Good day, welcome to the Vicat Q1 Sales 2023 Conference Call. Today's call is being recorded. At this time, I would like to hand the call over to Hugues Chomel, Deputy CEO and CFO of Vicat Group. Please go ahead.
Good afternoon, ladies and gentlemen. I am Hugues Chomel, Deputy CEO and Chief Financial Officer of the Vicat Group. With me is Stéphane Bisseuil, our Investor Relation Director. I will be presenting to you on Q1 2023 sales figures. Before starting the presentation, please have a look at slide two, where you can read our disclaimer regarding the forward-looking statements that this presentation may contain. Let us begin with the highlight of the period on slide three. Vicat's first quarter sales of close to EUR 900 million demonstrate the resilience of demand. The increase in consolidated sales was almost 20%, even when compared to a very good first quarter 2022 figures. This smart progression was driven by significant increases in selling prices.
Amid viable winter weather conditions, especially in California and Turkey, the group has pushed ahead with the ramp-up of its new installation in Alabama, and accelerated its strategy of improving its manufacturing performance and shifting away from fossil fuels to achieve its operational and environmental objectives. Let's move to France on slide four. In the first quarter of 2023, supported by strong increase in sales prices, group sales in France increased despite an unfavorable base effect. The cement business operating sales were up 21%. Taking into account an unfavorable basis of comparison linked to the dynamism of French market over the same period of last year, this performance reflects a slight contraction in demand, which was largely offset by strong increase in sales prices to compensate for the sharp rise in cost over the last 18 months.
Concrete and aggregates operating sales were up 2%. This evolution resulted from a decline in volumes offset by a significant improvement in sales prices over the quarter. In other products and services, operating sales increased by 4.5%, particularly in transport and building chemicals. Please turn to slide five. Business in Europe, excluding France, was down in the first quarter of 2023 in a mixed environment. In Switzerland, consolidated sales were down 8.6% at constant scope and exchange rates. The cement business operating sales increased slightly by 2%. This performance is the result of a decline in demand during the quarter, offset by a significant increase in prices. In the concrete and aggregate business, operating sales decreased by 14% as price increases in both concrete and aggregates could not compensate for lower volumes.
Other product and services operating revenues was down 12% compared to the first quarter of 2022, which was a high basis for comparison. In Italy, consolidated sales rose by 27%, due in particular to a significant increase in average sales prices. Moving now to the Americas on slide six. In both the U.S. and Brazil, the construction sector remained resilient in an environment marked by decline in volumes offset by a solid increase in sales prices. In the United States, the macroeconomic and sector environment remained generally favorable despite a particularly unfavorable basis of comparison in California, given the high level of demand recorded in the first quarter of 2022, and the exceptionally adverse weather conditions at the beginning of this year.
In the cement business, operating sales increased by 4.5% at constant scope and exchange rates over the period, resulting from the significant price increase that offsets the decline in volumes in California due to very poor weather conditions in the first three months of the year. The ramp-up of a new Ragland kiln resulted in a significant increase in volumes over the period in this region. In the concrete business, operating sales decreased by 5%, as higher prices and increased volume in the Southeast did not offset the impact of poor weather conditions on volumes in California. In Brazil, consolidated sales amounted to EUR 62 million at 14%. In the context marked by high inflation and a rapid rise in interest rates, demand was down in the group markets in a price environment that remained favorable.
In the cement business, operating revenues amounted to EUR 48 million at 12%, supported by a strong price increase compared to the same period of 2022. In the concrete and aggregate business, in line with the trends observed in the cement business, operating sales amounted to EUR 22 million, up 21%. On Slide seven, we can examine performance in Asia. Sales in India increased over the period as a whole in the context of high inflation. Prices are on the rise, remain very volatile, particularly at the end of the quarter. Consolidated sales were EUR 101 million at the end of March 2023, up 7%. In Kazakhstan, the group recorded consolidated sales of EUR 10 million, down 21% on a like-for-like basis.
This performance is the result of a significant drop in volumes, taking into account logistical disruption experienced by the Kazakhstan Temir Zholy. The situation is gradually returning to normal. Sales prices remain well-oriented. On slide eight, you have our performance in the Mediterranean region. In this region, sales increased strongly in both countries. In Turkey, the macroeconomic and sector environment remained dominated by high inflation and winter conditions were significantly more favorable than in 2022. As a result, the sales amounted to EUR 65 million compared to EUR 27 million in the first quarter of 2022. The cement business activity was marked by a very strong improvement in sales volumes, supported by weather conditions that were much more favorable than the first quarter of 2022. At the same time, in a context still marked by very high inflation, price increases are particularly strong.
