VICAT 
By Regulatory News:
The Vicat group (NYSE Euronext Paris: FR0000031775 – VCT) reports today its results for the first half of 2009.
Simplified consolidated income statement:
| (€ million) | 30 June 2009 | 30 June 2008 | Change (%) | |||||
| Reported |
At constant scope | |||||||
| Consolidated sales | 962 | 1,055 | -8.8% | -12.4% | ||||
| EBITDA* | 230 | 269 | -14.7% | -18.0% | ||||
| EBITDA margin (%) | 23.9 | 25.5 | ||||||
| EBIT** | 150 | 202 | -25.6% | -27.9% | ||||
| EBIT margin (%) | 15.6 | 19.1 | ||||||
| Consolidated net income | 110 | 141 | -22.0% | -24.2% | ||||
| Cons. Net income margin (%) | 11.4 | 13.4 | ||||||
| Net income | 89 | 129 | -30.6% | -31.4% | ||||
| Cash flow | 179 | 216 | -17.0% | -20.0% | ||||
* EBITDA: sum of gross operating income and other income and expenses on ongoing business
** EBIT: sum of EBITDA and net depreciation and provisions on ongoing business
The Management Board commented these results: ?The Vicat Group reports a solid first-half performance marked by resilient margins. Performances were mixed by geographic region and by quarter. In the United States, activity was affected by the economic crisis while in Egypt it remained particularly buoyant. The first quarter was marked by very unfavourable weather conditions due to the Group's location in mountainous areas of Europe, whereas momentum was more favourable in the second quarter.
Under this environment, the Group continues to rely on the positive impact of investments made in recent years - in particular those dedicated to improving the profitability of its industrial facilities - and on the cost-cutting measures that were rapidly adopted and implemented as of 2008. In the light of its strengths, its solid balance sheet and ongoing investments, the Group is confident in its ability to emerge stronger from the current economic crisis.
1. The first half of 2009 income statement
1.1. Consolidated income statement
In the first half of 2009, consolidated sales were €962 million, down 8.8% compared to the first half of 2008. At constant scope and exchange rates, sales declined 12.4%.
In Cement, consolidated sales decreased slightly, down 1.2% at constant scope and exchange rates, while Concrete & Aggregates and Other Products and Services dropped 24.0% and 14.1%, respectively, at constant scope and exchange rates.
The breakdown of consolidated sales by division shows that the sales contribution of Cement increased to 51% (vs. 45% at 30 June 2008) to the detriment of Concrete & Aggregates, whose contribution narrowed to 36% (vs. 41% at 30 June 2008). The contribution of Other Products and Services remained relatively stable at 13% compared to the year-earlier period (vs. 14% at 30 June 2008).
The decline in consolidated sales can be attributed mainly to an unfavourable basis of comparison due to the negative impact of the macroeconomic crisis, whose initial effects materialised only from the second half of 2008 onwards and to very poor weather conditions recorded in the first quarter of 2009, since the Group is highly active in mountainous regions in France and Switzerland.
Although business contracted very sharply in the first quarter of 2009, the Group reported significant improvements in the second quarter, notably in France and Europe, with the only exception being the United States. In Turkey, if the situation was very tough in the first quarter, there was nonetheless a slight improvement in the second quarter. Africa and the Middle East reported solid, robust business throughout the first half.
Consolidated EBITDA declined 14.7% to €230 million compared to the first half of 2009, down 18.0% at constant scope and exchange rates. The EBITDA margin slipped to 23.9% from 25.5% in the first half of 2008. Given the severe global economic downturn observed in the course of the second half of 2008, the first-half EBITDA margin once again illustrates the Group's resilience and financial solidity during a crisis. This resilience is the fruit of the Group's well-balanced regional coverage, the pertinence of the Performance 2010 plan to boost production capacity and the efficiency of industrial facilities, and the rapid implementation of the supplementary Performance Plus cost-savings plan.
Consolidated EBIT dropped 25.6% to €150 million in the first half of 2009 compared to the year-earlier period, a 27.9% decline at constant scope and exchange rates.
The decline in interest expenses reflects the positive impact of lower interest rates, which were partially offset by the increase in debt compared to 31 December 2008. Gearing rose to 39% at 30 June 2009 from 35% at 31 December 2008. This increase is mainly due to regular seasonal effects. For purposes of comparison, gearing was 38% at 30 June 2008.
