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Vicat Group: Full-Year 2021 Results

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·37-min read
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L’ISLE-D'ABEAU, France, February 15, 2022--(BUSINESS WIRE)--Regulatory News:

Vicat Group (Paris:VCT):

  • Strong increase in full-year results

  • Dynamic markets and favourable pricing trends

  • Solid cash generation and robust balance sheet

  • Proposed dividend at €1.65 per share

Condensed 2021 income statement approved by the Board of Directors on 11 February 2022

(€ million)

2021

2020

Change
(reported)

Change
(at constant
scope and
exchange rates)

Consolidated sales

3,123

2,805

+11.3%

+16.2%

EBITDA

619

557

+11.1%

+14.5%

Margin (%)

19.8

19.9

EBIT

360

298

+20.8%

+24.1%

Margin (%)

11.5

10.6

Consolidated net income

222

172

+29.1%

+31.8%

Margin (%)

7.1

6.1

Net income, Group share

204

156

+30.9%

+33.3%

Cash flow

488

460

+5.9%

+8.9%

Commenting on these figures, Guy Sidos, the Group’s Chairman and CEO said:

"The dedication of Vicat's teams supported the rise of the Group's results during a year that was contrasted in a mirror effect of the previous year.

Conditions in our markets remained dynamic, supported by favourable pricing trends in a context of sustained demand. This offsets the sharp rise in energy costs and wage increases.

Through innovation successes and relevant investment choices, focused on the decarbonisation of both its manufacturing processes and of its marketed products, the Vicat Group remains focused on achieving its objectives of reducing its carbon footprint and pursuing profitable growth."

Disclaimer:

  • In this press release, and unless indicated otherwise, all changes are stated on a year-on-year basis (2021/2020), and at constant scope and exchange rates.

  • The alternative performance measures (APMs), such as "at constant scope and exchange rates", "operational sales", "EBITDA", "EBIT", "net debt", "gearing" and "leverage" are defined in the appendix to this press release.

  • This press release may contain forward-looking statements. Such forward-looking statements do not constitute forecasts regarding results or any other performance indicator, but rather trends or targets. These statements are by their nature subject to risks and uncertainties as described in the Company’s annual report available on its website (www.vicat.fr). These statements do not reflect the future performance of the Company, which may differ significantly. The Company does not undertake to provide updates of these statements.

Further information about Vicat is available from its website (www.vicat.fr).

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In 2021, the Group’s business grew sharply given the dynamic trends in its markets and a favourable pricing environment, almost completely offsetting the steep rise in energy costs recorded in the second half of the year. Certain markets continued to experience disruption as a result of the persistent pandemic situation in 2021, but the construction sector was able to continue operating as a result of the measures introduced.

Overall, the Group’s consolidated sales totalled €3,123 million, up from €2,805 million in 2020, representing an +11.3% rise on a reported basis and a +16.2% increase at constant scope and exchange rates.

The trend in consolidated sales on a reported basis reflects:

  • organic business growth of +16.2%, supported by dynamic market conditions across all the Group’s business areas and supportive pricing trends;

  • an unfavourable currency effect of -3.6%, representing a negative impact of €-102 million over the full year as a result of the appreciation of the average rate of the euro and the depreciation of the Turkish lira;

  • and a scope effect of -1.2%, resulting in a negative impact of €-34 million, chiefly reflecting the sale of Créabéton Matériaux in Switzerland, partly offset by small acquisitions within concrete in France.

The Group’s operational sales totalled €3,558 million, up +11.5% on a reported basis and up +16.3% at constant scope and exchange rates. Each of the Group’s businesses contributed to this positive trend. In the Cement business, sales (€1,914 million) rose +14.4% on a reported basis and +18.8% at constant scope and exchange rates. In the Concrete & Aggregates business, operational sales (€1,191 million) rose by +10.0% on a reported basis and by +13.1% at constant scope and exchange rates. Lastly, the Other Products & Services business (€453 million) increased by +4.3% on a reported basis and up +14.8% at constant scope and exchange rates.

The Group’s consolidated EBITDA totalled €619 million in 2021, representing an increase of +11.1% on a reported basis and of +14.5% at constant scope and exchange rates. EBITDA margin was 19.8%, stable versus 2020. Reported EBITDA reflects an unfavourable currency effect of nearly €-17 million, a negative scope effect of slightly over €-2 million and, lastly, organic growth of close to €+81 million.

At constant scope and exchange rates, the increase in EBITDA was driven by:

  • dynamic business trends across all markets;

  • generally favourable pricing trends, which largely offset the inflation in energy costs (+18% over the full year);

  • a steep reduction in the operating loss previously recorded in Egypt.

EBIT totalled €360 million compared with €298 million in 2020. This represented an increase of +20.8% on a reported basis and of +24.1% at constant scope and exchange rates. The EBIT margin on consolidated sales came to 11.5%, an increase of +90 basis points (9.7% in 2019).

The Group’s operating profit totalled €336 million, representing a rise of +21.2% on a reported basis and of +24.0% at constant scope and exchange rates. This performance was largely attributable to improvements in operating profitability at both EBITDA and EBIT levels. It also reflects an additional write-off of nearly €16 million on loans linked to investments in Egypt.

