Ciments Français - 2009 half-year report

2009 half-year report

2009 half-year report
This report is a free translation into English of Ciments Français “Rapport semestriel 2009” and is provided solely for the convenience of international readers.

Limited Liability Company with a share capital of 145,322,308 euros Registered address: Tour Ariane - 5 place de la Pyramide Quartier Villon - 92800 Puteaux - France RCS Nanterre B 599 800 885

Photos: Plants and collaborators of the Group in France.

SUMMARY

> INTERIM MANAGEMENT REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 > CONDENSED INTERIM CONSOLIDATED FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . 25 > STATUTORY AUDITORS’ REVIEW REPORT ON THE FIRST HALF-YEAR
FINANCIAL INFORMATION FOR 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

> CERTIFICATION OF THE PARTY RESPONSIBLE
FOR THE INTERIM FINANCIAL REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

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INTERIM MANAGEMENT REPORT

COMMENTS ON THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT EVENTS OF THE FIRST HALF OF 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.

POST BALANCE SHEET EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

3.

ACCOUNTING PRINCIPLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

4.

RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

5.

INVESTMENTS AND FINANCING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

6.

PERFORMANCE BY COUNTRY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

7.

DISPUTES AND PENDING PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

8.

OUTLOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

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1. SIGNIFICANT EVENTS OF THE FIRST HALF OF 2009
- On June 19, 2009 the Boards of Directors of Ciments Français and Italcementi confirmed their favorable evaluation of the merger between the two companies but postponed its approval until June 26, 2009 due to discussions with American institutional investors, holders of USD 500 million worth of notes issued in 2002 and 2006. On June 27, 2009 Ciments Français and Italcementi announced that they were abandoning the merger project due to excessive requests, from the group of American note holders, which were not consistent with the purpose of the merger. - At the beginning of February, Standard & Poor’s confirmed its BBB rating and changed the outlook from stable to negative. Following the announcement of the merger, Standard & Poor’s confirmed its rating, while Moody’s decided to put the Baa1 rating under surveillance with potential downgrading. - During the months of March and May, Ciments Français renewed two credit lines totaling 250 million euros for a one-year period.

2. POST BALANCE SHEET EVENTS
On July 20, 2009 Moody’s Investor Services downgraded Ciments Français long-term rating from Baa1 to Baa2, negative outlook. In July 2009, Ciments Français renewed a 150-million euro revolving credit line falling due in 364 days. Italcementi S.p.A. and Ciments Français launched a medium-term credit line of 400 million euros with a 5-year maturity, of which 300 million euros are available for Italcementi S.p.A. and 100 million euros for Ciments Français SA. This credit facility, replacing a bilateral credit line for the same amount falling due in July 2012, enables Ciments Français to renew and extend the maturity of its revolving credit lines.

3. ACCOUNTING PRINCIPLES
The Group's consolidated financial statements as of June 30, 2009 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union on that date (see note 1.1 of the notes to the condensed interim consolidated financial statements). The Group has applied IAS 1 revised “Presentation of Financial Statements”, IFRS 8 “Operating Segments” and IAS 23 revised “Borrowing Costs”, which are mandatory for annual periods beginning on or after January 1, 2009. IAS 1 revised and IFRS 8 only affect the presentation and scope of information disclosed in the accounts, while IAS 23 revised restates previously published financial data. The condensed interim consolidated financial statements as of June 30, 2009 have been prepared in compliance with IAS 34 relating to interim financial reporting.

6

Interim management report

Significant events of the first half of 2009 Post balance sheet events Accounting principles Results

Investments and financing Performance by country Disputes and pending proceedings Outlook Condensed interim consolidated financial position Statutory auditors’ review report Certification of the party responsible for the interim financial report

6 6 6 Key consolidated data 7 Quarterly information 8 Sales volumes 9 Contribution to consolidated revenues 10 Operating results 10 Finance costs 11 Net profit 11 Statement of consolidated comprehensive income 11 12 13 23 23 25 51 52

4. RESULTS
GROUP RESULTS AND FINANCIAL POSITION
For comparison purposes between homogeneous data, income statement aggregates and balance sheets totals for the closing as of June 30, 2008 presented in this half-year report have been restated to reflect both the impact of IAS 23 revised (Borrowing costs) and the line-by-line reinstatement of the Turkish operations that were not sold (see note 2 to the condensed interim consolidated financial statements). Balance sheet totals for the closing as of December 31, 2008 presented in this management report have been retrospectively restated in conformity with IAS 23 revised. Income statement aggregates for fiscal 2008 presented in this business report are those published in the 2008 annual report.

4.1 Key consolidated data
(in millions of euros) Revenues Recurring EBITDA EBITDA EBIT Net consolidated Group profit - attributable to equity holders of Group parent - attributable to non-controlling interests (minority interests) Investments Cash flow from operating activity H1 2009 2,173.8 461.9 460.3 265.0 165.9 113.7 52.2 334.9 352.0 H1 2008 2,390.0 525.4 530.3 362.8 235.6 179.1 56.5 317.9 258.2 Fiscal 2008 (published) 4,774.8 1,021.0 996.4 606.9 348.2 262.2 86.0 675.8 630.8 % change H1 2009/2008 -9.0 -12.1 -13.2 -27.0 -29.6 -36.5 -7.5

(in millions of euros) Equity - attributable to equity holders of Group parent - attributable to non-controlling interests (minority interests) Net financial debt Headcount

30 June 2009 3,709.4 2,980.4 729.0 1,858.5 17,485

30 June 2008 3,466.7 2,805.6 661.1 1,691.7 18,331

31 December 2008 (IAS 23 revised restated) 3,757.3 3,012.3 745.0 1,721.8 17,886

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4.2 Quarterly information

(in millions of euros) Q2 Revenues Recurring EBITDA EBITDA EBIT Net consolidated Group profit - attributable to equity holders of Group parent - attributable to non-controlling interests (minority interests) Net financial debt - end of quarter 1,147.4 271.8 274.7 166.8 111.6 88.0 23.6 1,858.5

2009 Q1 1,026.4 190.1 185.6 98.2 54.3 25.7 28.6 1,716.9 Q2 1,295.5 293.2 294.0 210.2 141.2 116.4 24.9 1,691.7

2008 Q1 1,094.5 232.2 236.3 152.6 94.3 62.7 31.6 1,478.7

Business activity is traditionally more sustained in the second quarter due to the seasonal nature of the Group’s operations. Revenues for the second quarter of 2009 amounted to 1,147.4 million euros, down 11.4% from the same period in 2008. This decline arose largely from the trend in mature markets (Western Europe and North America) and in trading. The decline in Asia due to Thailand and India was more contained thanks to the strong rise in China and Kazakhstan, while performance in Eastern Europe & Southern Med Rim was substantially stable, with the small improvement in Morocco and the growth in Egypt absorbing the fall in the other countries. In Q2, recurring EBITDA amounted to 271.8 million euros, down 7.3% on Q2 2008, while EBIT at 166.8 million euros decreased by 20.6%, after recognition of impairment losses for 20.4 million euros on industrial facilities, mostly located in Thailand. The decline in operating results was more contained than during the first quarter. Beyond the positive decrease in variable costs following the progressive reduction in the price of energy production factors, results reflected the actions taken to boost industrial efficiency.

8

Interim management report

Significant events of the first half of 2009 Post balance sheet events Accounting principles Results

Investments and financing Performance by country Disputes and pending proceedings Outlook Condensed interim consolidated financial position Statutory auditors’ review report Certification of the party responsible for the interim financial report

6 6 6 Key consolidated data 7 Quarterly information 8 Sales volumes 9 Contribution to consolidated revenues 10 Operating results 10 Finance costs 11 Net profit 11 Statement of consolidated comprehensive income 11 12 13 23 23 25 51 52

4.3 Sales volumes
By geographical area and by activity (at comparable consolidation scope) Data relates to volumes sold by fully consolidated companies as well as by companies consolidated using the proportionate consolidation method, up to Group share.

