Volumes return to growth in the fourth quarter. Group positioned for 2011 earnings growth and substantial deleveraging

Fourth-quarter key figures
Sales up 9% to €3,959m Current operating income up 7% to €530m Net income Group share increased to €62m Net earnings per share increased to €0.22

Year-to-date key figures
Sales up 2% to €16,169m Current operating income down 1% to €2,441m Net income Group share increased 12% to €827m Net earnings per share increased to €2.89 Dividend of €1per share, subject to AGM approval

Group Highlights
Sales increased for the full year and quarter, helped by improved cement and aggregates volume trends, favorable foreign exchange, and new capacities in Brazil. Structural cost savings exceeded target, reaching €220 million for the year, of which €50 million in the fourth quarter. Current operating income slightly down for the year but rose for the quarter as higher sales volumes, favorable foreign exchange and cost cutting offset higher energy costs. Secured over €500m of divestments, meeting target for the year. Significant cash flow generation in 2010 helped by strong results on working capital. Strong cash and liquidity position maintained. Lower cost base, new capacities, and actions to mitigate higher cost inflation are in place to drive earnings growth in 2011 as volumes recover.

Bruno Lafont, Chairman and Chief Executive Officer of Lafarge, said: "While 2010 was a tough year for the cement sector as a whole, I am encouraged by the return to cement volume growth in the fourth quarter and the successful cash generation accomplishments of our operating teams in the last two years. The steps we have taken in 2010, ranging from structural cost savings to strategic investments in growing markets such as Brazil, will provide the foundation for further improvement and growth as we enter 2011. It will also allow the Group to accelerate deleveraging and reduce its debt by at least two billion euro in 2011. We will get the full benefits from volume growth thanks to our new cement capacities and the overall quality and strength of our portfolio of assets."

Outlook
The Group estimates cement demand in its markets to grow between 3 to 6 percent in 2011 versus 2010. Emerging markets continue to be the main driver of demand and Lafarge benefits from its well balanced geographic spread of high quality assets. For developed markets, the Group expects that demand will continue to slowly recover.

Overall pricing is expected to move higher for the year, although levels of pricing movements will vary by market.

Lafarge Aggregates & Concrete UK - UK Head Office
Granite House
Watermead Business Park
Syston
Leicestershire
LE7 1WA
UK

T: 0844 561 0037
F: 0870 336 8602