Regulatory News:
Vicat (Paris:VCT):
First-half 2020 results: controlled impact from
Covid-19
- Limited decrease in sales and in EBITDA, respectively -3.2%
and -5.8% at constant scope and exchange rates, mainly in France
and India
- Cash flow of €175 million: +3.5% at constant scope and
exchange rates
- Stronger balance sheet position: stable net debt and
leverage ratio* of 2.4x
- Setting up of a €175 million US private placement with a
15-year maturity
- Relocation of corporate headquarters in Isère
(France)
Audited condensed consolidated income statement:
(€ million)
First half 2020
First half 2019
Change (reported)
Change (at constant scope and
exchange rates)
Consolidated sales
1,304
1,340
-2.7%
-3.2%
EBITDA**
213
228
-6.7%
-5.8%
Net margin (%)
16.3
17.,0
EBIT***
76
97
-21.9%
-19.2%
Net margin (%)
5.8
7.2
Consolidated net income
29
48
-38.8%
-30.7%
Net margin (%)
2.3
3.6
Net income, Group share
27
46
-41.4%
-36.4%
Cash flow
175
173
+1.3%
+3.5%
*Leverage ratio: net debt/consolidated EBITDA **EBITDA: sum of
gross operating income and other income and expenses on ongoing
business. ***EBIT: EBITDA less net depreciation, amortisation and
provisions on ongoing business.
Commenting on these figures, Guy Sidos, the Group’s
Chairman and CEO said:
“In response to the pandemic, the Group has demonstrated its
flexibility and its responsiveness by taking steps from the outset
to protect its employees, its customers and its suppliers and by
launching strong measures to cut costs, control the working capital
requirement and lower capital expenditure. We limited the impact of
the pandemic, demonstrating the resilience of Vicat’s business
model, including during a crisis.
We kept our production activities running at almost all our
sites to keep pace with market trends and seize any commercial
opportunities by remaining close to our customers, which has helped
to mitigate the impact of the crisis.
In this unprecedented environment, visibility on our full-year
performance remains limited. Drawing on the experience gained in
the first half, the Group is pursuing its efforts, remaining
extremely attentive and reactive to any changes in the pandemic
situation and to the potential macroeconomic consequences it may
have across all the regions in which we operate.”
Disclaimer:
- In this press release, and unless indicated otherwise, all
changes are stated on a year-on-year basis (2020/2019), and at
constant scope and exchange rates.
- 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 from its website
(www.vicat.fr).
1. Income statement for the first half of 2020
1.1. Consolidated income
statement
First-half performance was significantly disrupted by the
Covid-19 pandemic. All 12 countries in which the Group operates
have been affected, but the impact varies considerably from one
region to another. India, France and Italy recorded a sharp fall in
their sales from the end of the first quarter followed by a rebound
at the end of the first half, especially in France. Consolidated
sales in the first six months of 2020 came to €1,304 million. That
represents a decrease of -2.7% on a reported basis compared with
the same period of 2019 and of -3.2% at constant scope and exchange
rates.
The key factors driving consolidated sales were:
- a +1.1% scope effect, resulting in a positive impact of +€15
million owing notably to the consolidation of Ciplan in Brazil from
1 January 2020 (vs. from 24 January in 2019) and small acquisitions
in the Concrete & Aggregates business in France and
Switzerland;
- a slightly negative currency effect of -0.6%, representing a
negative impact of -€8 million over the first half. Depreciation in
the value of the Brazilian real, Turkish lira, Indian Rupee and the
Kazakhstani tenge against the euro were only partly offset by
appreciation in the US dollar, the Swiss franc and Egyptian pound;
and
- lastly, sales recorded an organic contraction of -3.2%. The
impact of the pandemic on the Group’s business in France, India and
Italy was partly offset by higher sales across all the other
regions.
First-half operational sales by the Cement business rose +0.9%
on a reported basis and +1.9% at constant scope and exchange rates.
The Concrete & Aggregates business recorded a fall in
operational sales of -4.9% on a reported basis and of -7.1% at
constant scope and exchange rates. Lastly, the operational sales
recorded by the Other Products & Services business fell by
-7.7% on a reported basis and by -8.9% at constant scope and
exchange rates.
The Group’s consolidated EBITDA came to €213 million,
down -6.7% on a reported basis and down -5.8% at constant scope and
exchange rates. The EBITDA margin stood at 16.3% in the first half
of 2020 compared with 17.0% in H1 2019. The first-half EBITDA
performance reflected very minor positive scope effects (less than
+€1 million), almost -€3 million in negative currency effects and
an organic contraction of -€13 million.
