Vicat Sa Unsp/Adr

Welcome to the VCAT 2025 Full Year Results presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, all the participants are able to ask questions. Now, I will hand the conference over to Guy Sitos, Chairman and Group CEO, Hugh Schommel, Deputy CEO and Group CFO, and Pierre Pedrosa, Head of Investor Relations. Please, sir, go ahead.

Thank you. Good afternoon, ladies and gentlemen. Welcome to VCAT's 2025 results presentation. I'm Guy Sidot, Chairman and CEO of the VICA Group. Alongside me are Mr. Hugues Chaumel, Deputy CEO and CFO, as well as Pierre Pedrosa, Head of Investor Relations. On slide two, As a preliminary remark, we would like to draw your attention to the fact that the forward-looking information presented here reflects our current assessment of expected trends across the Group's various markets and should not be regarded as forecasts. On slide 3, 2025 is part of a solid and sustainable performance trajectory, illustrating the strengths and resilience of VCAT's business model. Consolidated revenue amounted to 3.85 billion euros in 2025, affecting an average annual growth rate of nearly 7% over the past five years. EBITDA reached 771 billion euros, also representing average growth of close to 7% over the same period. Roche remained stable at 8.1%, pending the full contribution of the nuclear in Senegal. Lastly, the group's leverage ratio continued to decrease, reaching 1.49 times in 2005, further strengthening VCAT's financial structure. These results once again demonstrate VCAT's ability to consistently combine operational performance with financial discipline in a demanding environment. Let's move to slide four. As a reminder, VCAT's business model is built on several key pillars that underpin its resilience. First, a family shareholding structure and a long-term vision grounded in continuity, which enable us to pursue a consistent and sustainable industrial strategy. We are a cement-focused business and benefit from a bone-earned high performing industrial asset base, vertically integrated across the value chain. We have a multi-regional model supported by a decentralized organization, which allows us to operate efficiently and to respond to the local needs of our markets. Vitka also has a long standing tradition of innovation. with stronger R&D capabilities. From the invention of artificial cement in 1817 to today's low-carbon cements such as Cara in France or Progresso in Switzerland, we are positioned as a key player of our industry's decarbonization. Lastly, we benefit from a geographically diversified portfolio across both developed and emerging markets. These pillars are the core of VCAT's identity and provide the foundation for a sustainable and robust model fully aligned with the ongoing transformation of our sector. Slide five provides an analysis of the group's investment cycle of the past 10 years and how we have balanced our strategic priorities with financial discipline. Following an initial phase between 2015 and 2018, during which investment levels remained stable, we made the decision from 2019 onwards to accelerate capital expenditure at a time when funding conditions were particularly favourable. Since 2023, in a context of higher cost of financing, we have been able to capitalize on these past investments to generate high cash flows and leverage of balance sheet. We do this while maintaining a level of investment consistent with our initial goals. Turning now to the key highlights of 2025 on slide six, In a complex international environment, the group delivered solid results. Organic revenue growth came in at 3.3%, accelerating to 8.1% in the first quarter. EBITDA reached 771 million euros, representing organic growth of 3.7%, compared to a record year in 2024. However, foreign exchange headwinds had a significant impact, resulting in a slight EBITDA decline on a reported basis. For the third consecutive year, the group generated strong free cash flow amounting to €324 million in 2025 and continued to reduce its net debt. Lastly, We made further progress on decarbonization. We reached an important milestone in securing the financial of VIA, of flagship carbon capture project in France, with the award of two subsidies at both the European and French levels. All together, these elements once again illustrate the strengths of VCAT's model, which is able to combine operational performance financial discipline and decarbonization. In France, as shown on slide 7, the radiation market has gone through an unprecedented slowdown and is now at its lowest level in 25 years. As far as we are concerned, we have lost 600,000 tons of cement over the past three years, representing nearly 20% of our production. Despite this environment, France showed remarkable resilience in 2025. After six consecutive quarters of decline, volume stabilized in the second half of 2025 at a low level, with a slight rebound in the fourth quarter. While visibility remains limited, notably due to the political concept and the upcoming municipal elections in France, this development is encouraging