SHAPE THE
FUTURE
Annual Report
2024
Strategic report
IFC
Vesuvius Overview
1
Highlights
2
At a glance
6
Chairman’s statement
8
Chief Executive’s strategic review
12
Our business model
14
Why invest in Vesuvius?
14
We operate in markets expected to
grow over the medium term
18
We serve our customers through
technological differentiation
20
We deliver robust and consistent
financial returns
22
We have a clear sustainability strategy
24
Operating review
24
Steel Division
25
Flow Control
26
Advanced Refractories
26
Sensors & Probes
27
Foundry Division
28
Financial KPIs
30
Financial review
33
Non-Financial and Sustainability
Information Statement
(Sustainability Report)
34
Our Sustainability strategy
and objectives
35
Progress on our sustainability targets
37
Tackling climate change
55
Our people
59
A responsible company
63
Our stakeholders and
Section 172(1) Statement
67
Risk, viability and going concern
72
Principal risks and uncertainties
Governance
75
Chairman’s governance letter
76
Board of Directors
78
Group Executive Committee
79
Corporate Governance Statement
79
Board Report
88
Audit Committee
96
Nomination Committee
103
Directors’ Remuneration Report
103
Remuneration overview
108
2023 Remuneration Policy
116
Annual Report on
Directors’ Remuneration
130
Directors’ Report
138
Statement of Directors’ Responsibilities
139
Independent Auditors’ Report
Financial Statements
148
Group Income Statement
149
Group Statement of
Comprehensive Income
150
Group Statement of Cash Flows
151
Group Balance Sheet
152
Group Statement of Changes in Equity
153
Notes to the Group Financial Statements
208
Company Balance Sheet
209
Company Statement of
Changes in Equity
210
Notes to the Company
Financial Statements
216
Five-Year Summary: Divisional Results
from Continuing Operations (unaudited)
217
Shareholder information (unaudited)
219
Glossary
For more information visit
www.vesuvius.com
Vesuvius plc
Annual Report and Financial Statements 2024
engineering and technology, providing high-technology
products and solutions to industrial customers who
We prioritise investment in innovation to maintain
our technological differentiation. Our customers are
predominantly in the steel and foundry industries
which we serve from our two Divisions.
Our technology-led products allow our customers
to tackle some of the most complex problems in
their production processes.
1
Strategic report
Governance
Financial statements
Highlights
10.3%
10.4%
11.1%
2024
2023
2022
Return on sales
1
10.3%
£154m
£190m
£217m
2024
2023
2022
Operating profit
£
154m
8.4%
8.9%
10.7%
2024
2023
2022
Return on invested capital
1
8.4%
-26.9%
-20.7%
2024
2023
Reduction in Scope 1 and 2 CO
2
e emission
intensity per metric tonne of product packed
for shipment versus 2019
²
-26.9
%
£188m
£200m
£227m
2024
2023
2022
Trading profit
1
£
188m
33.5p
44.0p
67.2p
2024
2023
2022
Statutory EPS
33.5p
1.3x
0.9x
0.9x
2024
2023
2022
Net debt to adjusted EBITDA
1
1.3x
£1,820m
£1,930m
£2,047m
2024
2023
2022
Revenue
£
1,820m
£61m
£128m
£123m
2024
2023
2022
Free cash flow
1
£
61m
0.52
0.60
1.08
2024
2023
2022
Lost Time Injury Frequency Rate per million hours
0.52
1. For definitions of alternative performance measures, refer to Note 35 of the Group Financial Statements.
2. Pro forma performance calculated as if dolime production had been operating normally in 2023 and 2024.
The actual reduction in Scope 1 and 2 CO₂e emission intensity in 2023 was 45.9% and in 2024 was 40.4%.
See page 51 for further information.
3. Figures above have been rounded to the nearest million.
2
Vesuvius plc
Annual Report and Financial Statements 2024
Flow Control
We supply the global steel industry with
consumable ceramic products, systems,
robotics and digital services for the
continuous casting process.
Sensors & Probes
We supply a range of products that enhance
the control and monitoring of our customers’
production processes.
What we do for our Steel customers
Advanced Refractories
We supply specialist refractory products
designed to enable steel-making equipment
to hold the molten metal.
Key products
UNSHAPED
(AlSi and basic monolithics)
c.55%
SHAPED AND OTHER
(including bricks and precast)
c.45%
Key products
VISO
(isostatic tubes, stoppers and nozzles)
c.45%
SLIDE-GATE
(refractories and systems)
c.35%
OTHER
(including fluxes, purging plugs and robots)
c.20%
At a glance
Revenue
£39.2m
Revenue
£769.0m
Revenue
£535.6m
We supply refractory
products, flow control
systems and process
measurement solutions
to our Steel Division
customers
Our solutions address
the key challenges of
our customers in the steel
industry, such as maintaining
steel quality and reducing
energy usage during the
casting process
We combine these with
robotics and mechatronic
installations to increase
their efficiency, lower their
costs and improve their
safety and product
consistency
Our products and their
applications preserve
the purity of the steel as
it moves through the
production process, from
initial refining to the cast
steel slab, bar or ingot
Revenue
£1,343.8m
Trading profit
£153.0m
We improve...
Safety
Improved safety
at customer plants
Quality
Better steel,
better castings
We are a world leader in the supply of refractory products, systems
and solutions to steel producers and other high-temperature
industries, helping our customers increase their efficiency
and productivity, and enhance their quality and safety.
Steel Division
Strategic report
Governance
Financial statements
3
Product demand is driven by
higher sophistication, demanding
higher-quality metal and more
complex castings.
Customers
Foseco’s primary customers are ferrous and non-ferrous
foundries serving various end-markets from large bespoke
castings to high volume automotive pieces. Most of Foseco’s
customers serve the general industrial market.
What we do for our Foundry customers
Key products
FEEDING AND FILTRATION
c.40%
BINDERS AND COATINGS
c.30%
OTHER
(including crucibles
and melt-shop products)
c.30%
General industrials
1
Light vehicle market
78%
22%
We provide customisable
products and process
technology to foundries
that improve the quality
of their castings
Our solutions address
our foundry customers’
key challenges of
casting quality and
production efficiency
We combine this
with technical advice,
application engineering
and computer
modelling to improve
process outcomes
Our products and solutions
clean the molten metal,
improve the solidification
of that metal, and reduce
wastage in the final casting
...for our Steel and
Foundry customers
Efficiency
Cheaper steel,
cheaper castings
Sustainability
Less energy usage and
CO
2
emissions
Operating under the Foseco brand, we are a world leader in the supply
of consumable products, technical advice and application support
to the global foundry industry, helping our customers to improve their
casting quality and foundry efficiency.
Foundry Division
Revenue
£476.3m
Trading profit
£35.0m
1.
General industrials includes: mining, agricultural, general engineering, heavy trucks and other industrial applications.
For more information see pages 14–17.
Ma
Production sites
R&D centres of excellence
At a glance
Vesuvius plc
Annual Report and Financial Statements 2024
4
Our global presence
Our worldwide footprint, with a focus on
the world’s growing markets, enables
us to capitalise on shifting dynamics in
the global steel and foundry markets.
6
Continents
6
R&D centres
of excellence
40
Countries
54
Production sites
68
Sales offices
5
Strategic report
Governance
Financial statements
Americas
3,146
employees
EMEA
4,309
employees
Asia-Pacific
6,260
employees
19% FOUNDRY
81% STEEL
£633.5m
Revenue
30% FOUNDRY
70% STEEL
£603.1m
Revenue
30% FOUNDRY
70% STEEL
£583.5m
Revenue
MONTERREY, MEXICO
Flow Control:
VISO
SKAWINA, POLAND
Flow Control:
VISO and slide-gate
VIZAG, INDIA
New site developed with further expansion capacity available
Advanced Refractories:
Precast, AlSi & basic monolithics
YINGKOU AND CHANGSHU, CHINA
Advanced
Refractories:
Basic monolithics
KOLKATA AND PUNE, INDIA
Flow Control:
VISO
Foundry:
Non-ferrous
fluxes
Foundry:
Filters
Flow Control:
Mould flux
Our capacity expansion in developing markets:
Breakdown by region
Chairman’s statement
Vesuvius plc
Annual Report and Financial Statements 2024
6
Dear Shareholder,
2024 marked a steady year for Vesuvius,
as we navigated adverse conditions across
our end-markets, a number of which
continued to suffer lower than expected
activity. The knock-on effects of a slowing
Chinese economy drove Chinese steel
exports to reach increasingly elevated
levels during the year, putting pressure
on end-markets for our Steel Division.
Similarly, Foundry end-markets were
very subdued as lower industrial activity
impacted our customers. Despite this, the
Group delivered a resilient performance,
thanks in large part to the decisive actions
of the management team and leadership,
as well as the hard work and commitment
from our employees globally.
Strategy
We continued to advance our strategy
successfully in 2024, with the Board
supporting key investments to drive
growth and strengthen the Group’s
capabilities. Our ability to gain market
share in our Flow Control and Foundry
businesses, despite a more challenging
economic environment than anticipated,
is testament to the Group’s differentiated
technology and excellent customer focus.
Product innovation remains central to
our strategy, enabling us to deliver
advanced solutions that create value
for our customers. Over the past year,
we launched 33 new products, as we
continue our commitment to staying
ahead of evolving customer needs.
Our Flow Control business has been
a standout contributor, with over 20% of its
sales now derived from products launched
in the past five years, demonstrating the
tangible impact of our innovation pipeline.
Our commitment to adding value extends
beyond product innovation to advanced
solutions based on robotics, which
continue to attract significant customer
interest. In 2024, we secured nine new
robotics projects, building on the five
projects secured in 2023. These
installations are transforming customer
operations by enhancing production,
improving process efficiency, and
promoting safer working environments.
This year, we also announced the
acquisition of a majority stake in PiroMET,
a Turkish business specialising in refractory
products, and advanced robotics and
gunning solutions. We recently completed
this acquisition, which will strengthen our
Advanced Refractories business in the
high-growth EEMEA region, further
enhancing our ability to meet customer
demand in these critical and expanding
markets, whilst also supporting our
ability to serve the European market.
The Group has continued to make
excellent progress delivering against the
cost savings targets announced at our
Capital Markets Day in November 2023.
The three-year cost reduction programme
is proceeding well, with the exit run-rate
at the end of 2024 ahead of expectations,
reflecting the diligent efforts of the
Vesuvius team as they identify and
execute key projects to support this goal.
To underpin long-term growth, we
continue to make targeted investments to
expand capacity in high-growth regions
like India and Poland. Our growth capex
programme has been instrumental in
enabling these efforts, ensuring we can
meet the evolving needs of our customers
and maintain our leadership position in
key markets.
People
The strategic progress and financial
performance we have delivered this
year is founded on the dedication and
professionalism of our employees across
the Group. The level of technological
innovation we see at Vesuvius simply
could not happen if we did not have
the right people in the right places, nor
could we maintain the depth of our
customer relationships without the
contribution of our operations, sales
and procurement teams.
We continued to advance our strategy in
2024 despite challenging market conditions
7
Strategic report
Governance
Financial statements
As in previous years, the engagement
survey we conducted during the year
showed that we have a motivated
workforce, committed to delivering on
our goals. It remains the case that our
people are at the heart of Vesuvius.
Members of the Board had another busy
year, visiting sites in Belgium, the Czech
Republic, France, Japan, Mexico, Poland
and the USA, and the entire Board made
a week-long trip to China. It is during
these visits that the Directors can speak
firsthand with our people, holding ‘town
hall’ meetings, listening to their questions
and feedback, and taking the temperature
of the organisation, as well as engaging
directly with our customers and other
stakeholders on the ground.
Safety
The number one priority at Vesuvius is to
provide our employees with a safe place
to work, and we are proud of the steps we
have taken over the years to ensure safety
is at the core of everything we do. Although
we are pleased that our Lost Time Injury
Frequency Rate continued to reduce this
year to 0.52 per million hours worked, which
is another improvement in performance,
we are aware that there is always more
work to be done. Only the highest levels
of safety performance can be accepted.
Progress on our
sustainability objectives
The Group has set clear internal
operational targets around sustainability
performance, particularly in relation to our
CO
2
emissions and energy consumption.
Our focus on sustainability is increasingly
intertwined with our R&D capabilities,
where our research enables us to continue
to develop innovative and energy efficient
solutions for our customers. We continue
to deliver positive progress against these
objectives, whilst recognising that the
Group’s ambitions for diversity remain
challenging, and as yet unfulfilled.
A highlight of the year was the
inauguration of our first carbon-free major
manufacturing site, for Flow Control and
Advanced Refractories products in Brazil.
This shows clearly what we can achieve as
we focus on our CO
2
e intensity reduction
targets. We continue to take steps towards
reaching our target of a net zero carbon
footprint by 2050, and have identified
priorities, targets and milestones as we
progress on this journey.
The Board and governance
In 2024, we welcomed two new
Independent Non-Executive Directors
to the Board. Eva Lindqvist joined in May,
as Senior Independent Director, following
her election at the AGM. She has over
35 years of experience in global industrial
and service businesses, including senior
leadership roles at Ericsson and Telia, and
brings strategic insight and governance
expertise, having served on numerous
listed company boards. Then in June, we
were pleased to welcome Italia Boninelli to
the Board. An experienced HR executive
with extensive international exposure
across the mining, healthcare, and
financial services sectors, Italia’s expertise
will be invaluable in her role as Chair
of the Remuneration Committee.
This year we also saw Douglas Hurt step
down as Senior Independent Director and
Chair of the Audit Committee after nine
years of dedicated service, with Robert
MacLeod succeeding him in the latter role.
Similarly, Kath Durrant, who joined the
Board in 2020, stepped down in July as
Chair of the Remuneration Committee
having served three years on the Board.
On behalf of the Directors, I would like to
thank both Douglas and Kath for their
significant contributions, wise counsel
and steadfast commitment to Vesuvius
during their tenure.
Dividend
Vesuvius has a progressive dividend policy.
As a minimum we will maintain our
dividend per share year-on-year and
increase it, through the cycle, in line with
earnings per share growth. The Board
has recommended a final dividend of
16.4 pence per share, bringing the total
dividend for the year to 23.5 pence per
share, which is a 2.2% year-on-year
increase on the total dividend for 2023
of 23.0 pence per share. If approved
at the Annual General Meeting, this final
dividend will be paid on 6 June 2025
to shareholders on the register at
25 April 2025.
Following the successful completion of
our first share buyback programme
in 2024, we were pleased to launch
a new programme for a second tranche
of £50 million, which we anticipate
completing over the next three months.
This decision underscores our confidence
in the ongoing strength of Vesuvius’ free
cash flow generation and reaffirms our
commitment to return value to our
shareholders while maintaining
a strong balance sheet.
Annual General Meeting
The Annual General Meeting will be
held on 16 May 2025. The Notice of
Meeting and explanatory notes
containing details of the resolutions to
be put to the meeting accompany this
Annual Report and are available on
our website: www.vesuvius.com.
Looking ahead
Vesuvius remains steadfast in its
strategy for growth and is confident in the
long-term attractiveness of global steel
and foundry market fundamentals.
We are committed to executing our
strategic ambitions with a primary focus
on safety, driving innovation through our
dedicated R&D capabilities, and delivering
market-leading, technologically advanced
products and solutions. Alongside these
priorities, we will maintain a robust
financial framework that supports
continued investment in the business and,
where appropriate, targeted acquisitions.
While the year ahead may bring
economic, commercial and operational
challenges, we continue to deliver on
self-help measures that enhance our
resilience and position us to capitalise on
opportunities as end-markets improve.
With our talented people, advanced
products and industry expertise,
we are well placed to deliver long-term
value for our shareholders.
On behalf of the Board, I would like to
thank our shareholders, employees and
customers for their continued support,
and I look forward to reporting on
further successes in the coming year.
Carl-Peter Forster
Chairman
5 March 2025
Chief Executive’s strategic review
Vesuvius plc
Annual Report and Financial Statements 2024
8
Vesuvius’ performance in 2024
showed resilience despite difficult
market conditions, thanks to
a strong focus on cost reduction
and the continuing benefits of
our technology strategy.
2024 difficult market background
Global steel production remained
subdued in the world excluding China,
Russia, Iran and Ukraine, with growth
limited to 0.8% for the full year (source:
World Steel Association), due to sharply
increasing steel exports from China.
Steel production in India continued to
exhibit strong growth (+6.3% year-on-
year), as did South East Asia (+5.3%)
and EEMEA (EMEA excluding EU+UK,
Iran, Russia and Ukraine) (+4.1%).
Conversely, steel production declined in
the Americas (-2.9%) and in North Asia
(-3.6%). Europe (EU+UK) only modestly
recovered from the very low point of
2023, with growth of 1.2%.
Despite steel production in China
contracting by 1.7%, the level of net
exports continued to rise during the year,
reaching 104 million tonnes, an increase
of c.20 million tonnes versus 2023, due to
an even sharper decline in domestic steel
consumption. These increasing exports
put steel production outside of China
under strong pressure and depressed
steel prices worldwide.
Foundry markets, with the exception of
India, remained very weak throughout
2024, in particular in Europe, North Asia
and in the Americas, as declining industrial
activity impacted the end-markets of our
customers. All industrial end-markets
outside of China were affected, including
the light vehicle industry which had
performed well in 2023. The foundry
market decline was particularly severe
in EU+UK and in North Asia, important
regions for our Foundry Division, and we
now do not expect them to return to their
pre-pandemic levels in the near future.
9
Strategic report
Governance
Financial statements
Updated Strategic Targets
Achieve a Return on Sales
of at least 12.5% by 2026
Achieve a Return on Sales
of at least 12.5% by 2028
Generate strong and recurring
free cash flow of at least £400m
between 2024 and 2026
Deliver our cumulative £400m
free cash flow target between
2024 and 2027
Achieve £30m of annually
recurring cash cost savings
by the end of 2026
Increase our cash cost savings
objective to £45m by 2028
Return on sales has increased to 10.3%,
10 basis points higher on an underlying
basis than 2023 (2023 ROS: 10.2% on
a constant currency basis). This reflects
substantial cost savings achieved in 2024,
largely offset by the negative impact of
declining volumes in the Foundry business.
Free cash flow fell to £61m in 2024
compared to £128m in 2023, reflecting
the reduced EBITDA due to trading,
combined with ongoing investment capex.
We expect capex in 2025 to be £80m–£85m
then revert to more normalised levels.
In 2024, we delivered cost savings under
our Group-wide programme of £13m with
an annualised exit run-rate of £18m.
Of the savings delivered in-year, slightly
under half were in the Foundry Division,
reflecting swift action taken to address
costs in a challenging environment. The
cost savings achieved to date have been
weighted towards headcount reductions.
We aim to:
Original targets
Updated targets
Progress in 2024
Strategic Update
Our Sustainability Priorities
£
£
For more information, see pages 22 and 23, and the Sustainability section of this report on pages 34–62.
Helping our customers
reduce their CO
2
emissions
Become a zero-accident
company
Reach net zero CO
2
emissions (Scope 1 and 2)
Improve gender diversity at
every level of the company
In November 2023, we presented our
strategy and medium-term targets to
investors at a Capital Markets Event.
We highlighted favourable medium-term
trends in our end-markets, and, through
our market-leading investment in research
and development, demonstrated
our ability to gain market share while
pricing for the value we generate for
our customers. We also set out a cost
reduction programme as detailed below.
Cost optimisation programme
delivering above expectations
The cost optimisation programme,
launched in late 2023, initially aimed
to deliver £30m of annually recurring
cash savings by 2026. This programme
covers all of our worldwide activities and
focuses on operational improvement,
lean initiatives, automation and
digitalisation, as well as optimisation
of our manufacturing footprint.
In 2024, we delivered cost savings under
this programme of £13m with an
annualised exit run-rate of £18m.
Of the savings delivered in-year, slightly
under half were in the Foundry Division,
reflecting swift action taken to address
costs in a challenging environment. The
cost savings achieved to date have been
weighted towards headcount reductions.
We expect to deliver incremental in-year
cost savings of £12m–£14m in 2025.
We anticipate one-off costs in 2025
in the region of £7m–£10m and a total
programme cost of £40m, including
capex costs.
Given this good progress in 2024, we are
now raising our cash cost savings objective
from £30m of recurring annual savings by
2026 to £45m of recurring annual savings
by 2028, with an incremental cost of
delivery of c.£20m.
Medium-term strategic targets
Over the past year, we implemented our
programme and delivered on these cost
reduction actions. We also saw the benefit
of our technology-led business model, with
our differentiation driving market share
gains in Flow Control and Foundry.
The market backdrop, however, has
been challenging, particularly in our Foundry
Division where the decline in market activity
has been significant, such that the benefit of
cost savings in 2024 has largely been offset
by this market decline. Despite the short-
term uncertainties in our end-markets, we
remain confident in the mid- to long-term
growth potential of these markets and in
particular growth in the steel market outside
of China. The strength of our technology-
based business model should also enable us
to continue outperforming our underlying
markets in Flow Control and Foundry.
Given the near-term uncertain tariff and
geopolitical environment and the decline
experienced in Foundry end-markets over
the last 18 months, we are now targeting
to achieve our mid-term Return on Sales
target of at least 12.5% by 2028 and to
deliver our cumulative £400m free cash
flow target by 2027. This will be partially
dependent on a return to normal
conditions in our end-markets and will be
supported by an extension of our cost
reduction programme which we are
increasing from £30m to £45m by 2028.
Chief Executive’s strategic review
continued
Vesuvius plc
Annual Report and Financial Statements 2024
10
Steel Division
Despite adverse market conditions, the
Steel Division performed well in 2024.
On an underlying basis, the Steel Division
revenue remained broadly stable (-0.1%)
while profit grew by 9.9%, resulting in
return on sales increasing by 110bps.
Revenue growth was driven by market
share gains offsetting slightly negative
market volumes evolution overall due
to our overweight market position in
North America, where steel production
declined in 2024.
Overall, we gained market share across
the Steel Division, with gains across the
Flow Control business and in Advanced
Refractories in the growing regions of Asia
and EEMEA, which more than offset some
limited Advanced Refractories market
share losses in EU+UK and the Americas.
Headline pricing decreased slightly,
reflecting a decline in raw materials costs.
Pricing net of cost inflation (raw materials
and labour), however, remained positive.
Steel Division profits were also supported
by the strong cost reduction actions
undertaken as part of the Group-wide
£30m cost-saving programme.
Foundry Division
Severe market decline, in particular in
EU+UK and North Asia which represents
c.40% of the Foundry Division turnover,
reduced overall Foundry Division revenue
by c.10%. The Division was, however, able
to mitigate this general market downturn
with market share gains of c.5%.
Headline pricing also decreased during
the year, reflecting a decline of raw
materials prices. Pricing net of cost
inflation (labour and raw materials) was
slightly negative as labour inflation was
not fully compensated by price increases.
The Division reacted strongly to this
challenging environment, successfully
implementing cost reduction actions and
accelerating production and resource
transfers from EU+UK to lower cost and
faster growing areas.
We expect this strong action plan will
pave the way for an improvement of the
Foundry Division results going forward
despite the continuing difficult market
conditions in Europe and North Asia.
Good cash generation and
strong balance sheet
The business delivered adjusted
operating cashflow of £130.3m in 2024,
which represented a 69% cash conversion
rate for the year. Free cashflow was
£60.8m, after cash capex of £100.8m
(2023: £92.6m). We maintained a strict
focus on working capital management
and were able to reduce our trade working
capital intensity further, which was
22.9% at year-end, versus 23.4% last year.
Our balance sheet remained strong
with a debt leverage ratio of 1.3x
(31 December 2023: 0.9x), at the lower
end of our 1.0–2.0x range. This reflects
the free cash flow described above,
£63.4m of payments relating to the
share buybacks executed during the
year and dividends of £61.1m.
In February 2025 we concluded the
refinancing of our revolving credit facility,
extended to £475m, with a syndicate of
ten banks for a term of 4.5 years.
Acquisition in Türkiye
Following the agreement reached in
November 2024, on 28 February 2025
we completed the acquisition of a 61.65%
shareholding in PiroMET, a Turkish
refractory company, for €26.2m. The
acquisition will strengthen our Advanced
Refractories business in the fast-growing
region of EEMEA and will also allow us to
leverage PiroMET’s expertise in robotics
and gunning worldwide.
Capacity-expansion programme
in Flow Control and in Asia
nearing completion
The investment programme to expand
capacity and support the growth of
Flow Control worldwide and Advanced
Refractories and Foundry in Asia, initiated
in 2021, is now largely complete and will
underpin the progression of our results
and profitability in the years to come.
The expanded production capacity for
VISO, Slide Gate and Mould Flux in Flow
Control is now largely operational and
will support the Business Unit’s expansion
in India, South East Asia, EEMEA and
North America.
In Advanced Refractories, the expansion
of our Basic monolithic and AlSi monolithic
capacity at our new flagship plant in
Vizag is nearing completion and will
support profitable growth of the
Business Unit in India going forward.
In Foundry, our non-ferrous flux production
line in China is now fully operational and
will enable the Business Unit to accelerate
its penetration of the fast-growing
aluminium foundry market.
This three-year capex programme of
capacity expansion will be mostly
completed by the end of H1 2025.
Following this, capex is expected to
revert towards normalised levels.
Performance
Investment
11
Strategic report
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Financial statements
Continued progress in the
productivity of R&D and new
product development
We increased our investment in research
and development in 2024 (on a constant
currency basis), spending £36.9m,
equating to 2.0% of revenue. This was
fully expensed in our income statement.
Our two focus areas remain:
(1) innovation in materials science, with
an objective to continuously improve the
performance of our consumables; and
(2) the development of mechatronics
solutions to enable our customers to
substitute the operators who manipulate
our consumable refractories with robots
and, by doing so, improve their safety,
reliability, cost and quality performance.
Our New Product Sales ratio, defined as
the percentage of our sales realised from
products which didn’t exist five years ago,
reached 19.1% for the Group in 2024
(and was over 20% in our Flow Control
business). This is up from 17.6% in 2023 and
well on track towards our Group target of
over 20% by 2026. We launched 33 new
products in 2024 and have an extensive
pipeline of products under development
which will be progressively introduced in
the market over the coming years and will
support our ambition to grow our revenue
and profitability.
Our robotics business is also accelerating,
with orders for robotic systems for Flow
Control growing from five projects in
2023 up to nine in 2024. We also saw
a considerable increase in robots shipped,
up to six in the year versus one in 2023,
reflecting the significant positive momentum
in orders over the last two years.
Best ever safety performance
In 2024, we achieved a further
improvement in safety, with a Lost Time
Injury Frequency Rate (the number of
injuries necessitating a lost work-shift,
per million hours worked) of 0.52, our best
result ever, having achieved 0.60 in 2023.
This positions Vesuvius among the
best-in-class companies worldwide and
is the result of many years of effort to
integrate safety as the number one priority
in the company culture. We remain
committed to our goal of zero accidents,
and we will strive towards this objective.
Significant progress on our
journey to net zero
We continue to implement our action
plan to progressively decarbonise our
activities. As a result, we have reduced
our carbon intensity (CO
2
e tonnes per
million tonnes product sold) by 27% as
compared with our 2019 reference year,
on a pro forma basis (-40% on a reported
basis), significantly ahead of our 2025
objective of a 20% reduction. This has
been achieved through decarbonising
our electricity, improving energy efficiency
and moving from higher to lower carbon-
emitting energy sources. As part of this
initiative, our plant in Rio de Janeiro, Brazil,
became our first carbon-free major
manufacturing site operating exclusively
on renewable electricity and biomethane.
This has been a challenging year for
Vesuvius with Foundry markets in Europe,
North Asia and the Americas weakening
significantly and global steel production
outside China negatively affected by the
sharp increase in Chinese steel exports
during the year. Despite this, thanks to
significant cost cutting, resilient pricing
and market share gains, we have delivered
a robust performance, maintaining our
results at the level of 2023 on an underlying
basis, demonstrating again the strength
of our technologically differentiated
business model.
For the year ahead, while we remain
confident in our own performance, we are
cautious on market conditions due to the
uncertain economic environment arising
from the negative impact of trade tariffs,
which continue to evolve, geopolitical
volatility and the continuing structural
weakness of Steel and Foundry markets in
Europe. We currently anticipate that our
trading profit in 2025 will be at a broadly
similar level to 2024 on a constant currency
basis and including the contribution from
the PiroMET acquisition. We expect that
cashflow for 2025 will be significantly
ahead of 2024, benefiting from our
working capital focus and a more
normalised level of capex.
Patrick André
Chief Executive
5 March 2025
Sustainability
Current trading and outlook
Our strengths
How we create value
P
r
o
d
u
c
t
d
e
s
i
g
n
R
&
D
M
a
n
u
f
a
c
t
u
r
i
n
g
A
p
p
l
i
c
a
t
i
o
n
Collaboration
with our Steel and
Foundry customers
We work in partnership with
our customers to develop the
products and solutions that
improve their performance
Vesuvius plc
Annual Report and Financial Statements 2024
12
Think beyond.
Shape the future.
Our purpose
Our business model
People
We have more than 11,000 people
and more than 2,000 directly
supervised contractors in our
skilled and motivated workforce
Assets
Our global footprint of 54 production
sites on six continents places us in
close proximity to our customers
Intellectual capital
We have six R&D centres of excellence
and dedicated R&D staff worldwide,
generating innovative products
and services
Financial capital
We have a strong balance sheet
and use the cash generated by our
business to invest in innovation,
people, operating assets, technology
and sales, to generate further growth
Global supply network
We work closely with a wide range of
suppliers to establish reliable and
well-developed sustainable supply chains
to secure high-quality raw materials
CORE Values
We champion our Values of Courage,
Ownership, Respect and Energy, and our
ethical approach to business conduct
Vesuvius is a global
leader in molten metal
flow engineering and
technology, serving
process industries
operating in challenging
high-temperature
conditions.
We think beyond today to create
the innovative solutions that will
shape the future, delivering
products and services that help our
customers make their industrial
processes safer, more efficient
and more sustainable.
In turn, we provide our employees
with a safe workplace where
they are recognised, developed
and properly rewarded, and
aim to deliver sustainable,
profitable growth to provide
our shareholders with a superior
return on their investment.
Our business approach
Entrepreneurial
Decentralised
A non-matrix organisation
Our global footprint enables us to
capitalise on shifting dynamics in the
global steel market, responding to our
customers’ needs where they are growing
Our continuous focus on improvements
in our manufacturing base, and IT
and support functions, along with the
automation of production processes,
reduces our cost base and maintains
the efficiency of our operations
Our network of talented scientists and
technicians create differentiated products
and solutions, allowing us to maintain
our technology leadership and solve
our customers’ most difficult problems
through innovation
Our shareholders
Our cash-generative
and low capital intensity
business provides
returns to our shareholders
and underpins
sustainable growth.
Our people
We encourage and reward
high performance to
create an environment
where all can realise their
individual potential.
Our customers
Our cutting-edge products
and solutions deliver
enhanced value for
our customers.
Our environment
We are taking active
steps to improve our
environmental efficiency.
Our customer intimacy and deep
knowledge of their processes and
requirements give our engineers an
unparalleled ability to deliver on
customer needs
Value for customers
Safety
– Better working
environments
Quality
– Optimised products
driving higher-quality steel,
and better castings
Efficiency
– Cheaper casting
and steel through reduction
of input costs and improved
operational efficiency
Sustainability
– Less energy
usage and reduced
wastage resulting in
lower CO
2
emissions in
our customers’ processes
Innovation
Customer knowledge
Global presence
Efficiency
We operate a profitable,
flexible, cash-generative
model focused on
sustainable growth.
£123.5m
returned through our share buyback
programmes and dividend
payments in 2024
£390.8m
paid to employees in wages and
salaries in 2024
33
new products launched in 2024
26.9%
pro forma reduction in Scope 1 and
Scope 2 CO
2
e emission intensity
per metric tonne of product packed
for shipment (vs 2019)
1
13
Strategic report
Governance
Financial statements
The value we create
How we make a difference
10.3%
Return on sales
£61m
Free cash flow
£13m
Cost savings
Robust financial returns in 2024
We are...
1.
Pro forma performance calculated as if dolime production had been operating normally in 2024. The actual reduction in Scope 1 and 2 CO₂e emission intensity
in 2024 was 40.4%. See page 51 for further information.
Why invest in Vesuvius?
We operate in markets
expected to grow
over the medium term
Flow Control
Flow Control provides end-to-end continuous casting solutions, from the ladle
to the mould, harnessing strong R&D capabilities to supply technologically
differentiated, bespoke products and systems to our customer base. We can
combine our consumables with our industry-leading slide-gate systems and
robotics to deliver highly reliable, safe and fully traceable operations.
Advanced Refractories
Advanced Refractories provides consumable products (monolithics, bricks,
precast) to the steel and industrial processes industries (e.g. aluminium,
foundry and cement). We combine our global on-site presence at customer
locations with our mechatronics solutions to deliver improved safety and
efficiency within our customers’ operations, whilst providing an ongoing
revenue stream from our consumable products.
Markets served
Product portfolio
31%
38%
31%
A
sia-Pacific
Americas
EMEA
By region
%
We have global exposure with under half our revenue
generated from the mature markets of North America and
Europe. We have a strong and growing position in India and
other emerging markets. China represents only 10% of our
revenue due to our focus on steel manufactured using high-tech
processes, but we are well placed to respond to an expected
growth in high-tech steel in China in the coming years.
Buildings and infrastructure
Mechanical equipment
Domestic appliances
Automotive
Other transport
Metal products
Electrical equipment
By end-market
%
Steel is the world’s most important engineering and construction
material. The steel manufactured today is principally used for
construction, infrastructure, automotive manufacture and
domestic goods.
Steel Division
Vesuvius plc
Annual Report and Financial Statements 2024
14
Across the Steel Division we see two main indicators, both of which forecast encouraging growth
1
Market indicators and trends
Global steel production volumes
The volume of steel produced directly impacts the quantity of
Vesuvius products consumed. We anticipate further growth in
steel production volumes outside of China (~2% CAGR) with an
estimated increase of more than 200 million tonnes in emerging
markets between 2023 and 2033, linked to the development
in emerging economies (including India and South East Asia).
The implementation of steel import/export tariffs may also
result in an increase of local production in mature markets
such as the Americas and EMEA.
Vesuvius’ existing exposure to mature markets, and our recent
investments in India, Poland and Mexico, mean that our
Steel Division is well positioned to capture this growth.
Steel production by type
The type of steel produced, e.g. high-tech steel used in
the automotive industry vs. commodity steel used in the
construction industry, impacts the production method used
by manufacturers. High-tech steel requires more sophisticated
production methodologies e.g. thin slab casting, which in
turn requires more elaborate and larger volumes of our
Flow Control products.
We anticipate that high-tech steel volumes, which currently
represent c.35% of steel production, will increase at ~2.7%
CAGR driven by the maturation of developing economies
as they transition from construction and infrastructure to
consumer demand. We also anticipate that commodity steel
volumes, which represent c.65% of current production volumes,
will increase ~0.5% CAGR, driven by fast-growing economies
and infrastructure investments. The high-tech steel segment
represents ~58% of Flow Control sales, hence the business
unit is well positioned to capture this growth.
2033
2023
2013
China
RoW
~90%
Vesuvius
sales
~10%
Vesuvius
sales
EU + TK
CIS
USMCA
JKANZ
India
Expected evolution of global steel production
million tonnes
1,615
1,898
1,989
Actuals
Forecast
2033
2023
2013
India
Middle East
South East Asia
Latin America
Africa
Expected growth in steel production in emerging markets
million tonnes
190
320
542
Actuals
Forecast
2033
2023
2018
Commodity steel
High-tech steel
High-technology steel production evolution,
million tonnes
1,828
1,898
1,989
32%
+2.7%
CAGR
+0.8%
CAGR
+0.5%
CAGR
68%
35%
65%
43%
57%
+2.2%
CAGR
Actuals
Forecast
Sources:
–
Actuals: World Steel Association Crude Steel Production data,
issued 24 January 2025.
–
Forecasts: Laplace Conseil.
15
Strategic report
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Financial statements
Why invest in Vesuvius?
The Foundry Division (Foseco) couples the design and manufacture of customised products and process technology with technical
support to improve the quality of metal castings produced in the foundry industry. Our product portfolio consists of six core product
lines, where we offer solutions to serve both ferrous and non-ferrous foundries.
COATINGS
FEEDING SYSTEMS
METAL
TREATMENT
REFRACTORIES
FILTERS
CRUCIBLES
Typical product line alloy application:
Ferrous
Non-ferrous
Product portfolio
Markets served
36%
25%
39%
Asia-P
acific
Americas
EMEA
By region
%
Ferrous sales in developed markets represent the core of the
Foundry Division’s business. We are witnessing the transition of
ferrous casting activity from Western Europe towards emerging
markets. We expect this strong growth to continue and we are
focused on expanding our business in these developing markets.
Light vehicles
Medium-heavy vehicles
Mining & construction
equipment
Railway and marine
Power generation
General engineering/Others
By end-market
%
Products manufactured by the foundry casting
market – made up of iron casting, steel casting and
non-ferrous casting – are used across all engineering sectors.
Foundry Division
We operate in markets
expected to grow
over the medium term
Vesuvius plc
Annual Report and Financial Statements 2024
16
We see positive dynamics in the Foundry market
1
Market indicators and trends
Global casting volumes
1
The volume of castings produced directly impacts the quantity
of Foseco’s products consumed. We anticipate growth in global
casting volumes (+2% CAGR), mainly linked to development
in India, South East Asia and China, where production of
light vehicles, trucks and buses in particular is increasing.
Foseco’s recent expansion in China, coupled with our
investments in automation and previous manufacturing
expansion in India, result in Foseco being well positioned
to benefit from this growth.
Global casting production by type
1
The type of metal being cast, e.g. ferrous vs. non-ferrous,
impacts the production method and the type and volume
of consumables required.
We anticipate non-ferrous casting volumes will grow faster
(~2.5% CAGR) than ferrous volumes (~1.6% CAGR), as a result
of automotive electrification, where vehicle volumes are
shifting from ICE (Internal Combustion Engine) to BEV
(Battery Electric Vehicles) which in turn increases the demand
for non-ferrous metals (e.g. aluminium) for production.
Whilst Foseco has historically been stronger in ferrous casting
technology, we continue to develop our non-ferrous portfolio.
Foseco’s existing product portfolio and market position in
ferrous castings positions us well to capture the market growth
in this area, whilst our focus on R&D and recent product
launches in non-ferrous (which account for >50% of our new
product development projects and new product launches),
aims to capture the faster growth in the non-ferrous market.
1. All CAGRs quoted are 2024–2030, source: Modern castings,
country foundry associations, World Steel Association, foundry-planet,
Global Foundry Magazine, Vesuvius & McKinsey data.
2030
2024
Expected evolution of global casting volume
(2024–2030)
million tonnes
112
124
1.8%
2030
2024
Expected evolution of global casting volume
(2024–2030)
¹
million tonnes
86
26
30
94
2.5%
1.6%
Ferrous
Non-ferrous
CAGR, %
124
112
Foundry’s customers
The Foundry market is highly fragmented
with three main customer segments.
Specialists represent the largest segment
of Foundry’s customer base. The Foundry
Division has thousands of customers
with no one customer representing
more than 2% of Foundry’s revenue.
Foseco customer segmentation
Typically light vehicle
and truck tier 2 suppliers
who produce a small range of
castings for various end users
Small accounts with
one-off production runs,
active across all sectors
The captive
–
Controlled by OEMs,
who produce in-house
where there is a
technological edge
vs. outsourcing
The specialist
–
Focused on a limited
number of markets
(mining, automotive,
windmill)
The jobbing
–
Produce a range
of products on request
–
Process and artisanal
capabilities
End-markets
Mainly consists of mining,
agriculture and light
vehicle foundries
Large run/series
(>1,000pcs/yr even up to >100kpcs/yr in automotive)
Small runs/series
(5–100pcs/yr)
17
Strategic report
Governance
Financial statements
We serve our customers
through technological
differentiation
Why invest in Vesuvius?
We have built up a global network of
expert scientists and technicians, based
across our six R&D centres of excellence.
These centres both develop new products
and provide specialist support for our
customers. In order to develop and
maintain our technological advantage, we
spend c.2% of revenue on R&D annually.
We operate a detailed process of
evaluation through the product
development cycle with a number of
stage-gates that each product must pass
to progress, in a process that typically
takes c. three years. The benefit of this
investment in innovation is seen in the
growing proportion of sales from new
products (being products launched in the
past five years). We have a target of 20%,
which has already been achieved by
our Flow Control Business Unit.
1. New product sales defined as sales from
products launched in the past five years.
Ongoing innovation pipeline of value-adding products
An innovation-led business
Flow Control
Our new high performance ladle
slide-gate plate, DuraPlate
*
L-Tech, is
designed for a range of end-markets,
including long steel production, stainless
steel and thin slab casting
–
Efficiency: long-life product
–
Safety: less operator handling
–
Sustainability: lower
refractory consumption
per kilogram of
steel produced
Advanced Refractories
Fully automated gunning robot for
furnace maintenance significantly
improves operational efficiency
and safety
–
Cuts gunning time in half
–
Operates at higher temperatures,
reducing downtime
–
Optimised monolithic
for high-speed
application
Foundry
SOLOSIL
*
is an environmentally-
friendly inorganic binder
–
Cores made with SOLOSIL TX
*
are
completely inorganic and therefore
emit only water vapour during core
storage and the casting process
–
Has health and safety and
environmental benefits,
as it eliminates hazardous
emissions and is
completely odourless
We employ expert material science and fluid dynamics specialists to create truly innovative
and differentiated products. These products are highly specialised to perform their function
in the extreme environments of steel manufacture and foundry casting.
2022
2021
2023
2024
–
R&D as a % of revenue
–
R&D investment £m
Consistent investment in R&D
£36.4m
£36.9m
£35.1m
£30.6m
1.9%
1.8%
2.0%
2.0%
(Constant currency)
2022
2021
2023
2024
2026
target
Steadily growing new product sales
1
%
>20%
15.3%
16.4%
17.6%
19.1%
*
Trademark of the Vesuvius Group of companies, unregistered or registered in certain countries, used under licence.
Vesuvius plc
Annual Report and Financial Statements 2024
18
Every steel mill and foundry is
different, so our customers
need and expect bespoke
solutions. In addition, the
effective functioning of our
products is in many cases
determined by their skilled
application or installation
which we provide through our
on-site technical expertise.
We seek to develop and maintain a close
partnership with our customers, fulfilling
the needs of their operations by:
–
Giving expert engineering and technical
input to advise on the optimum product
to maximise value
–
Providing after-sales service to support
optimum usage
–
Catering for their individual needs
Our Steel Division caters for the geometries
of the ladle and tundish of each different
steel mill and evaluates products ‘in use’
to ensure that refractory use in the
steel-making process is optimised.