At constant scope and exchange rates, the EBITDA decline was
primarily attributable to:
- the pandemic’s impact on EBITDA generated in France, India and
Italy, and particularly the volume contraction across these three
regions;
- a more competitive environment in Kazakhstan, particularly in
the second quarter; and
- a persistently downbeat macroeconomic and industry environment
in Turkey and Egypt.
These negative factors were offset partly by:
- the initial benefits of the cost-cutting plan implemented to
address the first effects of the pandemic, with savings netting
almost +€13 million in the first half of the year;
- a near -11% drop in energy costs in the Cement business,
excluding volume and currency effects, reaching almost -€13
million;
- a very substantial improvement in EBITDA across the Americas,
particularly in Brazil;
- significant growth in Africa, supported by the improvement in
the cement plant performance in Senegal and the ramp-up in the
grinder in Mali, robust market conditions and higher selling
prices.
EBIT came to €76 million, down a significant -21.9% on a
reported basis and down -19.2% at constant scope and exchange rates
on the €97 million reported in the first half of 2019. The EBIT
margin on consolidated sales was 5.8% compared with 7.2% in the
first half of 2019. This contraction was mainly attributable
to:
- the decline in EBITDA given the factors presented above;
- the increase in depreciation, amortisation and provisions
following the commissioning of the new mill in Mali and various
projects in India and France.
The +€6 million improvement in net financial expense to
-€16 million mainly reflected the gain from discounting a tax
credit recognised at Ciplan (Brazil) following a favourable court
ruling (+€7.0 million), while the cost of debt increased
slightly.
Tax expense declined by €7 million during the first half
as a result of the fall in pre-tax income. The increase in the
effective tax rate from 37.4% to 42.8% derived predominantly from
the impact of variations in the results of companies not subject to
income tax, lower dividend taxes and a non- deductible €11 million
provision for depreciation.
Consolidated net income totalled €29 million, down -30.7%
at constant scope and exchange rates and down -38.8% on a reported
basis. Net income, Group share fell -36,4% at constant scope and
exchange rates and -41.4% on a reported basis to €27 million.
Cash flow stood at €175 million, up +1.3% on a reported
basis and up +3.5% at constant scope and exchange rates.
1.2. Income statement analysed by
geographical region
1.2.1. Income statement, France
(€ million)
First half 2020
First half 2019
Change
(reported)
Change (at constant scope and
exchange rates)
Sales
444
500
-11.3%
-12.5%
EBITDA
56
84
-33.1%
-33.3%
EBIT
14
44
-68.9%
-68.1%
During the first half, the pandemic had a significant impact on
the Group’s performance in France. Following a very sharp slowdown
in late March and throughout April, the situation gradually
improved, with the Group recording solid business growth again in
June.
Even so, EBITDA declined sharply over the period as a whole,
with the positive impact of lower energy costs and the initial
benefits of the cost-cutting plan failing to offset the downturn in
business levels.
- In the Cement business, operational sales dropped -6.1% over
the first half as a whole. The business contraction was caused by a
volume decline of more than -9%, partly offset by an uptick in
selling prices, particularly in the domestic market, and by lower
energy costs. Against this backdrop, the Group’s EBITDA recorded a
contraction of -27.8%.
- In the Concrete & Aggregates business, operational sales
moved -16.6% lower at comparable scope owing to volume decline of
over -17% in both concrete and aggregates. Average selling prices
rose sharply, however. As a result of these factors, EBITDA
generated by this business in France was down -42.4% at constant
scope compared with the first half of 2019.
- In the Other Products & Services business, operational
sales dropped -11.5% over the period. The EBITDA recorded by the
business fell back -34.6%.
1.2.2 Income statement for Europe excluding France
(€ million)
First half 2020
First half 2019
Change
(reported)
Change (at constant scope and
exchange rates)
Sales
198
182
+9.0%
+2.1%
EBITDA
40
38
+4.4%
-1.4%
EBIT
20
19
+1.9%
-3.8%
Activity in Europe (excluding France) in the first half of the
year takes into account starkly contrasting trends in Switzerland
and Italy.
The Swiss market was not significantly affected by the pandemic
in the first half, with consolidated sales moving higher. In Italy,
the Group recorded a very steep decline in its business over the
first half as a whole as a result of the very challenging pandemic
and macroeconomic situation there.
The operational EBITDA margin on consolidated sales dipped very
slightly to 20.0% during the first half of the year from 20.9% in
the first six months of 2019.