The €-5 million improvement in net financial expense (to €-30 million in 2021 from €-35 million in 2020) largely reflects the reduction in the Group’s average cost of debt, as well as the positive change in hedging instruments, given the rise in interest rates over the last few months of 2021.

Tax expense rose by €-15 million as a result of the higher pre-tax income. The effective tax rate was lower than at 31 December 2020, falling from 30.7% to 29.1% in 2021. The key factors behind the reduction in the tax rate were the decline in the tax rate in France and a favourable country mix.

Consolidated net income was €222 million in 2021, representing a large rise of +31.8% at constant scope and exchange rates and of +29.1% on a reported basis.

Net income, Group share rose to €204 million, up by +33.3% at constant scope and exchange rates and +30.9% on a reported basis.

Cash flow came to €488 million, up +5.9% on a reported basis and up +8.9% at constant scope and exchange rates, reflecting the sharp increase in EBITDA generated over the year.

On the strength of these full-year 2021 results and given its confidence in the Group’s ability to continue pursuing its development, the Board of Directors decided at its meeting on 11 February 2022 to propose the distribution of a dividend of €1.65 per share, at the Group’s Annual General Meeting due to be held on 13 April 2022.

1. Income statement analysed by geographical region

1.1. Income statement, France

(€ million)

2021

2020

Change

(reported)

Change
(at constant
scope and
exchange
rates)

Consolidated sales

1,074

963

+11.5%

+10.7%

EBITDA

201

171

+17.9%

+17.8%

EBIT

118

92

+27.8%

+28.4%

The Group’s performance in France increased during the year, although the pandemic was once more a limiting factor. Strong growth in the first six months was followed by a moderate dip in the second half as a result of an unfavourable basis of comparison and the growing impact of a steep rise in energy costs. As a result, EBITDA posted an increase over the year as a whole, with a clear improvement in the EBITDA margin on consolidated sales to 18.7% from 17.7% in 2020.

  • In the Cement business, operational sales rose +9.4% at constant scope. Underpinning this performance was strong growth in the first six months, which helped to offset the contraction recorded in the second six months of the year as a result of an unfavourable basis of comparison. Amid a still supportive sector environment, prices moved higher and the EBITDA generated by the business rose +12.2% over the year.

  • The operational sales recorded by the Concrete & Aggregates business rose +13.7% at constant scope. This performance reflects higher deliveries of concrete and aggregates and sustained prices. Overall, the EBITDA generated by the business rose +21.8% at constant scope in 2021.

  • In the Other Products & Services business, operational sales advanced +16.0% at constant scope over the period. The EBITDA recorded by the business climbed +48.5% over the year.

1.2 Income statement for Europe (excluding France)

(€ million)

2021

2020

Change

(reported)

Change
(at constant
scope and
exchange
rates)

Consolidated sales

394

423

-7.1%

+3.8%

EBITDA

89

97

-8.7%

-5.2%

EBIT

55

55

0.0%

+1.4%

The Swiss market, barely affected by the pandemic in 2020, recorded solid growth in 2021. Italy, which benefited from a highly favourable basis of comparison at the start of the year given the very challenging pandemic and macroeconomic situation in the first six months of 2020, recorded a positive performance throughout the year, supported by favourable trends in the construction market. EBITDA for the region as a whole declined -5.2% at constant scope and exchange rates given a non-recurring item recorded in Switzerland during the first half of the year.

In Switzerland, the Group’s consolidated sales rose +3.0% at constant scope and exchange rates (down -8.3% on a reported basis as a result of the sale of Créabéton Matériaux effective 30 June 2021). Business there continued as normal with no significant impact on sector conditions from the pandemic. The EBITDA margin on consolidated sales stood at 23.2%.

  • In the Cement business, operational sales grew +1.5% at constant scope and exchange rates, supported by healthy performance of the markets and waste recovery activities. As a result of a non-recurring item recorded at the beginning of the year, the EBITDA generated by the business declined -13.5% at constant scope and exchange rates.

  • In the Concrete & Aggregates business, operational sales declined -5.8% at constant scope and exchange rates due to less favourable weather conditions at the beginning of the year and lower prices, especially in aggregates. Overall, the EBITDA generated by the business fell -9.9% at constant scope and exchange rates.

  • In the Other Products and Services business, operational sales rose +9.2% at constant scope and exchange rates (-23.0% on a reported basis, taking into account the sale of Créabéton Matériaux on 30 June 2021 and its deconsolidation in the second half). The EBITDA generated by the business rose +56.3% at constant scope and exchange rates.

In Italy, consolidated sales moved up +22.3% over the period. They were boosted by a favourable basis of comparison in the first half and a supportive environment throughout the year. Overall, business trends and prices improved throughout the year. EBITDA moved up +108.0% compared with 2020.

1.3 Income statement for the Americas

(€ million)

2021

2020

Change

(reported)

Change
(at constant
scope and
exchange
rates)

Consolidated sales

672

636

+5.7%

+11.0%

EBITDA

140

141

-1.3%

+3.8%

EBIT

84

86

-3.3%

+2.0%

In the United States and in Brazil, business trends remained favourable despite a challenging pandemic situation. After a sharp acceleration in business trends in Brazil from the third quarter of 2020, the second half of 2021 saw a far less favourable basis of comparison. The sector environment remained supportive, however. Overall, the Americas region’s sales and EBITDA both recorded growth.

