Regulatory News:
Vicat (Paris:VCT):
- Growth of +2.1% in consolidated sales at constant scope and
exchange rates in the first nine months of 2020
- Rebound in activity levels in France and India, further
strong momentum in the Americas and Africa
- Savings plan, tight cost control and WCR management in line
with objectives
- Increase in EBITDA* and in EBIT* over the first nine months
of the year**
- Relocation of head office at l’Isle d’Abeau (Isère, France)
and strengthening of Group Governance
Consolidated sales
(€ million)
Nine-months 2020
Nine-months 2019
Change (reported)
Change (at constant scope and
exchange rates)
France
713
750
-5.0%
-5.8%
Europe (excluding
France)
317
294
+7.8%
+2.5%
Americas
471
442
+6.7%
+12.9%
Asia
245
286
-14.4%
-9.2%
Mediterranean
122
126
-3.0%
+9.2%
Africa
198
161
+22.8%
+23.1%
Total
2,066
2,059
+0.3%
+2.1%
Commenting on these figures, Guy Sidos, the Group’s
Chairman and CEO said: “The Vicat group’s performance over the
first nine months of 2020 demonstrated its resilience and its
tremendous ability to seize growth opportunities arising in its
markets. The impact of COVID on the Group's operating profitability
was eliminated by the end of July. The good momentum observed since
then, particularly in the Group's most recent operations in India
and Brazil, lead to envisage that the Group's operating
profitability may increase significantly at constant scope and
exchange rates in 2020. Nevertheless, the Group is continuing its
efforts to reduce its structural costs, symbolised by the
relocation on 1 October of its head office to l’Isle d'Abeau in
Isère. Balance sheet liquidity was strengthened by the early
renewal of credit lines on excellent terms. Against this backdrop,
the Group is continuing its technological and financial efforts to
successfully accelerate its ecological and digital transition and
offer its customers its low carbon products under the DECA label,
launched in October on its Ready Mix Concrete business in France.
The Group's governance has been strengthened by the appointment of
a second Chief Operating Officer, Lukas Epple, Director of
Strategy, and two new Deputy CEO, Hugues Chomel, Chief Financial
Officer, and Christophe Bérenger, Director of Human Resources".
* 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. ** Given the current situation, the
Group has decided to publish profitability figures for the
nine-months to 30 September 2020 as an exception to its normal
practices.
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).
-----------------------------------------------------------------------------------------------------------------------------------
In the first nine months of 2020, the Vicat Group’s
consolidated sales came to €2,066 million, stable (+0.3%) on a
reported basis and up +2.1% at constant scope and exchange rates
compared with the same period of 2019. This performance reflects
the combined effects of:
- a negative currency effect of -2.5% as a result of the sharp
depreciation in the Brazilian real, the Turkish lira, the Indian
rupee and the Kazakhstani tenge;
- a scope effect of +0.8% arising mainly from the acquisition of
Ciplan in Brazil in late January 2019, and
- an organic increase of +2.1%.
Trends in operational sales by business were as follows:
- Cement posted a +4.7% increase on a reported basis and an +8.4%
rise at constant scope and exchange rates;
- Concrete & Aggregates recorded falls of -3.4% on a reported
basis and -3.3% at constant scope and exchange rates;
- Other Products and Services posted a contraction of -1.1% on a
reported basis and -1.9% at constant scope and exchange rates.
During the third quarter, consolidated sales came to €762
million. That represented an increase of +6.0% on a reported basis
and of +12.0% at constant scope and exchange rates. In line with
trends in June 2020, this rise was driven by a solid upturn in
activity levels once the strict lockdown measures were lifted and
by a catch-up effect over the summer, which delivered a boost to
all the Group’s activities.
1. Analysis of consolidated sales in
the nine months of 2020 by geographical region
1.1. France
(€ million)
Nine-months 2020
Nine-months 2019
Change (reported)
Change (at constant scope and
exchange rates)
Sales
713
750
-5.0%
-5.8%
During the first nine months of 2020, 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, which continued into the third
quarter (+7.7% at constant scope).
