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L�ISLE-D�ABEAU, France--(BUSINESS WIRE)--Regulatory News:

Vicat (Paris:VCT):

• Strong increase in sales: resilient volumes across almost all markets and significantly higher selling prices
• Profitability adversely affected by the significant increase in energy prices and non-recurring industrial costs in the United States, France and India
• Solid cash generation and robust balance sheet despite the growth in the working capital requirement
• Proposed dividend at �1.65 per share

Condensed income statement approved by the Board of Directors on 10 February 2023

*Definitions in the appendix of this press release

Commenting on these figures, Guy Sidos, the Group�s Chairman and CEO, said: �In 2022, the Vicat Group demonstrated resilience amid tough conditions. Faced with an unfavourable basis of comparison as a result of the sharp post-Covid rebound in business trends during 2021, a very strong increase in energy costs and non-recurring industrial costs in the United States, France and India, we responded rapidly, raising our selling prices significantly across almost all the markets in which we operate to offset the impact of inflation.

We have made progress with our policy of lowering our greenhouse gas emissions by harnessing existing solutions and investing in technologies that will enable us to reach our new 2030 targets.�

Disclaimer:

• In this press release, and unless indicated otherwise, all changes are stated on a year-on-year basis (2022/2021), 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�, �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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The Group posted strong sales growth in 2022 driven by a significant rise in its selling prices. This performance reflected:

• an increase in selling prices across almost all Vicat�s markets amid strong cost inflation;
• resilient Cement and Concrete volumes in most markets, except for Turkey;
• negative non-recurring items in the United States, with the longer-than-anticipated start-up of the Ragland plant�s new kiln, and in India, with debottlenecking operations to boost capacity at the Kalburgi plant during the third quarter; and
• the consequences of the political environment in Mali.

Overall, the Group�s consolidated sales totalled �3,642 million, up from �3,123 million in 2021, representing a +19.7% increase at constant scope and exchange rates.

Consolidated sales rose +16.6% on a reported basis as a result of:

- a scope effect of �0.3% (negative impact of ��10 million), largely resulting from the sale of the lightweight precast business in Switzerland, which was finalised on 30 June 2021;

- a negative currency effect of �2.7%, representing a negative impact of ��86 million over the year owing to the depreciation in the euro against other currencies except for the Turkish lira and the Egyptian pound; and

- organic growth of +19.7% (+�615 million) supported by increases in selling prices across all the regions.

The Group�s operational sales totalled �4,149 million, up +16.6% on a reported basis and up +20.6% at constant scope and exchange rates. Each of the Group�s businesses contributed to this positive trend. In the Cement business, sales (�2,296 million) rose +24.1% at constant scope and exchange rates. In the Concrete & Aggregates business, operational sales (�1,398 million) rose by +18.5% at constant scope and exchange rates. Lastly, sales in the Other Products and Services business (�454 million) rose +11.1% at constant scope and exchange rates.

Vicat�s consolidated EBITDA came to �570 million in 2022, down �7.9% on a reported basis and down �5.9% at constant scope and exchange rates. The EBITDA margin was 15.6%, down �420 basis points. The trend in reported EBITDA reflects an unfavourable currency effect of ��13 million and an organic decline of ��36 million. Despite this unprecedented inflation in costs, operating profitability was again well above its 2020 level (�557million).

At constant scope and exchange rates, the EBITDA decrease was primarily attributable to:

• a particularly unfavourable basis of comparison in 2021 as a result of the post-Covid rebound in business;

• very strong inflation in production costs, and especially in energy, since the second half of 2021, with a significant acceleration in 2022. As a result, energy costs soared +67% to �664 million over the full year, up from �398 million in 2021. This inflation was offset only gradually by a general increase in selling prices;
• Lastly, EBITDA was adversely affected by several non-recurring industrial operations that held back performance throughout the year:
  • the start-up of Ragland�s new kiln in the United States during the second and third quarters;

  • the operational upgrade in the first quarter of the Montalieu plant after two pandemic-blighted years;

  • the capacity increase at the Kalburgi Cement plant during the third quarter.

These three operations will have a highly positive impact on future levels of operating profitability.

Recurring EBIT came to �284 million, down from �360 million in 2021, representing a fall of �21.0% on a reported basis and of �19.1% at constant scope and exchange rates. The recurring EBIT margin on consolidated sales came to 7.8%, a decrease of �370 basis points.

