6 - Vicat

9EXAMINATION OF THE FINANCIAL CONDITION AND RESULTS9.2. COMPARISON OF RESULTS FOR 2009 AND 2008mainly the result of the deterioration of market conditionsin France, the United States and in Turkeydespite good performance in the other markets.Consolidated sales in the cement business increasedby 2.3 %, and 1.2 % at constant scope and exchangerates. Volumes were slightly up with a marked dropin the United States and France, and strong growthin the Africa/Middle East region. Prices continue toincrease in all markets except in the United Statesand Turkey where they are dropping because of thedifficult competitive conditions.Personnel costs have increased by 1.8 % and taxesand duties have gone up by 75.5 % compared to theprevious year, to approximately € 37 million, due tothe fact that the tax on cement paid for in Egypt, fornearly € 16 million, was recorded in this line in 2009and in another line in the 2008 accounts for approximately€ 8 million.By country, changes in the operating profit of theCement business raise the following observations :• In France, the Group sales decline to 12.2 % at constantscope, due to a 14.7 % reduction in volumes,slightly compensated by selling prices which heldup well. On these basis, the EBITDA margin on operatingsales remains solid, although it is slightlydown compared to 2008. The impact of the drop involumes and the increase in energy costs was onlypartially offset by the rise in sales prices and theeffects of the additional “Performance Plus” planto reduce costs.• In the United States, consolidated sales went downby 34.9 % at constant scope and exchange rates,affected by a considerable drop in the volumessold, particularly in the South East. The sales pricedropped considerably over the year which wasparticularly impacted by a consistently difficultcompetitive environment in California. Despite thesignificant effort made, involving reducing costsas decided as part of the additional “PerformancePlus” plan, the EBITDA registered a very significantdecrease.• In Switzerland, consolidated sales at constantscope and exchange rate saw a rise of nearly 9 %.This positive performance is the result of a major increasein volumes sold during the second half of theyear (+5 %) in a favorable pricing environment. Thesuccessful restart of the Reuchenette kiln, implementedin the summer as part of the “Performance2010” plan, stopped the external purchases of clinkerand played a key role in the steady improvement ofthe EBITDA margin.• In Italy, sales have decreased by 12.7 %, largelyexplained by a 10.4 % decrease in volumes due tothe difficult macro-economic environment and afiercely competitive context. However, the EBITDAmargin improved very significantly, essentially benefitingfrom the marked reduction in cement andclinker purchases.• In Turkey, sales volumes have decreased by morethan 2 % for the whole year. This drop was graduallyevened out during the year, the Group registereda growth in volumes sold in the second semester,and specifically during the last quarter with a riseof nearly 12 %. Lastly, while sales prices still saw areduction of around 7 % for the whole year, they didregister a slight rise in the last quarter comparedto the same quarter in 2008. Operating sales decreasedby 22.4 % in euros and 12.1 % at constantscope and exchange rate.• In West Africa, consolidated sales are up by 17.2 %,12.5 % at constant scope and exchange rate, takinginto account the increasing volumes and welldirectedprices. The EBITDA margin rate is howeverdown for the whole year because of the higher fuelprices and the increase in external purchases ofclinker during the 1 st half of the year in Senegal andthe disruption to the power supply in Mauritania inthe second half of the year.• In Egypt, consolidated sales for the whole yearreached € 196 million, a rise of 66.7 % at constantscope and exchange rate. The doubling of the capacityof the Sinai Cement plant in the 2nd halfof 2008, allowed Vicat to capture volumes fromthe dynamic Egyptian market. In a year which wassignificantly affected by unfavourable governmentmeasures (a rise in gas prices and the “clay tax”),the Group took advantage of a positive change insales volumes and the rise in the sales price to considerablyincrease its EBITDA whilst restricting thedecrease of its margin. This excellent performanceis the result of ongoing efforts to improve productivityand industrial efficiency which have beenimplemented as part of the "Performance 2010"plan.78 VICAT - 2009 registration document