Regulatory News:
Vicat (Paris:VCT):
▼ Strong growth in third-quarter sales (up +11.2%) across all
the Group’s regions, supported by the increase in selling prices
and higher cement volumes
▼ Strong activity increase in the US with the continuing
ramp-up in the Ragland plant’s new kiln
▼ 2023 target revised upwards with EBITDA expected to reach
at least €700 million
Consolidated sales by geographical region in the third
quarter of 2023:
(€ million)
Third quarter 2023
Third quarter 2022
Change reported
Change lfl*
France
301
284
+6.0%
+5.9%
Europe (excluding France)
108
104
+3.1%
+1.6%
Americas
270
236
+14.2%
+19.6%
Asia
131
127
+2.9%
+13.2%
Mediterranean
153
115
+32.8%
+139.2%
Africa
86
76
+13.8%
+14.7%
Total
1,048
942
+11.2%
+26.8%
*at constant scope and exchange rates
Guy Sidos, Group Chairman and CEO commented:
“Vicat achieved strong growth in the third quarter supported by
hikes in selling prices across most regions and higher sales
volumes, especially in emerging markets. This performance lifted
the pace of Vicat’s growth to almost +10% over the first nine
months of the year – validating the Group’s strategy of balancing
its portfolio across higher-margin developed countries and
higher-growth emerging markets. The Ragland plant’s (US) highly
efficient new kiln will act as a growth driver for the Group. This
strong momentum leads us to revise upwards our operating
profitability target for 2023. The Group’s medium-term priorities
remain executing its decarbonation strategy, restoring its
profitability ratios to pre-pandemic levels and deleveraging. I
would like to thank our teams for their hard work and commitment to
achieving these targets.”
Disclaimer:
- In this press release, and unless indicated otherwise, all
changes are stated on a year-on-year basis (2023/2022), and at
constant scope and exchange rates.
- The alternative performance measures (APMs), such as “at
constant scope and exchange rates”, “operational sales”, “EBITDA”,
“EBIT”, “net debt”, “gearing” and “leverage” are defined in the
appendix to this press release.
- This press release may contain forward-looking statements. Such
forward-looking statements do not constitute forecasts regarding
results or any other performance indicator, but rather trends or
targets. These statements are by their nature subject to risks and
uncertainties as described in the Company’s annual report available
on its website (www.vicat.fr). These statements do not reflect the
future performance of the Company, which may differ significantly.
The Company does not undertake to provide updates of these
statements.
Further information about Vicat is available on its website
(www.vicat.fr).
In the third quarter of 2023, the Group’s consolidated
sales posted a strong increase, moving higher across all its
regions. This performance chiefly reflected:
- Hikes in cement prices in most regions;
- Strong volume growth in the Cement business in Asia and in
the Mediterranean and also in the United States with the
ramp-up in the Ragland plant’s new kiln.
Consolidated sales by geographical region in the nine months
from January to September 2023
(€ million)
9 months 2023
9 months 2022
Change reported
Change lfl*
France
931
889
+4.7%
+4.6%
Europe (excluding France)
303
288
+5.2%
+1.9%
Americas
720
637
+13.0%
+14.2%
Asia
364
377
-3.3%
+3.6%
Mediterranean
349
260
+34.0%
+131.8%
Africa
294
245
+19.6%
+19.6%
Total
2,960
2,696
+9.8%
+20.1%
*at constant scope and exchange rates
Over the first nine months of 2023, the Group’s sales
came to €2,960 million, up 9.8% on a reported basis. Organic
growth in consolidated sales came to +20.1% at constant
scope and exchange rates as a result of:
- Mixed growth trends in Cement volumes varying from market to
market, with a slowdown in developed markets (France and
Europe) as a result of the residential sector’s weakness, but
positive momentum in the Mediterranean, Asia and Africa regions.