Cement & clinker in millions of tonnes H1 2009 2008 %
(1)

Aggregates in millions of tonnes H1 %
(2)

Ready-mixed concrete in millions of cubic meters H1 %
(2)

2009

2008

%
(1)

2009

2008

%
(1)

%
(2)

Western Europe (3) North America Eastern Europe & Southern Med Rim (4) Asia
(5)

5.3 1.8 9.9 5.2 1.8 (0.9) 23.1

6.2 2.5 10.5 5.5 2.8 (1.6) 25.9

-14.8 -28.8 -5.4 -4.9 -33.7 -10.5

-14.8 -28.8 -5.4 -4.9 -33.7 -10.5

18.2 0.2 1.3 0.3 20.0

23.0 0.2 1.4 0.4 25.0

-20.7 +6.1 -6.6 -34.6 -20.0

-20.7 +35.7 -9.1 -34.6 -19.9

3.1 0.3 1.7 0.3 0.2 5.6

4.1 0.5 2.3 0.4 0.1 7.4

-23.4 -26.3 -28.3 -35.2 -24.8

-22.1 -21.7 -28.3 -35.2 -22.4

Cement/clinker trading Eliminations TOTAL

(1) Changes at comparable consolidation scope. (2) Changes on a historical basis. (3) France, Belgium, Spain, Greece. (4) Egypt, Morocco, Bulgaria, Turkey. (5) Thailand, India, China, Kazakhstan.

In the cement and clinker business line, the decrease in sales volumes mainly related to mature countries and more particularly to North America and France. Trends varied in emerging countries, with overall receding sales: higher sales volumes in Egypt, China and Kazakhstan, relative stability in Morocco (increase in Q1 and decrease in Q2) and decline in the other countries (in particular Turkey, Thailand and Bulgaria) as well as in trading. At comparable consolidation scope, aggregates sales volumes decreased due to the significant drop in Western Europe (in particular France and Spain). In ready mix concrete, at comparable consolidation scope, the shrinking in volumes related to all the countries; it was particularly significant in France, Turkey and Spain.

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4.4 Contributions to consolidated revenues
By business segment (in millions of euros) Cement & clinker Construction materials Others TOTAL
* At comparable consolidation scope and exchange rates.

H1 2009 Amount 1,515.0 571.8 87.0 2,173.8

% 69.7 26.3 4.0 100.0

H1 2008 Amount 1,582.2 688.1 119.7 2,390.0

% change % 66.2 28.8 5.0 100.0 -4.2 -16.9 -27.3 -9.0 * -9.0 -20.7 -29.7 -13.4

By geographic area (in millions of euros) Western Europe North America Eastern Europe & Southern Med Rim Asia Cement trading Others (2) TOTAL
(1) At comparable consolidation scope and exchange rates. (2) Fuel trading, headquarters and holding companies.

H1 2009 Amount 933.6 189.5 701.4 204.3 112.8 32.1 2,173.8

% 42.9 8.7 32.3 9.4 5.2 1.5 100.0

H1 2008 Amount 1,111.8 228.2 651.9 202.4 126.7 69.0 2,390.0

% change % 46.5 9.5 27.3 8.5 5.3 2.9 100.0 -16.0 -16.9 +7.6 +0.9 -11.0 -53.5 -9.0
(1)

-16.5 -28.4 +1.8 +0.5 -35.0 -60.9 -13.4

Revenues for the first half of the year were down 9.0% on H1 2008 at 2,173.8 million euros, due to the important shrinking of the activity (-13.3%), marginally reduced by positive exchange and scope effects (+2.9% and +1.4% respectively). Revenues were up in the emerging countries thanks to the favorable dynamic in the first quarter in Eastern Europe & Southern Med Rim. This increase, considering the relative stability of revenues in Asia, failed to offset the continuing decline in business activity in Western Europe, North America and trading.

4.5 Operating results
Recurring EBITDA at 461.9 million euros was down 12.1%, mainly because of the sharp decrease in Western Europe and North America, only mitigated in part by the positive contribution of Eastern Europe & Southern Med Rim. Asia’s overall results were slightly down. EBIT decreased by 27.0% at 265.0 million euros after impairment of industrial assets, essentially in Asia, following the reduction in the economic life of several plants.

10

Interim management report

Significant events of the first half of 2009 Post balance sheet events Accounting principles Results

Investments and financing Performance by country Disputes and pending proceedings Outlook Condensed interim consolidated financial position Statutory auditors’ review report Certification of the party responsible for the interim financial report

6 6 6 Key consolidated data 7 Quarterly information 8 Sales volumes 9 Contribution to consolidated revenues 10 Operating results 10 Finance costs 11 Net profit 11 Statement of consolidated comprehensive income 11 12 13 23 23 25 51 52

4.6 Finance costs
Finance costs, net of finance income, at 42.2 million euros were down 15.8% on H1 2008 (50.1 million euros) essentially because of the decrease in interest rates and the increase in capitalized interests pursuant to IAS 23 revised.

4.7 Net profit
Profit before tax for the first half of 2009 amounted to 227.8 million euros against 325.2 million euros in the first half of 2008. It was strongly affected by the decrease in operating results but nonetheless benefited from lower net finance costs. Income tax expense totaled 61.9 million euros in 2009, down on 2008 (89.6 million euros in 2008) mainly because of the reduction in tax base. Net profit for the first half of 2009 amounted to 165.9 million euros, down 29.6% on H1 2008.

4.8 Statement of consolidated comprehensive income
As stated in note 1 to the consolidated financial statements, the Group has elected to present its comprehensive income in two statements: “Consolidated Income Statement” and “Consolidated Statement of Comprehensive Income”. The latter presents the changes in equity for the period other than those arising from transactions with Group equity holders acting in their capacity as such. These changes (before tax effect) include: • Fair value adjustments on available-for-sale investments for 11 million euros; • Fair value adjustments on hedging derivatives for -30.1 million euros; • Translation differences for -50.4 million euros. After recognition of the net profit presented in § 4.7 and considering the changes in equity described above, consolidated comprehensive income amounted to +107.2 million euros (of which +73.5 million euros attributable to equity holders of Group parent) against -0.2 million euros in the first half of 2008 (of which -16.5 million euros attributable to equity holders of Group parent).

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5. INVESTMENTS AND FINANCING
5.1 Investments
(in millions of euros) Financial assets H1 2009 Western Europe North America Eastern Europe & Southern Med Rim Asia Trading & others* Total investments Change in fixed assets payables Total investments Cash and cash equivalent from acquired companies Total cash flows from investing activities
* Including headquarters and holding companies.

Property, plant & equipment H1

Intangible assets H1

TOTAL H1

2008 0.6 27.1 10.8 17.5 56.0 0.2 56.2 (1.4) 54.8

2009 37.9 127.8 109.3 30.2 3.4 308.6 (0.9) 307.7 307.7

2008 53.9 73.6 47.8 43.3 2.8 221.4 40.0 261.4 261.4

2009 6.2 0.3 6.5 6.5 6.5

2008 1.0 0.2 0.5 1.7 1.7 1.7

2009 59.9 127.8 115.1 32.3 13.9 349.0 (15.7) 333.3 (6.1) 327.2

2008 55.5 100.9 58.6 43.3 20.8 279.1 40.2 319.3 (1.4) 317.9

15.8 5.8 2.1 10.2 33.9 (14.8) 19.1 (6.1) 13.0

Equity investments during the first half of 2009 amounting to 13.0 million euros (net of cash from acquired companies) related mainly to the acquisition of Béton Masoni in France in April and Gulf Ready Mix Concrete in Kuwait in May. Investments in property, plant & equipment were essentially made in North America (127.8 million euros), Morocco (83.9 million euros), France (28.3 million euros), India (23.2 million euros) and Egypt (17.3 million euros).

5.2 Financing and net financial debt
Cash flows generated by operating activities amounted to 352.0 million euros. Net financial debt increased by 136.7 million euros against December 31, 2008 after investments and payment of dividends. Debt to equity ratio and debt coverage ratio Debt to equity ratio or gearing ratio (net financial debt/total equity), traditionally higher as of June 30 due to the seasonal nature of the activity, was 50.1% against 45.8% as of December 31, 2009. The net debt coverage ratio (net financial debt/recurring EBITDA over the 12-month period) was 1.9 as of June 30, 2009 against 1.7 as of December 31, 2008.

