Operator: Welcome to the Vicat 2026 Q3 sales 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 Hugues Chomel, Deputy CEO and Group CFO, and Pierre Pedrosa, Head of Investor Relations. Please go ahead.
Hugues Chomel: Good afternoon, ladies and gentlemen. Welcome to the Vicat Q3 trading update presentation. I am Hugues Chomel, Deputy CEO and CFO of the Vicat Group, and I am joined today by 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 markets and should not be regarded as forecasts. Let me start with the key highlights of the quarter on slide three. Despite an environment that remains complex, Vicat once again delivered strong top-line growth. Sales were up by 10.2% on a like-for-like basis in Q3. This marks our sixth consecutive quarter of positive like-for-like growth and the fifth quarter in a row in which we have outperformed the industry.
Hugues Chomel: This consistent performance highlights the strength of our positioning, the good balance of our geographical mix, the quality of our product offering, and the ability to translate these strengths into sustained commercial momentum. On a reported basis, sales were up 9.6% as currency headwinds continued to ease. The trends we observed in H1 remain firmly in place. The recovery of our operation in the US continues. All our emerging countries are growing, with the exception of Mauritania, and pricing remains firm across most geographies against a backdrop of continued inflation pressure on energy costs. In the back of this solid performance, we are upgrading our sales guidance for the full year. We now expect like-for-like growth of 8% to 10% as we are confirming our EBITDA growth guidance at +5% to 9% like-for-like.
Hugues Chomel: Finally, on 1 October, we announced that we have entered into exclusive negotiation with Cemex to acquire the ready-mix concrete and aggregates business in the southeast of France. I will come back to this in a few minutes. Moving to slide four. With 10.2% like-for-like sales growth in Q3, we maintain a strong momentum observed in H1. Starting from the left of the graph, Europe was down EUR 12 million on a like-for-like basis, or -2.9%, impacted by a slowdown in volumes in France and to a lower extent Switzerland. Price momentum partly offsets lower volumes. The Americas grew by EUR 21 million like-for-like, or 8.7%, driven by the continued recovery in the United States and the sustained momentum in Brazil.
Hugues Chomel: Asia-Mediterranean remained the top performer in Q3, growing by EUR 70 million, or 27.6% like-for-like, driven by volume growth across the region, with notably an acceleration in India, as well as price increases in Kazakhstan, Turkey, and Egypt. Africa also delivered strong growth, adding EUR 22 million, or 26.6% like-for-like, with solid performances in Senegal and Mali. Change in scope added EUR 7 million, or +0.7%, reflecting the contribution of REALMIX in Brazil, consolidated since September 2025. Lastly, FX remained a headwind, but continued to ease at -EUR 13 million, or -1.4% in Q3, after -3.7% in H1. Let's now take a look at the nine-month picture on slide five. Group sales reached EUR 3.1 billion, up 10.6% like-for-like. In Europe, like-for-like sales were broadly stable at -0.4% over nine months. In France in particular, the market remains sluggish.
Hugues Chomel: The country now accounts for less than 29% of group sales, compared with over 31% a year before, as our international growth gradually dilutes its relative weight. The Americas delivered solid like-for-like growth of 7.6%. Reported growth was higher at 10.1%, supported by the integration of REALMIX, while FX was only a slight headwind. Asia-Mediterranean remains the strongest contributor to the group performance, up 27.7% like-for-like. Reported growth was lower at 15.7%, reflecting continued FX headwind. Lastly, Africa grew by 26.3% like-for-like, with a good performance in Senegal and Mali. Overall, sales grew double digit in all regions outside of Europe over the first nine months, while Europe remained resilient. This illustrates once again the strength of our balanced geographical footprint and the benefit of our exposure to emerging markets. Let's now look at our nine months sales evolution from another angle on slide six.
