2010 Full Year Results2010 Full Year Results

February 18, 2011

Bruno LafontBruno Lafont

Chairman and CEO

In 2010…We have built a solid base for 2011

� Strong geographical portfolio

� Started 12 MT of capacity in emerging markets

� Strengthened positions in growing Brazil market

� Successful cash generation measures

� Drove structural cost savings of €220M

� Improved working capital by 11 days, i.e. 350 M€

� Secured divestments of over €500M

3

The Group is well-positioned for 2011

� In emerging markets

� High quality assets to capture volume growth: Lafarge’s 68 MT of

capacity additions between 2006 and 2010 will drive growth

• Fundamental drivers of construction remain strong

• New capacities are answering the needs of the market

� In developed markets

� Lower cost base in place as volumes improve

• Large room for recovery

� Taking further action to offset the impact of higher inflation

4

The right capacities at the right place

In 2011…Higher Volumes to Drive Earnings Growth

In 2011…€2 Billion Debt Reduction

� Actions secure a minimum of €1Bn debt reduction

� Reduction of capex by €400M compared to 2010

� Reduction of dividend by 50% to €1 per share

� Reduction of costs and working capital

� Higher cash flows from operations provide upside

� Use divestments as an accelerator of this process

� At least € 750M of divestments in 2011

5

A significantly improved financial structure

A Well Diversified Portfolio in Place

6

North America

21MT

4%

65%

Latin America

12MT

5%

75%

Middle East and Africa

55MT

6%

80%

Asia

72MT

8%

75%

Central and Eastern Europe

20MT

6%

55%Western Europe

37MT

2%

55%

Total Capacity end 2010

Construction Growth Forecast through 2020*

Utilization rates for 2010

* Source: Global Construction 2020 report prepared in 2010 by Global Construction Perspectives and Oxford Economics

Capacities already in place

to capture the growth of our markets

Further Development of 11 million tons for 2011

Brazil0.4 MT

Algeria0.5 MT

Nigeria2.2 MT

Hungary1 MT

Poland0.5 MT

Saudi2 MT India

1 MT

China3 MT

Iraq0.4 MT

Diverse geographic portfolio of capacity additions

in growing markets

7

A Focus on Egypt

� Latest facts

� 7 days of sales interruption in total

� Sales have resumed since February 5th and are back to normal levels

� Egypt represents 4% of the Group’s 2010 revenues

� Long-term growth potential of Egypt is very significant

� Largest growing population in the Middle East

� Significant requirements for new housing and infrastructure

8

Creation of a UK leader in building materials

� A cash neutral deal to generate synergies, growth and added value

� The combination of two leading companies

� Tarmac, a company with a proud history

• 400 sites and 4,500 employees in ready-mix concrete, Aggregates, Asphalt & Paving, Cement & Lime

� Lafarge UK, a successful player in building materials

• Leader in Cement in the UK, with strong positions in Aggregates & Concrete

• 2,800 employees and 230 sites

• Lafarge’s Gypsum business in the United Kingdom is not included in this operation

� A combination of activities

� Complementary geographical coverage

� Complementary businesses

9This operation is subject to regulatory approval. Businesses will operate independently during this process.

Portfolio Optimization A cash neutral deal that will unlock significant value

� 50/50 Lafarge UK / Tarmac joint venture combining cement,

aggregates, ready-mix concrete, and asphalt/paving businesses

� Combined revenues of £1.8bn and EBITDA of £210M for 2010

� A widened offer of products and services for our clients

10

The combined operations will unlock significant value

� Accretive to Lafarge’s shareholders

� Generates at least £60M in annual synergies

� economies of scale

� a denser industrial network, with savings in logistics

� wider geographical coverage for the development of value-added products

Strong Potential for the Future

� Volume improvement to underpin earnings growth

� Both in developed and emerging markets

� Strategically diversified geographic portfolio of quality assets

� Significant debt reduction for 2011

� Further investments into innovation and development of new

products

11

The Group has a solid base to ensure

earnings’ growth in 2011

JeanJean--Jacques GauthierJacques Gauthier

Chief Financial Officer

Solid Performance in 2010 in a Challenging Environment

� Fourth Quarter Highlights

� Cement volumes rose in the quarter, the first increase since Q4 2008

� Current operating income increased 7%, helped by the strength

of the Brazilian assets acquired in Q3 and favorable foreign exchange

� €50M of structural cost savings partially offset the higher cost

of inflation

� Strong cash flows due to working capital actions

� Full Year Highlights

� Rate of volume declines slowed significantly for the year

� Pricing remained resilient in the face of a challenging environment

� Achieved target of securing more than €500M of divestments

� Exceeded structural cost savings target, achieving €220M for the year

� Generated strong free cash flows of €2.2Bn (1) for the year

13(1) Excluding the €338M one-time payment for the Gypsum competition fine paid in the third quarter 2010

