Vicat - FY 2024 Results

• Organic sales growth of + 2.3%, despite a difficult environment in Europe
• EBITDA of €783 million, with a margin of 20.2%
• EBITDA up 25.8% in the United States to €190 million
• 26.7% growth in free cash flow to €373 million
• Further debt reduction with leverage at 1,6x

Guy Sidos, Chairman and Chief Executive Officer, said: 

"In a deteriorated environment in Europe, the Group has delivered historic results that testify to the robustness of the Vicat model and the commitment of our teams. Strong growth in the United States, the resilience of Europe in a particularly deteriorated environment and progress in the Mediterranean region have all contributed to returning the EBITDA margin rate to the level of 2021. In line with what we had announced, the Group has formulated 3 new priorities towards 2027:

• Maintain EBITDA margin above 20% over the period;
• Continue to reduce the Group's debt in line with our new leverage target of below 1.0x by 2027;
• Accelerate the implementation of the climate roadmap and the promotion of low-carbon solutions.

The consolidated financial statements for the year ended 2024 were approved by the Board of Directors at its meeting on 14 February 2025. The audit procedures on the consolidated financial statements have been performed. The certification report was issued on February 18^th, 2025.

Activity: FY 2024 impacted by unfavorable exchange rate effects

The Group's consolidated sales totaled €3,884 million in 2024, up 2.3% on a like-for-like basis and down -1.3% on a reported basis, impacted by negative exchange rate changes:

• The currency effect over the period was a negative 127 million euros (-3.2%), mainly due to the depreciation of the Turkish lira and Egyptian pound and the Brazilian real against the euro;
• The scope effect amounted to -€15 million (or -0.4%) over the period.

Each business made a positive contribution to improving the Group's operating performance on a like-for-like basis in 2024:

• The Cement business was impacted by a -2.9% decline in volumes over the year, essentially in France and India. Cement prices remained solid in most of the Group's regions, particularly in developed countries;
• The Concrete and Aggregates businesses were affected by a -5.8% fall in volumes in 2024, although prices remained buoyant throughout the Group;
• Other Products & Services grew in 2024, thanks to a good performance in Turkey and by Vigier Rail in Switzerland.

EBITDA was €783 million, an all-time record for the Group. This increase of + 5.9% compared with 2023 (+10.1% on a like for like basis) is the result of growth in Ragland's business in the United States and in Egypt (exports), a favorable price/cost differential in almost all markets, and improvements in the Group's industrial performance. In a context where almost 40% of the Group's markets (France and Switzerland) are at historic lows, this performance demonstrates the solidity of the Vicat model.

• Energy costs amount to €488 million in 2024, down -21.5% compared to 2023, but still markedly higher than in 2021 (€394 million);
• Underlying inflation continues to drive up personnel costs and maintenance costs rise, by 6.0% to 849 million euros. This increase is mainly due to the indexation of the wage bill, particularly in Turkey and the United States, while the Group's total workforce remained stable over the period;
• Industrial performance improved in the Cement business, notably with an increase in the use of alternative fuels to replace fossil fuels, which rose by +4.0 points compared with the end of 2023 to 36.0%.

Recurring EBIT was up 5.7%, with a margin up 80 basis points.

Net financial expense will be €73 million in 2024, stable compared with 2023, due to:

• An increase in the net cost of debt, as the rise in interest rates, net of hedging, was partially offset by a fall in average debt volume;
• An improvement in other financial income and expenses (mainly dividends received from a stake in Egypt).

Consolidated net income came to €290 million in 2024, up 6.1% on a like-for-like basis and down -1.8% on a reported basis. The net margin was 7.5%. Net income is impacted by an accounting charge relating to the treatment of hyperinflation in Turkey of 28 million euros in 2024 compared with 6 million euros in 2023 (excluding the tax effect). Excluding this additional accounting charge of €22 million, which has no cash impact, net income reflects the improvement in operating profitability.

Net income Groupe share rose by 11.9% on a like-for-like basis and by 5.5% on a reported basis to €273 million over the period. This increase was due to the fall in minority interests, which was impacted by lower earnings in countries where the Group has minority interests (Brazil and Turkey), by the sale of Sinai White Cement (loss of minority interests) and by the buyout of minority interests in 2024 in Egypt and Kazakhstan.

Analysis by geographical area

A more detailed analysis of performance by geography is provided in the appendix to this press release.