In Advanced Refractories, we operate
contracts where we provide the technicians
to manage the refractory application process.
We achieve this through our dedicated team
of sales and marketing experts, who work
closely with our R&D teams. Our global
presence means that our customers are
served by experts from within their region.
We seek operational excellence
throughout our organisation.
–
We have a manufacturing base
optimised for mature and
growing markets
–
We share best practice across sites
–
We maximise the use of automation
to drive consistent product quality
–
We are improving health and safety
throughout our organisation
–
We are improving energy efficiency
and CO₂ emissions (relative to output)
throughout our organisation
Vesuvius develops systems
and robots that deliver
significant value to customers
by removing people from
working in dangerous areas
of a steel plant and improving
the speed and consistency of
changeover of refractory
parts, therefore increasing
the yield of high-quality steel
while reducing health and
safety risks.
Our robots are designed to work with our
systems and refractory products, and
provide a long-term partnership with
our customers.
In South East Asia, a major customer has
elected to install a range of our robots
and systems in the new production plant
they have commissioned.
They chose a combination of our latest
LG34
TM
ladle-gate systems and advanced
tube-changer systems SEM3085
TM
,
covering both the ladle and tundish
segments of their operations, all
integrated with our refractory products.
These systems are robot-ready and
enable the customer to produce
high-quality steel, as efficiently
and safely as possible.
Customer partnership
Operational excellence
Mechatronic solutions that support our refractory products
19
Strategic report
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Financial statements
Vesuvius plc
Annual Report and Financial Statements 2024
20
Our strategic targets
Our actions
Why invest in Vesuvius?
Market share gains
We aim to grow ahead of the market
in Flow Control and Foundry, and have
a consistent track record of achieving
this, with our market share gains in
Flow Control and Foundry around
or exceeding 2% in each of the past
three years.
Flow Control
We invest in R&D ahead of
competitors in order to maintain
technical superiority.
Our differentiated products are
typically priced at a premium to reflect
the value-add that they offer to our
customers over the total lifetime of the
product usage, taking into account the
improvements in the steel-makers’
process efficiency, quality of steel
output, safety and sustainability.
Foundry
Foundry products are designed
to optimise the casting process in
foundries. We invest in the development
of these products with a focus on
those where we can offer particular
differentiation, notably in filters,
feeding products, coatings and
non-ferrous metal treatments,
the latter being a growing
product category.
Advanced Refractories
Our strategy is to focus on the more
differentiated products around the
tundish, in robotics and industrial
products, where we seek to maximise
profit versus prioritising market
share gains.
Net positive pricing
Vesuvius has a track record
of net positive pricing,
particularly from
Flow Control
Net positive pricing represents full cost
recovery, which has been essential
to margin stability as raw material
costs can change significantly within
relatively short time frames, and
constitute a significant proportion
of our costs of goods sold.
Successful net positive pricing
demonstrates the ability of our
organisation to make timely
adjustments to pricing, appropriate
to our markets and reflective of
the relevant product costs. This
is a feature of our decentralised
organisation, where pricing can be
adjusted rapidly where necessary.
It also reflects the technological
differentiation of our products,
particularly in Flow Control
and Foundry.
We deliver robust
and consistent
financial returns
Achieve a Return on Sales of
at least 12.5%
Delivered through:
–
Market share gains
–
Market growth
–
Cost savings and operational efficiency
Delivered by 2028
£
Generate strong and recurring
free cash flow of at least £400m
Delivered through:
–
Profitable growth
–
Our capex-light business model
–
Reducing working capital
Delivered over 2024–2027
£
Achieve £30m of annually
recurring cost savings in 2026
vs 2023, plus further savings
of £15m by 2028
Delivered through:
–
Operational improvements
–
Manufacturing optimisation
–
Streamlining back office operations
Strategic Value
alignment
Return on Sales
£
Free Cash Flow
£
Cost Savings
Sustainability
We seek to outperform our underlying markets by, on average,
2% per annum, using our technology leadership to gain market
share and share the value we generate for our customers.
21
Strategic report
Governance
Financial statements
Our capital allocation priorities
Cost optimisation
We set a target of delivering an
annualised £30m of cost savings
by the end of 2026 and a further
£15m by 2028.
2025
2024
2026
Target
2028
Target
£30m
£30m
£15m
£13m
£12–£14m
est.
£25–27m
Cumulative cost savings
(£m)
Cost savings are split between:
–
Operational improvements in
manufacturing processes,
e.g. increased automation
–
Operational improvements
achieved by streamlining
administrative functions
–
Headcount reductions which have
been largely actioned in 2024
–
Transfer of manufacturing
capacity to some growing and
established markets to give
more flexible operations
Our actions in 2025 will be further
focused on manufacturing optimisation
and automation.
Returns to shareholders
–
Progressive dividend policy
–
Maintenance of a prudent balance sheet
–
Additional returns: £62.4m returned
via share buyback programmes in 2024
Inorganic investment
–
Acquisitions on a highly selective basis
–
One acquisition for ~£22m agreed
in 2024
Organic investment
–
R&D expenditure of ~2% of
revenue annually
–
c.£100m growth capex programme
largely concluded by end of 2024
–
Capex to revert towards sustaining
levels in 2025
1
2
3
*
Trademark of the Vesuvius Group of companies, unregistered or registered in certain countries, used under licence.
Every day we focus on improving the sustainability of our operations and help our
customers improve the safety, energy efficiency, yield and reliability of their processes.
We are committed to delivering products and services that improve safety, maximise
environmental performance, reduce greenhouse gas emissions and contribute to the
circular economy.
Helping our customers reduce their CO
2
emissions
The World Steel Association estimates that for every tonne of
steel produced, almost two tonnes of CO
2
are emitted. We
contribute to the fight against climate change by helping our
customers reduce their emissions. We do this by improving the
casting performance of steel plants, thereby increasing the
energy efficiency of their entire process. With around 10% of
a steel plant’s emissions resulting from wasted energy caused
by interruptions in production, metal wastage and poor output
quality, utilising our products to improve the quality and
efficiency of their processes can deliver significant benefits.
Similar challenges exist in the Foundry industry, where
our products help customers to maximise their energy
efficiency by improving the ratio of metal melted to finished
castings produced.
Our customers are embracing the challenge of reducing their
CO
2
emissions. In the iron, steel and aluminium industries, many
have pledged to reach net zero by 2050. They are investing
heavily to transform their manufacturing technologies for
the long term, working on a range of initiatives including the
direct reduction of iron with carbon-free hydrogen and
the replacement of carbon anodes in aluminium smelting.
We contribute to their efforts through technology partnerships
and developing new products for the next generation of
zero-emission aluminium, iron and steel-making processes.
We help them to evaluate the CO
2
emissions reduction our
products bring to their complete value chain.
Assisting our customers to improve their
environmental efficiency
Why invest in Vesuvius?
We have a clear
sustainability strategy
Basilite Quickstart
*
Eliminates the need for energy-intensive
flame drying of tundish linings prior to
steel production, reducing both energy
consumption and CO
2
emissions in the
steel-making process.
DuraSleeve
*
Its enhanced erosion-resistant
technology extends casting duration
and reduces energy waste by minimising
essential production stops.
SEMCO
*
Fast-drying and colour-change
coatings cut drying times compared to
traditional water-based coatings, resulting
in lower energy consumption for drying,
whilst optimising casting productivity.
Vesuvius expertise
–
Materials science
–
Application engineering
–
Digital solutions
–
Mechatronics
Providing technology and products to improve
–
Energy efficiency
–
Yield of high-quality metal
–
Process efficiency to
reduce stoppages
We have set four key sustainability priorities
Read more about our
KPIs on p35 and 36.
Vesuvius plc
Annual Report and Financial Statements 2024
22
1.
See Non-Financial and Sustainability Section on p33–62 in this document for details.
2.
Pro forma performance calculated as if dolime production had been operating normally in 2023 and 2024. The actual reduction in Scope 1 and 2 CO₂e emission
intensity in 2023 was 18.6% and in 2024 was 40.4%. See page 51 for further information.
Become a zero-accident company
Improve gender diversity at every level of the Company
Become a zero-accident company
Women now represent 21% of our Senior Leadership Group
(2023: 20%). This is a level that we consider is still too low and well
below our 2025 target of 25%, but which represents a significant
improvement as compared with the level of 15% in 2019.
Reach net zero CO
2
emissions (Scope 1 and 2)
Between 2019 and 2024, our overall CO
2
e emission intensity
metric (CO
2
e emissions per metric tonne of product packed for
shipment, Scope 1 and Scope 2, market-based) reduced by
26.9% on a pro forma basis
2
(2024 actual: -40.4%), versus
a target of 20% reduction by 2025.
In 2024, we continued to focus on further improvements,
modernising and upgrading our installed equipment to reduce
energy consumption and investing to renew equipment to the
best available technologies. We focused on generating our
own clean energy and, where this was not possible, converted
to less CO
2
-intensive energy sources. We also reduced our
energy wastage, recovering heat to feed processes and
heat water.
We were pleased to see continued progress with the reduction
of our Lost Time Injury Frequency Rate (LTIFR) in 2024,
recording a rate of 0.52 per million hours worked, which was
lower than 2023. We are determined to continue our journey to
zero accidents, and are focusing on two pillars to achieve this:
–
People development and behaviours, with ongoing training
and auditing, regular Safety Days and continued emphasis
on our Core Safety Rules
–
Reviewing equipment and activities, including upgrading
equipment, to improve machine guarding and lifting and
handling activities; and focusing on process safety
In common with many companies operating in heavy-duty
and engineering industries, we face challenges in attracting
women to join the organisation. As a result we are placing
greater emphasis on developing an internal pipeline of female
talent. We encourage managers to leverage our decentralised
entrepreneurial culture to drive programmes suited to local
needs and improved succession planning processes. In 2024,
our operations implemented various programmes and
initiatives, including a diversity ambassadors and training
programme, offering flexible working arrangements and
partnerships with universities to support the education
of women and girls in STEM.
Links to remuneration
5% of the VSP Award is based on increased gender diversity
Read more about this on p118.
Links to remuneration
5% of VSP Award is based on reduced Lost Time Injury Frequency Rate
Read more about this on p118.
Reduction in Scope 1 and 2 CO
2
e emission intensity per metric
tonne of product packed for shipment versus 2019
2
-20%
-26.9%
-20.7%
2025 Target
2024
2023
Links to remuneration
10% of the VSP Award is based on reduced CO
2
e emission intensity
Read more about this on p118.
Senior leaders
21%
79%
Female
Male
1.54
1.16
1.06
0.60
1.08
0.52
LTI Frequency Rate (LTIFR)
per million hours
2020
2019
2021
2022
2023
2024
23
Strategic report
Governance
Financial statements
Despite adverse market conditions,
the Steel Division performed well in 2024
Steel Division
Steel Division
2024 (£m)
2023 (£m)
Underlying
change
Change
Flow Control Revenue
769.0
793.0
1.3%
(3.0%)
Advanced Refractories Revenue
535.6
567.9
(2.6%)
(5.7%)
Sensors & Probes Revenue
39.2
39.1
7.0%
0.4%
Total Steel Revenue
1,343.8
1,400.0
(0.1%)
(4.0%)
Total Steel Trading Profit
153.0
147.6
9.9%
3.7%
Total Steel Return on Sales
11.4%
10.5%
+110bps
+90bps
Our Steel Division reported revenues of
£1,343.8m in 2024, flat on an underlying
basis (-0.1%) and a decrease of 4.0%
on a reported basis, reflecting currency
headwinds. The flat performance reflects
an increase in revenue of 1.3% in Flow
Control offset by a 2.6% reduction in
Advanced Refractories. Revenue from
Sensors & Probes grew 7% due to market
share gains. The impact of the underlying
steel market performance was negative
given our mix of business, as a result of
our strong position in the North American
market where steel production declined
during the year, which we partially offset
by market share gains.
Steel Division trading profit grew by
9.9% on an underlying basis to £153.0m.
The profit impact from volume declines
was greater than usual reflecting some
plant under-utilisation in recently
expanded sites. The impact of these
negative volumes was offset by a
combination of modestly positive net
pricing and accelerated cost savings,
both as part of our Group-wide
cost-saving programme, and additional
one-off benefits. The rise in trading profit
on broadly flat revenue has resulted in
the divisional return on sales reaching
11.4%, an increase of 110bps.
£1,343.8m
Steel Division revenue
£153.0m
Steel Division trading profit
Operating review
Vesuvius plc
Annual Report and Financial Statements 2024
24
811
793
769
2024
2023
2022
Strategic report
Governance
Financial statements
Flow Control
Flow Control Revenue
2024 (£m)
2023 (£m)
Underlying
change
Change
Americas
297.8
317.8
(1.1%)
(6.3%)
Europe, Middle East
& Africa (EMEA)
241.3
252.7
(1.2%)
(4.5%)
Asia-Pacific
230.0
222.4
7.8%
3.4%
Total Flow Control Revenue
769.0
793.0
1.3%
(3.0%)
In 2024, revenue in the Group’s Flow
Control business increased by 1.3% on
an underlying basis to £769.0m (a decline
of 3.0% on a reported basis after FX
headwinds). This performance was driven
by positive pricing and overall market
share gains, partially offset by market-
driven volume declines.
In the Americas, overall underlying revenue
declined 1.1%, made up of a small
outperformance of the market in North
America (volumes reducing 3% against
a market decline of 4%) but with modestly
positive pricing, and a slight decline in
South America with sales volumes
declining moderately while steel
production volumes were broadly flat,
in part due to a significant destocking
effect at our Argentinian customers.
Pricing in South America reduced slightly.
In EMEA, revenue declined 1.2%
compared to 2023. In EEMEA (excluding
Iran, Russia and Ukraine) where steel
production grew c.4%, we gained market
share with volume growth significantly
ahead of the market. This was offset by
moderate volume declines in the EU+UK,
slightly behind a flat market, due to a
voluntary reduction of our sales to some
customers at risk of insolvency. Pricing
over the region was broadly flat.
In Asia-Pacific, revenue grew 7.8%,
driven by double-digit sales volume
growth in India, well ahead of market
volume growth and high-single-digit
growth in China despite the steel market
contracting in this region.
Revenue
£m
£769m
Pascal Genest
President, Flow Control
25
645
568
536
2024
2023
2022
40
39
39
2024
2023
2022
Vesuvius plc
Annual Report and Financial Statements 2024
26
Operating review
continued
Steel Sensors & Probes Revenue
2024 (£m)
2023 (£m)
Underlying
change
Change
Americas
28.3
28.2
8.4%
0.2%
Europe, Middle East
and Africa (EMEA)
10.5
10.2
5.8%
3.2%
Asia-Pacific
0.4
0.6
(32.2%)
(34.8%)
Total Steel Sensors
& Probes Revenue
39.2
39.1
7.0%
0.4%
Advanced Refractories Revenue
2024 (£m)
2023 (£m)
Underlying
change
Change
Americas
188.2
212.1
(7.6%)
(11.2%)
Europe, Middle East
and Africa (EMEA)
167.6
191.5
(10.9%)
(12.5%)
Asia-Pacific
179.7
164.3
13.9%
9.4%
Total Advanced
Refractories Revenue
535.6
567.9
(2.6%)
(5.7%)
Advanced Refractories reported revenue
of £535.6m in 2024, a decrease of 2.6%.
This was broadly evenly split between
pricing declines (partly reflecting input
cost decreases) and some volume decline.
Sales volume decline was higher than
the underlying steel market in both the
Americas and the EU+UK region of EMEA,
due to market share losses at customers
where we had historically given priority to
pricing. Market share in these areas has
now stabilised. In Asia-Pacific, revenue
grew 13.9% driven by very significant
double-digit volume increases in India
and China, materially ahead of the
market, reflecting both demand for
our high-quality products and the
benefit of new capacity coming on
stream in these regions.
Revenue in Sensors & Probes was
£39.2m in 2024, up 7% year-on-year on
an underlying basis. Growth has been
driven mainly by robust market demand in
South America during the first half of the
year, increased sales of new high-value
products and by winning new customers
in EEMEA.
Advanced Refractories
Revenue
£m
£536m
Revenue
£m
£39m
Sensors & Probes
Nitin Jain
President, Advanced Refractories
Luigi Magliocchi
President, Sensors & Probes
551
530
476
2024
2023
2022
Strategic report
Governance
Financial statements
Our Foundry Division experienced a
difficult trading environment, with
reported revenues of £476.3m in 2024,
an underlying decrease of 6.3%, reflecting
contracting revenues in EMEA (-12.7%)
and the Americas (-7.8%), which we
partially offset by growth in Asia-Pacific
(+2.7%), including India (+12%) and China
(+6%). The underlying fall in revenue
was largely due to c.10% market volume
declines – partially offset by c.5% revenue
growth from market share gains –
and modestly negative sales price.
The market contraction described was
driven by double-digit declines in our
markets in EU+UK and North Asia and
a high-single-digit market decline in
North America. Against this backdrop,
India continued its strong and sustained
growth trend. Market share gains were
largest in EMEA, India and China, with
the latter being supported by our new
capacity in the region. Foundry markets
have stabilised at the level of H2 2024.
Trading profit and return on sales
contracted 28.9% and 230bps
respectively, both on an underlying
basis, reflecting the negative impact of
significant volume declines, particularly in
our traditionally most profitable regions.
This was partially offset by accelerated
cost savings as part of the Group-wide
plan to deliver £30m savings by 2026.
Karena Cancilleri
President, Foundry
Foundry Revenue
2024 (£m)
2023 (£m)
Underlying
change
Change
Americas
119.3
136.4
(7.8%)
(12.6%)
Europe, Middle East
and Africa (EMEA)
183.6
215.1
(12.7%)
(14.6%)
Asia-Pacific
173.4
178.3
2.7%
(2.7%)
Total Foundry Revenue
476.3
529.8
(6.3%)
(10.1%)
Total Foundry Trading Profit
35.0
52.8
(28.9%)
(33.6%)
Total Foundry Return on Sales
7.4%
10.0%
-230bps
-260bps
Revenue
£m
£476m
27
Foundry Division
Vesuvius plc
Annual Report and Financial Statements 2024
28
Underlying revenue growth
Return on Sales (ROS)
Headline EPS
Link to principal risks
Link to principal risks
Link to principal risks
Links to remuneration
Annual Incentive Plan
Read more about this on p110 and 117.
2024 delivery
-1.8%
2024 vs 2023
+4%
3-yr CAGR
2024 delivery
10.3%
2024 delivery
43.3p
Target
+4%
CAGR
medium-term
+2%
versus market (Flow
Control and Foundry)
Target
12.5%
by 2028
Progress in 2024
Headline EPS reduced by 7.2%, reflecting
an FX retranslation headwind, partially
offset by a positive underlying change of
2.1% compared to 2023. This reflects a
small fall in earnings offset by a reduction
in share count due to the share buybacks
undertaken in the year.
Rationale for being a financial KPI
Headline EPS is the underlying earnings
available to shareholders. EPS reflects
both the earnings achieved in the year
and the number of shares in issue.
Definition
*
Profit after tax, before separately
reported items, attributable to
shareholders, divided by the average
number of shares in issue over the year.
Principal risks
End-market
Failure to secure innovation
Business interruption
People, culture and performance
Health and safety
Environmental, Social and Governance
Protectionism and globalisation
Product quality failure
Complex and changing regulatory environment
Financial KPIs
Track record
p
43.3
46.7
56.5
2024
2023
2022
Track record
%
10.3
10.4
11.1
2024
2023
2022
Track record
%
-1.8
-3
18
2024
2023
2022
Definition
*
Adjusted earnings before interest,
tax amortisation and separately
reported items, divided by revenue.
Definition
*
Revenue growth on a constant currency
basis, excluding the impact of
acquisitions and disposals.
Rationale for being a financial KPI
Return on sales is a key measure of the
quality of the business, reflecting our
technologically differentiated and
value-adding products. We seek to
achieve an ROS of 12.5% by 2028
through a combination of cost
savings and revenue growth.
Rationale for being a financial KPI
A key indicator of organic growth of the
Group. We seek to drive organic revenue
growth through market share gains
with a target of outperforming our
underlying markets by at least 2%
in Flow Control and Foundry.
Progress in 2024
Return on sales reduced by 10 basis points
versus the FY23 reported figure, reflecting
an increase of 10 basis points on a constant
currency basis, offset by currency
retranslation. This underlying improvement
reflects substantial cost savings achieved,
largely offset by the negative impact of
declining volumes in the Foundry business.
Progress in 2024
Revenue declined 1.8% versus 2023,
being broadly flat in our Steel business
and reflecting a 6.3% decline in Foundry.
In Flow Control and Foundry, we achieved
our target of >2% market share gains.
£
£
£
£
£
£
1
2
3
4
6
5
7
*
See Note 35 to the Group Financial Statements on Alternative Performance Measures for detailed definitions.
1
2
3
4
6
5
7
1
2
3
4
6
5
7
1
5
6
7
8
9
2
3
4
29
Strategic report
Governance
Financial statements
Free Cash Flow (FCF)
Trade working capital intensity
Return on Invested Capital (ROIC)
Link to principal risks
Link to principal risks
Link to principal risks
£
£
£
£
£
£
Links to remuneration
Annual Incentive Plan
Read more about this on p110 and 117.
Links to remuneration
Annual Incentive Plan and
Vesuvius Share Plan
Read more about this on p110, 117 and 118.
2024 delivery
£61m
2024 delivery
22.9%
2024 delivery
8.4%
Definition
*
Adjusted earnings before interest, tax
and separately reported items, plus share
of post-tax profit of JVs and associates,
all after tax, divided by average invested
capital (total assets excluding cash
and non-interest-bearing liabilities).
Definition
*
Cashflow from operating activities
and after net capex, dividends received
from JVs and dividends paid to
non-controlling shareholders.
Definition
*
Average trade working capital to sales
ratio is calculated as the percentage of
average trade working capital balances
to the total revenue for the previous
12 months, at constant currency.
From 2025, management will be
incentivised on ROIC excluding the
impact of goodwill and intangibles
that arose under IFRS3 following the
acquisition of Foseco in 2008.
Target
£400m
cumulative 2024–2027
Target
21.0%
by end 2026
Track record
%
8.4
8.9
10.7
2024
2023
2022
Track record
%
22.9
23.4
23.8
2024
2023
2022
Track record
£m
61
128
123
2024
2023
2022
Rationale for being a financial KPI
Reflects the returns achieved by the
business on its capital, where returns
consistently above our weighted average
cost of capital demonstrate value
creation for our stakeholders.
Rationale for being a financial KPI
Free cash flow represents cash flow
available to the Group to either invest in
the business (such as by acquisitions),
to reduce our capital base (such as
through buybacks) or to distribute
back to shareholders. We aim to achieve
£400m FCF in aggregate between
2024 and 2027.
Rationale for being a financial KPI
Working capital intensity shows the
control of working capital, which is
a key variable component in achieving
our ROIC target. We aim to achieve
working capital intensity of 21% by
the end of 2026.
Progress in 2024
ROIC of 8.4% represents a decrease
compared to 2023, largely reflecting
the decline in earnings and also the
investment in growth capex over the
past year. ROIC excluding goodwill
capitalised on the acquisition of
Foseco in 2008 would be 13.6%.
Progress in 2024
Free cashflow fell to £61m in 2024
compared to £128m in 2023,
reflecting the reduced EBITDA due
to trading, combined with ongoing
investment capex.
Progress in 2024
Working capital intensity improved
by 50bps to 22.9%, principally
reflecting improvements in debtor
and creditor management.
Strategic
Value
alignment
Return on Sales
£
Free Cash Flow
£
Cost Savings
Sustainability
Details of the Group’s
Non-Financial KPIs
can be found on pages 35 and 36.
1
2
3
4
6
5
7
1
2
3
4
6
5
2
3
4
6
7
Vesuvius plc
Annual Report and Financial Statements 2024
30
Financial review
2024 performance overview
2024 was a stable year in terms of
underlying trading profit and return on
sales overall, despite depressed underlying
markets in Foundry in particular, and we
have continued to generate good free
cashflow. This has enabled the Board to
recommend an attractive final dividend to
our shareholders and commence a second
share buyback, while maintaining
investment in strategic areas.
Revenue for the year decreased by 5.7%,
of which 3.9% related to FX headwinds
and 1.8% underlying performance.
Underlying revenue performance was
driven by a decline in volume of 1.6%
and a reduction in pricing of 0.2%. On
a reported basis, the Steel and Foundry
Division revenue decreased by 4.0%
and 10.1%, respectively, in the year.
We achieved a trading profit of £188.0m,
down 6.2% on a reported basis of which
0.2% was underlying performance and
6.0% related to FX headwinds. Within the
underlying profit changes, there was a
£15.1m decline due to the drop-through
from volume declines, and a £2.0m decline
from net pricing. In addition, there was
a further contribution from our ongoing
cost-saving programme of £13m plus
a £6.0m benefit relating to lower
management incentives based on
full-year financial performance, and
a net -£2.4m relating to other one-off
items. Return on sales of 10.3% was up
10bps on an underlying basis.
Basis of preparation
All references in this financial review are to
headline performance unless stated otherwise.
See Note 35.1 to the Group Financial Statements
for the definition of headline performance.
We also report key metrics on an underlying
basis, where we adjust to ensure appropriate
comparability between periods, irrespective
of currency fluctuations and any business
acquisitions and disposals.
This is done by:
– Restating the previous period’s results at the
same foreign exchange (FX) rates used in the
current period
– Removing the results of disposed businesses in
both the current and prior years
– Removing the results of acquired businesses in
both the current and prior years
Therefore, for 2024:
– We have retranslated 2023 results at the
FX rates used in calculating the 2024 results
– No adjustments have been required for
acquisitions or disposals
Overall, we’ve delivered stable
trading profit and return on sales,
despite weak end-markets,
particularly in Foundry,
with continued generation
of good free cash flow.
31
Strategic report
Governance
Financial statements
Revenue
£m
2024
2023
% change
Reported
Reported
Currency
Underlying
Reported
Underlying
Steel
1,343.8
1,400.0
(54.7)
1,345.2
(4.0%)
(0.1%)
Foundry
476.3
529.8
(21.3)
508.5
(10.1%)
(6.3%)
Total Group
1,820.1
1,929.8
(76.0)
1,853.7
(5.7%)
(1.8%)
Trading profit
£m
2024
2023
% change
Reported
Reported
Currency
Underlying
Reported
Underlying
Steel
153.0
147.6
(8.4)
139.2
3.7%
9.9%
Foundry
35.0
52.8
(3.5)
49.3
(33.6%)
(28.9%)
Total Group
188.0
200.4
(11.9)
188.4
(6.2%)
(0.2%)
Return on sales
2024
2023
% change
Reported
Reported
Underlying
Reported
Underlying
Steel
11.4%
10.5%
10.3%
+90bps
+110bps
Foundry
7.4%
10.0%
9.7%
-260bps
-230bps
Total Group
10.3%
10.4%
10.2%
-10bps
+10bps
with headline performance of £47.2m
(2023: £51.9m), was 27.5% (2023: 27.5%).
The Group’s total income tax costs for the
period include a credit within separately
reported items of £8.9m (2023: £3.1m)
which primarily relates to deferred tax on
intangible assets and restructuring costs.
A tax charge reflected in the Group
Statement of Comprehensive Income in
the year amounted to £0.8m (2023: £2.0m
charge) which primarily relates to tax on
net actuarial gains and losses on pensions.
We expect the Group’s effective tax rate
in 2025 on headline profit before tax
and before the share of post-tax profits
from joint ventures to be in line with that
in 2024, dependent on profit mix and
any one-off items.
Non-controlling interests principally
comprise the minority holdings in Indian
subsidiaries for the Steel and Foundry
businesses. This increased to £13.1m
in 2024 (2023: £12.1m) reflecting the
ongoing strong growth in profit in
those subsidiaries.
Headline EPS from continuing operations
at 43.3p was 7.2% lower on an underlying
basis than 2023 (46.7p), reflecting both
the lower earnings and the higher level
of non-controlling interests, partially
offset by a reduction in average shares
in issue from 269.1m to 260.0m (basic),
reflecting both the two share buyback
programmes undertaken in 2024, and
the purchase of shares into the ESOP.
Statutory EPS of 33.5p is 23.8% lower
than the prior year (2023: 44.0p) reflecting
the factors just described and higher
separately reported costs.
The net impact of average 2024 exchange
rates compared to 2023 averages was
a headwind of £11.9m at a trading profit
level, in particular, due to the depreciation
of the Brazilian Real, the US Dollar and the
Indian Rupee versus Sterling. Translated
at FX rates on 27 February 2025, 2024
revenue would have been c.£1,799.9m and
trading profit would have been c.£185.2m,
giving currency headwinds of £20m and
£2.8m, respectively.
Investment in R&D is central to our strategy
of delivering market-leading product
technology and services to customers. In
2024, we spent £36.9m on R&D activities
(2023: £37.4m), which represents 2.0% of
our revenue (2023: 2.0%, on a constant
currency basis) and a small increase in
expenditure on a constant currency basis.
Net Interest cost for 2024 increased to
£16.2m (2023: £11.6m), principally related
to a reduction in finance income from
£16.6m to £10.9m due to a reduction
in deposits held in Argentina that
were accruing a high interest rate.
This reduction in deposits arose following
the successful repatriation of surplus
cash which would have otherwise
devalued relative to sterling.
Profit from joint ventures and associates
was broadly flat year-on-year at £1.1m
(2023: £0.9m).
Separately reported items of £34.3m were
recognised in 2024 compared to £10.3m
in 2023. £10.0m relates to amortisation
of acquired intangible assets, which is
consistently excluded from our adjusted
profit measure (2023: £10.3m). In addition,
one-off costs of £14.6m were incurred
relating to our cost-saving programme,
and in addition a provision for site
remediation works was increased by
£9.7m, reflecting a reassessment of the
duration of the related liability. Due to
the one-off nature of both these charges,
they are shown as separately reported.
Headline profit before tax (PBT) was
£172.9m, down 8.9% versus last year
(£189.7m) on a reported basis. Including
separately reported items, PBT of £138.6m
was 22.7% lower than last year.
A key measure of tax performance is the
headline Effective Tax Rate (ETR), which is
calculated on the income tax associated
with headline performance, divided by the
headline profit before tax and before the
Group’s share of post-tax profit of joint
ventures. The Group’s headline ETR,
based on the income tax costs associated
Vesuvius plc
Annual Report and Financial Statements 2024
32
Dividend
The Board has recommended a final
dividend of 16.4 pence per share to be
paid, subject to shareholder approval,
on 6 June 2025 to shareholders on the
register at 25 April 2025. When added
to the 2024 interim dividend of 7.1 pence
per share paid on 13 September 2024,
this represents a full-year dividend of
23.5 pence per share. The last date for
receipt of elections from shareholders
for the Vesuvius Dividend Reinvestment
Plan will be 15 May 2025.
Cost-saving programme
At the start of 2024 we initiated an
efficiency programme to realise recurring
savings of £30m per annum by 2026, of
which £13m has been delivered in 2024,
significantly ahead of schedule as we
accelerated our savings in response to the
difficult trading environment. We expect to
deliver further cost savings of £12–14m in
2025. The programme costs are expected
to be c.£40m, including capex and
operating expense, of which c.£14.6m of
operating expense has been incurred in
2024 with a further £7–10m expected in
2025. As set out above, these restructuring
costs are excluded from underlying
performance, allowing for a clear
measure of our operating performance.
Cash flow and balance sheet
Our cash management performance was
solid, achieving a 69% cash conversion
(2023: 93%), reflecting broadly flat trade
working capital and continued investment
in strategic capacity expansion.
We measure working capital both in terms
of actual cash flow movements, and as
a percentage of sales revenue. Trade
working capital as a percentage of sales
in 2024 improved to 22.9% (2023: 23.4%),
measured on a 12-month moving average
basis. The improvement was principally
due to a reduction in debtor days on
a 12-month average basis by 1.3 days,
an increase in creditor days by 1.9 days
and flat inventory days.
Free cash flow from continuing operations
was £60.8m in 2024 (2023: £128.2m).
Capital expenditure
Capital expenditure in 2024 was £100.8m
in cash outflow (2023: £92.6m) and
£116.1m including capitalised leases
(2023: £125.3m) of which £92.2m was in
the Steel Division (2023: £93.2m) and
£23.9m in the Foundry Division (2023:
£32.1m). Capital expenditure on revenue-
generating customer-installation assets,
almost entirely in Steel, was £11.0m
(2023: c.£8.4m) and we spent c.£39m in
2024 on growth capex, also principally in
Steel. Total cash capex in 2025 is expected
to be c.£80 –85m, reflecting a modest level
of growth capex which is being concluded
in H1 2025. Capital expenditure will then
revert to more normalised levels.
Net debt
Net debt on 31 December 2024 was
£329.2m, a £91.7m increase compared to
£237.5m on 31 December 2023, due to free
cash flow of £60.8m offset principally by
dividends of £61.1m, share buybacks of
£63.4m and purchases of shares for our
ESOP trust of £17.1m.
At the end of 2024, the net debt to EBITDA
ratio was 1.3x (2023: 0.9x) and EBITDA to
interest was 18.4x (2023: 31.5x). These ratios
are monitored regularly to ensure that the
Group has sufficient financing available to
run the business and fund future growth.
The Group’s debt facilities have two
financial covenants: the ratios of net debt
to EBITDA (maximum 3.25x limit) and
EBITDA to interest (minimum 4x limit).
Certain adjustments are made to the net
debt calculations for bank covenant
purposes, the most significant of which
is to exclude the impact of IFRS 16.
The Group had committed borrowing
facilities of £669.6m as of 31 December
2024 (2023: £685.8m), of which £202.5m
was undrawn (2023: £333.4m).
Return on invested capital (ROIC)
Our ROIC for 2024 was 8.4% (2023: 8.9%).
Excluding goodwill on our balance sheet
from the acquisition of Foseco in 2008, ROIC
for 2024 would be 14.3%. ROIC is our key
measure of return from the Group’s invested
capital, calculated as trading profit less
amortisation of acquired intangibles plus
share of post-tax profit of joint ventures and
associates for the previous 12 months after
tax, divided by the average (being the
average of the opening and closing balance
sheet) invested capital (defined as: total
assets excluding cash plus non-interest-
bearing liabilities), at the average foreign
exchange rate for the year.
Pensions
The Group has a limited number of
historical defined benefit plans located
mainly in the UK, USA, Germany and
Belgium. The main plans in the UK and
USA are closed to further benefits accrual.
All of the liabilities in the UK were insured
following a buy-in agreement with Pension
Insurance Corporation plc (‘PIC’) in 2021.
This buy-in agreement secured an
insurance asset from PIC that matches
the remaining pension liabilities of the UK
Plan, with the result that the Company no
longer bears any investment, longevity,
interest rate or inflation risks in respect of
the UK Plan.
The Group’s net pension liability at
31 December 2024 was £37.4m
(2023: £46.3m liability).
Technical guidance for 2025
Depreciation in 2025 is expected to be in
the range £65m–£70m and the net finance
charge is expected to be c.£18m–20m.
Financial risk factors
The Group’s approach to risk
management, including the mitigations in
place for our principal risks, is detailed on
pages 72 and 73. We consider the main
financial risk faced by the Group to be
a material business interruption incident
leading to reduced revenue and profit.
We also manage broad financial risks
such as cost inflation, bank financing and
capital market activity and to a lesser
extent foreign exchange and interest rate
movements (see Note 25 to the Group
Financial Statements). We mitigate
liquidity risk by financing using both
the bank and private placement debt
markets and we mitigate refinancing risk
by seeking to avoid a concentration of
debt maturities in any one calendar year.
Mark Collis
Chief Financial Officer
5 March 2025
Financial review
continued
This section of the Annual Report constitutes the Group’s
Non-Financial and Sustainability Information Statement and
addresses the requirements of S414CA and S414CB of the
Companies Act 2006. Information disclosed in other sections of the
Strategic Report is incorporated into this statement by reference:
The Statement provides information on the Group’s activities and policies in respect of:
Reporting requirement
Relevant policies
Where to read more
Environmental
matters
–
Environmental Policy
–
Why invest in Vesuvius?
–
Tackling climate change
p22 and 23
p37–54
The Company’s
employees
–
CORE Values
–
Code of Conduct
–
Speak Up Policy
–
Diversity and Equality Policy
–
Health and Safety Policy
–
A responsible company
–
Our people
–
Corporate Governance Statement
p59–62
p55–58
p79–129
Social and
community matters
–
Code of Conduct
–
A responsible company
p59
Respect for
human rights
–
Human Rights and Labour Policy
–
Statement on the Prevention of Modern Slavery
–
Sustainable Procurement Policy
–
A responsible company
p60–62
Anti-bribery and
corruption matters
–
Anti-bribery and Corruption Policy
–
Code of Conduct
–
A responsible company
p59–62
Business model
–
Our business model
–
Why invest in Vesuvius?
p12 and 13
p14–23
Stakeholders
–
Our stakeholders and S172 Statement
p63–66
Risk management
–
Risk, viability and going concern
–
Principal risks and uncertainties
p67–71
p72 and 73
Non-financial
Key Performance
Indicators
–
Progress on our sustainability targets
p35 and 36
Non-financial and Sustainability Information Statement
This statement also details, where relevant, the due diligence processes
implemented by the Company in pursuance of these policies.
The scope of this report covers 100% of activities inside Vesuvius’
operational control boundaries, matching the Group’s financial
reporting perimeter.
Further non-financial and
sustainability information can be
found in our Sustainability Report
online at:
www.vesuvius.com
33
Strategic report
Governance
Financial statements
Vesuvius’ sustainability strategy
brings together all our environmental,
social and governance initiatives into
one coordinated programme.
We create innovative solutions that
help our customers improve their safety
and quality performance, reduce their
environmental footprint, become
more efficient in their processes
and reduce costs. We work in close
partnership with the most advanced
steel-makers to develop the refractory
products for the green steel-making
and casting processes of the future.
Our Sustainability initiative sets out the
Group’s formal objectives and targets for
supporting our customers, our employees
and our communities, and for protecting
our planet for future generations. It is
embedded in the Group’s overall strategy
and informs how we deliver on our
strategic priorities.
The Board has identified nine significant
non-financial KPIs for the business,
covering the Group’s main sustainability
objectives. These KPIs were defined when
the sustainability strategy was launched
in 2020. Most targets associated with the
KPIs have a deadline in 2025. We will be
setting new KPI targets for 2030.
Our planet
Our customers
Our people
Our communities
Our sustainability strategy and objectives
Our communities
–
To support the communities in
which we operate, with a focus on
promoting and supporting women’s
education in scientific fields
–
To ensure ethical business conduct
both internally and with our
trading partners
–
To extend our sustainability
commitment to our suppliers
and encourage them to progress
Our planet
–
To tackle climate change by reducing
our CO
2
e emissions and helping our
customers reduce theirs with our
products and services. We are
committed to reaching a net zero
(Scope 1 and Scope 2) carbon
footprint at the latest by 2050
–
To engage in the circular economy
by extending the lifetime of our
products, reducing our waste,
recovering more of our products after
they have been used and increasing
the usage of recycled materials
Our people
–
To ensure the safety of our people
and everyone else who accesses our
sites. This is our first priority. We take
safety very seriously and are
constantly striving to improve
–
To attract talent and offer growth
opportunities to all our employees
through training and career
progression to develop diverse,
engaged and high-performing teams
Our customers
–
To support our customers’ efforts to
improve safety on the shop floor,
especially exposure to hot metal
–
To help customers improve
their operational performance and
thereby reduce their environmental
footprint, and especially their
CO
2
emissions
Vesuvius plc
Annual Report and Financial Statements 2024
34
Progress on our sustainability targets
The Group’s non-financial KPIs cover the Group’s main sustainability objectives. We have set
stretching targets for the Group’s sustainability KPIs to reach within set time frames. These are
set out in the table below.
Safety
Wastewater
Energy
intensity
Solid
waste
CO
2
e
emission
intensity
Recycled
material
Link to remuneration
Vesuvius Share Plan
Read more about this on p110, 117 and 118.
Link to remuneration
Annual Incentive Plan
and Vesuvius Share Plan
Read more about this on p110, 117 and 118.
Measure
Lost Time Injury Frequency Rate.
Measure
By 2025, reduce wastewater per metric
tonne of product packed for shipment
(vs 2019).
Measure
By 2025, reduce energy intensity per
metric tonne of product packed for
shipment (vs 2019).
Measure
By 2025, reduce solid waste (hazardous
and sent to landfill) per metric tonne of
product packed for shipment (vs 2019).
Measure
By 2025, reduce Scope 1 and Scope 2
CO
2
e emission intensity per metric tonne
of product packed for shipment (vs 2019).
Measure
By 2025, increase the proportion of
recycled materials from external sources
used in production.
Progress
%
-28.0%
2024
-25%
Target
Progress
%
-10.1%
2024
-10%
Target
Progress
0.52
2024
<1
Target
Progress
%
-21.7%
2024
-25%
Target
Progress
%
-26.9%
2024
-20%
Target
Progress
%
6.0%
2024
7%
Target
£
£
£
£
£
£
£
£
£
£
35
Strategic report
Governance
Financial statements
Progress in 2024
0.52
2024 was our best safety year ever,
but we recognise the fragility of our
performance. Much progress is still
needed to stabilise our performance
and continue our journey towards
zero accidents.
Progress in 2024
1,2,3
-28.0%
Progress in 2024 was significant, as a
capital expenditure project delivering
major benefits for the site with the highest
level of wastewater was completed early
in the year.
Progress in 2024
1,2,3
-10.1%
The Group’s performance continued to
improve in 2024 despite the low loading
of certain continuous ovens. We targeted
capital expenditure on equipment
upgrades and focused on further
continuous improvement through
refurbishments and process
parameter optimisation.
Progress in 2024
1,2,3
-21.7%
Many sites made good progress in
reducing solid waste in 2024, through
a combination of reduced waste
generation and implementation of
recycling solutions.
Progress in 2024
1,2,3
-26.9%
In 2024, we continued the conversion
of our plants to carbon-free electricity
contracts. We also celebrated our
first carbon-free major manufacturing
site with kilns fuelled by biomethane.
Progress in 2024
1,2,3
6.0%
In 2024, we continued to seek
opportunities to replace virgin materials
with recycled materials, but we remain
constrained by availability, cost and the
variability of properties that might affect
the performance of our products.
1. Re-baselined using pre-acquisition data for the business acquired from Universal Refractories, Inc. (Vesuvius Penn Corporation), and BMC
(Yingkou YingWei Magnesium Co., Ltd).
2.