12

Interim management report

Significant events of the first half of 2009 Post balance sheet events Accounting principles Results Investments and financing

Investments Financing and net financial debt Equity Parent company's results

Performance by country Disputes and pending proceedings Outlook Condensed interim consolidated financial position Statutory auditors’ review report Certification of the party responsible for the interim financial report

6 6 6 7 12 12 13 13 13 23 23 25 51 52

5.3 Equity
As of June 30, 2009 the share capital of Ciments Français SA amounted to 145,322,308 euros consisting in 36,330,577 shares of 4 euros each. On February 4, 2009 Ciments Français cancelled 430,505 treasury shares. During the first half of 2009, Ciments Français SA acquired 10,999 of its own shares as part of the authorization granted by the General Meeting on April 14, 2008. The total acquisition cost of 0.6 million euros was recognized as a debit against the treasury shares reserve. As of June 30, 2009 Ciments Français held 54,699 treasury shares totaling 2.7 million euros. Over the six-month period, the closing rate of several currencies depreciated against the euro (mainly the Egyptian pound), resulting in a decrease in the translation reserve for 50.4 million euros (of which 31.7 million euros attributable to equity holders of Group parent). In the first half of 2009, the impact of the changes in consolidation scope on equity was 0.8 million euros. The fair value adjustment on available-for-sale investments had a net positive impact of 11 million euros mainly due to the revaluation of Goltas shares. Net consolidated Group profit amounted to 165.9 million euros (of which 113.7 million euros attributable to equity holders of Group parent). After distribution by Ciments Français SA of 108.9 million euros in dividends, total equity amounted to 3,709.4 million euros (3,757.3 million as of December 31, 2008) of which 2,890.4 million euros attributable to equity holders of Group parent (3,012.3 million as of December 31, 2008).

5.4 Parent company’s results
As of June 30, 2009 Ciments Français SA net profit amounted to 131.0 million euros against 92.5 million euros as of June 30, 2008.

6. PERFORMANCE BY COUNTRY
Western Europe
FRANCE (1)
(in millions of euros) Revenues EBITDA EBIT Capital expenditure Headcount - end of period
(1) Excluding headquarters. (2) Before intra-Group eliminations and after intra-segment eliminations.
(2)

H1 2009 725.2 151.5 153.7 114.9 28.3 3,825

H1 2008 843.9 173.5 176.6 139.1 37.1 3,811

Fiscal 2008 1,601.9 334.2 336.9 258.0 86.9 3,770

Recurring EBITDA

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Cement (1)
(in millions of euros) Revenues (2) Recurring EBITDA EBITDA EBIT
(1) Excluding Socli (lime) and Axim (additives). (2) Before intra-Group eliminations and including re-invoicing of services.

H1 2009 425.8 114.1 113.3 94.3

H1 2008 482.6 109.8 112.3 93.9

Fiscal 2008 915.9 223.0 225.5 188.9

The construction and public works sector was penalized by the general economic downtrend and the unfavorable weather conditions of January and February. Cement consumption was down approximately 18% and the decline, originating in August 2008, is expected to continue into the second half of 2009, although at a lower rate. Group domestic sales volumes decreased by 15.9%, above market trend, and considering however that volumes for the same period in 2008 were affected by strikes in February. Revenues declined because price increases only mitigated in part the drop in volumes. Operating results were slightly up against the first half of 2008 as a result of cost-containment actions.

Construction materials
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT
* Before intra-Group eliminations.

H1 2009 334.4 30.3 33.3 16.6

H1 2008 404.6 53.5 54.0 37.7

Fiscal 2008 763.5 90.4 90.3 56.1

The downtrend in the construction sector penalized aggregates and ready mix concrete sales volumes, which were down 21.7% and 20.9% respectively. Sales prices increased in both business lines compared with the first half of 2008 but the fierce competitive pressure on the ready mix concrete market should result in growing tensions on prices in the second half of the year following falling demand. Revenues and operating results decreased significantly due to the negative volume effect, which was only offset in part by a positive price/variable cost dynamic and lower fixed costs.

14

Interim management report

Significant events of the first half of 2009 Post balance sheet events Accounting principles Results Investments and financing Performance by country Disputes and pending proceedings Outlook

Condensed interim consolidated financial position Statutory auditors’ review report Certification of the party responsible for the interim financial report

6 6 6 7 12 13 23 23 25 51 52

BELGIUM
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
* Before intra-Group eliminations.

H1 2009 116.9 21.7 22.3 10.3 4.8 538

H1 2008 127.8 20.4 20.4 7.9 5.3 543

Fiscal 2008 245.6 45.3 45.5 21.0 15.3 540

According to estimates, cement consumption in Belgium decreased by 17% during the first half of 2009. Group cement sales volumes in Benelux were up 1%. CCB global sales (including intra-Group sales towards France) were pushed down. Aggregates and ready mix concrete volumes were down 11.7% and 13.0% respectively, affected by the slackening of the construction sector. Overall, the price increase proved unable to offset the decrease in volumes and revenues dropped. On the other hand, operating results improved thanks to the level of sales prices towards France and the containment of operating costs (primarily fixed costs).
SPAIN
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
* Before intra-Group eliminations.

H1 2009 114.9 23.4 23.2 10.1 3.8 751

H1 2008 161.7 38.3 38.3 26.4 8.4 843

Fiscal 2008 299.7 67.9 67.3 43.4 20.0 792

The shrinking of the residential sector continued resulting in a 40.5% collapse on average in cement consumption (-28.0% in the Basque Country and -46.0% in Andalusia). Group cement sales performed better than the market, with a fall of 20.1%. Sales prices, globally down, varied according to regional trends. In the southern region, the decrease, which started in July 2008, intensified. Consequently, some of the batching units located south of the country were temporarily or permanently closed by the Group. Overall, revenues dropped by almost one third, due to both the unfavorable volume effect and the negative impact of the tightening of sales prices. The weakness of the construction market also affected sales volumes: aggregates sales fell by 35.8% and ready mix concrete by 24.5%. Overall, operating results decreased significantly, as a result of lower volumes and prices, despite contained fixed costs.

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GREECE
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
* Before intra-Group eliminations.

H1 2009 40.3 9.0 8.9 6.7 1.0 222

H1 2008 47.3 12.9 12.7 10.8 3.1 238

Fiscal 2008 97.4 27.7 27.7 23.4 6.0 222

During the first half of 2009, cement consumption decreased by an estimated 23.3%. Group cement and clinker sales volumes were down 19.3%, penalized by the decrease in exports. Ready mix concrete and aggregates sales volumes decreased by 17.9% and 20.6%, respectively. This reduction in sales volumes in the three core businesses led to lower revenues and operating results.

North America
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
* Before intra-Group eliminations.

H1 2009 189.8 (10.4) (10.7) (33.3) 127.8 1,951

H1 2008 228.2 22.7 23.6 1.0 73.6 2,169

Fiscal 2008 500.7 55.4 53.1 8.2 197.7 2,082

The United States were affected by the worst economic crisis since the Great Depression of 1929 with GNP falling at an annualized rate of 5.5% in the first quarter of 2009. At the end of May, the unemployment rate was 9.5% and expected to reach a peak of 10% in the first half of 2010. Based on the latest available data (May 2009), the construction sector slumped by 12%, while cement consumption on Group markets decreased by 27%. According to the latest estimates published by the Portland Cement Association, US cement consumption should shrink by a further 18% in 2009, following a 15.6% decrease in 2008. The trend is expected to reverse in 2010. The constant decrease in cement consumption led Essroc, like other cement producers, to close or temporarily halt operations at the production facilities worst hit by the constant erosion in sales volumes. In these difficult conditions, Group cement sales volumes were down 28.8%. Average sales prices remained substantially steady thanks to a favorable regional mix. The decrease in revenues and operating results was primarily due to the collapse in sales volumes, although operating results benefited from a sharp reduction in fixed costs arising from improved industrial efficiency.

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MOROCCO
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
* Before intra-Group eliminations.

H1 2009 166.6 66.7 66.8 57.5 83.9 1,117

H1 2008 154.9 43.8 43.8 34.8 19.3 1,059

Fiscal 2008 309.4 95.3 95.4 73.9 84.9 1,091

Although the effects of the world crisis have started to show, the national cement market maintained the record level of the same period in 2008. Group cement sales volumes, up 1%, were affected by strikes at the Safi cement plant and maintenance works at the Marrakech plant for the entire month of January. Construction materials sales volumes were down: -6.6% for aggregates and -14.7% for ready mix concrete. Overall, revenues in local currency were pushed up thanks to higher sales prices, which contributed to absorb the rise in production costs (particularly for energy). The reduction in clinker purchases also contributed to the significant increase in operating results. Construction works on the new production line of Aït-Baha (Group priority project) continued over the period.