The ramp-up in the Ragland plant (US) made a positive contribution
to volume growth over the period. Thus, volume effects contributed
+€80 million to the increase in nine-month 2023 sales;
- A significant hike in selling prices across almost all the
Group’s markets amid an inflationary environment, related to
energy costs in particular. Price effects contributed +€462 million
to nine-month 2023 sales.
The Group was hit by an unfavourable currency effect of –€278
million (–8.6%) chiefly arising from depreciation in the Turkish
lira and Egyptian pound against the euro over the first nine months
of the year, only partially offset by appreciation in the Swiss
franc against the euro. Scope effects over the period remains
negligible.
1. Sales by geographical regions
1.1. France
January to Sept. 2023
Third quarter
€ m
Change reported
Change lfl*
€ m
Change reported
Change lfl*
Sales
931
+4.7%
+4.6%
301
+6.0%
+5.9%
*at constant scope and exchange rates
Over the first nine months of 2023, the Group’s business trends
in France were mixed. Cement volumes contracted slightly,
and concrete and aggregates volumes declined more significantly,
whereas selling prices improved significantly, offsetting the
inflation in production costs, especially energy.
Cement volumes, which had remained resilient in the first
half of the year when volumes declined only slightly, fell more
significantly in the third quarter of 2023 by comparison with the
same period of 2022. The cement business was affected by the
slowdown in residential construction in France and by an
unfavourable base of comparison effect (a large infrastructure
project in the Centre region was achieved in the third quarter of
2022). Non-residential construction also experienced a slowdown in
the third quarter, while public works projects held up. The gradual
start-up in a railway infrastructure project is expected to support
the business in the future. The price hikes introduced at the
beginning of the year offset part of the cumulative increase in
energy prices in France, especially electricity (~2.5 times higher
than historic costs) and underlying inflation (personnel expense
and maintenance expenses). As a result, sales recorded by the
cement business rose +21.6% at constant scope in the third
quarter.
Concrete & Aggregates activity remained affected in
the third quarter of 2023 by a contraction in volumes triggered by
the slowdown in residential construction and by the low level of
public roadbuilding projects requiring large quantities of
aggregates. Price hikes were introduced during the year in both
concrete and aggregates to cover the substantial rise in costs
since 2022 and to rebuild margins. The start-up of some large
infrastructure projects is expected to support the business by the
end of the year. Overall, Concrete & Aggregates sales were
stable, rising +0.9% at constant scope in the third quarter.
Other Products & Services sales edged –1.7% lower at
constant scope in the third quarter.
1.2 Europe (excluding France)
January to Sept. 2023
Third quarter
€ m
Change reported
Change lfl*
€ m
Change reported
Change lfl*
Sales
303
+5.2%
+1.9%
108
+3.1%
+1.6%
*at constant scope and exchange rates
Total sales in Europe (excluding France) rose in the
first nine months of 2023, supported by favourable pricing
conditions in both Switzerland and Italy, which more than offset a
volume contraction in Switzerland.
The decrease in Cement volumes in Switzerland
continued into the third quarter, with a contraction on a similar
scale to in the first half of 2023 amid a slowing market in both
the residential and public works segments. Prices headed higher
again following the hikes introduced at the beginning of the year
to offset the cumulative inflation in costs, especially energy.
Cement sales rose +4.6% at constant scope and exchange rates in the
third quarter.
The Concrete & Aggregates business in
Switzerland posted growth. Concrete and aggregates volumes
were lower in the third quarter than in the same period of last
year, while prices moved up in the third quarter. Sales rose +4.5%
at constant scope and exchange rates during the period.
Other Products & Services sales in Switzerland
fell –13.8% at constant scope and exchange rates in the third
quarter following delays to certain projects.
In Italy, consolidated sales rose +2.7% at constant scope
and exchange rates in the third quarter amid a modest volume
contraction and a hike in selling prices relative to the past
year.