Hugues Chomel: Like-for-like growth was primarily driven by pricing, with a price effect of EUR 226 million over nine months. Our team did an incredible job at maintaining strong pricing discipline across almost all geographies in order to offset energy cost inflation. Volumes contributed a further EUR 78 million, driven by emerging markets and the US. FX remained a headwind at -2.9%, although the drag continued to ease quarter-after-quarter. Lastly, change in scope added 0.9%, reflecting the contribution of REALMIX. Altogether, sales grew by 8.6% on a reported basis. Moving to the proposed transaction with Cemex on slide seven. We have entered into exclusive negotiation to acquire 48 ready-mix concrete plants and nine aggregate quarries in the southeast of France. This is a highly complementary acquisition with strong medium-term value creation potential. The strategic rationale is threefold. First, geographical complementarity.
Hugues Chomel: These assets will strengthen our presence in the Rhône Valley and in the Provence-Alpes-Côte d'Azur region, including the Marseille-Nice corridor. Second, vertical integration. We will reinforce our access to cement and aggregate end markets while generating industrial, commercial, and logistics synergies across our operations. Third, decarbonization. We will be able to accelerate the rollout of our DECA low-carbon brand in France, which is among the most advanced in the market. The acquisition remains subject to the approval of the French Competition Authority, and we aim to complete it before the end of the year. Overall, this is exactly the type of selective value-creating bolt-on M&A we pursue, strategic fit with clear synergy potential, and fully aligned with our decarbonization roadmap. Let me now turn to the net debt and leverage on slide 8. After 3 years of steep deleveraging, we remain firmly committed to disciplined balance sheet management.
Hugues Chomel: Taking into account the proposed Cemex acquisition while preserving headroom to seize further targeted value-creating bolt-on opportunities, we have adjusted our leverage targets. We now expect a net debt-to-EBITDA ratio between 1.3 and 1.5 times over the 2026-2027 period. On the financing front, we have announced on 3 November the launch of a Schuldschein private placement for an initial amount of EUR 100 million, with the intention to increase the size depending on investor demand. This is a proactive liquidity management transaction which will further strengthen our financial flexibility and diversify our sources of funding in the current global financial environment. The placement is structured in two tranches for a 3 and 5 years maturities aimed at floating rates. In line with our strategic priorities, we are preserving the capacity to invest and pursue selective bolt-on M&A while maintaining a sound financial structure and rigorous leverage policy.
Hugues Chomel: Let me now take you through our four regions, starting with Europe on slide 9. Europe's sales were down 2.9% in Q3 at EUR 398 million and were broadly flat over 9 months at EUR 1.2 billion. In France, volumes were down in a market that remains sluggish, amplified by the summer heat wave, which slowed the activity and construction sites. Price increases implemented since the beginning of the year partly offset lower volumes. In Switzerland, activity was also affected by the heat waves. We continue to roll out our low-carbon Progresso range. We are also benefiting from mid-single-digit price increase since the beginning of the year. Overall, thanks to pricing momentum, Europe remains relatively resilient over the 9 months despite slower volume from Q3 onward. Moving to the Americas on slide 10.
Hugues Chomel: Sales were up 8.7% like-for-like in Q3 at EUR 283 million and 15.4% on a reported basis. Over 9 months, sales reached EUR 783 million at 7.6% like-for-like and 10.9% reported. The United States cement volume continued to recover, driven by non-residential markets. The pricing environment remains muted, resulting in an unfavorable price-cost spread. Maintenance costs at Ragland remain high in the quarter, with a gradual normalization expected from Q4. In Brazil, cement volumes have stabilized since Q2 at a solid level, while prices are up strongly year on year. Concrete and aggregates continue to show positive momentum, supported by the integration of REALMIX. Both currencies, the US dollar and the Brazilian real, were a tailwind in Q3. In a nutshell, the region is currently benefiting from two complementary growth drivers, the recovery of US operations and sustained momentum in Brazil.