BULGARIA
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
* Before intra-Group eliminations.

H1 2009 60.2 18.7 18.7 13.6 3.4 474

H1 2008 81.9 27.9 28.2 21.8 9.0 541

Fiscal 2008 170.2 57.4 57.4 44.5 18.0 491

The impact of the world crisis resulted in a sudden as well as significant fall in cement consumption in the first half of the year and the residential sector was strongly hit. Group domestic sales were down 31.1% (-35.0% including exports), consistent with market trend. Operating results fell heavily because of the negative volume effect.

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Asia
THAILAND
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
* Before intra-Group eliminations.

H1 2009 79.0 9.1 4.9 (25.2) 1.7 853

H1 2008 101.5 22.4 22.3 11.7 3.1 1,131

Fiscal 2008 199.6 36.2 36.1 5.3 9.0 1,091

Continuing political uncertainty, together with the financial crisis, the postponement of major infrastructure works and the investment slowdown led to a decrease in cement consumption with production capacities exceeding demand. During the first six-month period, the Group completed the restructuring plan, which included the use of the Takli and Cha-am plants as grinding centers and Pukrang as clinker production center. Group cement and clinker sales volumes were down 17.0%, because of the decline in the domestic (-12.7%) and export markets, in particular towards Cambodia in an economic slump. Ready mix concrete volumes were affected by strong competitive pressure in a shrinking market and decreased by 35.2%. Average sales prices dropped on the domestic market of cement and ready mix concrete but rose for exports, favored by the devaluation of the Thai baht against the US dollar. Operating results receded with respect to the same period in 2008, because of the sharp decrease in revenues and the rise in the average cost of fuels. The industrial restructuring described above generated significant non-recurring expenses in the first half, but has already produced important savings in fixed costs (maintenance and personnel). Due to the uncertain trend in business activity in Thailand, which has entered a lasting economic recessionary period, the residual economic life of assets was shortened and impairment losses for 19.3 million euros recognized on the Cha-am and Takli kiln lines.

20

Interim management report

Significant events of the first half of 2009 Post balance sheet events Accounting principles Results Investments and financing Performance by country Disputes and pending proceedings Outlook

Condensed interim consolidated financial position Statutory auditors’ review report Certification of the party responsible for the interim financial report

6 6 6 7 12 13 23 23 25 51 52

INDIA
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
* Before intra-Group eliminations.

H1 2009 95.2 39.7 39.9 33.1 23.2 780

H1 2008 94.6 33.9 34.2 27.5 35.4 818

Fiscal 2008 188.2 64.4 63.5 49.8 83.1 802

The growth of the Indian economy continued though at a slower rate due to the effects of the financial crisis on business activity. The construction sector benefited from government infrastructure investments, which more than compensated for the slowdown in the residential and non residential sectors. Cement consumption increased on the Group markets in southern India. Group cement sales volumes were down 8.9% compared with the first half of 2008, which had benefited from outside purchases of clinker. Average sales prices leveled with the first half of 2008 thanks to a globally more favorable activity during the first half of 2009. Operating results improved due to the positive sales price/cost effect, which was only mitigated in part by the decline in volumes and the devaluation of the rupee against the euro.
CHINA
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
* Before intra-Group eliminations.

H1 2009 23.8 3.8 3.8 1.6 1.7 432

H1 2008 10.7 (0.4) (0.4) (2.2) 0.5 472

Fiscal 2008 32.3 (0.6) (0.6) (18.9) 2.4 453

The Chinese economy continued growing, albeit at a slower rate than in the first half of 2008. The increase in cement consumption on the Group market (Shaanxi province in Central China) was supported by major infrastructure projects, which more than made up for the slackening of the residential and non residential sectors. Group cement and clinker sales volumes were up 40.8% against the first half of 2008, which had suffered from adverse weather conditions in the early part of the year. Revenues increased because of higher volumes and sales prices. Operating results improved thanks to growing revenues and despite rising energy costs.

21 www.cimfra.com

KAZAKHSTAN
(in millions of euros) Revenues* Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
* Before intra-Group eliminations.

H1 2009 13.5 0.0 0.0 (1.7) 3.6 399

H1 2008 8.5 0.4 0.5 (0.8) 4.2 464

Fiscal 2008 29.5 5.0 4.7 1.7 16.3 457

The country still endured the consequences of the world crisis. In the absence of financing, all infrastructure construction projects were postponed and the market slumped by 30% compared with the first half of 2008. In this difficult environment, Group sales volumes were up on the same year-earlier period, which had suffered from a long idle period due to the suspension of quarrying licenses. Operating results were affected by the strong contraction of sales prices and were down on the first half of 2008.

Cement and clinker trading
(in millions of euros) Revenues (1) Recurring EBITDA EBITDA EBIT Capital expenditure Headcount - end of period
(1) Before intra-Group eliminations. (2) Including Intercom and Medcem consolidated as from December 2008.

H1 2009 124.6 6.3 6.5 3.6 2.5 724

H1 2008 165.5 13.4 13.4 11.9 1.3 488

Fiscal 2008 323.6 15.4 15.4 11.0 2.9 661 (2)

During the first half of 2009, cement and clinker sales (intra-Group and to third parties) were down 33.7% against the same period of 2008. The reduction in volumes resulting from the shrinking of the market and the increase in competitive pressure hit all the terminals with the sole exception of Albania, whose business activity was buoyed by public investments before the elections held at the end of June. Operating results decreased sharply due to the reduction in both volumes and sales margins.

22

CONDENSED INTERIM CONSOLIDATED FINANCIAL POSITION
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
1. CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

2. NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

25 www.cimfra.com

Consolidated financial statements
Consolidated interim statement of financial position Consolidated interim income statement Consolidated interim statement of comprehensive income Consolidated interim statement of movements in total shareholders' equity Consolidated interim cash flow statement 27 28 29 30 31

26

Interim management report Condensed interim consolidated financial position

Consolidated financial statements

Consolidated interim statement of financial position Consolidated interim income statement Consolidated interim statement of comprehensive income Consolidated interim statement of movements in total shareholders' equity Consolidated interim cash flow statement

5 27 28 29 30 31 32 51 52

Notes to the consolidated interim financial statements Statutory auditors’ review report Certification of the party responsible for the interim financial report

CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION ASSETS
(in millions of euros) Property, plant & equipment Investment property Goodwill Intangible assets Investments in associates Other equity investments Deferred tax assets Other non-current assets TOTAL NON-CURRENT ASSETS Inventories Trade receivables Other current assets Income tax assets Equity investments and financial receivables Cash and cash equivalents TOTAL CURRENT ASSETS TOTAL ASSETS As of June 30, 2009 3,578.8 20.1 1,504.6 68.6 194.1 71.3 22.8 64.9 5,525.2 604.0 712.2 249.4 31.8 3.0 314.7 1,915.1 7,440.3 As of December 31, 2008* 3,522.2 7.1 1,504.9 71.8 188.1 50.0 21.6 102.3 5,468.0 698.7 723.5 239.7 50.2 0.0 324.1 2,036.2 7,504.2

EQUITY AND LIABILITIES
(in millions of euros) Share capital Reserves Treasury shares Retained earnings EQUITY (attributable to equity holders of Group parent) Non-controlling interests (minority interests) TOTAL SHAREHOLDERS' EQUITY Interest-bearing loans and long-term borrowings Employee benefit liabilities Non-current provisions Deferred tax liabilities Other non-current liabilities TOTAL NON-CURRENT LIABILITIES Bank overdrafts and short-term borrowings Interest-bearing loans and short-term borrowings Trade payables Current provisions Income tax liabilities Other current liabilities TOTAL CURRENT LIABILITIES TOTAL LIABILITIES TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
* IAS 23 revised. See notes to the condensed interim consolidated financial statements.