- In the Cement business, operational sales rose +2.2% over the
full nine-month period. Volumes decreased slightly over the period
as a result of the sharp slowdown in activity between March and
May, usually very busy months. A healthy upswing in June, which
carried forward into the third quarter, with operational sales
advancing +19.1%, helped offset part of this downturn. Selling
prices moved higher in the domestic market.
- The operational sales recorded by the Concrete & Aggregates
business dipped -10.4% at constant scope (down -8.8% on a reported
basis). This evolution was the result of volume declines in
concrete and aggregates. Conversely, average selling prices moved
higher in both concrete and aggregates. During the third quarter,
business recorded a healthy recovery in its sales, which moved
+1.8% higher at constant scope.
- In the Other Products & Services business, operational
sales dropped -6.0% over the full nine-month period. Following the
same pattern, sales in this business picked up significantly in the
third quarter (+4.9%).
1.2 Europe (excluding France)
(€ million)
Nine-months 2020
Nine-months 2019
Change (reported)
Change (at constant scope and
exchange rates)
Sales
317
294
+7.8%
+2.5%
Activity in Europe (excluding France) again takes into account
starkly contrasting trends in Switzerland and Italy. The Swiss
market was not significantly affected by the pandemic in the first
nine months, with consolidated sales moving higher. In Italy,
however, the Group recorded a very steep decline in its business
over the first nine months as a result of the very challenging
pandemic and macroeconomic situation there. In the third quarter,
the region’s activity levels clearly picked up, with an increase of
+3.1% at constant scope and exchange rates and +5.8% on a reported
basis.
In Switzerland, the Group’s consolidated sales climbed
+3.5% at constant scope and exchange rates (+9.1% on a reported
basis). Business there continued as normal with no major impact on
sector conditions arising from the pandemic. In the third quarter,
sales rose +3.2% at constant scope and exchange rates.
- In the Cement business, operational sales grew +3.7% at
constant scope and exchange rates thanks to a steady improvement in
volumes and selling prices. In the third quarter, operational sales
advanced by +5.8% at constant scope and exchange rates.
- In the Concrete & Aggregates business, operational sales
rose +9.9% at constant scope and exchange rates. Concrete volumes
rose significantly, albeit in a more competitive environment that
saw average selling prices move lower. Higher aggregates prices
helped to make up for a small decline in volumes. In the third
quarter, business grew by +4.3% at constant scope and exchange
rates.
- The Precast business posted stable consolidated sales (-0.5%)
at constant scope and exchange rates. Market conditions were again
unfavourable for consumer products as a result of a fiercely
competitive environment. Conversely, the recovery continued in the
railway sector.
In Italy, consolidated sales declined -16.2% over the
first nine months of the year as a result of the business shutdown
for several weeks in the first half. This downturn resulted from
the steep volume contraction, partly offset by a clear improvement
in selling prices. In the third quarter, conditions improved
significantly, with an end to the lockdown measures, leading to a
+0.7% rise in sales.
1.3 Americas
(€ million)
Nine-months 2020
Nine-months 2019
Change (reported)
Change (at constant scope and
exchange rates)
Sales
471
442
+6.7%
+12.9%
Reported figures for the region benefited from the positive
effect of consolidating the business in Brazil over the entire
first quarter of 2020. In 2019, Brazil was only consolidated from
24 January.
Despite a public health situation still causing concern,
activity levels in both the United States and Brazil continued to
move in the right direction, with growth gaining momentum in Brazil
during the third quarter. Sales in the region were boosted by a
solid increase in volumes, with the exception of concrete in the
South-Eastern US, and higher average selling prices. Upbeat
third-quarter performance across the Americas region (+19.2% at
constant scope and exchange rates) took into account the impact of
the unfavourable climate conditions in the South-Eastern US and the
wildfires in California.
In the United States, the macroeconomic and sector
environment remained favourable throughout the nine-month period.