In Switzerland, the Group’s consolidated sales rose by
+11.0% on a reported basis and by +3.7% at constant scope and
exchange rates in the first six months of 2020. EBITDA was stable
at constant scope and exchange rates and rose +5.8% on a reported
basis.
- In the Cement business, operational sales rose +2.6% at
constant scope and exchange rates. After favourable weather
conditions in the first quarter, second-quarter trends were a
little less robust, with restrictive health and safety-related
measures being introduced by certain Group customers. Even so,
volumes and average selling prices trended higher during the first
half. Overall, the EBITDA generated by the business rose +11.4% at
constant scope and exchange rates.
- In the Concrete & Aggregates business, operational sales
rose by +13.3% at constant scope and exchange rates over the first
half as a whole. Concrete volumes rose significantly, albeit in a
more competitive environment that saw selling prices erode.
Aggregates volumes and selling prices rose. Overall, the EBITDA
generated by the business rose +3.1% at constant scope and exchange
rates in the first half.
- The Precast business posted stable operational sales (-0.5%) at
constant scope and exchange rates. The competitive environment
remained very unfavourable in consumer products, particularly as a
result of imports. The rail sector picked up only very gradually,
even though the order backlog points to an improvement in the
business during the second half.
In Italy, as activity was totally stopped for several of
weeks, consolidated sales declined -23.2%. However, selling prices
rose sharply against a backdrop of falling volumes. As a result,
EBITDA fell -31.7% in the first half.
1.2.3 Income statement for the Americas region
(€ million)
First half 2020
First half 2019
Change
(reported)
Change (at constant scope and
exchange rates)
Sales
298
275
+8.2%
+9.1%
EBITDA
56
39
+45.3%
+51.1%
EBIT
26
8
+239.6%
+265.6%
In both the United States and Brazil, activity levels continued
to move in the right direction owing to the robust local markets in
which the Group operates despite worrying health-related trends.
Sales in the region were boosted by a solid increase in sales
volumes, with the exception of concrete in the South-Eastern US,
and higher average selling prices.
As a result of these factors, the Americas region’s EBITDA
posted a marked improvement of +45,3% on a reported basis and
+51,1% at constant scope and exchange rates in the first half.
In the United States, conditions in the construction
market remained broadly supportive despite the pandemic crisis. It
is worth noting that California benefited from a favourable base of
comparison for its first-quarter performance, which largely offset
the impact of the severe weather conditions in the South-East.
Against this backdrop, the Group successfully maintained the price
increases it introduced in cement in 2019 and implemented further
increases in the Concrete business. The Group’s consolidated sales
in the United States rose +8.2% on a reported basis and +5.5% at
constant scope and exchange rates. EBITDA came to €41 million in
the first half, up +25.8% on a reported basis and up +22.6% at
constant scope and exchange rates.
It is worth noting that the investment launched during 2019 at
the Ragland plant in Alabama to replace the existing kiln system
with a new one, continued during the first half. The scheduled
entry into service date of this new system remains unchanged (first
half of 2022). This new installation will increase the plant’s
existing capacity and significantly reduce production costs.
- In the Cement business, operational sales grew +11.2% at
constant scope and exchange rates. This performance derived from
solid growth in volumes, particularly in California given the
favourable base of comparison, as the South-East region was hit by
poor weather conditions in the first quarter. Average selling
prices rose across both areas as a result of the full impact of the
hikes introduced in 2019. However, it is important to note that the
price increases initially planned for the second quarter were
postponed given the pandemic situation. They may be introduced over
the summer, depending on how market conditions evolve. Against this
backdrop and given the fall in energy costs during the first half,
the EBITDA generated by the business grew +30.4% at constant scope
and exchange rates.
- In the Concrete business, operational sales rose +2.6% at
constant scope and exchange rates. The industry environment slowed
down in the second quarter, as this business is more sensitive to
the pandemic-related constraints, after an upbeat first quarter for
exactly the same reasons as those reported for the Cement business.
Over the first half as a whole, volumes declined slightly, with the
performance recorded in California only partially making up for the
contraction in the South-East region. Average selling prices rose
sharply, however, in both California and the South-East region.
Accordingly, the EBITDA generated by the business improved +1.7% at
constant scope and exchange rates over the period as a whole.
In Brazil, the pandemic struck just as the macroeconomic
environment was starting to stabilise. While certain regions seem
to have been hit harder by the pandemic, the Group has reaped the
benefit of a fairly supportive industry environment and has been
able to seize some growth opportunities by leveraging its efficient
manufacturing base and the improvements made over the past 12
months. Sales in Brazil rose to €63 million, up +8.2% on a reported
basis and +22.4% at constant scope and exchange rates.