As of June 30, 2009 145.3 903.4 (2.7) 1,934.4 2,980.4 729.0 3,709.4 1,793.6 118.6 175.0 235.2 42.7 2,365.1 109.6 274.0 462.5 1.5 44.9 473.3 1,365.8 3,730.9 7,440.3

As of December 31, 2008* 147.0 940.9 (36.3) 1,960.7 3,012.3 745.0 3,757.3 1,655.9 117.4 202.0 253.0 32.3 2,260.6 195.5 230.3 552.4 2.0 58.4 447.7 1,486.3 3,746.9 7,504.2

27 www.cimfra.com

CONSOLIDATED INTERIM INCOME STATEMENT
(in millions of euros) Note REVENUES Other revenues Change in inventories Internal work capitalized Goods and utilities expense Service expense Employee benefit expense Other operating income (expense) RECURRING EBITDA Other non-recurring income Other non-recurring expense EBITDA Amortization and depreciation Impairment EBIT Finance income Finance costs Impairment on financial assets Net exchange-rate differences and derivatives FINANCE INCOME (COSTS), NET Share of results of associates PROFIT BEFORE TAX Income tax expense NET CONSOLIDATED GROUP PROFIT Of which share attributable to: - Equity holders of Group parent - Non-controlling interests (minority interests) EARNINGS PER SHARE IN EUROS Share attributable to equity holders of Group parent - Basic earnings - Diluted earnings
* IAS 23 revised and IFRS 5 restated. See notes to the condensed interim consolidated financial statements.

H1 2009 Amounts 2,173.8 9.2 (40.8) 8.6 (815.0) (476.3) (322.1) (75.5) 461.9 3.3 (4.9) 460.3 (174.9) (20.4) 265.0 11.6 (48.3) (5.5) 17 (42.2) 5.0 227.8 18 (61.9) 165.9 113.7 52.2 7.6% 10.5% 12.2% 21.2% 21.2% % 100.0%

H1 2008* Amounts 2,390.0 16.9 (2.2) 7.2 (918.4) (580.5) (320.9) (66.7) 525.4 5.1 (0.2) 530.3 (167.5) 362.8 12.9 (59.5) (3.5) (50.1) 12.5 325.2 (89.6) 235.6 179.1 56.5 9.9% 13.6% 15.2% 22.2% 22.0% % 100.0%

Change 2009/2008 % -9.0%

4

11 12 13 14 4 15 4 15 4

-12.1%

-13.2%

-27.0%

-15.8%

-29.9%

-29.6% -36.5% -7.5%

19 19

3.10 3.10

4.86 4.84

28

CONSOLIDATED INTERIM STATEMENT OF MOVEMENTS IN TOTAL SHAREHOLDERS' EQUITY
Share Share capital premium reserve (in millions of euros)
As of January 1, 2008 Net profit for the period Other components of comprehensive income H1 2008 comprehensive income Share-based payment Dividends Capital increase Treasury share buyback Treasure share sale Cancellation of treasury shares Asment held at equity Changes in consolidation scope Others As of June 30, 2008 Net profit for the period Other components of comprehensive income H2 2008 comprehensive income Share-based payment Dividends Capital increase Treasury share buyback Treasury share sale Cancellation of treasury shares Changes in consolidation scope Others As of December 31, 2008 Net profit for the period Other components of comprehensive income H1 2009 comprehensive income Share-based payment Dividends Capital increase Treasury share buyback Treasury share sale Cancellation of treasury shares Changes in consolidation scope Others As of June 30, 2009
* IAS 23 revised and IFRS 5 restated. See notes to the condensed interim consolidated financial statements.

RESERVES Available Derivative Other for sale reserve reserves reserve

Translation Treasury Retained Equity reserve* shares earnings* attributable to owners of Group parent company*
(46.6) (172.1) (172.1) (95.0) 1,873.5 179.1 179.1 (92.4) 2,983.7 179.1 (195.6) (16.5) 3.8 (92.4) 1.2 (32.8) 1.8 (43.5) 0.3 2,805.6 86.9 149.4 236.3 3.1 0.6 (34.2) 0.0 0.9 0.0 3,012.3 113.7 (40.0) 73.7 2.6 (108.9) (0.7) 0.1 0.0 1.3 2,980.4

Noncontrolling interests (minority interests)
691.9 56.4 (40.2) 16.2 (48.3)

Total shareholders' equity*

150.7

941.6

61.7 (28.6) (28.6)

10.1 5.1 5.1

87.7

3.8 0.1 1.1 (32.8) 1.8 (76.3) (0.1) (218.8) 104.2 104.2 32.8 0.4 1,993.4 86.9 86.9

3,675.6 235.5 (235.8) (0.3) 3.8 (140.7) 1.2 (32.8) 1.8 (43.5) 1.1 0.5 3,466.7 116.5 203.9 320.4 3.1 (2.0) 0.6 (34.2) 0.0 3.0 (0.3) 3,757.3 165.9 (58.7) 107.2 2.6 (159.2) (0.7) 0.1 0.0 0.8 1.3 3,709.4

150.8

942.7

(43.2) 46.4 46.4

15.2 (1.2) (1.2)

91.5 3.1

(126.0)

1.1 0.2 661.1 29.6 54.5 84.1 (2.0)

0.6 (34.2) (3.8) 0.4 (114.2) (31.6) (31.6) 2.6 (108.9) (0.7) 0.1 34.2 (0.1) (145.9) 123.9 (120.1) 0.9 (0.4) 1,960.7 113.7 113.7

147.0

943.3

3.2 11.0 11.0

14.0 (19.4) (19.4)

94.6

(36.3)

2.1 (0.3) 745.0 52.2 (18.7) 33.5 (50.3)

(1.7)

(32.5) 1.4 1,934.4

0.8 729.0

145.3

943.3

14.2

(5.4)

97.2

(2.7)

30

Interim management report Condensed interim consolidated financial position

Consolidated financial statements

Consolidated interim statement of financial position Consolidated interim income statement Consolidated interim statement of comprehensive income Consolidated interim statement of movements in total shareholders' equity Consolidated interim cash flow statement

5 27 28 29 30 31 32 51 52

Notes to the consolidated interim financial statements Statutory auditors’ review report Certification of the party responsible for the interim financial report

CONSOLIDATED INTERIM CASH FLOW STATEMENT
(in millions of euros) Cash flow from operating activities Profit before tax Adjustments for: Amortization, depreciation and impairment Reversal undistributed results of associates Capital (gains) losses on assets disposals Changes in employee benefit liabilities and other provisions Stock options Finance costs, net Cash flow before tax, finance income/costs and change in working capital Change in working capital Cash flow from operating activities Dividends received Net finance costs paid Income taxes paid TOTAL NET CASH PROVIDED BY OPERATING ACTIVITIES Cash flow from investing activities Intangible assets Property, plant and equipment Financial investments, net of cash from acquired subsidiaries (1) Proceeds from disposals of non-current assets, net of cash from disvestments Repayment of long-term receivables TOTAL NET CASH USED IN INVESTING ACTIVITIES Cash flow from financing activities New interest-bearing loans and long-term borrowings Repayment of interest-bearing loans and long-term borrowings (Decrease) increase in bank overdraft and short-term borrowings Change in current financial assets Capital increase Purchase (sale) of treasury shares Dividends paid Other proceeds TOTAL NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES Effect of exchange rate changes on cash and cash equivalents and others (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
* IAS 23 revised and IFRS 5 restated. (1): of which changes in consolidation scope: Financial investments Cash and cash equivalents from acquired companies Financial investments net of cash from acquired companies See notes to the condensed interim consolidated financial statements.

H1 2009 227.8 194.8 (4.7) (2.0) (14.9) 2.6 35.0 438.6 27.5 466.1 (1.1) (36.4) (76.6) 352.0 (6.5) (307.7) (13.0) 12.1 (7.4) (322.5) 228.3 (19.4) (87.5) (3.8) 0.1 (0.6) (151.1) 0.4 (33.6) (5.2) (9.3) 324.1 314.8 (9.3)

H1 2008* 325.2 167.8 (10.1) (4.8) (6.5) 3.8 46.5 521.9 (112.1) 409.8 (4.0) (49.0) (98.6) 258.2 (1.7) (261.4) (54.8) 60.9 4.8 (252.2) 291.0 (188.2) 22.7 (1.0) 1.2 (31.0) (138.2) (1.3) (44.8) (19.5) (58.3) 358.9 300.6 (58.3)

(18.6) 6.1 (12.5)

(28.0) 1.4 (26.6)

31 www.cimfra.com

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Note 1 - Basis for preparation of the consolidated interim financial statements Note 2 - Comparability of accounts, changes in consolidation scope and significant events Note 3 - Seasonal nature of business Note 4 - Segment information Note 5 - Property, plant and equipment Note 6 - Investments in associates and other investments Note 7 - Trade receivables Note 8 - Capital and reserves Note 9 - Provisions Note 10 - Financial debt Note 11 - Goods and utilities expense Note 12 - Service expense Note 13 - Employee expense Note 14 - Other operating income (expense) Note 15 - Impairment Note 16 - Non-recurring income (expense) Note 17 - Finance income (costs) Note 18 - Income tax expense Note 19 - Earnings per share Note 20 - Related party transactions Note 21 - Post balance sheet events 33 37 38 38 39 40 40 41 41 42 46 46 46 47 47 48 48 48 49 49 50

32

Interim management report Condensed interim consolidated financial position

Consolidated financial statements Notes to the consolidated interim financial statements

Statutory auditors’ review report Certification of the party responsible for the interim financial report

5 26 32 51 52

NOTE 1 - BASIS FOR PREPARATION OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Ciments Français SA is a French limited liability company listed on Euronext Paris. Its financial statements were approved by the Board of Directors on July 30, 2009.