On this basis, operating sales in this activity increased by 259% on a like-for-like basis. Operating sales in the concrete and aggregate business were up 166%. As in cement business, favorable weather conditions at the beginning of the year and significant increases in sales prices supported the business performance in the first quarter of 2023. In Egypt, consolidated sales amounted to EUR 39 million, up 161% at constant scope and exchange rates. The market regulation agreement that has remained in force since July 2021 between the Egyptian government and oil producers helped the continued improvement in domestic sales prices during the first quarter, supported by an increase in demand. On slide nine, you have the numbers for Africa. In Africa, the group continues to benefit from favorable sector demand.
In the cement business, operating sales increased by 16% at constant scope and exchange rates, benefiting from the recovery of the Malian market and the dynamism of the Mauritanian markets, which offset the decline in deliveries to Senegal. Sales prices are up in each country. In Senegal, the aggregates business, driven by the gradual recovery of major governmental projects, posted operating sales of EUR 12 million, up 41%. On slide 10, I turn to the changes in the group's financial position at end of March 2023. At the end of March 2023, the group shareholder equity was EUR 2.8 billion, up from EUR 2.7 billion at the end of March 2022.
Group net debt was EUR 1.7 billion versus EUR 1.5 billion at the end of March 2022, given the significant increase in the working capital requirement with the growth in sales and the impact of inflation on inventories. On slide 11, you have our outlook for 2023 that is unchanged. In 2023, the group is targeting further significant sales growth with its market overall expected to display resilience and reflect the full benefit of the price hikes in selling prices implemented in 2022 and the fresh increases introduced in 2023. Performance in 2023 will reap the full benefit of the new Ragland kiln, elimination of an non-recurring costs incurred in 2022, and the stabilization in energy costs with increase in these now reflected by higher selling prices.
Taking these factors into account, the group 2023 EBITDA is expected to rise toward a level at least equivalent to that recorded in 2021. This concludes our presentation. Kevin, can we move to questions, please?
Certainly. If you would like to ask a question, please signal by pressing star one on your telephone keypad. Please ensure that the mute function of your telephone is switched off to allow your signal to reach our equipment. Again, please press star one to ask a question. Our first question today comes from Ebrahim Homami of CIC.
Hello, Hugues. Hello, Stephan. I have three questions, if I may. The first one is about the strong performance in France. Could you confirm that cement volumes in France were positive in the Q1? My second question is about the U.S. volume. Could you please give us the Ragland contribution. Of the increasing volume in the, in the, in the U.S. My third question is about the decrease in volumes of ReadyMix. Is it due to a higher exposure to the residential market?
Nuno, thank you for your questions. As you noticed, we are not disclosing volumes by market. Nevertheless, we have witnessed resilient volumes in France, in Cement. As far as Ragland is concerned, we have witnessed significant progression of volumes in line with our expectations. As you probably noticed, that has partially upset the significant downturn of volumes in California due to the weather condition. As far as ReadyMix is concerned, I mean, the globally ReadyMix are exposed to residential market. You have as well to keep in mind that we do not operate ReadyMix concrete in all our territories. Therefore, the difference in volume performance is as well the result of a geographical mix. Okay, thank you very much.
Our next question comes from Yves Bromehead of Societe Generale.
Good afternoon, gentlemen. Thank you for taking my questions. First I'd like to start by thanking Stefan for all those good years, and I wish him all the best in his future career. Thanks St é phane. Moving on maybe to my question, just on California, sorry, you flagged that the office space industry is starting to show some pressure. I was just wondering if you could elaborate on that, and if you would expect California to contribute positively in terms of volumes for the full year, or if maybe you expect the pressures there to increase over the course of the year, given the regional bank crisis. That's question number one.
Just question number number, just to try and clarify with the start of the year, just the direction of travel compared to what you've mentioned earlier this year for the outlook. Are you more confident or are you potentially seeing some weakening spots? I think you flagged Switzerland and a few other geographies. Just wanted to get a bit of clarity on the outlook here. Thank you.
Yves, Stéphane Bisseuil speaking. Thank you for your words, highly appreciated.
That's it. Hugues?