1.3 Americas
January to Sept. 2023
Third quarter
€ m
Change reported
Change lfl*
€ m
Change
reported
Change lfl*
Sales
720
+13.0%
+14.2%
270
+14.2%
+19.6%
*at constant scope and exchange rates
Over the first nine months of 2023, the Group’s business in the
Americas region posted strong growth. It was supported by
favorable pricing conditions in both the United States and in
Brazil and by the additional volumes resulting from the ramp-up in
the Ragland plant’s new kiln.
Cement volumes in the United States achieved further
growth in the third quarter as the Ragland plant’s new kiln
continued to ramp up. It is expected to reach its full nominal
capacity by the end of the year. Business trends in the South-East
US held up at a strong level thanks to the boost provided by the
infrastructure programmes launched in 2021 (IIJA1) and by the IRA2,
which promotes reindustrialisation across the United States. The
opening of new rail terminals in Georgia and Tennessee facilitated
the ramp-up in the Ragland plant’s output. The strong volume
increase in the South-East US paved the way for healthy overall
growth despite a fall in volumes in California below the record
levels set for the full year of 2022. Prices remained firm in both
regions, with further hikes introduced at the end of the summer to
offset the cumulative effects of inflation of the past two years.
Cement sales rose +41.4% in the United States at constant scope and
exchange rates in the third quarter.
The Concrete business in the United States also
delivered growth in the third quarter. Dynamic market conditions in
the South-East more than offset the small volume contraction in
California, where the local market was slightly less supportive
than in 2022. Selling prices in this business again moved higher in
both regions. Concrete & Aggregates sales rose +25.0% in the
United States at constant scope and exchange rates in the third
quarter.
In a broadly favourable macroeconomic context, the Cement
business in Brazil recorded a small downturn in volumes
during the third quarter. Nonetheless, its performance improved on
the first six months of the year. Prices were again stable in the
third quarter. Cement sales in Brazil fell –5.5% at constant scope
and exchange rates in the third quarter.
During the third quarter, the Concrete & Aggregates
business in Brazil achieved volume growth in aggregates and
higher concrete volumes, particularly around the city of Brasilia,
our largest regional market. Prices remained stable over the
period. Concrete & Aggregates sales rose +9.3% in Brazil at
constant scope and exchange rates in the third quarter.
1.4 Asia (India and Kazakhstan)
January to Sept. 2023
Third quarter
€ m
Change reported
Change lfl*
€ m
Change reported
Change lfl*
Sales
364
–3.3%
+3.6%
131
+2.9%
+13.2%
*at constant scope and exchange rates
In total over the first nine months of 2023, the Group’s sales
in Asia grew at constant scope and exchange rates thanks to
a positive third-quarter performance in India and Kazakhstan.
The Cement business in India powered ahead in the
third quarter, with volumes rising in all the states in which the
Group operates. Lowered cash costs restored competitiveness and
market conditions remained dynamic amid pre-electoral conditions
favourable for the construction sector, supported by a continuing
drive to develop infrastructure. In a competitive environment,
selling prices moved lower in the third quarter, in line with the
trend seen in the first six months of the year. Cement sales rose
+12.1% in India at constant scope and exchange rates in the third
quarter.
After a tough first half of the year marked by tensions across
the rail logistics supply chain, the Cement business in
Kazakhstan recovered. Volumes recorded strong growth in the
third quarter after an additional fleet of wagons was secured,
enabling a return to a growth momentum over the 9-month period,
albeit with higher logistics costs. Prices remained stable over the
period. As a result, Cement sales grew +18.7% in Kazakhstan at
constant scope and exchange rates in the third quarter.
1.5 Mediterranean (Turkey and Egypt)
January to Sept. 2023
Third quarter
€ m
Change reported
Change lfl*
€ m
Change reported
Change lfl*
Sales
349
+34.0%
+131.8%
153
+32.8%
+139.2%
*at constant scope and exchange rates
In the first nine months of 2023, the Group’s business in the
Mediterranean region was boosted by a volume recovery in
Turkey and a major hike in selling prices in local currency terms
amid a hyperinflationary environment. The business was again
affected by the strong fall in the value of the Turkish lira and
Egyptian pound against the euro.
