Principles of actionPrinciples of action

Our visionTo be the undisputed world leader

in building materials

Our commitmentsTo our customers, our employees,our communities, our shareholders

The Lafarge WayMaking our people successful,

Focusing on performance improvement,With a multi-local organizationTo build our performance culture

Our visionOur visionTo be the undisputed world leader

in building materials

Being the bestOur mission is to provide the con-struction industry with products,systems and solutions that are themost reliable, innovative and cost-effective.

With a leadership position in each ofour business lines, we are now theworld leader in building materials.This gives us the strength and theopportunity to shape and develop thefuture of the construction industry.

Our goal is to strengthen this lead-ership position by being the best,through our commitment to be:

The preferred supplier for our customers.

The preferred company for our employees.

The preferred partner for our communities.

The preferred investment for our shareholders.

Growing fast with the best valuecreationCement, Aggregates and Concrete,Roofing and Gypsum will give usample growth potential for the nextseveral years.

Each of these business lines willcontribute by growing faster thanthe competition and average markettrends.

Our objective is to grow at a double-digit annual rate over time. We willachieve this by:

Accelerating our internal growththrough the development of inno-vative products, systems and solu-tions, and through an increasingshare of the fast-growing marketsin our portfolio.

Doing acquisitions that resultfrom the continuing consolidationwithin our businesses.

Developing in the long-term otherbuilding materials businesses, wherewe can achieve worldwide leadership.

The measure of success will be ourability to be better than our com-petitors at creating value. This is acondition for our continued inde-pendance.

Achieving global leadership in local businessesthrough excellencein multi-local management Excellence in multi-local managementmeans combining local initiativeswith our global strengths by:

Mobilizing the full talents andenergies of our people to realize ourglobal ambition in each local market.

Taking the initiative locally with aglobal mindset, encouraging andenabling people throughout theGroup to share experience, to focuson adapting best practices to localconditions and to innovate further.

Leveraging these capabilities toexcel at:

Providing differentiated solutionsto meet customers needs in eachlocal market. Delivering continuous performanceimprovement. Building international teams andnetworks working towards commongoals.

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We want to share our vision with

all of our people to make it happen

PRINCIPLES OF ACTION/2003

Our commitmentsOur commitmentsTo our customers, our employees,our communities, our shareholders

Generating value for our customersOur success depends on the successof our customers. We are commit-ted to helping them create morevalue in their businesses than ourcompetitors can.

Being the preferred supplier for ourcustomers means:

Best understanding the needs andbusinesses of our different types ofcustomers.

Developing and delivering themost relevant and valuable products,systems and solutions by leveragingour global experience.

Making quality the commitmentof every employee.

Leading our industries in productand service innovation.

Being a customer-driven organiza-tion and involving every employeein this ambition.

Being measured by our customerssatisfaction and loyalty.

We want the Lafarge brand to standfor these commitments to excellencein our customers minds throughoutthe world.

Giving our peopleevery opportunity to contribute anddevelop their talentsLafarge employees embody thecompanys culture and know-how.Their expertise, motivation and abil-ity to develop and to demonstrateflexibility, creativity and entrepre-neurial spirit are key to the overallsuccess of the company.

Being the preferred employer for ourpeople means:

Offering a uniquely participativeand supportive environment wherepeople act out of convictions andwhere daily interaction is founded ontrust, respect, dialog and teamwork.

Giving our people exciting andchallenging responsibilities and thesupport they need to be successful.

Developing talents and potentialthrough constant opportunities oftraining programs and on-the-jobcoaching.

Fostering an environment whereinformation is widely available andopenly shared.

Being a truly international companywhere diversity is a valued asset.

Giving the utmost priority to safety an integral part of excellence.

Contributing to building a betterworld for our communitiesWe will succeed in creating sus-tainable value by contributing toeconomic, social and environmentalprogress.Wherever present, we operate withthe utmost respect for the commoninterest of present and future gener-ations.

Being the preferred partner for ourcommunities means:

Acting as responsible members of our communities: contributing to the development of the people,their health, rights and well being bygenerating economic growth andsupporting social, educational andcultural advancement.

Being committed to and engaged inthe protection of the environment,in the mitigation of climate change andin the conservation of non-renewableresources.

Contributing to economic progressthrough healthy and vigorous com-petition and committing to sharevalue creation with our customersand end-users.

