6 - Vicat

INFORMATION ON TRENDS12.2. TRENDS AND OBJECTIVE1212.2.1.1. The Group’s business prospects in its marketsThe Group summarizes the salient facts for its variousmarkets that were reported when the 2009 resultswere published.• In France, the Group expects very gradual stabilisationin volumes in 2010, particularly cement, withprice conditions that could remain, at best, veryslightly positive. The initial effects of the stimulusplan announced by the French government shouldhave a very gradual impact on the construction industryin general, particularly infrastructures, whileresidential new builds should benefit from the taxincentives introduced in 2009. Meanwhile, non-residentialconstruction is likely to see a further declineover the full year. The Group should benefit frommore favourable purchasing prices for fuels and thecontinuation of its policy of using more alternativefuels.• In Switzerland, conditions should remain favourableon the whole, with the Group capitalising onthe continuation of major infrastructure projects.The increase in the Reuchenette plant's kiln capacityat the end of the first half of 2009 marked thedefinitive end to purchasing of clinker from externalsources and enables the Group to increase its useof alternative fuels. Lastly, the Group will benefitfrom more favourable purchasing prices for fuelsand continues with its policy of using more alternativefuels.• In Italy, the Group expects market conditions toremain difficult in 2010 both in terms of volumesand pricing. Against this backdrop, Vicat will capitaliseon its niche position and should benefit frompurchasing conditions for clinker and freight, whichare expected to remain favourable.• In the United States, the lack of visibility on botheconomic conditions and potential investment onthe part of States prevents the Group from formulatingany forecasts for 2010, which is neverthelessexpected to remain very difficult. While the implementationof the stimulus plan on a national levelcould have a substantial effect on the Group's markets,the location, type and timing of investmentare still uncertain.• In Turkey, conditions are expected to stabilise verygradually, particularly in terms of volumes. However,continuing fierce competition could have an unfavourableimpact on the development of selling prices.Despite this, the modernisation of the Group's productionfacilities as part of the "Performance 2010"plan gives it the possibility of producing at low cost.The Group should also be able to increase its use ofalternative fuels significantly.• In Egypt, local market conditions should remainfavourable in terms of both volumes and prices.However, the comparison base for volumes willbe much less favourable than in 2009, with the increasedcapacity of the Sinai Cement plant alreadyfully factored in for the year. Vicat therefore expectssales to develop in line with the market.• In West Africa, market conditions are expected toremain generally favourable but still closely linked topublic authority investment in major infrastructureprojects and the development of money transfersfrom the diaspora. The Group should also benefitfrom certain drivers. First of all, Vicat will be ableto benefit fully from its increased capacity, finalisedas part of the "Performance 2010" plan, allowingit to meet local and export demand without havingto purchase clinker from external sources. Itshould also benefit from more favourable purchasingprices for fuels. Lastly, the Group should be ina position to increase significantly the proportionof alternative fuels used.12.2.1.2. Group objectivesIn this environment, the Group is determined to carryon prudently with its development strategy, by relyingon :• A solid financial structure with gearing and leveragelevels that are among the lowest in the sector.• The effects of the “Performance 2010” investmentplan, related in particular to reducing productioncosts through modernization of its industrial plantand strengthening of the Group’s industrial andcommercial positions. In 2010, the Group shouldbenefit fully from investments made in the contextof this plan, in particular in Switzerland andSenegal.• Finally, in continuation of the “Performance2010” plan, pursuit of the benefits of implementingthe complementary “Performance +” plan.This “Performance +” plan, put in place in 2009,was designed to reduce costs, by adapting theirstructure to the various levels of business while increasingindustrial efficiency, and to improve theGroup’s free cash flow, in particular by deferringinvestments that are considered to be non-strate-2009 registration document - VICAT 95