Operating income came to �278 million, down �17.4% on a reported basis and down �14.6% at constant scope and exchange rates. This fall was mainly attributable to the contraction in operating profitability affecting both EBITDA and recurring EBIT.

Of this ��20 million reduction in net financial income (expense) compared with 2021:

• ��3 million derived from the increase in the Group�s average debt and interest, partially offset by the increase in investment income and the positive change in the fair value of interest-rate hedging derivatives; and
• ��12 million derived from the application of IAS 29 in Turkey and ��7 million from the currency loss arising from the devaluation of the Egyptian pound against the euro.

The macroeconomic and inflationary situation in Turkey meets the criteria set out under IAS 29 for application of the accounting arrangements for hyperinflationary economies. Under the standard, non-monetary items are restated based on the change in a general price index between the date those items were acquired and the end of the reference period to reflect their �actual value� at the balance sheet date translated at the year-end exchange rate. In Turkey�s case, application of the standard has prompted:

• restatement of the opening balance sheet at 1 January 2022, leading to a +�59 million impact on the Group�s share of equity;
• an impact on the 2022 income statement of ��20.8 million (�12 million via net financial income (expense).

Tax expense declined �24 million compared with 2021. The effective tax rate was 28.6%, below the 2021 rate of 29.2%.

This reduction in tax derived primarily from the fall in the Group�s taxable income and the new tax convention applicable in Senegal with retroactive effect from 1 January 2021, leading to a reduction in deferred tax liabilities.

Consolidated net income was �175 million, down �28.0% at constant scope and exchange rates and down �21.0% on a reported basis versus 2021.

Net income, Group share fell �29.5% at constant scope and exchange rates and �23.6% on a reported basis to �156 million.

Cash flow from operations came to �461 million, down �5.5% on a reported basis and down �6.0% at constant scope and exchange rates, reflecting the decrease in EBITDA generated over the year and the non-cash IAS 29 adjustments.

On the strength of these full-year 2022 results and given its confidence in the Group�s ability to continue pursuing its development, the Board of Directors decided at its meeting on 10 February 2023 to propose the distribution of a dividend of �1.65 per share, at the Group�s Annual General Meeting due to be held on 7 April 2023.

1. Income statement analysed by geographical region

1.1. Income statement, France

The Group�s sales in France moved higher in 2022, despite a small reduction in volumes from the record levels seen in 2021. Cement consumption held up at a high level, however. In a high-inflation environment, selling prices rose significantly across all the Group�s activities.

EBITDA declined significantly during the period given the very clear increase in operating costs, particularly energy costs (up +55%), and an unfavourable basis for comparison in 2021.

• In the Cement business, operational sales rose +10.6% at constant scope. Given the unfavourable basis of comparison resulting from the French market�s dynamic performance last year, this increase reflects a slight drop-off in demand offset by a gradual, but significant rise in selling prices during the year. Nonetheless, the price increases introduced offset only partially the very strong increase in energy costs. One-off maintenance operations carried out in a period of high activity levels after the two-year-long Covid-19 pandemic gave rise to non-recurring costs at the beginning of the year. The EBITDA generated by this business declined by �14.3%.
• The operational sales recorded by the Concrete & Aggregates business rose +3.8% at constant scope. This performance was driven by a significant improvement in selling prices throughout the year, offsetting the impact of a small contraction in volumes. Given the increase in costs, the EBITDA generated by the business moved down �20.3% at constant scope.
• In the Other Products & Services business, operational sales advanced +8.4% at constant scope over the period. The EBITDA recorded by the business fell �8.3% over the period.

1.2 Income statement for Europe (excluding France)

Business trends in Europe (excluding France) were positive in 2022, supported by a still solid environment in Switzerland given an unfavourable basis of comparison, and a positive industry environment in Italy. The decline in sales on a reported basis reflects a scope effect resulting from the sale of the Creabeton precast business in Switzerland, which was finalised on 30 June 2021. EBITDA across the region as a whole declined �4.2% on a reported basis and �8.2% at constant scope and exchange rates as a result of the significant increase in energy costs in Switzerland, especially in electricity, which gained pace during the second half of 2022.

In Switzerland, the Group�s consolidated sales were stable at constant scope and exchange rates (down �4.1% on a reported basis). EBITDA moved �11.4% lower at constant scope and exchange rates. The EBITDA margin on consolidated sales narrowed slightly to 22.4% from 23.2% in 2021.