Hugues Chomel: Turning to the Asia-Mediterranean on slide 11, once again benefiting from strong momentum. Sales grew by 27.6% like-for-like in Q3 to EUR 301 million. In India, cement in Q3 and prices remain resilient year to date. The mid-single-digit price increase was implemented mid-October. In Kazakhstan, volume normalized and were slightly up in the quarter while prices continue to rise. In Turkey, volumes kept growing despite higher comps, while price continued to increase in the context of hyperinflation. Maintenance costs remain high in the quarter and are expected to normalize in the coming months. In Egypt, domestic activity was solid, supported by infrastructure demand, with prices down against a high comparison base. In the export markets, pricing remained strong, more than offsetting lower volumes since the beginning of the year. FX remained a headwind across the region, except for the Kazakh tenge.
Hugues Chomel: Despite the currency drag, Asia-Mediterranean remains a strong contributor to growth in the quarter, supported by broad-based volume momentum as well as pricing dynamic. Africa, on slide 12, was up 26.6% like-for-like in the quarter at EUR 105 million. In Senegal, cement volume grew slightly, and pricing continued to benefit from the increases implemented in the H1. Aggregates continue to keep growing despite demanding comps, supported by infrastructure demand, with stable prices in the quarter. In Mali, the recovery continued despite a security and political environment that remains complex and volatile, with accelerating volume growth and higher prices. In Mauritania, cement activity was down in the Q3, following disruptions in the public power supply. Overall, Senegal and Mali continue to drive strong growth in Africa. Turning to the full-year guidance on slide 13. Based on our solid year-to-date performance, we are upgrading our sales growth target.
Hugues Chomel: Now expect growth of 8% to 10% on a like-for-like basis over the full year, up from 7% to 9% previously. Our EBITDA growth guidance remains unchanged at 7% to 9% like-for-like. As previously mentioned, EBITDA in the H2 will grow at a more moderate pace compared to the H1 due to the growing impact of higher energy costs, which was mitigated by hedging in H1, and to a tougher comparison base in some geographies. These factors are fully reflected in our guidance. Lastly, our net CapEx objective also remains unchanged at around EUR 290 million. To conclude, Vicat delivered another strong quarter in a challenging environment, confirming the strength and the resilience of our model. We have now delivered six consecutive quarters of positive growth, consistently outperforming our industry and demonstrating a strong positioning across all markets.
Hugues Chomel: At the same time, we remain disciplined in the way we allocate capital. The proposed Cemex transaction illustrates our selective approach to external growth, targeted bolt-on acquisitions that strengthen our existing positions, create synergies, and support long-term value creation while preserving a solid balance sheet and maintaining strict financial discipline. Thank you for your attention, and I will now take your questions.
Operator: Please note that we will take audio questions from analysts only. You can request to speak via the green hand icon. We kindly ask investors to submit questions via the chat box below the player. The next question comes from Auguste Deryckx from Kepler Cheuvreux. Please unmute your microphone.
Hugues Chomel: August?
Auguste Deryckx: Okay. Hello. Hello.
Hugues Chomel: Hello. Ça y est. Oui, oui.
Auguste Deryckx: Bonjour. Désolé, il y a un petit problème. Je vais le faire en anglais. Thanks for the presentation and congrats for the very strong results. I have two questions. The first one is on the US. The performance was driven by Brazil and non-resi in the US. My question is, if we assume no recovery of the housing market over 2027, do you still see room for volume growth and margin expansion in this region? If yes, what will be the key drivers for that? The second question is on CapEx. You have a kind of low level of CapEx this year. Can we say that some CapEx are delayed and so potentially leading to higher CapEx in the next years? Or somewhere around 300 is the new normative level?
Hugues Chomel: Thank you for your question, Auguste. Regarding the US market trends, this year, our US operations are growing significantly, but compared to a particularly weak 2025 comparison base for various reasons you may recall. The US economy obviously remains very dynamic, notably in the non-residential sector. We do still see that as well as some demand. On the other hand, the recovery in the residential market remains contingent to a decrease of the mortgage rate, and we don't foresee that in the near future. So, those are our views on pricing. Pricing this year has been so far disappointing and quite muted, and is weighing on the industry margins. We really believe that there is a need for strong price increases at the beginning of next year, and we will give them the inflation context.