In the United States, the macroeconomic and sector environment remained favourable during the year. It should be noted that first-half 2021 performance in California was impacted by an unfavourable basis of comparison given the record volumes delivered during the same period of 2020. In all, the Group’s consolidated sales rose +4.9% at constant scope and exchange rates to €485 million over the full year. EBITDA totalled €96 million for the year, up +1.4% at constant scope and exchange rates.

The construction of a new 5,000-tonne/day kiln at the Ragland plant in Alabama continued in 2021. The new line, due to be commissioned in the first half of 2022, will increase the plant’s capacity and therefore help meet the strong market demand, significantly reduce production costs and play a real role in reaching the Group’s carbon emission targets.

  • In the Cement business, operational sales rose +1.8% at constant scope and exchange rates in 2021 thanks to upbeat trends in the markets in which the Group operates, especially the South-East, and a steep rise in prices over the period. Against this backdrop, the EBITDA generated by the business grew +2.3% at constant scope and exchange rates.

  • In the Concrete business, operational sales rose +8.6% at constant scope and exchange rates thanks to a supportive sector environment, especially in the South-East region, and to higher average selling prices. The EBITDA generated by the business edged down -1.4% at constant scope and exchange rates during the year given the inflation in costs, especially transport costs as a result of the steep hike in fuel prices.

In Brazil, consolidated sales reached €187 million, up +29.7% at constant scope and exchange rates. Even though the pandemic situation was critical, and the basis of comparison was unfavourable in the second half, business trends remained dynamic. EBITDA recorded solid growth throughout the year, rising to reach €43 million, up by +9.1% at constant scope and exchange rates.

  • In the Cement business, operational sales totalled €151 million, up from €128 million in 2020, representing an increase of +27.6% at constant scope and exchange rates. This performance reflects the dynamic conditions in the markets in which the Group operates and positive pricing trends. Overall, given the steep increase in energy costs during the second half, EBITDA reached €37 million over the year compared with €38 million in 2020, a shift which represents a rise of +5.5% at constant scope and exchange rates.

  • In the Concrete & Aggregates business, operational sales reached €55 million, an increase of +42.6% at constant scope and exchange rates. The improvement in market conditions was accompanied by a rise in prices, both in concrete and in aggregates. Overall, the EBITDA generated in the period moved up +36.3% at constant scope and exchange rates.

1.4 Asia (India and Kazakhstan)

(€ million)

2021

2020

Change

(reported)

Change
(at constant
scope and
exchange
rates)

Consolidated sales

428

348

+23.0%

+27.9%

EBITDA

122

103

+18.4%

+23.2%

EBIT

88

68

+28.7%

+34.0%

The Asia region, and particularly India, was again affected by the pandemic, which was a drag on the macroeconomic and sector environment.

In India, after a first half boosted by a highly favourable basis of comparison, the second half brought a macroeconomic environment which continued to be favourable, but was affected by very strong cost inflation, especially in energy prices, and more volatile pricing trends towards the end of the year. As a result, the Group posted consolidated sales of €363 million over 2021 as a whole, up +31.0% at constant scope and exchange rates.

Overall, EBITDA came to €100 million, representing an increase of +25.3% at constant scope and exchange rates. The EBITDA margin on consolidated sales reached 27.5%.

Consolidated sales in Kazakhstan came to €65 million, up +13.6% at constant scope and exchange rates. This performance was achieved through further expansion in the Group’s business in its domestic market, which made up for the drop in exports. Given this favourable geographical mix and the dynamic trends in the Kazakh market, prices rose significantly.

EBITDA moved up +15.1% at constant scope and exchange rates to reach €22 million during the year.

1.5 Mediterranean (Egypt and Turkey) income statement

(€ million)

2021

2020

Change

(reported)

Change
(at constant
scope and
exchange
rates)

Consolidated sales

228

173

+31.8%

+59.2%

EBITDA

3

-11

n.s.

n.s.

EBIT

-15

-29

+49.8%

+51.2%

The Mediterranean region, hit by the adverse macroeconomic and sector conditions, recorded growth in both Turkey and Egypt. Overall, taking these factors into account, the Group recorded an improvement in its EBITDA in 2021.

In Turkey, even though the steady depreciation and very high volatility in the Turkish lira since August 2018 continued to impact the macroeconomic and sector environment, the construction market recovered further. Consolidated sales totalled €150 million, up +58.0% at constant scope and exchange rates. EBITDA recorded a significant increase over the year as a whole to €13 million, up from €8 million in 2020.

  • In the Cement business, the improvement in the sector environment since the end of 2020 carried through into 2021 with activity volumes and prices recording a clear increase. As a result, operational sales totalled €109 million, up +58.5% at constant scope and exchange rates. Overall, the EBITDA generated by the business came to €10 million, representing an increase of +63.1% at constant scope and exchange rates. The increase in prices helped make up for the strong cost inflation, reflecting currency depreciation and the substantial spike in energy costs.

  • The operational sales recorded by the Concrete & Aggregates business came to €70 million, up +62.7% at constant scope and exchange rates. The business was boosted during the year by the continuing improvement in market conditions and a steady and significant price increase. EBITDA, which had been at breakeven point in 2020, reached €2 million in 2021.