Thank you. Thank you, Yves. For California, the full year expectations, you have to keep in mind two or three factors. First of all, 2022 was a very high basis of comparison. It was the historical records volumes that we recorded in California. It's a tough base of comparison. Second thing is, as we flagged, we had real difficult weather with constant rain, even snow in March in Los Angeles, which is rather unusual. This will be difficult to compensate on a full year basis.
Beyond that, we see as mentioned, a slowdown in of commercial offices. At the same time, there is a significant activity going on logistical platforms, large, what they call big-box links to the e-commerce, but drive rather strong volumes. As well in California, some significant realization linked to infrastructure. All in all the demand trend past those weather incidents is not so bad. We, there is It's a little early to tell whether we will have some impact of the bank crisis on the sector.
On the, your second question regarding the evolution of the guidance, as you have seen, we have maintained our guidance globally unchanged, so we are not having a different overall view on the expectation for the full year. We adjusted marginally certain countries up or down, depending on the start of the year. Overall, no modification in our full year expectation.
Okay, thank you very much.
Again, please press star one if you'd like to ask a question. The next question today comes from Arnaud Pinatel of On Field Investment Research.
Yes. Good afternoon, gentlemen. I will also say all the good things I thought about Stefan, thank him for all this year, for his professionalism and his transparency, and we will regret him definitely. Having said that, my question would be on France first. I was hearing, Hugues, that you were mentioning a relative resilient volume in Q1, when we look at the most recent housing permits, I think for Q1, they were down by more than 30%. Does it mean that we have not seen yet in France the impact, the negative impact of the new construction trends, on the cement demand? Should we expect it ahead of us, for example, in the second part of the year? That will be my first question.
My second question will be on pricing. We are hearing that producer in the U.S. are not seeing a second price increase of July. I just wanted to understand if you are also planning a second price increase in the U.S., and is it possible to increase prices in California especially? That will be my second question. I think that's it. Thank you very much.
St é phane? Yeah. Thank you. Thank you, Arnaud, for your kind words also.
Yeah. Thank you, Arnaud, for your questions. On France, well, I see the statistics as you do. Obviously, there is always a time lag between permits and the trend we observed. This has been fluctuating a bit in the recent months. Nevertheless, we do expect a slowdown in residential. We already feel it in Ready-mixed concrete, where the volumes are show some sensible decrease this year. We do not see it exactly the same way yet in cement. I believe that geographical mix may, and the infrastructure size may be the part of the difference. On pricing, in U.S., we have increased prices in both region in Q1.
We do believe that there may be some additional room for price increases probably. Of course, if there is an opportunity, we will try to pursue it. It will reflect probably the tension in the supply market and what is different in between the Southeast and California. We do believe that there is still a substantial tension in supply in Southeast. Very clear. Perhaps just to follow up on prices. In Europe, we see a strong momentum in Q1, I suspect that for the rest of the year, knowing that, especially in France, if you believe the volumes are going to be to slow down, we cannot expect another price increase. Cause I thought you had, at one point, announced something for April.
I don't know if it's still.
You know.
implemented or not.
Our views early in the year and at the end of last year and earlier this year was expecting further rise in energy prices. We had positioned indeed a second price increase to make up for this further increase in energy costs. As this energy, further energy increase has not materialized, there is not the need for now for a further price increase. We will stay flexible and try to protect our margins as we had we were late on cost recovery last year. The current pricing is up to the current energy levels.
Okay. we can see Ready-mixed concrete prices increasing also. we can see Ready-mixed concrete prices increasing. Does it mean that you are also relatively confident to see no erosion of prices in France for the rest of the year?
You know, you know as I do that, this is a very competitive business. We will do our best to protect the margins, but we'll have to adjust with whatever the market requires. There is a cumulative cost increase for the last 18 months that has been significant, and that has justify our price increases. We believe that this is a global market condition, and we'll do our best to keep it that way.
Very clear. Thank you very much for this answer.
As a reminder, if you do have a question, please signal by pressing star one on your telephone keypad. It looks like there are no further questions, so I'd like to hand the call back to Mr. Chomel for any additional or closing remarks.
Thank you very much. This concludes our call for today. It's as many of you know, St é phane will be leaving us on June 30th, and I will join my own words to yours to thank St éphane for his contribution to Vicat over the last 16 years. Thank you very much, Stefan. We wish you the very best for your future endeavor. I will be ensuring the interim until our new hire is in place, so do not hesitate to reach out to me from July onwards. We will be publishing our half year results on July 26th. With that, I thank you all for your interest in Vicat. Have a good day.
That does conclude today's conference call. We thank you all for your participation. You may now disconnect.