Key Figures

14

12 months 4th Quarter

€m 2009 2010 Var. lfl 2009 2010 Var. lfl

Sales 15,884 16,169 2% -3% 3,641 3,959 9% -

EBITDA 3,600 3,614 - -6% 768 824 7% -2%

Current Operating Income 2,477 2,441 -1% -8% 494 530 7% -4%

Operating Margin 15.6% 15.1% -50bp 13.6% 13.4% -20bp

Net income Group share (1) 736 827 12% (38) 62 nm

Earnings per share (in €) 2.77 2.89 4% (0.13) 0.22 nm

Net dividend (in €) (2) 2.00 1.00

ROCE (3) 6.0% 5.8%

Free cash flow 2,834 2,151(4) -24% 1,123 848 -24%

Net debt 13,795 13,993 1%

(1) Net income attributable to the owners of the parent company.

(2) Subject to approval of Annual General Meeting(3) After tax, using the effective tax rate – Effective tax rate: 19.9% in 2009 and 21.9% in 2010(4) Excluding the €338m one-time payment for the Gypsum competition fine paid in the third quarter 2010

Exceeded 2010 Cost-Cutting Target

� Driving permanent cost savings for the Group

� Leveraging industrial technical expertise, purchasing power,

and knowledge sharing through the Group network

� Focus on energy efficiency, industrial productivity and SG&A

15

Structural cost cuts (million €)

70

170 180230

2006 2007 2008 2009

0.4% *

1.0% * 0.9% *1.4% *

220

2010

>200

Obj 2011

1.4% *

Achieving over €1Bn of structural cost savings since 2006

*en % du chiffre d’affaires

CementCement

17

Cement Highlights

(1) Before elimination of inter divisional sales

12 months 4th Quarter

MT 2009 2010 Var. lfl 2009 2010 Var. lfl

Volumes 141.2 135.7 -4% -3% 33.6 34.4 2% 1%

€m

Sales (1) 10,105 10,280 2% -3% 2,288 2,514 10% 1%

EBITDA 3,076 3,005 -2% -7% 683 695 1% -7%

Current Operating Income 2,343 2,230 -5% -10% 507 503 -1% -9%

€

EBITDA / t 21.8 22.1

� Volumes increased in Q4 for the first time since Q4 2008, supported by growth in emerging markets

� Prices were resilient in a challenging environment, despite price declines in some markets

� For the year, our cost reduction program supported a solid 2010 EBITDA margin of 29.2%, despite rising variable costs in the second half of the year

23.2%21.7%

2009 2010

Operating margin

Aggregates & ConcreteAggregates & Concrete

19

Aggregates & Concrete HighlightsSigns of Improvement for Aggregates Volumesand Tight Cost Management

(1) Before elimination of inter divisional sales

12 months 4th Quarter

2009 2010 Var. lfl 2009 2010 Var. lfl

Volumes

Pure Aggregates MT

RMX Mm3

196.0

37.1

193.2

34.0

-1%

-8%

1%

-5%48.3

8.6

48.1

8.4

0%

-2%

0%

-3%

M€

Sales (1) 5,067 5,093 1% -3% 1,173 1,260 7% -1%

EBITDA 458 482 5% -6% 116 123 6% -4%

Current Operating Income 193 216 12% -8% 46 53 15% -8%

3.8%4.2%

2009 2010

Operating margin� Sales stabilized in the fourth quarter, supported by

volume growth in North America and in the United Kingdom

� Operating margin improved, reflecting continuous cost containment and aggregates volumes improvement

� Ready-Mix sales of Value Added Products improved at comparable scope and contributed to earnings

GypsumGypsum

21

Gypsum Highlights Continuing Results Improvements

(1) Before elimination of inter divisional sales

12 months 4th Quarter

Mm² 2009 2010 Var. lfl 2009 2010 Var. lfl

Volumes 667 690 3% 3% 165 173 5% 5%

M€

Sales (1) 1,355 1,441 6% 2% 320 351 10% 4%

EBITDA 119 143 20% 13% 17 30 76% 61%

Current Operating Income 38 58 53% 42% (4) 10 nm nm

2.8%

4.0%

2009 2010

Operating margin

� Organic growth in sales both year-to-date and in Q4

� Solid market trends in Asia and in the UK

� Operating margins improved in a context of slightly lower prices, thanks to tight cost control and improved volumes