- In the Cement business, operational sales came to €52 million,
up from €45 million in 2019. Volumes and pricing moved above their
prior-year levels in the business. Given the significant fall in
energy costs, EBITDA thus came to €13 million over the period. That
represents a significant increase on the first half of 2019 after
taking into account a €5 million non-recurring tax benefit
(following a favourable court ruling).
- In the Concrete & Aggregates business, operational sales
came to €15 million, down -9.4% on a reported basis, but up +1.9%
at constant scope and exchange rates. They were underpinned by
higher volumes and average prices in both concrete and aggregates.
Overall, EBITDA moved up +30.7% at constant scope and exchange
rates.
1.2.4 Income statement for the Asia region (India and
Kazakhstan)
(€ million)
First half 2020
First half 2019
Change
(reported)
Change (at constant scope and
exchange rates)
Sales
149
193
-22.8%
-20.2%
EBITDA
38
48
-21.0%
-18.3%
EBIT
19
31
-39.1%
-37.0%
The Asia region was affected by the pandemic crisis, which had a
fairly significant impact on the macroeconomic and industry
environment from the end of the first quarter onwards. Amid these
tough conditions, the Group focused on implementing cost-cutting
and protecting its margins.
India has been worst hit by the pandemic of all the
countries in the Group’s geographical portfolio. The strict
lockdown measures imposed by the government led to the complete
shutdown of the Group’s manufacturing facilities for almost a
month, before production and sales activities gradually resumed.
The lockdown measures also had a very negative impact on the
resumption of work on construction projects. These were affected by
a labour shortage that prevented a more rapid and dynamic pick-up
in the sector. As a result, the Group posted consolidated sales of
€119 million in the first half of 2020, down -24.0% at constant
scope and exchange rates. This trend reflects a volume decline of
close to -22% and a contraction in average selling prices,
especially during the first quarter. It is worth noting that the
Group’s volumes edged higher again in June compared with June 2019,
while selling prices moved up slightly in the second quarter. The
situation remains highly volatile, however.
Given this environment, the Group rapidly implemented a plan to
cut and optimise its production costs in order to curb the impact
of the pandemic crisis on the margin. Energy costs also dropped
substantially in the first half. Taking these factors into account,
although EBITDA declined -18.4% at constant scope and exchange
rates, the EBITDA margin on consolidated sales widened over the
period to 23.6% from 22.0% in the first half of 2019.
In Kazakhstan, after a sharp increase in activity in the
first quarter, the operating environment deteriorated in the second
quarter as the pandemic crisis affected both the domestic market
and export markets. Consolidated sales were thus stable over the
first half as a whole (down -0.2%) at constant scope and exchange
rates. The volume increase offset the pressure on prices that was
first seen in late 2019 and that continued into early 2020.
Taking these factors and the significant rise in energy costs
into account, the EBITDA recorded in the period declined -18.0% at
constant scope and exchange rates to reach €10 million, down from
close to €13 million in the first half of 2019.
1.2.5 Income statement for the Mediterranean region (Egypt
and Turkey)
(€ million)
First half 2020
First half 2019
Change
(reported)
Change (at constant scope and
exchange rates)
Sales
75
75
+0.3%
+6.2%
EBITDA
-9
-4
-118.1%
-96.3%
EBIT
-18
-14
-31.7%
-26.1%
The Mediterranean region was again hit by the persistently tough
macroeconomic and industry conditions in Turkey and Egypt. The
pandemic crisis aggravated the situation in both regions, although
its precise impact could not be determined. Against this backdrop,
the Group recorded negative EBITDA of -€9 million in the first
half.
In Turkey, sales totalled €54 million, up +6.0% at
constant scope and exchange rates and down -5.8% on a reported
basis. After a first-quarter sales contraction of -1.4% at constant
scope and exchange rates, activity levels improved during the
second quarter, with sales moving up +11.2% at constant scope and
exchange rates. The macroeconomic and industry environment was
still dampened by the August 2018 devaluation, and the impact of
this was probably exacerbated by the pandemic.
A breakeven EBITDA was recorded in the first half, down on the
€2 million posted in the first half of 2019.
- In the Cement business, first-half operational sales rose +6.5%
at constant scope and exchange rates. Following the -2.6%
contraction in operational sales in the first quarter at constant
scope and exchange rates, the business returned to growth in second
quarter (rise of +12.8% at constant scope and exchange rates).
Although volumes rose in both Konya and Bastas regions, average
selling prices moved lower over the first half as a whole. Taking
these factors and also higher energy costs into account, the EBITDA
generated by this business was positive.