The Group’s consolidated sales rose +4.2% at constant scope and
exchange rates. During the third quarter, activity levels were
slightly affected, particularly in concrete, by unfavourable
weather conditions in the South-Eastern US and by the Californian
wildfires. Even so, sales rose +1.9% at constant scope and exchange
rates.
- In the Cement business, operational sales rose +9.4% at
constant scope and exchange rates over the first nine months of
2020. Volumes recorded a strong increase, especially in California.
Selling prices edged higher over the first nine months.
Third-quarter activity levels remained upbeat (+6.6% at constant
scope and exchange rates) despite unfavourable weather conditions
in the South-Eastern US and wildfires in California. The hike in
selling prices in California, initially planned for April, but then
pushed back as a result of the pandemic situation, was in the end
introduced in the third quarter and is expected to have a positive
impact from the fourth quarter onwards.
- In the Concrete business, operational sales were stable (+0.2%
at constant scope and exchange rates). The price hikes recorded in
California and in the South-Eastern US made up for the volume
contraction, especially in the South-Eastern region. Third-quarter
sales were down -3.7% at constant scope and exchange rates as a
result of lower volumes in California caused by the impact of more
restrictive public health measures in the region, offset partially
by higher selling prices in both the South-Eastern US and in
California.
In Brazil, consolidated sales came to €113 million, up
+15.5% on a reported basis and up +43.4% at constant scope and
exchange rates over the first nine months. Activity levels
accelerated during the third quarter (+74.7% at constant scope and
exchange rates) from the already upbeat levels recorded in the
first half.
- In the Cement business, operational sales were €93 million, an
increase of +54.0% at constant scope and exchange rates driven by a
strong improvement in volumes and selling prices.
- In the Concrete & Aggregates business, operational sales
came to €30 million, an increase of +32.6% at constant scope and
exchange rates. The significant increase in volumes at constant
scope was accompanied by a rise in selling prices, particularly in
aggregates.
1.4 Asia (India and Kazakhstan)
(€ million)
Nine-months 2020
Nine-months 2019
Change (reported)
Change (at constant scope and
exchange rates)
Sales
245
286
-14.4%
-9.2%
The Asia region was affected by the pandemic crisis, which had a
fairly significant impact on the macroeconomic and sector
environment from the end of the first quarter onwards. Amid these
tough conditions, the Group focused on implementing cost-cutting
and protecting its margins. The situation improved significantly
during the third quarter, with sales rising +3.0% on a reported
basis and +13.5% at constant scope and exchange rates.
In India, the strict lockdown measures imposed by the
government had a very major impact on business particularly during
the second quarter. Activity levels have since picked up with a
very gradual start-up in construction projects. As a result, the
Group posted consolidated sales of €195 million in the first nine
months of 2020, down -11.6% at constant scope and exchange rates.
This trend reflects a marked volume decline, offset to some extent
by a firming-up in average selling prices since the second quarter.
In the third quarter, activity levels picked up very substantially.
Sales grew +16.9% at constant scope and exchange rates compared
with the third quarter of 2019, thanks to a boost from a
significant increase in selling prices and volumes that led to
record levels of profitability despite the effects of a strong
Monsoon.
Consolidated sales in Kazakhstan came to €51 million, up
+1.2% at constant scope and exchange rates. Volumes moved higher
throughout the period, making up for the slight erosion in selling
prices. In the third quarter, consolidated sales advanced +3% at
constant scope and exchange rates on the back of firmer selling
prices.
1.5 Mediterranean (Egypt and Turkey)
(€ million)
Nine-months 2020
Nine-months 2019
Change (reported)
Change (at constant scope and
exchange rates)
Sales
122
126
-3.0%
+9.2%
The Mediterranean region was affected by the macroeconomic and
sector downturn in Turkey, although the situation is now
stabilising gradually. In Egypt, the security and competitive
environment remained a challenge throughout the period. In the
third quarter, activity levels rose +13.5% at constant scope and
exchange rates (-7.5% on a reported basis).