Pro forma: performance as if the dolime process had been operating normally in 2024 (based on average production levels for 2019–2022).
See page 51 for further information.
3. Actual Group performance for 2024, with actual dolime production: Energy intensity -14.0%, CO
2
e emission intensity -40.4%, Wastewater -24.6%,
Solid waste -18.0%, Recycled material 6.5%.
4. Further information on sources of data, scope of entities covered, calculation methodologies and progress can be found in the 2024 Sustainability
Report which is available at: www.vesuvius.com.
Details of the Group’s
Financial KPIs
can be found on pages 28 and 29.
Gender diversity
Compliance training
Supply chain
Link to remuneration
Annual Incentive Plan
and Vesuvius Share Plan
Read more about this on p110, 117 and 118.
Measure
By 2025, increase female representation
in the Senior Leadership Group
(approx. 150 top managers).
Measure
Increase the percentage of targeted
staff who complete anti-bribery and
corruption training annually.
Measure
By the end of 2025, conduct sustainability
assessments of our raw materials
suppliers (as a percentage of Group
raw material spend).
Progress
%
21%
2024
25%
Target
Progress
%
100%
2024
90%
Target
Progress
%
58%
2024
60%
Target
Strategic
Value
alignment
Return on Sales
£
Free Cash Flow
£
Cost Savings
Sustainability
Vesuvius plc
Annual Report and Financial Statements 2024
36
Progress in 2024
21%
We remain far from our ambition to
reach 25% by the end of 2025. We see
this as a challenging target given the
relatively low attractiveness of our
industry to female entrants.
Progress in 2024
100%
All targeted employees successfully
completed the training in 2024 .
Progress in 2024
58%
Most of our large suppliers have now
joined our Supplier Sustainability
Assessment programme. Future progress
will be slower as we address the large
number of smaller suppliers.
Tackling climate change
We are committed to reducing
our environmental footprint by
reaching net zero greenhouse gas
emissions (Scope 1 and Scope 2) by
2050 at the latest and helping our
customers reduce their emissions
through improvements in the
efficiency of their operations.
Vesuvius supports the Paris Agreement’s
central aim, to strengthen the global
response to the threat of climate change
by keeping a global temperature
rise this century well below 2°C above
pre-industrial levels, and pursuing efforts
to limit the temperature increase even
further to 1.5°C, via the implementation
of its Roadmap to Net Zero.
As the world transitions to a low-carbon
global economy, Vesuvius supports the
call for policymakers to:
–
Build a level global playing field,
including carbon border adjustment
mechanisms, and robust and predictable
carbon pricing for companies.
This will strengthen incentives to
invest in sustainable technologies
and to change behaviours
–
Develop the necessary energy
production and distribution
infrastructure to provide access to
abundant and affordable clean energy
Reducing our impact
Vesuvius actively participates in measures
to tackle climate change by working to
reduce the CO
2
e emissions of all of our
operations and the quantity of raw
materials used, alongside helping
our customers to reduce their own
CO
2
footprint through the use of our
products and services. Vesuvius also
embraces society’s expectations for
greater transparency around
environmental reporting.
Supporting our customers
According to estimates from the World
Steel Association (WSA), the steel industry
generates between 7% and 9% of global
direct emissions from the use of fossil
fuels, and it estimates that on average
1.91 metric tonnes of CO
2
are emitted
for every tonne of steel produced.
The iron and steel industries are taking
action to address the decarbonisation
challenge, and we are supporting them,
working in partnership with them to
develop more sustainable solutions.
With around 10kg of refractory material
required per tonne of steel produced, the
careful selection and use of energy-saving
refractories can beneficially impact
the net emission of CO
2
in the steel
manufacturing process. In the foundry
process, the amount of metal melted
versus the amount sold as finished castings
is the critical factor impacting a foundry’s
environmental efficiency. Vesuvius
continuously works with its customers
to increase this metal yield.
The actions being taken by governments
and societies around the world to
mitigate climate change, and the
changes in temperature and weather
patterns resulting from it, present both
opportunities and risks to Vesuvius. In its
broadest context, we believe that the
need for climate change initiatives will
create ever greater opportunities for
the Group to support our customers –
to improve their efficiency and reduce
their environmental impact.
Vesuvius’ Environmental Policy
We commit to:
–
Minimise direct and indirect CO
2
and other
greenhouse gas emissions, by reducing the
energy intensity of our business and using
cleaner energy sources
–
Minimise the consumption of water
and other resources
–
Reduce waste at source and
during production
–
Increase the usage of recycled materials
and promote the development of the
circular economy
–
Minimise any pollution or releases of
substances which could adversely affect
humans or the environment
–
Avoid negative impacts on biodiversity
See the full policy on
www.vesuvius.com
for further details.
External reporting & recognition
We are signatories to the UN Global
Compact and report annually on our
sustainability activities, commitments
and progress.
We are very proud of our progress
to date, as exemplified by the
external recognition of the following
rating agencies:
AA
B
37
Strategic report
Governance
Financial statements
Tackling climate change
continued
Topic
Disclosure summary
Vesuvius disclosure
Governance
Disclose the
organisation’s
governance around
climate-related risks
and opportunities.
Describe the Board’s oversight of
climate-related risks and opportunities.
Tackling climate change
Risk, viability and
going concern
Directors’ Remuneration Report
p39 and 40
p67–69
p103–129
Describe management’s role in assessing and managing
climate-related risks and opportunities.
Tackling climate change
Risk, viability and
going concern
p39 and 40
p67–69
Strategy
Disclose the actual
and potential
impacts of climate-
related risks and
opportunities on
the organisation’s
businesses, strategy,
and financial
planning where
such information
is material.
Describe the climate-related risks and opportunities the
organisation has identified over the short, medium and long term.
Tackling climate change
p42–44
Describe the impact of climate-related risks and opportunities
on the organisation’s businesses, strategy and financial planning.
Tackling climate change
At a glance
Our business model
Why invest in Vesuvius?
p37–54
p2 and 3
p12 and 13
p22
Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related scenarios,
including a 2°C or lower scenario.
Tackling climate change
p45–47
Risk management
Disclose how the
organisation
identifies, assesses
and manages
climate-related
risks.
Describe the organisation’s processes for identifying and
assessing climate-related risks.
Tackling climate change
Risk, viability and
going concern
p39–44
p67–69
Describe the organisation’s processes for managing
climate-related risks.
Tackling climate change
Risk, viability and
going concern
p37–54
p67–73
Describe how processes for identifying, assessing and managing
climate-related risks are integrated into the organisation’s
overall risk management.
Tackling climate change
Risk, viability and
going concern
p37–54
p67–73
Metrics and targets
Disclose the metrics
and targets used to
assess and manage
relevant climate-
related risks and
opportunities where
such information
is material.
Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its strategy
and risk management process.
Tackling climate change
p35, 36
and 42
Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG
emissions, and the related risks.
Tackling climate change
p51–54
Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets.
Tackling climate change
p35, 36,
48–54
Task Force on Climate-related
Financial Disclosures
(TCFD) Report
The disclosures included in this Annual
Report are consistent with the Task
Force on Climate-related Financial
Disclosures (TCFD) Recommendations
and Recommended Disclosures, and have
been prepared taking into account the
Guidance for all sectors. The disclosure
is also in accordance with FCA Listing
Rule requirements.
This section provides the relevant
disclosures or otherwise provides
cross-references in the table below,
for where the disclosures are located
elsewhere in the Annual Report.
In preparing this TCFD disclosure we
considered recent developments in
global affairs and macro trends, such as:
–
Uncertainties regarding the projected
growth of the electric vehicle market
(and consequently the peak and decline
of the hybrid vehicle market)
–
The energy crisis and price gaps that
exist between regions, and at the same
time, the rapid reduction of the cost per
installed kWh of renewable energy and
associated massive investments plans
–
The development and implementation
of policies in all regions aimed at
accelerating the transition to renewable
sources of energy and the
decarbonisation of industry
We concluded that the underlying
assumptions and drivers of our scenario
analysis, and the risks and opportunities
that we have identified, do not require
any significant modification this year.
We are aware of a growing acceptance
that the 1.5°C global warming ambition
will not be met, which supports the
assumption in our scenario plans that the
most optimistic scenario is a 2°C increase
in global warming.
Vesuvius plc
Annual Report and Financial Statements 2024
38
Governance structure
Board oversight
Vesuvius has a governance structure in place to ensure that all climate-related risks and opportunities are appropriately managed.
The Board holds overall accountability for this, with the Chief Executive ultimately responsible for planning the Group’s objectives
to manage climate-related risks and opportunities, and delivering on this strategy.
Chief Executive
Is ultimately responsible
for the delivery of the
Sustainability initiative,
including planning the
Group’s climate-related
objectives and
delivering on
the strategy
Our sustainability governance
Board
–
Holds accountability and oversight for the
management of all climate-related risks and
opportunities and the impact on the Group
–
Oversight of Group’s response to climate change
is integrated into its monitoring of Group’s broader
strategy and initiatives, and is factored into its
key decisions such as significant capital and
other investments
–
Formally discusses the Group’s Sustainability
initiative at least twice per year and sets the Group’s
climate change related priorities and targets,
reviewing the Group’s performance and progress
against them
Audit Committee
–
Supports the Board in ensuring climate-related
issues are integrated into the Group’s risk
management process
–
Reviews the Group’s TCFD reporting and
assessment of performance against targets
Remuneration Committee
–
Supports the sustainability objectives through the
alignment of the Group’s remuneration strategy
–
Executive Directors and other GEC members
participate in the Vesuvius Share Plan
where the vesting of 10% of each award is
based on reduction of the Group’s Scope 1 and 2
CO
2
e emission intensity
Group Executive Committee
Chief Executive, Chief Financial Officer, General Counsel and Company Secretary, Chief HR Officer,
Business Unit (BU) Presidents
–
Approves Group sustainability-related policies, and
monitors the Group’s management of climate change
risks and opportunities
–
Receives reports from the VP Sustainability on the
Group’s progress with sustainability initiatives
–
Is responsible for the progress of the Group against
its sustainability objectives, including those in relation
to climate change
BU Presidents
–
Incorporate climate change risks and
opportunities into their BU strategy and
business planning processes.
–
Communicate targets inside their organisations
–
Allocate resources, define and implement plans to
manage climate-related risks and opportunities
–
All BU Presidents and VPs have part of their
annual incentive tied to performance against
CO
2
e emission intensity reduction
Sustainability Council
Group Executive Committee, Vice President Sustainability, Head of Communication and Employee Engagement,
Head of Investor Relations, Head of Strategy, Vice Presidents Operations, three regional Business Unit VPs
–
Meets quarterly to oversee the Group’s
sustainability activities
–
Monitors the Group’s progress against
sustainability metrics and targets, including
climate-related objectives
–
Assists the Board in assessing the implications of
long-term climate-related risks and opportunities,
elaborating strategy and setting priorities
–
The Council reports to the Board twice per year
VP Sustainability
–
Leads the Group’s sustainability activities and
coordinates the work of the Sustainability Council
–
Prepares the Group’s assessment of climate change
risks and opportunities and oversees the formulation
of climate-related scenarios
–
Ensures the Group has a clear set of sustainability
KPIs and produces quarterly performance reports
–
Organises Group-wide communications covering
climate-related risks and opportunities
–
Leads external reporting and disclosures on
sustainability matters
39
Strategic report
Governance
Financial statements
Climate-related risks
Each year the Group undertakes a robust
assessment of the principal and emerging
risks which could have a material impact
on the Group. As part of this process,
climate-related risks are reviewed by
the GEC, and subsequently by the Board,
to ensure that the risk register reflects
any material changes in the operating
environment and business strategy, and to
ensure that the management of climate-
related risks is integrated into our overall
principal risk management framework.
The Board takes these climate-related
risks and opportunities into account
when quantifying the organisation’s risk
appetite. A number of sustainability risks
are recorded in the Group’s analysis of
principal risks (see the Risk, viability and
going concern section on pages 67–73).
Alongside this process for reviewing the
Group’s material risks, the Board has
undertaken a more detailed assessment of
the Group’s specific climate-related risks
and opportunities, including the Group’s
physical and transition risks, and the
anticipated impact of these risks and
opportunities on the Group over the short,
medium and long term. It also considers,
each year, the formulation of the three
different climate-related scenarios
constructed to assess the potential
financial implications of climate change
and assesses the impact of these
climate-related risks and opportunities
on the Group’s strategy.
Physical risks and
business continuity
Thanks to significant restructuring
carried out over the past seven years,
Vesuvius now operates in a resilient and
optimised global footprint. None of our
manufacturing sites contribute directly
or indirectly to more than 10% of our
revenue and a significant amount of
redundancy for most product lines
remains, providing backup in case of
local disruption and ensuring continuity
of supply for our customers.
Vesuvius operates in 54 manufacturing
sites and six R&D centres of excellence
located in 23 countries. From time to time
our operations can be subject to physical
damage driven by weather events, such
as severe storms and flooding, water
shortages or wildfires, whose frequency
and intensity may be exacerbated by
climate change. Such events may also
impact the manufacturing capabilities of
our customers and suppliers, and impact
our supply chain logistics.
Sites are routinely audited by our insurers
and our external risk specialist. Their
reports are combined with water stress
analyses (based on the Aqueduct water
risk atlas) and our history of events to
create a physical and weather event risks
map, indicating our manufacturing and
R&D sites’ susceptibility to physical risks
arising from climate change.
In 2024, we continued updating our
risk map based on professional risk
engineering surveys. 32 sites were
identified as being high-risk for at least
one type of weather event (flooding,
hailstorm, lightning, storms, tornadoes
and wildfires), and four are located in
areas of very high water stress (and 16 in
areas of high water stress). None of our
sites were markedly affected by any major
weather event in 2024 (no disruption to
customers and no insurance claims made).
We anticipate that the likelihood and
severity of adverse weather events will
continue to increase, and we therefore
manage our business to prepare for
them and mitigate their impact when
they do occur.
Local and product line business
continuity plans are maintained by our
manufacturing sites and are regularly
reviewed. Vesuvius sites maintain and
exercise emergency plans to deal with
such events as part of their normal risk
management and business continuity
processes. Exercises and drills are
organised covering IT disaster recovery,
fire, explosion, weather and geophysical
events, and our processes are improved
based on the lessons learned.
Tackling climate change
continued
Vesuvius plc
Annual Report and Financial Statements 2024
40
Sites with the highest exposure to earthquake, water stress or weather events
Country
Site
Water
stress
(high and
very
high)
Flood –
water
bodies
Flood –
precipitation
Hailstorm
Lightning
Wind –
tropical
storms
Wind –
extra
tropical
storms
Tornado
Wildfire
Earthquake
Australia
Port Kembla
Belgium
Ostend
Brazil
Piedade
Resende
Rio de Janeiro
São Paulo
China
Anshan
Bayuquan
Changshu
Suzhou
Weiting
Wuhan
Yingkou BRC
Czech Republic
Trinec
India
Kolkata
Mehsana
Puducherry
Pune
Vizag
Indonesia
Jakarta Timur
Italy
Muggio
Japan
Toyokawa
Malaysia
Pelubhan Klang
Mexico
Monterrey
Ramos Arizpe
Netherlands
Hengelo
Poland
Skawina
South Africa
Johannesburg
Olifantsfontein
Taiwan
Ping Tung
Türkiye
Gebze
Istanbul
UAE
Ras Al Khaimah
UK
Tamworth
USA
Champaign
Charleston
Chicago Heights
Conneaut
Coraopolis
Graham
Wampum
Wurtland
Highest exposure to weather events and earthquakes based on risk evaluations conducted as part of our insurance programme; water stress based on
Aqueduct water risk atlas.
41
Strategic report
Governance
Financial statements
Climate-related risks and
opportunities analysis
The fight against climate change
continues to require higher-technology
steel and larger, more complex castings.
Wind and solar energy production
capacity are both considerably more
steel-intensive than fossil fuel power
stations, and these are both set to
grow considerably. Allied to this,
the steel-making process is itself
decarbonising thanks to efforts to improve
the performance of existing assets, and
the shift from blast furnaces to direct
reduced iron and electric arc furnaces.
Our products are useful for low-carbon
applications as well as the more traditional
ones. No alternative to iron and steel,
with the ability to offer the same range
of properties and applications at
comparable scales and costs, is envisaged
in the foreseeable future. The technology
transition required to decarbonise the
iron and steel industry will not render our
products obsolete. More than 70% of our
revenue in steel is generated at the ladle
and caster stages of the steel-making
process, which will be unaffected by
the changes. Other steps of the iron
and steel-making process will continue
to require refractory materials.
Transition risks
We believe that the main climate change transition risks facing the Group relate to:
1
The potential for carbon taxing or
emissions rights trading schemes to
be introduced or increased, in Europe and
the US, but not uniformly in other regions,
without effective border adjustment
mechanisms to accompany them.
An increase in the cost of carbon emissions
would affect our manufacturing costs.
We are addressing this through our energy
efficiency improvement initiatives and
conversion to non-fossil fuels wherever
possible. Long-lasting energy price
increases and significant differences
between Europe and other regions
would further exacerbate this risk,
affecting our customers’ manufacturing
footprint and our own.
2
The rapid transition from iron to aluminium
for light vehicle castings.
A very rapid transition from iron to
aluminium for light vehicle castings would
affect our revenue in the iron castings
market. We expect this to be compensated
for by increased sales for aluminium
castings, growing sales of products for
thin-section automotive component iron
castings and turbo-charger castings for
hybrid vehicles.
Climate change related metrics
We routinely monitor a large number of metrics, both internal and external, to assess the ongoing validity of our assumptions and
identified risks and opportunities, and to monitor the progress of actions. Some of the main metrics are listed in the table below:
External metrics
–
Projected compound annual growth rate (CAGR) of the high-technology steel segment
+2.7% between 2022 and 2032
(vs 0.5% for commodity steel)
–
Projected CAGR of the wind turbine market
13% (between 2023 and 2030)
–
Projected CAGR of the electric vehicle market
18.5% (between 2024 and 2031)
–
Projected CAGR of the hybrid vehicle market
7% (between 2024 and 2031)
–
Projected CAGR of the internal combustion engine vehicle market
-11% (between 2024 and 2031)
–
Projected CAGR of the EAF market
4% (between 2023 and 2029)
Internal metrics
–
Steel sales into the EAF market
27% in 2024
–
Percentage of Flow Control sales from high-technology steel
58% in 2024
–
Percentage of Foundry sales into non-ferrous markets
19% in 2024
–
Percentage of sales realised with products which did not exist five years ago
19% in 2024
–
Energy intensity (kWh per kg product packed for shipment)
10.1% reduction (pro forma
¹
) in 2024
vs 2019 baseline
–
R&D spend
+5% p.a. from 2020 to 2024
–
Number of sites at high risk of water stress or at least one type of weather event
36 in 2024
–
Number of sites with negative or poor risk ratings from the insurance
loss prevention risk evaluation
6 in 2024
1.
Pro forma: performance as if the dolime process had been operating normally in 2024 (based on average production levels for 2019–2022).
See page 51 for further information.
Tackling climate change
continued
Vesuvius plc
Annual Report and Financial Statements 2024
42
Climate-related risks and
opportunities analysis
The choice of short-, medium-, and
long-term horizons for the analysis of
key climate-related impacts, risks and
opportunities is driven by projected
customer footprint evolutions and
investment cycles, the speed of
deployment of emerging technologies,
the duration of product development
cycles, policy and regulatory evolutions,
and capital equipment lifetime
(often two decades or more).
Short term (2026)
The short term is defined as one to
two years. It is aligned with our strategic
plans. Within this time frame, regulatory and
policy changes will have very limited impact
on the Group’s climate-related risks and
opportunities. This is also the typical timeframe
required for major capital expenditure
decision-making and implementation.
Impact categories (trading profit)
Medium term (2035)
This is the most likely horizon for policies
and regulatory frameworks (such as
the EU Emissions Trading System and
Carbon Border Adjustment Mechanism)
currently being defined in many regions
to reach their full effect. The effects of
technological innovation currently in the
later development stages will become
effective and their deployment will begin
during this period.
We anticipate that the major adjustments
to customers’ footprints and technology
investments will be in full swing by then.
Long term (2050)
This deadline has been retained by the
UN and many policy-making bodies to set
decarbonisation goals. We are committed
to reaching net zero (Scope 1 and 2) by
2050 at the latest.
The opportunities we have identified
are integrated into the Group’s business
strategy and are being pursued by the
relevant Business Units.
Opportunities
Opportunity
Description
Impact
Potential annual impact on trading profit in the
short, medium and long term
Short term
2026
Medium term
2035
Long term
2050
Products and services
Ability to
diversify
business
activities
Commercialise refractory solutions
for low-CO
2
emitting processes in the
production of aluminium to replace
carbon-based products
Increased revenue
and trading profit
Insignificant
Minor
Minor to
high
Commercialise refractory solutions
for hydrogen-based Direct Reduced
Iron production and steel to replace
traditional refractory products
Insignificant
Insignificant
to minor
Insignificant
to high
Markets
Access to
new markets
Accelerated growth of the wind power
market leading to increased sales to
foundries serving this market
Increased revenue
and trading profit
Minor
Minor
Minor to
high
Accelerated growth of the aluminium
castings market for light electric vehicles
and light-weighting leading to increased
sales to foundries serving this market
Minor
Minor
Minor
to high
Accelerated growth of ferrous castings
for hybrid vehicles (turbo-chargers)
and thin-section castings for internal
combustion engines leading to increased
sales to foundries serving this market
Insignificant
to minor
Insignificant
to minor
Insignificant
Accelerated growth of the high-technology
steel segment
Insignificant
to minor
Minor to high
Moderate to
very high
Very high (>£25m)
Major (£15–25m)
High (£10–15m)
Moderate (£5–10m)
Minor (£1–5m)
Insignificant (£0–1m)
43
Strategic report
Governance
Financial statements
Tackling climate change
continued
Impact categories (trading profit)
We have assessed our risks and sorted them
according to the following classification,
which used the same thresholds as for the
assessment of principal risks:
Very high (>£25m)
Major (£15–25m)
High (£10–15m)
Moderate (£5–10m)
Minor (£1–5m)
Insignificant (£0–1m)
Risks
Description
Impact
Mitigating actions
being undertaken
Potential annual impact on trading profit in the
short, medium and long term
Short term
2026
Medium term
2035
Long term
2050
Physical risks
Increased frequency
and severity of extreme
weather events
(heatwaves, rain
and river flooding,
cyclones, snow etc.)
Physical damage
to Vesuvius
locations
and people
Business
disruption due to
natural disasters
Increased cost
due to physical
damage
Reduced revenue
from business
interruption
Mitigating actions for
severe weather events
and the associated risks
are included in the
business continuity
plans of plants, and
insurance is purchased
Minor
Minor
Minor
Transition risks – Policy and legal
Carbon taxing/
emissions rights
trading/border
adjustment
mechanisms
introduced
or extended
Increase in
manufacturing
costs
Increased
operating costs
(main risk in
Europe)
Capex to improve
energy efficiency and
conversion to non-fossil
fuels to eliminate CO
2
emissions. Relocation
of manufacturing to
reflect movements in
customer base
Insignificant
Insignificant
to minor
Insignificant
to moderate
Transition risks – Market
Rapid growth of
aluminium casting
processes for light
vehicle castings
at the expense of
traditional ferrous
and other
non-ferrous
processes (due
to conversion to
electric vehicles)
Shift from
castings using
a high level of
consumables to
low consumable
processes
creates risk of
revenue loss for
the Foundry
Division
Reduced revenue
from shrinking
market as some
traditional
castings will
disappear or be
converted to
alternative
processes
In ferrous, push to
develop sales of Feedex
and coatings for thin-
section automotive
components, and
products for turbo-
charger casting. Invest
in R&D, marketing
and sales force. In
non-ferrous, develop
products for HPDC and
LPDC processes and
increase penetration
in markets with lower
usage of refractories
Minor
Moderate
to high
Moderate
to high
Transition from internal
combustion engines
to electric vehicles
will lead to the
decline of sand and
gravity castings
Reduced volume
of aluminium
power train
components
Reduced revenue
from shrinking
market of
consumables
for sand and
gravity castings
Adapt product portfolio,
focusing on HPDC
and LPDC
Insignificant
to minor
Minor to
moderate
Minor to
moderate
Transition from Blast
Furnaces – Basic Oxygen
Furnaces converted to
Direct Reduced Iron
production or Electric
Arc Furnaces (EAF) for
iron and steel-making
Share of EAF
in total steel
production
increases
Reduced size
of market
where Vesuvius
is strongest,
leading to weaker
positions in the
steel market
Adjust R&D and product
development priorities.
Redeploy sales force,
focusing on EAF market
Insignificant
Minor
Minor to
moderate
Risks
Vesuvius plc
Annual Report and Financial Statements 2024
44
4°C warming scenario
‘Good intentions hampered by
fear of economic war’
Incomplete policy and fiscal
packages distort competition,
slowing down technology
development and leading to
geographic shifts in steel supply
3°C warming scenario
‘Closed doors’
Regional/national self-interest
drives economic policy, competition
wins over cooperation, regulatory
framework and technologies
evolve differently
2°C warming scenario
‘Global accord’
High cooperation and commitment
to limit emissions facilitates
technology development and the
transition to a low-carbon world
Three long-term
scenarios
Climate change scenario analysis
Vesuvius has undertaken scenario
analysis to seek to quantify the likely
impact of climate change on the business
and to test the resilience of the Group’s
strategy to the changes that lie ahead.
We considered three scenarios,
modelling the potential financial impact
of 2°C, 3°C and 4°C temperature
increases on our business.
Best case scenario
In formulating our scenarios, we took
as our ‘best case’ a 2°C scenario. This
was based on the premise that despite
the tremendous acceleration of public
awareness, regulation, technology
development and capital allocation in
recent years, we doubt that there is
sufficient time for the 1.5°C target to
be achieved. We therefore identified
our most optimistic scenario as 2°C.
Our assumption is that any further
acceleration which would allow the
planet to get back onto a 1.5°C course
would reinforce the main characteristics
and accelerate the timeline of our
2°C scenario, without fundamentally
changing its features.
From assumptions to strategy
The scenarios take as their starting point
the regulatory and macroeconomic
assumptions underpinned by the
International Energy Agency’s WEO
2020 Stated Policies Scenario and
Sustainable Development Scenario.
Supplementing this we have identified,
for each scenario, the areas of our
business in which changes may occur,
such as:
–
The evolution of end-markets
–
Our customer footprint
–
The pace and breadth of technology
transition in iron and steel-making
–
The pace of conversion from fossil fuels
to clean electricity and hydrogen
–
The evolution of the aluminium market
We then evaluated the potential
magnitude of the risks and opportunities
in each scenario, and analysed the
implications for Vesuvius. We considered
our strategic response in terms of:
–
Our manufacturing and
commercial footprint
–
Our portfolio of products and services
–
The conversion of our manufacturing
processes to clean energy
–
The prospects for our aluminium
casting business
With this approach, the impacts
on all key areas of the business were
covered (sales, R&D, manufacturing
and procurement).
The outcomes of the scenario analyses
have been taken into account in
formulating plans for achieving
the Group’s strategy.
45
Strategic report
Governance
Financial statements
Tackling climate change
continued
4°C warming scenario – ‘Good intentions
hampered by fear of economic war’
3°C warming scenario – ‘Closed doors’
2°C warming scenario – ‘Global accord’
1
Regulatory and
macroeconomic
environment
The EU and US implement carbon
pricing mechanisms (taxation or
cap on trade), but no Carbon
Border Adjustment Mechanisms
or Tariffs (or insufficient to prevent
the transfer of manufacturing
away from these regions)
The EU and US implement carbon
pricing mechanisms (taxation or
cap on trade), and Carbon Border
Adjustment Mechanisms or
Tariffs to protect their industries
from delocalisation
All major economies implement
carbon pricing mechanisms.
The cost of CO
2
increases in all
regions at a comparable pace
2
Conversion of
power generation
from fossil fuels to
clean electricity
and hydrogen
–
Fast growth in Europe
of non-CO
2
emitting
electricity sources
(nuclear and renewable)
–
The cost of fossil fuels increases
significantly in Europe
–
Energy prices differ greatly
between Europe and the
rest of the world over a long
period of time
–
Coal reduces progressively,
but does not disappear.
Natural gas continues to
grow outside Europe
–
Hydrogen does not become
available on a wide scale and
economically competitive
until well after 2040
–
Fast growth of non-CO
2
emitting
energy sources (nuclear and
renewable) in Europe
–
The cost of fossil fuels increases
significantly in Europe. Coal
reduces progressively, but does
not disappear, natural gas
continues to grow outside Europe
–
Energy prices in Europe and the
rest of the world realign
progressively
–
Hydrogen becomes available on
a wide scale in the USA and
Europe, and economically
competitive between 2030
and 2040
–
Fast growth of non-CO
2
emitting
energy sources (nuclear and
renewable) in all regions
–
The cost of fossil fuels increases
significantly (taxation). Coal as
a source of energy disappears,
natural gas starts to reduce
–
Energy prices in Europe
and the rest of the world
realign progressively
–
Hydrogen becomes available
on a wide scale and economically
competitive between 2030
and 2040
–
Fast electrification of the
automotive industry
–
Fast growth of hydrogen-fuelled
heavy vehicles
3
Technology
transition –
iron and
steel-making
–
The transition in blast
furnaces to clean processes
(e.g. Direct Reduction Iron
(DRI), hydrogen, Carbon
Capture and Storage (CCS),
Carbon Capture, Utilisation
and Storage (CCUS)) does
not happen on a large scale
–
US steel producers convert
blast furnaces to DRI and
Electric Arc Furnaces (EAF) to
benefit from the low cost and
high availability of natural gas
–
European iron-making transitions
to clean processes (e.g. hydrogen,
DRI, CCS, CCUS). The speed of
the transition is dictated by the
availability of green hydrogen in
large quantities
–
Some US blast furnaces are
converted to hydrogen, others
to DRI and EAF
–
Chinese steel plants convert to
clean iron and steel-making
processes, albeit at a slower pace
–
Little or no transition outside
China, the EU and the USA
–
Fast transition of iron-making to
clean processes in all regions;
blast furnaces are revamped
ahead of their normal schedule
–
European and Chinese integrated
steel-making grows primarily in
hydrogen-based iron production,
implementing CCS and CCUS
technologies as well
–
DRI and EAF grow in the US
(benefiting from the availability
of low-cost shale gas), and Europe
–
Customers also invest to increase
the performance of furnaces,
including downstream of casting
4
High-technology
steel market
High-technology steel market
grows at 0.9% per year
High-technology steel market grows
at 1.2% per year (light-weighting
and material efficiency efforts by
downstream industries accelerate
shift from lower to higher
performance grades)
High-technology steel market
grows at 1.6% per year (light-
weighting and material efficiency
efforts by downstream industries
accelerate shift from lower to
higher performance grades)
5
Aluminium
market
Aluminium market grows
at 3% per year, especially High
Pressure Die Casting (HPDC)
and Low Pressure Die Casting
(LPDC) processes
Aluminium market grows at 5% per
year (driven by the demand for
transportation, construction
and packaging) until 2030.
Growth of HPDC/LPDC at a higher
pace in the US and EU markets.
Moderate development of
secondary aluminium casting
Aluminium market grows at 7%
per year (driven by the demand
for transportation, construction
and packaging) until 2025.
Growth of HPDC/LPDC at a higher
pace in the US and EU markets.
Rapid development of secondary
aluminium casting
Potential financial
impact in 2035
(profit before tax)
-£5m to £0m
£0m to £5m
£5m to £10m
Vesuvius plc
Annual Report and Financial Statements 2024
46
Firstly, effective border adjustment
mechanisms to accompany carbon
taxation, or cap and trade systems in
regions with ambitious emissions reduction
objectives, will greatly support the
implementation of technologies required
to decarbonise steel-making (including the
development of hydrogen as the reducing
agent). Conversely, the absence or
ineffective implementation of border
adjustments would lead to significant
delocalisation of the steel industry and
a displacement of CO
2
emissions to
other countries rather than a significant
reduction on a worldwide scale. The
energy crisis which started in late 2021
and was particularly acute in Europe
has resulted in additional costs and loss
of competitiveness for the European
steel industry. In the short term, this was
addressed by the temporary stoppage of
steel plants. If the energy cost gap with
other regions continues, this could result
in the permanent closure of steel plants
and delocalisation of production to other
regions. This shift in our customer footprint
would lead to the need to adapt our own
manufacturing footprint.
Secondly, public policy and investment
financing will significantly affect the
relative cost and availability of non-CO
2
emitting energy sources versus fossil fuels
and their associated infrastructures.
These will greatly influence the pace of
deployment of selected technologies
and industries (electric vehicles,
carbon-free hydrogen and decarbonised
steel-making). Infrastructure, construction
and other downstream markets will
also be incentivised to reduce steel
consumption, accelerating the shift
towards high-technology steel. Investment
incentives and rising energy costs,
as experienced since the end of 2021,
will positively affect the growth rate of
investment in renewable energies and
penetration of electric vehicles in the
automotive markets.
Finally, the level of international
cooperation to encourage and support
less developed economies to engage in
the technology transition will also affect
our customer manufacturing footprint.
Regulatory and macroeconomic drivers
may affect our climate change scenarios
in the short, medium and long term.
All three scenarios assume that the strong
connection between world GDP and world
steel output will continue, supported by
urbanisation and rising living standards,
as there is no significant substitute for steel.
The fight against climate change is
expected to have a far-reaching impact
on many different industries translating
into the accelerated growth of the
high-technology steel segment in which
Vesuvius has a key presence. For example,
solar and wind power plants, where
investment is growing fast, are far more
steel-intensive per kWh of installed
capacity than their fossil fuel equivalents.
Likewise, hydrogen transportation, another
area of rapid growth, also requires
considerable amounts of special grades
of steel for new pipelines and ships. With
evolutions occurring over many years, this
driver will have a stronger impact over the
medium and long term than the short term.
Our scenarios consider the pace and
extent of the technology transition in iron
and steel-making. The Blast Furnace –
Basic Oxygen Furnace (BF–BOF) route
for steel-making is significantly more CO
2
intensive than the Electric Arc Furnace
(EAF) route. However, EAFs cannot always
be used to produce all higher-quality steel
grades and they rely on the availability of
scrap steel (itself a function of the level of
economic development). Going forward,
quality levels produced by EAFs will
continue to improve.
Various technologies to decarbonise
the BF–BOF route are being developed,
including solutions which seek to capture
the carbon as it is emitted and either store
it or use the carbon in other processes.
Alternatively, the BF–BOF route may be
replaced by a combination of Direct
Reduced Iron (DRI) and EAFs.
Hydrogen-based DRI associated with
EAFs has the potential to be nearly
carbon-free if carbon-free electricity and
hydrogen are available. We anticipate
that there will be a gradual reduction in
steel production via the BF–BOF route
and growth in the EAF route. The extent
and pace of this change will depend
on technologies coming to maturity,
the availability of infrastructure
(carbon-free electricity and hydrogen),
and regulatory frameworks.
These technologies will require many years
to mature and be deployed on a large
scale. This driver is therefore expected not
to have any impact over the short term,
and to reach its maximum impact in the
long term.
Conclusion on strategic resilience
Sustainability has always been at
the heart of Vesuvius’ business and the
Group’s analysis concludes that the
opportunities for the Group manifested
by the global pressure to mitigate
climate change outweigh the risks.
Our technology helps our customers
improve their process efficiency and
their environmental footprint.
We estimate the financial impact of the
opportunities and risks on the Group will
be most adverse under a 4°C scenario
and most positive under a 2°C scenario.
Under all three scenarios, we expect to
benefit from the continuing growth in the
production of steel in line with GDP, along
with the accelerating shift towards higher
performance iron and steel castings,
as we support customers to maximise the
efficiency and quality of their production.
With our technological expertise, strong
customer relationships and broad
manufacturing footprint, we expect
to play a key role in supporting our
customers’ efforts to decarbonise
their operations.
We also believe there is a low downside
for Vesuvius in all three scenarios as more
than 70% of our business in steel is in the
steel casting part of the operation which,
as a stand-alone process, is low CO
2
emitting (1% to 3% of a steel plant’s
CO
2
emissions), and which we do not
expect to be affected by technology
shifts that the decarbonisation of iron
and steel-making will require.
Whilst the electrification of light vehicles
and ongoing light-weighting efforts are
expected to translate into a shrinking of
the market for certain iron castings, it is
anticipated that this will be more than
compensated for by the growth in other
markets such as wind turbines and
aluminium castings.
We do not anticipate that climate change
will lead to any significant changes in our
access to capital or require the impairment
of assets on a material scale.
Key factors impacting Vesuvius’ three climate change scenarios
1. Regulatory and macroeconomic drivers
differentiate our scenarios
2. The future of steel
3. Technology transition
47
Strategic report
Governance
Financial statements
Roadmap to Net Zero
We have set intermediate targets in our
journey to reach net zero CO
2
e emissions
by 2050 (Scope 1 and Scope 2), in line
with the Paris Agreement and the UK’s
commitment in the Climate Change
Act 2008 (2050 Target Amendment)
Order 2019. These emissions encompass
the seven GHGs listed by the
Intergovernmental Panel on Climate
Change in the Kyoto Protocol (CO
2
,
CH
4
, N
2
O, HFCs, PFCs, SF
6
and NF
3
).
Our preferred metrics to monitor progress
with our journey to net zero are energy
and CO
2
e emission intensity (energy
consumption and CO
2
e emissions per
metric tonne of product packed for
shipment). These reflect the progress made
in our operations better than absolute
metrics. Managing this energy intensity not
only has environmental benefits, it is also
part of our long-term strategy to enhance
our cost competitiveness.
Our targets
Our targets cover 100% of Vesuvius’
operations. They are aligned with the
Science Based Targets initiative (SBTi)
requirements for a well below 2°C global
warming scenario and are consistent with
the Paris Agreement. 2019 was selected
as the baseline for all energy and GHG
emissions data and targets, absolute and
relative, as this was the last year of normal
trading prior to the COVID-19 pandemic.
–
10% improvement in the Group’s
energy intensity between 2019
and 2025
–
20% reduction in CO
2
e emission
intensity normalised per metric
tonne of product packed for
shipment (Scope 1 and Scope 2)
by 2025 (vs 2019 baseline)
–
100% carbon-free electricity by 2030
–
A reduction in total Scope 1 and
Scope 2 CO
2
e emission intensity
of 50% by 2035 (vs 2019 baseline)
–
Zero Scope 1 and Scope 2 CO
2
e
emissions by 2050
We aim to achieve our decarbonisation
goals without the use of any carbon offsets
(or only to address residual emissions).
The Group energy CO
2
e emissions
reduction targets have been cascaded
to all Business Units, which have built
action plans accordingly. Portions of the
Group Executive Committee’s Long-Term
Incentive Plan and senior management
annual variable compensation are linked
to the achievement of CO
2
e emissions
reduction targets.
Our plan
Our Roadmap to Net Zero is based on
five key areas of focus:
1
Modernising and upgrading
installed equipment to reduce our
energy consumption
2
Investing to renew equipment to the
best available technologies and
converting to less CO
2
e intensive
energy sources
3
When possible, replacing high CO
2
e
emission electricity (generated from
coal or natural gas) with greener
electricity or other sources of energy
4
Reducing our energy wastage,
recovering heat to feed processes
and heat water
5
Generating clean energy
Assumptions and sensitivities
Some significant assumptions underpin
our net zero plan, including:
–
The availability of the necessary
technologies, at an affordable level and
at a scale appropriate for our industry,
especially for the firing of refractory
ceramics and carbon capture (including
carbon capture technologies for the
dolime production process)
–
The development of additional
production capacity and distribution
infrastructure for renewable energy and
hydrogen, and their cost competitiveness
–
Adequate policy support to foster
innovation and ensure the cost of CO
2
emissions will increase the attractiveness
of carbon-free processes
–
No significant change to our business
model and product portfolio
The achievement of our CO
2
e emissions
targets will also be sensitive to:
–
The growth of revenue, organically,
and from acquisitions, and divestitures
–
Product mix evolution (especially driven
by dolime volume, which is the most
CO
2
intensive product line)
–
Macroeconomic conditions and the
capex cycle impacting plant loading
(and thereby the energy efficiency of
continuous processes)
In the short and medium term, we will focus
on reducing the Scope 1 and Scope 2
emissions of product lines other than
dolime. We have made investments in
recent years to optimise the energy
efficiency and reduce the CO
2
intensity
of this process. Further significant
improvements will require investing in
technologies such as carbon capture,
which we anticipate will not be available at
an affordable level and at an appropriate
scale, in the short and medium term.
Tackling climate change
continued
Vesuvius plc
Annual Report and Financial Statements 2024
48
Our plan to reach net zero covers 100% of our operations. We aim to achieve our decarbonisation goals without the use of any carbon
offsets (or only to address residual emissions).
Short term (2026)
A wide variety of projects have been
initiated and more are being considered,
to help us deliver our energy efficiency
and CO
2
e emissions reduction targets,
including:
–
Optimisation of process parameters
–
Introduction of new refractory furniture
–
Retrofitting of ovens and kilns
–
Replacement of older and less
efficient units
–
Upgrades of compressors
–
Replacement of light sources with
LED lights
–
Replacement of diesel-powered forklift
trucks with electric forklift trucks
–
Installation of heat recovery systems
in ovens and kilns
–
Burner setting optimisation and loading,
and cycle optimisation
–
Continued conversion of electricity
supplies to carbon-free sources
–
Installation of solar panels
We endeavour to use the best available
technologies to reduce CO
2
emissions in all
our major capital expenditure projects.
Medium term (2035)
We anticipate that further emissions
reduction will be possible through further
energy efficiency measures (continuation
of the short-term actions).
Technological developments currently in
preparation with our partners will allow
us to reduce GHG emissions even further.
Projects have been launched across
a range of activities including:
–
Electrification of high-temperature
manufacturing processes that currently
rely on natural gas or LPG. The first
investments to replace natural gas-
powered ovens with electric ovens
were completed at the end of 2024
–
The use of a combination of natural
gas and renewable energy such as
carbon-free hydrogen to fire refractory
materials. We have already started
R&D trials with a blend of hydrogen
and natural gas
–
The use of bio-fuels instead of natural
gas. The first investments to replace
natural gas with biomethane were
completed in 2024
Whilst the list of assets that will require
upgrade or replacement is defined,
a precise time plan cannot be elaborated
beyond the next few years:
–
Electric and hydrogen-powered
high-temperature processes are still in
the development phase and not ready
for industrial-scale deployment. The
manufacture of each product family in
our portfolio requires a specific set of
parameters such as type of process
(batch vs continuous), temperature
and atmosphere. It is still too early to
decide which technological solutions
will be possible and most appropriate
for each process
–
All high-temperature processes will
require an adequate and affordable
supply of carbon-free energy to be
economically viable. Availability and
price trajectories may vary greatly
from region to region
These low-carbon production processes
should be progressively introduced during
the 2025–2035 period, as they meet the
technical and economic conditions allied
with the availability of required energy.