1.1 Statement of compliance
Because of its stock exchange listing in a European Union country and pursuant to the European directive n°1606/2002 of July 19, 2002 the condensed consolidated financial statements of Ciments Français and its subsidiaries (the “Group”) are prepared in conformity with “International Financial Reporting Standards” (IFRS) as adopted by the European Union at the date of the approval of the financial statements by the Board of Directors and available at http://ec.europa.eu/internal_market/ accounting/ias_en.htm#adopted-commission. The consolidated financial statements as of June 30, 2009 have been prepared in accordance with IAS 34 related to interim financial reporting and the IFRSs adopted by the European Union and applicable as of June 30, 2009. They give a fair view of the accounting position of Ciments Français and its subsidiaries as well as interests in associates or joint ventures. Because of their condensed nature, these financial statements do not contain all the information required for the preparation of comprehensive consolidated financial statements and should be read in conjunction with the consolidated financial statements of Ciments Français for the financial year ended December 31, 2008 available on the company’s website. As of June 30, 2009 the accounting standards and interpretations adopted by the European Union are similar to the IFRS (including IAS and interpretations) with mandatory application published by the IASB, with the exception of IAS 39, only partly adopted, and of the amendment to IFRS 7, not adopted. They have no effect on Ciments Français consolidated accounts. The consolidated financial statements of the Group have been drawn up in accordance with IFRS as published by the IASB on June 30, 2009. The accounting standards used to prepare the interim consolidated financial statements comply with IFRS as adopted by the European Union as of June 30, 2009 and available on its website. They are similar to those used to draw up the financial statements as of December 31, 2008, except for the changes presented below. The Group has applied IAS 1 revised, IFRS 8 and IAS 23 revised, mandatory for annual periods beginning on or after January 1, 2009. IAS 1 revised and IFRS 8 only affect the presentation and scope of information reported in the accounts, while IAS 23 revised restates previously published financial data. • IAS 1 revised ”Presentation of Financial Statements”: This standard introduces the concept of comprehensive income, which includes the changes in equity for the period other than those arising from transactions with equity holders acting in their capacity as such. The Group has elected to present its comprehensive income in two statements: the “Consolidated Income Statement” and the “Consolidated Statement of Comprehensive Income” pursuant to § 12 of this standard. The Group has also opted for the titles used in the standard, the balance sheet now being called “Statement of Financial Position”. • IFRS 8 “Operating Segments”: This standard supersedes IAS 14 - Segment Reporting. It introduces the notion of “management approach” in segment reporting. This standard requires a modification in both the
33 www.cimfra.com

presentation and the note on segment reporting, that shall now be based on internal reporting regularly reviewed by the Group chief operating decision maker in order to decide on resources to be allocated to the segment and assess its performance. The segments determined in accordance with IFRS 8 are identical to the primary operating segments defined pursuant to IAS 14. Disclosures required by IFRS 8 are detailed in note 4. • IAS 23 revised “Borrowing Costs”: This standard published by the IASB in March 2007 and adopted by the European Union on December 10, 2008 is mandatory on or after January 1, 2009. For the Group, application of this revised standard constitutes a change in accounting policy. Its content and impacts can be detailed as follows: - The amended version of IAS 23 removes the option of immediately recognizing as an expense any borrowing costs that directly relate to the acquisition, construction or production of a qualifying asset (i.e. an asset that takes a substantial period of time to get ready for use or sale) and requires that such borrowing costs be capitalized as part of the costs of the asset. - This change in accounting policy has been applied retroactively, in conformity with the transitional provisions of IAS 23 revised, § 28, as follows: • The Group has elected January 1, 2006 as commencement date for the capitalization of borrowing costs; • As regards income statement and further to this change in accounting policy, finance costs were reduced by 7.2 million euros in the first half of 2009, by 2.5 million euros in the first half of 2008 and by 6.6 million euros for the entire 2008 year; • As for balance sheet, this change in accounting policy resulted in the recognition of an increase in the fair value of qualifying assets and correlatively in their depreciation for a net amount of 10.3 million euros against equity, which increased by 6.1 million euros in 2008 after recognition of deferred tax liabilities for 4.2 million euros. Because these are condensed financial statements, the obligation required by IAS 1 revised (§ 39) to present a financial position at the opening of the comparative period (i.e. January 1, 2008) does not apply (IAS 1 revised § BC 33). The standards and interpretations adopted by the European Union as of December 31, 2008 that were not applied early during fiscal 2008 but are mandatory on or after January 1, 2009 are as follows: - IFRIC 14 “IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction”. This interpretation has no impact on Group financial statements as of June 30, 2009; - Amendments to IFRS 2 “Group Cash-Settled Share-Based Payment Transactions - Vesting Conditions and Cancellations”. The impact of these provisions on the published periods is given in note 13 (Employee expense). Texts published as of December 31, 2008 by the IASB, adopted by the European Union between the close of the last financial year and the date of approval of the accounts (i.e. between December 31, 2008 and March 4, 2009), and applicable on or after January 1, 2009, are as follows: - Improvements to IFRS May 2008: 14 out of the 35 improvements came into force on January 1, 2009 (IAS 20, 40 and 41 as well as 11 editorial or wording improvements relating to 9 standards). These improvements have no effect on financial statements as of June 30, 2009. - Amendments to IAS 32 and IAS 1 “Puttable Financial Instruments and Obligations Arising on Liquidation”; - Amendments to IFRS 1 and IAS 27 “Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate”. These amendments have no effect on H1 2009 financial statements.
34

Interim management report Condensed interim consolidated financial position

Consolidated financial statements Notes to the consolidated interim financial statements

Statutory auditors’ review report Certification of the party responsible for the interim financial report

5 26 32 51 52

- IFRIC 13 “Customer Loyalty Programmes”: This interpretation addresses the accounting modes of free or discounted goods or services sold as part of customer loyalty programs, which companies use to reward their customers with points, air miles or other awards on purchase of goods or services. IFRIC 13 shall be applied by entities as it was adopted at European level, no later than on the opening date of their first financial year beginning after December 31, 2008. This interpretation has no effect on Group financial statements. Texts published by the IASB as of December 31, 2008 and adopted by the European Union after the close of the last financial year, i.e. after March 4, 2009, are as follows: - IFRIC 12 - “Service Concession Arrangements”: This interpretation has no effect on Group financial statements. - IFRIC 16 - “Hedges of a Net Investment in a Foreign Operation”: This interpretation, with mandatory application before or on January 1, 2010 for Ciments Français, has no effect on Group financial statements as of June 30, 2009. - IAS 27 revised - “Consolidated and Separate Financial Statements” and IFRS 3 revised - “Business Combinations”: Adopted by the European Union on June 3, 2009, these new provisions (published on June 12, 2009) are therefore applicable to periods beginning on or after July 1, 2009. They can be applied early, but only jointly (IFRS 3 revised and IAS 27 revised). Texts published by the IASB since last year-end closing and not yet adopted by the European Union are as follows: - Amendment to IFRS 7 - “Improving Disclosures about Financial Instruments“: Published on March 5, 2009, it is in force for annual periods beginning on or after January 1, 2009. - Amendments to IFRIC 9 and IAS 39 - “Embedded Derivatives”: Published on March 12, 2009, they are retrospectively applicable to reporting periods closing on or after June 30, 2009. - Annual improvements to IFRS (2007 - 2009): Published on April 16, 2009, they are applicable to financial years beginning on or after January 1, 2010. - Amendments to IFRS 2 - “Group Cash-Settled Share-Based Payment Transactions”: Published by the IASB on June 18, 2009 these amendments clarify the accounting for group cash-settled share-based payment transactions. The amended version clearly states that the subsidiary receiving goods or services must account for them no matter which entity in the group settles the transaction, and no matter whether the transaction is settled in shares or cash. The amount recognized by the entity does not necessarily match the amount recognized by the group. These amendments also incorporate guidance previously included in IFRIC 8 - “Scope of IFRS 2” and IFRIC 11 - “IFRS 2 Group and Treasury Share Transactions”. As a result, the IASB has withdrawn IFRIC 8 and IFRIC 11. The amendments will be mandatory and applicable retrospectively to annual periods beginning on or after January 1, 2010. Early application is permitted. The Group did not anticipate any standard with no mandatory application at January 1, 2009 (IAS 27 revised and IFRS 3 revised). Regarding the accounting treatment of changes in minority interests without loss of control, the parent company has elected to change from the rules previously applied up to the end of December 2008 to those provided by IAS 27 revised, which will be applicable from 2010. This choice of option has no effective application in Ciments Français accounts as of June 30, 2009. The preparation of interim financial statements requires the use of estimates, judgments and assumptions affecting the
35 www.cimfra.com