Despite a macroeconomic environment characterised by
hyperinflation and a sharp depreciation in the Turkish lira against
the euro, the Cement business in Turkey posted solid
volume growth in the third quarter. The support provided by the
government to the construction sector to stimulate the economy
ahead of the March 2024 local elections and the direct and indirect
effects of the earthquake that struck south-east Turkey injected
momentum into the business. The reconstruction drive, forecast to
require over 13 million tonnes of cement3, is set to support the
market over the next two years. Selling prices were raised further
to offset the effects of inflation on production costs. A waste
heat recovery system (harnessing hot gases to generate electricity)
currently being implemented will help to lower cost prices. As a
result, Cement sales grew +37.1% in Turkey in the third quarter (up
+149.0% at constant scope and exchange rates).
The Concrete & Aggregates business in Turkey
expanded in the third quarter as a result of strong volume growth
and higher selling prices. Concrete sales surged +74.8% in Turkey
(up +215.9% at constant scope and exchange rates in the third
quarter).
The Cement business in Egypt experienced a
continuing contraction in domestic volumes during the quarter, in
line with the market trend. To recap, market regulation agreements
capping production capacity were introduced by the authorities from
July 2021 to eliminate the structural overcapacity in the
marketplace. Prices rose sharply in the third quarter to offset the
impact of cost inflation. Since the beginning of the year, the
Group has seized opportunities to export clinker. These export
flows helped support the business in the third quarter. Cement
sales rose +44.1% in Egypt at constant scope and exchange rates
(albeit down –17.4% on a reported basis as a result of an
unfavourable currency effect in the third quarter).
1.6 Africa (Senegal, Mali, Mauritania)
January to Sept. 2023
Third quarter
€ m
Change reported
Change lfl*
€ m
Change reported
Change lfl*
Sales
294
+19.6%
+19.6%
86
+13.8%
+14.7%
*at constant scope and exchange rates
Between January and September 2023, the Group’s business in
Africa reaped the benefit of the sharp recovery in the
Malian market after the political crisis, which had significantly
cut deliveries to the country in 2022 and the full-year impact of
the price hike introduced in September 2022 in Senegal.
The Cement business in Senegal experienced a small
volume contraction in the third quarter. Production is expected to
remain limited until the new kiln starts up in 2024. Residential
demand remains firm, and infrastructure projects are also
supporting the market. Prices also rose in the third quarter owing
to the September 2022 rise in regulated prices. Cement sales rose
+2.9% in Senegal at constant scope and exchange rates in the third
quarter.
The Aggregates business in Senegal posted growth
in the third quarter as a result of positive price and volume
effects. It again received a boost from the public works sector as
major government projects went ahead. Aggregates sales rose +17.3%
in Senegal at constant scope and exchange rates in the third
quarter.
The Cement business in Mali was lifted in the
third quarter by strong volume growth owing to a favourable base of
comparison. Cement sales rose +81.9% in Mali at constant scope and
exchange rates in the third quarter.
Cement sales rose +33.3% in Mauritania at constant scope
and exchange rates in the third quarter.
2. Recent events
The Group’s recent contract wins in the infrastructure
segment in Europe come to support the business amid the slowdown in
the residential market:
- 17 October 2023 – VINCI-led consortium including Vicat
Aggregates awarded works package CO11 by TELT
The Board of Directors of TELT (Tunnel Euralpin Lyon-Turin)
awarded a contract for the recovery of excavation materials on the
French side of the Mont Cenis tunnel (works package CO11) to a
consortium encompassing Eurovia Alpes (the lead contractor and a
VINCI Construction subsidiary), Carrières du Bassin Rhônalpin,
Terélian (both VINCI Construction subsidiaries), SATM, Granulats
Vicat (Vicat subsidiary), Spie Batignolles Valérian, Spie
Batignolles Malet and GIE GMM 73.
This €800 million contract covers industrial processing of the
23 million tonnes of materials excavated on the French side with a
circular approach including reuse of over 50% of the spoil on the
project sites. The project will run for 120 months.