• In the Cement business, operational sales moved up +1.1% at constant scope and exchange rates. This performance reflects a contraction in volumes during the year, offset by a solid increase in selling prices. Taking into account these factors and also the strong increase in energy costs, particularly electricity, which accelerated considerably during the second half, the EBITDA generated by the business dropped �16.7% at constant scope and exchange rates.
• In the Concrete & Aggregates business, operational sales declined �3.8% at constant scope and exchange rates. Amid a contraction in both concrete and aggregates volumes, selling prices moved higher in concrete and were almost stable in aggregates. As a result of these factors, the EBITDA generated by this business fell �8.0% at constant scope and exchange rates.
• In the Other Products and Services business, operational sales fell were almost stable at constant scope and exchange rates (down �0.9%). The EBITDA generated by the business rose +4.9% at constant scope and exchange rates, given the accretive impact of the Creabeton disposal in the first half of 2021.

In Italy, consolidated sales grew by +45.8%. Volumes rose and selling prices moved significantly higher throughout the period. EBITDA rose strongly over the year.

1.3 Income statement for the Americas

Demand across the Americas region remained solid in the construction sector despite a high basis of comparison, especially in Brazil. The impact of the surge in energy prices and of the non-recurring costs linked to the start-up of the Ragland plant�s new kiln was offset only partially by the hike in selling prices. Consequently, EBITDA moved lower over the full year.

In the United States, the sector environment remained favourable. Second- and third-quarter performance was adversely affected by the start-up of the Ragland plant�s new kiln in Alabama, which temporarily reduced production capacity and deliveries in the region. Lastly, highly unfavourable weather conditions in the South-East region adversely affected performance at the end of the year. In spite of this non-recurring effect, consolidated sales totalled �581 million, up +6.6% at constant scope and exchange rates, supported by the strong performance in California. As a result, EBITDA totalled �88 million, down �19.0% at constant scope and exchange rates.

Construction of the Ragland plant�s new 5,000-tonne per day kiln line in Alabama is now complete. This installation has increased the plant�s capacity so it can meet the strong demand in the marketplace, substantially reduce production costs and actively help the Group to meet its CO₂ emission reduction targets. Following a series of technical adjustments during the third quarter, the ramp-up of the new plant remained on track during the final quarter of the year.

• In the Cement business, operational sales in the region grew +6.4% at constant scope and exchange rates in 2022, reflecting the strength of the construction market in the regions in which the Group operates and a significant increase in selling prices.
  
  Even so, given the surge in energy costs and specific costs linked to the start-up of the Ragland plant�s new kiln, the EBITDA generated by the business declined by �15.4% at constant scope and exchange rates.

• In the Concrete business, operational sales rose +6.0% at constant scope and exchange rates as further positive market trends continued to provide support for the business. Against this backdrop, selling prices moved significantly higher. Nonetheless, the EBITDA recorded by this business fell over the period, indirectly as a result of the start-up of the Ragland plant�s new kiln amid the stretched cement supply conditions prevailing in the region.

In Brazil, consolidated sales totalled �279 million, up +27.3% at constant scope and exchange rates. Despite an unfavourable basis for comparison, higher interest rates and inflation in the country, volumes were stable in the Group�s markets. The hike in prices has to date partially offset the surge in production costs. As a result, EBITDA declined �6.7% at constant scope and exchange rates to �47 million over the year.

• In the Cement business, operational sales were �218 million, an increase of +23.0% at constant scope and exchange rates, supported by robust demand and a large increase in selling prices. Nonetheless, higher selling prices made up only partially for the very strong increase in energy costs. Overall, EBITDA fell �19.3% at constant scope and exchange rates.
• In the Concrete & Aggregates business, operational sales came to �92 million, an increase of +44.2% at constant scope and exchange rates. Market conditions remained favourable throughout the period, and they were supported by an increase in concrete and aggregates selling prices. Amid these positive conditions, EBITDA rose sharply.

1.4 Asia (India and Kazakhstan)

Sales in India grew throughout the period, with consolidated sales rising to �433 million, up +12.8% at constant scope and exchange rates. This performance was driven by volume growth, supported in particular by public-sector demand. Amid very strong inflation, higher selling prices only partially made up for the very strong rise in energy costs. In addition, work on increasing capacity at the Kalburgi Cement plant amid high activity levels gave rise to non-recurring operating expenses.

