Vicat Sa · EURONEXT:VCT
Vicat Sa — Investor Day (November 2021)
82 slides from Vicat Sa's investor day presentation, Nov 16, 2021
Slide 1: Climate Strategy Day – 16 November 2021
Climate Strategy Day – 16 November 2021 1
Slide 2: Introduction
Introduction with Guy Sidos, Chairman & CEO of Vicat 2 Vicat Climate Day 16 November 2021
Slide 3: Vicat's Climate strategy is part of the larger sustainability agenda
Vicat’s Climate strategy… is part of the Group’s larger sustainability agenda 3 Vicat Climate Day 16 November 2021
Slide 4: Our agenda today
Our agenda today § Introduction § Context & Regulations § Where Vicat stands today § Our Climate strategy § Our roadmap • 2030 objectives & 2050 ambition • Action plan & technologies • Costs & Financing § Conclusion 4 Vicat Climate Day 16 November 2021
Slide 5: Presenting today
Presenting today Eric BOURDON Lukas EPPLE Marie GODARD-PITHON Laury BARNES-DAVIN Hugues CHOMEL Deputy CEO, COO & Chief Strategy Investment & Performance Scientific Director & Head Deputy CEO & CFO Head of Industry Officer Director of R&D Guy SIDOS Chief Climate Officer Chairman & CEO 5 Vicat Climate
Slide 6: Context & Regulations
Context & Regulations Clarifier certains thèmes et définitions 6 Vicat Climate Day 16 November 2021
Slide 7: Scopes 1, 2 and 3
!"#$$#%&$ '() = Scopes 1,𝑥 2 and 3 *& +,-&.#.é 0%&$%""é1 *& !"#$$#%& '() 2 +,-&.#.é N 2Y HFC S NF 3 CO 2 CH4 SF 6 PFC S SCOPE 3 SCOPE 2 SCOPE 1 SCOPE 3 upstream indirect energy-related indirect emissions direct to production indirect downstream Scope 1, scope 2 or scope 3 are used in the context of
Slide 8: Production processes
Production processes WATER ADDITIVES AND ADMIXTURES CLAY CEMENT LIMESTONE CONCRETE CLINKER AGGREGATES + SAND TRANSPORT 8 Vicat Climate Day 16 November 2021 / Context & Regulations
Slide 9: Total emissions, gross and net
Total emissions, gross and net CLINKER Biomass C+O2 > CO2 Fuels Biomass Fossil Waste combustion 1/3 Fossil Fuels Fossil Waste Gross emissions Total emissions Net emissions Fossil Fuels Decarbonation Raw Decarbonation 2/3 CaCO 3> CaO+CO2 Materials 2/3 2/3 30% -0% LCA ETS + Taxonomy 9 Vicat Climate Da
Slide 10: What does carbon neutrality mean?
What does carbon neutrality mean? IT’S A ZERO-SUM OPERATION Global levers Emissions reduction Increase in wells Levers at the organizational level PILLAR A PILLAR B PILLAR C I reduce my GHG I reduce the I increase emissions emissions of others carbon sinks My company Scope 1 & 2 - - In my value chai
Slide 11: CCUS = Carbon Capture Usage & Storage
CCUS = Carbon Capture Usage & Storage CCS : Carbon Capture & Storage CCU: Carbon Capture & Usage 11 Vicat Climate Day 16 November 2021 / Context & Regulations
Slide 12: Clinker / CCU uptake potential
Clinker / CCU (Carbon Capture and Usage) UPTAKE POTENTIAL (MT/AN) VERSUS LENGTH OF CO2 STORAGE EOR / EGR Methanol Formic Acid (hydrogen) Carbonates Syngas/methane mineralization Uptake potential 300 Mt/y Algae green house Polymerization 50 Mt/y Polycarbonates Urea Enhanced geothermal 5 Mt/y Urea/Met
Slide 13: Our industry's share
Our industry’s share ESTIMATED CONTRIBUTIONS OF THE DIFFERENT SECTORS TO GLOBAL MAN-MADE GREENHOUSE GAS EMISSIONS (IN CO2 EQUIVALENT) Forestry and deforestation Energy supply 3% 17% 26% Agriculture 14% 13% 5-7% 13% 8% Transportation Cement industry Industry Buildings Share of cement industry in GHG
Slide 14: Different type of regulations
Different type of regulations EMISSIONS TRADING WORLDWIDE THE STATE OF PLAY OF CAP-AND-TRADE IN 2021 14 Source : International Carbon Action Partnership Vicat Climate Day 16 November 2021 / Context & Regulations
Slide 15: Fit for 55 Package & 2030 emissions reduction targets