- The operational sales recorded by the Concrete & Aggregates
business rose +12.5% at constant scope and exchange rates over the
period. In the first half, volumes rose slightly in concrete and
surged in aggregates. Selling prices edged lower over the period as
a whole. As a result, EBITDA fell slightly in the first half.
In Egypt, consolidated sales totalled €21 million, up
+7.0% at constant scope and exchange rates. The pandemic has
exacerbated the effects of what was an already unfavourable
situation, with macroeconomic trends barely improving, severe
logistical constraints and fierce competition. Volumes rose by
close to 21% over the period as whole but were still at a low
level. Selling prices continued to fall as a result of the pressure
brought by the Egyptian Army’s new plant, however. The Group is
pushing ahead with its work on both kilns to lift its operating
performance. The Group recorded an EBITDA loss of -€9 million in
the first half of 2020, compared with a loss of -€6 million in the
first half of 2019.
1.2.6 Income statement for Africa
(€ million)
First half 2020
First half 2019
Change
(reported)
Change (at constant scope and
exchange rates)
Sales
140
115
+21.8%
+21.8%
EBITDA
32
23
+37.3%
+37.3%
EBIT
15
8
+80.2%
+80.3%
In Africa, the environment remained positive, despite the
pandemic’s substantial impact, which brought large
government-funded projects in Senegal to a standstill. The Group’s
performance during the first half also benefited from a favourable
base of comparison.
In the Cement business, consolidated sales advanced by +39.1% at
constant scope and exchange rates. This increase reflected very
strong growth in Cement volumes in Senegal thanks to the major
improvement in the production performance of the Rufisque plant in
Senegal and the ramp-up in the new mill in Mali. Selling prices
also improved sharply as a result of the hike introduced in the
third quarter of 2019. As a result of these factors and lower
energy costs, the EBITDA generated by the business surged
+122%.
Conversely, the Aggregates business in Senegal was held back by
the stoppage of numerous government-funded projects amid the
pandemic crisis. As a result, its consolidated sales declined
-45.8% over the period as a result of a steep volume contraction.
EBITDA thus fell a substantial -61.1% lower.
2. Balance sheet and cash flow statement
At 30 June 2020, the Group had a solid financial structure, with
€2,404 million in shareholders’ equity, compared with €2,461
million at 30 June 2019. It is important to note that the currency
devaluation at the balance sheet date had a major impact on both
assets and equity.
Net debt totalled €1,271 million compared with €1,290 million at
31 December 2019 and €1,465 million at 30 June 2019.
On this basis, gearing stood at 52.86% at 30 June 2020, compared
with 49.71% at 31 December 2019 and 59.54% at 30 June 2019. The
leverage ratio was 2.49x, compared with 2.45x at 31 December 2019
and 2.95x at 30 June 2019.
Adjusted for the impact of IFRS 16, which is used for the
calculation of the covenants, gearing at 30 June 2020 stood at
43.8% compared with 40.36% at 31 December 2019 and 49.8% at 30 June
2019. The leverage ratio was 2.38x, compared with 2.28x at 31
December 2019 and 2.82x at 30 June 2019.
Based on these factors, the Group reiterated that:
- its borrowing needs at 30 June 2020 are covered by €442 million
in undrawn, secured, available and sufficient credit lines to meet
forthcoming repayments, in addition to the cash it has at its
disposal.
- the covenants stated in its borrowing agreements have been
met.
Its cash flow totalled €175 million during the first half,
representing an increase of +3.5% at constant scope and exchange
rates.
Capital expenditure during the first half came to €122 million.
Close to a third of this amount relates to the construction of the
new kiln-line at the Ragland plant in the United States.
Given recent macroeconomic trends across its various regions,
the Group plans to resume certain investments that had been delayed
as a result of the pandemic crisis. Capital expenditure is now
expected to total around €280 million over the full year.
Lastly, the Group’s free cash flow was €100 million during the
first half, supported in particular by a strong reduction in
working capital requirements. In the first half of 2019, free cash
flow amounted to -€54 million.
3. Recent events
On 30 July 2020, the Group entered into a €175 million financing
agreement structured as a US private placement with a leading US
investor.
The credit line will be drawn down on 30 November 2020 to repay
the maturing US private placement established in 2010.
Given the fixed interest rate agreed of 2.07%, this 15-year
borrowing facility will deliver significant financial expense
savings for the Group from 2021 onwards.
4. Outlook for 2020
In 2020, macroeconomic conditions in all of the countries where
the Group is active are likely to be significantly affected by the
Covid-19 crisis, to varying degrees depending on health conditions
and the governmental responses.