As a result, EBITDA fell to �73 million, down �31.2% at constant scope and exchange rates versus its 2021 level.

Consolidated sales in Kazakhstan came to �67 million, down �1.0% at constant scope and exchange rates. This performance reflected a significant increase in selling prices, which almost entirely offset the contraction in volumes delivered during the period. What�s more, the higher selling prices made up for the impact of cost inflation. As a result, full-year EBITDA came to �26 million, up +12.5% at constant scope and exchange rates.

1.5 Mediterranean (Turkey and Egypt) income statement

In the Mediterranean region, sales moved sharply higher in both countries amid a persistent lack of visibility. The key factor behind the increase was a large hike in selling prices, sparking a significant recovery in operating profitability.

In Turkey, the macroeconomic and sector environment was affected by the hyperinflation. Overall, consolidated sales totalled �258 million (versus �150 million in 2021), up +226.8% at constant scope and exchange rates.

EBITDA recorded a significant increase over the full year to �44 million, up from �13 million in 2021. As a result, the EBITDA margin on consolidated sales was 17.2% versus 8.5% in 2021.

• In the Cement business, the Group decided to limit the use of its least energy-efficient manufacturing facilities to curb the impact of higher costs in a hyperinflationary environment. Taking these factors into account plus the slowdown in the construction sector amid economic conditions affected by inflation, volumes delivered fell over the period in order to protect margins. The volume contraction was offset to a very large extent by higher prices. As a result, the business� operational sales climbed +235.3% at constant scope and exchange rates to �192 million. Overall, the EBITDA generated by the business totalled over �33 million, despite the depreciation in the Turkish lira, versus �10 million in 2021.
• In the Concrete & Aggregates business, operational sales rose +219.3% at constant scope and exchange rates to �117 million. While concrete deliveries declined over the full year, aggregate deliveries posted solid growth as a result of a dynamic second-half performance. Significant price hikes were introduced, following the Cement business� lead. The EBITDA generated by the business lay well inside positive territory.

In Egypt, consolidated sales totalled �116 million, up +62.3% at constant scope and exchange rates. Following the market regulation agreement between the Egyptian government and all producers that entered force in July 2021 and was renewed in August 2022, selling prices in the domestic market continued to improve, supported by an increase in demand in a market adversely affected by inflation and the currency devaluation. Overall, Egypt contributed a breakeven EBITDA performance in 2022, compared with a loss of close to ��10 million in 2021.

1.6 Africa (Senegal, Mali, Mauritania) income statement

In Africa, the market remained resilient despite the effects of inflation and the political crisis in Mali on the region�s economy.

• In the Cement business, operational sales in the Africa region fell �2.1% at constant scope and exchange rates. While business trends picked up in Senegal and improved significantly in Mauritania, these factors did not fully offset the sharp contraction in Mali�s market as a result of the political environment. Selling prices rose in both these markets, but not sufficiently to make up for the impact of the cost inflation observed in the region, particularly as a result of the selling price controls introduced by the Senegalese authorities. Overall, the EBITDA generated by the business fell �53.0% over the period.
• In Senegal, the Aggregates business, supported by the gradual resumption of major government construction projects, recorded operational sales of �38 million, up +28.2% at constant scope and exchange rates. Volumes grew sharply during the year, while selling prices fell due to an unfavourable product and customer mix. EBITDA rose +4.2% over the year to reach �9 million.

2. Changes in the Group�s financial position at 31 December 2022

At 31 December 2022, the Group�s financial structure remained solid, with a substantial equity base and net debt under control despite the higher working capital requirement. Consolidated equity totalled �2,863 million at that date, compared with �2,606 million at 31 December 2021.

Net debt totalled �1,567 million at 31 December 2022 compared with �1,318 million at 31 December 2021.

On this basis, the Group�s leverage ratio stood at 2.75x (versus 2.13x at 31 December 2021) and its gearing at 54.7% (versus 50.6% at 31 December 2021) at 31 December 2022.

Medium- to long-term borrowings are subject to special clauses (covenants) requiring certain financial ratios to be met. Given the level of Group�s net debt and balance sheet liquidity, the bank covenants do not pose a risk for the Group�s financial position. At 31 December 2022, the Group was compliant with all financial ratios required by covenants included in financing agreements.

3. Capital expenditure and

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Investor relations contact:

St�phane Bisseuil:

Tel + 33 (0)1 58 86 86 05

[email protected]

Press contacts:

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