Fit for 55 Package & 2030 emissions reduction targets “FIT FOR 55" PACKAGE The 2050 climate neutrality target agreed in the European Green Pact is broken down into an intermediate target set by the EU of -55% of net GHG emissions by 2030 (vs. 1990), compared to the previous target of -40%. A strong
Slide 16: Two levers for a fair-level playing field: ETS and CBAM
Two levers for a fair-level playing field ETS CBAM EU ETS 2030 strengthened to -61% from Non-EU importers, as of 2023, will be asked to -43% from 2005 declare products exported to the EU • First part of phase 4 (2021-2025) unchanged The reporting mechanisms of CBAM will be imposed on • Second part o
Slide 17: European sustainable taxonomy
Clarifier certains thèmes et définitions European sustainable taxonomy The EU has defined a scientifically enforceable common language (taxonomy) for the sustainability of activities and investments. This taxonomy has been established by focusing on the following 6 objectives: Climate change Climate
Slide 18: Vicat today
Slide de mise en exergue Vicat today Clarifier certains thèmes et définitions 18 Vicat Climate Day 16 November 2021 / Vicat today
Slide 19: A strategic priority for the Group
A strategic priority for the Group The Climate Committee The Climate Strategy Department The operational is composed of is in direct link with departments, in collaboration • The Chairman and CEO, • the industrial strategy with the Group’s • The Climate Strategy Director • the operational teams, wit
Slide 20: A long-standing commitment
A long-standing commitment A long-lasting quest for The development A major player best performance and of secondary fuels in the circular economy reduction in cash-costs began over 40 years ago 20 Vicat Climate Day 16 November 2021 / Vicat today
Slide 21: What are our areas of action?
What are = *& our areas !"#$$#%&$ '() 𝑥 of action? +,-&.#.é 0%&$%""é1 *& !"#$$#%& '() 2 +,-&.#.é N 2Y HFC S NF 3 CO 2 CH4 SF 6 PFC S SCOPE 3 SCOPE 2 SCOPE 1 SCOPE 3 upstream indirect energy-related indirect emissions direct to production indirect downstream Upstream energy Electricity consumption…
Slide 22: CO2 Emissions - Scopes 1 & 2 in 2020
CO2 Emissions - Scopes 1 & 2 in 2020 VICAT GROUP EMISSIONS (in thousands of tons) Total direct and indirect CO2 Cement 16 449 Concrete & Aggregates 98 Other products and services 10 TOTAL 16 557 22 Vicat Climate Day 16 November 2021 / Vicat today
Slide 23: Scope 3: 3.0 Mt – 15%
Scope 3 : 3.0 Mt – 15% Vicat Group 2020 Scope 1: 15.9 Mt Scope 3: 3.0 Mt 82% 15% 3% Scope 2 market based: 0.6 Mt 23 Vicat Climate Day 16 November 2021 / Vicat today
Slide 24: A modern industrial base
A modern industrial base SWITZERLAND (2010) 1 cement plant FRANCE (2008/2023) 19 concrete plants 5 cement plants 19 aggregate quarries 2 grinding plants 149 concrete plants Capacity: 0.9 MT cement 39 aggregate quarries ITALY (2003) Capacity: 4.6 MT cement 1 grinding plant KAZAKHSTAN (2011) 2 termina
Slide 25: Ultra-modern technology
Ultra-modern technology 100% DRY PROCESSES WITH PRECALCINER IN EMERGING MARKETS Semi-dry process Dry process without 2% precalciner 7% 91% Dry process with precalciner As a % of total Group clinker capacity 25 Vicat Climate Day 16 November 2021 / Vicat today
Slide 26: 3 types of regulatory situations
3 types of regulatory situations Europe (France, Switzerland, Italy): Strongly enforced ETS system, the “Laboratory” for the Group United States: Regulation trend is strengthening Rest of the World (Brazil, Africa, Asia, Mediterranean): Regulation is in the making 26 Vicat Climate Day 16 November 20
Slide 27: Net CO2 direct emissions
Net CO2 direct emissions* 2020 Kg CO2 net / tct eq. 700 631 620 600 583 523 500 400 300 200 100 0 Europe (ETS) Europe (ETS) + US Rest of the world Vicat Group *Definition of net CO2: direct emissions including the physico-chemical transformation of raw materials at high temperatures and the use of f
Slide 28: Substitution rate