in the context of reduced interest rates. Let me remind you that residential needs in France remain very significant in this respect. The Relance Logement Plan, recently announced by the government, is a specifically intended to address this situation by supporting the construction of new housing. As a result, the conditions are gradually aligning for a moderate and progressive recovery from 2026 onwards. With its long standing roots in France, which represents 31% of the group's revenue and with its available capacity, Wicca is very well positioned to benefit from this recovery as soon as it materializes. Still in France, as shown on slide 8, the TELT project. TELT is the Oralpine Lyon-Turin Tunnel. So this project contributed to activity 2025, it is currently the largest civil engineering project under construction in Europe. The gradual ramp up with the commissioning of the tunnel boring machines is expected to support cement conception in 2026 and even accelerate it from 2027 onwards. Overall, we have practically secured more than 1.3 million tons of cement, as well as around 4 million tons of aggregates over the lifetime of the project. I will also highlight a works package named CO11, which we won jointly with Vinci. This contract covers the treatment of excavated material. In total, nearly 24 million tons of material will be sorted with the objective of recycling half of it. And we have recently inaugurated our first treatment station. And today, the TELT project represents a major growth driver for operation in France. It will provide strong support to our volumes over the next seven to eight years. More broadly, the outlook for the infrastructure segment in France is promising, with good visibility over the coming years. The launch of the French access work for TELT, which is in addition to the main TELT tunnel, The future EPR nuclear reactors, notably near our Ontario plant, and the construction of the so-called PANG aircraft carrier. It's a new generation of aircraft carrier in France, in Toulon. And these are a few examples that will drive up our activity in the coming years. In Brazil now, on slide 9, The group delivered a solid performance in 2025, supported by favorable market momentum and sustained commercial development in the Midwest region, notably in Brasilia and the state of Goiás. In 2025, we completed the acquisition of RealMix, a ready-mix concrete player in Goiás. This transaction enabled us to further strengthen our vertical integration and to secure additional cement and aggregate volumes. Consolidated from the 1st of September 2025 onwards, RealMix made a positive contribution to our results at the end of the year. In Brazil, we generated a big year of 63 million euros in 2025, driven by market growth, the strong performance of our commercial teams, the contribution of RealMix, and the quality of our industrial asset base. Let us now turn to Turkey on slide 10. Our results grew strongly. in 2035, with EBITDA reaching 58 million euros, up by nearly 32%. The corporate rates in Central Anatolia were, or seven volumes, increased by 19% in 2025. The construction market in this region benefited from favorable demographic trends with populations migrating from the areas affected by the 2023 earthquake towards the Ankara region. In addition, in 2025, the government accelerated infrastructure projects, not only around Ankara, but also in northern Anatolia in order to rebuild the areas impacted by the earthquake. We are also seeing some production capacity being redirected towards export markets, which favors domestic players such as Vika in Turkey. And in the current hyperinflationary environment in Turkey, we have been able to adjust our selling prices in order to protect our margins. On slide 11, In Egypt, the remarkable turnaround of our performance continued in 2025. EBITDA once again increased sharply, reaching €61 million, up by nearly 79%, with the margin rising to 37.3%. Export volumes remain sustained, and the rebound of the domestic market was confirmed in the second half of the year, notably with the launch of several large real estate projects. Longer term, the region continues to offer attractive prospects for the Group, particularly through potential reconstruction opportunities that may arise in certain areas currently affected by conflicts. Let us finally turn to Senegal on slide 12, where we have made a major investment over the past few years. And after a startup in June 2025, KIN6 has continued to ramp up, delivering first tangible financial contributions in the first quarter. As a reminder, this modern high-performance facility is intended to replace kilns 3 and 4 and to eliminate our clean kiln imports, which has already been achieved. It will also accelerate our decarbonisation and will generate cost savings of €20 per tonne of cement in the coming years. The ramp-up of kiln 6 will continue this year and will be a key driver of the Group's performance in Africa in 2026 and 2027. I will now hand over to Hugues Chomel for a more detailed review of our financial statement.