At present, business is conducted within the strict framework of
the procedures adapted to the public health conditions in each
country where the Group is present. Within this framework, it is
important to note that:
- The twelve countries where the Group operates have been
affected by the Covid-19 epidemic, sometimes with timing
differences in the intensity of its impact;
- The sharing of experience between countries allows good
practice and operating modes to be introduced to help meet the
demands of the situation in each country and ensure business
continuity where this is allowed;
- Given the current environment, business levels are highly
volatile.
The Group thus continues to operate its business at a level that
varies according to the local constraints:
- In France, business levels have continued to improve after
reaching a low point in early April and can now be regarded as
dynamic;
- In Switzerland, business has remained on a growth trajectory in
Cement and in Concrete & Aggregates;
- In West Africa, the strong business trends in Cement are
supported by volumes and prices moving in the right direction. The
sharp slowdown in public infrastructure projects in Senegal
continues to hold back the Aggregates business there;
- In the US, activity levels have held up well since the start of
the pandemic crisis in terms of both volumes and selling prices.
The increase in cement selling prices initially scheduled for the
spring has been postponed owing to the pandemic;
- In Brazil, activity levels have been firm in terms of both
volumes and selling prices;
- In Turkey and Egypt, the persistently tough macroeconomic and
competitive environment remains a drag on activity levels, but this
cannot be specifically attributed to the Covid-19 pandemic;
- In Kazakhstan, the lockdown and the competitive environment
have had a slight impact on volumes and selling prices, after an
especially strong start to the year;
- Activity is picking up again very gradually in India given the
fresh lockdown measures introduced recently. Operations there had
been halted completely for a period during the second quarter.
The upturn in activity levels, particularly in France and India,
the decrease in costs for a total amount of -€51 million for the
full year, mainly linked to the drop in energy costs expected to
exceed -8% (excluding volume and currency effects) representing a
total impact of -€23 million, the introduction of a structural
cost-cutting programme now expected to deliver -€28 million in
savings, a clear focus on the working capital requirement and,
lastly, a scaling-down of the original capital expenditure plans,
should help curb the crisis’ impact on the Group’s results and
financial position.
Taking all these factors, the lack of visibility and the high
level of volatility linked to the current situation into account,
the Group anticipates a moderate decline in EBITDA over the full
year subject to the effects that any second wave of the pandemic
might have.
Conference call
To accompany the publication of the Group’s first-half 2020
results, Vicat is holding a conference call in English on
Friday, 31 July 2020 at 3pm Paris time (2pm London time and
9am New York time).
To take part in the conference call live, dial one of the
following numbers:
France: +33 (0)1 76 77 22 57 UK: +44 (0)330 336 9411 USA: +1 323
994 2131
To listen to a playback of the conference call, which will be
available until 7 August 2020, dial one of the following
numbers:
France: +33 (0) 1 70 48 00 94 UK: +44(0) 207 660 0134 USA: +1
719 457 0820 Access code: 8492441#
Next report:
Third-quarter 2020 sales on 3 November 2020 after the
market close.
About Vicat
The Vicat Group has over 9,000 employees working in three core
divisions, Cement, Concrete & Aggregates and Other Products
& Services, which generated consolidated sales of €2.740
billion in 2019. The Group operates in twelve countries: France,
Switzerland, Italy, the United States, Turkey, Egypt, Senegal,
Mali, Mauritania, Kazakhstan, India and Brazil. Some 64% of its
sales are generated outside France.
The Vicat Group is the heir to an industrial tradition dating
back to 1817, when Louis Vicat invented artificial cement. Founded
in 1853, the Vicat Group now operates three core lines of business:
Cement, Ready-Mixed Concrete and Aggregates, as well as related
activities.
Vicat group – Financial data – Appendix
Definition of alternative performance measures
(APMs):
- Performanceat 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.
- Value-added: value of production less consumption of
materials used in the production process.
- Gross operating income: value-added, less staff costs,
taxes and duties (other than on income and deferred taxes) plus
operating subsidies.
- 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: 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 reflecting a company’s
profitability, which is calculated as net debt/consolidated EBITDA.
