Vicat: First Quarter 2014 Sales up 14% at Constant Scope and Exchange Rates

  Vicat: First Quarter 2014 Sales up 14% at Constant Scope and Exchange Rates

Business Wire

PARIS LA DÉFENSE -- April 28, 2014

Regulatory News:

  *Solid sales growth at constant scope and exchange rates across all five
    major geographical zones
  *Favourable weather conditions in France and buoyant markets in
    Switzerland, the United States, West Africa and Turkey
  *Ongoing ramp-up in India
  *Renewed growth in Egypt

The Vicat group (Paris:VCT) (NYSE Euronext Paris: FR0000031775 – VCT) has
today reported sales for the three months ended March 31, 2014, which amounted
to €536 million, an increase of 9.2% or 14.0% at constant scope and exchange
rates.

Consolidated sales by business segment:

                First quarter  First quarter  Change
(€ million)     2014           2013           Reported  At constant scope
                                                            and exchange rates
Cement           275             256             +7.4%     +15.2%
Concrete &       194             175             +11.0%     +13.3%
Aggregates
Other Products   67              60              +11.4%     +11.4%
& Services
                                                    
Total           536            491            +9.2%     +14.0%

Commenting on these figures, the Group’s CEO stated:
"Vicat achieved strong sales growth in the first quarter of 2014. Our
businesses benefited from mild weather conditions in France and were able to
capture positive momentum in the Swiss, US and Turkish construction sector.
The return to growth in Egypt is a positive sign for our full-year
performance, and we are continuing to ramp-up our business in India, although
prices are likely to remain volatile.
The Group is still gradually reaping the benefits of its investments over the
last few years, using its strong market positions to maximise cash flow and
continue reducing debt."

In this press release, and unless indicated otherwise, all changes are stated
on a consolidated, year-on-year basis (2014/2013), and at constant scope and
exchange rates.

Consolidated sales in the first quarter of 2014 totalled €536 million, up 9.2%
year-on-year. At constant scope and exchange rates, the increase was 14.0%.
Operational sales rose 13.9% (15.2% on a consolidated basis) in the Cement
business and 12.2% (13.3% on a consolidated basis) in the Concrete &
Aggregates business at constant scope and exchange rates. Sales in the Other
Products & Services business were up 12.5% (11.4% on a consolidated basis).

The breakdown of first-quarter operational sales by business shows a slight
decrease in the contribution of the Cement business to 52.9% of total
operational sales, as opposed to 53.6% in the first quarter of 2013. The
Concrete & Aggregates business accounted for 32.4% of the total, versus 32.0%
in the year-earlier period. Other Products & Services accounted for a slightly
larger share of operational sales, i.e. 14.7% as opposed to 14.4% in the first
quarter of 2013.

Movements in the Group's sales in the first quarter of 2014 resulted mainly
from:

  *solid volume growth in France and Switzerland, where weather conditions
    were mild during the period,
  *ongoing firm business momentum in Turkey, West Africa and the United
    States,
  *renewed business growth in Egypt, due to an improvement in the security
    situation,
  *the ongoing ramp-up in the Group's business in India.

These factors offset the decline in business levels in Kazakhstan, which
suffered from weather conditions that were substantially worse than in 2013,
and the ongoing decline in sales in Italy, where the economic and sector
environment remains weak.

1. Geographical breakdown of consolidated sales in the first quarter of 2014

1.1. France

                    First quarter   First quarter  Change
(€ million)         2014            2013           Reported  At constant
                                                                 scope
                                                               
Consolidated sales   197              183             +7.6%      +6.6%

Consolidated sales in France rose by 6.6% at constant scope to €197 million in
the first quarter of 2014. This solid growth was driven by firm growth in
sales volumes, resulting from particularly mild weather conditions in early
2014.

By segment:

  *In the Cement business, operational sales were up 5.2% (+8.1% on a
    consolidated basis). There was solid volume growth of over 6% in the first
    quarter, driven by mild weather conditions. The average selling price
    fell, mainly due to an adverse product-mix effect.
  *In Concrete & Aggregates, operational sales rose by 5.6% at constant scope
    (+6.4% on a consolidated basis). This business also benefited from
    favourable weather conditions. Concrete volumes rose more than 6%, while
    aggregates volumes were up more than 17%.
  *In Other Products & Services, consolidated sales grew by 4.6%, supported
    by mild weather conditions.

1.2. Europe (excluding France)

                                                Change
(€ million)          First          First                     At constant
                    quarter 2014  quarter 2013  Reported  scope and
                                                              exchange rates
                                                            
Consolidated sales   89             73             +22.2%     +21.4%

In Switzerland, first-quarter sales were driven by further strong growth in
the construction market, the start of new infrastructure projects and
favourable weather conditions. They totalled €85 million, representing solid
year-on-year growth.

