Vicat posted 2023 EBITDA of EUR740m, a rise of 30 per cent compared to 2022, an improvement on analysts CIC Market Solutions’ expectations of EUR709-716m.
Several factors account for Vicat's strong financial results, claims CIC Market Solutions. Despite a sharp downturn in the new housing segment in Europe (41 per cent of revenues, and 31 per cent in France), consolidated volumes were up 6.3 per cent, thanks in particular to the ramp-up of the Ragland kiln in Alabama. In the Americas, which now account for 25 per cent of group revenues, EBITDA rose by 60 per cent, despite organic revenue growth (positive price and volume effects) of 'only' 16 per cent, highlighting the productivity gains achieved by the new kiln.
In addition, Vicat’s Asian portfolio (accounting for 12 per cent of revenues) improved its performance in the 2H23, after a first half marked by high input costs in India (10 per cent of group revenues) and logistical problems in Kazakhstan. Vicat also managed to post solid performances in the Mediterranean and Africa, despite hyperinflationary or geopolitically sensitive conditions.
"Vicat is set to continue to benefit from solid catalysts in 2024 and 2025, helped by the more favourable basis of comparison for Ragland in 1Q24 and the first cement volumes delivered on the Lyon-Turin line rail works, which will eventually represent 5-10 per cent of volumes in France," adds CIC Market Solutions. "In addition, Vicat is due to start the new Sococim kiln in Senegal, which should substantially improve profitability in the region."
On the strength of these factors, Vicat expects EBITDA in 2024 to be higher than in 2023 and leverage to be below 1.3x at end 2025. CIC Market Solutions has raised its target price to EUR43, versus EUR40 previously. Vicat's full results were posted on CemNet on 8 February 2024.
