Vicat reports 8% growth YoY in 2023

Vicat has reported 8.1 per cent YoY growth in consolidated sales to EUR3.94bn in 2023, compared to EUR3.64bn in the previous year. Over the same period EBITDA has improved by 29.8 per cent from EUR570m to EUR740m. The EBITDA margin has expanded by 3.1 points from 15.7 per cent to 18.8 per cent. The company attributes the advance to its “geographically balanced” portfolio benefiting from cash generation in developed markets and growth opportunities in emerging markets. 

France, which accounts for 31 per cent of the company’s sales, saw revenue advance by 2.8 per cent YoY to EUR1.2bn, with price increases helping to offset a decline in cement, concrete and aggregates volumes due to a slowdown in the residential market.

Europe, which contributes 10 per cent of Vicat’s sales, saw sales improve by 4.9 per cent YoY to EUR407m, despite a continued fall in volumes due to weak residential and infrastructure markets. The Americas market, which accounts for 25 per cent of sales, expanded by 13.9 per cent YoY to EUR979m, supported by strong volume growth in the USA and record EBITDA in Brazil.

The Asian market, which makes up 12 per cent of sales, fell 1.6 per cent YoY to EUR492m, as prices continued to be eroded by increasing competition.However, when compared with the 1H23, which was affected by high input costs in India and logistical issues in Kazakhstan, the performance of the Asian market improved in 2H23, according to analysts.

The Mediterranean, which also accounts for 12 per cent of sales, improved by 24.1 per cent YoY to EUR464m, backed by strong volume growth in Turkey, while Africa, claiming 10 per cent of sales, grew by 11.9 per cent in 2023 to EUR384m as Senegal, Mali and Mauritania reported strong demand and pricing. 

Capex for the year came in at EUR329m, down from 2022 due to a “slight calendar shift in disbursement to 2024 related to Senegal kiln”. The alternative fuel rate for 2023 improved by 3.9 points YoY to 32 per cent, against the 2023 target of 50 per cent. Meanwhile, the clinker rate in 2023 was 76.8 per cent, down 0.7 points, against the 2030 target of 69 per cent. 

Outlook
For 2024 the company expects to see continued sales growth, EBITDA above the 2023 level and capex of around EUR325m.

Analysts highlight ramp-up of the Ragland kiln in Alabama, USA, as supporting volumes going forward. In Europe, the first volumes supplied to the Lyon-Turin line rail works are expected to eventually represent 5-10 per cent of French volumes. In the African region, the commissioning of a new kiln in Senegal is expected to have a positive effect on profitability in the region.