Substitution rate 2020 % substitution rate 70% 66% 60% 50% 50% 40% 30% 26% 20% 17% 10% 0% Europe (ETS) Europe (ETS) + US Rest of the world Vicat Group 28 Vicat Climate Day 16 November 2021 / Vicat today
Slide 29: Clinker factor
Clinker factor 2020 % clinker / ct 86% 84% 84% 82% 80% 80% 79% 78% 77% 76% 74% 72% Europe (ETS) Europe (ETS) + US Rest of the world Vicat Group 29 Vicat Climate Day 16 November 2021 / Vicat today
Slide 30: Vicat climate strategy
Slide de mise en exergue Vicat climate strategy Clarifier certains thèmes et définitions 30
Slide 31: Our firm belief
Our firm belief Concrete is irreplaceable and will remain the preferred solution for the circular and sustainable economy Concrete must become carbon neutral, decarbonization is the challenge for the entire concrete value chain of which cement is a key component Cement production will evolve towards
Slide 32: One goal - Two realities – Two strategies
One goal - Two realities – Two strategies Decarbonization is TWO REALITIES EXIST TODAY technically possible but economically feasible if and only if: • environmental regulations are COUNTRIES OR REGIONS FAST-GROWING COUNTRIES adapted WITH A STRONG CLIMATE PLAN WITH ACTIONS • governments support this
Slide 33: Expected trends in highly-regulated markets
Expected trends in highly-regulated markets Environmental regulations The willingness Measures to guarantee a level are highly developed already of governments to playing field via e.g. watertight or we expect them to be tighter decarbonize the economy and CBAM and or financial support to in the nea
Slide 34: Expected trends in highly-regulated markets: costs
Expected trends in highly-regulated markets IN THE SHORT TERM : IN THE LONG TERM : an increase in costs due to the increased costs due to direct and acquisition of CO2 emissions certificates indirect costs of CO2 reduction In this context of strong regulation, the increase in "carbon-linked costs" w
Slide 35: Action levers in highly regulated markets
Action levers in highly regulated markets Replacing fossil fuels Reducing the clinker factor Developing new low-carbon Preparing the future and benefitting by alternative fuels and by using locally available concrete solutions and making from concentrated production of CO 2 develop waste treatment a
Slide 36: Unmatched footprint in highly-regulated markets
Unmatched footprint in highly-regulated markets EBITDA in 2020 SHARE OF CO2 EMISSIONS CEMENT SCOPE 1 in 2020 Europe Europe US US Rest of world Rest of world Strong EBITDA generation in markets Sound CO2 performance in these markets with clear or upcoming environmental regulations In highly-regulated
Slide 37: Markets with CO2 regulation in the making
Markets with CO2 regulation in the making Overall strong potential for growth due to population increase Markets characterised by an absence or weak application of CO2 regulation As it stands, "profitable" investments for CO2 reduction per ton of cement are mostly those that use the classic levers :
Slide 38: Markets with CO2 regulation in the making: the need for strict regulation
Markets with CO2 regulation in the making: the need for strict regulation In absence of strict regulation, there is no pricing of carbon Only a strong and enforceable regulatory framework will create the economic conditions to change the rules of the games. This is why Vicat is in favour of regulato
Slide 39: Markets with CO2 regulation in the making: action levers
Markets Markets with with already strong regulation CO2 regulation - VICAT in the making: strategy action levers In this context, Vicat continues to invest in these markets by applying the Best Available Technologies Investing Best Available Replacing fossil fuels by alternative Reducing the clinker
Slide 40: Secured EBITDA generation capacity
