2003 results information Meeting

2003 RESULTS

• Information Meeting

• February 26, 2004

Disclaimer

• Lafarge is a corporation listed on the NYSE and Euronext Paris. Statements made in this presentation that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions ("Factors") which are difficult to predict. Some of the Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: the cyclical nature of the Company's business; national and regional economic conditions in the countries in which the Group does business; currency fluctuations; seasonality of the Company's operations; levels of construction spending in major markets; supply/demand structure of the industry; competition from new or existing competitors; unfavorable weather conditions during peak construction periods; changes in and implementation of environmental and other governmental regulations; our ability to successfully identify, complete and efficiently integrate acquisitions; our ability to successfully penetrate new markets; and other Factors disclosed in the Company's Reference Document filed with the French COB under the reference number D0-0375 as updated on June 5, 2003 and November 17, 2003, and its annual report on Form 20-F filed with the Securities and Exchange Commission in the USA. In general, the Company is subject to the risks and uncertainties of the construction industry and of doing business throughout the world. The forward-looking statements are made as of this date and the Company undertakes no obligation to update them, whether as a result of new information, future events or otherwise.

2003 RESULTS

• Jean-Jacques Gauthier

• Chief Financial Officer and Executive Vice President

Highlights of the year

• Solid operational performance delivered in a challenging environment

• Significant unfavorable exchange rate impact

• Sales up 4.6% excluding foreign exchange and scope impact

• Operating income(1) up 1.7% excluding foreign exchange and scope impact, despite incremental pension costs

Highlights of the year

• Substantial improvement of our financial structure

• Strong free cash flow, up 43% to € 1.6bn

• Very substantial net debt reduction: - € 3.2bn - € 1.2bn excluding impact of currency fluctuations and of rights issue

• Cash flow from operations to net debt ratio up from 19% to 25.5% and gearing down from 110% to 67%

Key figures

2003 Sales up 4.6% like for like

2003 Operating income(1) up 1.7% like for like

Significant unfavorable currency impact on operating income(1): - 8.6%

• US Dollar - 16% (49)

• Brazilian real - 21% (18)

• Pound sterling - 9% (21)

• Venezuelan bolivar - 39% (15)

• Canadian Dollar - 6% (13)

• Malaysian ringgit - 16% (10)

• Jordan dinar - 16% (8)

• Chilean peso - 17% (7)

• Others (44)

• TOTAL (185)

Operating income(1) by Division

CEMENT

Cement operating income(1) up 4 % like for like

• Substantial negative impact from currency fluctuations (- € 149m). Negative scope impact (- € 48m)

• Good volume growth (+ 4.6%) and overall positive price effect (+ 1.4%)

• Operating margin largely stable (- 0.2% to 21.2%) despite:

• incremental pension costs (- 0.3% impact on margin)
• German and Philippines price wars (- 0.5% impact on margin)

• Steady operational performance improvement

• ROCE: 8.4%

Cement: Stable operating margins

Cement: Operating income(1) variance analysis

Former Blue Circle operations

Former Blue Circle operations: Variance analysis of estimated impact on operating income(1)

BCNA Cement: Operating income(1) variance analysis

UK Cement: Operating income(1) variance analysis

Greece Cement: Operating income(1) variance analysis

Blue Circle operational contribution to overall operating income(1)

2001-2003 Blue Circle operating income(1) evolution

• Synergies delivered

• Bottom line growth held back by adverse market situations

Synergies delivered as expected

AGGREGATES AND CONCRETE

Aggregates and Concrete operating income(1) down 9% like for like

• Substantial negative impact from currency fluctuation (- € 27m)

• - 5% variation like for like excluding incremental pension costs

• Concrete performance continues to improve

• Decline concentrated to Aggregates and Paving

• Poor results in France (volumes and costs)
• US results hit by some weaker markets and New Mexico paving exit costs (Western US)

