lafarge's
businesses in emerging markets despite "hiccups" now and then.
Lafont also said he saw market conditions stabilising in
Europe this year, thanks to signs of improvement in Spain and
Greece. He said he expected sales to dip slightly in France this
year but forecast a "rather positive market" in the UK.
EYES RETURN TO INVESTMENT GRADE BY YEAR-END
The group kept its dividend stable at 1 euro per share and
reaffirmed its target to achieve at least 600 million euros of
EBITDA this year from cost reduction and innovation measures,
and to reduce net debt to below 9 billion.
Net debt stood at 10.3 billion euros as of Dec. 31 and,
since then, the group has already secured 380 million euros from
The group, which is trying to cut debts built up from an
acquisition spree, 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.
The debt pile results mainly from Lafarge's 2008 purchase of
Egypt's Orascom and has led to "junk" ratings from credit rating
agencies Standard & Poor's and Moody's.
Lafarge said it aimed to return to an investment grade
rating by the end of this year.
Quarterly earnings before interest, tax, depreciation and
amortisation (EBITDA) fell 6 percent to 793 million euros ($1.09
billion), while sales dipped 2 percent to 3.71 billion.
Analysts polled by Reuters had on average expected quarterly
sales of 3.7 billion euros and EBITDA of 853 million.
($1 = 0.7272 euros)
(Editing by James Regan, Andrew Callus and Gareth Jones)