Hugues Chomel: On your second question on CapEx, we do not see a strong rebound of CapEx coming in the short term. You can, in the short term, consider that as a new normal. Beyond that, at some point, we will probably engage into large decarbonization CapEx, but that will be staggered on years. They will not impact significantly 2027.
Auguste Deryckx: Okay, very clear. Merci beaucoup, Hugues.
Operator: The next question comes from Ibrahim Homani from CIC. Please unmute your microphone.
Ebrahim Homani: Hello, Hugues. Hello, Pierre. Congrats for the results, and thank you for taking my questions. I have three, if I may. The first one is about the guidance, which implies an EBITDA margin between 19.5% to 20.2%. Where do you expect to land within this range? Be more than 20% or less than 20% of 2025? My second question is about energy costs in H2. What level of increase should we expect in H2 in terms of energy costs? My last question is about Cemex. Could you maybe give us some favor on the sales and EBITDA impact of this acquisition on your P&L for 2027? Thank you very much.
Hugues Chomel: Yeah, thank you for your question, Ibrahim. On the guidance, indeed, the figures you mentioned are the extreme of the two brackets we did guide on. As you have probably observed, we did disclose two brackets because there is still uncertainties. I will not be able to make it more precise today. Nevertheless, 20% remains our target, and we will certainly not be too far off from it, but depending on how the last month of the year do unfold. Regarding the, I may respond first to you on acquisition on Cemex. Obviously, we are still not in a situation to disclose a lot of detail as the negotiation is getting finalized, and we still are in the process of getting the approval of the French Competition Authority.
Hugues Chomel: Nevertheless, I can give you an order of magnitude of the revenues we would consolidate, which would be around EUR 100 million. It can still vary depending on the carve-out we may have to do depending on the French Competition Authority's decisions. At the current low level of the French market, we do not expect to see a significant impact on French margin in the short term. In medium term, we do believe that the synergies will be extracted and will generate value. Regarding energy costs, as you know, we have a hedging policy that is aiming to cover consumption six months forward. So, we have a pretty clear view of what is coming towards the end of the year, and obviously, costs are increasing quarter after quarter. However, the real hedge on energy prices is price increases.
Hugues Chomel: So far, we have been able to pass through the energy cost inflation to the market through the strong price increases, as demonstrated during the presentation. We do expect to see a cost increase in Q4. Lastly, we are not hedged on transportation fuels. That remains very volatile and can create a little bit of uncertainty, obviously, on a smaller cost base.
Ebrahim Homani: Thank you very much.
Operator: The next question comes from Artus Peau from On Field Investment Research. Please unmute your microphone.
Arthus Piot: Hi, thank you very much for taking my questions. I actually have four of them, so I will maybe go through them one by one so that is easier. The first one is on margin. Your H2 guidance implies some organic margin pressure, which you attribute to energy cost maintenance and base effects. Could you quantify the EBITDA impact of maintenance in H2, particularly, sorry, at Ragland, and confirm whether this issue will be fully resolved by year-end? Given that Ragland major upgrade was like four years ago, what explains the persistent maintenance costs?
Hugues Chomel: Yes, thank you for your questions. As we have disclosed when we guided at the end of H1, there are several structural reasons for EBITDA growth to slow down in H2. The first one is the less comparison H2 last year, where we had several of our countries accelerating significantly in H2, namely Brazil, Egypt, Turkey, and Senegal, with the first effects of CEM VI. As you know, CEM VI was an important driver of EBITDA growth in H1, and it will still be in H2, but there was already a significant contribution last year in H2. So, the base effect is significant. Secondarily, can you mute your mic? Little bit of noise. Thanks. Secondarily, we do see rising energy costs quarter after quarter. We raise prices to offset it, but the pressure is more important as we go into the year.
Hugues Chomel: On the maintenance costs, they have been substantial, but they are normalizing, and we do expect this situation to be under control. Yes, I will be happy to take your other questions.