VINCI Construction will be able to draw on the Vicat Group’s
longstanding experience of TELT’s project.
- 24 October 2023 – In Switzerland, Vigier Rail has won the
contract to provide CFF, the Swiss national railway operator, with
railway sleepers for the years 2024-2026, extendable to 2028. The
contract is worth CHF180 million over 5 years
3 November 2023 – Vicat has successfully refinanced €880
million in lending facilities by arranging Sustainability Linked
Loans to increase its liquidity and extend the maturity of its
debt
The Vicat Group has completed the expected refinancing of its
treasury lines, which were due to expire in late 2024 and early
2025. The Group has refinanced the syndicated loan provided by its
longstanding group of five banking partners (BNP Paribas, Crédit
Agricole CIB/LCL, Crédit Industriel et Commercial / CIC Lyonnaise
de Banque, HSBC Continental Europe and Société Générale) and
increased its size from €550 million to €600 million. The Group has
also refinanced and increased the size of its bilateral bank lines
from €240 million to €280 million. All these lines have a 5-year
maturity and are renewable twice for a period of one year. By
completing this refinancing, the Group has increased its liquidity
by €90 million and extended the average maturity of its debt by one
year to 5.8 years at 30 September 2023.
These new Sustainability Linked Loans (SLLs) are aligned with
the Vicat Group’s 2030 decarbonation objectives of:
- reducing its specific carbon emissions to 497 kg CO2 net per
tonne of cement equivalent,
- reducing the clinker rate in cement to 69%, and
- increasing the proportion of alternative fuels used in place of
fossil fuels to 50% Group-wide.
The reaching or non-reaching of one or more of the annual
targets linked to these three indicators will give rise to a
positive or negative annual margin adjustment.
Following this refinancing and the Green Loan arranged at the
beginning of the year to fund the construction of a new kiln in
Senegal, almost one-third of the Group’s gross debt now qualifies
as green finance (SLL or green loan).
3. Outlook for 2023
In 2023, the Group expects further significant sales
growth, with its markets overall expected to display resilience
and reflect the full benefit of the price hikes in selling prices
implemented in 2022 and the fresh increases introduced in 2023. In
addition, performance in 2023 will reap the benefit of:
- the full impact of the new kiln at the Ragland plant (US);
- elimination of the non-recurring costs incurred in 2022;
- stabilisation in energy costs.
Taking these factors into account, the Group’s
2023 EBITDA is expected to amount to at least €700
million
Previously (27 July 2023): “to rise towards a
level appreciably above that recorded in 2021”
In 2023 and 2024, the Group plans to scale back its capital
expenditure outlays to around €350 million in 2023 followed by
another reduction in 2024. Over the period as a whole, this capital
expenditure will focus on:
- completion of the construction work on the new kiln in
Senegal;
- investment projects to meet the carbon footprint reduction
targets; and
- maintenance capex.
The strong increase in EBITDA, the strict control of working
capital requirements and reduction in capital expenditure will pave
the way for a decrease in the Group’s net debt from this year
onwards.
The Group does not plan to launch any further strategic
growth capex projects until the leverage ratio has been brought
down below 2.0x.
Presentation meeting and conference call
To accompany this publication, the Vicat Group is holding an
information conference call in English on 8 November 2023 at 3pm
Paris time (2pm London time and 9am New York time).
To take part in the conference call live, dial in on one of the
following numbers: France: +33 (0)1 70 37 71 66 United Kingdom: +44
(0)33 0551 0200 United States: +1 786 697 3501
The conference call will also be livestreamed from the Vicat
website or by clicking here. A replay of the conference call will
be immediately available for streaming via the Vicat website or by
clicking here.
The presentation supporting the event will be available on
Vicat’s website from 10am.
Next event:
Full-year 2023 results on 13 February 2024 after the market
close.