In Egypt, consolidated sales totalled €78 million, up +62.3% at constant scope and exchange rates. Following the market regulation agreement by the Egyptian government with all the manufacturers that entered force in July 2021, the sector environment became healthier during the second half, paving the way for a steady increase in prices amid favourable market trends. While these factors seem to be the first signs of a long-awaited reversal in trend, the EBITDA recorded in Egypt was again €-10 million in negative territory over the full year (versus €-19 million in 2020), reflecting a clear improvement in the second half.

1.6 Africa (Senegal, Mali, Mauritania) income statement

(€ million)

2021

2020

Change

(reported)

Change
(at constant
scope and
exchange
rates)

Consolidated sales

327

262

+25.1%

+24.9%

EBITDA

65

56

+15.2%

+15.0%

EBIT

30

25

+20.0%

+19.8%

In Africa, the Group continues to benefit from a favourable sector environment, without any impact from regional geopolitical crises, supported by performance improvements at the Rufisque plant and by the commercial ramp-up in Mali.

  • In the Cement business, operational sales in the region grew +25.1% at constant scope and exchange rates, with a boost provided by the dynamic trends in the West African market. Prices in Senegal were stable over the year as a whole. They are increasing in Mali and Mauritania. Given these factors, the EBITDA generated by the business moved up +14.3% at constant scope and exchange rates in 2021.

  • The Aggregates business in Senegal recorded consolidated sales of €30 million, up +23.6% over the period as a result of the gradual resumption of major government construction projects amid positive pricing trends. As a result of these factors, EBITDA increased by +19.9%.

2. Changes in the Group’s financial position at 31 December 2021

At 31 December 2021, the Group’s finances remained in good shape, with a strong equity base and net debt under control. At the same date, total equity totalled €2,606 million, compared with €2,420 million at 31 December 2020 on a pro forma basis (the 2020 figures have been restated following the IFRS IC decision on attributing benefits to periods of service under certain defined benefit plans).

Net debt totalled €1,318 million at 31 December 2021 compared with €1,202 million at 31 December 2020.

On this basis, the Group’s leverage ratio stood at 2.13x (versus 2.16x at 31 December 2020) and its gearing at 50.6% (versus 49.7% at 31 December 2020 on a pro forma basis) at 31 December 2021.

The average interest rate of gross debt as of 31 December 2021 is stable at 3.1%, as is the average maturity of 5.0 years.

Given the level of Group’s net debt and its balance sheet liquidity, the existence of covenants in the medium- and long-term borrowing agreements do not pose a threat to the Group’s financial position. At 31 December 2021, the Group was compliant with all financial ratios required by covenants included in financing agreements.

3. Capital expenditure and free cash flow

For the sake of greater clarity, capital expenditure and free cash flow will now be presented with a distinction made between "maintenance" capex and "strategic" capex linked to operational business development decisions, which can thereby be adjusted to fit cyclical trends.

"Maintenance" capex represents investments made every year to maintain the technical performance of the Group’s existing manufacturing base.

"Strategic" capex can be broken down into two categories:

  • Capex to reduce the Group’s carbon footprint and committed to pursue the Climate strategy outlined at the Capital Markets Day on 16 November 2021. These are investments intended to help meet the targets of reducing greenhouse gas emissions;

  • Growth capex linked to global projects, including expanding capacity, such as the new Ragland kiln. Even so, it’s worth noting that the proportion of these projects directly attributable to reducing the carbon footprint is classified under the first category of "capex to reduce the carbon footprint".

(€ million)

2021

2020

2019

Maintenance capex

155

129

162

Strategic capex

232

190

76

o/w capex to reduce the carbon footprint

75

51

23

o/w growth capex

156

139

52

Total outlays of capital expenditure

387

319

238

Free cash flow (before strategic capex)

295

418

234

Free cash flow (calculated based on all capital expenditure)

63

228

159

Maintenance capex amounted to €155 million in 2021, compared with €129 million in 2020.

On this basis, free cash flow (before strategic capex) came to €295 million, compared with €418 million in 2020 and €234 million in 2019.

A large portion of the €156 million in growth capex committed in 2021 reflects the continuing construction of the new Ragland kiln in the United States.

Lastly, the Group’s capex to reduce the carbon footprint totalled €75 million in 2021, reflecting a steady rise since 2019 as it accelerated the pace of projects launched as part of the Climate strategy. In this regard, the Group can restate that the amount of capital expenditure to be committed to reducing its carbon footprint is estimated at €800 million until 2030, or €80 million p.a. on average.

4. Financial investments

4.1 Increased stake in Ciplan

The Vicat Group has increased its stake in CIPLAN (Brazil) by an additional 8%, increasing it to 74.13%. This additional stake corresponds to the realisation of the liability guarantee of the previous majority shareholder.

4.2 Increased vertical integration in France and Switzerland

During 2021, the Group continued its vertical integration strategy in the Concrete and Aggregates business, making small, targeted acquisitions in France and Switzerland to strengthen its local network.