• ROCE: 6.8%

Aggregates and Concrete operating income(1): variance analysis by business line

Aggregates and Concrete operating margins affected by unfavorable markets

Aggregates and Concrete: Operating income(1) variance analysis

ROOFING

Roofing operating income(1) up 14% like for like

• Strong increase in operating income(1) in Germany, Eastern Europe and USA

• Weaker France and Benelux

• ROCE: 4.8%

Roofing operating margins show good improvement

Roofing: Operating income(1) variance analysis

GYPSUM

Gypsum operating income(1) up 56% like for like

• Strong margin recovery in North America driven by improved industrial performance and increased volumes with good pricing in Q4

• Improved results in all regions

• Germany and Poland benefit from Gyproc synergies

• ROCE: 6.3%

Gypsum operating margins: strong growth

Gypsum: Operating income(1) variance analysis

Pension costs and cash contribution

• In 2003, increase of pension costs and cash contribution in line with expectations, respectively € 99m and € 36m

• Defined benefit plans in North America & in UK show a combined funded position of 84% at year end 2003 (87% in 2002). Adverse effects on net position of funded plans due to lower discount rates in NA and UK, and higher inflation related salary assumptions for the UK

• For 2004, € 25m additional pension costs and cash contribution expected

FROM OPERATING INCOME TO NET INCOME

From operating income(1) to net income

Non-recurring Items

Net Financial Charges

Cash flow statement

Ongoing management of our debt

• Management of debt maturity

• Successful bond exchange offer in December 2003
• Average maturity of fixed rate debt: 4.3 years

• Good level of committed unused lines of credit of € 3bn

• Covenant free
• Significant increase in the average duration

• Debt Structure

• Fixed rate debt carries 5.8% average rate at year end
• € denominated net debt at 47% of total, 24% USD/CAD, 24% GBP

2003 Acquisitions and disposals

• Capital Expenditure 2003 2002

• Sustaining capital expenditure 536 704
• Internal development (eg: Ewekoro, Tetouan) 213 380
• External development (eg: Poland, China, Gyproc) 435 429

• 1,184 1,513

• Divestments (eg: Materis stake, Florida, Tong Yang) 603 725

Other operations announced

• Acquisitions and new plants

• Halla (10.2% stake, $ 71m): completed in January
• Chongqing expansion $ 40m

• Disposals

• Molins: € 270m, to be completed by summer 2004

Financial structure: Overall significant improvement

2003 RESULTS

• Bernard Kasriel

• Chief Executive Officer

Highlights of 2003 and beyond

• 2003: a solid operational performance

• Getting the expected return on BCI

• Disciplined use of the rights issue and active management of the portfolio

• 2004, a year of gradual improvement:

• Robust growth of our operating income expected

• Looking ahead: a value creating growth

2003: A challenging environment

• Extreme weather conditions in Q1 and Q2 in North America

• unusually high maintenance costs in H1
• additional maintenance costs and heavy destocking in cement and aggregates in H2 to meet catch up demand

• Erratic energy costs (fuel, coal, petcoke, gas) and some shortage (petcoke)

• General increase of electricity costs

• Price wars in cement in Germany and the Philippines

Cement: Operational performance

• Operating margin largely stable

• despite incremental pension costs and exceptional price wars in Germany and Philippines

• Good growth in volumes + 4.6%

• Overall favorable trends in prices

• main exception in Germany, with stabilisation in H2
• Philippines recovering gradually

• BCI synergies achieved

Cement: Improved industrial performance

• Increase in reliability

• 2002: 91.4%
• 2003: 92.9% (100 basic points: 1 Mt)
• mid-term objective: 96%

• Fuel (14% of the production cost) net savings of € 6m in 2003 due to:

• decrease in calorific consumption (- 2%)
• optimization of fuel mix (despite low availability of petcoke)
• despite an increase of € 24m in prices

• Electricity (14% of the production cost)

• net adverse impact of cost rise - € 18m, despite a slight reduction in consumption per ton

• Fixed costs largely stable

• maintenance costs reduction of 2% (+ € 10m)

Aggregates and Concrete: Operational performance

• Weaker performance exaggerated by incremental pension costs and negative currency impact