Arthus Piot: All right. Just a follow-up on the Ragland maintenance cost. Can you explain to us what they are about? What is the nature of these costs?
Hugues Chomel: I do not want to go into detail, but a plant that is after 4 years is entering a normalized maintenance cost cycle, and it is nothing to be too worried about. It will go back to normal.
Arthus Piot: All right, thanks. The next one is concerned, like, cost inflation in 2027. What do you expect in terms of cost inflation? Because some European peers anticipate mid to high single-digit inflation and price increases of around 5%. Is that consistent with your expectation, and have you announced similar increases in Europe? What about the US? Is it the same thing? Because we saw some of your peers increasing prices as well in the US starting 1 January. Have you already started doing that, or are you waiting?
Hugues Chomel: As a general comment, it is too early to give elements on 2027. Nevertheless, in the US specifically, as I mentioned a few minutes back, indeed, the cost inflation is significant. The price cost has been negative in the last 2 years, and we do see a strong need for price increase at the beginning of the year. It is not yet announced.
Arthus Piot: All right, thank you. Then a more specific question on France. Are political, like, uncertainty and social unrest affecting construction activity in Q4? How do you see the outlook for 2027, particularly with, like, the presidential elections?
Hugues Chomel: Yes. On France, we do not see a strong link between political situation and short-term consumption. Nevertheless, the recent volume trends have been disappointing, and the political landscape, as well as the recent unrest, do affect the business confidence, but itself affects the investment cycle. As such, it is negative headwinds for the French activity.
Arthus Piot: All right. Thank you very much. The last one is on the US outlook, given the recent midterms. Following the midterms, do you see potential policy changes affecting construction demand in 2027? In particular, are you concerned about tighter data center regulation? Conversely, could a potential easing of tariffs and de-escalation of the war with Iran help reduce inflationary pressure, improve affordability, and therefore support the recovery in residential construction?
Hugues Chomel: Well, obviously, it is a little early to draw all the conclusions from the midterms. On the data center story, it has been a contributor to the growth of the non-residential sector, for sure. Nevertheless, it is a few percent of the global consumption, so I do not see that as a major movement as far as cement is concerned. Obviously, a de-escalation with Iran and with these consequences on energy prices would be a very important factor. Nevertheless, when you see the current level of mortgage rates, it will take several decreases of leading rates before they are back to a supporting level for residential construction. So we do not see that happening in the short term.
Arthus Piot: All right. Thank you very much.
Operator: The next question comes from Chaima Ferrandon from ODDO BHF. Please unmute your microphone.
Chaima Ferrandon: Hello. Thank you for taking my questions. I have two. A follow-up on the US, volumes look positive, driven by non-residential and data centers. Can you elaborate on the different dynamic between California and Southeast, and what can we expect going forward? The second one is for India, you announced a 4% to 5% price increase in mid-October. How customers have reacted so far, and is the increase going through easily? How confident are you that it can stick given the competitive context there?
Hugues Chomel: On US, we have seen positive volume trends in both regions, with different comparison base. Specifically, we had an easier comparison base in California. In both regions, there is a strong contribution from a non-residential sector, but not a large part linked to data centers. It is substantial project by size, but as a percentage of demand, as mentioned before, it remains relatively limited. As far as India is concerned, indeed, we did place a price increase mid-October. It has been well accepted by the market. I believe that, although it is a very competitive market landscape, everybody's feeling the heat of energy prices, and therefore, everybody's starting to be rational with the need of price increases after a year of flat prices and increasing input costs. I do believe that this price increase will stick, nevertheless, and we still see pretty strong volume growth in this market.
Chaima Ferrandon: Thank you.
Operator: The next question comes from Ephrem Ravi from Citigroup. Please unmute your microphone.
Ephrem Ravi: Oh, hello. Two questions. The first one, can you remind us what your alternative fuel rate for 2026 would be? Last year, I think it was about 37%, and I know you have got a target of 50% by 2030, but what would it be by end of 2026? How much is that kind of helping to mitigate the fuel cost increases that you are seeing, your increased adoption of alternative fuels?
