Vicat Sa Unsp/Adr

Welcome to the VCAT first quarter 2026 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 Hugh Schomel, Deputy CEO and Group CFO, and Pierre Pedrosa, Head of Investor Relations. Please go ahead.

Good afternoon, ladies and gentlemen. Welcome to VICA Q1 2026 Trading Update presentation. I am Hugues Chamal, Deputy CEO and CFO of the VICA Group. I am joined by Pierre Pedreza, Head of Investor Relations. On slide 2, 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. Starting with the key highlights of the quarter on slide 3, the group delivered a solid start in an international environment that remains particularly complex. Organic sales growth was strong at 8.5%. This performance was driven by price increases in Europe, a pickup in volumes in the US, and strong momentum in emerging countries. Once again, this illustrates the strength of Vika's model, which is built on a balanced geographical presence across developed and fast-growing markets. On a reported basis, sales grew 4.1%, taking into account persistent foreign exchange headwinds. On the back of this robust first quarter, we confirm our full year 2026 guidance, with a slight like-for-like growth expected in both sales and EBITDA. Lastly, we have updated our geographical segmentation in order to better reflect business trends and to align more closely with our internal organization. You can see this new segmentation on slide 4. The new Europe regions combines France and the former Europe region, namely Switzerland and Italy. These three countries have comparable business mixes, common strategies and similar growth drivers. The new Europe region represents 41% of group sales in Q1, which makes us a clear beneficiary of a European residential recovery when it materializes. The new Asia-Mediterranean region brings together the former Asia and Mediterranean regions, which already share the common management structure and similar exposures orders to emerging markets. This new region accounts for 22% of group sales in Q1. The Americas and Africa regions remain unchanged and account for 25 and 12% of sales, respectively. Noticeably, all four regions delivered growth in Q1. Let me now turn to the slide 5 for a closer look at sales growth evolution. As I mentioned, the group delivered strong like-for-like sales growth of plus 8.5% in the first quarter. This performance was broad-based with solid like-for-like growth in three of our four regions and particularly strong contributions from Asia Mediterranean and Africa. Sales were up organically by more than 20% in both regions. While Europe stabilized, the Americas also delivered significant like-for-like growth at plus 7.7%, with a rebound in the US. Recent acquisition accounted for a plus 1.4% scope effect. As expected, foreign exchange remained a significant headwind in the quarter, with a negative impact of 5.9% for minus 52 million euros. This mainly reflects the weakening of the US dollar, the Turkish lira and the Indian rupee against the euro over the period. As a result, group sales stood at 922 million euros, up 4.1% compared to the first quarter of 2025. Let me now briefly go through the highlights of each geography, starting with the new Europe region on slide 6. With sales of 381 million euros in Q1, Europe as a whole stabilized organically at minus 0.9%, supported by positive pricing momentum across the region. and was up one point on a reported basis. In France, cement volumes were slightly down due to adverse weather conditions and municipal elections. Prices increased mainly to offset higher electricity costs triggered by the shift to a new electricity contract with EDF, namely CRPM, as well as CO2 implied costs. An additional price surcharge has been announced effective in May to offset the effects of the energy crisis. The French residential market, which is a key growth driver for Vita in the region, continues its soft landing. While leading indicators are somehow encouraging, the recovery should remain modest and gradual this year, and more skews towards the second half. In Switzerland, the pattern was similar with positive price momentum helping to keep our cement activity stable following a very strong start of the year in 2025. Overall, Europe demonstrated good resilience in Q1 with solid pricing momentum. Turning to the Americas on slide seven. The region delivered a strong quarter, with sales up 7.7% on a like-for-like basis, and 3% on a reported basis, reaching 228 million euros. In the US, cement activity rebounded, driven by volume recovery in California. This was helped by a favorable base effect and also some early signs of improvement in non-residential demands, particularly in the southeast, supported by data center-related activity. The residential market, however, remained weak, and will most likely remain so as long as interest rates stay high. Brazil also reported a solid performance, as cement activity continued to grow, supported by healthy demand in the Midwest region and by the contribution from rare mix. As the US dollar weakened against the euro, sales in the region were affected by negative FX impacts. But, overall, the Americas delivered a solid performance with encouraging fines in the US. Moving to the new Asia Mediterranean region on slide 8. As I mentioned, like-for-like growth was 21.2%, but largely offset by the depreciation of local currencies against the euro. On the reported basis, sales grew 2.9% to 203 million euros. While all four countries delivered like-for-like growth, the main drivers were India and Turkey. In India, volumes increase while prices remain stable at the low level. Turkey continues to deliver a strong performance, benefiting from a low comp in Q1 