4.3 Acquisition of Béton Direct in France

On 22 December 2021, Vicat became a majority shareholder in Béton Direct, a website selling ready-mix concrete that exclusively targets individual consumers and craftsmen. This acquisition supports the Vicat’s strategy in France on two fronts: net zero emissions and the digital transformation. The acquisition of this advanced e-commerce technology represents an opportunity for the Vicat group and Béton Direct to increase their position in direct sales to consumers, a segment in which demand is rising. The cost of the transaction has not been disclosed, but should not be regarded as material given the size and financial strength of the Vicat Group.

5. Recent events

5.1 Continuing the construction of the Ragland kiln in the United States

The investment in a new 5,000-tonne/day kiln at the Ragland plant in Alabama, which began in 2019, continued in 2021. In line with the original plan, the new manufacturing facility employing the latest cement production technologies is due to be commissioned during the first half of 2022. It’s a "global" project with multiple dimensions:

  • the new kiln will provide the additional capacity needed to meet the needs of the Group’s markets in the South-East region of the United States, by increasing the plant’s capacity to 1.8 million tonnes p.a., from 1.2 million tonnes previously;

  • the technology used, highly energy-efficient, will help reduce production costs by 30% per tonne produced;

  • lastly, the new kiln, which works without coal, will actively help the Group to meet its carbon emission reduction targets.

5.2 Launch of construction of a new kiln in Senegal

The Group, via its subsidiary SOCOCIM Industries, has decided to launch a €240 million investment plan with a view to building a new kiln line in order to meet the following targets:

  • a doubling of the Group’s capacity in the sub-region which will reach 7 million tonnes per year. This increase will help to meet demand in the Senegalese market, which is poised for strong growth over the next few years, as well as supplying clinker to its subsidiaries’ cement grinding plants;

  • a very significant improvement in the manufacturing performance of all its operations in Senegal thanks to the adoption of the latest cement technologies. This greater efficiency, especially energy efficiency, will enable a significant reduction in production costs;

  • lastly, the new kiln will actively help the Group to meet its carbon emission reduction targets, as it has the ability to use a significant mix alternative fuels.

The new production facility is scheduled for commissioning in 2024.

5.3 Industrial partnership with and investment in Haffner Energy

The Vicat Group and the Haffner Energy group have entered into an industrial agreement, which has been confirmed with the acquisition of a stake in Haffner Energy in the context with the latter’s IPO on 15 February 2022. Under this agreement, Vicat and Haffner Energy are pooling their expertise to develop decarbonisation solutions as part of the Vicat Group’s overall strategy to reduce its carbon footprint. Haffner Energy designs and supplies technologies and services for producing decarbonised hydrogen from the thermolysis and steam reforming of sustainable biomass thanks to its HYdrogen NO CArbon ("Hynoca®") process. This process can produce hydrogen at a highly competitive price while sequestering 16 kg of CO2 per kg of hydrogen produced.

5.4 Development of the first zero-carbon binder

On 12 January, the Vicat Group announced it had developed a binder that retains all the properties and uses of traditional cement with the benefit of a carbon footprint corresponding to a net emissions level of less than 0 kg of CO2 equivalent per tonne.

Including verified Environmental Information Modules, this new binder reaches the following emission levels net of CO2:

  • binder 0133H, with a technical performance similar to that of a 42.5 R cement, has a value of -15 kg of CO2 per tonne;

  • binder 2402H, with a technical performance similar to that of a 32.5 R cement, has a value of -310 kg of CO2 per tonne

Initially, this innovative new binder is intended for the French market to meet the existing and future requirements of the new RE2020 building regulations.

In the context of its deployment, several prerequisites before it can go on sale in France will be addressed:

  • Demonstrator projects will go ahead during spring 2022;

  • It will then be made available to the first construction sites from 2022, once the technical assessment for experimentation (ATEX) has been obtained;

  • An application for a technical opinion (ATEC) would then be submitted and obtained from 2024;

  • Lastly, when the ATEC is secured, distribution on an industrial scale could begin in the French market during 2024.

Note that this low-carbon binder will be subject to a standardisation procedure that may take several years in France (around 5 years) and in Europe (around 10 years). However, this stage is not a prerequisite for its launch on the market once the ATEX and ATEC permits have been granted.

6. Outlook for 2022

In 2022, the Group anticipates another increase in its activity levels and an improvement in its financial performance. As a result, the EBITDA generated by the Group in 2022 is likely to grow, but not by as much as in 2021.

The Group will be supported by a macroeconomic and sector environment that is expected to remain broadly favourable, with an anticipated price hike that should help offset the steep rise in energy costs, currently estimated at around 30%.

Even so, strong seasonal effects are likely to be a factor during the year, with:

  • an unfavourable basis of comparison in the first half, mainly as a result of the significant increase in energy costs expected over the period;

  • a clear improvement in the second half as energy costs gradually stabilise and the full impact of the expected hike in selling prices feeds through.

In 2022, the Group will keep up its investment drive, focusing chiefly on:

  • finalisation of construction work at the new Ragland kiln in the United States, which is expected to start up in the first six months of this year;

  • start of construction work on the new kiln (Kiln 6) in Senegal;

  • the ramp-up in projects to meet carbon footprint reduction targets;

  • a drive to incrementally boost capacity at production facilities in India and to invest in new terminals to expand its market and lower logistics costs.