Our responsibility is as much aboutcomplying with local and interna-tional laws and standards as it isabout aligning our actions with ourvalues. Respect for the commoninterest, openness and dialog ,integrity and commitment are themain ethical principles of our Groupand of our people.

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PRINCIPLES OF ACTION/2003

Delivering the valuecreation that ourshareholders expectOur Groups ability to conduct itsstrategies depends on the continuingtrust and loyalty of our shareholders.

Being the preferred investment forour shareholders means:

Delivering value creation throughgrowth and continuous performanceimprovement.

Maintaining our financial strength.

Being a model for corporate gov-ernance.

Respecting the interests of ourminority partners.

Providing financial markets withregular and reliable informationregarding our strategies, perform-ance and results.

We want the Lafarge brand to standfor these commitments

to excellence

The Lafarge WayThe Lafarge Way

Expecting people to give their bestAll of our employees are expected toperform at their full potential. Webelieve that entrusting people withresponsibilities, and not merely tasks,is the best way to leverage theirskills, initiatives and motivation.

We expect each individual work-ing on our sites to contribute to asafe and healthy work environmentthrough responsible behaviors.

We value efforts and good will, butwe are convinced that accountabilityis ultimately about delivering results.While our goal is to help everyonesucceed, we expect all of our peopleto be open about their difficultiesand willing to ask for help when theyneed it.

We want to involve all of our peo-ple in our ambition and strategies so they can better contribute their talents, initiatives and energies, andsupport the accelerating need forchange that our businesses require.

We want all of our employees tobe key players in the formulation oftheir own personal objectives.

We expect our people to sharetheir experiences and to seek thoseof others. Best practices derive fromour ability to recognize and share ourlocal successes, regardless of theirscale.

We expect all of our people to practicethe Lafarge Way in their daily actions.

Leading by exampleThe higher the responsibility, thegreater the commitment to our valuesmust be.

Leadership is the ability to mobi-lize people and to inspire themtoward a common ambition andbetter results. It requires patience,dedication and flexibility to drivechange throughout our organization.

Managers are expected to clearlyand jointly define the right objectives,delegate authority, provide frequentconstructive feedback and evaluateresults fairly and consistently. Theyensure that achievements are recog-nized and celebrated. They help theirpeople deal with potential perform-ance issues early on and ultimatelyaddress repeated failure.

A key responsibility for managers isto develop their people.They exposeemployees to challenging assign-ments, help them to learn from theirachievements and mistakes and support them in outperformingthemselves.

Achieving greaterresults throughteamwork Outstanding achievements are real-ized as part of a team effort.

Teamwork provides the opportu-nity to complement our individualskills and strengths and to compen-sate for our weaknesses and short-comings.

Dealing with conflict is an integraland productive part of teamwork.Teamwork is not about reachingconsensus on every issue. It is abouteach individual contributing, accept-ing and seeking differences of opin-ion as a source of progress. It is alsoabout ensuring that decisions areclear and implemented with thesupport of those who have beeninvolved.

Effective teamwork creates an envi-ronment of trust and confidence.Thisis built daily through professionalism,personal commitment, shared goalsand respect for common rules.

Making our people successful

> > >Courage, integrity, commitment, consideration

for others and an overriding

concern for the Groups

interest are the foundations

of our management

philosophy. Every employee

is expected to demonstrate

commitment to these

values. This is our way

of building trust at all levels

of our organization.

Resulting from the actions of allPerformance is the accumulatedresult of the actions of all teams andindividual employees at every levelof our organization.

We want continuous performanceimprovement to be a day-to-day priority for each person of our Group.

Our performance approach con-cerns all dimensions of our business:safety, strategy, sales and marketing,industrial, financial, human resources,sustainable development.

Performance is always measured:

Operational performance is measuredthrough a variety of Key PerformanceIndicators (KPIs) and their financialimpact. Global performance results fromthe combination of operational per-formance and the economic impactof the environment. It is measuredthrough Economic Value Added (EVA).

We want all of our people to beable to measure and understand theimpact and consequences of theiractions.

Making performancea daily commitmentStriving to continuously improve ouroffer to our customers and to beahead of our competitors, seizingevery opportunity offered by chang-ing environments and encouragingeveryone to always do things betterare the everyday priorities for a per-formance-driven organization.