The decline in the Group's tax rate, to 16.7% from 25.2% in the first half of 2009, reflects a greater contribution from regions with the lowest tax rates, notably Senegal and Egypt, after recent investments.
Net income attributable to shareholders was €89 million, down 30.6% from the year-earlier period and a 31.4% decline at constant scope and exchange rates. The net margin slipped to 9.3%, from 12.2% in the first half of 2008.
1.2. Group Income statement by region
1.2.1. Income statement: France
| (€ million) | 30 June 2009 | 30 June 2008 | Change (%) | |||||
| Reported | At constant scope | |||||||
| Consolidated sales | 431 | 541 | -20.3% | -20.3% | ||||
| EBITDA | 103 | 142 | -27.9% | -27.6% | ||||
| EBIT | 74 | 116 | -36.2% | -35.9% | ||||
Consolidated sales in France declined 20.3% at constant scope in the first half of 2009. EBITDA was down 27.9% to €103 million. The EBITDA margin* slipped from 26.1% to 23.6% in the first half of 2009. The EBITDA margin decline was partially contained by the positive impact of Performance 2010 and additional cost-cutting measures launched under the Performance Plus plan.
- In Cement, Group sales declined 16.2%, mainly due to lower volumes shipped, which declined roughly 20% over the period. After a particularly tough first quarter, notably due to very poor weather conditions, the decline in shipments was not nearly as sharp in the second quarter. Consequently, the EBITDA margin* was still solid, although lower than in the first half of 2008. The impact of declining volumes and rising energy costs were only partially offset by higher prices and the first payoffs of the ?Performance? cost-cutting plans.
- In Concrete & Aggregates, sales declined 25.0%, with concrete volumes sold down by more than 29% and aggregate volumes down by more than 26%. Although there was some pressure on concrete prices, aggregate prices increased robustly, bolstered by a better product mix. Taking into account this environment and the first payoffs of the ?Performance? plans, the decline in the EBITDA margin* was limited to less than three points compared to the first half of 2008.
- In Other Products and Services, sales declined 15.0% due to the economic downturn. The EBITDA margin also declined slightly over the period.
*EBITDA / operational sales
1.2.2 Income statement: Europe (excluding France)
| (€ million) | 30 June 2009 | 30 June 2008 | Change (%) | |||||
| Reported |
At constant scope | |||||||
| Consolidated sales | 135 | 140 | -3.6% | -9.9% | ||||
| EBITDA | 33 | 31 | +7.0% | +0.3% | ||||
| EBIT | 22 | 22 | -2.8% | -7.6% | ||||
Consolidated sales in Europe (excluding France) declined 3.6% in the first half. At constant scope and exchange rates, sales were down 9.9%.
The EBITDA margin* improved significantly to 24.1% in the first half of 2009 from 21.7%.
In Switzerland, sales declined slightly less than 10% at constant scope and exchange rates. After very poor weather conditions in the first quarter, the second quarter benefited from a strong pick up in activity.
- In Cement, consolidated sales declined by nearly 11% at constant scope and exchange rates. The impact of the 10% decrease in volumes sold was partially offset by higher selling prices. The improvement in the Cement EBITDA margin* in the first six months of the year is mainly due to the ending of external cement and clinker purchases and higher selling prices. These favourable factors offset the decline in volumes sold, higher fuel costs (coal) and the prolonged shutdown of production at the Reuchenette plant to complete the increase in kiln capacity under the Performance 2010 plan.
- In Concrete & Aggregates, consolidated sales declined a little more than 6% at constant scope and exchange rates. The decline in volumes sold of both concrete and aggregates was almost completely offset by higher selling prices. As a result, the EBITDA margin* was flat compared to the first half of 2008.
- In the Precast business, consolidated sales declined slightly more than 12% at constant scope and exchange rates. This decline is mainly due to the impact of poor weather conditions in the first quarter of 2009 as business rebounded strongly in the second quarter. With volumes in decline, selling prices came under some pressure during the period. Nonetheless, the EBITDA margin* increased slightly.
In Italy, consolidated sales declined by just under 11%, undermined by the decline in volumes sold in a persistently tough economic environment. The Group generally managed to maintain selling prices, thanks to niche market positions in a highly competitive environment. The EBITDA margin* improved significantly, supported by much better purchasing terms for clinker and freight than in the year-earlier period.
