Vicat post 3% sales increase in 1Q20
Vicat reported a 2.6 per cent advance in total consolidated sales in the January-March 2020 period to EUR615.5m from EUR600m in the 1Q19. At constant scope and exchange rates, consolidated sales edged up 0.2 per cent YoY.
The company posted a 5.5 per cent rise in consolidated cement sales to EUR319m in the first quarter of 2020 – or an increase of 3.7 per cent at constant scope and exchange rates – when compared with the 1Q19.
Concrete and aggregate sales were up 1.4 per cent YoY to EUR228m in the 1Q20 from EUR225m, although on a like-for-like (LfL) basis, they slipped 2.1 per cent.
Other product and services saw sales drop by 5.6 per cent (-7.2 per cent LfL) from EUR73m in January-March 2019 to EUR69m in January-March 2020.
Group EBITDA in the 1Q20 slipped 1.6 per cent (-2.9 per cent) YoY to EUR57m as operating profitability improved in most regions despite the significant impact of the health crisis in France and India in March.
It noted limited impact from the COVID-19 pandemic over the quarter as a whole, but significant effects were reported in France, Italy and India at the end of the period.
Commenting on these figures, Guy Sidos, the Group’s Chairman and CEO, said: “The Group’s performance over the first quarter of 2020 was solid despite a sharp slowdown at the end of the period in France, India and Italy. Faced with the sanitary crisis, the Group demonstrated its flexibility and responsiveness by putting in place from the outset protective measures for our colleagues, our clients and our suppliers and introducing strong measures to cut costs, increase control of our working capital requirements and reduce our investments in line with the situation.
Industrial and commercial activity was maintained on almost all sites, in line with market evolutions, and this has attenuated the impact of the crisis. Nevertheless, visibility remains particularly low for the rest of the year, and a significative impact on first-half results and ratios is to be expected from this exceptional situation.”
Results by sales region
In France sales decreased 6.5 per cent YoY (-8 per cent LfL) to EUR211m. Cement sales were down 2.7 per cent with volumes down more than six per cent when compared with 1Q19 as business activity slowed considerably in the second half of March, which is a historically dynamic month. Selling prices were higher in the domestic market but fell in export markets. Concrete and aggregate sales decreased by 21 per cent with concrete and aggregates volumes down by nine and 13 per cent, respectively, although selling prices edged up. Other products and services sales decreased by 6.8 per cent YoY.
The rest of Europe saw sales increase by 14.7 per cent (+7.4 per cent LfL) to EUR86m in the 1Q20 when compared with the 1Q19, when sales stood at EUR75m. The improvement was driven by strong growth (+9.1 per cent LfL) in Switzerland, which largely offset the 15 per cent YoY decline in Italy following the introduction of strict lockdown measures in March.
In the Americas sales advanced 16.6 per cent (+11.4 per cent LfL) to EUR134m in the 1Q20 when compared to EUR115m in the 1Q19, benefitting from the favourable effect of the consolidation of Brazil over the entire 1Q20. In the US strong performance in the Californian market more than offset the unfavourable weather conditions in the southeast while by the end of March, the COVID-19 pandemic had had not significant impact on the industry. Group consolidated sales expanded by 14.6 per cent (11.2 per cent LfL). Meanwhile, in Brazil consolidated sales rose 24.4 per cent (+11.9 per cent LfL) to EUR30m in the 1Q20 with conditions in the industry improving gradually, in an environment that was not visibly impacted by COVID-19.
In the Asia region sales dropped by 10.3 per cent (-10.5 per cent LfL) to EUR81m in the 1Q20 when compared with EUR90m in the 1Q19. The COVID-19 pandemic had varying impacts on the region. In India sales fell 15.1 per cent LfL to EUR69m in the 1Q20. After modest growth in volumes at the start of the quarter, the introduction of lockdown measures resulted in a total closure of the business and a shuttering of all production sites in the regions. As a result, volumes were down by nearly 10 per cent and selling prices fell when compared with the year-ago period. However, in Kazakhstan Vicat saw sales jump 32.1 per cent LfL to EUR12m as volumes increased over the period as a whole, largely offsetting lower prices.
In the Mediterranean the deterioration in the Turkish market impacted sales, which fell by 1.4 per cent LfL to EUR21m in the 1Q20. Moreover, the security situation and competitive environment in Egypt remained difficult. However, the appreciation of the Egyptian pound helped lift consolidated sales by 21.2 per cent (+5.3 per cent LfL) As a result, Mediterranean sales slipped by 1.1 per cent (+0.6 per cent LfL) YoY to EUR33m in the 1Q20.
Price increases in Africa and improving operations at the company’s Rufisque plant in Senegal, helped to bolster Vicat’s African sales by 16.1 per cent to EUR71m in the 1Q20 when compared with the previous-year’s first quarter. The opening of its new grinding unit in Mali also supported Vicat’s African operations.