Secured EBITDA generation capacity Vicat has invested 4,9 billion euros over the past 15 years and has therefore proven its capacity to generate the cash flows necessary to finance the upcoming industrial conversion and growth challenges. Our strategy of banking EU ETS CO2 allowances will provide us
Slide 41: Our roadmap
Slide de mise en exergue Our roadmap Clarifier certains thèmes et définitions 41
Slide 42: Our stated objectives & ambition
Our stated objectives & ambition TODAY OBJECTIVE 2030 AMBITION 2050 Vicat’s net emissions in Group commitment (current Target of carbon neutral by 2050 France (historical scope) scope) on the basis of available across the value chain will in tons of CO2 reduced by technologies limiting require disru
Slide 43: Vicat's Value Chain
Vicat’s Value Chain ACTIONS ACROSS THE WHOLE VALUE CHAIN IN ORDER TO ACHIEVE CARBON NEUTRALITY RAW PRODUCT DESIGN & CONSTRUCTION USE & DEMOLITION REUSE & MATERIALS MANUFACTURING ENGINEERING MAINTENANCE & WASTE RECYCLING PREPARATION Transport, logistics and distribution 100% AFR France : Regions and
Slide 44: 2030 Objectives
2030 Objectives
Slide 45: Action levers to 2030
Action levers to 2030 Reduction of clinker content Substitution of fossil fuels Energy efficiency and renewable energy production Low carbon product offering New construction methods 45 Vicat Climate Day 16 November 2021 / Our roadmap / 2030 objectives
Slide 46: Clinker factor reduction
Clinker factor reduction The additions that are used Objective: To develop binders with a lower clinker factor or envisaged are not Uncertain carbon weight and scarcity for the following sufficient to address the additions: CO2 challenge • Blast furnace slag, • Fly ash from coal-fired power stations
Slide 47: Clinker factor - Limestone filler
Clinker factor - Limestone filler § Limestone is an abundant raw material § Up to 35% substitution rate § The start-up 2170, in which Vicat acquired a stake in 2019, is a pioneer in limestone micronization. 47 Vicat Climate Day 16 November 2021 / Our roadmap / 2030 objectives
Slide 48: Clinker factor - Activated Clays
Clinker factor - Activated Clays 50% Cements combining activated clay and limestone § Activated clays acts as pozzolanic material. Clinker 50% § Temperature of clay calcination much lower than clinker firing Limestone 15% and emitting only water vapor • Pozzolanic properties are amplified by combini
Slide 49: Argilor project – Xeuilley France
Argilor project – Xeuilley France 10 years of R&D Clay with satisfactory quality at the quarry of the plant Innovative project for minimum CO2 emissions: Flash calciner technology using very high level of alternative fuels (85%) 40 M€ investment including more than 13 M€ financial support from ADEME
Slide 50: Alternative Fuel Recovery technologies
Alternative Fuel Recovery technologies AFR preparation: New preheater design: AFR conveyor: Rufisque (SN), Bastas, Konya (TR) Cozum (TR), Bioval-ALTèreNATIVE CSR (FR), Altola (CH) Ragland Kiln 2 (US), future Rufisque Kiln 6 (SN) 50 Vicat Climate Day 16 November 2021 / Our roadmap / 2030 objectives
Slide 51: CarbRecoCl: Carbonation of kiln dust
CarbRecoCl: Carbonation of kiln dust CO2 Usage of excess kiln dust through RDF* with high chlorine Kiln dust Lightweight aggregates mineralisation Use of technology developed by Carbon 8 Production of aggregates that are light, insulating and carbon negative *RDF = Refuse-derived fuel 51 Vicat Clima
Slide 52: Recycling Model (VITO - Terenvie)
) Recycling Model (VITO - Terenvie) 1 2 3 4 1) Metal separation 2) Glass sorting 3) Gravel classification 4) Sorting of light materials 5) Washing and classification of sands 6) Crushing 7) Material washing 8) Water treatment & filtration 5 6 7 8 52 Vicat Climate Day 16 November 2021 / Our roadmap /
Slide 53: Energy efficiency and production of decarbonated energy
