Lafarge’s consolidated sales were up 3 percent for the full year 2014 on a comparable basis, with the combination of higher volumes and increased prices across all of its product lines to address cost inflation. The negative trend of the impact of exchange rates in the first three quarters of 2014 reversed in Q4 as sales were positively impacted by 2 percent in the quarter (up 1 percent on a like for like basis). The full year was negatively impacted by 2 percent, but up 3 percent on a like-for-like basis.
Cement volumes increased 4 percent for the year when excluding the impact of the limited ability to transport cement in Iraq in the second half of the year. Aggregates and ready-mix volumes were down 1 percent and 2 percent, respectively, like for like for the year.
Full year EBITDA was down 3 percent on a gross basis with an adverse impact from exchange rates of -4 percent. However, it was up 5 percent when excluding scope, exchange rates, CO2 sales, a €20 million one-time gain recorded in 2013 in North America and the loss of volumes in Iraq in the second half. On a like-for-like basis, EBITDA margin was up 40 basis points in the full year, thanks to the contribution of self-help measures and positive trends in the United States and most markets in Middle East and Africa compensating the impact of lower volumes in Europe and Brazil.
Adjusted for one-off items, net income for the year increased by 10 percent. This reflects organic growth, the improvement of the result of joint ventures, which increased from flat in FY13 to €69 million in FY14, and the reduction of financial expenses, which more than offset the adverse impact of scope and exchange rates.
Overall, Lafarge sees cement demand increasing for the full year 2015 between 2 to 5 percent versus 2014 in its markets, predominantly driven by growth in emerging markets. Cost inflation in 2015 should continue, at a slower pace than in 2014 given recent evolution of fuel oil prices, which the company believes will result in higher prices overall.
Bruno Lafont, chairman and chief executive officer of Lafarge, commented, “2015 will be an exceptional year for the Group. Over the past years, we have undertaken a structural and fundamental transformation. We focused on our customers, promoted innovation and reshaped our portfolio to concentrate on fast growing market segments. We have also developed a culture of strict capital allocation discipline, reducing our cost base and optimizing our working capital and our investments.”
Lafont also noted that the planned merger with Holcim is four months away.