Precise capital expenditure project lists
have been defined for the 2026 horizon
and are in preparation for the next
few years. We estimate the incremental
capital commitment required by our
decarbonisation roadmap will be
approximately £7m per year until 2035.
We do not expect the useful economic
lives of our existing assets to be materially
affected by our plans until 2035. We will
continue using the internal price of
carbon to assess the relative benefits
and prioritise projects.
We also anticipate that changes in our
product portfolio towards less energy-
intensive products (such as resin-bonded
and unshaped refractories) will continue,
though the impact cannot be quantified.
Long term (2050)
Beyond 2035, the short-term and
medium-term programmes will continue
to deliver opportunities.
We are regularly monitoring the
emergence and readiness of new
technologies, through our network of
suppliers of capital goods, universities and
trade associations. In the longer term
(2050), various technologies are promising
candidates for the near zero emissions
curing and firing of refractory products
(electricity, carbon-free hydrogen,
synthetic gas, biomass).
We currently anticipate that carbon
capture solutions will be available for our
industrial application during the 2035–2050
period, though most will probably not be
available sooner. We are progressively
adapting our product and process R&D
programmes to explore such opportunities.
Capital expenditure requirements and
the useful economic lives of our existing
assets will depend on the evolution of
technologies currently in development.
Our plan to reach net zero
Scope 2 electricity
Reach net zero
Scope 1 + Scope 2
CO
2
e emissions
1
Reduce the
intensity by
20% from the
2019 baseline
Reduce the
intensity by
50% from the
2019 baseline
Short term
Medium term
Long term
2026
2035
2050
Convert to 100%
carbon-free sources
2019
2030
Our journey to net zero
1.
Re-baselined using pre-acquisition data for the business acquired from Universal Refractories, and BMC from 2019 onwards.
49
Strategic report
Governance
Financial statements
Progress in 2024
1
Carbon-free energy sources
2
Capital commitments and internal CO
2
pricing
3
Improving our energy efficiency
Our progress – key Group initiatives for energy conservation and for increasing energy efficiency
We have continued converting our manufacturing sites to carbon-free electricity and undertaken a number of major projects
to significantly reduce the Scope 1 CO
2
e emissions of the Group by addressing some of its most CO
2
e intensive installations.
The Group supports the transition towards
renewable energy sources and cleaner
carbon-free technology when possible.
Our energy strategy includes an ongoing
effort to convert to carbon-free electricity
contracts whenever practical and economically
viable, investment in solar panels, and the
conversion of processes to electricity as soon
as the technology is cost-effective.
In 2024, three sites converted to carbon-free
electricity contracts. At the end of 2024, we had
43 sites with carbon-free electricity contracts,
representing 75% of our manufacturing sites
and R&D centres of excellence.
81% of the grid electricity consumed in our
sites in 2024 was generated from renewable
sources (71% in 2023), and 83% using processes
that did not emit CO
2
e (renewable and nuclear)
(75% in 2023).
A third Vesuvius plant became carbon-free
in 2024, with Rio de Janeiro converting all
of its natural gas-based production processes
to biomethane. CO
2
e emissions from the
Rio de Janeiro plant are now at zero.
In addition, capital expenditure projects
for solar panels with a value of £0.3m were
approved in 2024. Ten of our sites are now
equipped with photovoltaic solar panels and
19 sites are investigating solar panel projects.
We include an environmental impact analysis
in the evaluation of our capital expenditure
projects as these are the key decisions that drive
long-term future sustainability performance,
and CO
2
emissions in particular.
Our Environmental Policy, which is the
responsibility of the Chief Executive and the
Group Executive Committee, covers all our
operations and states that all our investment
decisions will include an analysis of their
environmental impact. An internal price for
CO
2
emissions (Scope 1 and Scope 2) is included
in the calculation of payback for all investments
reaching the threshold for approval by the
Business Unit Presidents or Chief Executive.
Vesuvius views this shadow pricing mechanism
as a key tool to ensure that the environmental
impact of long-term investment decisions is
understood. It seeks to ensure that the best
available technology is adopted, even in
locations where no external cost for carbon
is in place or foreseen. The internal price of CO
2
was introduced in 2020. It is reviewed annually
by the Sustainability Council and is applicable
across all Business Units in all regions. The price
is adjusted, taking into consideration both the
previous year’s price and the evolution of the
EU Emissions Trading System (EU-ETS) carbon
pricing. In 2020, it was initially set at €30 per
tonne of CO
2
. It was raised to €90 per tonne
in 2021, and subsequently maintained at this
level. The Sustainability Council has decided to
maintain the internal price of CO
2
emissions at
€90 per tonne of CO
2
for 2025.
All Vesuvius plants have targets to reduce
energy intensity. We have implemented a
structured approach across the Company.
We collect and analyse data from our sites,
identify gaps and opportunities and eventually
target our engineering projects. We select
the processes and sites that are the most
energy-intensive or have the greatest
impact, and coordinate the projects centrally.
We also share best practices across locations.
For example, in one of the most energy-
consuming sites, we will improve our process
by installing additional nozzles in the spray
towers, building on the experience from another
Vesuvius site. Many additional initiatives are
managed locally.
In 2024, the first investments replacing natural
gas-powered ovens with electric ovens were
completed, as part of our plan to electrify
high-temperature manufacturing processes
that currently rely on natural gas or LPG. We
also ran R&D trials focusing on the use of a
combination of natural gas and carbon-free
hydrogen to fire refractory materials, and
completed the first investments in replacing
natural gas with biomethane. During the year,
we also continued the deployment of meters on
energy-intensive equipment.
We are encouraging sites to carry out energy
audits and pursue ISO 50001 certification.
13 sites carried out energy audits in 2024, and
31 have planned audits in 2025. Three sites
have already obtained ISO 50001 certification.
This combination of initiatives allows us to
better identify and analyse opportunities and
target investments on projects with the largest
impact. More than 4,700 employees have
received training on energy conservation and
greenhouse gas emissions reduction.
In 2024, as a result of thermal processes
optimisation and the installation of retrofit
solutions, we have reduced energy consumption
by more than 15 GWh per year and CO
2
e
emissions by 20 KT versus 2023. New capital
expenditure worth c.£7m, dedicated to
122 projects with energy efficiency and
CO
2
emissions reduction as one of their
prime objectives, was approved in 2024.
Tackling climate change
continued
Vesuvius plc
Annual Report and Financial Statements 2024
50
Our energy
consumption and
Scope 1 and Scope 2
CO
2
e emissions
Whilst Vesuvius’ products differ
significantly in the energy intensity of their
manufacture, most of our manufacturing
processes are not energy intensive nor
do they produce significant quantities of
waste and emissions. Dolime production
(based in South Africa), which uses coal
to calcine dolomite, is our major emitter
of CO
2
. Dolime and the next five of
our 39 main manufacturing processes
account for 61% of our energy
consumption and 69% of our location-
based CO
2
e emissions. These continue
to be a clear focus for our investment
to reduce CO
2
e emissions.
In January 2023, an incident incapacitated
one of our dolime rotary kilns, which
resulted in it being out of service for over
a year. As a consequence, the tonnage of
dolime produced by the Group has been
considerably lower than in prior years and
the Group’s product mix has been very
different. The Group’s absolute energy
consumption, CO
2
e emissions, energy
intensity and CO
2
e emission intensity
reduction have been affected by the lower
output of dolime, which has higher energy
and carbon intensity than most of our
production processes. The dolime
installation resumed production in 2024
albeit at a lower level than prior to the
2023 incident.
The Group’s progress in reducing our
CO
2
e emission intensity was adversely
affected in 2024 by the increase in
dolime production. Low volumes of other
product lines resulted in lower fill rates for
continuous processes and lower energy
efficiency, thereby also contributing to
a higher CO
2
e emission intensity. Between
2019 and 2024 the Group achieved an
overall reduction in energy intensity
(normalised to per metric tonne of product
packed for shipment) of 14.0%. The pro
forma energy intensity reduction assuming
the Group had produced dolime at the
normal rate, was 10.1% vs a target of
10% by 2025.
During the same period, our overall CO
2
e
emission intensity metric (CO
2
e emissions
per metric tonne of product packed for
shipment, Scope 1 and Scope 2, market-
based) reduced by 40.4% vs a target of
20% by 2025. This includes a 40.2%
reduction in energy CO
2
e intensity, and
a 41.2% reduction in process CO
2
e
intensity, per metric tonne of product
packed for shipment. Excluding dolime,
the CO
2
e emission intensity reduction
between 2019 and 2024 was 40.2%.
If the production of dolime had remained
on average the same as the 2019–2022
period, prior to the dolime incident,
our pro forma CO
2
e emission intensity
reduction would have been 26.9%.
Scope 1
covers emissions from fuels used in
our factories and offices, fugitive emissions
and non-fuel process emissions.
Scope 2
relates to the indirect emissions
resulting from the generation of electricity,
heat, steam and hot water we purchase to
supply our offices and factories.
Scope 3
covers all other direct CO
2
and
CO
2
e emissions that occur in the Company’s
value chain.
The conversion by many of our sites to
carbon-free electricity contracts has
helped our CO
2
e emissions reduce at a
faster pace than our energy efficiency
improvements. Vesuvius’ total energy costs
in 2024 were £45.6m, c.2.5% of revenue
(£48.5m in 2023, c.2.5% of revenue).
None of our installations meet the criteria
to be included in the European Union
Emissions Trading System (ETS). South
Africa is the only country where we exceed
the threshold to be submitted to a carbon
tax or an emissions trading scheme.
The carbon tax cost in 2024 was c.£ 0.1m
(£0.2m in 2023), based on emissions in
the prior year.
In 2024, Vesuvius did not engage in any
greenhouse gas removal activities within
its own operations or upstream or
downstream value chain, nor did we
finance any removal projects outside
our value chain through the purchase of
carbon credits.
Our projected future progress
Factoring in the significant assumptions
that underpin our net zero plan (see p48),
we believe that we are on track to achieve
the projected 100% reduction of our Scope
2 emissions by 2030 and the projected
50% reduction of our combined Scope 1
and Scope 2 emissions intensity by 2035.
Having already converted most of our
manufacturing sites to carbon-free
electricity, the reduction of our CO
2
e
emissions intensity will be driven by
progress in addressing Scope 1 emissions.
Consequently, the pace of progress will
slow down.
2024
2023
2022
2021
2020
2019
Electricity from non-CO
2
emitting
sources
(% of total)
37%
39%
50%
65%
75%
83%
2024 Scope 1 and Scope 2 CO
2
e emissions per region (market-based) %
Metric tonnes CO
2
e
2024
Metric tonnes
%
Africa
111,583
46
Europe and Middle East
42,866
18
USA, Mexico, Canada
33,866
14
China & NA
33,891
14
India & SA
12,323
5
South America
6,866
3
Notes:
–
Includes the business of Universal Refractories, Inc. (Vesuvius Penn Corporation) which was acquired in 2021 and BMC (Yingkou YingWei Magnesium Co.,Ltd),
which was acquired late 2022.
–
The numbers are collated from 100% of entities within the Group’s Operational Control Boundary.
–
Further information on sources of data, scope of entities covered, calculation methodologies and progress can be found in the 2024 Sustainability Report
which is available at: www.vesuvius.com.
51
Strategic report
Governance
Financial statements
Scope 1, Scope 2 and Scope 3 CO
2
e emissions (market-based)
1,2
In 2024, Vesuvius’ total Scope 1, Scope 2 and Scope 3 CO
2
e emissions were 2,003,560 metric tonnes.
Metric tonnes CO
2
e
2024
2023
Metric
tonnes
%
Metric
tonnes
2
%
2
Scope 1 Process CO
2
e emissions
57,926
26.9%
29,637
17.4%
Scope 1 Energy CO
2
e emissions
157,090
72.9%
139,241
81.9%
Scope 1 Fugitive emissions
575
0.3%
1,037
0.6%
Total Scope 1 CO
2
e emissions
215,591
10.8%
169,914
8.6%
Scope 2 CO
2
e emissions (market-based)
25,804
1.3%
38,149
1.9%
Scope 3 CO
2
e emissions
1,762,165
88.0%
1,777,008
89.5%
Total
2,003,560
100%
1,985,072
100%
1.
The numbers are collated from 100% of entities within the Group’s Operational Control Boundary.
2.
The Scope 2 and Scope 3 emissions data for 2023 was re-evaluated during 2024, using an updated methodology and revised emissions factors from the
International Energy Agency, and as a result some minor amendments have been made to these figures.
Vesuvius plc long-term energy consumption and energy intensity (aggregate of Scope 1 and Scope 2)
1,2,3
2024 vs 2019
2024
2023
3
2019
3
Total energy consumption
(million kWh)
963
896
1,211
Energy consumption per metric tonne of product packed for
shipment (kWh/MT)
-14%
1,076
1,054
1,252
Notes:
1.
The numbers are collated from 100% of entities within the Group’s Operational Control Boundary.
2.
2019 was selected as the baseline for all energy and GHG emissions data and targets, absolute and relative, as this was the last year of normal trading prior
to the COVID-19 pandemic. Progress is measured against the 2019 performance.
3. Emissions numbers for 2019 and 2023 were re-evaluated using an improved approach in 2024, and as a result some minor amendments have been made.
Further information on sources of data, scope of entities covered, calculation methodologies and progress can be found in the 2024 Sustainability Report
which is available at: www.vesuvius.com.
Vesuvius plc statement of verification
Scope 1, Scope 2 and Scope 3 carbon footprint reporting and supporting evidence contained herein
for the period 1 January 2019 to 31 December 2024 covering GHG emissions as CO
2
e in metric tonnes,
CO
2
e intensity in metric tonnes of CO
2
e per metric tonne of product packed for shipment, energy
consumption in kWh and energy intensity in kWh of energy per metric tonne of product packed for
shipment, location-based and market-based, were verified by Carbon Footprint Ltd in accordance with
the ISO 14064 Part 3 (2019): Greenhouse Gases: Specification with guidance for the verification and
validation of greenhouse gas statements.
A copy of the limited assurance statement can be found on our website: www.vesuvius.com.
In 2024, the Group’s normalised energy
consumption increased by 2.1% to 1,076
kWh per metric tonne of product packed
for shipment (2023: 1,054). Location-
based emissions increased by 11.4% to
0.341 metric tonnes of CO
2
e per metric
tonne of product packed for shipment
(2023: 0.306) and market-based emissions
increased by 10.2% to 0.270 metric tonnes
of CO
2
e per metric tonne of product
packed for shipment (2023: 0.245).
In 2024, natural gas use increased
by 1%, and electricity consumption by 1%
whereas coal (a CO
2
intensive fuel and
raw material used in dolime production)
consumption grew by 76%, to 15,767
metric tonnes (2023: 8,974, 2022: 27,231
metric tonnes) driven by the increase of
dolime production.
During 2024, the Group also consumed
364 cubic metres of diesel (+15% on 2023:
317) primarily in the operation of forklift
trucks on its sites, and 28 cubic metres of
fuel oil, a decrease of 83% (2023: 165).
In total, 392 cubic metres of oil was used
as fuel in 2024 (19% up on 2023: 482).
Tackling climate change
continued
Vesuvius plc
Annual Report and Financial Statements 2024
52
Global GHG emissions and energy consumption
Location-based statutory reporting (Operational Control Boundary)
1,2,3,4,5,6
Emissions
and energy
sources
UK and
Offshore
CO
2
e ‘000
metric
tonnes
2024
Global
CO
2
e ‘000
metric
tonnes
2024
Proportion
relating to
the UK and
Offshore
Area
UK and
Offshore
CO
2
e ‘000
metric
tonnes
2023
6
Global
CO
2
e ‘000
metric
tonnes
2023
6
Proportion
relating to
the UK and
Offshore
Area
UK and
Offshore
energy
used
‘000 kWh
2024
Global
energy
used
‘000 kWh
2024
Proportion
relating to
the UK and
Offshore
Area
UK and
Offshore
energy
used
‘000 kWh
2023
Global
energy
used
‘000 kWh
2023
Proportion
relating to
the UK and
Offshore
Area
Combustion of fuel and operation of facilities including fugitive emissions (Scope 1)
2.289
216
1.1%
2.150
170
1.3%
11,943
764,552
1.6%
11,343
699,011
1.6%
Electricity, heat, steam and cooling purchased for own use (Scope 2)
0.329
90
0.4%
0.339
90
0.4%
1,848
198,497
0.9%
1,905
196,612
1.0%
Total GHG emissions and energy
2.617
305
0.9%
2.489
260
1.0%
13,791
963,048
1.4%
13,248
895,622
1.5%
Change
5.1%
17.3%
4.1%
7.5%
Vesuvius’ chosen intensity measurement
(location-based statutory reporting)
1,2
Metric tonnes CO
2
e per metric tonne of
product packed for shipment
kWh of energy per metric tonne of
product packed for shipment
UK and
Offshore
2024
Global
2024
UK and
Offshore
2023
6
Global
2023
6
UK and
Offshore
2024
Global
2024
UK and
Offshore
2023
Global
2023
Emissions and energy reported above
normalised to metric tonnes CO
2
e
per metric tonne of product packed
for shipment
3.123
0.341
3.441
0.306
16,457
1,076
18,315
1,054
Change
-9.2%
11.4%
-10.1%
2.1%
Metric tonnes of CO
2
e per £m revenue
Total GHG emissions as metric tonnes
CO
2
e per £m revenue (location-based)
23.7
167.8
20.3
134.9
Change
16.7%
24.4%
1.
Location-based Statutory Reporting of Global GHG emissions (metric tonnes of CO
2
e) and energy consumption (‘000 kWh). The numbers are collated from
entities within the Group’s Operational Control Boundary.
2. In reporting GHG emissions, we have used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) methodology to identify our
location-based GHG inventory of Scope 1 (direct) and Scope 2 (indirect) CO
2
e. We report in metric tonnes of CO
2
equivalent (CO
2
e). We have used emission
factors from the UK Government (Defra) and the IEA GHG Conversion Factors for Company Reporting 2024 in the calculation of our GHG emissions.
3. Our energy-related greenhouse gas (GHG) emissions, reported as carbon dioxide equivalents (CO
2
e), include direct emissions of the three main GHGs
(carbon dioxide (CO
2
), methane (CH
4
) and nitrous oxide (N
2
O)).
4. Process related emissions of the following in CO
2
equivalent and in metric tonnes are not significant: Direct methane CH
4
emissions and Direct nitrous oxide
N
2
O emissions.
5. Emissions of the following in CO
2
equivalent and in metric tonnes are not significant: Direct sulphur hexafluoride (SF
6
) emissions; Direct HFC emissions;
and Direct PFC emissions.
6. The emissions numbers for 2023 were re-evaluated during 2024, using an updated methodology, and as a result some minor amendments have been made to
these numbers. Further information on sources of data, scope of entities covered, calculation methodologies and progress can be found in the 2024
Sustainability Report which is available at: www.vesuvius.com.
Greenhouse gas (GHG) reporting
We have reported to the extent reasonably practicable on all the emission sources required under Part 7 of the Accounting Regulations
which fall within our Group Financial Statements. Statutory reporting is location-based according to the GHG Protocol.
All sites report their energy consumption and GHG emissions on a quarterly basis. Performance and variation are analysed, and
improvement plans built accordingly.
The Group also meets all its obligations in relation to the Producer Responsibility Packaging Waste regulations and the Energy Saving
Opportunity Scheme by which the UK implemented the EU Energy Efficiency Directive.
53
Strategic report
Governance
Financial statements
Scope 3 emissions
Vesuvius’ Scope 3 CO
2
e emissions, mainly
upstream, contribute to a greater part of
our total CO
2
e emissions than our Scope 1
and Scope 2 emissions. Our products are
used by customers whose processes emit
significant amounts of CO
2
. They serve to
contain and protect liquid metal and
manage its flow, but do not participate in
the heating operations or chemical
reactions that lead to CO
2
emissions.
Emissions associated with the processing
or use of our products are hence very
limited. More specifically:
–
Some products require drying or
pre-heating prior to use by our
customers. Emissions generated during
these operations are included in the
‘Processing of sold products’ category
–
Refractory materials do not require
energy during their use; having
undergone high-temperature processes
during their manufacturing, they are
inert and do not release any greenhouse
gases during their use
–
Some non-refractory products contain
chemicals, which will be partially burnt
during usage by our customers.
Emissions due to the combustion of
chemicals are included in the ‘Use of
sold products’ category
Since 2021, we have undertaken a focused
evaluation of emissions associated with
raw materials, using publicly available
average CO
2
emissions factors. We have
also collected information on energy
source, CO
2
emissions data and reduction
plans from our raw materials suppliers as
part of our Request for Quotation process.
We have begun to collect CO
2
emissions
data relating to transportation from
our forwarders in all regions. In 2024,
the CO
2
emissions data that we received
from our forwarders covered 26% of
our transportation spend (upstream
and downstream), and we were able to
evaluate CO
2
emissions covering a further
61% of our transportation spend using
operational data and Defra conversion
factors. The remainder of our CO
2
emissions from upstream and downstream
transportation (13%) was estimated based
on spend and Defra conversion factors.
Various initiatives have been launched
to reduce our Scope 3 CO
2
emissions,
including returnable packaging, the
electrification of company fleet
vehicles and arrangements for
collective commuting.
Our process for evaluating Scope 3
CO
2
emissions continues to evolve, as
assessment techniques become more
sophisticated. In 2023, this re-evaluation
included adopting a more granular
approach to our assessment of emissions
from raw materials, where we more than
doubled the number of factors used,
to achieve more refined data on emissions
from purchased goods.
Scope 3 emissions
1,2,3,4,5
Metric tonnes CO
2
e
2024
2023
5
Metric tonnes
%
Metric tonnes
%
Purchased goods and services
1,451,402
82%
1,441,413
81%
Capital goods
46,048
3%
39,992
2%
Fuel- and energy-related activities (not included in Scope 1 or 2)
39,473
2%
37,088
2%
Upstream transportation and distribution
28,516
2%
39,086
2%
Waste generated in operations
14,391
1%
14,979
1%
Business travel
9,887
1%
11,443
1%
Employee commuting
34,470
2%
40,891
2%
Upstream leased assets
0
0%
0
0%
Downstream transportation and distribution
57,897
3%
80,896
5%
Processing of sold products
19,250
1%
14,924
1%
Use of sold products
37,554
2%
34,194
2%
End-of-life treatment of sold products
23,276
1%
22,103
1%
Downstream leased assets
0
0%
0
0%
Franchises
0
0%
0
0%
Investments
0
0%
0
0%
Total Scope 3 CO
2
e emissions
1,762,165
100%
1,777,008
100%
1. The numbers are collated from 100% of entities within the Group’s Operational Control Boundary.
2. Conversion factors for GHG emissions and energy used the 2024 UK Government GHG Conversion Factors for Company Reporting. Conversion factors for
GHG emissions for electricity globally used the IEA Emission Factors 2024.
3. Calculation of Scope 3 GHG emissions used the Carbon Footprint Limited Sustrax system.
4. Scope 3 2024 Upstream subtotal 1,624,188 metric tonnes (92%) Downstream subtotal 137,977 metric tonnes (8%).
5. Scope 3 emissions data for 2023 was re-evaluated during 2024, using an updated methodology, and as a result some minor amendments have been made to
these figures. Further information on sources of data, scope of entities covered, calculation methodologies and progress can be found in the 2024 Sustainability
Report which is available at: www.vesuvius.com.
Tackling climate change
continued
Vesuvius plc
Annual Report and Financial Statements 2024
54
Our People and Culture Strategy aims
to build an outstanding business by
ensuring we have the individuals, skills
and capabilities critical to the delivery
of our strategy.
Vesuvius is a geographically and
culturally diverse group, employing
more than 13,000 people of more
than 70 nationalities in 40 countries.
The underlying foundation for our
People and Culture Strategy is our
strong culture of delivering results in our
diverse, entrepreneurial, decentralised
organisation, where everyone is
empowered to take action, working
with like-minded people in a non-matrix
environment.
A flexible workforce
Our activity levels fluctuate based on
customer demand. A variety of measures
have been implemented to ensure our
workforce is equally flexible. These include
the employment of agency workers,
overtime and flexitime agreements,
and suspended employment.
81%
19%
Employees
Directly
supervised
contractors
A significant proportion of our headcount
is employed in customer locations. The
length of this employment with Vesuvius is
dependent on the continuation or renewal
of contracts. In many countries, we employ
workers via professional agencies.
Whenever business is transferred by
a customer from one supplier to another,
this employment via agencies rather than
direct employment provides workers with
employment continuity, as it permits them
to continue working for the customer whilst
their services are transferred.
Full-time vs part-time employees
62
(1%)
Part-time
11,071
(99%)
Full-time
Directly supervised contractors
2,582
Salaried vs hourly employees
6,523
(59%)
Hourly
4,610
(41%)
Salaried
Permanent vs temporary employees
399
(4%)
Temporary
10,734
(96%)
Permanent
Talent attraction and development
Staying competitive in today’s rapidly
evolving world requires a keen focus
on the attraction and development of
appropriate talent. We balance a mix of
high-quality external recruits with our
strong internal talent pipeline to source
these colleagues, and then provide
continuous development to facilitate
their success.
During recruitment for key talent we craft
clear, well-defined success profiles for
each role, and utilise multiple rounds of
assessments, interviews, psychometric
assessments and reference checks to
secure top-tier talent. In 2024, we also
launched a newly refreshed employer
brand to strengthen our position in
the market.
Internally, we have developed a robust
system for tracking and evaluating
performance effectiveness across all
levels. This includes two comprehensive,
Company-wide system-based
performance processes: one focused on
an overall performance review, where
managers assess employees on key
factors such as alignment with Vesuvius’
core Values, achievement of results, and
role-specific competencies; the second on
reviewing year-end personal objectives,
which are linked to individual goal
achievement and career progression.
In addition, we hold mid-year
performance reviews to ensure alignment,
address any gaps, and refine development
plans for the remainder of the year. These
processes are vital in identifying skills gaps,
talent risks, and opportunities for growth,
enabling us to take corrective action
where needed.
Training and development
Our leaders take responsibility for
managing and developing their teams.
Our Learning Management System
provides a global hub for Vesuvius’ online
training courses. Mandatory training
courses are automatically assigned to new
joiners and completion statistics are easily
reportable. Targeted training courses can
also be allocated to employees in specific
roles, e.g. modern slavery training for
people in purchasing.
Our internal HeaTt training is aimed at
the continuous technical development of
Vesuvius employees. Courses range from
entry to expert levels and are continuously
updated to keep pace with developing
technology and delivery methods,
thereby guaranteeing that Vesuvius
experts are at the forefront of technical
innovation. They are a great way for our
hugely experienced technical experts
to pass on their knowledge to the next
generation and ensure the sustainability
of our know-how.
Our people
55
Strategic report
Governance
Financial statements
Global Mentoring programme
In 2024, Vesuvius continued its global
mentoring programme for its top talent
focusing on leadership and talent
development. There are currently 23
mentees taking part in the 12-month
programme, of which nine are women.
Mentees learn from the experience and
perspectives of a senior leader, including
members of the Group Executive
Committee in Vesuvius, creating an
individual personal development plan
to enhance their careers and leadership
capabilities. The programme ensures
internal knowledge transfer and builds
a broader, deeper and more ready
talent pool.
Global reward
Reward and recognition are integral
components of our employee value
proposition, enabling us to attract,
engage and retain key talent and highly
qualified employees. We are committed
to operate reward and performance
management systems which are
transparent and objective.
Our management Annual Incentive
Plans are measured against both
Vesuvius’ financial targets and personal
performance, an incentive structure
consistent with that of our Executive
Directors. The Vesuvius Share Plan for
Executive Directors and Group Executive
Committee members encourages robust
decision-making based on long-term
goals rather than short-term gains and
works to align the interests of participants
with those of shareholders.
Global mobility
We believe that our global operations
should be managed and staffed by local
personnel. However, we also provide
selected groups of employees with a range
of international assignments. These
assignments are usually for a limited
period, most often three years.
International assignees do not come from
one or two countries alone. We have a truly
international mix of nationalities in our
mobile population. Individuals move not
only within a region, but also between
regions. Our mobility programme shows
that our assignee population is as diverse
as our Group.
Employee engagement
Vesuvius recognises that companies with
highly engaged employees deliver better
business outcomes. They have lower
absenteeism, lower employee turnover,
fewer safety incidents, better product
quality, and higher productivity, sales and
profitability. At Vesuvius, we regard
engagement as critical to our ongoing
success and we work hard to listen to our
people and act when issues impacting
engagement are identified.
We seek to understand and support all
employees, including those who may
be more vulnerable in the workplace by
using anonymous methods of providing
feedback such as our annual employee
engagement survey – I-Engage and
Speak Up. We measure the effectiveness
of these tools by analysing response rates,
tracking the percentage of employees
participating each year and identifying
trends in engagement across different
departments and regions.
Employee engagement is a collective
responsibility, especially for our
management teams. As a principal tool
to help nurture this engagement we have
partnered with Mercer to undertake our
annual I-Engage survey, which captures
employees’ perceptions and attitudes
towards Vesuvius and their work. The
survey results are compiled into team-
specific reports, which managers discuss
transparently with their teams. Together,
they identify areas for improvement and
develop practical action plans to deliver
positive change to the work environment.
In 2024, we maintained a very high
participation level with 92% of employees
responding to the 38 questions. The
overall level of engagement reduced
slightly but still remained high, with
safety and immediate manager
engagement rated particularly positively,
and survey follow-up noted as an area
for improvement.
92%
response
rate
Respondents to our
2024 I-Engage survey
Internal communications
We continue to develop our internal
communications programme to ensure we
have a strong mix of channels to reach our
diverse population. The Chief Executive
regularly addresses the whole Group
via Company-wide email and video,
delivering strategic messages, and in
2024 held 12 interactive virtual sessions
with the Senior Leadership Group to share
business updates. Company news and
announcements are regularly shared on
the Group intranet, whilst screen savers
are used to support major communication
campaigns. We also utilise posters and
site ‘town hall’ meetings for on-site
communications.
Whenever possible, face-to-face
communication is conducted at different
levels of the organisation, providing the
necessary opportunities for interactive
Q&A sessions with business leaders.
Employee consultation and industrial relations
Vesuvius supports freedom of association
and the right to collective bargaining.
In all the countries in which we operate,
the Group informs and consults local works
councils and trade unions on matters
concerning the Vesuvius business as
required. These processes and procedures
are regulated by local law and generate
constructive dialogue between employee
representatives and management,
which provides benefits to our business.
In addition to local employee
representation, the Group operates
a European Works Council (EWC)
with elected representatives from the
UK and each of the EU countries in
which Vesuvius has employees.
Our people
continued
Vesuvius plc
Annual Report and Financial Statements 2024
56
The Board has noted the recommendation
of the Parker Review that each FTSE 350
company should set a percentage
target for senior management positions
that will be occupied by ethnic minority
executives in December 2027. The
Company currently analyses management
on the basis of nationality, which indicates
a great deal of diversity in the senior
management group, but not ethnicity.
The Board has conducted a survey of
ethnicity for senior management positions,
but has determined that no ethnicity target
should be set at this time.
Copies of the Board Diversity Policy and
Group Policy on Diversity and Equality are
available to view on the Vesuvius website:
www.vesuvius.com. Further information
on the Group’s approach to promoting
diversity can be found on pages 99–101.
Diversity and inclusion
As an organisation, Vesuvius has a global,
multicultural operational and customer
base, which we wish to reflect inside our
organisation with a multicultural, diverse
community of excellent professionals from
all backgrounds. This starts by focusing on
broad diversity of gender and nationality,
with an aim to ensure that all employees
and job applicants are given equal
opportunity and that our organisation is
representative of all sections of society
where we operate. Vesuvius operates in
40 countries around the world, employing
people with more than 70 nationalities,
making us a truly diverse business.
We regard this diversity as a critical aspect
of our success and future growth, as it
allows us to access the widest range of
skills and experience. Each employee is
respected and valued, and as a result
they are all able to give their best. All
employees are given help, training and
encouragement to develop their full
potential and utilise their unique talents.
Overall responsibility for implementing
the Group’s Diversity and Equality Policy
rests with the Executive Directors. The
Nomination Committee monitors progress
with meeting its objectives. At the end
of 2024, the Senior Leadership Group
(comprising c.150 senior managers)
consisted of 27 nationalities located
in 23 countries. 15% of our overall
workforce were women, which was
stable versus 2023.
Women now represent 21% of our
Senior Leadership Group, a level that
we consider is still too low, but which
represents a significant improvement as
compared with the level of 15% in 2019.
Diversity – 31 December 2024
Female
Male
Gender not
available
1
Total
Female
Male
Board
4
5
9
44%
56%
Group Executive
Committee members
2
6
8
25%
75%
Leadership roles reporting to
members of the GEC
12
41
53
23%
77%
Directors of subsidiaries included
in consolidation
2
14
71
85
16%
84%
Senior Managers
3
28
118
146
19%
81%
All other employees
1,645
9,339
3
10,987
15%
85%
Vesuvius employees
1,673
9,457
3
11,133
15%
85%
Directly supervised contractors
83
324
2,175
2,582
Vesuvius employees and directly
supervised contractors
1,756
9,781
2,178
13,715
1. The Group had 2,582 directly supervised contractors who were contracted through third parties
and for whom the Group does not hold detailed employment records.
2. Of the 85 employees who are directors of Group subsidiaries but not members of the GEC or direct
reports of the GEC, 16% are women. This disclosure is made to comply with regulatory requirements.
It includes directors of dormant companies. Some individuals hold multiple directorships.
3. Senior Managers as defined for the purposes of Section 414C(8)(c) include directors of the
Company’s subsidiaries.
Diversity and Equality Policy
–
We are dedicated to encouraging
a supportive and inclusive culture
amongst our global workforce
–
We aim to ensure that all employees and job
applicants are given equal opportunity and
that our organisation is representative of all
sections of society where we operate. Each
employee will be respected and valued
and able to give their best as a result
–
We are committed to providing equality and
fairness to all in our employment and not
providing less favourable reward, facilities
or treatment on the grounds of age,
disability, gender, marital or civil partner
status, pregnancy or maternity, race, colour,
nationality, ethnic or national origin, religion
or belief, or sex, gender reassignment or
sexual orientation
–
We are opposed to all forms of unlawful and
unfair discrimination
See the full policy on www.vesuvius.com for
further details.
57
Strategic report
Governance
Financial statements
Health and Safety Policy
We commit to:
–
Abide by simple and non-negotiable
standards
–
Report transparently and thoroughly
investigate any incident to learn,
share and avoid repeats
–
Undertake risk assessments to identify
hazards, prioritise any deficiencies
and correct them in an appropriate
way, as well as to develop appropriate
safe work procedures
–
Ensure every business facility follows
the agreed health and safety plans,
committing to: reduce the frequency and
severity of injuries; improve workstation
ergonomics; prevent exposure to hazardous
substances; and minimise the risk of
occupational diseases
–
Increase awareness about health and safety
issues and provide training for all new
employees and contractors
–
Ensure every business facility has an
appointed Health and Safety Manager
See the full policy on www.vesuvius.com
for further details.
Health, safety and well-being
at work
Safety is our top priority and our
overriding commitment to health
and safety is embedded throughout
the organisation.
Our approach is to identify, eliminate,
reduce or control all workplace risks, and
an ongoing system of training, assessment
and improvement is in place to focus on
achieving this. We remain fundamentally
committed to protecting the health and
safety of employees, contractors, visitors,
customers and any other persons affected
by our activities.
We want to become a zero-accident
company and are striving to become
a best-in-class organisation for safety
performance and leadership.
Health and safety governance
The Board has overall responsibility
for health and safety-related matters
and delegates authority for the
management of the health and safety
performance of the business to the
Chief Executive. The Business Unit
Presidents are in turn, responsible
for the deployment of the Health and
Safety Policy.
The Board receives regular information
on every Lost Time Injury and key safety
performance indicators. In addition, the
Board carries out a biannual review of
health and safety performance and each
of the annual presentations of Business
Unit strategy include health and safety.
Lost Time Injuries
LTIFR 12 months rolling
Lost Time Injuries
per million hours worked
2020
2021
2022
2023
2024
2019
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Group safety audits
The Group operates a central safety
auditing team of three auditors, each
with more than ten years’ experience, who
report to the VP Sustainability. The team’s
main purpose is to verify the deployment
and ongoing application of the Group’s
standards and policies in our locations,
including our manufacturing sites, R&D
facilities and the customer locations
in which a significant number of our
employees operate daily. Each audit
also includes an assessment of the site’s
HSE leadership. During 2024, the team
conducted 63 audits (2023: 66).
Following each audit, action plans are
created by the site management teams to
address any issues identified and work on
completing these is assessed on a regular
basis. The observations made during
audits are used to improve the Group’s
training programmes and to enhance
the Group’s health and safety standards.
Sites are also encouraged to carry out
self-assessments, based on the Group
safety audit compliance checklist,
to monitor their progress.
Safety audits and improvement opportunities
In 2024, 82% (2023: 83%) of our working
population performed routine safety
audits every month. This generated
an average of ten (2023: nine)
implemented safety improvement
opportunities per person, resulting in
an improvement in worker safety.
The audit programme involves employees
at all levels – from the Group Executive
Committee and safety specialists, through
to local site management, employees and
directly supervised contractors.
Lost time recordable injuries
Vesuvius operates a robust and
comprehensive process for the timely
reporting of medical incidents.
We use more stringent definitions for
Lost Time Injuries (LTIs) and ‘severe
accidents’ than the definitions used by
many regulatory bodies. All sites are
required to report on all Recordable
Injuries (aligned with the OSHA definition),
to maintain the focus on safety. All LTIs and
Recordables require a full investigation.
We believe that the long-term significant
improvements in Lost Time Injury and
Recordable Injury Frequency rates
reflect a broader trend of underlying
improvement for the Group and result
from a strong management commitment
to change.
2024 safety performance
Our Lost Time Injury Frequency Rate
(LTIFR) of 0.52 per million hours worked
in 2024 was lower than 2023 (0.60),
but we recognise that there is more work
left to do. Three employees suffered hand
injuries and one a foot injury, requiring
surgery and hospital stays, in 2024.
We are actively taking steps to learn
from these severe injuries and to improve
our systems and procedures to prevent
any similar occurrences.
Our people
continued
Vesuvius plc
Annual Report and Financial Statements 2024
58
Vesuvius is committed to making a
positive contribution to society. As part
of this, we focus on operating an ethical
business with appropriate policies in
place to ensure compliance with the
regulations and laws in all our markets.
Our CORE Values
The Group’s CORE Values convey the
mindset and attitudes we expect each
employee to show every day. They are
at the heart of the culture of the Group,
promoting our image to external
stakeholders, and underpinning the
commercial promise we provide to
our customers.
The Values are reinforced through
our performance management systems
and are celebrated each year through
our Living the Values Awards which
select regional and global winners
for each Value.
We seek to establish strong relationships with key stakeholders
and support the communities in which we operate
Code of Conduct
Our Code of Conduct sets out the
standards of conduct expected,
without exception, of everyone who
works for Vesuvius in any of our
worldwide operations.
The Code of Conduct emphasises our
commitment to ethics and compliance with
the law, and covers every aspect of our
approach to business, from the way that
we engage with customers, employees,
the markets and other stakeholders, to the
safety of our employees and workplaces.
Everyone within Vesuvius is individually
accountable for upholding its
requirements. We recognise that lasting
business success is measured not only
in our financial performance, but in the
way we deal with our customers, business
associates, suppliers, employees,
investors and local communities.
The Code of Conduct is displayed
prominently at all our sites and is published
in our 29 major functional languages. It is
available to view at www.vesuvius.com.
We continue to enhance the policies that
underpin the principles set out in the Code
of Conduct. These assist employees to
comply with our ethical standards and
the legal requirements of the jurisdictions
in which we conduct our business.
We communicate openly and
transparently within the organisation,
through ‘town hall’ meetings, Board and
senior management visits, management
feedback, performance evaluation,
measuring employee engagement and
responding to the feedback we receive.
Critically, there is ongoing and consistent
communication of our CORE Values and
the principles of our Code of Conduct.
We engage staff across the Group in both
general and targeted training, to ensure
a consistent understanding of our policies
and procedures.
The Code of Conduct covers eight key areas:
Code of Conduct
1.
Health, safety and the environment
2.
Trading, customers, products
and services
3. Anti-bribery and corruption
4. Employees and human rights
5. Disclosure and investors
6. Government, society and
local communities
7. Conflict of interests
8. Competitors
A responsible company
59
Strategic report
Governance
Financial statements
Vesuvius’ CORE Values
Courage
–
I systematically say, decide and do what
is right for Vesuvius including when it is
difficult, unpopular, or not consensual
–
I express my opinions openly during
discussions, but I also defend Group
decisions once they’ve been taken,
even if they do not correspond to my
initial position
–
I proactively take leadership responsibility
on difficult projects and topics that are
important to the Group’s performance,
motivated by the perspective of success
rather than paralysed by the risk of
personal failure
Respect
–
I demonstrate respect for other people’s
ideas and opinions even if I disagree
with them
–
I welcome open debate. I listen to others, and
foster esteem and fairness with customers,
suppliers, co-workers, shareholders and the
communities where we operate
–
I communicate my objectives clearly and take
time to explain all decisions. I behave with the
highest level of integrity. I promote diversity
at all levels of the Company
Ownership
–
I am personally accountable for the
consequences of my actions and for the
performance of the Group in my area
of responsibility or oversight, without
blaming external circumstances or the
actions of others
–
I demonstrate an entrepreneurial spirit,
looking for and seizing business
opportunities and I immediately address
problems that come up as soon as
I become aware of them
–
I manage the Group’s money and resources
as though they were my own
Energy
–
I work hard and professionally in pursuit
of excellence
–
I constantly raise the bar and challenge the
status quo. For me, the sky is the limit
–
I lead by example, inspiring and motivating
my team to go the extra mile. I promote
a positive and energising work environment
–
I continuously deliver outstanding customer
experience and innovative solutions
–
I never underestimate competitors and
permanently strive to reinforce the
Group’s leadership position
Human Rights and Labour Policy
Our policy expressly prohibits forced,
compulsory or child labour in any form
and applies to both ourselves and those
who wish to work with us.
Our other commitments include:
–
Health and safety:
to work towards our
goal of zero injuries in the workplace
–
Freedom of association and right to
collective bargaining:
to respect our
workers’ democratic rights to participate or
not participate in trade unions, or other
collective bargaining organisations, without
fear of intimidation, pressure or reprisal.