Energy efficiency and production of decarbonated energy Investment in the best cement technologies in terms of energy efficiency: • Senegal: Roller press Rufisque -25% specific electricity consumption • Turkey: Replacement of existing coolers with latest generation Konya +20% heat recovery efficienc
Slide 54: Low carbon product offering
Low carbon product offering LOW CARBON OFFERING BY VICAT FRANCE : DECA A COMMON LABEL FOR ALL ACTIVITIES: Products Services Construction systems (biosourcing..) 54 Vicat Climate Day 16 November 2021 / Our roadmap / 2030 objectives
Slide 55: New construction methods: 3D printing
New construction methods: 3D printing Saving of material which allows a reduction of CO2 between 20 and 40% Development of a range of products adapted to 3D printing and associated services First plant opened in Chambéry with in-house technology 55 Vicat Climate Day 16 November 2021 / Our roadmap /
Slide 56: Ambition 2050
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Slide 57: The road to 2050
The road to 2050 CO2 capture, storage and usage New associated businesses 57 Vicat Climate Day 16 November 2021 / Our roadmap / Ambition 2050
Slide 58: CCUS = Carbon Capture Usage & Storage
CCUS = Carbon Capture Usage & Storage CCS: Technical and economic study in progress CCU: Multiple CO2 usage routes possible. on several sites. No real technological challenges Need to invest in industrial demonstrators to develop new (known technologies). Very high CAPEX required. technologies and c
Slide 59: CO2 Capture
CO2 Capture CO2 Capture is a technology brick needed for CCS as well as for CCU routes CO2 capture in diluted flue gas using conventional solvent requires high operating costs Oxyfuel technology is based on pure oxygen use, instead of natural air, in the combustion process that generates the high te
Slide 60: CO2 usage by photosynthesis
CO2 usage By photosynthesis 60 Vicat Climate Day 16 November 2021 / Our roadmap / Ambition 2050
Slide 61: Cimentalgue
Cimentalgue PRODUCTION OF PHOTOSYNTHETIC MICROALGAE IN NATURAL LIGHT Objectives : • recovering CO2 and waste heat from the cement plant through the cultivation of micro-algae • Increase the yield of microalgae cultivation, without using external energy. 61 Vicat Climate Day 16 November 2021 / Our ro
Slide 62: CO2 usage by mineralization
CO2 usage By mineralization 62 Vicat Climate Day 16 November 2021 / Our roadmap / Ambition 2050
Slide 63: CarbRecoGBR (FASTCARB)
CarbRecoGBR (FASTCARB) Carbonation of recycled aggregates and concrete sand CO2 is mineralised: capture is irreversible Maturation: • A demonstrator that allows to store and avoid 2720 t CO2 / year • 3 patents registered (1 process and 2 products) • 1 new business model Natural aggregates Residual c
Slide 64: CO2 usage by chemical conversion with hydrogen
CO2 usage By chemical conversion with hydrogen 66 Vicat Climate Day 16 November 2021 / Our roadmap / Ambition 2050
Slide 65: A long-standing commitment to the hydrogen sector
A long-standing commitment to the hydrogen sector Guy Sidos is a member of the CNH, Conseil National de l’Hydrogène, representing the construction business Vicat joins the Board of Administration of France Hydrogène 67 Vicat Climate Day 16 November 2021 / Our roadmap / Ambition 2050
Slide 66: The Vicat hydrogen model
The Vicat hydrogen model Production de chaleur décarbonée 68 Vicat Climate Day 16 November 2021 / Our roadmap / Ambition 2050
Slide 67: Vicat hydrogen projects
Vicat hydrogen projects 1- HYMPULSION: H2 distribution station in Saint Egrève as part of the AURA region's ZEV project. 2- GENVIA/ VICTORHYA : 3 Share in GENVIA for the acceleration of the development of the innovative high temperature and reversible SOE (solid oxide electrolyzer) 4 technology deve
Slide 68: HYNOVI Project