Consolidated financial statements for the
six-month period to 30 June 2020 approved by the Board of Directors
on 27 July 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
June 30, 2020 December 31, 2019 (in thousands of
euros)
Notes
NON CURRENT ASSETS
Goodwill
3
1,160,379
1,224,430
Other intangible assets
4
171,331
187,046
Property, plant and equipment
5
1,977,426
2,031,781
Rights of use relating to leases
6
192,224
219,066
Investment properties
14,967
15,125
Investments in associated companies
84,420
85,212
Deferred tax assets
89,907
89,938
Receivables and other non-current financial assets
7
224,643
236,142
Total non-current assets
3,915,297
4,088,740
CURRENT ASSETS
Inventories and work-in-progress
400,846
401,551
Trade and other accounts
415,640
416,568
Current tax assets
63,692
72,811
Other receivables
222,834
192,776
Cash and cash equivalents (see. note 6)
8
382,575
398,514
Total current assets
1,485,587
1,482,220
TOTAL ASSETS
5,400,884
5,570,960
LIABILITIES
June 30, 2020 December 31, 2019 (in thousands of
euros)
Notes
SHAREHOLDERS' EQUITY
Capital
9
179,600
179,600
Additional paid in capital
11,207
11,207
Consolidated reserves
1,974,659
2,140,361
Shareholders' equity
2,165,466
2,331,168
Minority interests
238,103
264,767
Total shareholders' equity and minority interests
2,403,569
2,595,935
NON CURRENT LIABILITIES
Provisions for pensions and other post-employment benefits
10
155,912
141,235
Other provisions
10
117,315
140,243
Financial debts and put options
11
1,124,965
1,109,769
Lease liabilities
11
159,671
178,398
Deferred tax liabilities
231,165
246,086
Other non-current liabilities
48,813
52,072
Total non-current liabilities
1,837,841
1,867,803
CURRENT LIABILITIES
Provisions
10
9,986
10,635
Financial debts and put options at less than one year
11
373,656
391,594
Lease liabilities at less than one year
52,963
59,864
Trade and other accounts payable
380,028
354,652
Current taxes payable
48,742
49,162
Other liabilities
294,099
241,315
Total current liabilities
1,159,474
1,107,222
Total liabilities
2,997,315
2,975,025
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
5,400,884
5,570,960
CONSOLIDATED INCOME STATEMENT
June 30, 2020 June 30, 2019 (in thousands of euros)
Notes
Sales revenues
13
1,303,695
1,339,758
Goods and services purchased
(820,485)
(851,775)
Added value
1.22
483,210
487,983
Personnel costs
(245,721)
(234,553)
Taxes
(38,552)
(38,329)
Gross Operating Income
1.22
198,937
215,101
Other operating income (expense)
15
13,916
13,046
EBITDA
1.22
212,853
228,147
Net charges to operating depreciation, amortization and provisions
14
(137,206)
(131,247)
EBIT
1.22
75,647
96,900
Other non-operating income (expense)
15
132
12,685
Net charges to non-operating depreciation, amortization and
provisions
14
(14,161)
(15,115)
Operating income (expense)
61,618
94,470
Cost of net financial debt
16
(18,141)
(17,173)
Other financial income
16
9,129
7,028
Other financial expenses
16
(6,635)
(11,804)
Net financial income (expense)
16
(15,647)
(21,949)
Earnings from associated companies
3,066
2,601
Profit (loss) before tax
49,037
75,122
Income tax
17
(19,676)
(27,148)
Consolidated net income
29,361
47,974
Portion attributable to minority interests
2,351
1,854
Portion attributable to the Group
27,010
46,120
Earnings per share (in euros)
Basic and diluted Group share of net earnings per share
9
0,60
1,03
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in
thousands of euros)
June 30, 2020 June 30, 2019
Consolidated net income
29,361
47,974
Other comprehensive
income Items not recycled to profit or loss
: Remeasurement of the net defined benefit liability
(6,606)
(16,661)
Tax on non-recycled items
1,900
4,157
Items recycled to profit or loss : Net income from
change in translation differences
(149,563)
15,152
Cash flow hedge instruments
6,592
7,741
Tax on recycled items
(1,703)
(2,000)
Other comprehensive income (after tax)
(149,380)
8,389
Total comprehensive income
(120,019)
56,363
Portion attributable to minority interests
(19,944)
6,436
Portion attributable to the Group
(100,075)
49,927
CONSOLIDATED STATEMENT OF CASH FLOW
(in thousands of euros)
Notes
June 30, 2020 June 30, 2019
Cash flows from operating
activities
Consolidated net income
29,361
47,974
Earnings from associated companies
(3,066)
(2,601)
Dividends received from associated companies
1,296