*EBITDA / operational sales
1.2.3 Income statement: United States
| (€ million) | 30 June 2009 | 30 June 2008 | Change (%) | |||||
| Reported |
At constant scope | |||||||
| Consolidated sales | 104 | 136 | -23.7% | -37.3% | ||||
| EBITDA | 8 | 24 | -66.1% | -69.4% | ||||
| EBIT | (9) | 9 | - | - | ||||
In the United States, consolidated sales fell sharply, down 23.7%, or a 37.3% decline at constant scope and exchange rates, in a market that continues to be strongly affected by the macroeconomic crisis.
The EBITDA margin* dropped to 7.7% from 17.4% in the year-earlier period.
In Cement, consolidated sales were down 38.2% at constant scope and exchange rates. This decline is mainly due to the decline of more than 30% in volumes sold. In the Southeast, volumes sold continued to contract. In California, volumes sold fell significantly. Although selling prices declined slightly in the Southeast, they continued to strongly decrease in California. Under these conditions, the Cement EBITDA margin* contracted sharply, since major cost-cutting efforts under the ?Performance? plans did not offset the cumulative negative effects of the decline in volumes and prices in the first half of the year.
In Concrete, consolidated sales declined 36.9% at constant scope and exchange rates. This decline can be attributed to the sharp drop-off in volumes sold in both California and the Southeast. Sales prices were also under pressure in both regions throughout the period. Under these conditions, the impact of cost-cutting measures implemented as part of the ?Performance? plans sharply reduced the decline in the EBITDA margin*.
*EBITDA/operational sales
1.2.4 Income statement: Turkey, Kazakhstan and India
| (€ million) | 30 June 2009 | 30 June 2008 | Change (%) | |||||
| Reported |
At constant scope | |||||||
| Consolidated sales | 70 | 95 | -26.1% | -15.9% | ||||
| EBITDA | 6 | 16 | -62.6% | -55.8% | ||||
| EBIT | (3) | 8 | - | - | ||||
In Turkey, consolidated sales amounted to €70 million, down 15.9% at constant scope and exchange rates.
The EBITDA margin* fell sharply to 9.3% from 17.5% in the first half of 2008. Although the Group met its cost-cutting goals for the period, they only partially offset the decline in business and pricing pressures.
In Cement, consolidated sales declined by more than 22% at constant scope and exchange rates. In a tough macroeconomic environment, volumes decreased slightly less than 9%, mainly due to the drop-off in exports, notably to Russia, which had been a very buoyant market in the first half of 2008. In the local market, business was resilient. Yet in a fiercely competitive environment marked by surplus production capacity, there were strong pricing pressures throughout the period. Consequently, the Cement EBITDA margin* contracted sharply.
In Concrete & Aggregates, consolidated sales declined a little less than 3%. Concrete volumes were stable, which is an excellent performance in the current situation. Aggregate volumes declined by about 10%. Prices were generally flat over the period. Under this environment, and supported by the first effects of the ?Performance? plans, the Group managed to significantly improve the profitability of this business unit compared to its performances in the first half of 2008.
In Kazakhstan and India, new production facilities will start up operationally in late 2010 and early 2012, respectively, as initially planned. Yet certain operating charges related to the installation of these facilities were accounted for during this first half.
*EBITDA / operational sales
1.2.5 Income statement: Africa and the Middle East
| (€ million) | 30 June 2009
| 30 June 2008 | Change (%) | |||||
| Reported |
At constant scope | |||||||
| Consolidated sales | 221 | 142 | +55.4% | +41.5% | ||||
| EBITDA | 81 | 57 | +40.8% | +27.8% | ||||
| EBIT | 66 | 46 | +44.9% | +31.6% | ||||
Consolidated sales in Africa and the Middle East rose 41.5% at constant scope and exchange rates.
The EBITDA margin* was 36.4% in the first half of 2009, down from 40.2% in the same period in 2008. This decline, which was anticipated by the Group, is mainly due to higher taxes in Egypt and higher fuel costs in both Egypt and Senegal.
In Egypt, a very buoyant market, Vicat fully benefited from new production capacity installed under the Performance 2010 plan. As a result, sales increased by more than 104% at constant exchange rates during the period, lifted by another significant increase in volumes sold, up nearly 76%, and favourable pricing trends. In contrast, in line with the Group expectations, the EBITDA margin* in Egypt was impacted by a negative basis of comparison due to government measures put in place in the second-half of 2008 (higher natural gas prices and introduction of the so-called ?tax on clay? on cement). Even so, the profitability of the Group's business in Egypt remains very satisfactory.