HYNOVI Project POWER-TO-METHANOL FOR MASSIVE, CROSS-SECTORAL DECARBONIZATION Gas pre-treatment Capture and purification CO2 Oxygen for Aviation oxy-combustion Mobility Decarbonated methanol production Maritime unit CH3OH Supply of Electrolysis of water decarbonized H2 Industry CCU is a doubly releva
Slide 69: HYNOVI: multiple positive effects
HYNOVI: multiple positive effects Almost 500 More than 2000 jobs Relocation of more than With an installed electrolyser kilotons of CO2 created (including indirect 1/4 of the current methanol capacity of 330 MW, the HYNOVI per year will be jobs), while preserving production in France while project c
Slide 70: 2030 objectives
Slide de mise en exergue 2030 objectives Clarifier certains thèmes et définitions 72
Slide 71: Net CO2 direct emissions
Net CO2 direct emissions* kgCO2 net / tct eq. 700 700 631 620 600 583 600 523 540 500 500 400 400 300 300 200 200 100 100 0 0 2020 2020 2030 objective 2020 2030 objective Europe (ETS) Europe (ETS) +US Rest of the world 2030 Objectives of • 430 KgCo2 in Europe • 540 KgCo2 at Group level *Definition o
Slide 72: Substitution rate
Substitution rate % substitution rate 70% 66% 70% 60% 60% 50% 50% 50% 40% 40% 40% 30% 30% 26% 20% 17% 20% 10% 10% 0% 0% 2020 2020 2030 objective Europe (ETS) Europe (ETS) +US Rest of the world 2020 2030 objective 2030 Objectives of • Close to 100% in Europe • 40% at Group level 74 Vicat Climate Day
Slide 73: Clinker factor
Clinker factor % clinker / ct 85% 84% 85% 83% 83% 81% 80% 81% 79% 79% 79% 77% 77% 77% 75% 75% 75% 73% 73% 71% 71% 69% 69% 2020 2020 2030 objective 2020 2030 objective Europe (ETS) Europe (ETS) +US Rest of the world 75 Vicat Climate Day 16 November 2021 / Our roadmap / 2030 objectives
Slide 74: Going forward
Going forward Show our Commit to Use the CSR report Have our commitments achievements understandable as a lever in our extra-financial confirmed by third parties objectives communication 76 Vicat Climate Day 16 November 2021 / Our roadmap / 2030 objectives
Slide 75: Costs & Financing
Costs & Financing Clarifier certains thèmes et définitions 77
Slide 76: Proven ability to finance the industrial conversion
Proven ability to finance the industrial conversion Vicat has invested 3.7 billion euros in During that period, the While maintaining industrial capex over the last 15 years Group has generated its debt ratios doubling its installed capacity while investing steady levels of gross 1.2 billion euros t
Slide 77: Capex to reach our 2030 objectives
Capex to reach our 2030 objectives Cost of various projects for 2030: The equivalent of 80 million Not fully additional 800 million euros euros per year in specific to existing investments investment trends Nature of Capex Capex by region Clinker Factor / Activated clay 30% 30% Substitute Fuels 36%
Slide 78: Investment financing
Investment financing Reduction Rise Public support Green in costs in sales prices mechanisms financing 80 Vicat Climate Day 16 November 2021 / Our roadmap / Costs & Financing
Slide 79: Choice in CCUS technology not settled
2030-2050 Choice in CCUS Drop in CCUS Partnership on Public funding technology not technology specific projects settled costs Gradual ramp up of all Price Available Quotas to be 16 plants to highest rises Free Cash Flow after unblocked decarbonized 2030 investment standards + New opportunities 81 Vi
Slide 80: Financial leverage to invest in the transition
Financial leverage to invest in the transition THE VICAT CO2 QUOTAS STOCK SURPLUS STANDS AT 5.1 MILLION TONS IN 2020 AND IS EXPECTED TO LAST UNTIL 2032 900 Phase I Phase II Phase III Phase IV-1 Phase IV-2 6,000 2005-2007 2008-20012 2013-2020 2021-2025 2026-2030 800 5,000 700 600 4,000 500 3,000 400
Slide 81: Conclusion
Slide de mise en exergue Conclusion With Guy Sidos, Chairman & CEO of Vicat Clarifier certains thèmes et définitions 83
Slide 82: Slide 82