Accordingly, capital expenditure is expected to be higher than in 2021 at around €400 million, including 130 million in "maintenance" investments and 270 million in "strategic" investments. The Group reserves the right to adjust its investment plans, by reducing, if necessary, the proportion of its "growth" capex, to match the shifting trends in its markets and its cash-flow generation.

The Group is issuing the following elements of appreciation about the performance expected in the various countries in which it operates. It wishes to make clear that these trends are highly dependent on the latest developments in the pandemic and the latter’s impact on each of them:

  • In France, activity levels are expected to remain on a growth trajectory throughout the year, supported by a macroeconomic environment that should be favourable for the construction sector. As a result, the Group expects its volumes to rise slightly and its prices to rise markedly to offset the impact of higher energy costs, especially electricity;

  • In Switzerland, the Cement and the Concrete & Aggregates businesses should reap the benefit of upbeat conditions in the construction sector;

  • In the United States, both volumes and selling prices are expected to continue increasing. The impact of the economic stimulus plan being rolled by the US administration is likely to make itself felt gradually from the second half of this year. In this market, the Group is expected to reap the benefit of the commissioning of the new Ragland kiln from the end of the first half;

  • In Brazil, business and profitability levels in 2021 have set a high basis of comparison in a market in which trends are expected to remain nonetheless favourable. As a result, the Group expects stable business levels over the year as a whole, supported by the continued rise in prices;

  • In India, the macroeconomic and sector environment is expected to remain favourable. The rise in energy costs is gradually expected to stabilise with prices remaining highly volatile;

  • In Kazakhstan, 2021 performance levels set a high basis of comparison. While the market environment is expected to remain supportive, this will remain contingent on developments in the political and social situation;

  • In Turkey, the situation is expected to keep improving gradually in 2022, subject to trends in the Turkish lira and interest rates. The price increase should help offset the rise in energy costs;

  • In Egypt, amid a gradually improving industry environment, a clear improvement in the Group’s performances over the year as a whole is anticipated provided that the measures implemented by the government to restore a healthier market environment are left in place;

  • In West Africa, trends in Cement are expected to remain dynamic, with support from a favourable sector environment in terms of volumes and prices. The Aggregates business in Senegal is likely to continue its recovery.

Presentation meeting and conference call

To accompany this publication, the Vicat Group is organising an information meeting in French at 10:00 am on 16 February 2022 at Pavillon Ledoyen, 8 avenue Dutuit, 75008 Paris.

In addition, Vicat is holding a conference call in English on 16 February 2022 at 3 pm Paris time (2 pm London time and 9 am New York time).

To take part in the conference call live, dial in on one of the following numbers:

France: +33 (0)1 70 37 71 66
UK: +44 (0)33 0551 0200
US: +1 212 999 6659

The conference call will also be livestreamed from the www.vicat.fr website. A replay of the conference call will be immediately available for streaming via the Vicat website or by clicking here.

The presentation supporting the event will be available on Vicat’s website or by clicking here from 10:00 am.

Next event:

Annual General Meeting, 13 April 2022

About Vicat

The Vicat Group has close to 9,500 employees working in three core divisions, Cement, Concrete & Aggregates and Other Products & Services, which generated consolidated sales of €3.123 billion in 2021. The Group operates in twelve countries: France, Switzerland, Italy, the United States, Turkey, Egypt, Senegal, Mali, Mauritania, Kazakhstan, India and Brazil. Vicat, a family-owned group, is the heir to an industrial tradition dating back to 1817, when Louis Vicat invented artificial cement. Founded in 1853, the Vicat Group now operates three core lines of business: Cement, Ready-Mixed Concrete and Aggregates, as well as related activities.

Vicat group – Financial data – Appendix

Definition of alternative performance measures (APMs):

  • Performance at constant scope and exchange rates is used to determine the organic growth trend in P&L items between two periods and to compare them by eliminating the impact of exchange rate fluctuations and changes in the scope of consolidation. It is calculated by applying exchange rates and the scope of consolidation from the prior period to figures for the current period.

  • A geographical (or a business) segment’s operational sales are the sales posted by the geographical (or business) segment in question less intra-region (or intra-segment) sales.

  • Value-added: value of production less consumption of materials used in the production process.

  • Gross operating income: value-added, less staff costs, taxes and duties (other than on income and deferred taxes) plus operating subsidies.

  • EBITDA (earnings before interest, tax, depreciation and amortisation): sum of gross operating income and other income and expenses on ongoing business.

  • EBIT: (earnings before interest and tax): EBITDA less net depreciation, amortisation, additions to provisions and impairment losses on ongoing business.

  • Cash flow: net income before net non-cash expenses (i.e. predominantly depreciation, amortisation, additions to provisions and impairment losses, deferred taxes, gains and losses on disposals and fair value adjustments).

  • Free cash flow: net operating cash flow after deducting capital expenditure net of disposals.

  • Net debt represents gross debt (consisting of the outstanding amount of borrowings from investors and credit institutions, residual financial liabilities under finance leases, any other borrowings and financial liabilities excluding options to sell and bank overdrafts), net of cash and cash equivalents, including remeasured hedging derivatives and debt.

  • Gearing is a ratio reflecting a company’s financial structure calculated as net debt/consolidated equity.

  • Leverage is a ratio reflecting a company’s profitability, which is calculated as net debt/consolidated EBITDA.