Consolidated sales 2024:

EBITDA 2024:

In Europe (excluding France), sales rose in 2024, notably thanks to the appreciation of the Swiss franc against the euro and the good performance of the precast business (Vigier Rail) in Switzerland and the cement business in Italy. In Switzerland, the cement business continued to be impacted by the weakness of the residential market, with the rate of decline slowing sequentially in 2024 to stabilize in the fourth quarter, while prices remained stable over the year. Results improved significantly in the region, particularly in Italy, thanks to lower electricity costs.

Sales in the Americas zone rose in 2024, driven by a good performance in the United States, despite a downturn in business and an unfavorable exchange rate effect in Brazil. The ramp-up of a network of rail terminals around the Ragland plant in the South-East made a very positive contribution to business growth. Prices remained solid in the United States, with increases in cement in California and in concrete in both regions. EBITDA in the United States totaled €190 million (+25.8%). In Brazil, the cement business was marked by a weaker contraction in volumes in the second half of the year than in the first, while the competitive environment remained tense. EBITDA rose in Brazil thanks to a favorable price/cost differential.

Business in the Asia zone was mixed, with a slowdown in India and stability in Kazakhstan. After a solid first half, business slowed in India, with volumes down significantly in the second half due to the intensification of the competitive environment in the southern states. The post-election environment also weighed on construction activity, with a temporary slowdown in public spending, particularly in the state of Andhra Pradesh. In Kazakhstan, prices rose in the second half, following a downward trend in the first half, with volumes remaining stable over the year. Results were down in Asia due to higher costs in Kazakhstan, despite an increase in profitability in India thanks to a sharp fall in cash costs.

Business in the Mediterranean zone grew thanks to a spectacular recovery in Egypt. However, the zone continues to be affected by the sharp depreciation of the Turkish and Egyptian currencies against the euro. Against a backdrop of persistent hyperinflation, the cement business in Turkey was impacted by a slight fall in volumes in 2024 linked to the slowdown in the economy, while prices rose, only partially offsetting the effects of inflation. In Egypt, business benefited from strong growth in export volumes, which offset weak domestic demand. Domestic sales prices rose sharply in the second half of the year. The zone's results recovered strongly despite the decline in profitability in Turkey.

In Africa, the Group's business remained stable, particularly in Mali, with prices down slightly in Senegal and higher volumes in Mauritania. Results rose thanks to lower energy costs in Senegal and operational improvements at the plant. The Group's priority remains the start-up of kiln 6 in Senegal, whose ramp-up phase should begin in the second quarter of 2025, with the first contribution to EBITDA expected in the second half of 2025.

Investment and cash generation: Strong growth in free cash flow

In 2024, total net capital expenditure will amount to €320 million, up from €300 million in 2023. These disbursements include strategic growth investments, mainly related to kiln 6 in Senegal.

Free cash flow reached a new record of €373 million (compared with €295 million in 2023). This is the result of higher EBITDA and a significant reduction in working capital requirements over the period. As a result, the cash conversion rate is 48% (40% in 2023).

Financial position: Achieving the 2024 target and continuing to reduce debt

The Group has undrawn confirmed credit lines not allocated to cover liquidity risk on NEU CP amounting to €847 million at 31 December 2024 (€683 million at 31 December 2023).

Climate performance

In the United States, the ramp-up of Ragland's more efficient kiln 2 and the switch to type 1L cement in California and the South-East contributed to improvements in the substitution rate and the clinker factor respectively. The substitution rate also rose sharply in India (+13 points) thanks to the start-up of new grinding facilities in Bharathi and Kalburgi and the diversification of supply sources.

The start-up of the Argilor project at Xeuilley (using activated clays as a sustainable substitute to replace clinker) in the second half of 2024 should help to improve France's clinker factor from 2025. The DECA range (low-carbon solutions) continues to grow, accounting for more than 16% of sales (by volume) of the Cement business in France, an increase of more than 100% year-on-year.

The Vicat Group has reiterated its climate roadmap and its 2030 target of lowering its direct specific emissions to 497 kg CO₂ net per ton of cement equivalent and to 430 kg CO₂ net per ton of cement equivalent in Europe. This objective is solely based on existing proven technologies and does not rely on any technological breakthroughs, such as carbon capture and storage/use.

In 2024, the Group launched the 'low carbon to zero carbon' initiative with the announcement of 2 CCS projects, in Montalieu, France (VAIA project) and in Lebec, California (Lebec Net Zero LNZ project). The Group recently signed a cooperation agreement with the United States Department of Energy (DOE), Office of Clean Energy Demonstrations, to finance up to 50% of phase 1 investments and a maximum of $500 million for the LNZ project as a whole.