and well-oriented demand in central and interior. Egypt posted a decent performance supported by price momentum, despite being impacted by a calendar effect that will be offset in Q2. Overall, the region's performance highlights the strategic value of our exposure to emerging markets. Despite persisting foreign exchange headwinds, they remain a key area of growth over growth. Let's finally turn to Africa on slide 9. Africa was also a strong growth contributor in Q1, with life-for-life growth of 22.2%, and a very similar increase on a reported basis at 21.1%, bringing the region's sales to 110 million euros. This performance was notably driven by strong momentum in our aggregate activities in Senegal, where demand is supported by major infrastructure projects. In the cement activity, we are moving ahead with a ramp-up of 10.6, which is already delivering a significant improvement in our production costs in the region. On slide 10, we provide a deep dive into our aggregate assets in Senegal, which have been performing well for the past 12 consecutive months. There are two aggregate quarries in Senegal, one producing basalt and the other limestone, with a combined annual capacity of more than 3.5 million tonnes. The Diag quarry, dedicated to basalt production, is the largest aggregate quarry within the group. It allows us to be the market leader in Senegal on this segment. We are currently benefiting from an acceleration in aggregate volumes in Senegal. following a year of relative latency. After the new presidential team took office, there was an extensive audit period of a major infrastructure project in Senegal, which penalized activity in 2024. Since Q2 2025, the market is accelerating, supported by solid demand. Highway projects such as Dakar-Saint-Louis and Mbour-Kaolac, as well as most specialized infrastructure projects, including preparatory works for the port of Hendayem and coastal reinforcement works on Gorée Island, all require basal work and represent strong upcoming growth drivers. Moving now to slide 11, on our energy bill and the way we manage our exposure to energy costs. In 2025, the group energy bill amounted to 513 million euros, representing around 13% of group revenues. This cost base is mainly composed of fuels used in our processes, which account for slightly more than half of the total, followed by electricity, which represents around one-third of the bill, and transportation fuels, mainly related to logistics activities. If we take a closer look at our thermal energy bill, it is largely based on coal, petroleum coke, and alternative fuels, which are increasingly used as a part of our climate strategy. As a reminder, the base threat to hedge against inflation risk is to increase the rate of alternative fuels. The group is already at 37% in 2025 and is targeting 50% by 2030. Exposure to natural gas remains very limited at group level and is primarily concentrated in the United States. The group has implemented a systematic hedging strategy tailored to each market. For fossil fuels, we typically hedge around six months ahead by combining inventories and orders in transit. For electricity, we deploy hedging only in countries where power markets are deregulated. In other countries, electricity is managed locally under regulated tariffs. Finally, for transportation fuels, we use indexation mechanisms and, when necessary, voluntarily price increases to mitigate higher diesel prices. Altogether, this hedging policy provides effective protection against short-term volatility. However, it does not make us immune to a prolonged increase in energy costs. which is why we monitor very closely the evolution of the situation in the Middle East and its consequences for energy markets. Turning now to full year outlook on slide 12. While the Q1 performance marks a solid start for the year, we remain cautious and mindful of the persistent macroeconomic and geopolitical uncertainties. Therefore, the group confirms its outlook for 2026, which is a slight growth in both sales and EBITDA on a like-for-like basis, and net industrial capex of around 290 million euros. This is, of course, subject to the absence of significant escalation or prolonged continuation of the conflict in the Middle East, given its potential impacts on energy costs and on the macroeconomic environment. And lastly, let me reiterate on slide 13 that while the current international environment clearly calls for presence, ICA is well positioned to benefit from significant medium-term growth drivers across all its regions. Several of them have already become visible. Firstly, CanSix in Senegal is already improving significantly on operational costs in Africa. In France, the TELT project will provide multi-year support to activity. The gradual recovery of the French residential market, when it materializes, will represent an important catalyst for the group. While the pace of recovery is likely to remain measured in the near term, the leading indicators are still well-oriented. In the US, residential recovery remains at a low level, which implies meaningful recovery potential once interest rates become more supportive. Some emerging markets in the Mediterranean area offer attractive mid-term growth opportunities, including potential reconstruction needs once current conflicts eventually resolve. To conclude this presentation, we believe that VICA is well positioned to combine resilience in today's environment with attractive growth opportunities for the years ahead. This reinforces our confidence in the group projectory and value creation potential. Thank you for your attention, and I will now take your questions.

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