About Vicat
For almost 200 years, Vicat has been a leading player in the
mineral and biosourced building materials industry. Vicat is a
group listed on the Euronext Paris market and is under the majority
control of the founding Merceron-Vicat family. Committed to a
trajectory that will make it carbon-neutral across its value chain
by 2050, the Vicat Group now operates three core lines of business:
Cement, Ready-Mixed Concrete and Aggregates, as well as related
activities. The Vicat Group is present in 12 countries spanning
both developed and emerging markets. It has 9,900 employees and
generated consolidated sales of €3,642 million in 2022. With its
strong regional positions, Vicat is developing a circular economy
model beneficial for all and consistently innovating to reduce the
construction industry’s environmental impact.
Vicat Group – Financial data – Appendix
Definition of alternative performance measures
(APMs):
- Performance at constant scope and exchange rates is used
to determine the organic growth trend in P&L items between two
periods and to compare them by eliminating the impact of exchange
rate fluctuations and changes in the scope of consolidation. It is
calculated by applying exchange rates and the scope of
consolidation from the prior period to figures for the current
period.
- A geographical (or a business) segment’s operational
sales are the sales posted by the geographical (or business)
segment in question less intra-region (or intra-segment)
sales.
- EBITDA (earnings before interest, tax, depreciation and
amortisation): sum of gross operating income and other income and
expenses on ongoing business.
- EBIT: (earnings before interest and tax): EBITDA less
net depreciation, amortisation, additions to provisions and
impairment losses on ongoing business.
- Cash flow from operations: net income before net
non-cash expenses (i.e. predominantly depreciation, amortisation,
additions to provisions and impairment losses, deferred taxes,
gains and losses on disposals and fair value adjustments).
- Free cash flow: net operating cash flow after deducting
capital expenditure net of disposals.
- Net debt represents gross debt (consisting of the
outstanding amount of borrowings from investors and credit
institutions, residual financial liabilities under finance leases,
any other borrowings and financial liabilities excluding options to
sell and bank overdrafts), net of cash and cash equivalents,
including remeasured hedging derivatives and debt.
- Gearing is a ratio reflecting a company’s financial
structure calculated as net debt/consolidated equity.
- Leverage is a ratio based on a company’s profitability,
calculated as net debt/consolidated EBITDA.
Nine-month 2023 sales by business
Cement
(€ million)
Nine-month 2023
Nine- month 2022
Change reported
Change lfl*
Volume (thousands of tonnes)
21,535
20,238
+6.4%
Operational sales
1,902
1,687
+12.8%
+26.4%
Consolidated sales
1,623
1443
+12.5%
+26.3%
*at constant scope and exchange rates
Concrete & Aggregates
(€ million)
Nine-month 2023
Nine- month 2022
Change
reported
Change lfl*
Concrete volumes (thousands of
m3)
7,406
7,477
–0.9%
Aggregates volumes (thousands of
tonnes)
18,209
18,614
–2.2%
Operational sales
1,124
1,039
+8.2%
+16.5%
Consolidated sales
1,096
1,013
+8.2%
+16.1%
*at constant scope and exchange rates
Other Products & Services
(€ million)
Nine-month 2023
Nine- month 2022
Change
reported
Change lfl*
Operational sales
349
343
+1.5%
+5.0%
Consolidated sales
242
241
+0.4%
–0.1%
*at constant scope and exchange rates
1Infrastructure Investment and Jobs Act 2Inflation Reduction Act
3According to Türkçimento, the Turkish cement producers trade
association
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107619273/en/
Investor relations contact:
Pierre Pedrosa Tel +33 (0)6 73 25 98 06
pierre.pedrosa@vicat.fr
Press contacts:
Karine Boistelle-Adnet Tel +33 (0)4 74 27 58 04
karine.boistelleadnet@vicat.fr
Volt Carbon Technologies (TSXV:VCT)
Historical Stock Chart
From Dec 2024 to Jan 2025
Volt Carbon Technologies (TSXV:VCT)
Historical Stock Chart
From Jan 2024 to Jan 2025