–
Unlawful discrimination, harassment and
abusive behaviours:
to ensure that each
employee and potential employee is
treated with fairness and dignity and that
discriminatory practices, or unwelcome
verbal or physical conduct are not tolerated
–
Remuneration:
to ensure that wages and
benefits paid to employees shall meet legal
or industry minimum standards
–
Discipline policies:
ensure proportionality
of sanctions, with a range of potential
disciplinary actions and procedural fairness
See the full policy on www.vesuvius.com
for further details.
Compliance training
Compliance training gives our employees
a clearer understanding of the scope of
risks that exist as we conduct our business
and gives context to how the Group
expects each employee to respond to
those risks.
The Board has set a target of at least 90%
of targeted staff completing the annual
Anti-Bribery and Corruption training.
In 2024, 100% of the targeted staff
completed this training.
Mandatory online training
courses – 2024 participation
% of targeted
audience
completing
course
Anti-Bribery and
Corruption (annual)
100%
Gifts, Hospitality
and Entertainment
(onboarding)
96%
Modern Slavery
95%
Anti-Tax Evasion
100%
Data Protection
97%
Cyber Security Awareness
– 7 Basic Modules
90%
Governance and policies
Vesuvius’ compliance policies underpin the
principles set out in our Code of Conduct.
They are the practical representation of
our status as a good corporate citizen, and
they assist employees to understand and
comply with our ethical standards and the
legal requirements of the jurisdictions in
which we conduct our business. They also
give practical guidance on how this can
be achieved.
Human rights
The Group’s Human Rights and Labour
Policy reflects the principles contained
within the UN Universal Declaration of
Human Rights, the International Labour
Organization’s Fundamental Conventions
on Labour Standards and the UN
Global Compact, to which the Group is
a signatory. The Policy sets out the
principles for our actions and behaviour
in conducting our business and provides
guidance to those working for us on how
we approach human rights issues. These
principles have been integrated into the
work of our procurement teams as we
assess our suppliers and their business
practices. The Policy was reviewed and
updated in 2022.
Prevention of slavery
During 2024, we published our ninth
Modern Slavery transparency statement
outlining the Group’s approach to the
prevention of slavery and human
trafficking in our business and supply
chain. A copy of our latest statement is
available to view on our website:
www.vesuvius.com.
We have identified the following four
industries that pose a higher risk of
modern slavery for Vesuvius:
1.
Mining and extractive industries
(raw materials)
2.
Textiles (personal protective equipment
(PPE) and work clothing)
3.
Transport and packaging
4.
Maintenance, cleaning, agricultural
work, and food preparation
(contracted workers)
As our spend with mining and extractive
industry suppliers is far greater than the
other three industries, and the number
and diversity of suppliers is also the
greatest, we have been focusing our
efforts on these industries. We have
deepened our investigation of higher-risk
raw materials, based on the studies
carried out by Drive Sustainability and the
Responsible Minerals Initiative on the
responsible sourcing of materials in the
automotive and electronics industries,
with which our portfolio of raw materials
shares many commonalities.
In 2024, we provided webinar training on
modern slavery to our key purchasing staff
and continued to use an online e-learning
module to upgrade the training given to
all supplier-facing staff. It provides key
guidance on the ‘red flags’ associated
with modern slavery to assist them in
identifying these during supplier visits
and accreditation.
See the Group’s Statement on the Prevention
of Slavery and Human Trafficking
www.vesuvius.com/en/sustainability/
our-policies/statement-on-modern
-slavery.html
A responsible company
continued
Vesuvius plc
Annual Report and Financial Statements 2024
60
Business ethics/anti-bribery
and corruption and working
with third parties
Vesuvius’ Code of Conduct affirms our
commitment to competing vigorously,
but honestly, and not seeking competitive
advantage through unlawful means.
We conduct ourselves ethically in all
public affairs activities, in alignment with
local laws and regulations. We do not
engage in unfair competition, exchange
commercially sensitive information with
competitors, or acquire information
regarding a competitor by inappropriate
means. When received for business
purposes, we safeguard third-party
confidential information and use it only
for the purpose for which it was provided.
We engage with selected third-party
representatives and intermediaries in
our business. We recognise that they
can present an increased bribery and
corruption risk. Our procedure on working
with third parties clearly outlines our
zero-tolerance approach to bribery
and provides practical guidance for
our employees in identifying concerns
and how to report them.
Vesuvius engages with third-party
sales agents, many of whom operate in
countries where we do not have a physical
presence. Our employees’ use of, and
interaction with, sales agents is supported
by an ongoing training programme for
those who have specific responsibility
for these relationships.
As part of our communication around
anti-bribery and ethics, employees are
actively encouraged to consult on ethical
issues. They have open access to the
Compliance Director and Legal function
who provide support on a regular basis.
During 2024, the Group continued the
due diligence review of our third-party
representatives and intermediaries.
We repeated the enhanced due diligence
reviews of sales agents, custom clearance
agents, distributors and logistics providers,
undertaken in prior years.
During the year we completed due
diligence on more than 2,000
counterparties worldwide. As a result
of this process, we terminated relationships
with 29 counterparties who did not meet
our standards.
Anti-bribery and
Corruption Policy
This Policy sets out the responsibilities for all
Vesuvius directors, officers and employees,
and those working for us, in observing and
upholding our zero-tolerance position on
bribery and corruption; and provides
information and guidance to those working
for us on how we recognise and deal with
bribery and corruption issues.
The Policy covers the following areas of
potential risk:
–
Third parties
–
Gifts, hospitality and entertainment
–
Donations and sponsorship
–
Facilitation payments
–
Dealing with public officials
–
Promotional activities
–
Bidding and tendering
–
Market access
–
Outside interests
See the full policy on www.vesuvius.com
for further details.
Responsible sourcing
Vesuvius recognises the crucial role that
its suppliers play in creating value in the
products and services that Vesuvius
ultimately provides to its customers.
In addition to the consistent and timely
supply of materials, products and services
which are of the highest quality, we expect
our suppliers to operate in a manner that is
appropriate, in terms of their ethical, legal,
environmental and social responsibilities.
Principles
Overall, our objective is to encourage
suppliers to implement a meaningful
sustainability programme, embrace the
UN Global Compact principles, evaluate
and reduce our upstream CO
2
emissions
and identify potential risks (and if
necessary, address them) in our supply
chain. The satisfaction of our customers’
requirements, the safety and reliability of
Vesuvius’ products, and the efficiency of
Vesuvius’ internal processes are dependent
on the reliability of its network of suppliers.
Vesuvius is committed to ensuring that we
utilise high-quality raw materials, secured
through reliable and well-developed
raw material suppliers. The principles of
sustainable procurement are prescribed
within the Vesuvius Sustainable
Procurement Policy and supported
by supplementary processes.
Sustainable Procurement Policy
We operate a Sustainable Procurement
Policy which outlines key criteria for
suppliers. The Policy uses the Group
Procurement’s ‘Request for Quotation’
(RFQ) process to engage a significant
number of Vesuvius suppliers and is
provided in conjunction with the Vesuvius
Terms and Conditions of Purchase.
For suppliers to participate in the RFQ,
they are obliged to accept and agree
to the terms of the Sustainable
Procurement Policy, as it forms an
addendum to Vesuvius’ standard contract
clauses. Once accepted, it is the
responsibility of the supplier to verify
and monitor compliance against the
Policy – both for their operations and those
of any sub-contractors. The full policy
is available on the Vesuvius website.
Since its inception in 2021, 305 active
vendors, representing 66% of the raw
material spend, have formally pledged to
comply with the Policy.
Sustainable Procurement Policy
The Policy covers all suppliers of goods
and/or services either used in our
manufacturing processes and/or sold
directly by us to customers, including Tolling
and Resale suppliers. It applies to suppliers,
their agents and their sub-contractors.
The major elements of the Sustainability
Procurement Policy are:
–
Employees and human rights
–
Conflict minerals
–
Ethical and compliant business practices
– Environment
– Quality
–
Business continuity
See the full policy on www.vesuvius.com
for further details.
61
Strategic report
Governance
Financial statements
Supplier sustainability assessment criteria
Environment
Energy consumption and GHGs
Water
Biodiversity
Local and accidental pollution
Materials, chemicals and waste
Product use
Product end-of-life
Customer health and safety
Environmental services
and advocacy
Labour and Human Rights
Employee health and safety
Working conditions
Social dialogue
Career management
and training
Child labour, forced labour
and human trafficking
Diversity, discrimination
and harassment
External stakeholder
human rights
Ethics
Corruption
Anti-competitive practices
Responsible information
management
Sustainable Procurement
Supplier environmental
practices
Supplier social practices
21 criteria based on international standards
Supplier sustainability
assessments
As part of our sustainability agenda,
Vesuvius has implemented a Supplier
Sustainability Assessment programme,
covering all suppliers of goods either
used in our manufacturing processes
and/or sold directly by us to customers,
including Resale suppliers.
Vesuvius has partnered with an
independent third-party service provider
– EcoVadis – to rate our raw materials
suppliers using a detailed set of criteria.
These cover four themes and 21 criteria
based on international standards: Labour
and Human Rights; Ethics; Environment;
and Sustainable Procurement.
In 2024, 141 employees from our
procurement teams received specific
training on supplier on-site sustainability
and quality assessments (92% of the
target group).
The Group has a target to assess at least
60% of our raw material spend by 2025.
Participating suppliers were selected
based on a number of criteria including:
–
Category of raw material
–
Availability of alternative sources
–
Share of supplier revenue with Vesuvius
–
Grades in previous assessments
–
Whether the supplier was new
–
Supply chain incidents
Since its launch, 269 suppliers have joined
the programme, representing 58% of the
total raw material spend. Fewer than 8%
of the suppliers assessed did not reach
Vesuvius’ minimal EcoVadis score. We are
requiring these suppliers to implement
improvement actions within a three-year
time frame. Progress will be monitored
through routine evaluations and an annual
reassessment. Across the crucial topics,
the average total score of Vesuvius’
suppliers was 54.2, compared to an
industry standard of 47.8.
Supplier CSR and quality audits
Vesuvius conducts an annual Supplier
Audit programme focusing on their
Corporate Social Responsibility (CSR)
practices, product quality and security
of supply. The programme is led by the
Group’s Purchasing and Quality teams.
The goal of the audits is to verify that our
suppliers abide by fundamental principles
regarding the environment and social
practices, and reduce the number
of quality issues that may affect
our raw materials.
As part of this, we carry out on-site
inspections, share expectations with
our suppliers, identify risks and adapt
our internal controls accordingly. We
encourage our suppliers to improve their
own processes and help them prioritise
actions to achieve this. Commencing in
2022, a number of ‘red flag’ items have
been included in our on-site verification
questionnaire, especially addressing
human rights issues, such as child or forced
labour, for which immediate escalation
and investigation is required in case any
breach is detected.
In 2024, 123 audits were conducted (100%
on-site) (2023: 157). No cases of human
rights breaches were detected as part of
the supplier audit checks. 14.6% of audited
suppliers received grades below threshold
(2023: 5.7%). Whenever suppliers fail to
meet the required standards, either action
is taken to support them to improve or our
relationship with them is terminated.
A responsible company
continued
Vesuvius plc
Annual Report and Financial Statements 2024
62
63
Strategic report
Governance
Financial statements
Vesuvius recognises that effective
engagement with stakeholders is vital to
the Group’s success. Understanding the
needs and priorities of key stakeholders,
and building strong and positive
relationships with them, lies at the
heart of Vesuvius’ business.
Section 172 of the Companies Act 2006
codifies this engagement, requiring the
Board to promote the success of
the Company over the long term for
the benefit of members as a whole,
whilst having regard to other key
stakeholders’ interests.
In performing its duties, the Board focuses
on the sustainable success of the Group
and the existence of a culture that
supports this success. The Board
recognises that, in seeking to maintain
long-term profitability, the Group is reliant
on the support of all of its stakeholders,
including the Group’s workforce, its
customers, suppliers and the communities
in which its businesses operate.
When taking key decisions the Board
balances the competing interests of
different stakeholders with an overriding
focus on ensuring the long-term success of
the Group. The Board confirms that it has
acted in accordance with the Section 172
requirements throughout the year.
Section 172
requirement
Find out more
Page
Consequences
of any decision
in the
long term
At a glance
Our purpose
Our business model
Why invest in Vesuvius?
2–5
12
12 and 13
14–23
Interests of
employees
Our purpose
Our stakeholders
Our people
Remuneration Policy
12
63 and 64
55–58
108
Fostering
business
relationships
with suppliers,
customers
and others
Our purpose
Our business model
Why invest in Vesuvius?
A responsible company
Our stakeholders
12
12 and 13
14–23
59–62
63–66
Section 172
requirement
Find out more
Page
Impact of
operations
on the
community
and the
environment
Our sustainability strategy
and objectives
Progress on our
sustainability targets
Tackling climate change
A responsible company
Our stakeholders
34
35 and 36
37–54
59–62
66
Maintaining
high standards
of business
conduct
A responsible company
Our stakeholders
Corporate Governance Statement
Directors’ Report
59–62
63–66
80–82
135
Acting fairly
between
members
Our purpose
Our stakeholders
Corporate Governance Statement
12
63–66
80–82
Examples of how the Board considered stakeholders’ interests in some of the key
decisions it took during 2024 are given below.
Our stakeholders and Section 172(1) Statement
Effective engagement with stakeholders is critical to
the success of the Group
Acquisition of PiroMET
During the year the Board approved the acquisition of PiroMET, a Turkish business which
supplies refractory materials and related application technologies. An agreement was signed
on 15 November 2024 to acquire a 61.65% stake in the business. The Board believes that the
acquisition will strengthen our Advanced Refractory customer offering in the fast-growing
region of EEMEA, and will allow us to leverage PiroMET’s expertise in robotics and gunning to
drive further opportunities for the Group. We completed the purchase on 28 February 2025
and welcome PiroMET’s employees to the Group. In approving the transaction, the Board
considered the impact on the staff in the Group’s existing businesses in Türkiye, and the greater
opportunities that the acquisition could bring for them, as well as the benefits to the Group of an
improved operating footprint, and the benefits to our customers from a wider product portfolio.
Share Buyback
In November 2024, the Board approved a further share buyback programme to purchase up to
£50 million in value of the Company’s shares, with the shares acquired to be cancelled to reduce the
Company’s share capital. The decision to launch a further share buyback was taken after a careful
analysis of the strength of the Company’s balance sheet, and the ongoing longer-term financial
requirements of the business. The Board considered the views of the Company’s shareholders and the
impact that the purchase would have on other investors, concluding that it would send a positive signal
that the Company was performing well, and that it would benefit all of the Group’s stakeholders.
A further buyback was chosen over, for example, a tender offer or special dividend, reflecting
the preference of shareholders and advice from brokers, as a structure that equally benefits
all shareholders over a sustained period. Over the course of the programme, the buyback is
expected to be modestly EPS accretive and as such will enhance TSR in the event that our
trading valuation multiple is maintained. The impact of the buyback is recognised in the
Company’s budget and as such it is reflected in the Group’s incentive targets.
Capital investment in new warehouse capacity – Skawina, Poland
In May, the Board approved investment in the construction of an automated central warehouse in
the Skawina plant, to replace the existing disparate facilities. The new facility is expected to become
operational in 2026. The project will deliver significant operational and logistical flow improvements
and reduce costs. It will also allow for a significant reduction of inventories, leveraging the recently
installed SAP A1 ERP and associated Warehouse Management system. The Board noted that the
project would secure environmental benefits by eliminating the need for travel to the external
warehouse, and would improve the efficiency and long-time viability of the site. The Board noted
that whilst the automation of the warehouse would lead to a reduction in the number of forklift
drivers required, doing this would improve safety at the site, by reducing overall forklift use.
Vesuvius plc
Annual Report and Financial Statements 2024
64
Our stakeholders
continued
Our stakeholders
Given the diversity of the Group, engagement with most stakeholders takes place locally or is managed by specialist Group functions.
The Board maintains oversight of this engagement through its briefings on the dynamics of key relationships and stakeholder groups,
and also engages directly as appropriate.
The Group’s key stakeholder groups, reflecting those who have the biggest impact on the business, and our modes of engagement are
outlined in the tables below.
How the business engages
How the Board engaged in 2024
Our people
Why we engage
With our decentralised management
model, the dedication and professionalism
of our people, their capacity to own
their roles and their drive for results are
the most significant contributors to
Vesuvius’ success.
We engage with our people, encouraging
and rewarding high performance to create
an environment where all can realise their
individual potential.
Issues that matter to them
–
Health and safety
–
Development and retention
–
Career opportunities
–
Remuneration and recognition
–
Diversity and inclusion
–
Management support
–
International mobility
–
Sustainability performance
Fundamental focus on health and safety and the
care of all employees, with regular safety briefings,
safety training, the thorough investigation of all
safety incidents, daily focus on safety improvements
and awards recognising excellent performance
Continuing dialogue between employees and
their managers, including the conduct of regular
performance reviews
We operate a competitive remuneration and
benefits strategy, emphasising talent development
with tailored career-stage programmes
Living the Values and other award schemes
celebrate individual achievements in the
demonstration of our Values and processes
We operate global communication mechanisms
including an intranet and global email
communications, alongside forums such
as local ‘town hall’ meetings
The Group recognises trade unions and operates
local works councils, alongside its European
Works Council
Wide-ranging internal training is offered on key
job-related issues, with programmes such as the
Vesuvius University – HeaTt
At every Board meeting the Board received
a report on the Group’s performance against
health and safety KPIs and reviewed, in detail,
the circumstances of any Lost Time Injuries
that had been reported
The Board reviewed the Group’s strategy to
attract talent to the business and reviewed the
HR objectives for each Business Unit
The Remuneration Committee was informed
of global salary budgets and oversaw the
Group’s share compensation programmes
The Nomination Committee reviewed senior
management development and succession
planning, and monitored the Group’s progress
on diversity objectives
Carla Bailo served as the designated
Non-executive Director responsible for
workforce engagement. She oversaw the
Board’s engagement activities, including
the programme of 21 site visits undertaken
by Directors to meet Vesuvius employees
‘on the ground’ and to hear firsthand about
their experiences
The Board reviewed the results of the I-Engage
survey and the follow-up actions proposed
The Board reviewed the nature and volume
of reports received by the confidential
Speak Up helpline
Outcomes
–
Safe, motivated workforce
–
More attractive recruitment marketing to new recruits
–
17% employee turnover in 2024
–
92% response rate to I-Engage survey
–
Greater understanding of views of the workforce
65
Strategic report
Governance
Financial statements
How the business engages
How the Board engaged in 2024
Customers
Why we engage
Engaging with, and listening to, our
customers helps us to understand their
needs and identify opportunities and
challenges. Customer intimacy lies
at the heart of our business model and
collaborating with them enables us
to deliver value using our expertise to
improve the safety and efficiency of their
manufacturing processes, enhancing
their end-product quality and reducing
their costs.
Issues that matter to them
–
Health and safety
–
Product quality and performance
–
Value generation
–
Innovation and provision of solutions
–
Production efficiency
–
Environmental performance
Our business model focuses on collaboration
with customers to provide customised solutions.
We employ highly skilled technical experts who
understand our customers’ needs, and can identify
opportunities and solutions for them
We work with customers to improve the safety,
energy efficiency, yield and reliability of their
processes, and the quality of their products
We engage with customers on safety leadership
and support their training requirements
We maintain senior-level dialogue with all key
customers, and establish customer relationships
on a global basis as required, complemented by
a broad local servicing capability
We provide technical customer training and
participate in industry forums and events
The Chief Executive maintained a regular
dialogue with a range of the Group’s key
customers, holding face-to-face meetings
with 12 of them
The full Board visited a key customer in China,
as part of its off-site Board meeting
The Board received briefings on the Group’s
end-markets and the dynamics of the Group’s
relationships with its customers, including
information on pricing discussions
At every Board meeting, the Board reviewed
information on the Group’s performance
against key manufacturing quality targets
and was provided with updates on actions
undertaken to rectify any significant quality
issues or customer complaints
The Board received updates on the steps
being taken by the Group to respond to
customers’ ongoing requirements, and the
research and development, marketing and
new product launch strategies being actioned
to respond to these
Suppliers and contractors
Why we engage
Maintaining a flexible workforce through
the use of contractors and cost-effective
access to high-quality raw materials is
vital to our success. Our suppliers and
contractors are critical to our business.
Issues that matter to them
–
Operational performance
–
Responsible procurement
–
Trust and ethics
–
Payment practices
We employ a significant number of directly
supervised contractors to work at our
customer locations
We conduct regular visits to key suppliers
Senior-level relationships are built with all
large suppliers
All suppliers/brokers for major raw materials have
regular interaction with the Global Purchasing Team
Dedicated category directors build long-term
relationships and product expertise for key
raw materials
Our purchasing and supplier-facing staff receive
training on modern slavery to assist them in
identifying any issues
Vesuvius operates a Sustainable Procurement
Policy which sets out the standards that suppliers
must adopt in order to supply the Group.
We conduct a rigorous and consistent supplier
accreditation procedure to ensure compliance
with these standards
The Chief Executive met with a number of
key suppliers
The Board received a briefing on the Group’s
suppliers and regular updates on supply
and purchasing dynamics, and pricing
The Board received updates on the
strategy for logistics and the sourcing of
raw materials together with key concerns
and performance issues
The Board monitored the Group’s compliance
activities and approved the Group’s annual
Modern Slavery Statement
Outcomes
–
Clear understanding of customers’ challenges and requirements
–
Collaborative customer relationships
–
Investment in enhancement of existing products and development of new innovative
products to support customers’ needs
–
Customer considerations are a key input into strategic planning
–
Engagement on sustainability matters
Outcomes
–
The services of more than 2,500 directly supervised contractors were utilised in 2024
–
269 suppliers have been rated under our Supplier Sustainability Assessment programme
–
305 suppliers have pledged to comply with our Sustainable Procurement Policy
–
We have a good understanding of the capability and capacity of key suppliers
–
Suppliers have a clear understanding of Vesuvius’ expectations as an ethical business
–
Broader supply chain
–
Engagement on sustainability matters
Vesuvius plc
Annual Report and Financial Statements 2024
66
Our stakeholders
continued
How the business engages
How the Board engaged in 2024
Investors
Why we engage
The support of our equity and debt
investors, and continued access to funding,
is vital to the performance of our business.
We work to ensure that our investors and
lenders have a clear understanding of our
strategy, performance and objectives,
recognising that supportive investors are
more likely to provide the Company with
funds for expansion. We engage with
lenders to ensure that we have clear
knowledge and awareness of market
sensitivities and trends, and comply
with our contractual obligations.
Issues that matter to them
–
Shareholder value
–
Financial and operational performance
–
Strategy and business development
–
Dividend and gearing policy
–
Sustainability strategy
and performance
–
Governance
–
Transparency and ethical behaviour
Our Head of Investor Relations, Chief Financial
Officer and Chief Executive hold regular meetings
with key and prospective investors
The Group Treasurer and CFO hold regular
meetings with key personnel from banks and other
lenders who provide the Group’s debt funding
The Group Treasury function maintains an ongoing
dialogue with key relationship banks and other local
banks in the countries in which Vesuvius operates
The Group’s Annual Report provides an overview of
the Group’s activities. Regular announcements and
press releases are published to provide updates on
the Group’s performance and progress
There is ongoing dialogue with the Company’s
analysts to address enquiries and promote
the business
The Chief Executive and Chief Financial
Officer held meetings with key and
prospective investors
The Board approved the terms of the
Group’s revolving debt refinancing
The Board discussed with its advisers,
shareholders’ perspectives on the Group’s
strategy and received presentations on
market dynamics and value drivers
The Board received copies of key analysts’
notes issued on the Company
The Chairman met with shareholders and
potential new investors, and discussed the
Group’s strategy
Ahead of the 2024 AGM, the Chairman
contacted the Group’s largest shareholders
and governance agencies, to invite them to
discuss any matters they wished to raise
The Directors attended the AGM to
meet with shareholders
Communities
Why we engage
We work to maintain positive relationships
with the communities in which we operate.
Our social responsibility activities
complement our Values and we encourage
our employees to engage with communities
and groups local to our operations.
Issues that matter to them
–
Career opportunities
–
Operational performance
–
Transparency and ethical behaviour
–
Environmental performance
We provide work experience and internships
to local university students and school children
We maintain contact with universities to identify
local talent and our businesses attend careers
fairs and provide student work placements
and internships
Many of our sites sponsor local charitable activities
and participate in local volunteering initiatives
We maintain clear oversight and control of the
environmental impact of our production sites
We have a clear strategy for carbon reduction
in our manufacturing processes
The Board received biannual updates
on the Group’s sustainability activities
Environmental agencies
and organisations
Why we engage
Good environmental management is
aligned with our focus on cost optimisation,
operational excellence and long-term
business sustainability. We engage with
appropriate organisations to ensure that
we are complying with regulatory
requirements, and to publicise
our performance.
Issues that matter to them
–
Governance and transparency
–
Operational performance
–
Reporting on performance metrics
–
Environmental performance
Vesuvius is a signatory to the UN Global Compact
We publish a full Sustainability Report online
which can be accessed via Vesuvius’ website
We regularly engage with government agencies
who visit our sites and carry out inspections
We respond to environmental research as
part of our customers’ and suppliers’ due
diligence processes
We engage with rating agencies and respond to
environmental and social responsibility research
and questionnaires
The Board monitored progress on the Group’s
sustainability KPIs and reviewed longer-term
plans on sustainability initiatives, including the
journey to net zero
The Board received biannual presentations
from the VP Sustainability on the Group’s
progress against its sustainability targets
and updates on its ESG ratings
The Board and Audit Committee monitored
the Group’s progress with its TCFD compliance
Outcomes
–
Development of the Group’s strategy
–
Long Term shareholder base
–
Solid support for the Group’s revolving debt refinancing
–
£62.4m returned through our share buyback programme and £61.1m total dividends
paid in 2024
Outcomes
–
Development of future talent
–
Positive contribution to local communities and charities
–
Improved environmental sustainability of the Group’s operations
Outcomes
–
Positive ratings by a range of ESG organisations
–
Sustainable business operations
–
Supportive relationships with local government agencies
67
Strategic report
Governance
Financial statements
How we manage risk
The Board exercises oversight of the
Group’s principal risks and reviews the
way in which the Group manages those
risks. As part of this process the Board:
(i) understands which individuals within
the business are responsible for managing
each principal risk; and (ii) reviews
and, where appropriate, updates,
the Group’s appetite for each principal
risk and assesses the adequacy of the
steps taken to mitigate them.
The Board takes overall responsibility for
establishing and maintaining a system
of risk management and internal control
and for reviewing its effectiveness.
The Group undertakes a continuous
process to identify and review risk and
this assessment undergoes a formal
review at half-year and at year-end.
The risks identified by the business are
compiled centrally to deliver a coordinated
picture of the Group’s key risks. These
risks are then reviewed by the Group
Executive Committee.
An integral part of the Group’s risk
management process is for each
Non-executive Director to contribute
their view on the principal risks facing the
Group, the risk appetite the Group should
have for each of these risks and what
emerging risks the Group might face in the
future. These contributions are overlaid
on the Group’s initial assessment of risks
to build a comprehensive analysis of
existing and emerging risks. In this way,
the Directors’ views on each of the
principal risks, and on emerging risks in
general, are independently gathered and
integrated into management discussions
and any actions required.
The Group’s risk process covers both
financial and non-financial risks, and
considers the risks associated with the
impact of the Group’s activities on
employees, customers, suppliers, the
environment, local communities and
wider society.
The Directors undertake regular, individual
site visits and they believe this direct
engagement with employees is an
effective way to hear firsthand about
issues and concerns that exist in the
business and also the potential risks
that it faces. More details on the site
visits undertaken in 2024 can be found
on page 80.
During 2024, the Group built on the
externally facilitated review of its risks
performed in 2023. The review conducted
in 2023 did not result in any material
changes to the Group’s principal risks
and uncertainties. In 2024, in anticipation
of the updates made to the UK Corporate
Governance Code on ongoing
effectiveness of risk management and
internal control systems coming into force,
the Group commenced a further review of
its risk management processes, as well as
further work to understand the mitigation
that these provide of the Group’s identified
risks. This process is ongoing.
Changes to risk in 2024
We detail below changes during 2024
to the scale or nature of risks facing the
Group. As noted in previous years, certain
issues arose during the year that are
reflected in the Group’s principal risks. In
each case, the business impact was limited
by the mitigations already in place and by
the Group’s risk management processes.
We also detail the emerging risks facing
the Group to which we remain vigilant.
Risk: Complex and changing
regulatory environment
2024 was a year in which geopolitical
tensions continued to have the potential
to adversely impact our business.
In response to the continuing war in
Ukraine, regulators in the UK, EU and
USA, continued to expand the scope of
financial and trade sanctions, imposing
further prohibitions on trade with specific
individuals and entities as well as on
products and the provision of services.
The impact of these incremental
regulations was not material in 2024, and was
closely monitored to ensure that we reflected
any new developments in our business.
Similarly, the ongoing conflict in the
Middle East continued to affect shipping in
the Red Sea. This again had the potential
to impact the cost and timing of certain
inbound and outbound freight, and we
worked closely with our intermediaries
and insurers to understand and minimise
the impact on our business.
Risk: Protectionism and globalisation
During the year we continued to pay close
attention to wider geopolitical dynamics,
as these could push certain of the countries
in which we operate to adopt a more
protectionist stance. As the change in
administration in the United States
approached, we continued to monitor the
potential for significant changes in global
and regional trading environments and
how these might affect our products and
supply chains.
Risk: Business interruption
Cyber security remains a critical
component of our business interruption
risk, and is an issue that continues to
grow in its scope and sophistication. 2024
has seen a continued investment in our
systems and processes, as well as further
investment in training and awareness of
cyber issues across the Group. As with all
businesses, we continue to monitor trends
and developments in system security
threats that could have an effect on our
ability to conduct our business.
Risk: People, culture and performance
The environment to attract and retain
high-calibre people across all levels of
our business continues to be increasingly
competitive in many of our labour markets.
As noted in 2023, this remains the case for
manufacturing roles, which are adversely
affected by changing demographics and
shifting trends in the workforce. We also
continue to see a reduction in the
promotion of material science teaching
within our developed markets, which may
The Group undertakes a continuous process to review and
understand existing and emerging risks which might impact
the Group’s long-term performance.
Risk, viability and going concern
Vesuvius plc
Annual Report and Financial Statements 2024
68
further reduce the availability of suitably
qualified candidates going forward.
Risk: End-market risks
As anticipated, 2024 saw continuing
volatility in our markets. Whilst this is
lasting longer than we had anticipated,
we believe that our end-markets of Steel
and Foundry are structurally set to grow in
the longer term.
2024 saw a significant increase in the
volume of steel exported from China,
which had a knock-on effect on production
levels in other markets around the globe.
There was significant pressure on
steel-makers in the EU and UK which
led the Group to increase monitoring of
customers to manage debtor exposure
and the risk of bad debt.
The Group is well placed to manage
short-term impacts with its flexible
manufacturing footprint, geographically
diversified revenue streams and strong
financial position.
Emerging risks
The emerging risk trends facing the Group
did not materially change in 2024. The
dynamics of our markets continue to
develop, and the growth that we anticipate
in the future will not always come from
the markets that have served us well in
the past. We will continue to focus on this
emerging trend, investing in markets
with high future growth and ensuring that
our manufacturing footprint remains
sufficiently dynamic and responsive
to take advantage of changing
growth opportunities.
This will be made more complex with the
threat of increased protectionism, which
could disrupt the established global trade
dynamics and supply chains, and drive
a more regional and local focus for
governments and steel and foundry
producers alike. Against this backdrop we
have been focused on ensuring that we
have the flexibility to provide solutions to
our customers from the most efficient and
effective location, reflected in our strongly
geographically diversified operating base.
We remain focused on the increased use of
artificial intelligence and automation in all
elements of our business. We continue to
develop our understanding of where AI
can improve our products and allow us to
offer new solutions to our customers.
We are also looking at the ways that it can
streamline our own production methods
and administration processes as part of
our wider strategy on digitalisation, to
ensure we leverage the benefits to the
fullest extent whilst minimising any
adverse impact.
We continue to monitor the transition we
see to the increased use of non-ferrous
metals in industry, particularly the
automotive industry. Whilst the trends in
ferrous casting are positive, trends in
non-ferrous metal production and casting
are also favourable, and we are focused –
in R&D and elsewhere – on developing
products that will enable us to benefit from
the growth in alternative end-markets.
Consumers, employees and other
stakeholders in many countries are
increasingly focused on the impact of
businesses on society and the environment.
There is a growing regulatory demand on
businesses for transparency in this area.
Vesuvius already has a set of broad
Environmental, Social and Governance
(ESG) commitments and has long been
focused on driving efficiency in our
customers’ processes, with our products
now clearly seen as having environmental/
climate benefits. However, the reporting
obligations in this area and the external
assurance required on this reporting
are both expected to increase in cost
and complexity in the coming years.
Further information on the Group’s
ESG commitments can be found in
the Non-Financial and Sustainability
Information Statement on pages 33–62.
Finally, we committed at the end of 2023 to
make annualised cost savings of £30m by
2026. We have made excellent progress
against this target in 2024. Part of this
efficiency saving is enabled by the ongoing
implementation of a new Enterprise
Resource Planning (ERP) system in certain
countries. The Group is aware of the
challenges associated with an ERP
implementation and will manage these
closely to minimise the risk of business
interruption and cost overruns and to
ensure that the operational efficiencies
envisaged are delivered on a timely basis.
All of these issues could represent
disruptors to our business. We remain
focused on each of them through our risk
identification and management processes
as well as on the management of any other
new risks that emerge during 2025.
Principal risks
In 2024, the Board did not identify any new
principal risks or any material changes to
the Group’s previously identified principal
risks and uncertainties. These principal risks
and uncertainties are set out on pages 72
and 73 and are those the Board considers
to be most relevant in terms of their
potential impact on the Group achieving
its strategic objectives. Each principal
risk could materially affect the Group, its
businesses, future operations and financial
condition, and could cause actual results to
differ materially from expected or historical
results. Principal risks are not the only ones
that the Group faces or will face. Some risks
are not yet known and some currently not
deemed to be material could become so.
Cyber security
The processes and controls to manage the
constantly evolving cyber security threat
are a significant area of focus for the
Group. Members of the GEC, Group IT
and senior management meet regularly
to manage operational cyber risks.
These risks were thrown into sharp focus
for the Group as a result of the cyber
attack we suffered in February 2023.
The Board oversees the Group’s control
systems for managing cyber risk and
together with the Audit Committee
receives regular updates on the
Group’s activities in this respect.
Cyber risks are integrated within the
Group’s risk management processes and
form part of its Business Continuity Plan
(BCP). The Group also maintains a Disaster
Recovery Plan to address any network,
data centre or IT infrastructure issue. The
Group’s Incident Handling and Response
Policy ensures we maintain appropriate
visibility of all network infrastructure.
The Group takes a holistic approach to
addressing cyber challenges, focusing
on improving our IT infrastructure, including
our operational technology environments,
as well as our IT procedures and data
governance. We run regular training
programmes on cyber security and conduct
regular cyber security risk assessments,
including scenario analysis to mitigate the
business impact of any downtime, and
increase awareness of social engineering
fraud and system access through poor
security behaviour. We also perform
in-house and externally conducted
vulnerability/penetrative testing, comparing
the results with industry benchmarks to
improve our processes and undertake an
ongoing external assessment of our cyber
security resilience and maturity.
Risk, viability and going concern
continued
69
Strategic report
Governance
Financial statements
Climate change
The Group’s risk management processes
consider the potential impact of
climate-related risks. The Group does
not regard climate change itself to
represent a material stand-alone risk
to the Group’s operations.
Whilst a significant proportion of the
Group’s revenue is generated from steel
manufacture and automotive castings,
industries that are under transition
as a result of the focus on improving
environmental performance, we believe
these changes will, overall, be positive for
the Group. The Group’s business strategy
is based on helping our customers improve
their manufacturing efficiency and the
quality of their products, thereby reducing
their climate impact. We also envisage
benefits for the Group from the
acceleration of the energy transition,
as this will create continued demand for
the high-quality steel produced using
Vesuvius’ products and solutions.
One of the Group’s principal risks is
Environmental, Social and Governance
criteria. This captures our sustainability
performance and our customers’
sustainability transition and recognises the
impact Vesuvius can have on reducing the
environmental impact of our customers.
The Group recognises that climate change
could present uncertainty for the Group
in terms of increased regulation and the
evolution of the geographical distribution
of our customer base. Further information
about the Group’s consideration of
climate-related risks and opportunities
can be found in the Tackling climate
change section of the Non-Financial and
Sustainability Information Statement on
pages 37–54.
Risk mitigation
Each principal risk is owned by specific
members of senior management who
actively manage the risk as well as
contributing to the analysis of its likelihood
and impact, and continually monitoring
the process for mitigation. This analysis is
reported to the Board. Risks are analysed
in the context of our business structure
which protects against certain of our
principal risks with diverse currencies,
a widespread customer base and local
production matching the diversity of
our markets. Additionally, we mitigate
risk through employee training and our
contractual terms. Our processes are not
designed to eliminate risk, but to identify
our principal risks and to mitigate them
to a reasonable level in the context of
delivering the Group’s strategy.
Business continuity and insurance
In partnership with risk management
advisers and our insurers, we seek to
identify the most effective means of
reducing or eliminating insurable risks,
through risk management and the
placing of insurance cover.
Our insurer property loss control
programme is based upon insurer loss
modelling and focuses on insured losses.
The insurer’s loss control engineers
undertake a series of on-site inspections
focused on machinery breakdown, fire,
natural catastrophe and other property
damage and business interruption
risks. These surveys yield a series of
loss-reduction recommendations. The
execution of these recommendations
is agreed with site management and
followed through to completion.
In parallel, Vesuvius’ own loss
management programme focuses
on strategic sites and sites that are
not routinely covered by the insurer
programme. Assisted by an independent
consultant, we undertake property loss
control and business continuity surveys
using Vesuvius’ bespoke risk and exposure-
based protocol. These reports yield further
risk reduction recommendations, and
improvement actions are agreed and
completed by site management.
To support the Group’s loss control
activities, risk management workshops
are conducted covering loss prevention,
emergency planning, crisis management
and business recovery. Business continuity
planning is also conducted to ensure
there is sufficient resilience in the Group’s
manufacturing network to address
individual supply interruptions.
Internal control
The Group’s internal control system
is designed to manage, rather than
eliminate, the risks facing the Group and
safeguard its assets. No system of internal
control can provide absolute assurance
against material misstatement or loss.
The Group’s system is designed to provide
the Directors with reasonable assurance
that problems are identified on a timely
basis and are dealt with appropriately.
The Audit Committee assists the Board
in reviewing the effectiveness of the
Group’s system of internal control,
including financial, operational
and compliance controls, and risk
management systems. The key features
of the Group’s system of internal control
are set out in the table on the next page.
Reviewing the effectiveness of risk
management and internal control
The internal control system covers the
Group as a whole and is monitored and
supported by the Group’s Internal Audit
function, which conducts reviews of
Vesuvius’ businesses and reports
objectively both on the adequacy and
effectiveness of the system of internal
control and on those businesses’
compliance with Group policies and
procedures. The Audit Committee receives
reports from the Group Head of Internal
Audit and reports to the Board on
the results of its review.
The Group also conducts a self-
certification exercise by which senior
financial, operational and functional
management certify the compliance,
throughout the year, of the areas under
their responsibility with the Group’s policies
and procedures, and highlight any
material issues that have occurred
during the year.
As part of the Board’s process for
reviewing the effectiveness of the system
of internal control, it delegates certain
matters to the Audit Committee. Following
the Audit Committee’s review of internal
financial controls and of the processes
covering other controls, the Board
annually evaluates the results of the
internal control and risk management
procedures conducted by senior
management. Since the date of this
evaluation, there have been no significant
changes in internal controls or other
matters identified which could
significantly affect them.
In accordance with the provisions of the
UK Corporate Governance Code, the
Directors confirm that they have carried
out a robust assessment of the principal
and emerging risks facing the Company,
including those that threaten its business
model, future performance, solvency or
liquidity. They have also reviewed the
effectiveness of the Group’s system of
internal control and confirm that any
control weaknesses identified during the
year and to the date of this report are
being remediated.
Further detail regarding the Audit
Committee’s review of the effectiveness of
the Group’s risk management and internal
control systems is contained in the Audit
Committee report on pages 88-95.
Vesuvius plc
Annual Report and Financial Statements 2024
70
Key features of risk management and internal control
Strategy and
financial reporting
Comprehensive strategic planning and forecasting process
Annual budget approved by the Board
Monthly operating financial information reported against budget
Key trends and variances analysed and action taken as appropriate
Vesuvius GAAP
Accounting policies and procedures formulated and disseminated to all Group operations
Covers the application of accounting standards, the maintenance of accounting records
and key financial control procedures
Operational controls
Operating companies and corporate offices maintain internal controls and procedures
appropriate to their structure and business environment
Compliance with Group policies on items such as authorisation of capital expenditure,
treasury transactions, the management of intellectual property and legal/regulatory issues
Use of common accounting policies and procedures, and financial reporting software
used in financial reporting and consolidation
Significant financing and investment decisions reserved to the Board
Monitoring by the Board of policy and control mechanisms for managing treasury risk
Clearly delegated financial authority thresholds for capital expenditure, purchasing,
customer contracts and hiring
Health and safety audits
Board review of product quality metrics
Risk assessment
and management
Continuous process for identifying, evaluating and managing any significant risks
Risk management process designed to identify the key risks facing each business
Reports made to the Board on how those risks are managed
Top-down risk identification undertaken at Group Executive Committee and
Board meetings
Board review of insurance and other measures used in managing risks across the Group
The Board is notified of major issues and makes an annual assessment of whether risks
have changed
Ongoing assurance processes by the legal function and Internal Audit including the
annual self-certification process
Externally supported Speak Up whistleblowing helpline
Internal Audit
Reviews Vesuvius’ businesses and reports on the adequacy and effectiveness of their
systems of internal control and compliance with Group policies and procedures
Agrees action plans for the resolution of any improvement actions identified by their audits,
and monitors, with local management and the Business Unit Presidents, progress through
until completion
Reports to the Audit Committee on the results of each audit and provides regular updates
on high-priority action items
The Audit Committee discusses the key risks identified by Internal Audit
The Group Head of Internal Audit conducts private meetings with the Audit Committee
without management being present
Risk, viability and going concern
continued
71
Strategic report
Governance
Financial statements
Viability Statement
In accordance with the UK Corporate
Governance Code, the Directors have
assessed the viability of the Group over
a three-year period to 31 December 2027,
taking into account the Group’s current
position and the potential impact of the
principal risks and uncertainties. The
Directors have determined that three years
is an appropriate period over which to
provide the Viability Statement because this
is the Company’s planning cycle and it is
sufficiently funded by financing facilities with
average maturity terms of approximately
four years. The projected cash flows for the
next three years have been based on the
latest Board-approved budgets and capital
markets day financial projections.