• Overall decrease in operating margin from 7% to 6.3%

• of which half from impact of incremental pension costs

• Contrasted performance between product lines

• disappointing in French aggregates
• good in ready mix concrete (+ 0.3% in the operating margin)

• Performance programs help partially to offset difficult environment: asset optimization, pricing management, cost reduction

Roofing: Operational performance

• Operating margin improved by + 0.8% points

• Germany: increase of 2% points

• Significant reduction in fixed costs of production and SG&A

• despite inflation, decrease by 8% (€ 50m of net savings between 1999 and 2003)
• decrease by 1.2% of the ratio SG&A / sales between 2002 and 2003

• Roofing systems components represent now 17% of sales (vs 14% in 2000)

• Substantial working capital improvement

Gypsum: Operational performance

• Significant recovery in North America driven by strong industrial performance of Silver Grove & Palatka and good volumes with improved pricing in Q4

• Significant improvement in all other regions

• Gyproc integration is well advanced and the realization of synergies is on track (Germany, Poland)

• Substantial negative effect of input costs increase (energy - € 10m, steel) partly offset by performance initiatives

• SG&A reduction:

• SG&A / sales ratio decreases by 1.1 point in 2003

• Active working capital management

Getting the expected return on Blue Circle

• In 2003 we progressed towards our target

• at a slower pace than initially expected due to specific adverse economic situations

• Since July 2001, we have made significant performance improvements and delivered the expected synergies

• With a capital employed of € 8bn and a cost of capital around 7%, we expect to reach the break even in terms of value creation in 2006

A likely scenario of former BCI results(1) evolution

An active management of our asset portfolio

• 2003: € 603m divestments At the top end of our objective (€ 400m - € 600m)

• Cement Florida
• Materis
• Tong Yang

• 2004:

• Stake in Molins

A disciplined use of investment funds

• Investments and acquisitions

• Cement capacity expansion

• Mexico
• China: Chongqing (new line in 2004)

• Increased shareholdings

• Poland: Lafarge Polska to 100%
• South Korea: Lafarge Halla Cement to 50.1% (2004)

US: Construction output 1988-2004

US: Split of construction demand by end-uses

US: Split of construction demand by end-uses

Improvement in industrial sector but flat infrastructure spending

Construction demand in Europe

Continuous growth for most emerging markets

2004 outlook

• Markets:

• Current worldwide trading trends set to continue
• Overall good pricing to be maintained
• Germany and Philippines expected to deliver significant improvements

• Energy and Freight:

• Increases in costs a challenge

• Further performance improvement

2004 outlook

• Further strengthening of our financial structure

• Whilst using our increased flexibility for selected growth investments

Lafarge strategy The worldwide leader in building materials

• Leading market positions in each activity

• Cement N°1
• Aggregates & Concrete N°2
• Roofing N°1
• Gypsum N°3

• Well balanced geographical portfolio of assets

We confirm our growth business model

• Cement emerging markets

• Roofing

• Gypsum

Organic growth in 2003

Strong & well diversified presence in emerging markets

Mid-term margin growth

• Cement

• Benefits from significant improvements in former BCI businesses and in emerging countries reproducing the performance improvement track-record of the 1997-2000 years

• Aggregates and Concrete

• Asset, price and cost management

• Roofing

• On track to achieve the 1998-2000 operating margins: a recovery of the German market would speed up this improvement

• Gypsum

• 2004-2005 should see Lafarge harvesting investments of the last five years with US turnaround confirmed

Lafarge: A group that delivers solid performance in challenging times and offers significant potential for the future

• Lafarge: A group that delivers solid performance in challenging times and offers significant potential for the future

Appendices

Blue Circle operational contribution to overall operating income(1)

Malaysia Cement: Operating income(1) variance analysis

Philippines Cement: Operating income(1) variance analysis

Nigeria Cement: Operating income(1) variance analysis

Chile Cement: Operating income(1) variance analysis

BCNA A&C: Operating income(1) variance analysis

Pension funding status at year end