Income statement by business

The full 2021 consolidated financial statements, together with the notes, are now available on the Company’s website at: www.vicat.fr.

Cement

(€ million)

2021

2020

Change

(reported)

Change
(at constant
scope and
exchange
rates)

Volume (thousands of tonnes)

28,141

25,043

+12.4%

Operational sales

1,914

1,673

+14.4%

+18.8%

Consolidated sales

1,633

1,421

+14.9%

+19.4%

EBITDA

456

415

+9.9%

+13.2%

EBIT

300

264

+13.5%

+16.9%

Concrete & Aggregates

(€ million)

2021

2020

Change

(reported)

Change
(at constant
scope and
exchange
rates)

Concrete volumes
(thousands of m3)

10,472

9,309

+12.5%

Aggregates volumes (thousands of tonnes)

23,998

22,713

+5.7%

Operational sales

1,191

1,083

+10.0%

+13.1%

Consolidated sales

1,158

1,050

+10.3%

+13.2%

EBITDA

133

121

+10.4%

+12.3%

EBIT

49

34

+45.8%

+47.2%

Other Products & Services

(€ million)

2021

2020

Change

(reported)

Change
(at constant
scope and
exchange
rates)

Operational sales

453

434

+4.3%

+14.8%

Consolidated sales

332

334

-0.6%

+11.9%

EBITDA

30

21

+39.0%

+51.9%

EBIT

11

0

n.s.

n.s.

Principal 2021 financial statements

Consolidated income statement

2021

2020

Revenue

3,122,940

2,805,162

Goods and services purchased

(2,002,119)

(1,720,244)

Added value

1,120,821

1,084,918

Employees expenses

(483,699)

(489,921)

Taxes

(56,968)

(62,078)

Gross operating income

580,154

532,919

Other operating income (expenses)

38,964

24,396

EBITDA

619,118

557,315

Net charges to operating depreciation, amortization and provisions

(259,196)

(259,467)

EBIT

359,922

297,848

Other non-operating income (expenses)

(28,291)

(6,080)

Net charges to non-operating depreciation, amortization and provisions

4,793

(14,207)

Operating income (expense)

336,424

277,561

Cost of net financial debt

(28,442)

(36,870)

Other financial income

19,363

20,671

Other financial expenses

(20,919)

(18,630)

Financial income

(29,998)

(34,829)

Share of profit (loss) of associates

5,156

4,021

Profit (loss) before tax

311,582

246,753

Income tax

(89,398)

(74,609)

Consolidated net income

222,184

172,144

Portion attributable to minority interests

18,005

16,149

Portion attributable to the Group

204,179

155,995

EARNINGS PER SHARE (in euros)

Basic and diluted earnings per share

4.55

3.47

Balance sheet

ASSETS

(in thousands of euros)

December 31, 2021

December 31, 2020 (1)

Goodwill

1,157,232

1,118,874

Other intangible assets

173,653

170,812

Property, plant and equipment

2,169,041

1,987,852

Right of use related to leases

195,112

186,829

Investment properties

32,218

14,831

Investments in associated companies

92,774

77,873

Deferred tax assets

68,012

68,965

Receivables and other non-current financial assets

219,241

239,176

Total non-current assets

4,107,283

3,865,212

Inventories and work-in-progress

429,243

354,937

Trade and other accounts

436,219

440,874

Current tax assets

6,947

3,328

Other receivables

206,475

152,496

Cash and cash equivalents

527,393

422,843

Total current assets

1,606,277

1,374,478

TOTAL ASSETS

5,713,560

5,239,690

SHAREHOLDERS’ EQUITY AND LIABILITIES

(in thousands of euros)

December 31, 2021

December 31, 2020 (1)

Capital

179,600

179,600

Additional paid-in capital

11,207

11,207

Treasury shares

(52,194)

(53,587)

Consolidated reserves

2,800,755

2,689,713

Translation reserves

(579,950)

(640,805)

Shareholders’ equity, Group share

2,359,418

2,186,128

Minority interests

246,681

234,310

Total shareholders’ equity

2,606,099

2,420,438

Provisions for pensions and other post-employment benefits

108,529

125,860

Other provisions

104,974

116,764

Financial debts and put options

1,291,434

1,270,162

Lease liabilities

159,883

157,563

Deferred tax liabilities

219,800

214,196

Other non-current liabilities

23,927

37,999

Total non-current liabilities

1,908,547

1,922,544

Provisions

10,381

13,522

Financial liabilities and put options at less than one year

371,119

165,375

Lease liabilities at less than one year

55,502

47,382

Trade and other accounts payable

459,647

375,329

Current taxes payable

27,558

24,557

Other liabilities

274,707

270,543

Total current liabilities

1,198,914

896,708

Total liabilities

3,107,461

2,819,252

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

5,713,560

5,239,690

(1) 2020 figures have been restated based on IFRS IC about the periods of service to which a company attributes benefit for a particular type of defined benefit plan.

