Welcome to the Vicat 2026 Third-Quarter 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.
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.
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 U.S. 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. On 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%-10%, as we are confirming our EBITDA growth guidance at +5%-9% like-for-like.
Finally, on October 1st, 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.
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 the first half. 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.
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-month sales evolution from another angle on slide six.
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 U.S. 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 aggregates 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.
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 aggregates 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 eight. After three years of steep deleveraging, we remain firmly committed to disciplined balance sheet management.
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 1.3x and 1.5x over the 2026-2027 period. On the financing front, we have announced on November 3rd 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 troubled financial environment. The placement is structured in two tranches for three- and five-year 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.
Let me now take you through our four regions, starting with Europe on slide nine. Europe's sales were down 2.9% in the third quarter at EUR 398 million and were broadly flat over nine 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 on 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 nine months despite slower volume from Q3 onward. Moving to the Americas on slide 10.
Sales were up 8.7% like-for-like in the third quarter at EUR 283 million and 15.4% on a reported basis. Over nine months, sales reached EUR 783 million, up 7.6% like-for-like and 10.1% reported. The U.S. cement volume continue to recover, driven by non-residential market. The pricing environment remains muted, resulting in an unfavorable price-cost spread. Maintenance cost at Ragland remain high in the quarter, with a gradual normalization expected from the fourth quarter. In Brazil, cement volumes have stabilized since the second quarter at a solid level, while prices are up strongly year -on -year. Concrete and aggregate 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 U.S. operations and sustained momentum in Brazil.
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 the third quarter 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 a 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 Kazakhstani tenge .
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 first half. Aggregates 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 third quarter 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 targets.
We now expect growth of 8%-10% on a like-for-like basis over the full year, up from 7%-9% previously. Our EBITDA growth guidance remains unchanged at 7%-9% like-for-like. As previously mentioned, EBITDA in the second half will grow at a more moderate pace compared to the first half 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.
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 acquisition 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.
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.
Auguste ?
Okay. Hello.
[inaudible].
[Non-English content]. Thanks for the presentation and congrats for the very strong results. I have two questions. The first one is on the U.S. The performance was driven by Brazil and non-resi in the U.S. 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 EUR 300 million is the new normative level?
Thank you for your question, Auguste. Regarding the U.S. market trends, this year, our U.S. operations are growing significantly, but compared to a particularly weak 2025 comparison base for various reasons you may recall. The U.S. economy obviously remains very dynamic, notably in the non-residential sector. We do still see that as well as some infra 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. 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, given the inflation context.
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.
Okay, very clear. [Non-English content] Hugues.
The next question comes from Ebrahim Homani from CIC. Please unmute your microphone.
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 the energy cost in H2. What level of increase should we expect in H2 in terms of energy costs? My last question is about Cemex. The Cemex asset, could you maybe give us some flavor on the sales and EBITDA impact of this acquisition on your P&L for 2027? Thank you very much.
Yeah, thank you for your question, Ebrahim. 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. Nevertheless, I can give you an order of magnitude of the revenues we would consolidate.
It should 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 it 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's 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. So far, we have been able to pass through 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.
Thank you very much.
The next question comes from Arthus Piot from On Field Investment Research. Please unmute your microphone.
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?
Yes, thank you for your question. 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 Kiln 6. As you know, Kiln 6 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. The base effect is significant. Secondly, you can mute your mic. A little bit noise. Thanks. Secondly, 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.
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.
All right. Just a follow-up on the Ragland maintenance costs. Can you explain to us what they're about? What is the nature of these costs?
I don't want to go into detail, but a plant that is after four years is entering a normalized maintenance cost cycle, and it's nothing to be too worried about. It will go back to normal.
All right, thanks. The next one is concerned, 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 U.S.? Is it the same thing? Because we saw some of your peers, increasing prices as well in the U.S. starting 1st of January. Have you already started doing that, or are you waiting?
As a general comment, it is too early to give elements on 2027. Nevertheless, on the U.S. specifically, as I mentioned a few minutes back, indeed, the cost inflation is significant. The price cost has been negative in the last two years, and we do see a strong need for price increase at the beginning of the year, but it is not yet announced.
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?
Yes. On France, we don't see a strong link between short, I mean, 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. So as such, it is negative headwinds for the French activity.
All right. Thank you very much. The last one is on the U.S. outlook, given the recent midterms. So 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?
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 don't see that as a major movement as far as cement is concerned. Obviously, a de-escalation with Iran and with its 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 lending rates before they are back to a supporting level for residential construction. So we don't see that happening in the short term.
All right. Thank you very much.
The next question comes from Chaima Ferrandon from ODDO BHF . Please unmute your microphone.
Hello. Thank you for taking my questions. I have two. A follow-up on the U.S. Volume looks positive, driven by non-residential and data centers, but could you elaborate on the different dynamic between California and Southeast, and what can we expect going forward? The second one is for India. You implemented a 4%-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?
On U.S., 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.
Thank you.
The next question comes from Ephrem Ravi from Citigroup. Please unmute your microphone.
H ello. 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've 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're seeing, your increased adoption of alternative fuels?
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 close 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.
Okay. Thank you. Sorry, second question, just on your increased net debt-to-EBITDA kind of guidance from 1x end of 2027 to sort of 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 kind of in November 2026. Other than the Cemex deal, how much more bolt-ons would you see? I know you can't speak about the price on the Cemex deal, but given sales of around EUR 100 million, it doesn't look like it's 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?
Yes. Obviously, as we mentioned, we want to both accommodate the Cemex deal as well as other potential targeted external growth opportunities. 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. We have factored that inside as well. Those are the elements I can share with you.
Thank you.
[Non-English content]
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.
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.
We have another question on group transportation costs. You mentioned that transportation costs are not hedged. Is the internal quarry cost, trucking, its by diesel price increase? Do you pass through those incremental costs to final customers?
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. This is true for internal trucking and quarry equipment. I mean, they do not all use diesel, but let's simplify. We aim to cover this cost through the price increase and the fuel surcharge that we have on our products. Indeed.
The last question on the Cemex operation. Could you please clarify the timeframe and when we should expect the integration of the assets?
Depending on the timing of the French Competition Authority, this could close at the end of this year, then it would be a January 1 integration, or December 31 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.
Thank you. There are no more questions at this time. So I hand the conference back to the speakers for the closing comments.
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 February 15, 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.