Vicat - September 2019

Vicat’s consolidated sales in the 1H19 fell 0.6 per cent YoY, at constant scope and exchange rates, to EUR1340m. EBIT also contracted, down by eight per cent to EUR97m, compared to EUR107m in the 1H18. Vicat’s home market of France saw strong activity in the infrastructure, industrial and commercial markets, offsetting the contraction in the residential sector. Overall sales came in at EUR500m in the 1H19, up 5.1 per cent YoY, at constant scope and exchange rates, with cement sales advancing by four per cent and average selling prices improving. 

The rest of Europe saw overall sales decline by 4.4 per cent YoY to EUR182m. Switzerland recorded a contraction in the precast and concrete business, while the cement business saw stable volumes but lower selling prices due to a change in the product and client mix.

In the Americas, overall sales improved by 4.2 per cent YoY, at constant scope and exchange rates, to EUR275m in the 1H19. Challenging weather conditions caused US cement sales volumes to fall by five per cent, although prices rose substantially across the region. The Brazilian cement business saw an uptick in both volumes and prices. 

Overall sales in Asia slipped 2.3 per cent YoY to EUR193m with Indian sales declining by 5.8 per cent in the 1H19, while sales in Kazakhstan advanced by 18.4 per cent YoY as volumes were redirected to export markets due to more attractive prices.

Although the Mediterranean region as a whole saw total sales plummet by 18.5 per cent YoY to just EUR75m, much of this was due to a 23 per cent decline in Turkish sales on the back of the 2018 currency devaluation. Vicat’s Turkish cement business recorded a substantial fall in volumes, partly offset by a strong increase in average selling prices. Total sales in Egypt, meanwhile, improved by 12.6 per cent YoY in the opening half of this year.

Elections in Senegal, Mali and Mauritania had an impact on Vicat’s Africa results, despite a positive macroeconomic and sector environment, with overall sales in the 1H19 falling by 5.9 per cent YoY to EUR115m. Cement sales in the region fell by 7.4 per cent due to production constraints, while selling prices remained unchanged.

For the full year, although certain emerging-market regions continue to face uncertain political and sector environments, Vicat expects to see broadly firm economic growth. Energy prices are forecast to be more favourable in the second half of the year, contributing to the group’s forecast of a marked improvements in both EBITDA and net income for 2019.