Thank you, Mr. Silos, and good afternoon, ladies and gentlemen. I will start with the main highlights of the Group Consolidated Income Statement on slide 13. Revenue amounted to 3.854 billion euros, representing an organic growth of 3.3%, but remaining broadly stable on a reported basis due to a negative foreign exchange impact of 242 million euros. EBITDA reached 771 million euros, up organically by 3.7%, in line with the plus 2 to plus 3% target communicated last July. The EBITDA margin therefore stood at 20%, consistent with our medium-term priority. Net income group share increased by 6% at constant scope and exchange rates, reaching 275 million euros. Despite a particularly negative foreign exchange impact in 2025, the quality of the group results demonstrate once again our ability to deliver solid operational and financial performance in a challenging economic environment. On slide 14, you can see the evolution of the revenue by region in 2025 compared with 2020. scope and exchange rates, the solid organic growth delivered across the group reflect contrasting trends from one region to another. France recorded a slight increase on a reported basis supported by the gradual stabilization of the cement business in the second half of the year, as mentioned by Mr. Siddos, and by the positive contribution of the integration of ceramics since January 2025. The Europe region grew by 7.9% on a reported basis, benefiting beyond the appreciation of the Swiss franc from the recovery of the market in Switzerland, BGA's exposure to major infrastructure projects, as well as the commercial success of a low-carbon offering. Americas posted a decrease, mainly reflecting the slowdown in the United States. This decrease was, however, partly offset by the strong performance in Brazil. In US, interest rates remain high throughout the year, penalizing the housing sector. Uncertainty resulting from the tax and tariff changes created a climate of instability, which impacted the non-residential markets. In this environment, the group performance was contrasted across regions with growth in the southeast and a sharp decline in California. In Asia, revenue recorded a slight organic decline of 1.5%. Activity in India remained volatile due to a highly competitive environment, particularly in the south of the country, which put pressure on pricing despite an improvement in the second half of the year. The Mediterranean region stood out, delivering organic growth of more than 30%. Lastly, Africa posted a slight decrease of 2.9% despite the strong performance in Senegal, notably driven by an acceleration in aggregate sales following the restart of major public infrastructure projects. As you can see on the chart on the right of the slide, the group organic growth accelerated throughout the year. reaching plus 8.1% in the fourth quarter. Now turning to slide 15, to the evolution of ABDA, whose main drivers are illustrated on this chart. The increase at constant scope and exchange rates is mainly explained by a positive volume effect in cement, concrete and aggregates. overhaul pricing developments allowed to offset cost increases, which were notably driven by wage inflation. Industrial performance also contributed positively, notably in Senegal. Foreign exchange had a negative impact of 46 million euros. This reflects the depreciation of all currencies in which the group operates against the euro, with a notable exception of the Swiss franc. Let me remind you that 59% of the group revenues is exposed to non-euro currencies. Overall, EBITDA recorded a moderate decrease of 1.6% compared to 2024, which was which was a record year for the group. Therefore, this can be considered a very solid performance given the environment we faced in 2025. Moving to slide 16, 2025 was also characterized by a strong cash generation. We maintained strict investment discipline. net capex amounted to 299 million euros down compared to 2024. capex was split more or less evenly between maintenance capex and strategic capex including the cash outflows related to kiln 6 in senegal this discipline will be maintained in 2026 with expected capex of around 290 million euros for the third consecutive year the WCAG Group generated strong free cash flow amounting to €324 million in 2025 and illustrating the highly cash-generative nature of our business model. As shown on slide 17, this free cash flow of €324 million notably reflects a further reduction in working capital requirement And as I just mentioned, control over capex. Cash conversion rates stood at 42% in 2025. On this basis, and taking into account the group's market capitalization at the end of January, the cash-free cash flow yield is around 9%, one of the highest in the industry. This highlights both the strength of all cash generation and a re-rating potential that remains significant despite the share price increase over the past year. This cash generation enabled us to continue on the leveraging trajectory. As shown on slide 18, the group net debts decreased by 85 million euros in 2025 to reach 1,151,000,000 euros. A leverage ratio stood at 1.49 times ABDA, marking a further reduction in line with our priorities. On slide 19, you can see a detailed breakdown of a group net debt at the end of 2025. It is characterized by a well-balanced maturity profile with an average maturity close to five years. Average interest rate was 3.86% before hedging in 2025, down significantly year-on-year. With growth cash at €528 million and €877 million of available unloved credit lines, the group benefits from strong liquidity and the resources needed to continue pursuing its development. Thank you for your attention. I will now hand it back to Mr. Silos.