1,482
Elimination of non cash and non-operating items:
- depreciation, amortization and provisions
148,490
146,578
- deferred tax
2,518
(3,875)
- net (gain) loss from disposal of assets
(997)
(1,790)
- unrealized fair value gains and losses
108
210
- other
(2,598)
(15,159)
Cash flows from operating activities
1.22
175,112
172,819
Change in working capital requirement
44,980
(139,899)
Net cash flows from operating activities (1)
19
220,092
32,920
Cash flows from investing
activities
Outflows linked to acquisitions of non-current assets:
- Tangible and intangible assets
(122,497)
(90,120)
- Financial investments
(12,848)
(54,873)
Inflows linked to disposals of non-current assets:
- Tangible and intangible assets
2,239
2,920
- Financial investments
1,576
6,821
Impact of changes in consolidation scope
0
(291,774)
Net cash flows from investing activities
20
(131,530)
(427,026)
Cash flows from financing
activities
Dividends paids
(70,866)
(73,142)
Increases/decreases in capital
500
Proceeds from borrowings
11
48,117
1,018,155
Repayments of borrowings
11
(33,461)
(549,469)
Repayement of lease liabilities
11
(24,548)
(21,016)
Acquisitions of treasury shares
(4,931)
(2,368)
Disposals or allocations of treasury shares
4,303
4,807
Net cash flows from financing activities
(81,386)
377,467
Impact of changes in foreign exchange rates
(16,547)
3,921
Change in cash position
(9,371)
(12,718)
Net cash and cash equivalents - opening balance
21
328,674
261,969
Net cash and cash equivalents - closing balance
21
319,303
249,251
(1) :- Including cash flows from income taxes: €(9.0) million in
2020 and €(45.0) million in 2019. - Including cash flows from
interest paid and received:€ (19.3) million in 2020 including €
(5.2) million for financial expenseson IFRS 16 leases and € (16.4)
million in 2019 including € (5.4) million for interest expenseon
IFRS 16 leases.
STATEMENT OF CHANGES IN CONSOLIDATED
SHAREHOLDER'S EQUITY (in thousands of euros) Capital
Additional paidin capital Treasuryshares Consolidatedreserves
Translation reserves
Shareholders'equity Minorityinterests
Total
shareholders'equity and minorityinterests At January 1,
2019
179,600
11,207
(56,144)
2,524,952
(400,348)
2,259,267
221,474
2,480,741
Half year net income
46,120
46,120
1,854
47,974
Other comprehensive income (1)
(6,435)
10,241
3,806
4,582
8,388
Total comprehensive income
39,685
10,241
49,926
6,436
56,362
Dividends paids
(66,435)
(66,435)
(7,030)
(73,465)
Net change in treasury shares
4,402
(1,456)
2,946
2,946
Changes in consolidation scopeand additional acquisitions
(6,440)
(6,440)
Other changes
620
620
238
858
At June 30, 2019
179,600
11,207
(51,742)
2,497,366
(390,107)
2,246,324
214,678
2,461,002
At January 1, 2020
179,600
11,207
(52,416)
2,598,620
(405,843)
2,331,168
264,767
2,595,935
Net income
27,010
27,010
2,351
29,361
Other comprehensive income (1)
(3,513)
(123,572)
(127,085)
(22,295)
(149,380)
Total comprehensive income
23,497
(123,572)
(100,075)
(19,944)
(120,019)
Dividends paids
(66,373)
(66,373)
(5,042)
(71,415)
Net change in treasury shares
1,733
(1,751)
(18)
(18)
Changes in consolidation scopeand additional acquisitions Other
changes
764
764
(1,678)
(914)
At June 30, 2020
179,600
11,207
(50,683)
2,554,757
(529,415)
2,165,466
238,103
2,403,569
1) Breakdown by nature of other
comprehensive income:
Other comprehensive income includes mainly cumulative conversion
differences from end 2003. To recap, applying the option offered by
IFRS 1, the conversion differences accumulated before the
transition date to IFRS were reclassified by allocating them to
retained earnings as at that date.
Group translation reserves are broken down by currency as
follows at June 30, 2020 and 2019:
(in thousands of euros)
June 30 , 2020 June 30, 2019
US Dollar
44,208
38,134
Swiss franc
215,065
187,275
Turkish new lira
(283,139)
(265,413)
Egyptian pound
(126,675)
(124,896)
Kazakh tengue
(95,957)
(85,699)
Mauritanian ouguiya
(11,789)
(6,755)
Brazilian real
(91,337)
(1,915)
Indian rupee
(179,791)
(130,838)
(529,415)
(390,107)
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Vicat Investor relations contact: Stéphane
Bisseuil: Tel.: +33 1 58 86 86 05 stephane.bisseuil@vicat.fr
Press contacts: Marie-Raphaelle Robinne Tel.: +33 (0) 4
74 27 58 04 marie-raphaelle.robinne@vicat.fr
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