application of accounting policies and the amounts reported in the interim financial statements. Estimates and assumptions have been determined in view of the current crisis environment making it difficult to make any economic forecast. Actual results may turn out to be different. In order to prepare the financial statements as of June 30, 2009, the management has made estimates, judgments and assumptions in areas similar to those used for the preparation of the consolidated financial statements for the year ended December 31, 2008, taking into account the following specificities: - Pension expense and other long-term employee benefits: Pension expense and other long-term employee benefits at half-year closing are based on the extrapolation of actuarial assumptions made at the previous year-end closing. These assumptions may be altered in the event of significant changes in market conditions compared to the previous closing or in case of curtailment and settlement, or any other major nonrecurring event. - Income tax expense: At half-year closing, income tax expense is established for each Group’s entity by applying the annual effective income tax rate applicable for the whole year to the profit before tax for the interim period. - Goodwill impairment tests: Because of indicators of impairment losses, in particular performance below budget, the Group has recalculated the recoverable amounts of some cash-generating units (CGUs). The main following assumptions were revised for the relevant CGUs: • Projected cash flows for the 2009 to 2012 period according to trend forecasts for 2009; • Confirmation of the discount rates used at the end of 2008; • Approval of the scenarios used as basis for normative cash flows; • Appraisal of the value of the Turkish entity based on comparable transactions.

36

NOTE 3 - SEASONAL NATURE OF BUSINESS
Demand for cement and construction materials varies according to weather conditions affecting the level of activity in the construction sector. The Group usually experiences a decrease in sales during the first and fourth quarters reflecting the effects of winter in the European and North American markets, and an increase in sales in the second and third quarters due to better weather conditions.

NOTE 4 - SEGMENT INFORMATION
H1 2009 revenues and results by country were as follows:
(in millions of euros) Revenues IntraGroup sales (5.2) (9.3) (2.9) (0.3) (3.6) (0.1) (7.2) (11.8) (84.0) 124.4 Revenues after elimination 790.6 105.6 37.4 189.5 414.0 166.6 60.1 60.8 71.8 95.2 23.8 13.5 112.8 32.1 2,173.8 Recurring EBITDA 173.2 23.4 9.0 (10.4) 137.1 66.7 18.7 (4.6) 9.1 39.7 3.8 0.0 6.3 (10.2) 461.9 EBITDA EBIT Finance income (costs) (42.2) (42.2) Share of results of associates 0.6 (0.7) 0.1 0.5 4.6 5.0 Profit before tax 227.8 227.8 Income tax (61.9) (61.9) Net profit 165.9

France/Belgium Spain Greece/Cyprus North America Egypt Morocco Bulgaria Turkey Thailand India China Kazakhstan Cement/clinker trading Others* Eliminations and unallocated GROUP TOTAL

795.8 114.9 40.3 189.8 417.6 166.6 60.2 60.8 79.0 95.2 23.8 13.5 124.6 116.1 (124.4) 2,173.8

176.0 23.2 8.9 (10.7) 137.1 66.8 18.7 (4.6) 4.9 39.9 3.8 0.0 6.5 (10.2) 460.3

125.2 10.1 6.7 (33.3) 96.9 57.5 13.6 (12.0) (25.2) 33.1 1.6 (1.7) 3.6 (11.2) 265.0

* Headquarters, holding companies and fuel trading.

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NOTE 6 - INVESTMENTS IN ASSOCIATES AND OTHER INVESTMENTS
6.1 Investments in associates
This category consists mainly of the Group’s share including goodwill, in the equity of the following companies:
(in millions of euros) Value of investments 30 June 2009 Ciment Québec (Canada) Vassiliko Cement Works (Cyprus) Asment Cement (Morocco) Innocon (Canada) Tecno Gravel (Egypt) Acquitaine de Transformation (France) Sider Navi (Italy) Others TOTAL 63.1 63.1 45.7 0.0 5.0 3.8 5.0 8.4 194.1 31 December 2008 60.5 66.2 41.7 0.0 4.6 3.8 5.0 6.3 188.1 Share of results H1 2009 0.7 (0.7) 4.6 (0.6) 0.5 0.5 5.0 H1 2008 3.7 5.7 2.3 (0.3) 0.3 0.8 12.5

6.2 Other investments
During the six-month period, the Group acquired a stake in ITC Libya Limited (Libya) for 5.7 million euros. The fair value adjustment of available-for-sale interests recognized by the Group as of June 30, 2009 amounted to +11 million euros, net, of which +13.7 million euros related to shares in Goltas Cimento.

NOTE 7 - TRADE RECEIVABLES
As part of the program to transfer receivables launched at the end of December 2006 by Ciments Calcia and Unibéton, receivables transferred as of June 30, 2009 amounted to 144.9 million euros (145.2 million euros as of December 31, 2008). This program qualifies for derecognition of receivables considering that risks have been transferred for up to 90%. Amounts kept in the balance sheet were as follows: • Additional subordinate deposits (25.0 million euros) recognized as other current liabilities (25.2 million euros as of December 31, 2008); • The Group’s commitment in the form of arranged guarantees for 12.1 million euros recognized under trade receivables with balancing entries of 10.0 million euros in loans and borrowings and reduction in other payables (for 2.1 million euros).

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NOTE 10 - FINANCIAL DEBT
10.1 Net financial debt
Assets and liabilities included in net financial debt were as follows:
(in millions of euros) Category of financial assets and liabilities Balance sheet caption 30 June 2009 (314.7) (16.2) (3.0) (333.9) Bank overdrafts & short-term borrowings Current interest-bearing loans & borrowings Other current liabilities 109.6 274.0 4.1 387.7 (6.7) Other non-current assets (24.2) (30.9) Interest-bearing loans Other non-current liabilities 1,793.6 42.2 1,835.8 1,858.5 31 December 2008 (324.1) (17.8) (341.9) 195.5 230.2 8.0 433.7 (58.1) (58.1) 1,655.9 32.2 1,688.1 1,721.8

Cash and cash equivalents Fair value of derivative instruments Other current financial investments Cash and cash equivalents & current financial assets Bank overdrafts & short-term borrowings Current interest-bearing loans & borrowings Fair value of derivative instruments Current interest-bearing loans, borrowings & financial liabilities Non-current financial assets Non-current derivative instruments Non-current financial assets Interest-bearing loans Fair value of non-current derivative instruments Non-current interest-bearing loans & other financial liabilities NET FINANCIAL DEBT

Cash and cash equivalents Other current assets Equity investments & financial receivables

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10.5 Undrawn confirmed credit lines
During the first half of 2009, Ciments Français renewed 250 million euro credit lines falling due in 364 days. These lines were not used at the end of June 2009. As of June 30, 2009, beyond the use of credit lines recognized in balance sheet liabilities, 1,468 million euros in undrawn confirmed credit lines were available (1,752 million as of December 31, 2008).

10.6 Non-current loans and borrowings by currency
(in millions of euros) Euro US & Canadian dollars Egyptian pound Moroccan dirham Indian rupee Chinese yuan TOTAL 30 June 2009 1,260.8 362.2 33.1 44.1 83.5 9.9 1,793.6 31 December 2008 1,185.1 384.4 35.1 11.4 32.0 7.9 1,655.9

The increase in non-current loans and borrowings in Indian rupee and Moroccan dirham related to the industrial projects of Yerraguntla and Chennai implemented by Zuari Cement Limited in India, and to the Aït-Baha cement plant in Morocco.