In Turkey, although the continuing depreciation in the
Turkish lira since August 2018 and the pandemic crisis continued to
affect the macroeconomic and sector environment, the recovery in
the construction market remained on track. Sales totalled €89
million, up +10.4% at constant scope and exchange rates (down -7.8%
on a reported basis).
- In the Cement business, operational sales rose +10.3% at
constant exchange rates over the first nine months. The firmer
trends seen in the second quarter continued into the third, pushing
operational sales up +15.5% at constant scope and exchange
rates.
- Operational sales in the Concrete & Aggregates business
rose +15.2% at constant scope and exchange rates over the first
nine months of the year. During the third quarter, operational
sales in the business posted a substantial increase of +19.3% at
constant scope and exchange rates compared with the third quarter
of 2019.
In Egypt, consolidated sales totalled €33 million, up
+5.2% at constant scope and exchange rates (up +13.0% on a reported
basis). The pandemic has accentuated the effects of what was
already an unfavourable situation, with macroeconomic trends barely
improving, severe logistical constraints and fierce competition.
Volumes rose over the first nine months of the year but were still
at a low level. Selling prices continued to fall as a result of the
pressure created by the Egyptian Army’s new plant. In the third
quarter, sales rose +2.3% at constant scope and exchange rates.
1.6 Africa
(€ million)
Nine-months 2020
Nine-months 2019
Change (reported)
Change (at constant scope and
exchange rates)
Sales
198
161
+22.8%
+23.1%
In Africa, the Group reaped the full benefit of a favourable
sector environment despite the pandemic crisis, operational
improvements at its Rufisque plant, a supportive pricing
environment and, lastly, the ramp-up in its new grinding station in
Mali. Third-quarter trends remained on track, with sales advancing
26.1% at constant scope and exchange rates despite the weather
conditions and an unfavourable base of comparison for prices in
Senegal.
- In the Cement business, operational sales in the Africa region
grew +36% at constant scope and exchange rates notably supported by
the ramp-up in the new grinding station in Mali. This performance
reflected a strong increase in Cement volumes. Selling prices in
Senegal also rose significantly given the price increases
introduced in 2019. Third-quarter operational sales moved 16.2%
higher thanks to a volume increase despite less favourable
wintering than in 2019 and an expected decline in selling prices as
a result of the introduction of a new levy on cement.
- In Senegal, consolidated sales in the Aggregates business were
€17.7 million, a fall of -41.9% over the period. Volumes dropped
sharply as a result of the shutdown of numerous state-financed
construction projects amid the pandemic crisis. Third-quarter sales
declined -28.6%.
2. Trends in operational profitability
and financial structure in the first nine months of
2020
2.1 Trends in the Group’s operational profitability in the
first nine months of 2020
Given the current situation, the Group has decided to publish,
as an exception to its usual practice, the EBITDA and EBIT it
generated in the first nine months of 2020.
Hence, Group EBITDA came to €403 million in the first nine
months of 2020 versus €373 million in the same period of 2019,
representing an increase of +8.1% on a reported basis and +11.7% at
constant scope and exchange rates. The Group EBIT came to €201
million in the first nine months of 2020, versus €175 million in
the same period of 2019, up +14.6% on a reported basis and +20.5%
at constant scope and exchange rates. This increase reflects a
continuing improvement in operating margins across the Americas,
Africa, Europe (excluding France) and Asia. The clear rebound in
activity levels in France during the third quarter was not enough
to make up for the decline in the first six months, and so
profitability was lower year-on-year over the first nine months of
the year. The Mediterranean region was alone in recording a further
decline in its operating margin during the third quarter and also
over the first nine months.
2.2 Trends in the Group’s financial structure in the first
nine months of 2020
At 30 September 2020, the Group’s equity stood at €2,381 million
and its net debt at €1,265 million versus €1,407 million at 30
September 2019. On this basis, and taking account of IFRS 16,
gearing was 53.1% versus 54.9% at 30 September 2019. Leverage ratio
was 2.27x compared with 2.88x at 30 September 2019.
