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Cement sales remain relatively stable for Vicat Group

World Cement,

Sales in 2012

Vicat has released its sales results for 2012, revealing that total sales increased by 1.2% y/y to reach €2.29 billion. However, at constant scope and exchange rates, this figure represents a decline of 0.2%, as operations were affected by unfavourable weather conditions in Europe and by disrupted markets in countries such as Egypt and Mali. Other geographical regions fared better, and positive trends were noted in Turkey, India, Kazakhstan and the US. In 4Q12, consolidated sales increased by 4.5% y/y to €562 million. Although the Group’s Other Products and Services division contracted during the quarter, sales were higher y/y for cement, aggregates and concrete.

Consolidated cement sales came in at €1.16 billion, up 1.6%, although volumes did drop slightly, falling 0.8% to 17.89 million t. Sales of concrete and aggregates remained fairly stable, increasing by 1% to €826 million. In terms of sales volumes, concrete fell by 0.5% to 7.93 million m3, while aggregates were down 3.2% from 22.22 million t to 21.52 billion t. Operational sales saw a 52.3% contribution from the Group’s Cement division, 32.5% from Concrete and Aggregates and 15.2% from Other Products and Services.

Highlights from the regional markets

  • Total consolidated sales decreased by 6.8% at constant scope to €879 million in France, hit by both bad weather and the ongoing effects of the financial crisis. Cement sales fell by 11.6%.
  • Overall in Europe (excluding France) sales were fairly stable. 1H12 sales on a y/y basis were impacted by the difference in weather conditions but sales picked up in 2H12.
  • Cement sales were up 5% in Switzerland in 2012 and 18% in 4Q, with volumes rising by almost 2%. However, concrete and aggregates sales declined for the full year, unable to recover from the unfavourable weather conditions.
  • Export sales and a selective business policy led to higher prices, which helped to somewhat offset a decline in volumes in Italy.
  • In the US, total sales increased from €165 million in 2011 to €196 million in 2012, aided by higher volumes and the utilisation rate of production capacity at the company’s plants.
  • In Turkey, a rise in cement sales volumes in 4Q12 boosted total cement sales for the year, which were up 10.9%. Exports may have contracted but trends in the local market were more positive.
  • Increased production at the Jambyl cement plant in Kazakhstan helped to drive sales revenue and volumes. In 2012, Vicat recorded sales of €66 million, up from €27 million in 2011.
  • Overall sales were up 30.5% in India, and over 2.5 million t of cement was dispatched. Production began at Vicat Sagar’s 2.8 million t greenfield cement plant in December and its products were launched under the ‘Bharathi Cement’ brand early this year.
  • The Group’s performance in Egypt was hampered by fuel shortages and political instability, with sales falling 27%.
  • The West African market also posed problems, such as a fall in average prices, political upheaval in Mali and greater competition in Senegal, where there were also shutdowns and delays for the Group’s Aggregates business. Overall, sales declined by 5.2%, but cement sales increased by 2%.

Financial outlook

Vicat expects its EBITDA for 2012 to be lower than that of 2011, although 2H12 is likely to show improvement from 1H12. Despite increased activity in the more mature markets in the latter half of the year, growth in the emerging markets, cost reduction and productivity enhancement measures, the EBITDA margin is likely to experience a y/y loss due to higher energy costs, problems in Egypt, as well as low volumes in France and unfavourable prices in West Africa.

Adapted from press release by Louise Fordham.

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