In making this statement, the Directors
have carried out a robust assessment of
the principal risks that may threaten the
business model, future performance,
solvency and liquidity of the Group.
This is embodied in the annual review of
a three-year business plan which includes
a review of sensitivity to ‘business as usual’
risks, such as profit growth and working
capital variances, severe but plausible
events and the impact these could have on
the Group’s debt covenants and available
liquidity. The results take account of the
availability and likely effectiveness of the
mitigating actions that could be taken to
avoid or reduce the impact or occurrence
of the underlying risks. Whilst the review
has considered all the principal risks
identified by the Group, the following were
selected for enhanced stress testing: an
unexpected global supply chain disruption
leading to increased lead times and
business interruption due to the unplanned
closure of a key production facility.
The Group’s prudent balance sheet
management, flexible cost base able to
react quickly to end-market conditions,
access to long-term capital at reasonable
cost and geographically diversified
international businesses leave it well
placed to manage these principal risks.
In performing the stress testing, certain
assumptions were made, including that
supply chain disruption would lead to
a need for increased inventory levels over
multiple years; and the loss of a production
facility would, after the recovery of
production capacity, result in certain
sustained customer losses. Any loan facility
requiring refinancing was considered to
be renewed ahead of its maturity date.
The Group’s committed syndicated bank
facility of £385.0m, of which £203.0m was
undrawn at the end of 2024, with maturity
in August 2026, was replaced by a new
committed syndicated bank facility of
£475.0m with maturity in August 2029
(see Note 25.2.d). Under the enhanced
stress testing, a potential breach of a
covenant would only occur in the event of
an unforeseen reduction in revenue of
greater than 23%, without consideration
of any remedial factors such as capital
expenditure reduction. Accordingly,
the Directors confirm that they have a
reasonable expectation that the Group
will be able to continue in operation and
meet its liabilities as they fall due over the
three-year period to 31 December 2027.
Furthermore, the Board believes that
the Group continues to be well positioned
for success in the longer term because
of our exposure to long-term growing
end-markets, our market-leading position
that is supported by ongoing investment in
innovation and R&D, our strong degree of
customer intimacy with around a third of
our employees working at customer
facilities, and the focus we have on
building quality teams with clear
organisational responsibility.
Going concern statement
The Group’s available liquidity stood at
£389m at year-end 2024, down from
£488m at year-end 2023. The Directors
have prepared cash flow forecasts for the
Group for the period to 30 June 2026.
These forecasts reflect an assessment of
current and future end-market conditions,
which are expected to be challenging in
2025 (as set out in the ‘outlook’ statement
in the Chief Executive’s strategic review in
this document), and their impact on the
Group’s future trading performance.
The Directors have also considered a
severe but plausible downside scenario,
based on an assumed volume decline
and loss of profitability over the period.
This downside scenario assumes:
–
A decline in business activity level in
2025 and 2026 by 3% compared to
2024 performance
–
A decline in profitability (Return on
Sales) of 2.1% compared to
2024 performance
–
Working capital as a percentage of
sales in the downside case deteriorates
by 1.0% vs 2024
On a full-year basis relative to 2024, this
implies a c.23% decline in Trading Profit.
The Group has two covenants; net debt/
EBITDA (under 3.25x) and an interest
cover requirement of at least 4.0x. In this
downside scenario, the forecasts show
that the Group’s maximum net debt/
EBITDA (pre-IFRS 16 in line with the
covenant calculation) does not exceed
1.9x, compared to a leverage covenant
of 3.25x, and the minimum interest cover
reached is 17x compared to a covenant
minimum of 4x.
The forecasts show that the Group will
be able to operate within its current
committed debt facilities and show
continued compliance with the Group’s
financial covenants. On the basis of the
exercise described above and the Group’s
available committed debt facilities, the
Directors consider that the Group and the
Company have adequate resources to
continue in operational existence for a
period of at least 12 months from the date
of signing of these financial statements
and that there is no material uncertainty in
respect of going concern. On 21 February
2025 the Group obtained a new
committed syndicated bank facility of
£475m reaching maturity in August 2029,
replacing the previous one in place (see
Note 25.2.d) with the same covenants. This
is considered to be a non-adjusting event
after balance sheet date. Accordingly, they
continue to adopt a going concern basis in
preparing the financial statements of the
Group and the Company.
Identify
Viability time horizon and
risk analysis framework
Assess
Principal risks
and stress scenarios
Model
Viability against risk
scenarios, examining
probabilities and impacts
Report
See Viability Statement
Viability process
Vesuvius plc
Annual Report and Financial Statements 2024
72
Risk
Potential impact
Mitigation
End-market risks
Vesuvius suffers an unplanned
drop in demand, revenue and/or
margin because of market
volatility beyond its control.
Strategic Value
alignment
£
£
Unplanned drop in demand and/or
revenue due to reduced production
by our customers
Margin reduction
Customer failure leading to increased
bad debts
Loss of market share to competition
Cost pressures at customers leading
to use of cheaper solutions
Geographic diversification of revenues
Product innovation and service offerings securing long-term
revenue streams and maintaining performance differential
Increase in service and product lines by the development of
measurement and mechatronic capabilities
R&D includes assessment of emerging technologies
Manufacturing capacity rationalisation and flexible cost base
Diversified customer base: no customer is greater than 10% of revenue
Robust credit and working capital control to mitigate the risk of
default by counterparties
Protectionism
and globalisation
The Vesuvius business model
cannot adapt or respond
quickly enough to threats from
protectionism and globalisation.
Strategic Value
alignment
£
£
Restricted access to market due to
enforced preference of local suppliers
Increased barriers to entry for new
businesses or expansion
Increased costs from import duties,
taxation or tariffs
Loss of market share
Highly diversified manufacturing footprint with manufacturing
sites located in 24 countries
Strong local management with delegated authority to run
their businesses and manage customer relationships
Cost flexibility
Tax risk management and control framework together with
a strong control of intercompany trading
Product quality failure
Vesuvius staff/contractors are
injured at work or customers, staff
or third parties suffer physical injury
or financial loss because of failures
in Vesuvius products.
Strategic Value
alignment
£
£
Injury to staff and contractors
Product or application failures lead
to adverse financial impact or loss of
reputation as technology leader
Incident at customer plant causes
manufacturing downtime or damage
to infrastructure
Customer claims from product
quality issues
Quality management programmes including stringent
quality control standards, monitoring and reporting
Experienced technical staff knowledgeable in the application
of our products and technology
Targeted global insurance programme
Experienced internal legal function overseeing third-party contracting
Complex and changing
regulatory environment
Vesuvius experiences a
contracting customer base or
increased transaction and
administrative costs due to
compliance with changing
regulatory requirements.
Strategic Value
alignment
£
£
Revenue reduction from reduced
end-market access
Disruption of supply chain and
route to market
Increased internal control processes
Increased frequency of
regulatory investigations
Reputational damage
Trade restrictions
Compliance programmes and training across the Group
Independent Internal Audit function
Experienced internal legal function including dedicated
compliance specialists
Global procurement category management of strategic
raw materials
Failure to secure
innovation
Vesuvius fails to achieve
continuous improvement in its
products, systems and services.
Strategic Value
alignment
£
£
Product substitution by customers
Increased competitive pressure
through lack of differentiation of
Vesuvius’ offering
Commoditisation of product portfolio
through lack of development
Lack of response to changing
customer needs
Loss of intellectual property protection
Enduring and significant investment in R&D,
with market-leading research
A shared strategy for innovation throughout the Group,
deployed via our R&D centres
Stage-gate process from innovation to commercialisation to
foster innovation and increase alignment with strategy
Programme of manufacturing and process excellence
Quality programme, focused on quality and consistency
Stringent intellectual property registration and defence
Principal risks and uncertainties
Strategic Value
alignment
Return on Sales
£
Free Cash Flow
£
Cost Savings
Sustainability
See more about
Our business model
on
p12 and 13
73
Strategic report
Governance
Financial statements
Risk
Potential impact
Mitigation
Business interruption
Vesuvius loses production
capacity or experiences supply
chain disruption due to physical
site damage (accident, fire,
natural disaster, terrorism),
or other events such as industrial
action, cyber attack or global
health crises.
Strategic Value
alignment
£
£
Loss/closure of a major plant
temporarily or permanently impairing
our ability to serve our customers
Damage to or restriction in our
ability to use assets
Denial of access to critical systems or
control processes
Disruption of manufacturing processes
Inability to source critical
raw materials
Loss of data, leading to confidentiality,
regulatory and reputational issues
Diversified manufacturing footprint
Disaster recovery planning
Business continuity planning with strategic maintenance of
excess capacity
Physical and IT access controls, security systems and training
Cyber risks integrated into wider risk management structure
Well-established global insurance programme
Group-wide safety management programmes
Dual sourcing strategy and development of substitutes
People, culture
and performance
Vesuvius is unable to attract and
retain the right calibre of staff,
fails to instil an appropriate
culture or fails to embed the
right systems to drive personal
performance in pursuit of the
Group’s long-term growth.
Strategic Value
alignment
Organisational culture of high
performance is not achieved
Staff turnover in growing economies
and regions
Stagnation of ideas and
development opportunities
Loss of expertise and critical
business knowledge
Reduced management pipeline for
succession to senior positions
Internal focus on talent development and training,
with tailored career-stage programmes and clear
performance management strategies
Contacts with universities to identify and develop talent
Career path planning and global opportunities for
high-potential staff
Internal programmes for the structured transfer of technical
and other knowledge
Clearly defined Values underpin business culture
Group focus on enhancing gender diversity
Health and safety
Vesuvius staff or contractors are
injured at work or suffer mental
health issues because of failures in
Vesuvius’ operations, equipment,
policies or processes.
Strategic Value
alignment
Injury to staff and contractors
Health and safety breaches
Lack of staff availability and
operational downtime
Inability to attract and retain
the necessary workforce
Reputational damage
Active safety programmes, with ongoing wide-ranging
monitoring and safety training
Independent safety audit team
Quality management programmes including stringent
manufacturing process control standards, monitoring
and reporting
Environmental, Social
and Governance criteria
Vesuvius fails to capitalise on the
opportunity to help its customers
significantly reduce their carbon
emissions as environmental
pressure grows on the steel
industry or Vesuvius fails to meet
the expectations of its various
stakeholders including employees
and investors.
Strategic Value
alignment
Loss of opportunity to grow sales
Loss of opportunity to increase margin
Loss of stakeholder confidence
including investors
Reputational damage
Continued development of our Sustainability initiative, which
includes stretching targets focused on reducing the Group’s energy
usage, CO
2
emissions and waste, and increasing recycled materials
R&D focus on products that assist customers to reduce carbon
emissions and improve their own sustainability measures
Skilled technical sales force to develop efficient solutions for
our customers
Globally disseminated Code of Conduct sets out standards of
conduct expected and Anti-bribery and Corruption Policy adopted
with zero tolerance regarding bribery and corruption
Internal Speak Up mechanisms to allow reporting of concerns
Extensive use of due diligence to assess existing and potential
business partners and customers
The Strategic Report set out on pages
1–73 contains a fair review of our
businesses, strategy and business
model, and the associated principal
risks and uncertainties. We also deliver
a review of our 2024 performance and
set out an overview of our markets and
our stakeholders.
Details of our principles, and our people
and community engagement, together
with our focus on safety, are also
contained in the Strategic Report.
Approved by the Board on 5 March 2025
and signed on its behalf by
Patrick André
Chief Executive
Governance
75
Chairman’s governance letter
76
Board of Directors
78
Group Executive Committee
79
Corporate Governance Statement
79
Board Report
88
Audit Committee
96
Nomination Committee
103
Directors’ Remuneration Report
103
Remuneration overview
108
2023 Remuneration Policy
116
Annual Report on
Directors’ Remuneration
130
Directors’ Report
138
Statement of Directors’ Responsibilities
139
Independent Auditors’ Report
Vesuvius plc
Annual Report and Financial Statements 2024
74
75
Strategic report
Governance
Financial statements
Dear Shareholder,
On behalf of the Board, I am pleased to present Vesuvius’
Corporate Governance Statement. This Statement provides
investors and other stakeholders with an insight into the
governance structure and activities of the Board and its
Committees during the year. It also describes how the Group has
complied with the Principles of the UK Corporate Governance
Code during 2024. The table on page 79 signposts where detailed
information on each section of the Code (and associated
Principles) can be found. The Board of Vesuvius plc is committed
to maintaining high standards of governance and to continuous
improvement to reflect ongoing best practice.
The Board’s key focus in 2024 was on continuing to support
management to further develop the Group’s strategy. In
November, it approved the purchase of a 61.65% stake in
PiroMET, a Turkish business, which strengthens our Advanced
Refractories business in the fast-growing region of EEMEA.
Following the successful completion of our £50m share buyback
programme in August, we launched a second £50m share
buyback programme at the end of the year, to deliver on our
promise to return cash to shareholders.
Alongside this strategic focus, the Directors also oversaw the
continued refreshment of the Board during 2024. We welcomed
Eva Lindqvist and Italia Boninelli to the Board on 15 May 2024
and 1 June 2024, respectively. Eva assumed the role of Senior
Independent Director when Douglas Hurt retired from the Board
at the close of the 2024 AGM and Italia took over as Remuneration
Committee Chair when Kath Durrant stepped down from the
Board on 31 July 2024.
Yours sincerely
Carl-Peter Forster
Chairman
5 March 2025
Chairman’s governance letter
In this section
Board of Directors on
p76
Group Executive Committee on
p78
Corporate Governance Statement
p79
Board Report
p79
Board leadership and Company purpose on
p80
Division of responsibilities on
p83
Audit Committee report on
p88
Nomination Committee report on
p96
Directors’ Remuneration Report on
p103
Also see:
Group’s statement of purpose on
p12
Strategic Report on
p1–73
Vesuvius plc
Annual Report and Financial Statements 2024
76
Carl-Peter Forster
Chairman
Appointed to the Board 1 November 2022,
and as Chairman on 1 December 2022
Two years on the Board
–
Extensive board experience as Chairman
and Chief Executive within international
listed companies
–
Proven strategic and operational skills gained
in complex multinational industrial goods
and engineering businesses
–
Global commercial and engineering
experience, including expertise in operational
excellence and lean manufacturing
Current external appointments
Carl-Peter is Chair of Keller Group plc and Senior
Independent Director at Babcock International
Group plc. He is also Chairman of StoreDot,
Director of The Mobility House AG, Gordon
Murray Group Ltd, Envisics Ltd, Lead Equities
Fund Management GmbH and associated
companies and serves as a Director on the
advisory board of Kinexon GmbH.
Career experience
Carl-Peter has spent the majority of his career
holding senior leadership positions in some of
the world’s largest automotive manufacturers,
including BMW, General Motors and Tata
Motors (including Jaguar Land Rover). Since he
stepped down from Tata Motors in 2011, he has
served as a director on a wide variety of public
and private company boards, including IMI plc
from 2012–2021, Rexam plc from 2014–2016
and Geely Automotive Holdings, Hong Kong,
as well as Volvo Cars Group from 2013–2019.
He served as Chairman of Chemring Group plc
from July 2016 to 30 November 2024.
Patrick André
Chief Executive
Appointed to the Board 1 September 2017
Seven years on the Board
–
Global career serving the steel industry
–
Strong background in strategic development
and implementation
–
Customer focus and proven record of delivery,
with strong commercial acumen
–
Drive and energy in promoting his
strategic vision
Current external appointments
None.
Career experience
Patrick joined the Group as President of the
Vesuvius Flow Control Business Unit in 2016,
a role which he occupied until his appointment
as Chief Executive in September 2017.
Before joining the Group, Patrick served as
Executive Vice President Strategic Growth,
CEO Europe and CEO for Asia, CIS and Africa,
for Lhoist company, the world leader in lime
production. Prior to this, he was CEO of the
Nickel division, then CEO of the Manganese
division of ERAMET group, a global
manufacturer of nickel and special alloys.
N
Key to Board Committee membership
A
Audit Committee
N
Nomination Committee
R
Remuneration Committee
Committee Chair
Engagement with the workforce
E
Carla Bailo serves as the designated
Non-executive Director responsible
for workforce engagement.
*
Cevian Capital is a shareholder of Vesuvius plc
and, at 5 March 2025, held 22.71% of Vesuvius’
issued share capital.
Changes to the Board during the year
The Directors named were in office during the
year and up to the date of this Annual Report,
with the exception of Eva Lindqvist who joined
the Board on 15 May 2024 and Italia Boninelli
who joined the Board on 1 June 2024.
Douglas Hurt stepped down as Senior
Independent Director and Chair of the
Audit Committee at the close of the 2024 AGM,
held on 15 May 2024. Kath Durrant stepped
down as Chair of the Remuneration Committee
on 31 July 2024.
Mark Collis
Chief Financial Officer
Appointed to the Board 1 April 2023
One year on the Board
–
Wealth of international operational
experience and leadership skills
–
Complements the strong performance-
oriented culture and the skills of the
management team
–
Respected leader for the finance and
IT functions
Current external appointments
None.
Career experience
Mark was previously Chief Financial Officer of
the Operations business of John Wood Group
PLC. He has over 20 years of senior financial
experience in a number of international
businesses including Amec Foster Wheeler plc
and Expro International Group. Mark is a
Chartered Accountant qualified with the ICAEW.
Board of Directors
77
Strategic report
Governance
Financial statements
A
N
R
Eva Lindqvist
Senior Independent Director (SID)
Appointed to the Board 15 May 2024
Nine months on the Board
–
Strong engineering background
–
Broad management skillset in the industrial
and service sectors
–
Experienced UK governance professional
–
Proven management and leadership skills
in multinational businesses
Current external appointments
Eva currently supports several small companies
and non-profit organisations, and serves as
a Non-executive Director of CLS Holdings plc,
Greencoat Renewables plc and Tele2 AB.
Career experience
Eva is an engineer with more than 35 years’
experience in global industrial and service
businesses. She spent 20 years with Ericsson,
focusing on strategy, production development and
international sales, and then became Senior Vice
President and Chief Executive of Telia. She has
served on the board of a range of listed companies
including Acast AB, Bodycote plc, Keller Group plc,
Mr Green & Co AB, Sweco AB and Tarsier AB.
She is a member of the Royal Swedish Academy
of Engineering Sciences.
Friederike Helfer
Non-executive Director
Appointed to the Board 4 December 2019
Five years on the Board
–
An experienced strategist, with strong
analytic capability
–
Commercial acumen and a strong track
record of working with a portfolio of
companies to identify scope for operational
and strategic improvement
Current external appointments
Partner of Cevian Capital.
*
Career experience
Friederike is a Partner of Cevian Capital.
She joined Cevian in 2008 and served as
a Non-executive Director on the boards
of thyssenkrupp AG from 2020 to 2023 and
Valmet Oyj from 2013 to 2017. These are
both companies in which Cevian was also
invested. Prior to joining Cevian, Friederike
worked at McKinsey & Company. She is
a CFA Charterholder.
N
Italia Boninelli
Non-executive Independent Director
Appointed to the Board 1 June 2024
Nine months on the Board
–
Experienced HR practitioner with a broad
range of international experience
–
30+ years’ experience of people management
–
Proven management and leadership skills
Current external appointments
None.
Career experience
Italia has served as a strategic human resources
director in a variety of industries (including
mining, healthcare and financial services),
most recently at AngloGold Ashanti and
Gold Fields Ltd. Her roles have included
responsibility for employees across South Africa,
Australia, the United States, UK, Germany,
Belgium, Hong Kong and several Latin American
countries. She served as a Non-executive
director and member of the remuneration
committee of Polymetal International PLC
from 2019 until 2022.
A
N
R
Dinggui Gao
Non-executive Independent Director
Appointed to the Board 1 April 2021
Three years on the Board
–
Strong operational experience driving
performance in multinational companies
–
Proven track record of leadership and
international commercial experience
–
Strong focus on technology and in-depth
knowledge of Asian markets
Current external appointments
Operating Partner CITIC Capital Holdings Ltd.
Career experience
Dinggui has 40 years of operational experience
having worked in multinational companies
including Bosch, Honeywell, Eagle Ottawa and
Sandvik AB. Between 2017 and 2021 he was
Managing Director, China of Formel D Group,
the German global service provider to the
automotive and components industry.
Until June 2024 he was a Non-executive
Director of Intramco Europe B.V.
A
N
R
Robert MacLeod
Non-executive Independent Director
Appointed to the Board 1 September 2023 and
as Chair of the Audit Committee from AGM 2024
One year on the Board
–
Qualified Chartered Accountant, with significant
experience in large multinational companies
–
Knowledgeable corporate and operational
finance professional
–
Wealth of general management and financial
leadership experience
Current external appointments
Non-executive Director and Chair of the
Remuneration Committee of RELX PLC,
Non-executive Director and Chair of the Audit
and Risk Committee of Balfour Beatty plc,
Non-executive Director of the British Standards
Institution, and Non-executive Member of the
Defence Science and Technology Laboratory.
Career experience
Robert served as CEO of Johnson Matthey PLC
from 2014 to 2022 and Group Finance Director
from 2009 to 2014. Prior to this he worked at WS
Atkins PLC, latterly as Group Finance Director.
A
N
R
Carla Bailo
Non-executive Independent Director
Appointed to the Board 1 February 2023
Two years on the Board
–
Strong engineering and product
management experience
–
Research and development background from
more than 40 years in the automotive industry
–
International experience and extensive
knowledge of US markets
Current external appointments
Non-executive Director of Advance Auto Parts,
Inc., SM Energy Company and the Gatik Safety
Advisory Council.
Career experience
Carla was President and CEO of the Center for
Automotive Research (CAR) in the USA for five
years, until 2022. Prior to joining CAR, Carla was
Assistant Vice President for Mobility Research
and Business Development at The Ohio State
University. She spent 25 years at the Nissan
Motor Company, culminating as Senior VP,
R&D, Americas and Total Customer Satisfaction.
Carla served as Non-executive director of EVe
Mobility Acquisition Corp. until 21 February 2024.
She is certified by the National Association of
Corporate Directors and has a certification in
cybersecurity from the Digital Directors Network.
A
N
R
E
Vesuvius plc
Annual Report and Financial Statements 2024
78
Group Executive Committee
Patrick André
Chief Executive
Nine years with the Group
For biographical details, please
see the Board of Directors on
page 76.
Agnieszka Tomczak
Chief HR Officer
Six years with the Group
Appointed as Chief HR Officer in
October 2018. Agnieszka has over
30 years of senior leadership
experience in multinational
companies spanning various
business sectors and industries.
Prior to joining Vesuvius, she spent
12 years at ICI, which was
subsequently acquired by
AkzoNobel, in regional and
global HR roles.
Agnieszka is based in London, UK.
Henry Knowles
General Counsel and
Company Secretary
Eleven years with the Group
Appointed as General Counsel
and Company Secretary in
September 2013. Prior to joining
Vesuvius, Henry spent eight years
at Hikma Pharmaceuticals PLC,
a generic pharmaceutical
manufacturer with significant
operations in the Middle East,
North Africa and the US where he
held the roles of General Counsel
and Company Secretary. Henry is
also responsible for the Group’s
Intellectual Property function.
Henry is based in London, UK.
Pascal Genest
President, Flow Control
Four years with the Group
Appointed President, Flow Control
in January 2021. Pascal joined the
Group from GFG Alliance where he
held the position of CEO Liberty
Ostrava in the Czech Republic.
Prior to this he was CEO of SULB
in Bahrain. Pascal has 20 years’
experience working in the steel
industry, mainly with ArcelorMittal.
He has also worked in consulting,
in private equity and in the
aluminium industry.
Pascal is based in London, UK.
Nitin Jain
President, Advanced Refractories
Three years with the Group
Appointed as Deputy President,
Advanced Refractories on 1 July
2024. He subsequently assumed
the role of President, Advanced
Refractories, in January 2025. Nitin
joined Vesuvius in March 2021 as
Regional Vice President, Steel India
and South East Asia. Prior to this
he served as Managing Director
India and Market Director Asia,
for Imerys S.A. He has worked in
leadership roles in mergers and
acquisitions, operations, product
management, and sales and
technology, in both North America
and Asia.
Nitin is based in London, UK.
Mark Collis
Chief Financial Officer
One year with the Group
For biographical details, please
see the Board of Directors on
page 76.
Karena Cancilleri
President, Foundry
Five years with the Group
Appointed President, Foundry in
October 2019. Karena joined the
Group from Beaulieu International
Group, where she served for six
years as VP Engineered Products
and latterly President Engineered
Products. She has a breadth of
managerial experience spanning
various international leadership
roles in companies such as
FiberVisions, Kraton Corporation
and Shell.
Karena is based in London, UK.
Changes to the
Group Executive Committee
(GEC)
Richard Sykes served as President,
Advanced Refractories, and as
a member of the GEC throughout
2024. He retired from Vesuvius
on 31 December 2024.
Nitin Jain joined the GEC on
his appointment as Deputy
President, Advanced Refractories,
on 1 July 2024.He took over as
President, Advanced Refractories
on 1 January 2025.
Karena Cancilleri, President,
Foundry, has signalled her intention
to leave the Group at the end of
March 2025. Manuel Delfino will
be appointed President, Foundry
effective 1 July 2025, following
Karena Cancilleri’s departure.
During the interim period between
1 April 2025 and 1 July 2025,
Patrick André will take direct
responsibility for the management
of the Foundry Division.
Manuel joined the Group in
September 2003 and has since
worked in both Vesuvius’ Steel and
Foundry Divisions. He has worked
and lived in Venezuela, Colombia,
Brazil, Germany, Mexico and the
US where he currently holds
the position of Vice President,
Flow Control North America.
79
Strategic report
Governance
Financial statements
Corporate Governance Statement
Board Report
2018 UK Corporate Governance Code
The Company applied the Principles of the 2018 UK Corporate Governance Code (the ‘Code’), and was fully compliant
with its Provisions, throughout the year ended 31 December 2024. A copy of the Code can be found on the FRC website at:
https://www.frc.org.uk/library/standards-codes-policy/corporate-governance/uk-corporate-governance-code/
Information availability
Board
leadership and
Company
purpose
The Corporate Governance Statement (‘CG Statement’) on pages 79–129 gives information on the Group’s
compliance with the Principles relating to the Board’s leadership and Company purpose.
More detailed information on:
–
The Group’s statement of purpose can be found on pages 12 and 80
–
The Group’s strategy, resources and the indicators it uses to measure performance can be found on
pages 9, 12 and 13, and 4, 5 and 12 and 28, 29, 35 and 36, respectively
–
The Group’s engagement with stakeholders and the Group’s Section 172(1) Statement is contained in the
Section 172(1) Statement and stakeholder engagement section on pages 63–66
–
The Group’s approach to workforce matters can be found in the Our people section on pages 55–58,
with further details of the Group’s approach to employee involvement and engagement contained in the
Section 172(1) Statement on pages 63 and 64
Details of the Group’s framework of controls is contained in the Audit Committee report on page 92 of the
CG Statement and in the Risk, viability and going concern section on pages 69 and 70.
Division of
responsibilities
The CG Statement describes the structure and operation of the Board. The Nomination Committee report,
on pages 101 and 102, describes the process the Company conducts to evaluate the Board, to ensure that it
continues to operate effectively, that individual Directors’ contributions are appropriate and that the oversight
of the Chairman promotes a culture of openness and constructive yet challenging debate.
Composition,
succession
and evaluation
Details of the skills, experience and knowledge of the existing Board members can be found in the Board
biographies contained on pages 76 and 77. Information on the Board’s appointment process and approach to
succession planning and Board evaluation is contained in the Nomination Committee report on pages 96–102
of the CG Statement.
Audit, risk
and internal
control
Information on the policies and procedures the Group has in place to monitor the effectiveness of the Group’s
Internal and External Audit functions and the integrity of the Group’s financial statements is contained in the
Audit Committee report on pages 88–95 of the CG Statement, along with an overview of the procedures
in place to manage risk and oversee the internal control framework. Further information on the Group’s
approach to risk management is contained in the Risk, viability and going concern section of the
Strategic Report on pages 67–73. The Board believes the 2024 Annual Report to be a fair, balanced and
understandable assessment of the Company’s position and prospects. A description of the Audit Committee’s
work in enabling the Board to reach this conclusion is contained in the Audit Committee report on page 92.
Remuneration
The Company’s approach to investing in and rewarding its workforce is described in the Our people section
on pages 55 and 56. The Directors’ Remuneration Report section of the CG Statement describes the Group’s
approach to Directors’ remuneration, including the procedure for developing policy and the Remuneration
Committee’s discretion for authorising remuneration outcomes. It also includes information about the
Remuneration Consultants appointed by the Remuneration Committee. Details of the linkage of the
Directors’ Remuneration Policy with long-term strategy is contained on page 103 and also highlighted on
pages 28 and 29, and 35 and 36 in the sections on Key Performance Indicators.
The aforementioned sections are incorporated into the Corporate Governance Report by reference.
Vesuvius plc
Annual Report and Financial Statements 2024
80
Board leadership and Company purpose
The Board is responsible for leading the Group in an efficient and
entrepreneurial manner, establishing the Group’s purpose, Values
and strategy, and satisfying itself that these and the Group’s
culture are aligned. It focuses primarily on strategic and policy
issues and is responsible for ensuring the long-term sustainable
success of the Group. It also oversees the allocation of resources
and monitors the performance of the Group in pursuit of this
strategy. It is responsible for effective risk assessment and
management of the Group’s risk profile. In performance of these
duties, the Board has regard to the interests of the Group’s key
stakeholders and is cognisant of the potential impact of the
decisions it makes on wider society.
The Company held a Capital Markets Day in November 2023 to
outline the Group’s strategic objectives for the next three years,
and to provide further insight into the positive long-term growth
trends anticipated in the steel and foundry markets. Further
information on the Group’s strategic targets can be found on
page 9. The Board has identified a number of Key Performance
Indicators (KPIs) which provide information on key aspects of the
Group’s financial and non-financial performance. Reviewing
this information assists the Board to assess progress with the
execution of the Group’s strategy and to determine any remedial
action that needs to be taken. Detailed information on the Group’s
financial and non-financial KPIs can be found on pages 28 and 29,
and 35 and 36, respectively.
The Group has established a framework of controls to enable risk
to be assessed and managed. Further information on this can be
found in the Audit, risk and internal control section on page 87 of
this Board Report.
Sustainability
Vesuvius recognises that lasting business success is measured
not only in financial performance but in the way in which the
Group deals with its customers, suppliers, business associates,
employees, investors and local communities. Our sustainability
strategy supports the Group’s key strategic objectives which are
focused on creating a better tomorrow in a profitable and
sustainable way. To drive change throughout the Group, the
Board has set specific targets focused on ways in which the
Group can improve its impact on our planet, our communities
and our people, and improve the impact of our customers.
The Board monitors these targets and oversees the output of the
Sustainability Council in spearheading new activities to enhance
Group performance. Further information can be found in the
Strategic Report on pages 22 and 23 and in the Non-financial
and Sustainability Information Statement on pages 33–62.
Culture
The Board monitors the corporate culture of the Group.
The Group’s CORE Values – Courage, Ownership, Respect and
Energy – define our behaviours across the business and are the
practical representation of the culture we seek to foster, aligning
with the Company’s purpose and strategy, and supporting our
governance and control processes. These Values are prominently
displayed at all sites. Our CORE Values are reinforced in our
performance management systems, which ensure that they
are firmly embedded in our day-to-day conversations and
behaviours. Further detail can be found on page 59.
The CORE Values are supported by the Group’s Code of
Conduct which sets out the standards of conduct expected,
without exception, of everyone who works for Vesuvius in any
of its worldwide operations. The Code of Conduct emphasises
the Group’s commitment to ethical behaviour and compliance
with the law. It also covers every aspect of Vesuvius’ approach
to business, from the way that the Group engages with customers,
employees, its markets and each of its other stakeholders,
to the safety of its employees and places of work. Everyone
within Vesuvius is individually accountable for upholding
these requirements.
The Board seeks to ensure that the Group’s workforce policies and
practices are consistent with the Group’s long-term sustainable
success. Further information about these policies can be found
in the Our people and A responsible company sections of the
Non-financial and Sustainability Information Statement on
pages 55–62. Additional information on the Group’s remuneration
practices for senior managers can be found in the Directors’
Remuneration Report on pages 103–129 and the Group’s
approach to diversity in the Nomination Committee Report on
pages 99–101. Information on the Group’s Speak Up confidential
employee concern helpline is set out on page 82.
Board site visits
The Directors undertook an extensive programme of site visits
in 2024. A full off-site Board meeting was held in China, with
Directors visiting Vesuvius’ sites in Bayuquan, Changshu, Suzhou,
Yingkou and Wuhan, along with a customer site in Qian’An.
In addition, the Non-executive Directors visited sites in Ghlin in
Belgium, Trinec in the Czech Republic, Feignies in France, Kobe
and Toyokawa in Japan, Monterrey and Ramos Arizpe in Mexico,
Skawina in Poland and Chicago Heights, USA during the year.
The visits provided the Board with the opportunity to meet local
management, and hear firsthand about business performance,
and local opportunities and challenges. During the visits the
Directors were also able to interact with a cross-section of
employees, from various functions and organisational levels,
and at some sites ‘town hall’ meetings were held, providing the
Non-executive Directors with the opportunity to engage with
the workforce to hear the views of employees and answer their
questions about the Company. The Directors engaged in
firsthand discussions on culture and purpose, providing direct
feedback to the Board on their perceptions of each site and
potential areas for improvement, alongside highlighting examples
of best practice that could be shared more widely.
Purpose
Vesuvius is a global leader in molten metal flow engineering and
technology, serving process industries operating in challenging
high-temperature conditions. We think beyond today to create the
innovative solutions that will shape the future, delivering products and
services that help our customers make their industrial processes safer,
more efficient and more sustainable. In turn, we provide our employees
with a safe workplace where they are recognised, developed and
properly rewarded, and aim to deliver sustainable, profitable growth
to provide our shareholders with a superior return on their investment.
Corporate Governance Statement
continued
81
Strategic report
Governance
Financial statements
Board assessment of culture
During the year, the Board’s assessment of the Group’s culture considered the Group’s:
Adherence to the CORE Values
Entrepreneurship
Transparency
Customer focus
Diversity and respect for local cultures
Commitment to safety
The Board focused on ensuring that there was a consistent culture
across the Group, underpinned by the CORE Values. During their
site visits, the Directors met with local employees and assessed
the extent to which the Values were understood and motivated
employee behaviour. They then reported back on their individual
findings. In 2024, nominations were once again sought for the
Group’s peer-nominated Living the Values Awards. The Board
was delighted that there were 1,260 nominations, showcasing
examples of individuals and teams going the ‘extra mile’ to
live the CORE Values. Members of the Group Executive
Committee presented both regional and global awards as part
of the process of recognising those individuals who exemplify
our Values. The global awards presentation was hosted online
to allow all employees to join and celebrate the examples of
Vesuvius’ Values in action.
As part of the Board’s rolling agenda, the Board received reports
from each Business Unit President on their business strategy,
new commercial initiatives and future technology trends.
The Nomination Committee monitored the recruitment,
development and retention of key talent across the Group to
execute the Group strategy, and the Board also received reports
on the key commercial achievements across the Business Units
as part of regular reporting from the Chief Executive.
The engagement and openness of the senior managers who
presented to the Board and Committees during the year, along
with the employees the Board met during site tours, ‘town hall’
meetings and formal and social engagements, was assessed
in terms of the Group’s culture. These firsthand reviews were
supported by the Directors’ regular review of the output of the
Group’s Speak Up processes. In addition, the Audit Committee
sought qualitative feedback from External and Internal Audit
on how transparent/engaged managers had been during
audit interactions.
In 2024, the Board received detailed briefings on the Group’s
key customers, and their concentration, diversity and core
challenges, alongside information on the state of the Group’s
markets. They also reviewed the initiatives undertaken in
the Company to understand value drivers at our customers,
to underpin our solutions-focused business model, and
communicate the value contributed to customers by our
products. The Chief Executive provided updates on key
customer issues, and undertook a range of customer visits,
meeting face-to-face with customers to discuss business
challenges and future prospects. During the Board site visit to
China in September, the Directors visited a key Steel Division
customer to hear firsthand their views on the Vesuvius offering.
Throughout the year, the Board also received regular updates
on quality performance, with detailed analysis of any specific
quality issues.
In 2024, the Board met the diversity target it had set under the
Board Diversity Policy, with women now occupying 44% of
directorships on the Board. The Nomination Committee
considered the Board’s diversity as part of the Director
recruitment exercises and monitored progress with the
achievement of the Group’s gender diversity target. This
seeks to have 25% female representation in the Senior
Leadership Group, which comprises c.150 individuals, by
2025. The Board also reviewed the results of the employee
engagement survey.
At each meeting during the year, the Board received an update on
issues affecting the global health and well-being of the Group’s
employees. As a priority the Board receives regular updates on
the Group’s performance against safety targets, and reviews all
Lost Time Incidents and the follow-up action taken. In addition,
the Board receives biannual reports on the progress of the Group’s
safety programmes. During the year, the Directors used their
individual site visits to assess each site’s commitment to safety,
and the Executive Directors and Group Executive Committee
members’ long-term incentives include a safety target alongside
other sustainability measures. A core tenet of the Group’s
Sustainability initiative is a focus on ensuring the Group affords
a safe working environment for all its employees. The Board has
set a Group safety target of less than one Lost Time Injury per
million hours worked. This equates to an average of less than two
lost time work-related Lost Time Injuries or illnesses per month.
The Board is encouraged to see the further excellent progress
made in 2024 in reducing the rate of Lost Time Injuries to 0.52,
but recognises that there is further work still to be done to reach
the Group’s ultimate aim of zero accidents.
Vesuvius plc
Annual Report and Financial Statements 2024
82
Whistleblowing policy
Speak Up
All Vesuvius employees can speak up without fear of retaliation, either
to Vesuvius management or via independent channels. The operation of
our Speak Up policy is overseen by the Board. Details of it are provided
on the internal Vesuvius website, and communicated by local language
posters in all our locations. A third-party operated confidential Speak Up
helpline is available 365 days per year, 24 hours per day, to anyone wishing
to raise concerns anonymously or in situations where they feel unable to
report directly. Details of the helpline can also be found on the Vesuvius
website. This independent facility supports online reporting through
a web portal and reporting by phone or by voicemail. Ensuring global
accessibility, employees can speak with operators in any of our
29 functional languages.
All reports received are reviewed and, where appropriate, investigated,
and feedback is provided to the reporter via the helpline portal. Vesuvius’
Speak Up helpline is highlighted during internal compliance training and
new joiner inductions. No Vesuvius employee will ever be penalised or
disadvantaged for reporting a legitimate concern in good faith. Reports
received via Speak Up channels are managed by the dedicated ethics and
compliance team under the supervision of the Group Head of Compliance
and our General Counsel. When received, reports are assessed for risk
and category of concern. All reports are considered in line with a protocol
for review, investigation, action, closure and feedback, independent of
management lines where necessary, and involving senior Business Unit or
HR management as appropriate. For complex issues, formal investigation
plans are drawn up, and support from external experts is engaged where
necessary. Feedback is recognised as an important element of the Speak
Up process and we aim to acknowledge all cases within seven days of
receipt. The Group monitors the volume, geographic distribution and
range of reports made to the Speak Up facility to ascertain whether there
are significant regional compliance concerns, or particular themes that
recur, and whether this indicates that there are countries where access to
this facility is less well understood or publicised.
During 2024, the Board received updates on the nature and volume of
reports received by the confidential Speak Up helpline, key themes
emerging from these reports and the results of investigations undertaken.
Further details on specific issues were provided where requested. In 2024,
the Group received a total of 206 reports, of which 188 (91.3%) were
submitted through the Speak Up facility and 18 (8.7%) were walk-in
reports. Each one of these was reviewed and, where appropriate,
investigated. Similar to prior years, a majority of these reports related to
HR issues which indicated no compliance concerns, nor serious breaches
of the Code of Conduct. Of the small number of reports received that
contained allegations of a breach of our Code of Conduct, thorough
investigations were performed and, where appropriate, disciplinary
action was taken.
Section 172 duties
The Directors are cognisant of the duty they have under Section
172 of the Companies Act 2006 to promote the success of the
Company over the long term for the benefit of shareholders
as a whole, whilst also having regard to a range of other key
stakeholders. In performance of its duties throughout the year,
the Board had regard to these duties and remained cognisant
of the potential impact on these stakeholders of the Group’s
activities. Details of the Board and the Company’s engagement
with stakeholders during the year can be found in the
Section 172(1) Statement on pages 63–66.
Corporate Governance Statement
continued
Division of responsibilities
83
Strategic report
Governance
Financial statements
Company Secretary
Advises the Chairman on governance, together with providing updates on regulatory and compliance matters. Supports the Board
agenda with clear information flow. Acts as a link between the Board and its Committees and between the Non-executive Directors
and senior management
The Board
Responsible for Group strategy, risk
management, succession and policy issues.
Sets the purpose, Values and culture for
the Group. Monitors the Group’s progress
against the targets set
Chairman
Provides leadership and guidance for the
Board, promoting a high standard of
corporate governance. Sets the Board
agenda and chairs and manages
meetings. Independent on appointment,
he is the link between the Executive and
Non-executive Directors
Chief Financial Officer
Supports the Chief Executive in
developing strategic direction and works
with the Board to develop and implement
the Group’s strategy. Directs, monitors
and manages the finance and IT
functions to ensure the Company’s
financial objectives are met, ensuring
sound financial management
and control of the Company’s business
Senior Independent Director
Acts as a sounding board for the
Chairman, an alternative contact
for shareholders and an intermediary
for other Non-executive Directors.
Leads the annual evaluation of the
Chairman and recruitment process
for the Chairman’s replacement,
when required
Non-executive Directors
Exercise a strong, independent voice,
constructively challenging and
supporting the Executive Directors.
Scrutinise performance against
objectives and monitor financial
reporting. Monitor and oversee risks and
controls, determine Executive Director
remuneration and manage Board
succession through their Committee
responsibilities. The Non-executive
Directors meet at least twice a year
without the Executive Directors
being present
Chief Executive
Develops strategy for review and
approval by the Board. Directs,
monitors and manages the operational
performance of the Company.