In West Africa, first-half sales increased by nearly 12% at constant scope and exchange rates. Cement sales rose by more than 12% at constant scope and exchange rates, buoyed by persistently strong growth in volumes sold in Senegal and Mali. Prices generally held up well over the period. As expected, the EBITDA margin* contracted in Senegal due to the impact of higher fuel costs and the increase in external clinker purchases to keep pace with strong growth in demand. External clinker purchases will cease with the start-up of the new kiln scheduled for the end of the third quarter 2009 in line with the Performance 2010 plan.
Consolidated sales of Aggregates in West Africa declined sharply, by a little over 22%, mainly due to the scheduled shutdown of the production facility in first quarter for modernisation purposes, and the slowdown in the residential sector. Even so, the EBITDA margin* of this activity increased significantly.
*EBITDA / operational sales
1.3. Group income statement by division
1.3.1. Cement
| (€ million) | 30 June 2009
| 30 June 2008
| Change (%) | |||||
| Reported |
At constant scope | |||||||
| Volume (?000 t) | 7,325 | 7,237 | +1.2% | |||||
| Operational sales | 579 | 586 | -1.2% | -4.9% | ||||
| Consolidated sales | 491 | 477 | +3.0% | -1.2% | ||||
| EBITDA | 174 | 194 | -10.3% | -14.1% | ||||
| EBIT | 124 | 152 | -18.7% | -22.1% | ||||
Consolidated Cement sales rose 3.0%, but declined 1.2% at constant scope and exchange rates.
This solid performance, despite a more challenging environment in certain markets, is due to a 1.2% increase in cement volumes sold and a generally favourable pricing environment, except in Turkey, where prices in the domestic market declined by more than 13% compared to the first half of 2008, and in the United States, notably in California.
EBITDA declined 14.1% at constant scope and exchange rates to €174 million, and the EBITDA margin narrowed to 30% from 33% in the first half of 2008. The erosion of the EBITDA margin reflects the decline in volumes and prices in several markets, but also the increase in production factors in Egypt, which were only partially offset by the impact of the Performance 2010 and Performance Plus plans.
1.3.2. Concrete & Aggregates
| (€ million) | 30 June 2009 | 30 June 2008 | Change (%) | ||||||||||||||||||||||||||||||||||||||
| Reported |
At constant scope | ||||||||||||||||||||||||||||||||||||||||
| Concrete volumes (?000 m3) | 3,345 | 4,293 | -22.1% | ||||||||||||||||||||||||||||||||||||||
| Aggregate volumes (?000 t) | 8,975 | 11,052 | -18.8% | ||||||||||||||||||||||||||||||||||||||
| Operational sales | 358 | 452 | -20.9% | -24.1% | |||||||||||||||||||||||||||||||||||||
| Consolidated sales | 345 | 434 | -20.6% | -24.1% | |||||||||||||||||||||||||||||||||||||
| EBITDA | 44 | 60 | -28.0% |
-30.5%
Share
© Business Wire - 2009
Vicat specializes in the production and marketing of cement, ready-to-use concrete granulates. Net sales by family of product break down as follows:
- cement (54.7%): 28.8 Mt sold in 2023;
- ready-to-use concrete and aggregates (37.3%): 10 million m3 of ready-to-use concrete and 24.3 Mt of aggregates sold.
The remaining net sales (8%) are from transporting materials and merchandise to large work sites, prefabricated concrete products, and fabrication of building products (glues, coatings, etc.) and paper.
At the end of 2023, the group owns 273 concrete plants, 71 granulate quarries, 16 cement plants, and 5 crushing centers worldwide.
Net sales are distributed geographically as follows: France (30.8%), Europe (10.3%), Americas (24.9%), Asia (12.5%), Mediterranean (11.8%) and Africa (9.7%).
Sector
Construction Materials
Calendar
2024-04-28
- Q1 2024 Sales and Revenue Release
Trading Rating
Investor Rating
ESG Refinitiv
B- Sell  Mean consensus OUTPERFORM Number of Analysts 5 Last Close Price
36
EUR Average target price
39.2
EUR Spread / Average Target +8.89% EPS RevisionsQuarterly revenue - Rate of surprise
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