An attractive shareholder policy

For the 2023 financial year, the Group paid a dividend of €2.0 per share, an increase of 21% compared with 2022. For the 2024 financial year, the Board of Directors will propose a dividend of €2.0 at the next General Meeting, implying an attractive yield of almost 5%¹ . Over the last 30 years, the Vicat Group has never lowered its dividend.

Outlook for 2025

The Group has set itself the following targets for 2025:

Sales growth on a like-for-like basis

Low single-digit EBITDA growth

Financial leverage (net debt/EBITDA) of 1.3x by the end of 2025

These objectives take into account:

• An acceleration in performance in the second half of the year, thanks in particular to the contribution of kiln 6 in Senegal;
• Stabilizing energy costs;
• Net capital expenditure of around €280 million and tight control of working capital requirements.

Geographical outlook for 2025:

In Europe, business is likely to continue to be impacted by the weakness in residential construction, with the downturn slowing. Major infrastructure projects in France and Switzerland should make a positive contribution. The gradual integration of the cost of decarbonization should support the favorable price trend in Europe.

In the United States, sales in the South-East should continue to grow, thanks to full use of the network of rail terminals around the plant, while business in California should evolve in line with market trends. Prices are expected to remain resilient in the United States.

Activity in emerging countries should be contrasted, with still significant currency effects, notably in the Mediterranean zone. The good momentum should continue in Egypt, thanks to exports. Senegal should benefit from the contribution of the new kiln in the second half of the year. Brazil is expected to make progress in a competitive environment that remains tense. Business in Turkey should continue to be affected by hyperinflation and a weak currency. Business in India is expected to remain more contained in the south, where markets are more competitive, and to benefit from the increase in logistical capacity to serve Mumbai.

Presentation meeting and conference call

In connection with this publication, the Vicat Group will hold an information conference call in English on 19 February 2025 at 3pm CET Paris (2pm London and 9am New York).

To take part live, dial one of the following numbers:

France: +33 (0) 1 70 37 71 66

UK : +44 (0) 33 0551 0200

US: +1 786 697 3501

The conference call will also be webcast via the Vicat website or via the following link. A recording of the conference call will be immediately available for replay on the Vicat website or via the following link.

The presentation that will support this event will be available from 12 noon CET on the Vicat website.

Upcoming

Annual General Meeting: 11 April 2025.

First-quarter 2025 sales: 28 April 2025 after close of trading.

Contacts

For 170 years, Vicat has been a leading player in the mineral and biosourced building materials industry. Vicat is a group listed on the Euronext Paris market, part of the SBF 120 Index, and is under the majority control of the founding Merceron-Vicat family. Committed to a trajectory that will make it carbon-neutral across its value chain by 2050, the Vicat Group now operates three core lines of business: Cement, Ready-Mixed Concrete and Aggregates, as well as related activities. The Vicat Group is present in 12 countries spanning both developed and emerging markets. It has close to 10,000 employees and generated consolidated sales of €3,884 million in 2024. With its strong regional positions, Vicat is developing a circular economy model beneficial for all and consistently innovating to reduce the construction industry's environmental impact.

Disclaimer

• In this press release, and unless indicated otherwise, all changes are stated on a year-on-year basis (2024/2023), and at constant scope and exchange rates.
• The alternative performance measures (APMs), such as "at constant scope and exchange rates”, "operational sales”, "EBITDA”, "recurring EBIT”, "net debt” 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 Universal Registration Document 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.

Definition of alternative performance indicators (APIs)

• 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.
• EBITDA (earnings before interest, tax, depreciation and amortization): sales less purchases used, staff costs and taxes adjusted for other income and expenses on ongoing business.
• Recurring EBIT: (earnings before interest and tax): EBITDA less net depreciation, amortization, additions to provisions and impairment losses on ongoing business.
• Free cash flow: net operating cash flow after deducting capital expenditure net of disposals and financial investments and before the dividend payment.
• 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.
• Leverage is a ratio based on a company's profitability, calculated as net debt/consolidated EBITDA.

All the 2024 financial statements (consolidated and parent-company accounts) are available, together with the notes, on the www.vicat.fr website in the Investors section, under News Releases and Financial Presentations.

Simplified consolidated financial statements 2024