Responsible for the application of
Group policies, implementation of
Group strategy and the resources
for their delivery. Accountable to the
Board for Group performance
The Board
Carl-Peter Forster
Non-executive Chairman
Patrick André
Chief Executive
Mark Collis
Chief Financial Officer
Carla Bailo
Non-executive Director and designated Non-executive Director
responsible for workforce engagement
Italia Boninelli
Non-executive Director and Chair of the Remuneration Committee
Joined 1 June 2024
Dinggui Gao
Non-executive Director
Friederike Helfer
Non-executive Director
Eva Lindqvist
Senior Independent Director
Joined 15 May 2024
Robert MacLeod
Non-executive Director and Chair of the Audit Committee
Leavers during the year:
Kath Durrant
Non-executive Director and Chair of the Remuneration Committee
Stepped down on 31 July 2024
Douglas Hurt
Senior Independent Director and Chair of the Audit Committee
Stepped down on 15 May 2024
The Chairman and Chief Executive
The division of responsibilities between the Chairman and the Chief Executive is set out in writing. These role descriptions were reviewed
during the year as part of the Company’s annual corporate governance review. They are available to view on the Company’s website:
www.vesuvius.com.
Vesuvius plc
Annual Report and Financial Statements 2024
84
Audit Committee
To monitor the integrity of
financial reporting and to assist
the Board in its review of the
effectiveness of the Group’s
internal controls and risk
management systems
Chair
Robert MacLeod
Membership
All independent
Non-executive Directors
Remuneration Committee
To determine the remuneration
policy for the Executive Directors
and set the appropriate
remuneration for the Chairman,
Executive Directors and
senior management
Chair
Italia Boninelli
Membership
All independent
Non-executive Directors
Nomination Committee
To advise the Board on
appointments, retirements and
resignations from the Board and
its Committees and to review
succession planning and talent
development for the Board and
senior management
Chair
Carl-Peter Forster, Chairman
(except when considering his
own succession, in which case the
Committee would be chaired by
the Senior Independent Director)
Membership
Chairman and the
Non-executive Directors
Governance Committees
Finance Committee
To approve specific funding and
treasury-related matters in
accordance with the Group’s
delegated authorities or as
delegated by the Board
Chair
Carl-Peter Forster, Chairman
Membership
Chairman, Chief Executive,
Chief Financial Officer and
Group Treasurer
Administrative Committees
In addition, the Board delegates certain responsibilities to a
Finance Committee and Share Scheme Committee, which operate
in accordance with the delegated authority agreed by the Board
Share Scheme Committee
To facilitate the administration of
the Company’s
share schemes
Chair
Any Board member
Membership
Any two Directors or any
two Directors and the
Company Secretary
Board
The Board
The Board has a formal schedule of matters reserved to it and
delegates certain matters to its Committees. It is anticipated that
the Board will convene on seven occasions during 2025, holding
ad hoc meetings to consider non-scheduled business if required.
Directors’ independence
The Board considers that, for the purposes of the UK Corporate
Governance Code, 62.5% of the Board – five of the current
Non-executive Directors (excluding the Non-executive Chairman),
namely Carla Bailo, Italia Boninelli, Dinggui Gao, Eva Lindqvist and
Robert MacLeod, are independent of management and free from
any business or other relationship which could affect the exercise of
their independent judgement. Friederike Helfer is a Partner of
Cevian Capital, which continues to hold 22.71% of Vesuvius’ issued
ordinary share capital (excluding Treasury shares). As a result,
Friederike Helfer is not considered to be independent. The
Chairman satisfied the independence criteria on his appointment
to the Board. The Board and its Committees have a wide range
of skills, experience and knowledge, and further details of each
Director’s individual contribution in this regard can be found in
their biographical information on pages 76 and 77.
Board Committees
The principal governance Committees of the Board are the Audit,
Nomination and Remuneration Committees. Each Committee
has written terms of reference which were reviewed and where
applicable, updated during the year to reflect the requirements
of the revised UK Corporate Governance Code. These terms of
reference are available to view on the Company’s website:
www.vesuvius.com.
Committee composition is set out in the relevant Committee
reports. No one, other than the Committee Chair and members of
the Committee, is entitled to participate in meetings of the Audit,
Nomination and Remuneration Committees. However, as
detailed in the Committee reports, where the agenda permits,
other Directors and senior management regularly attend by
invitation, supporting the operation of each of the Committees
in an open and consensual manner.
The interactions in the governance process are shown in the
schematic below.
Group Executive Committee
The Group also operates a Group Executive Committee (GEC),
which is convened and chaired by the Chief Executive and assists
him in discharging his responsibilities. During 2024, the GEC
comprised the Chief Executive, Chief Financial Officer, the main
Business Unit Presidents, the Chief HR Officer and the General
Counsel/Company Secretary. In addition, Nitin Jain, Deputy
President, Advanced Refractories, joined the GEC on 1 July 2024
in advance of his promotion to President, Advanced Refractories.
The GEC met for six formal multi-day meetings and two R&D
reviews during 2024.
Corporate Governance Statement
continued
Strategy
–
Reviewing M&A opportunities
–
Receiving and reviewing reports on strategy from the Flow Control, Advanced Refractories, Foundry and
Sensors & Probes Business Units
–
Receiving and reviewing regular reports from the CEO on the implementation of the Group’s strategic
objectives, and monitoring the Group’s achievement of its cost-saving targets
–
Reviewing the progress of the Group’s sustainability agenda, including receiving updates on the Group’s
health, safety and environmental objectives, and TCFD compliance
–
Participation in a two-day off-site review of strategy attended by the three main Business Unit Presidents
and the Company’s key financial advisers
–
Receiving and considering a progress report on the Group’s R&D strategy and objectives
–
Receiving and considering reports on the Group’s key customers, and its purchasing, cyber, legal and
compliance activities and the management of the Group’s key litigation and pension liabilities
–
Reviewing the Group’s capital structure, including investors’ views, and receiving reports from the
Company’s brokers on market issues
–
Reviewing the Group’s capital expenditure, and approving material items including the Group’s warehouse
expansion in Skawina, Poland
Performance
–
Receiving regular business reports from the CEO on business highlights including the Divisions’ commercial
activities, changes in the Group’s markets and procurement practices
–
Receiving regular reports on the Group’s financial performance against key indicators
–
Receiving biannual reports on progress against the Group’s sustainability targets
–
Receiving regular safety reports and summaries of the investigations conducted after serious
safety incidents
–
Receiving regular reports on performance against product quality targets
–
Scrutinising the Group’s financial performance and forecasts
–
Reviewing and agreeing the annual budget and financial plans
–
Approving the Group’s trading updates, and preliminary and half-year results announcements
Governance
–
Receiving regular reports from the Board Committees
–
Approving the launch of the Group’s second £50 million share buyback programme
–
Approving the new syndicated bank facility
–
Overseeing the process to identify new Non-executive Directors, and then approving the appointments of
Italia Boninelli and Eva Lindqvist
–
Approving the Annual Report and Notice of AGM
–
Approving the payment of the interim dividend, and approving the recommendation of the payment of the
final dividend subject to shareholder approval
–
Reviewing the Group’s internal controls, risk management practices and risk appetite, monitoring the
Group’s key risks and approving the Group’s risk register
–
Reviewing and approving the Group’s Modern Slavery Statement
–
Reviewing information received through the Group’s Speak Up reporting processes, including
investigation outcomes
–
Reviewing the Group’s external sustainability ratings and the steps being taken to ensure future compliance
with CSRD, including approving the Group’s double materiality assessment
–
Approving the Group’s UK tax strategy
–
Reviewing and approving the level of fees for the Non-executive Directors
–
Completing an evaluation of the Board and Committees’ performance, and reviewing progress against the
improvement actions identified in the 2023 Board evaluation
–
Reviewing the Board’s engagement with employees, including feedback from the Directors’ site visits and
the results of the Group engagement survey
–
Receiving regular updates on corporate governance and regulatory developments, and conducting the
formal annual review of the Group’s governance arrangements
85
Strategic report
Governance
Financial statements
2024 Board programme
The Board discharges its responsibilities through an annual
programme of meetings.
At each of the regularly scheduled meetings, a number of
standard items were considered.
These included:
–
Directors’ duties, including those in respect of S172,
and conflicts of interest
–
Minutes of the previous meeting and matters arising
–
Reports from the Chief Executive (CEO) and the Chief
Financial Officer (CFO) on key aspects of the business,
and from the General Counsel and Company Secretary
on governance matters
In 2024, the Board focused on key areas of strategy, performance and governance, including the matters outlined below:
Vesuvius plc
Annual Report and Financial Statements 2024
86
Information and support
The Board ensures that it receives, in a timely manner, information
of an appropriate quality to enable it adequately to discharge
its responsibilities. Papers are provided to the Directors in
advance of the relevant Board or Committee meeting to enable
them to make further enquiries about any matters prior to the
meeting should they so wish. This also allows Directors who are
unable to attend to submit views to the relevant Chairperson in
advance of the meeting.
In addition to the formal Board processes, the Chief Executive
provides updates on important Company business issues
between meetings, and the Board is provided with regular reports
on key financial and management information. The Directors
also receive regular updates on shareholder matters, along
with copies of analysts’ notes issued on the Company. For the
distribution of all information, Directors have access to a secure
online portal, which includes a reference section containing
relevant background information.
All Directors have access to the advice and services of the
Company Secretary.
There is also an agreed procedure in place for Non-executive
Directors, in the furtherance of their duties, to take independent
legal advice at the Company’s expense.
Directors’ conflicts of interest
The Board has established a formal system to authorise situations
where a Director has an interest that conflicts, or may possibly
conflict, with the interests of the Company (situational conflicts).
Directors declare situational conflicts so that they can be
considered for authorisation by the non-conflicted Directors.
In considering a situational conflict, these Directors act in the way
they consider would be most likely to promote the success of the
Company and may impose limits or conditions when giving
authorisation, or subsequently, if they think this is appropriate.
The Company Secretary records the consideration of any conflict
and any authorisations granted. The Board believes that the
approach it has in place for reporting situational conflicts
continues to operate effectively. The Board has authorised
(subject to certain exceptions) any potential or actual conflicts
of interest that might arise as a result of Ms Helfer’s role as
a Partner of Cevian Capital AG.
Board and Committee attendance
The attendance of Directors at the Board meetings held in 2024, and at meetings of the principal Committees of which they are
members, is shown in the table below. The maximum number of meetings in the period during which the individual was a Board or
Committee member is shown in brackets.
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
% attendance
3
Chairman
Carl-Peter Forster
11 (11)
–
–
5 (5)
100%
Executive Directors
Patrick André
11 (11)
–
–
–
100%
Mark Collis
11 (11)
–
–
–
100%
Non-executive Directors
Carla Bailo
11 (11)
5 (5)
5 (5)
5 (5)
100%
Italia Boninelli
1
6 (6)
3 (3)
3 (3)
3 (3)
100%
Kath Durrant
2
6 (7)
3 (3)
3 (3)
3 (3)
94%
Dinggui Gao
10 (11)
5 (5)
5 (5)
5 (5)
96%
Friederike Helfer
8 (8)
–
–
5 (5)
100%
Douglas Hurt
2
4 (5)
2 (2)
2 (2)
2 (2)
91%
Eva Lindqvist
1
6 (6)
3 (3)
3 (3)
3 (3)
100%
Robert MacLeod
11 (11)
5 (5)
5 (5)
5 (5)
100%
1.
Eva Lindqvist and Italia Boninelli and were appointed to the Board on 15 May 2024 and 1 June 2024, respectively.
2.
Douglas Hurt retired from the Board at the close of the AGM on 15 May 2024 and Kath Durrant stepped down from the Board on 31 July 2024.
3. The table reflects the number of Board and Committee meetings that the Directors could have attended during the year.
Kath Durrant, Dinggui Gao and Douglas Hurt missed Board
meetings arranged at short notice due to pre-existing
commitments. All Directors received the papers for meetings
that they missed in advance and relayed their comments
to the Chairman for communication at the meeting.
The Chairman and Non-executive Directors have letters of
appointment which set out the terms and conditions of their
directorship. An indication of the anticipated time commitment
is provided in recruitment role specifications, and each
Non-executive Director’s letter of appointment provides details
of the meetings that they are expected to attend, along with the
need to accommodate travelling time. Non-executive Directors
are required to set aside sufficient time to prepare for meetings,
and regularly to refresh and update their skills and knowledge.
Copies of all contracts of service or, where applicable, letters of
appointment of the Directors, are available for inspection during
business hours at the registered office of the Company and are
available for inspection at the location of the Annual General
Meeting (AGM) for 15 minutes prior to and during each AGM.
All Non-executive Directors have agreed to commit sufficient
time for the proper performance of their responsibilities,
acknowledging that this will vary from year to year depending
on the Group’s activities, and will involve visiting operational and
customer sites around the Group. The Chairman in particular
dedicates a significant amount of time to Vesuvius in discharging
his duties.
Corporate Governance Statement
continued
87
Strategic report
Governance
Financial statements
Directors are expected to attend all scheduled Board and
Committee meetings and any additional meetings as required.
Each Director’s other significant commitments are disclosed to the
Board during the process prior to their appointment and they are
required to notify the Board of any subsequent changes.
The Company has reviewed the availability of the Chairman and
the Non-executive Directors to perform their duties and considers
that each of them can, and in practice does, devote the necessary
amount of time to the Company’s business.
Composition, evaluation and succession
Appointment and replacement of Directors
The Company’s Articles of Association specify that Board
membership should not be fewer than five nor more than 15
Directors, save that the Company may, by ordinary resolution,
from time to time, vary this minimum and/or maximum number of
Directors. Directors may be appointed by ordinary resolution or
by the Board. The Board may appoint one or more Directors to
any executive office, on such terms and for such period as it thinks
fit, and it can also terminate or vary such an appointment at any
time. The Articles specify that, at every AGM, any Director who
has been appointed by the Vesuvius Board since the last AGM
and any Director who held office at the time of the two preceding
AGMs, and who did not retire at either of them, shall retire from
office. However, in accordance with the requirements of the Code,
all Directors will offer themselves for election or re-election at the
2025 AGM. The Board believes that each of the current Directors
is effective and demonstrates commitment to his or her respective
role. Accordingly, the Board recommends that shareholders
approve the resolutions to be proposed at the 2025 AGM relating
to the election and re-election of the Directors. The biographical
details of the Directors offering themselves for election or
re-election, including details of their other directorships and
relevant skills and experience, will be set out in the 2025 Notice of
AGM. The biographical details of the Directors are also set out on
pages 76 and 77.
Recommendations for appointments to the Board and rotation
of the Directors are made by the Nomination Committee. The
Nomination Committee is also responsible for overseeing the
maintenance of an effective succession plan for the Board and
senior management. Further information on the activities of the
Nomination Committee is set out in the Nomination Committee
report on pages 96–102.
A comprehensive induction programme is available to new
Directors. The induction programme is tailored to meet the
requirements of the individual appointee and explains the
dynamics and operations of the Group, and its markets and
technology. The induction includes, as a minimum, a series of
meetings with key Group executives, along with site visits to the
Group’s key strategic sites. Further details of the induction
provided for Italia Boninelli and Eva Lindqvist are set out in
the Nomination Committee report on page 98.
The Chairman, through the Company Secretary, continues to
ensure that there is an ongoing process to review training and
development needs. Directors are provided with details of
seminars and training courses relevant to their role and are
encouraged to attend them. External input on legal and
regulatory developments impacting the business is also
given, as appropriate, with specialist advisers invited to
the Board and Committee meetings to provide briefings
on material developments.
In 2024, regulatory updates were provided as a standing
item at each Board meeting in a Secretary’s Report and at
each Remuneration Committee meeting in a Remuneration
Update Report. Information on developments impacting the
work of the Audit Committee is provided to the Committee by
the Finance team and Auditors. In 2024, the Board received
presentations on material topics such as the likely impact of
the forthcoming EU CSRD requirements, the Remuneration
Committee considered changes in guidance from key institutional
governance agencies and the Audit Committee reviewed the work
being undertaken to support the Company’s compliance with
the forthcoming corporate reform measures which will require
a Board declaration on the effectiveness of the Company’s
material controls.
Performance evaluation
The Board carries out an evaluation of its performance and
that of its Committees and individual Directors, including the
Chairman, every year. Details of the evaluation conducted in
2024 can be found in the Nomination Committee report.
Audit, risk and internal control
The Audit Committee is responsible for ensuring that policies
and procedures are in place to ensure the independence and
effectiveness of the Internal and External Audit functions. It also
reviews the effectiveness of the Group’s Internal and External
Audit functions, in addition to monitoring the integrity of the
Group’s financial and narrative statements. Further information
about the work of the Audit Committee can be found in the
Audit Committee report on pages 88–95.
The Board is responsible for setting the Group’s risk appetite
and ensuring that appropriate risk management systems are in
place. The Audit Committee assists the Board in reviewing the
effectiveness of the system of internal control, including financial,
operational and compliance controls, and risk management
systems. The Group’s approach to risk management and internal
control is discussed in greater detail on pages 67–71 and the
Group’s principal risks and how they are being managed or
mitigated are detailed on pages 72 and 73. The Viability
Statement which considers the Group’s future prospects is
included on page 71. Risk management and internal control are
also discussed in greater detail in the Audit Committee report.
All of the independent Non-executive Directors serve on both the
Audit and Remuneration Committees. They therefore bring their
experience and knowledge of the activities of each Committee to
bear when considering critical areas of judgement. This means
that, for example, the Directors are able to consider carefully the
impact of incentive arrangements on the Group’s risk profile and
ensure that the Group’s Remuneration Policy and programme are
structured to align with the long-term objectives and risk appetite
of the Company.
Remuneration
The Directors’ Remuneration Report on pages 103–129 is
incorporated into this Corporate Governance Report by
reference. It describes the work of the Remuneration Committee
in developing the Group’s policy on executive remuneration,
determining Director and senior management remuneration,
reviewing workforce remuneration and related policies – including
ensuring that these align with the Group’s strategic objectives and
culture, and overseeing the operation of the executive share
incentive plans. It also includes information on the Group’s
remuneration advisers.
Vesuvius plc
Annual Report and Financial Statements 2024
88
On behalf of the Audit Committee, I am pleased to present my
first Audit Committee report, since taking over as Chair of the
Audit Committee in May upon Douglas Hurt’s retirement from
the Board. Douglas chaired the Audit Committee for a little over
nine years and I would like to express the appreciation of the
Board for Douglas’ significant contribution.
The foundation of the Committee’s work is a recurring
programme of activities which are defined in an annual rolling
Audit Committee timetable. The Audit Committee then considers
additional items as matters arise or priorities change.
During the year we welcomed a new Head of Internal Audit who
I interviewed as part of the recruitment process. They will continue
to broaden the Internal Audit remit beyond financial matters to
focus on other material Group risks.
The Committee also considered the ongoing implementation
of the CFO’s Finance function strategy. The strategy focuses on
improving organisational design, systems, processes and controls
and the quality of finance personnel, with an objective of greater
cost-efficiency and improved business support.
In September, the Committee received a letter from the FRC
noting that, as part of its ordinary review processes, it had
conducted a review of Vesuvius’ Annual Report and Accounts
for the year ended 31 December 2023. The FRC noted that there
were no questions or matters with respect to the report that
required a response.
Robert MacLeod
Chair of the Audit Committee
5 March 2025
The Audit Committee comprises all the independent
Non-executive Directors of the Company.
Robert MacLeod was appointed Chair of the Committee on
15 May 2024, following Douglas Hurt’s retirement from the Board.
Robert is a Chartered Accountant and served as Finance Director
of W.S. Atkins Plc and Johnson Matthey Plc for ten years. Douglas
and Robert’s backgrounds provide them with the ‘recent and
relevant financial experience’ required under the Code.
The Code and Financial Conduct Authority Disclosure Guidance
and Transparency Rules also contain requirements for the Audit
Committee as a whole to have competence relevant to the sector
in which the Company operates. Vesuvius’ Non-executive
Directors have significant breadth and depth of experience,
both from their previous roles and from their induction and
other activities since joining the Vesuvius Board. The Directors’
biographies are shown on pages 76 and 77. The Board considers
that the Audit Committee as a whole has competence relevant
to Vesuvius’ business sector.
The Committee met five times during 2024 and once in 2025
prior to the signing of this Annual Report. The Board Chairman,
the non-independent Non-executive Director, the Chief Executive,
the Chief Financial Officer, and the Group Head of Internal Audit
were all invited to each meeting. Other management staff
attended as appropriate.
Audit Committee meetings are conducted to promote an open
debate; they enable the Committee to provide constructive
challenge of significant accounting judgements, and guidance
and oversight to management, to ensure that the business
maintains an appropriately robust control environment. Between
meetings, the Audit Committee encourages open dialogue
between the External Auditors, the management team and the
Group Head of Internal Audit to ensure that emerging issues are
addressed in a timely manner.
Robert MacLeod
– Committee Chairman
Carla Bailo
Italia Boninelli
(from 1 June 2024)
Kath Durrant
(until 31 July 2024)
Dinggui Gao
Douglas Hurt
(until 15 May 2024)
Eva Lindqvist
(from 15 May 2024)
The Company Secretary is
Secretary to the Committee
Audit Committee
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The Committee operates under formal terms of reference which
were reviewed during the year and updated to reflect the
implementation of the new UK Corporate Governance Code.
They are available to view in the Investors/Corporate
Governance/Board Committees section of the Company’s
website: www.vesuvius.com. Within these terms, the Committee
and its individual members are empowered to obtain outside
legal or other independent professional advice at the cost of
the Company. These powers were not utilised during the year.
The Committee may also secure the attendance at its meetings
of any employee or other parties with relevant experience and
expertise should it be considered necessary.
The Committee members believe that they received sufficient,
relevant and reliable information throughout the year from
management and the Internal and External Auditors to enable
the Committee to fully discharge its responsibilities. The work of
the Audit Committee is further elaborated in the remainder of
this report.
To monitor and assess the integrity of the financial statements of the
Company, and to review any significant financial reporting issues and
judgements which those statements contain:
–
It reviewed the integrity of the half-year and annual Financial
Statements and recommended their approval to the Board
–
It reviewed the Preliminary and Interim Results announcements
–
It deliberated on and challenged reports from the Chief
Financial Officer setting out: areas of judgement and/or
estimation, the rationale for the accounting treatment and
disclosures, the pertinent assumptions, and the sensitivities
of the estimates to changes in the assumptions
–
It reviewed provisions held for disposal, closure and
environmental costs, including the reasonableness of
underlying assumptions and estimates of costs, and the
quantum of any related insurance assets
–
It considered the Group’s outstanding litigation items,
and the adequacy of provisions held in regard to these
–
It reviewed the External Auditors’ Reports for the
half-year and year-end, on the treatment of significant issues,
which provided a summary for each issue, including an
assessment of the appropriateness of management’s
judgements or estimates
–
It challenged the assumed growth rates and discount rates
used for asset impairment assessments
–
It considered the Company’s going concern and viability
statements, reviewing the nature, quantum and assessment of
the significant risks to the business model, future performance,
solvency and liquidity of the Group which were modelled as
part of the scenarios
–
It advised the Board on whether the Annual Report and
Financial Statements, taken as a whole, are fair, balanced
and understandable and provided the information necessary
for the shareholders to assess the Group’s position and
performance, business model and strategy
–
It reviewed the management representation letters to be
provided to the External Auditors by the Company in respect
of the half-year and annual financial statements and
recommended them to the Board for approval
–
It confirmed that it was content that the External Auditors
had received access to all the information necessary to
conduct their audit
–
It considered the Group’s compliance with the requirements in
respect of TCFD reporting, including the assurance received
regarding the sustainability KPI data
–
It considered the small number of recommendations made
by the FRC for inclusion in the 2024 Annual Report
–
It reviewed the Group’s Tax Strategy, and commended the
Group’s UK tax strategy to the Board for approval
How the Audit Committee delivered on its responsibilities in 2024
Published financial information
Vesuvius plc
Annual Report and Financial Statements 2024
90
To review and monitor the Company’s internal financial controls and
risk management processes, and monitor and review the role and
effectiveness of the Company’s Internal Audit function and
audit programme:
–
It received reports from the Internal Audit function at each
meeting, summarising activity and outlining progress with
the audit programme
–
It monitored the responses from and follow-up by
management, to Internal Audit recommendations, including,
where necessary, short-term mitigations and discussed any
significant issues raised, the root causes for those issues and
the actions being taken to resolve them
–
It monitored and reviewed the role and effectiveness of the
Company’s Internal Audit function and audit programme,
considered the resourcing of the function and approved
the new Internal Audit Charter
–
It reviewed the resourcing and delivery of the 2024 Internal
Audit plan and approved the 2025 Internal Audit plan
–
It considered the annual effectiveness of the Internal Audit
process, receiving feedback from the CFO on the results of
an internal review of the Internal Audit function and the actions
proposed to further enhance the work of the function
–
It met with the Group Head of Internal Audit without
management being present on a regular basis, and discussed
a range of topics, ensuring that the function operated free
from management or other restrictions
–
The Committee Chair participated in the process to recruit
a new Group Head of Internal Audit
–
It received a report from the CFO on the strategy for the
Finance function
–
It reviewed the Group’s risk management processes and
internal controls, including the work undertaken to review
the Group’s risk register and the results of the Group’s
self-certification process
–
It recommended statements to be included in the Annual
Report concerning the effectiveness of the Group’s internal
financial controls and risk management systems
–
It considered the Group’s procedures for detecting fraud,
and carried out a review of all alleged instances of fraud
notified to the Committee
–
Members of the Committee met and discussed business
and control matters with senior management both during
Board presentations and during site visits
To oversee the relationship with the external auditors including making
recommendations to the Board in relation to their appointment,
negotiating and agreeing the statutory audit fee and the scope of the
statutory audit, approving any permitted non-audit services, reviewing
the findings of their work, assessing the effectiveness of the external
audit process and monitoring the external auditors’ processes for
maintaining independence:
–
It reviewed the findings of the work of PwC (the Group External
Auditors) including their key accounting and audit judgements,
how any risks to audit quality were addressed and their views
on interactions with senior management
–
It monitored the External Auditors’ independence, objectivity
and effectiveness
–
It reviewed the findings of the FRC’s annual Audit Quality
and Inspection Report of the External Auditors
–
It considered the External Auditors’ 2024 Audit Strategy and
approved the 2024 engagement letter. It also made
recommendations to the Board on the reappointment of
the External Auditors and agreed the annual fees
–
It reviewed and approved the non-audit services provided by
the External Auditors
–
It considered the intended rotation of the External Audit
Partner following the completion of the 2024 audit and, having
noted that the Chair of the Committee had met with the
proposed candidate, and having concluded that the individual
exhibited the appropriate skills and independence to fulfil the
role, approved the appointment of the new Audit Partner
–
It reviewed the effectiveness of the External Audit process,
receiving feedback from management on the results of an
internal review of the External Audit process and the areas
identified for further improvement
–
It met with the External Auditors without management being
present on a regular basis
How the Audit Committee delivered on its responsibilities in 2024
Risk management and internal control
External Audit
Audit Committee
continued
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Significant issues and material judgements
The Committee considered the following significant issues in
the context of the 2024 Financial Statements. It identified these
areas to be significant, taking into account the level of materiality
and the degree of judgement exercised by management.
The Committee resolved that the judgements and estimates
made on each of the significant issues detailed below were
appropriate and acceptable.
Impairment of goodwill
The 2024 year-end carrying value of goodwill was tested
against the current and planned performance of the CGUs.
The Committee considered the Board-approved medium-term
business plans and terminal growth assumptions, and the
discount rates used in the assessments. Relevant sensitivities
using reasonably possible changes to key assumptions were
evaluated. The detailed assumptions are provided in the Group
Financial Statements.
Given that the models indicated, even with the application of
reasonable sensitivities to the assumptions, that there remains
significant headroom between the Value in Use and the carrying
value, the Committee concurred that no goodwill impairment
charges were required.
Cost reduction programme expenses
In 2023, Vesuvius announced a multi-year cost reduction
programme. The Committee reviewed the nature and materiality
of the expenses being incurred to achieve targeted cost savings.
The Committee also considered disclosure of similar expenses
by other companies. The Committee agreed that disclosure
of these expenses as a separately reported item will provide
useful information, assisting users in better understanding the
underlying financial performance in the periods when the
programme costs are incurred or making projections of future
results. The Committee agreed with this classification of
expenses and considers the disclosure in the Annual Report
to be appropriate.
Provision for wastewater treatment in respect of disused mines
In 1999, the Group acquired Premier Refractories which owned
a disused clay mine in the United States. In 2018, wastewater
containing pollutants was discovered and in 2022 a water
treatment facility was installed. There is judgement to determine
both the annual expected treatment cost and the period over
which the cost will continue to be incurred. The Committee
reviewed the reassessment of expected water treatment costs
performed by the Company in 2024. The Committee also
considered the period over which water treatment costs are
expected to be incurred. After consideration and challenge,
and having reviewed the analysis of expected operations by the
Company, the Committee is satisfied that there are appropriate
levels of provisions set for committed water treatment costs and
that adequate disclosure has been made. The Committee also
reviewed the nature and materiality of costs arising from the
reassessment of the provision. The Committee agreed that
disclosure of the costs arising from the increase in provision
as a separately reported item will provide useful information,
assisting users in better understanding the underlying financial
performance of the Company. The Committee agreed with
this classification of costs arising from the increase of the
provision and considers the disclosure in the Annual Report
to be appropriate.
Other provisions
The Committee continues to monitor the implications of a number
of potential exposures and claims arising from litigation, product
quality, employee disputes, restructuring, environmental matters,
tax disputes and indemnities or warranties outstanding for
disposed businesses. After due consideration and challenge,
and having considered legal advice obtained by the Company,
the Committee is satisfied that there are appropriate levels of
provisions set aside to settle third-party claims and disputes,
and that adequate disclosure has been made.
Report to the Board on how the Committee has discharged its
responsibilities. Arrange for periodic reviews of its own performance and
review its constitution and terms of reference to ensure it is operating
effectively and recommend any changes it considers necessary to the
Board for approval:
–
It reviewed the forthcoming changes to the UK Corporate
Governance Code with respect to the requirement for
Companies to make a declaration of the effectiveness of the
businesses’ material controls and the assurance undertaken
of those controls as at the balance sheet date, and the actions
being taken to prepare for this requirement
–
It approved amendments to its terms of reference and
monitored developments in corporate governance that
were likely to impact the future work of the Committee,
including the development of the UK Government’s plans
to augment the regime on internal control and assurance
–
It conducted an evaluation of its performance
and effectiveness
–
It reported to the Board on the outcomes of
Audit Committee meetings
Governance
How the Audit Committee delivered on its responsibilities in 2024
Vesuvius plc
Annual Report and Financial Statements 2024
92
Fair, balanced and understandable reporting
The Committee considered all the information available to it in
reviewing the overall content of the Annual Report and Financial
Statements and the process by which it was compiled and
reviewed, to enable it to provide advice to the Board that the
Annual Report and Financial Statements are fair, balanced and
understandable. The Committee was satisfied that it could
recommend to the Board that the Annual Report and Financial
Statements are fair, balanced and understandable.
Risk management and internal controls
Risk management is inherent in management’s thinking and is
embedded in the business planning processes of the Group.
The Board has overall responsibility for establishing and
maintaining a system of risk management and internal control,
and for reviewing its effectiveness; the Audit Committee assists
the Board in reviewing the effectiveness of the Group’s system of
internal control, including financial, operational and compliance
controls, and risk management systems.
Committee members participated in this Board review of existing
risks and ongoing mitigating actions. The review continued to
focus on emerging risks and well as existing ones across all of
the Group’s markets, trading and other activities. Following this
process, the Group’s principal risks and uncertainties were
confirmed to remain appropriate and were therefore unchanged
in 2024.
The Committee considered the Company’s going concern
statement and challenged the nature, quantum and effects of the
combination of the unlikely but significant risks to the business
model, future performance, solvency and liquidity of the Group.
These were all modelled as part of the scenarios and stress testing
undertaken to support the Viability Statement. As part of this
review, the Committee considered the Group’s forecast funding
requirements over the next three years and analysed the impact
of key risks faced by the Group with reference to the Group’s debt
covenants; these included stress testing for a significant business
downturn, business interruption due to an unplanned loss of
a key plant and the impact of significant supply chain disruption.
The Committee noted that the Group’s debt headroom was
sufficient to accommodate the modelled stress scenarios.
As a result of its review, the Committee was satisfied that the
going concern statement and Viability Statement had been
prepared on an appropriate basis. The 2024 going concern
statement and the 2024 Viability Statement are contained
within the Risk, viability and going concern section on page 71.
The key features of the Group’s internal control system, which
provides assurance on the accuracy and reliability of the Group’s
financial reporting, are detailed in the Risk, viability and going
concern section on page 70. During 2024, the Committee
considered the process by which management evaluates internal
controls across the Group. PwC reports if there are any significant
control deficiencies identified during the course of their audit,
with no such deficiencies reported in 2024.
The Group is made up of several large operating units, but
also many small units in geographically diverse locations.
Consequently, segregation of duties, overlapping access controls
on systems and remote management oversight can give rise
to control vulnerabilities and fraud opportunities. The Group
continues to move towards greater harmonisation of its ERP
landscape and a shared services model for financial transactions
which is expected to enhance the overall internal control
environment in the smaller operating units.
The Group undertakes a range of activities to mitigate the risk
of fraud. This framework is regularly reviewed to determine areas
for improvement. Reducing the risk of fraud remains one of the
key areas of focus for Group Internal Audit.
Any control issues identified by management locally or as a result
of the work performed by Group Internal Audit are escalated as
appropriate. Group Internal Audit rates all control issues they
identify in terms of their significance and agrees remediation
plans with the management of the auditee and an action owner,
in each case establishing a target date for remediation. For
significant issues, management at all levels within the Business
Unit are engaged to agree the actions and remediation dates.
The status of the remediation is monitored in the Internal Audit
system and overdue issues are escalated appropriately with
management and are reported at Audit Committee meetings.
Where a specific audit identifies multiple issues, or where issues
arise on the progress of remediation activities, the Audit
Committee continues to challenge management to identify
root causes and ensure that the right organisational structure
and people are in place to address issues effectively.
The Board is responsible for the oversight and monitoring of the
Group’s Speak Up helpline, but the Audit Committee monitors
any complaints received by the Company regarding fraud,
accounting, internal accounting controls and auditing matters.
During the year it reviewed the investigations being undertaken in
relation to allegations of fraud and those implicated in them, as
well as the action subsequently taken to implement changes to the
Company’s practices and procedures to prevent any repetition.
Each year, the senior financial, operational and functional
management of the businesses self-certify compliance with
Group policies and procedures for the areas of the business under
their responsibility and confirm the existence of adequate internal
control systems throughout the year. The Committee reviews any
exceptions noted in this bottom-up exercise.
After considering these various inputs, the Committee was able to
provide assurance to the Board on the effectiveness of internal
financial control within the Group, and on the adequacy of the
Group’s broader internal control systems.
Audit Committee
continued
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Internal Audit
The Group’s Internal Audit function operates on a global basis
through professionally qualified and experienced individuals.
The team reports to the Group Head of Internal Audit, who in turn
reports directly to the CFO and the Chair of the Audit Committee.
The Company has appointed a new Group Head of Internal Audit,
who joined Vesuvius in September 2024.
The Committee received, considered and approved the 2024
Internal Audit plan which was constructed using a risk-based
approach to cover the Group’s control environment. The plan was
based on the premise that all operating units are audited at least
once every three to four years, and each of the large operating
entities located in Germany, the US, China, Mexico and Brazil
are audited on an annual basis.
Throughout 2024, Internal Audit continued to perform a
programme of audits focusing on internal financial controls and
key compliance topics, alongside audits with a focused scope
aligned to the principal risks. In total, five categories of audit
were conducted:
–
Financial controls audits
–
Compliance audits
–
Focused audits (contract audits, capex projects,
IT procurement, sustainability reporting, revenue
and service contracts)
–
IT audits
–
Follow-up audits
The majority of the 32 audit assignments undertaken in 2024
(2023: 35) focused on financial controls.
The Committee received a report from the Group Head of
Internal Audit at each of its meetings detailing progress against
the agreed plan, and key trends and findings. An update on
the progress made towards mitigating open issues was also
given. Common themes emerging from Internal Audit reports
coupled with Internal Audit and management’s assessment of risk
have informed the development of the 2025 Internal Audit plan.
The 2025 plan also continues to include audits related to the
Group’s principal risks.
Internal Audit monitors the progress made on the resolution of
identified issues, and meetings continue to be held with each
Business Unit President to ensure that engagement on the
resolution of those issues is clearly understood at all levels
of the business and responsibility for remediation has been
appropriately assigned. The results are communicated to the
Audit Committee which also involves senior management
as necessary to provide an update against any high-priority
actions. Internal Audit undertakes follow-up reviews as required.
In situations where audit findings require longer-term solutions,
the Audit Committee oversees the process for ensuring that
adequate mitigating controls are in place.
At the end of the year the CFO also conducted an internal review
of the effectiveness of the Internal Audit function.
Having considered the work of the Internal Audit function during
2024, including progress against the 2024 Internal Audit plan,
the quality of reports provided to the Committee, and the results
of the review of the function’s effectiveness, the Committee
concluded that the Group Internal Audit function operated
effectively during 2024, exhibiting an appropriate level of
independence and challenge.
External Audit
Auditors’ appointment
In 2017, the Company appointed PricewaterhouseCoopers LLP
(‘PwC’) as External Auditors to the Company and the Group, and
Mazars LLP (‘Mazars’) to audit the non-material entities within the
Group. Darryl Phillips serves as the PwC audit partner responsible
for the Group audit, a role he assumed following the completion of
the 2020 half-year review. In accordance with the usual time frame
for Audit Partner rotation, Darryl will be stepping down from the
role following the completion of the 2024 year-end audit, and will
be replaced by Linda Kempenaar.
Under the Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes
and Audit Committee Responsibilities) Order, the Audit
Committee is required to report in which year the Company
proposes to complete a competitive tender process in respect of
the statutory External Auditor, and the reasons why the proposed
year for the competitive tender process is in the best interests of
the shareholders. In compliance with the Order, the Audit
Committee confirms that a competitive tender process for the
appointment of a statutory auditor will, subject to satisfactory
annual reviews of the effectiveness of the External Auditors and
its costs in the intervening period, be conducted later this year
or next year with a view to recommending the appointment of
a new statutory auditor or the reappointment of the incumbent
auditor, for the financial year ending December 2027. The Audit
Committee believes that conducting a competitive tender process
for the appointment of a new statutory auditor for the financial
year ending December 2027 will allow enough time to ensure any
successor firm would be independent on appointment, and in the
best interests of the shareholders.
Vesuvius plc
Annual Report and Financial Statements 2024
94
2024 Audit plan
During the year the Committee evaluated the PwC Group audit
scope for 2024. The year-end audit plan was based on agreed
objectives, with the audit focused on areas identified as
representing significant risk and requiring judgement. In order
to manage costs, and ensure that the Group maintains audit
relationships outside the ‘Big 4’, Mazars undertakes some of the
Group audit work under the direction of PwC. It is principally
responsible for the statutory audits of the non-material Group
subsidiaries, but it also undertook specific audit procedures for
certain component entities that were within PwC’s Group audit
scope in 2024.
PwC maintained an ongoing dialogue with the Audit Committee
throughout the year, providing regular updates, including
commentaries on significant issues and its assessment of
consistency and appropriateness in the judgements and
estimates made by management. Private sessions were held with
PwC without management being present. PwC confirmed that its
work had not been constrained in any way and that it was able
to exercise appropriate professional scepticism and challenge
throughout the audit process. The Chairman of the Audit
Committee met on a number of occasions with PwC to monitor
the progress of the audit and discuss questions as they arose.
The Independent Auditors’ Report provided by PwC on pages
139–146 includes PwC’s assessment of the key audit matters.
These key audit matters are discussed in the significant issues
and material judgements comments above. The report also
summarises the scope, coverage and materiality levels applied
by PwC in its audit. As part of the audit planning process and
based on a detailed risk assessment, the Committee agreed
a materiality figure of £9.1m for Group financial reporting
purposes which is 7% higher than last year (£8.5m) and is based
on 5.0% of three-year average profit before tax adjusted for
non-recurring separately reported items. Importantly, much
lower levels of materiality are used in the audit fieldwork on the
individual businesses across the Group and these lower figures
drive the scope and depth of audit work. Any misstatement at
or above £0.45m was reported to the Committee.
There were no significant changes this year to the coverage of the
audit which stood at 73% of the Group’s revenue and 88% of the
Group’s profit before tax. This coverage was considered to be
sufficient by the Committee. The audit coverage is reflective of the
long tail of smaller businesses within the Group that individually
are not ‘material’ to the Group result.
The PwC audit fee approved by the Audit Committee was £2.3m.
This was constructed bottom-up on a local currency basis and
was assessed in light of the audit work required by the agreed
materiality level and scope. The fee agreed with Mazars for
the audit of the non-material entities and three material entities
was £1.1m, resulting in a combined audit fee for 2024 of £3.4m,
compared with £3.3m in 2023.
Independence and objectivity
The Committee is responsible for safeguarding the independence
and objectivity of the External Auditors in order to ensure the
integrity of the External Audit process. It is responsible for the
implementation and monitoring of the Group’s policies on
External Audit, including the policy on the employment of former
employees of the External Auditors, and the policy on the
provision of non-audit services by the External Auditors. To assist
with its assessment of independence, the Committee also sought
regular confirmation from the incumbent External Auditors
during 2024 that they considered themselves to be independent of
the Company in their own professional judgement, and within the
context of applicable professional standards. It assessed the work
of the External Auditors, reviewing compliance against the
non-audit services policy and reviewed the details of the non-
audit services provided by the External Auditors and associated
fees. As a result of its review, the Committee concluded that the
External Auditors remained appropriately independent.
Non-audit services
Vesuvius operates a policy for the approval of non-audit services.
A copy of the current policy is available to view in the Audit
Committee section of the Investors/Corporate Governance
pages of the Company’s website: www.vesuvius.com.
The use of the External Auditors for the provision of non-audit
services is strictly prohibited except for specific permitted
audit-related services. These comprise: Category 1 services
which the External Auditors are obliged to perform due to law
or regulation, such as regulatory and solvency reports; and
Category 2 services which could be provided by others
(albeit there are typically significant efficiencies to be had when
done in combination with the audit, such as interim reporting).
An annual budget for the additional Category 2 service fees
proposed to be paid to the External Auditors in the following year
is presented for pre-approval to the Audit Committee each year.
Audit Committee approval is required for expenditure in excess of
this approved budget.