10.7 Non-current loans and borrowings by maturity
(in millions of euros) 2010 2011 2012 2013 2014 Beyond TOTAL
* Over a 12-month period.

30 June 2009* 44.0 330.4 373.9 171.9 873.4 1,793.6

31 December 2008* 257.9 11.5 333.5 213.8 41.5 797.7 1,655.9

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NOTE 11 - GOODS AND UTILITIES EXPENSE
(in millions of euros) Purchase of raw materials and semi-finished goods Fuel purchase Purchase of packaging, materials and spare parts Purchase of finished goods Electricity, water, gas Changes in inventories and other expense TOTAL H1 2009 (191.3) (128.3) (135.9) (142.1) (160.4) (57.0) (815.0) H1 2008 (261.9) (187.1) (151.7) (167.9) (155.3) 5.5 (918.4)

NOTE 12 - SERVICE EXPENSE
(in millions of euros) Transportation on sales Subcontracting Legal and consulting fees Leases Insurances Others TOTAL H1 2009 (187.9) (156.1) (18.9) (30.7) (20.8) (61.9) (476.3) H1 2008 (241.7) (217.0) (17.3) (31.3) (20.3) (52.9) (580.5)

The reduction in the “Transportation on sales” caption can be explained by the decrease in business activity.

NOTE 13 - EMPLOYEE EXPENSE
(in millions of euros) Salaries and profit-sharing Social contributions and defined benefit plans expense Stock option plans expense of which expense recognized pursuant to IFRIC 11 Others TOTAL H1 2009 (220.2) (64.7) (2.6) (0.3) (34.6) (322.1) H1 2008 (221.0) (77.5) (3.8) (0.2) (18.6) (320.9)

Group headcount as of June 30, 2009 was 17,485 against 17,886 as of December 31, 2008. The 2.24% decrease in the number of employees resulted from the staff reduction plan in Kazakhstan, the restructuring of the industrial setup in Thailand and the shutdown of a cement plant in North America. It also included the acquisitions in ready mix concrete in France and Kuwait.

46

NOTE 16 - NON-RECURRING INCOME (EXPENSE)
(in millions of euros) Capital gains on assets disposal Re-organizations* Others TOTAL
* Including in 2009, Thailand for -4.1 million euros.

H1 2009 3.2 (4.5) (0.3) (1.6)

H1 2008 5.1 (0.2) 4.9

NOTE 17 - FINANCE INCOME (COSTS)
(in millions of euros) Costs Interest income Interest expense Net interest expense on interest-bearing net financial debt Dividends, net Other finance income Other finance costs Sub-totals Sub-total, net (1) Fair value of interest rate derivative instruments Foreign exchange gains (losses) Fair value of foreign exchange rate derivative instruments Sub-totals Sub-total, net (2) TOTAL FINANCE INCOME (COSTS), NET (3) = (1) + (2) (48.3) (40.4) (9.0) (9.0) (36.7) (0.7) (8.1) (8.8) (5.5) (42.2) H1 2009 Income 7.9 2.1 10.6 12.7 3.3 3.3 Costs (50.6) (42.2) (11.6) (11.6) (46.6) (5.5) (5.5) (3.5) (50.1) H1 2008 Income 8.4 2.4 4.8 7.2 2.0 2.0 -

The reduction in net finance costs vs. H1 2008 resulted mainly from savings following the decrease in interest rates and from higher capitalized interests pursuant to IAS 23 revised (see note 1).

NOTE 18 - INCOME TAX EXPENSE
BREAKDOWN OF INCOME TAX EXPENSE (in millions of euros) Current income tax Deferred income tax TOTAL H1 2009 (69.5) 7.6 (61.9) H1 2008 (82.1) (7.5) (89.6)

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Trade receivables from and trade payables to related parties were as follows:
(in millions of euros) Italcementi Group Trade receivables Trade payables Interest-bearing loans and borrowings (current portion) Associates Trade receivables Trade payables 3.9 0.7 4.3 6.6 35.8 1.7 5.8 34.0 5.0 30 June 2009 31 December 2008

NOTE 21 - POST BALANCE SHEET EVENTS
On July 20, 2009 Moody’s Investor Services downgraded Ciments Français long-term rating from Baa1 to Baa2, negative outlook. In July 2009, Ciments Français renewed a 150-million euro revolving credit line falling due in 364 days. Italcementi S.p.A. and Ciments Français launched a medium-term credit line of 400 million euros with a 5-year maturity, of which 300 million euros for Italcementi S.p.A. and 100 million euros for Ciments Français SA. This credit facility, replacing a bilateral credit line for the same amount falling due in July 2012, enables Ciments Français to renew and extend the maturity of its revolving credit lines.

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KPMG Audit Département de KPMG S.A. Immeuble Belvédère 1, cours Valmy 92923 Paris-La Défense Cedex

Ernst & Young Audit Faubourg de l’Arche 11, allée de l’Arche 92037 Paris-La Défense Cedex

This is a free translation into English of the statutory auditors’ review report issued in French and is provided solely for the convenience of English-speaking readers. This report should be read in conjunction with, and is construed in accordance with, French law and professional auditing standards applicable in France.

For the six-month period ended 30 June 2009 Statutory Auditors’ Review Report on the half-yearly consolidated financial statements

To the Shareholders, Following our appointment as statutory auditors by your annual general meetings and in accordance with article L.451-1-2 III of the French Monetary and Financial Code (“Code monétaire et financier”), we hereby report to you on: • the review of the accompanying condensed half-yearly consolidated financial statements of Ciments Français S.A., for the sixmonth period ended 30 June 2009, • the verification of information contained in the half-yearly management report. These condensed half-yearly consolidated financial statements were prepared under the responsibility of the Board of Directors in a context where the economic outlook is difficult to assess which already prevailed at the end of the year 2008 as described in Note 1.1. to the half-yearly management report. Our role is to express a conclusion on these financial statements based on our review. I. Conclusion on the financial statements We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-yearly consolidated financial statements are not prepared in all material respects in accordance with IAS 34 - the standard of the IFRS as adopted by the European Union applicable to interim financial statements. Without qualifying the conclusion expressed above, we draw attention to note 1.1 to the condensed half-yearly consolidated financial statements which sets out the change in accounting principles due to the first application of IFRS 8, IAS 1 revised and IAS 23 revised. II. Specific verification We have also verified information given in the half-yearly management report on the condensed half-yearly consolidated financial statements that were subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-yearly consolidated financial statements. Paris-La Défense, July 30, 2009

The statutory auditors French original signed by

KPMG Audit Département de KPMG S.A. Patrick-Hubert Petit Philippe Grandclerc

ERNST & YOUNG Audit

Pierre-Henri Pagnon

51 www.cimfra.com

CERTIFICATION OF THE PARTY RESPONSIBLE FOR THE INTERIM FINANCIAL REPORT

1. Party responsible for the interim financial report Mr. Yves René Nanot, Chairman & Chief Executive Officer, appointed by the Board of Directors of July 12, 1993.

2. Certification “I hereby attest, that, to the best of my knowledge, the condensed financial statements presented in the interim financial report are prepared in conformity with applicable accounting standards and give a true and fair view of the assets, financial position and results of Ciments Francais; that the interim management report gives a true and fair view of the significant events having occurred during the first six months of the year with their impact on the condensed consolidated interim financial statements, of the most significant related-party transactions and of the major risks and uncertainties for the remaining six months of the year”.

La Défense, July 31, 2009

French original signed by

Yves René NANOT Chairman & Chief Executive Officer

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Ciments Français Communication Department Edition August 2009 Design and production: collors&associés Photos: Ciments Calcia (Italcementi Group) Printed on ecologic paper by Advence

Carbon dioxide emissions generated by this publication will be fully and voluntarily offset through the funding of a CO2 emission reduction or sequestration project coordinated by Yann Arthus Bertrand’s organization GoodPlanet.

Ciments Français Tour Ariane 92088 Paris La Défense Cedex - France Tél. : 33 (0) 1 42 91 75 00 Fax : 33 (0) 1 47 74 59 55 www.cimfra.com