Hugues Chomel: Yeah. Alternative fuels was indeed 37% last year. It has been going down slightly since the beginning of the year for different local regions, and a slightly unfavorable volume mix, with volumes growing in some markets where the level is still low. It should be more or less closed from last year's by year end. It has not been a mitigating factor this year. It is structurally one, and it is supporting the business case of increasing alternative fuel rates going forward, as well as decarbonization. We are still committed to the 50% alternative fuel rate, and we do believe we will be in line with it.
Ephrem Ravi: Okay. Thank you. So second question, just on your increased net debt-to-EBITDA guidance from 1x end of 2027 to 1.3x to 1.5x. I mean, everything else being equal, that implies an increase of net debt guidance by about EUR 300 million to EUR 450 million by end of 2027, and you are already in November 2026. Other than the Cemex deal, how much more bolt-ons would you see? I know you cannot speak about the price on the Cemex deal, but given sales of around EUR 100 million, it does not look like it is triple-digit million. Is there a lot of cushion in that net debt-to-EBITDA guidance range for further bolt-ons, or is there something that we are missing?
Hugues Chomel: Yes. Obviously, as we mentioned, we want to both accommodate the Cemex deal as well as other potential targeted external growth opportunities. So, we could, depending on the opportunities, close other deals within this timeframe. Secondly, this range that we have defined is there as well to accommodate the different hypotheses on the closing dates of the different deals, depending whether this deal close at the end of the year or slightly at the beginning of following. I would like to remind you as well, as we have launched a process to buy out the minority of Sinai Cement in Egypt last year. This has not yet been approved by the market authority, but the day it is approved, we could implement it. So we have factored that inside as well. So, those are the elements I can share with you.
Ephrem Ravi: Thank you.
Hugues Chomel: Tu as des questions concrètes?
Pierre Pedrosa: Non.
Hugues Chomel: Je comprends rien.
Pierre Pedrosa: We have one question on Turkey. Global volume in the Turkish market are slightly declining on a year-to-date basis. How do you explain the resilience of Vicat volumes in the region? Is it due to regional mix? Thank you.
Hugues Chomel: Yes. As you may know, we are present mostly in Anatolia with plants and ready-mix concrete in the Ankara and Konya market, at the north and the south of the Anatolian region. We do have a strong footprint in that region, and we are absent in the other regions of Turkey. So far, we have seen still very sustained consumption in this market, specifically with population movement from the earthquake areas to the Ankara area over the year that has driven increased consumption.
Pierre Pedrosa: We have another question on group's transportation costs. You mentioned that transportation costs are not hedged. Is the internal quarry cost trucking, it is by diesel price increase? Do you pass through those incremental costs to final customers?
Hugues Chomel: We have mentioned that transportation fuels are not hedged because we do not have. In most markets, those are regulated prices that we cannot hedge. Indeed, we do have a significant increase on those costs, and we do aim to increase. I mean, they do not all use diesel, but it is simplified. We aim to cover this cost through the price increase and the fuel surcharge that we have on our products. Indeed.
Pierre Pedrosa: The last question on the Cemex operation. Could you please clarify the timeframe and when we should expect the integration of the assets?
Hugues Chomel: Depending on the timing of the French Competition Authority, this could close at the end of this year, and then it would be a 1 January integration or 31 December integration, or slightly after, at the beginning of next year. Our aim is to close as soon as we can, and we are doing whatever is in our hands to make that happen.
Operator: Thank you. There are no more questions at this time. I hand the conference back to the speakers for the closing comments.
Hugues Chomel: Ladies and gentlemen, thank you for joining us today and for your attention through this presentation. Our next event will be the full year 2026 results on 15 February 2027. In the meantime, Pierre and myself remain available, and we are looking forward to meet you during the next roadshows and conferences. Thank you and goodbye.