We want to promote an environmentwhere individuals and teams:

Seek to constructively challengeand be challenged.

Use their creativity and find waysto do more with less.

Address existing problems andissues in a systematic way beforemoving on to new initiatives.

Increase continuously the reliabilityof our processes in order to improvequality.

Use best practices without firsttrying to reinvent what others havealready done successfully.

Focus their energy on implemen-tation and drive for results.

Support, and are supported by the whole organization, alwaysachieving greater performance.

Sharing systems and tools Performance requires robust andreliable systems and tools.The Groupand Divisions have defined a com-mon performance framework for allof our businesses.

The Divisions have identified thekey value drivers in each businessline.These are the areas where eachBusiness Unit is expected to contin-uously improve and reach excellenceeverywhere in the world.

The Management Cycle reflectsthe involvement and commitmentto a common ambition of all of ourpeople in each Business Unit, eachDivision and at Corporate. TheManagement Cycle is structuredaround the strategic review, the per-formance plan, the organization andhuman resources review and thebudget.

All of our operations use systemsand tools in their daily management:common languages, KPIs, bench-marking, best practices, knowledgeand information management sys-tems and HR tools, including appro-priate training and reward systems.

Focusing on performance improvement

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Building on our localand global strengthsEach of our businesses is primarily alocal business: our products cannoteconomically be transported over significant distances, constructionmarkets have strong local character-istics, proximity is important to ourcustomers, relationships with localcommunities are key, and much ofour know-how originates from localexperience.

For the Group, the challenge is toleverage our global strengths with-out undermining our local entrepre-neurial spirit. Being a multi-localorganization involves:

Encouraging local initiative througheffective delegation supported byreliable global processes and tools.

Ensuring that the dialog betweenstaff and line is not simply aboutcontrol, but about getting the mostout of every business opportunity.

Creating an organization whereour global experience and know-howare easily accessible to everyone andpermanently enriched, shared andimplemented.

Leveraging the creativity of localteams to innovate further.

Involving Business Unit managementteams in addressing the permanentconflicts that arise from operatingglobally in local businesses.

Making our BusinessUnits successful by leveraging the resources of a decentralizedorganization Managing the tension between localand global is one of the key chal-lenges of our Group and defines theway we are organized.

Our Group relies on the initiativeof our Business Units.The Groups activities are carried outby the Business Units, which are thecenter of our organization.To respondeffectively and rapidly to local chal-lenges and serve our customers moreefficiently, they are empowered tomake most decisions that impactthem.Their autonomy is not, however, thatof a single independent business.Increasingly their actions have animpact beyond their immediateenvironment, which requires involvingother parts of the Group more sys-tematically in their decisions. Theyuse our global experience to buildtheir local successes but also activelycontribute to Group and Divisionpolicies, tools and know-how.

Divisions are responsible forimproving performance and ensur-ing the long-term success of theiractivities.One of the main duties of theDivision is to foster performanceimprovement, principally throughthe sharing of experience, internaland external benchmarking andresource optimization. They have akey role in challenging the BusinessUnits to achieve greater performanceambitions.

Corporate is responsible for ourlong-term strategies and for theglobal identity of the Group.The role of Corporate is to maximizethe benefits derived from being agroup: vision and strategic coher-ence, financial strength, global image,organization and human resources.Corporate ensures the continuity ofour common values, identity andperformance culture.

International networks acceler-ate our ability to share our globalexperience.Functional and peer networks organ-ize and enhance our ability to shareinformation and experience. Theyare the links that both formally andinformally connect the diversity ofall of our operations worldwide.

Sharing clearprocesses and a limited number of respected andknown rulesIn a group of our size, effective decision making requires clear andwell-defined processes that alloweveryone to understand how a deci-sion is made and who is ultimatelyresponsible.The main process involv-ing all levels of our organization isour Management Cycle. It organizes the dialog between staff and line,provides a framework for effectivedelegation and enables the resolutionof conflicting priorities. It ensures thatconsistency exists between BusinessUnit commitments, Group andDivision objectives and the expecta-tions of our shareholders.

A limited number of rules is a pre-requisite to efficiency and fairness.These rules should be known byeveryone in our organization andimplemented consistently through-out the Group, the Divisions and theBusiness Units.

With a multi-local organization

To build our performance culture

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PRINCIPLES OF ACTION/2003

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