Consolidated statement of cash flow

(in thousands of euros)

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES

Consolidated net income

222,184

172,144

Share of profit (loss) of associates

(5,156)

(4,021)

Dividends received from associated companies

1,208

4,860

Elimination of non-cash and non-operating items:

- depreciation, amortization and provisions

255,811

276,796

- deferred taxes

5,717

5,086

- net gain (loss) from disposal of assets

(7,622)

(5,114)

- unrealized fair value gains (losses)

(3,625)

128

- others

19,070

10,693

Cash flows from operating activities

487,587

460,572

Change in working capital

(48,674)

67,647

Net cash flows from operating activities (1)

438,913

528,219

CASH FLOWS FROM INVESTING ACTIVITIES

Outflows linked to acquisitions of non-current assets:

- tangible and intangible assets

(386,570)

(319,370)

- financial investments

(40,157)

(23,613)

Inflows linked to disposals of non-current assets:

- tangible and intangible assets

10,759

18,946

- financial investments

4,105

4,912

Impact of changes in consolidation scope

(31,005)

(2,992)

Net cash flows from investing activities

(442,868)

(322,117)

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid

(74,116)

(74,282)

Increases/decreases in capital

0

250

Proceeds from borrowings

331,443

210,729

Repayments of borrowings

(140,122)

(209,432)

Repayment of lease liabilities

(52,963)

(62,198)

Acquisitions of treasury shares

(22,887)

(7,555)

Disposals or allocations of treasury shares

24,701

4,423

Net cash flows from financing activities

66,056

(138,065)

Impact of changes in foreign exchange rates

9,182

(37,552)

Change in cash position

71,283

30,485

Net cash and cash equivalents - opening balance

359,159

328,674

Net cash and cash equivalents - closing balance

430,442

359,159

(1) :

- Of which cash flows from income taxes: (€84.3 million) in 2021 and (€34.5 million) in 2020.

- Of which cash flows from interest paid and received: (€27 million) in 2021 including (€10.2 million) for financial expenses on IFRS 16 leases and (€36 million) in 2020 including (€9.7 million) for financial expenses on IFRS 16 leases.

Statement of changes in consolidated shareholder’s equity

(in thousands of euros)

Capital

Additional paid-in capital

Treasury shares

Consolidated
reserves

Translation
reserves

Shareholders' equity, Group share

Minority
interests

Total shareholders' equity

At January 1, 2020 (1)

179,600

11,207

(52,416)

2,606,610

(405,786)

2,339,215

264,767

2,603,982

Net income

155,995

155,995

16,149

172,144

Other comprehensive income (1) (2)

(3,394)

(234,959)

(238,353)

(36,719)

(275,072)

Total comprehensive income

0

0

0

152,601

(234,959)

(82,358)

(20,570)

(102,928)

Dividends paid

(66,369)

(66,369)

(8,232)

(74,601)

Net change in treasury shares

(1,171)

(1,455)

(2,626)

(2,626)

Other changes

(1,674)

(60)

(1,734)

(1,655)

(3,389)

At December 31, 2020 (1)

179,600

11,207

(53,587)

2,689,713

(640,805)

2,186,128

234,310

2,420,438

At January 1, 2021

179,600

11,207

(53,587)

2,689,713

(640,805)

2,186,128

234,310

2,420,438

Net income

204,179

204,179

18,005

222,184

Other comprehensive income (2)

5,387

60,855

66,242

7,666

73,908

Total comprehensive income

0

0

0

209,566

60,855

270,421

25,671

296,092

Dividends paid

(66,314)

(66,314)

(7,890)

(74,204)

Net change in treasury shares

1,569

174

1,743

1,743

Changes in scope of consolidation and additional acquisitions

(26,024)

(26,024)

(5,328)

(31,352)

Other changes

(6,535)

(6,535)

(82)

(6,617)

AT DECEMBER 31, 2021

179,600

11,207

(52,018)

2,800,580

(579,950)

2,359,419

246,681

2,606,099

(1) 2020 figures have been restated based on IFRS IC about the periods of service to which a company attributes benefit for a particular type of defined benefit plan .

(2) Breakdown by nature of other comprehensive income:
Other comprehensive income includes mainly cumulative translation adjustments from end 2003. To recap, applying the option offered by IFRS 1, the conversion differences accumulated before the transition date to IFRS were reclassified by allocating them to retained earnings as at that date.

Comprehensive income

in thousands of euros)

2021

2020 (1)

Consolidated net income

222,184

172,144

Other comprehensive income

Items not recycled to profit or loss:

Remeasurement of the net defined benefit liability

7,350

3,328

Other items not recycled to profit and loss

(2,127)

0

Tax on non-recycled items

(2,574)

(547)

Items recycled to profit or loss:

Changes in currency translation adjustments

69,699

(281,574)

Cash flow hedge instruments

1,946

4,878

Tax on recycled items

(386)

(1,157)

Other comprehensive income (after tax)

73,908

(275,072)

TOTAL COMPREHENSIVE INCOME

296,092

(102,928)

Portion attributable to minority interests

25,671

(20,570)

Portion attributable to the Group

270,421

(82,358)

(1) 2020 figures have been restated based on IFRS IC about the periods of service to which a company attributes benefit for a particular type of defined benefit plan.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220215005881/en/

Contacts

Investor relations:
Stéphane Bisseuil:
Tel.: +33 1 58 86 86 05
stephane.bisseuil@vicat.fr

Press:
Marie-Raphaelle Robinne
Tel.: +33 (0) 4 74 27 58 04
marie-raphaelle.robinne@vicat.fr

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