Net IncomeNet Income

23

Net Income

12 months 4th Quarter

€m 2009 2010 2009 2010

Current Operating Income 2,477 2,441 494 530

Other income (expenses) (227) (272) (209) (127)

Finance costs, net (926) (723)(1) (248) (224)

Income from associates (18) (16) (4) (2)

Income taxes (260) (316) (16) (32)

Non-controlling interests (310) (287) (55) (83)

Net income Group Share (2) 736 827 (38) 62

(1) Including the gain on the disposal of Cimpor shares for €161m(2) Net income attributable to the owners of the parent company

Cash Flow and DebtCash Flow and Debt

HighlightsHighlights

25

Cash Flow

(1) The €338m one-time payment for the Gypsum competition fine paid in the third quarter 2010 is excluded from the cash flow from operations and presented in a separate line to facilitate comparability of periods

(2) Including debt acquired / Net of the debt disposed of, and including the non controlling interests’ share in capital increase of subsidiaries (mainly EBRD additional investment in our operations in Eastern Europe in Q4 2009 and Q4 2010)

(3) Including the divestment of a minority stake in Lafarge Malayan Cement Berhad for €141m in Q3 2010

12 months 4th Quarter

€m 2009 2010 2009 2010

Cash flow from operations

Change in working capital

Sustaining capex

2,177

1 029

(372)

2,156(1)

354

(359)

405

891

(173)

323

698

(173)

Free cash flow excluding non recurring payment 2,834 2,151(1) 1,123 848

Non-recurring payment (1) - (338) - -

Free cash flow 2,834 1,813 1,123 848

Development investments (2)

Divestments (2)

(1,349)

919

(1,034)

364(3)

(338)

286

(198)

78

Cash flow after investments 2,404 1,143 1,071 728

Dividends

Equity issuance (repurchase)

Currency fluctuation impact

Change in fair value

Others

(536)

1,448

33

(138)

(122)

(849)

26

(490)

41

(69)

(26)

3

(111)

(64)

(55)

(28)

6

(128)

54

35

Net debt reduction (increase) 3,089 (198) 818 667

Net debt at the beginning of period 16,884 13,795 14,613 14,660

Net debt at period end 13,795 13,993 13,795 13,993

Balanced Debt Maturity Schedule and Strong Liquidity

� Successfully refinanced €2.7Bn in 2010 with an average interest

cost of 4.5% and average maturity of 6.5 years

� Cash and cash equivalents and committed unused credit lines fully

cover short-term obligations

26(1) Excluding puts on shares and derivatives instruments: €0.3bn in 2010 and 2009

at December 31, 2010 (€m) (1)

Outlook 2011Outlook 2011

2011 Outlook – Market* Overview

28

* Market growth forecast at national level

(1) Relative to year-end pricing; down at average pricing

Volumes

(%)Price Highlights

North America 1 to 4 + Progressive recovery; prices improving

Western Europe -5 to -2 =/+Slowdown in Spain and Greece with modest improvement in France

Central and Eastern Europe 3 to 6 +Solid market trends in Russia and Poland; Romania lower with stabilization elsewhere; prices improving

Middle East and Africa 4 to 7 =/+(1) Solid market trends in most countries

Latin America 7 to 10 + Solid market trends; prices improving

Asia 4 to 7 + Solid market trends; prices improving

Overall 3% to 6% +Solid market trends in most emerging countries and stabilization or slow recovery in mature markets

2011 Outlook – Other Elements

� +8% energy cost increase (1 euro per tonne)

� Structural cost reduction of a further €200M in 2011

� Cost of debt (gross): 5.7%

� Tax rate: 26% (1)

� Capital expenditures:

� Sustaining: ~ €0.5 Bn

� Development: ~ €0.5 Bn

29(1) Impacted by country mix

ConclusionConclusion

31

Disclaimer

This document may contain forward-looking statements. Such forward-looking statements do not constitute forecasts regarding the Company’s results or any other performance indicator, but rather trends or targets, as the case may be. These statements are by their nature subject to risks and uncertainties, many of which are outside our control, including, but not limited to the risks described in the Company’s annual report available on its Internet website (www.lafarge.com). These statements do not reflect future performance of the Company, which may materially differ. The Company does not undertake to provide updates of these statements.

More comprehensive information about Lafarge may be obtained on its Internet website (www.lafarge.com).

This document does not constitute an offer to sell, or a solicitation of an offer to buy Lafarge shares.