  *In Cement, operational sales were up 13.0% (5.4% in consolidated terms) at
    constant scope and exchange rates, supported by solid growth in volumes.
    Selling prices were stable.
  *In Concrete & Aggregates, operational sales were up 39.2% (40.5% in
    consolidated terms) at constant scope and exchange rates. As well as firm
    volume growth, this segment benefited even more than the Group's other
    businesses from mild weather conditions, the positive sector environment
    and the start of new infrastructure projects in the Group's catchment
    area. Ex-works selling prices were almost unchanged in both concrete and
    aggregates.
  *The Precast business posted sales growth of +25.9% at constant scope and
    exchange rates, with sales volumes up 30% and particularly strong growth
    in sales to the rail sector.

In Italy, consolidated sales fell 17.6%, mainly due to a 19.2% fall in
volumes, caused by ongoing tough conditions in the domestic market. Measures
intended at stimulating the economy in general and the construction sector in
particular have yet to have an impact. Against this background, and given the
Group's selective commercial policy, selling prices rose slightly.

1.3. United States

                                                Change
(€ million)          First          First                     At constant
                    quarter 2014  quarter 2013  Reported  scope and
                                                              exchange rates
                                                            
Consolidated sales   51             46             +9.5%      +12.8%

Business levels in the United States continued to recover, and the
macroeconomic situation remained positive. In addition, the residential
construction sector is seeing firm growth, supported by the gradual reduction
in household mortgage debt levels. The Group's sales US rose 12.8% relative to
the first quarter of 2013.

  *In Cement, operational sales were up 13.9% (7.6% in consolidated terms) at
    constant scope and exchange rates. Volumes continued to rise, growing more
    than 3% despite the exceptionally harsh weather conditions that hit the
    Southeast in the first two months of 2014. Volumes grew almost 5% in
    California and were stable in the Southeast. Selling prices rose
    year-on-year, with a greater increase in the Southeast than in California,
    this prior to price increases expected to take place in April 2014.
  *In Concrete, sales grew 14.9% at constant scope and exchange rates.
    Volumes rose more than 7% across the region as a whole. Again, performance
    varied widely between California and the Southeast, because of the
    particularly tough first-quarter weather conditions in the latter zone.
    Prices in each zone rose because of positive mix effects and price rises
    carried out in 2013, particularly in California. Further price rises are
    expected in April 2014.

1.4. Turkey, India and Kazakhstan

                                                Change
(€ million)          First          First                     At constant
                    quarter 2014  quarter 2013  Reported  scope and
                                                              exchange rates
                                                            
Consolidated sales   101            101            -0.9%      +21.6%

In Turkey, consolidated sales amounted to €44 million, up 25.8% at constant
scope and exchange rates. Strong Q1 performance was the result of weather
conditions, which were equally mild as those seen in Q1 2013, and further
growth in the construction sector.

  *In Cement, operational sales grew strongly, rising 30.5% (43.3% in
    consolidated terms) at constant scope and exchange rates. Volume growth in
    the domestic market was much more moderate at 3.5%, but selling prices
    rose sharply.
  *In Concrete & Aggregates, operational sales rose 5.9% (6.7% in
    consolidated terms) at constant scope and exchange rates. Volumes fell
    relative to Q1 2013, due to delays with some projects. However, selling
    prices continued to rise.

In India, consolidated sales totalled €47 million in the first quarter of
2014, up 27.2% at constant scope and exchange rates. Volumes rose 33.5% to
almost 1.1m tonnes. Selling prices remained highly volatile because of current
competitive and sector conditions, and fell by almost 6% in Q1 2014.

In Kazakhstan, consolidated sales fell 14.0% to €9 million. This decline was
mainly caused by the high base for comparison arising from particularly mild
weather conditions in the first quarter of 2013. Volumes fell almost 14% in Q1
2014, while prices were essentially stable.

1.5. Africa and Middle East

                                                Change
(€ million)          First          First                     At constant
                    quarter 2014  quarter 2013  Reported  scope and
                                                              exchange rates
                                                            
Consolidated sales   98             87             +12.9%     +15.6%

In Egypt, consolidated sales amounted to €27 million, up +26.7% at constant
scope and exchange rates. This growth resulted from a near-12% increase in
volumes, driven mainly by an improved security situation in the North Sinai
region. In addition, demand for cement was firm but supply was limited by the
difficult conditions experienced by all operators in terms of access to energy
and security. As a result, prices increased significantly in the first quarter
of 2014.

In West Africa, revenue rose 11.6% due to solid volume growth (14%), with a
good performance in the domestic Senegalese market and even stronger growth in
export markets. This growth was supported by the initiation and continuation
of major construction projects and demand for social housing, particularly in
Senegal. However, prices fell relative to the first quarter of 2013.

