Vicat's 1H20 results see consolidated sales of EUR1.3bn

Vicat has announced 1H20 results with consolidated sales of EUR1.304bn, down 2.7 per cent from EUR1.340bn in 1H19. EBITDA reached EUR213m, representing a decline of 6.7 per cent on EUR228m earned in 1H19. The EBITDA margin stood at 16.3 per cent in the 1H20 compared with 17 per cent in 1H19.

First-half operational sales of the cement business rose 0.9 per cent on a reported basis, and 1.9 per cent at constant scope and exchange rates. The concrete and aggregates business recorded a fall in operational sales of 4.9 per cent on a reported basis, and of 7.1 per cent at constant scope and exchange rates. Operational sales recorded by the other products and services business fell by 7.7 per cent on a reported basis, and by 8.9 per cent at constant scope and exchange rates.

Consolidated net income totalled EUR29m, down 30.7 per cent at constant scope and exchange rates and down 38.8 per cent on a reported basis. Cash flow stood at EUR175m, up 1.3 per cent on a reported basis and up 3.5 per cent at constant scope and exchange rates.

Regional performances
France
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.

Operational cement sales dropped 6.1 per cent over the first half as a whole. The business contraction was caused by a volume decline of more than nine per cent, 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 per cent.

Switzerland
The Swiss market was not significantly affected by the pandemic in the first half, with consolidated sales moving higher.The Swiss Cement business saw operational sales rise by 2.6 per cent at constant scope and exchange rates.

Italy
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. As activity totally stopped for several of weeks, consolidated sales declined 23.2 per cent. However, selling prices rose sharply against a backdrop of falling volumes.

USA
US operational cement sales grew 11.2 per cent 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 southeast 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, says Vicat.

Brazil
In Brazil the pandemic struck just as the macroeconomic environment was starting to stabilise. Sales in Brazil rose to EUR63m, up +8.2 per cent on a reported basis and +22.4 per cent at constant scope and exchange rates. The Brazilian cement business' operational sales came to EUR52m, up from EUR45m in 2019. Volumes and pricing moved above their prior-year levels in the business.

Asia
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. 1H20 sales reached EUR149m, down 22.8 per cent from EUR193m in 1H19.

India has been worst hit by the pandemic of all the countries in the group’s geographical portfolio. The group posted consolidated sales of EUR119m in the first half of 2020, down 24 per cent at constant scope and exchange rates. This trend reflects a volume decline of close to 22 per cent 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.

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 per cent) 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.

Mediterranean
The Mediterranean region was again hit by the persistently-tough macroeconomic and industry conditions in Turkey and Egypt. However, sales reached US$75m in 1H20, up 0.3 per cent on 1H19.

In Turkey sales totalled EUR54m, up six per cent at constant scope and exchange rates and down 5.8 per cent on a reported basis. The Turkish cement business, first-half operational sales rose 6.5 per cent at constant scope and exchange rates.

Meanwhile, in Egypt, consolidated sales totalled EUR21m, up seven per cent at constant scope and exchange rates.

Africa
In Africa the environment remained positive, despite the pandemic’s substantial impact, which brought large government-funded projects in Senegal to a standstill. Sales for the region totalled EUR140m, up 21.8 per cent from EUR115m in 1H19. The cement business, consolidated sales advanced by 39.1 per cent at constant scope and exchange rates.