Excluding IFRS 16, the standard still used for the calculation
of certain covenants, gearing at 30 September 2020 was 44.8% versus
45.4% at 30 March 2019, and leverage was 2.15x, versus 2.61x at 30
September 2019.
The Group continued its refinancing operations, with the
signature on October 30, 2020 of a CHF 200 million syndicated loan
and a €50 million bilateral line of credit. These two facilities
have a 5-year maturity. After taking these two lines into account,
the Group has further strengthened the liquidity of its balance
sheet and has confirmed unused financing lines of €493 million
euros.
3. Outlook for 2020
In 2020, macroeconomic conditions in all of the countries where
the Group is active have been affected by the Covid-19 pandemic,
with varying impacts depending on the public health situation and
the government responses.
Business continues to be conducted strictly within the framework
of the procedures adapted to the public health situation in each
country where the Group is present. It is important to note
that:
- The twelve countries where the Group operates remain affected
by the pandemic, but to different degrees;
- The sharing of experience between countries allows efficient
operating modes to be introduced to address the situation in each
country while ensuring business is conducted as effectively as
possible;
- given the current environment, business trends remain highly
volatile and visibility has reduced significantly.
Nonetheless, subject to any developments in the public health
situation in the regions where it is active and weather conditions
at the end of the year, the Group now anticipates marked
growth in its EBITDA at constant scope and exchange rates
over the full year taking into account:
- the recovery in activity levels, especially in France and India
and strong momentum in the Americas and Africa regions;
- the -8% reduction in energy costs (impact estimated at -€24
million excluding volume and currency effects);
- the programme to cut structural costs (by an estimated -€28
million).
In addition, in order to reinforce its financial strength, the
Group is focusing clearly its attention to reducing its working
capital requirement and keeping a tight grip on its capital
expenditure. Capital expenditure is now expected to total around
€280 million over the full year.
Conference call
To accompany the publication of its nine-month 2020 sales, the
Vicat group is organising a conference call in English that will
take place on 4 November 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 United Kingdom:
+44 (0)330 336 9411 United States: +1 323-994-2082 Access code:
9719073#
To listen to a playback of the conference call, which will be
available until 11 November 2020, dial one of the following
numbers:
France: 33 (0)1 70 48 00 94 United Kingdom:
+44 (0) 207 660 0134 United States: +1 719 457 0820 Access code:
9719073#
Next report:
The Group will report its full-year 2020 results on 15 February
2021 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):
- 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.
- 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.
Analysis of nine-month 2020 sales by
business
Cement
(€ million)
Nine-months 2020
Nine-months 2019
Change (reported)
Change (at constant scope and
exchange rates)
Volume (thousands of tonnes)
18,013
16,661
+8.1%
Operational sales
1,232
1,176
+4.8%
+8.5%
Consolidated sales
1,045
991
+5.4%
+9.5%
Concrete &
Aggregates
(€ million)
Nine-months 2020
Nine-months 2019
Change (reported)
Change (at constant scope and
exchange rates)
Concrete volumes (thousands of m3)
6,652
6,767
-1.7%
Aggregates volumes (thousands of
tonnes)
16,294
17,760
-8.3%
Operational sales
791
819
-3.4%
-3.3%
Consolidated sales
768
804
-4.5%
-4.7%
Other Products &
Services
(€ million)
Nine-months 2020
Nine-months 2019
Change (reported)
Change (at constant scope and
exchange rates)
Operational sales
324
328
-1.1%
-2.0%
Consolidated sales
253
263
-3.8%
-5.4%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201103005442/en/
Investor relations: Stéphane Bisseuil Tel. +33 1 58 86 86
05 stephane.bisseuil@vicat.fr
Press: Marie-Raphaëlle Robinne Tel. +33 (0)4 74 27 58 04
marie-raphaelle.robinne@vicat.fr
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