2. First-quarter sales by business segment

2.1. Cement

                                                 Change
(€ million)           First          First                     At constant
                     quarter 2014  quarter 2013  Reported  scope and
                                                               exchange rates
Volume (thousands     4,598          4,099          +12.2%   
of tonnes)
Operational sales     325            304            +6.8%      +13.9%
Eliminations          (50)           (48)
Consolidated sales    275            256            +7.4%      +15.2%

2.2 Concrete & Aggregates

                                        First    Change
(€ million)                First          quarter              At constant
                          quarter 2014  2013     Reported  scope and
                                                               exchange rates
Concrete volumes           1,888          1,798     +5.0%    
(thousands of m^3)
Aggregates volumes         5,154          4,728     +9.0%
(thousands of tonnes)
Operational sales          199            181       +9.8%      +12.2%
Eliminations               (5)            (6)
Consolidated sales         194            175       +11.0%     +13.3%

2.3. Other Products & Services

                                                Change
(€ million)          First          First                     At constant
                    quarter 2014  quarter 2013  Reported  scope and
                                                              exchange rates
                                                            
Operational sales    90             82             +10.1%     +12.5%
Eliminations         (23)           (22)
Consolidated sales   67             60             +11.4%     +11.4%

3. Changes in the Group's consolidated financial position at March 31, 2014

Historically, the first quarter has not been representative of the Group's
full-year financial performance.

Net debt equalled 54% of consolidated shareholders' equity at March 31, 2014
as opposed to 52% at March 31, 2013, confirming the strength of Vicat's
balance sheet.

Given the level of the Group’s net debt, bank covenants do not pose a threat
either to the Group’s financial position or to its balance sheet liquidity. At
March 31, 2014, Vicat complied with all financial ratios required by covenants
in financing agreements.

4. Outlook

For 2014, the Group wishes to make the following comments concerning its
various markets:

  *In France, the Group expects the sector environment to stabilise gradually
    in 2014, based on current low levels of consumption and a macroeconomic
    situation that is likely to improve very gradually. Volumes are expected
    to fall slightly and the price environment should remain marginally
    positive.
  *In Switzerland, volume growth will be affected by the high base for
    comparison in 2013, when business levels were particularly strong, and
    prices are expected to be stable.
  *In Italy, the macroeconomic situation is likely to remain weakened by the
    recent recession, and volumes are expected to fall again, although the
    pace of decline should gradually slow. Selling prices are likely to
    continue rising, based on initial signs of consolidation in the market and
    the Group's selective commercial policy.
  *In the United States, volumes are expected to rise again, in line with the
    upturn in the broad US economy. The Group anticipates sharply higher
    selling prices from the second quarter of 2014.
  *In Turkey, elections will be held in 2014, but performance should be
    supported by the ongoing positive sector situation, although macroeconomic
    conditions will be affected by exchange-rate volatility and higher
    interest rates. The Group expects performance to continue improving in
    Turkey, although at a slower pace than in the past.
  *In Egypt, the situation remains unpredictable, but the gradual improvement
    in the security situation should enable the Group to resume growth in its
    business and improve its performance. The Group is confident about the
    positive performance of the Egyptian market in the medium and long term.
  *In West Africa, the market should remain buoyant overall in terms of
    consumption. Price movements will depend on the potential arrival of a new
    competitor, among other factors. In the medium term, the Group remains
    confident in its ability to reap the full benefits from its modern
    production facilities, its knowledge of the Senegalese market and its
    ability to export throughout the region.
  *In India, the market is likely to remain affected in the short term by
    weak infrastructure investment in the run-up to elections scheduled in the
    second quarter of 2014. As a result, prices will remain highly volatile
    and will probably see further pressure, before infrastructure and
    construction works gradually begin to recover during the second half of
    the year. On a medium- to long-term view, the Group remains very confident
    that it can take full advantage of its strong positions in the Indian
    market, which continues to show excellent potential.
  *In Kazakhstan, the Group's ideal geographical location and highly
    effective production base should enable it to benefit fully from a market
    poised for solid growth in terms of both volumes and prices.

4. Conference call

To accompany the publication of its sales for the first half of 2014, the
Vicat group is organising a conference call that will be held in English on
Tuesday, April 29, 2014 at 3pm Paris time (2pm London time and 9am New York
time).

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

France:           +33 (0)1 76 77 22 21
United Kingdom:     +44 (0)20 3427 1907
United States:      +1 718 354 1157

To listen to a playback of the conference call, which will be available until
7pm on March 18, 2014, dial one of the following numbers:

France:           +33 (0)1 74 20 28 00
United Kingdom:     +44 (0)20 3427 0598
United States:      +1 347 366 9565

Access code: 6386597#

Next date for shareholders:
May 6, 2014 (10am): Annual General Meeting of Shareholders

Next publication:
August 4, 2014 (after the market closes) first-half 2014 sales and earnings

ABOUT VICAT

The Vicat Group has almost 7,700 employees working in three core divisions,
Cement, Concrete & Aggregates and Other Products & Services, which generated
consolidated sales of €2,286 million in 2013.
The Group operates in 11 countries: France, Switzerland, Italy, the United
States, Turkey, Egypt, Senegal, Mali, Mauritania, Kazakhstan and India. Around
62% of its sales come from outside France.
The Vicat 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.

Disclaimer:
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).

Contact:

Vicat
Investor relations contact:
Stéphane Bisseuil
Tel: +33 (0)1 58 86 86 13
stephane.bisseuil@vicat.fr
or
Press contact:
François Lesage
Tel: +33 (0)1 58 86 86 26
francois.lesage@tbwa.com
 
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