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Laclede Group Inc LG
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/09/2012

Operator: Good day and welcome to the Lafarge 2012 Third Quarter Results Conference Call. Today's conference is being recorded. This conference is hosted by Mr. Bruno Lafont, Chief Executive Officer; and Mr. Jean-Jacques Gauthier, Chief Financial Officer of Group Lafarge.

At this time, I would like to turn the call over to Mr. Bruno Lafont. Please go ahead.

Bruno Lafont - Chairman and CEO: So, good morning, and thank you for joining us on today's call. I am happy to be with you today to go through our breaking results for the third quarter.

As you have seen, they showed a fourth consecutive quarter of improvement, despite a difficult environment in Europe and a more demanding comparable basis in North America, from a very low level in North America. So, this has not only benefited our cement and aggregates and concrete activities, but also our Gypsum business which is very much exposed to the housing segment.

When looking at these results and at what we have achieved in the past quarter, I want to stress two things. First, the strength of our unique positions to emerging markets and well-balanced portfolio of operating assets across the globe. You should note that the EBITDA we generated outside Europe, which is three quarters of the Group's EBITDA, grew 16% in the quarter and 20% year-to-date. This has been supported by solid growth in most of our emerging markets.

For example, Brazil delivered another quarter of strong results and our new line in Nigeria continued to drive sales growth in a strong market. We also benefited from the positive trends in the residential activity in the U.S. And the result from our Gypsum activities in the U.S. has improved strongly and we expect this strength to continue because of the positive trend in the residential is particularly impacting the gypsum business.

Second comment I want to make on this result is that our results reflect the increasing momentum of our self-help program that we unveiled to you in June at our Analyst Day. On the cost cutting side, in the first nine months of the year, we achieved EUR290 million of cost savings. This represents an acceleration from the first half and will continue. We are confident that our cost reduction program will achieve as announced at least EUR400 million of savings for the year.

For innovation, significant actions have been taken year-to-date that set the stage for our future success. For example, we are accelerating the deployment of high value added product and solutions. We have launched over 120 new products in our cement and concrete divisions in the first nine months of this year 50% increase from last year.

We are also now ready to further penetrate new markets as in the oil and gas sector. The American Petroleum Institute has recently certified our plants in Spain and Egypt for the production of Oil Well Cement and we are now bidding on contracts. We are also expanding our business relationships with (key commercial) contractors. We have higher 10 key account managers who are working closely to provide advance services to 20 of the largest construction contractors in the world. These provide just a few examples of how we are moving forward in every block of our innovation program and all these measures are already showing early signs of success. In short, we are fully mobilized on our EUR1.75 billion action plan to increase EBITDA between 2012 and 2015 and we are further accelerating the implementation supported by our new organization today fully in place. This is why I am confident that our self-help program will deliver at least EUR550 million in additional EBITDA in 2013.

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