All audit-related and permissible non-audit services proposed to
be carried out for any Group company worldwide by the External
Auditors must be pre-approved before an engagement is agreed.
Pre-approval must be obtained from the Chief Financial Officer,
who will confirm that the Audit Committee has approved the
engagement. Any assignment proposed to be carried out by the
External Auditors must also have been cleared by the External
Auditors’ own internal pre-approval process, to assess the firm’s
ethical ability to do the work.
In 2024, the fees for non-audit services payable to PwC amounted
to £0.2m (2023: £0.2m). The 2024 fees represent payment for
assurance services related to the review of the Group’s half-year
financial statements, quarterly reviews and tax form audits in
India (as required by regulation) and Mexico, and subscription to
the PwC knowledge database. These are services where it was
considered most efficient to use PwC because of their existing
knowledge of the business or because the information required
was a by-product of the audit process. In each of the past four
years the non-audit-related fees have represented <9% of the
statutory audit fees.
Audit Committee
continued
95
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Effectiveness of the External Audit process
The Committee and the Board are committed to maintaining
the high quality of the External Audit process. Each year the
Committee carries out a formal assessment of the performance
of the External Auditors in carrying out their work and of the audit
process in general. Input into the evaluation in 2024 was obtained
from management and other key Company personnel, members
of the Audit Committee and the External Audit team. The review
focused on the External Auditors’ mindset and culture, skills,
character and knowledge, and the quality of its controls, as set
out in the guidance for audit committees prepared by the FRC.
The evaluation of the External Auditors included the
following steps:
–
A survey of key finance and non-finance stakeholders
–
A commentary-based survey of Audit Committee members
focused on their experience of working with PwC
–
A review of other external evidence on PwC audit quality
(e.g. a report on PwC by the FRC)
–
Discussions with PwC and key finance and
non-finance personnel
The quality of the audit team, their audit approach, technical
expertise and independence were all positively rated along with
their communication of issues and findings. Debrief meetings
were held at a local level to discuss the 2023 audit, and to
constructively share feedback that would facilitate further
improvements to the audit planning for the 2024 audit. A set of
Audit Quality Indicators for the 2024 audit were agreed with
PwC. Fulfilment of these will be monitored by the Committee.
Reappointment of PwC
The Committee is responsible for making recommendations to
the Board in relation to the appointment, reappointment and
removal of the External Auditors. In undertaking this duty, the
Committee takes into consideration a number of factors
concerning the External Auditors and the Group’s current
activity, including:
–
The results of its most recent review of the effectiveness of
the Auditors
–
The results of its review of the independence and objectivity
of the Auditors, particularly in light of the provision of
non-audit services
–
Its ability to coordinate a global audit, working to
tight deadlines
–
The cost competitiveness of the Auditors in relation to
the audit costs of comparable UK companies
–
The tenure of the incumbent Auditors
–
The periodic rotation of the senior audit management assigned
to the audit of the Company
–
External reviews of the performance and quality of the
Auditors, including:
–
The annual report issued by the Audit Quality Review team of
the Financial Reporting Council on the work of the Auditors
–
The Auditors’ own annual Transparency Report
Having considered the aforementioned factors, the Committee
recommended to the Board that PwC be reappointed. It confirms
that its recommendation is free from the influence of any third
party and that there are no contractual restrictions on the choice
of auditors. A resolution proposing the reappointment of PwC
will be included in the Notice of AGM for 2025.
Statement of compliance with the Competition and
Markets Authority (CMA) Order
The Committee considers that the Company has complied with
the Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes
and Audit Committee Responsibilities) Order 2014 (Article 7.1),
published by the CMA on 26 September 2014, including with
respect to the Audit Committee’s responsibilities for agreeing
the audit scope and fees and authorising non-audit services.
Audit Committee evaluation
The Audit Committee’s performance was evaluated as part
of the Board and Committee performance evaluations
performed by the Company Secretary, which are further
described in-depth on pages 101 and 102. The review concluded
that the Committee continued to operate effectively, with an
appropriately diverse membership, access to good quality
information and well-prepared agenda. The quality of discussion
was highly rated, with a good level of engagement and open
discussion. The execution of a smooth transition to the new Chair
was also positively noted. It was agreed that the Divisional
Finance VPs would be invited to present at future meetings to
enhance the work of the Committee, and that priorities for the
Committee in 2025 would include supporting the CFO in the
implementation of the Finance function strategy and working
with the new Group Head of Internal Audit to further enhance
the work of the Internal Audit function.
On behalf of the Audit Committee
Robert MacLeod
Chair, Audit Committee
5 March 2025
Vesuvius plc
Annual Report and Financial Statements 2024
96
Carl-Peter Forster
– Committee Chairman
Carla Bailo
Italia Boninelli
(from 1 June 2024)
Kath Durrant
(until 31 July 2024)
Dinggui Gao
Friederike Helfer
Douglas Hurt
(until 15 May 2024)
Eva Lindqvist
(from 15 May 2024)
Robert MacLeod
The Company Secretary is
Secretary to the Committee
Nomination Committee
Dear Shareholder,
In 2024, the Committee’s focus on Board recruitment continued,
with Eva Lindqvist joining at the AGM to replace Douglas Hurt
as Senior Independent Director, and Italia Boninelli appointed in
June to take over from Kath Durrant as Chair of the Remuneration
Committee in July.
The Committee also continued to spend time in 2024 on senior
management development and succession planning, particularly
with respect to the changes in membership of the Group Executive
Committee. The Committee monitored the turnover, diversity
and promotional potential of staff reporting to members of the
GEC, and considered the Group’s wider talent management
programme. It reviewed the talent distribution and diversity in
the Group’s senior and middle management, and the challenges
and opportunities for the Group’s talent pipeline. In addition,
the Committee reviewed progress with the Group’s diversity
initiatives, noting the positive progress made in attracting
more women to join the Group.
Yours sincerely
Carl-Peter Forster
Chairman, Nomination Committee
5 March 2025
Role and responsibilities
The Nomination Committee’s foremost priorities are to ensure
that the Company has the best possible leadership and that plans
are in place for orderly succession to both the Board and Group
Executive Committee positions. The Committee ensures that the
procedure for the selection of potential candidates for Board
appointments – either as an Executive Director or independent
Non-executive Director – is formal, rigorous and transparent,
and undertaken in a manner consistent with best practice. It also
ensures that the Board is composed of individuals with the
appropriate drive, abilities, diversity and experience to lead the
Company in the delivery of its strategy, and that appointments
are made on merit, against objective criteria, with due regard for
the benefits of gender, social, ethnic and cognitive diversity, and
personal strengths.
The Committee is composed solely of Non-executive Directors
and is chaired by the Chair of the Board. The Chief Executive and
Chief HR Officer attend all scheduled meetings of the Committee.
Members’ biographies are set out on pages 76 and 77. The
Committee met five times during the year. It operates under
formal terms of reference, a copy of which is available on the
Group’s website at: www.vesuvius.com/en/investors/corporate-
governance/committees.html.
The Committee and its members are empowered to obtain
outside legal or other independent professional advice at the cost
of the Company in relation to its deliberations. These rights were
not exercised during the year. The Committee may also secure the
attendance at its meetings of any employee or other parties it
considers necessary.
Board composition
The Committee keeps the current and future membership needs
of the Board and its Committees under continual review.
The independence and diversity of the Board, along with the
Company’s ongoing compliance with the Board Diversity Policy,
and the requirements of the UK Listing Rules as they pertain to
the Committee, are also examined as part of the Group’s annual
corporate governance review. Whilst the Board recognises that
over time the proportion of female Directors may fluctuate
naturally as Board members retire and new Directors are
appointed, the Board will always seek to review a diverse list of
candidates for any Board position.
Having taken into account the structure, size and composition of
the Board, along with prospective retirements of Board members,
the Committee sought to recruit additional resource for the Board
and its Committees in 2024.
97
Strategic report
Governance
Financial statements
–
It reflected on the balance of skills, knowledge and experience
of the current Directors and compared this to the list of key
skills the Board assesses are needed to support the delivery
of the Company’s strategy
–
It reviewed the membership needs of the Board and its
Committees, considering the existing tenure and the
prospective rotation and retirement of Board members
–
It recommended to the Board that Eva Lindqvist be appointed
as a new Non-executive Director
–
It appointed Spencer Stuart to undertake a search for a new
Non-executive Director, to take over the role of Chair of the
Remuneration Committee from Kath Durrant on her
retirement from the Board
–
It considered and interviewed potential candidates, including
assessing whether individuals had the appropriate time
available to commit to the roles, before making final
recommendations on the appointment of the preferred
candidate, Italia Boninelli, to the Board
–
It ensured, in line with good governance, that the Committee
continued to review succession processes for the Group’s
Executive Directors
–
It maintained oversight of the changes to membership of the
GEC during the year, reviewing talent development and
succession proposals for the resourcing of vacant roles
going forward
–
It undertook an in-depth review of the talent management
programme for the Group’s senior and middle management,
considering the promotional potential of these individuals,
and the diversity and level of turnover in this group
–
It reviewed the Board and senior management succession
plans, focusing particularly on any gaps in these and the
action being undertaken to ensure these are filled on
a timely basis
–
It reviewed the Group’s wider talent pipeline, including the
methods used to identify and develop talent across the Group
–
It participated in the Board’s evaluation of its performance,
reviewing the Committee’s performance and effectiveness
during 2024, including evaluating the contribution of each
Non-executive Director and whether they continued to be
able to allocate sufficient time to fulfil their duties
–
It reviewed the diversity of the Group’s employees, with a focus
on gender diversity and the range of nationalities represented
in the Senior Leadership Group
–
It reviewed the Group’s progress in achieving its diversity
targets, noting the actions being taken to improve the Group’s
diversity, particularly the number of women employed
throughout the Group
–
It approved the Nomination Committee report for publication
in the Annual Report
–
It reviewed the Committee’s terms of reference and
recommended to the Board a minor change to reflect the
updated UK Corporate Governance Code
Board composition
Succession planning and senior management development
Committee evaluation
Diversity
Governance
How the Nomination Committee delivered on its responsibilities in 2024
Vesuvius plc
Annual Report and Financial Statements 2024
98
Requirement – The Committee sought to recruit a new Remuneration Committee Chair.
Areas covered:
Provided by:
Vesuvius’ purpose, strategy, customer and supplier landscape
and strategic priorities
Attending the Group’s June Strategy meetings and further
one-to-one sessions with the CFO, BU Presidents, VP Business
Development and Chief Digital Officer
Business operations and culture
Vesuvius Technical/Product Training, site visits to operations and
a customer in China with the Board, and to Skawina in Poland
Financial position and performance, risk management,
tax and treasury matters
CFO, External Audit Partner, Company Broker, Head of Investor
Relations, Global Shared Services Manager, Group Head of Tax,
Group Treasurer
People management and Executive compensation strategy
Chief HR Officer, External Remuneration Adviser
Health and safety and sustainability strategy
VP Sustainability, provision of policies/procedures, access to past
Board sustainability presentations
Corporate governance, Board operations, legal and
regulatory matters
General Counsel/Company Secretary, Compliance Director
Remuneration Committee Chair appointment process
Italia Boninelli and Eva Lindqvist’s induction programmes
The global specialist search consultant, Spencer Stuart, was
retained to assist with the search. Spencer Stuart has adopted
the Voluntary Code of Conduct addressing gender diversity
and best practice in search assignments. It does not have any
other connection with the Group, other than in respect of
management recruitment work undertaken as part of normal
trading activities.
A candidate specification was prepared taking into
consideration the balance of skills, knowledge and experience
of the existing Directors, the diversity of the Board, the
independence of continuing Board members, and the ongoing
requirements and anticipated strategic developments of the
Group. A candidate was sought with experience serving on
the Remuneration Committee of a listed UK company.
Spencer Stuart identified potential candidates and produced
a diverse longlist for consideration. A shortlist was drawn up,
based upon the objective criteria identified at the beginning
of the process and these candidates were invited for interview
with the Chairman.
The preferred candidates then met with other members
of the Board. Italia Boninelli was then identified as the lead
candidate, and detailed external references were taken up.
Italia demonstrated that she had sufficient time available to
devote to the role and the Committee confirmed that there
were no potential conflicts of interest.
The Committee made a formal recommendation to the
Board for the appointment of Italia, and the Board approved
the appointment.
A comprehensive induction programme was put in place.
Italia was given access to past Board and Committee papers,
and she attended the Board’s June Strategy meetings where she
received immersive insight into the Group’s strategy for its global
businesses. She also attended the whole Board’s visits to the
Group’s operations in China in September. A programme of
formal meetings with senior executives was also set up to ensure
that she was quickly able to assimilate additional fundamental
information about the business and the Group’s operations.
Brief
Search considerations
Review
Selection
Appointment
Induction
Nomination Committee
continued
99
Strategic report
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Financial statements
Diversity
The Group’s policy on Diversity and Equality outlines Vesuvius’
commitment to encouraging a supportive and inclusive culture
among its global workforce, promoting diversity and eliminating
any potential discrimination in our work environment. (See the
Policy summary on page 57.) Vesuvius’ Board Diversity Policy
explains how this commitment manifests in relation to the Board.
Vesuvius recognises the value of a diverse and skilled workforce
and is committed to creating and maintaining an inclusive and
collaborative workplace culture that will provide sustainability for
the organisation into the future. We believe that the dedication
and professionalism of our people is the most significant
contributor to our success. Having a balance of cultures,
ethnicities and genders helps to promote innovation, creativity
and engagement.
The diversity of our senior management cadre and employees is
one of the core strengths of the Group. (See page 57 for further
information about the Group’s approach to diversity.)
The Nomination Committee considers the Group’s progress
in implementing the Group’s diversity policy each year and
the achievement of the Group’s diversity targets. Across the
Group in 2024, 15% of our workforce were women, which is no
change versus 2023. The Group has set a target of ensuring
that 25% of the Senior Leadership Group of the Company
(which comprises c.150 individuals) are female by 2025.
This KPI has been incorporated into the long-term incentives of
our senior management. The number of women in the Senior
Leadership Group increased slightly to 21% in 2024 (2023: 20%),
but is still disappointingly well below target. Each of the Group’s
four Business Units has put in place strategies to enhance
gender diversity.
As at 31 December 2024, the gender balance of the Group’s employees was as follows:
Female
Male
Gender not
available
1
Total
Female
Male
Group Executive Committee members
2
6
8
25%
75%
Leadership roles reporting to members of the GEC
12
41
53
23%
77%
Senior Managers
2
14
47
61
23%
77%
All other employees
1,659
9,410
3
11,072
15%
85%
Vesuvius employees
1,673
9,457
3
11,133
15%
85%
Directly supervised contractors
83
324
2,175
2,582
Vesuvius employees and directly supervised contractors
1,756
9,781
2,178
13,715
Senior Leadership Group
3
32
121
153
21%
79%
1.
The Group had 2,582 directly supervised contractors who were contracted through third parties and for whom the Group does not hold detailed
employment records.
2.
Senior Managers comprise Group Executive Committee members plus key leadership roles reporting directly to members of the Group Executive Committee.
3. The Senior Leadership Group comprises the 153 most senior managers in the organisation.
Senior management development and succession
The Committee’s succession planning activities also encompass
the senior management levels immediately below the Board,
aiming to support and encourage the growth of a pool of talent
able to step up to the Group’s top roles. As a matter of routine,
the Committee is informed of changes in personnel amongst
Senior Managers and the Committee maintained oversight of
the changes to membership of the Group Executive Committee
throughout the year.
The Committee considers succession plans for each member of
the GEC. It assesses the availability of candidates who could cover
the roles on a short-term contingency basis should the need arise,
along with the pool of medium-term and long-term talent
available for future development into specific roles. It monitors the
level of turnover and diversity in the broader management group,
along with the balance of internal promotions and external
appointments into these roles. During 2024, it monitored
succession plans for members of the GEC, and examined the
Group’s talent management processes and how the senior and
middle management cadres were performing – all aimed at
ensuring the Group has a pipeline of experienced and talented
managers to succeed to roles at the highest level of the business.
In this process, the Committee focused both on the bench strength
in key skills and expertise, as well as the talent pipeline in critical
geographies. The Committee also considered the level of turnover
in the senior and middle management tiers and the challenges
and opportunities for developing and retaining an appropriate
talent pool.
Vesuvius plc
Annual Report and Financial Statements 2024
100
Board diversity
A large part of the work of the Nomination Committee focuses on
ensuring that the Board and its Committees have the appropriate
range of diversity, skills, experience, independence and
knowledge of the Company and the markets in which it operates,
to enable them to discharge their duties and responsibilities
effectively. The Board Diversity Policy confirms the Group’s
commitment to maintaining a diverse Board, while continuing
to appoint candidates based on merit. We continue to look
at diversity in its broadest sense – reflected in the range of
backgrounds and experience of Board members who are
drawn from different nationalities and have managed
a variety of complex global businesses. The Nomination
Committee recognises that diversity is a key ingredient in
creating a balanced culture for open discussions at Board
level and in minimising ‘groupthink’.
All independent Non-executive Directors serve on the Audit
and Remuneration Committees, and the Chairman and all the
Non-executive Directors serve on the Nomination Committee,
so the diversity of the Board’s principal Committees reflects the
diversity of our Non-executive Directors. The Nomination
Committee therefore considers the diversity of the Non-executive
Directors as a stand-alone cadre, as well as the diversity of the
Board as a whole, when considering recruitment to the Board.
In 2023, the Board set a target for at least 40% female Board
membership, with at least one of the senior Board positions
(Chair, CEO, SID or CFO) to be held by a woman by the end of
2024. As at 31 December 2024, women made up 44% of the
Directors (versus 33% as at 31 December 2023), and one of the
senior Board positions (SID) was held by a woman. In addition,
one of the Directors (11%) identified as having an Asian heritage,
and another Director (11%) identified as having a mixed-race
heritage, with no changes in these numbers since 31 December
2024. Currently, seven Directors hold citizenship outside the UK.
Women made up 60% of the membership of the Audit and
Remuneration Committees as at 31 December 2024 (40% in
2023), and 57% of the membership of the Nomination Committee
(43% in 2023). There have been no changes in the constitution of
the Board or its Committees between 31 December 2024 and the
date of this report.
As at 31 December 2024, the gender balance of the Directors and members of the Group Executive Committee was as follows:
Number of
Board
members
Percentage of
the Board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and Chair)
Number in
Group
Executive
Committee
Percentage of
Group
Executive
Committee
Men
5
56%
3
6
75%
Women
4
44%
1
2
25%
Not specified/prefer not to say
–
–
–
–
–
The data for this table was collected by asking individuals to self-report against the categories displayed.
As at 31 December 2024, the ethnic background of the Directors and members of the Group Executive Committee was as follows:
Number of
Board
members
Percentage of
the Board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and Chair)
Number in
Group
Executive
Committee
Percentage of
Group
Executive
Committee
White British or other White (including minority-white groups)
7
78%
75%
6
74%
Mixed/Multiple ethnic groups
1
11%
25%
1
13%
Asian/Asian British
1
11%
–
1
13%
Black/African/Caribbean/Black British
–
–
–
–
–
Other ethnic group
–
–
–
–
–
Not specified/prefer not to say
–
–
–
–
–
The data for this table was collected by asking individuals to self-report against the categories displayed.
As at 31 December 2024, the gender balance of the Directors serving on the Audit, Remuneration and Nomination Committees was
as follows:
Number of
Audit and
Remuneration
Committee
members
Percentage of
the Audit and
Remuneration
Committee
Number of
Nomination
Committee
members
Percentage of
the
Nomination
Committee
Men
2
40%
3
43%
Women
3
60%
4
57%
Not specified/prefer not to say
–
–
–
–
The data for this table was collected by asking individuals to self-report against the categories displayed.
Nomination Committee
continued
101
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Financial statements
Board evaluation
The Board carries out an evaluation of its performance in the last
quarter of each year. This year’s evaluation was overseen by the
Chairman, and after a number of years’ external facilitation by
the corporate advisory firm, Lintstock, was internally facilitated
by the Company Secretary.
Each evaluation was conducted via a series of targeted
questionnaires, sent to all the Directors, the Company Secretary
and Chief HR Officer. As with previous years, the evaluation
covered both the performance of the Board and that of its
Committees, along with individual reviews of each Director
and an analysis of the performance of the Chairman. Narrative
reports were prepared for the Board, and the Audit, Nomination
and Remuneration Committees.
In 2024,
the Board
assessment
focused on six
core areas:
Board dynamics
Allocation of Board time
Strategy
Workforce engagement
Risk management
Ongoing priorities
Vesuvius plc recognises the value of a diverse and skilled
workforce and is committed to creating and maintaining an
inclusive and collaborative workplace culture that will provide
sustainability for the organisation into the future. Vesuvius is
committed to ensuring equality of opportunities, with the aim of
promoting diversity and inclusion. In this context, the promotion
of diversity and inclusion relates, but is not limited to, both
protected and non-protected characteristics, including gender,
age, educational and professional background, ethnicity, sexual
orientation, disability and socio-economic background.
Objectives
–
The Nomination Committee will focus on ensuring that it, the
Board and the Board’s Committees, have the appropriate
range of diversity, skills, experience, independence and
knowledge of the Company to enable them to discharge their
duties and responsibilities effectively
–
As all independent Non-executive Directors serve on the
Audit and Remuneration Committees, and the Chairman and
all of the Non-executive Directors serve on the Nomination
Committee, the diversity of the Board’s principal Committees
reflects the diversity of the Non-executive Directors. For the
purposes of considering the diversity of the Board’s
Committees, the Nomination Committee will therefore
consider the diversity of the Non-executive Directors as
a stand-alone cadre, as well as the diversity of the Board
as a whole, when considering recruitment to the Board
–
The Nomination Committee will ensure that all appointments
to the Board and its Committees are aligned with Vesuvius’
Policy, and are based on merit with each candidate assessed
against objective criteria focused on the skills, experience and
knowledge required of the position, and with due regard to
the benefits of diversity and inclusion on the Board
–
The Nomination Committee will engage with executive search
firms in a manner which ensures that opportunities are taken
for a diverse range of candidates to be considered for
appointment. This will include ensuring that the Committee
only uses search firms that are signed up to the Voluntary Code
of Conduct for Executive Search Firms
–
The Nomination Committee supports senior management
efforts to increase diversity in the senior management pipeline
to facilitate succession planning towards executive Board
positions. With respect to the representation of women on the
Board, the Board is supportive of the initiatives to increase the
proportion of women on the boards of FTSE 350 companies.
Vesuvius aims, by the end of 2024, to achieve a Board with at
least 40% of the Directors being women, and at least one of
the senior positions (the Chair, Chief Executive, Senior
Independent Director and Chief Financial Officer) being
held by a woman, while continuing to appoint candidates
based on merit
–
With regard to ethnic diversity, the Board is committed to
ensure that at least one Director is from a minority ethnic
background
–
The Board recognises that over time the proportion of women
Directors and Directors from a minority ethnic background
may fluctuate naturally as Board members retire and new
Directors are appointed
View the Board Diversity Policy on the Vesuvius website at:
www.vesuvius.com/content/dam/vesuvius/corporate/
Sustainability/policies/board-diversity-policy-july-2023.pdf
Vesuvius Board Diversity Policy
Vesuvius plc
Annual Report and Financial Statements 2024
102
Overall, the Board was felt to be well-composed with a good
range of skills and experience, covering a mixture of different
industrial sectors, functional expertise and geographies. The
Board’s dynamics were generally positively rated with good
collaboration and high-quality debate, though it was noted that
there had been heightened tension in the Boardroom around
some topics during the year. The Board agenda was considered
balanced, with an improved focus on strategic and commercial
matters. The Board’s understanding of the views and
requirements of stakeholders was also rated highly, with the
Board’s visit to a customer site in 2024 identified as particularly
valuable. The Board was felt to engage well with the workforce
through site visits and discussions, but it was felt that more
work could be done to allow Directors to fully understand the
Company’s culture and performance challenges through those
visits. The Board’s oversight of risk management was considered
to have improved, with thorough annual assessments.
The Chairman conducted one-on-one meetings with each of
the Directors, to discuss the evaluation process and outcomes,
and ensure that the Group was drawing effectively on each of
their skills and experience. He concluded that each Director
continued to contribute effectively to the work of the Board.
From these discussions a number of points for further attention
of the Board were highlighted, including the continued need to
deepen the Board’s understanding of the priorities and dynamics
of the Group’s customer and supplier base, as well as
developments in the structure of the Group’s competitive
environment. The importance of robust succession planning
was also re-emphasised, together with ensuring that through its
agenda and activities, the Board continues to meet senior
managers, to gain understanding and feedback on the
operational issues that are of most importance to the Group.
Each of these areas was seen as a key input to the Board’s
overall discussions on Group strategy and its development.
An assessment of the Chairman was conducted by the Senior
Independent Director with overall feedback provided to the
Chairman on the positive role he is playing. Each of the
Committees was also considered to have operated effectively
during the year.
As in previous years, a set of action points was compiled from the
output of the evaluation to ensure that its findings are integrated
into the Board’s activities. These will be implemented by the Board
in 2025, with progress reviewed by the Board throughout the year.
The 2023 evaluation identified the following priorities for future Board attention. These were addressed during 2024 as follows:
Area
Issue
Action taken in 2024
Strategy
Measure the impact and success of
the Group’s investment in R&D
Presentations on R&D strategy were received from each Business Unit R&D
head. These included information on new product development, allocation
of resources and areas of critical focus, as well as the commercial impact of
historical R&D.
Continue the development of the
Board’s understanding of priorities
and dynamics in our customer and
supplier relationships
In addition to the Chief Executive’s regular updates in this area, the Group Head
of Strategy and the VP Purchasing again presented to the Board on customer
and supplier base, and on structural changes and developments during the
year. These areas were also highlighted by the BU Presidents in their operational
presentations to the Board.
People and
organisation
In line with good governance, ensure
a robust process is in place to consider
Executive Director succession
The Nomination Committee continued to review its strategies for Executive
Director succession, focusing on process, readiness and the talent pipeline.
Board dynamics
Ensure Board agenda – and
presentations to the Board – enable
the Board to focus on the key issues/
priorities to drive business success
The Board’s agenda continued to develop with increased focus on strategy,
operational challenges and the Group’s priorities for development. Each of the
BU Presidents presented to the Board on issues specific to their Business Units,
identifying critical activities to drive performance and efficiency.
Facilitate greater contact between
the Board and BU Presidents
As noted above, as well as presenting formally to the Board twice in each year,
the BU Presidents supported and attended site visits with Board Directors
during the year. The BU President for Flow Control also travelled with the
Board during its visit to China in September 2024.
Committee evaluation
The Committee’s activities were a separate part of the evaluation
of Board effectiveness during the year. The results of the
evaluation questionnaires circulated by the Company Secretary
were collated, and a written report tabled and discussed by the
Committee, as well as being discussed in one-on-one meetings
with the Chairman.
The Nomination Committee was considered to operate
effectively, with the smooth rotation and induction of new
Non-executive Directors in 2024 noted as a key achievement.
The Committee was considered to comprise individuals with
appropriate experience, skills and knowledge and the quality
of discussion in meetings was highly rated, with subjects
handled efficiently.
The quality of information provided to the Committee was also
rated highly, although the need to deepen discussions on senior
management talent was noted. Succession plans for the Executive
Directors and other members of the GEC were highlighted as an
area for continued focus along with senior management quality
and turnover.
On behalf of the Nomination Committee
Carl-Peter Forster
Chairman, Nomination Committee
5 March 2025
Nomination Committee
continued
103
Strategic report
Governance
Financial statements
Directors’ Remuneration Report
Remuneration overview
Italia Boninelli
– Committee Chair
(from 31 July 2024)
Carla Bailo
Kath Durrant
(until 31 July 2024)
Dinggui Gao
Douglas Hurt
(until 15 May 2024)
Eva Lindqvist
(from 15 May 2024)
Robert MacLeod
The Company Secretary
is Secretary to the Committee
Key activities in 2024
–
Reviewing and approving achievement against the
performance targets for the outcome of the 2023 Annual
Incentive arrangements
–
Setting performance targets and approving the structure
of the 2024 Annual Incentive arrangements
–
Reviewing and assessing the Company’s attainment of
performance conditions applicable to the Vesuvius Share
Plan (VSP) awards made in 2021
–
Setting the performance measures and targets, and
authorising the grant of new awards in 2024 under the VSP,
the Deferred Share Bonus Plan and the Medium-Term
Incentive Plan
–
Considering the Company’s ongoing share sourcing
requirements to meet obligations under the Company’s share
plans, and funding of the Employee Benefit Trust (EBT)
–
Reviewing employee remuneration arrangements around
the Group
–
Considering retention issues and implementing significant
uplifts in base pay for selected key management roles
–
Approving the 2023 Directors’ Remuneration Report
–
Reviewing the Committee’s terms of reference
–
Approving the 2025 remuneration for the Chairman,
Chief Executive, CFO and senior management
Alignment of our KPIs with Company strategy, purpose and Values
The delivery of financial KPIs and the development of an effective organisation sustainable over the long term relies on a clear
set of Values. Vesuvius believes that high levels of performance and growth require a diversity of thinking and continuous
innovation, underpinned by the Values of courage, ownership, respect and energy. The alignment of our incentives with our
strategic objectives is summarised in the table on the following page. The reward structure operated as intended in 2024 and
no changes are proposed in the KPIs used to assess performance in 2025.
Dear Shareholder,
I am pleased to present our Directors’ Remuneration Report
(‘Remuneration Report’) for 2024.
The report outlines how we implemented the Directors’
Remuneration Policy in 2024, and how we intend to apply the
Policy in 2025.
I would firstly like to thank my predecessor, Kath Durrant, for her
work as the Committee’s Chair for the first part of the year and
for her support throughout the handover of responsibilities.
I would also like to thank my fellow Committee members for
their insights and valued contributions during the past year.
Overview of executive remuneration
The Committee remains focused on providing the Chief Executive
and his executive team with a remuneration framework which is
aligned to the Group’s long-term strategic goals and which
provides a fair reward for the successful delivery of those goals.
In addition, the Committee has continued to monitor the
competitiveness of executive remuneration during the past year
– both in terms of the structure of incentives and the quantum
relative to the global marketplace in which the Group recruits its
executives. Whilst no changes are proposed to the structure of
executive remuneration for 2025, this will remain an area of
particular focus for the Committee ahead of the next Directors’
Remuneration Policy renewal in 2026.
For 2025, the Chief Executive and CFO will both receive
a base pay increase of 3% which is slightly below our global
workforce budget of 5% but consistent with UK market forecasts.
No changes are proposed to their levels of incentive opportunity
in 2025.
Strategic
Value
alignment
Return on Sales
£
Free Cash Flow
£
Cost Savings
Sustainability
See more about
Our business model
on
p12 and 13
Vesuvius plc
Annual Report and Financial Statements 2024
104
Remuneration overview
continued
KPI
2023 and 2024
weighting
2025 weighting
Strategic
rationale
Annual Incentive Plan: one-year performance
Headline EPS
40%
50%
Aligned with our strategic aim of sustainable, profitable growth
Maintains the primary focus on a profit measure in short-term incentivisation
Working capital/sales
20%
30%
Consistent with our strategic aim of maintaining strong cash generation and
an efficient capital structure
Post-tax ROIC
20%
–
ROIC has been removed as an Annual Incentive Plan metric for 2025, in order
to eliminate the overlap between short- and long-term incentive targets
Personal measures
20%
20%
Enables a focus on specific personal deliverables, managed through the
performance management system
Vesuvius Share Plan: three-year performance
Relative TSR
40%
40%
Aligned with our strategic aim of delivering shareholders a superior return on
their investment
Post-tax ROIC
40%
40%
Consistent with our strategic aim of generating sustainable profitability and
creating shareholder value
ESG
20%
20%
Provides a specific focus on the three priority long-term ESG measures for the
Group: CO
2
e emissions intensity (10%), Safety (5%) and Diversity (5%)
Performance and incentive outcomes in 2024
As the Chief Executive outlined in his statement, Vesuvius’ performance in 2024 showed resilience despite difficult market conditions,
thanks to a strong focus on cost reduction and to the continuing benefits of the Group’s technology strategy. Performance highlights
are summarised below – full details are in the Strategic Report on pages 6–11 and 24–62.
Financial/
operational
–
Global steel production remained subdued with growth limited to 0.8% for the full year
–
Foundry markets, with the exception of India, remained very weak throughout 2024, affecting all industrial
end-markets outside of China, including the light vehicle industry which had performed well in 2023
–
Despite adverse market conditions, the Steel Division performed well in 2024. On an underlying basis,
the Steel Division revenue remained broadly stable (-0.1%) while profit grew by 9.9%
–
Severe market decline, in particular in EU+UK and North Asia which represents c.40% of the Foundry
Division turnover, reduced overall Foundry Division revenue by c.10%. The Division was, however, able to
mitigate this general market downturn with market share gains of c.5%
–
We maintained a strict focus on working capital management and were able to reduce our trade working
capital intensity further, to 22.9% at year-end, versus 23.4% last year
Strategic including
sustainability
–
We continued our strong investment in research and development in 2024 at £37m, equating to 2.0%
of revenue. Our New Product Sales ratio reached 19.1% for the Group in 2024, up from 17.6% in 2023
–
Our cost optimisation programme, launched late 2023, delivered cost savings of £13m in 2024, with an
annualised exit run-rate of £18m
–
We have reduced our carbon intensity (CO
2
e tonnes per million tonnes product sold) by 27% versus our
2019 reference year, on a pro forma basis (-40% on a reported basis), significantly ahead of our 2025
objective of a 20% reduction
Health and safety
–
In 2024, we achieved a further improvement in safety, with a Lost Time Injury Frequency Rate of 0.52,
our best result ever, having achieved 0.60 in 2023
In 2024, the Annual Incentive Plan (AIP) was based 40% on
Group headline earnings per share (EPS), 20% on Group post-tax
ROIC (return on invested capital), 20% on the Group’s working
capital to sales ratio (based on the 12-month moving average)
and 20% on specified personal objectives. Performance against
these measures is illustrated in the charts overleaf and full details
are given on page 120.
The Committee also agreed personal objectives for the
Chief Executive and CFO at the start of 2024, and assessed
their performance to merit 71.0% and 70.0% of maximum
targets, respectively.
The outcome of the Annual Incentive Plan was 36.5% of maximum
for the Chief Executive and 36.3% of maximum for the CFO,
representing 63.9% and 54.5% of base salary, respectively.
The Committee gave careful consideration to these outcomes
and was satisfied that they were consistent with the Group’s
resilient performance and strategic progress outlined above.
The Committee noted that similar and complementary KPIs exist
in the incentive programmes for managers and employees and
was mindful of the outturns for the wider workforce in confirming
its decisions for Executive Directors and the Group Executive
Committee. Consequently, the Committee concluded that no
discretionary adjustment was required.
105
Strategic report
Governance
Financial statements
A full disclosure of the Annual Incentive Plan outturn is provided on page 120.
The performance period for the 2022 Vesuvius Share Plan award ended on 31 December 2024 and the formulaic outcome was
65.0% of maximum vesting, full details of which are provided on page 122. The Committee was satisfied that this outcome,
derived from strong performance across all three of the performance metrics over the three-year performance period,
was appropriate in light of the overall stakeholder experience and concluded that no discretionary adjustment was required.
Chairman and Non-executive Directors’ fees
In line with the base pay increases for the Executive Directors,
the Committee approved a 3% increase in the Chairman’s annual
fee from 1 January 2025. Separately, the Board considered
Non-executive Director fees and made some consequent
adjustments to the fee structure that are detailed on page 124.
Employee engagement
During the year the Non-executive Directors visited plants in
Czech Republic, Belgium, the United States, Mexico, Poland,
Japan and China. Each of these site visits enabled direct
discussions with local management teams and the workforce
on a range of topics. At larger sites, ‘town hall’ meetings were also
held and enabled a two-way dialogue on a range of issues of
interest to the workforce. In these meetings it was usual for
Non-executive Directors to present on how the Board and its
Committees operate, and on corporate governance, including
executive remuneration.
In 2024, the Remuneration Committee received a report from
the Chief HR Officer regarding workforce terms and conditions
across the globe and summarising key areas of focus, particularly
the pressure on attracting and retaining staff in many key talent
markets. Work undertaken by management to address this
challenge, including considering more bespoke incentive
arrangements for certain commercial roles in business units
and regions, was noted by the Committee and taken into
consideration in its deliberations on executive remuneration.
Shareholder engagement
At the 2024 AGM, the Annual Report on Remuneration (excluding
the Directors’ Remuneration Policy) was supported by 97.1% of
voting shareholders and we are very grateful for this strong
demonstration of support. As no changes are proposed to the
structure of executive remuneration arrangements in 2025, we
have not consulted with shareholders on specific remuneration
issues during the past year. However, the Committee and I would
welcome any comments or feedback from shareholders on
remuneration matters at the forthcoming AGM.
Our Directors’ Remuneration Policy was last approved at the
2023 AGM and so will require its standard triennial renewal by
shareholders at the 2026 AGM. Ahead of that renewal, the
Committee will undertake a detailed review of the remuneration
framework to ensure that it continues to support the Group’s talent
and strategic priorities. We will consult with shareholders as
required, and if any material changes are proposed.
The remainder of this Directors’ Remuneration Report outlines
how we implemented the Directors’ Remuneration Policy in 2024
and how we intend to apply the Policy in 2025. I would welcome
your support for this Report at the AGM.
Italia Boninelli
Chair of the Remuneration Committee
5 March 2025
Weighting
40%
Total shareholder return
40%
Three-year average ROIC
20%
Environmental, Social
and Governance
Long-Term incentive
Performance
51%
72%
Patrick André,
Chief Executive
Threshold
On-target
79%
Weighting
Performance
40%
EPS
20%
ROIC
20%
Working capital/sales ratio
20%
Personal objectives
Annual Incentive Plan outturn
13%
71%
Patrick André,
Chief Executive
Mark Collis,
Chief Financial
Officer
Threshold
On-target
70%
11%
13%
75%
75%
11%
Vesuvius plc
Annual Report and Financial Statements 2024
106
Remuneration Committee structure
The membership of the Remuneration Committee comprises all
of the independent Non-executive Directors of the Company.
The Committee Chair is Italia Boninelli, who has served on the
Committee since her appointment to the Board on 1 June 2024,
and as Committee Chair since 31 July 2024. Carla Bailo, Dinggui
Gao and Robert MacLeod have served on the Committee
throughout 2024. Eva Lindqvist joined the Committee on her
appointment to the Board, on 15 May 2024. Douglas Hurt served
on the Committee up until 15 May 2024, at which point he stepped
down from the Board having served as a Director for nine years.
Kath Durrant stepped down from the Board on 31 July 2024
having served as a Director for over three years, for the majority
of which she also served as Chair of the Committee.
The Committee complies with the requirements of the UK
Corporate Governance Code for the composition of remuneration
committees. Each of the members brings a broad experience of
international businesses and an understanding of their challenges
to the work of the Committee. The Company Secretary is
Secretary to the Committee. Members’ biographies are on
pages 76 and 77.
Meetings
The Committee met five times during the year. The Group’s
Chairman, Chief Executive, Chief Financial Officer and Chief HR
Officer were invited to each meeting, together with Friederike
Helfer, Vesuvius’ non-independent Non-executive Director,
though none of them participated in discussions regarding their
own remuneration. In addition, a representative from Deloitte,
the Remuneration Committee adviser, attended the meetings.
The attendees supported the work of the Committee, giving
critical insight into the operational demands of the business and
their application to the overall remuneration strategy within the
Group. In receiving views on remuneration matters from the
Executive Directors and senior management, the Committee
recognised the potential for conflicts of interest to arise and
considered the advice accordingly. The Chair of the Committee
reported the outcomes of all meetings to the Board.
The Committee operates under formal terms of reference
which were reviewed during the year. The terms of reference
are available on the Group website: www.vesuvius.com.
The Committee members are permitted to obtain outside legal
advice at the Company’s expense in relation to their deliberations.
The Committee may also secure the attendance at its meetings
of any employee or other parties it considers necessary.
Role and responsibilities
The Committee is responsible for:
–
Determining the overall remuneration policy for the Executive
Directors, including the terms of their service agreements,
pension rights and compensation payments
–
Setting the appropriate remuneration for the Chairman,
the Executive Directors and senior management (being the
Group Executive Committee)
–
Reviewing workforce remuneration and related policies,
and the alignment of incentives and rewards with culture,
taking these into account when setting the policy for
Executive Director remuneration
–
Overseeing the operation of share incentive plans
Advice provided to the Remuneration Committee
Deloitte is appointed directly by the Remuneration Committee
to provide advice on executive remuneration matters, including
remuneration structure and policy, updates on market practice
and trends, and guidance on the implementation and operation
of share incentive plans. The Committee appointed Deloitte,
a signatory to the Remuneration Consultants Group Code of
Conduct in relation to Executive Remuneration Consulting in
the UK, following a formal tender process in 2014. Deloitte also
provides the Remuneration Committee with ongoing calculations
of total shareholder return (TSR) to enable the Committee to
monitor the performance of long-term share incentive plans.
Deloitte does not have any other connection with any
individual Director.
In addition, in 2024, Deloitte provided the Group with IFRS 2
calculations for the purposes of valuing the share plan grants
and, within the wider Group, was engaged in various jurisdictions
to provide tax advisory work, and some consultancy services.
During 2024, Deloitte’s fees for advice to the Remuneration
Committee, charged on a time spent basis, amounted to
£62,690. The Committee conducted a review of the performance
of Deloitte as remuneration adviser during the year and
concluded that Deloitte continued to provide effective, objective
and independent advice to the Committee. No conflict of
interest arises as a result of other services provided by
Deloitte to the Group.
Directors’ Remuneration Report
Operation of the Remuneration Committee
107
Strategic report
Governance
Financial statements
The Committee is satisfied that the Remuneration Policy, approved in 2023, is designed to promote the long-term success of the
Company in accordance with the requirements of the Code with regard to:
The Remuneration Policy was prepared in accordance with the Companies Act 2006 and the Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008 (as amended). It also meets the requirements of the Financial Conduct
Authority’s Listing Rules and the Disclosure Guidance and Transparency Rules.
Executive remuneration arrangements
are transparent with full disclosure in the
Annual Report. The Annual Incentive
structure for the Executive Directors is
based on the same structure utilised for
senior executives throughout the Group.
Long-term sustainable growth is core to
the long-term incentive, and alongside
five-year holding periods clearly aligns
the interests of executives with those of
the Group’s shareholders.
The remuneration illustrations indicate
the minimum and maximum potential
remuneration. The Committee reviews
the underlying financial performance
of the Company over the performance
period, and the non-financial
performance of the Group and
participants, to ensure that pay-out levels
are justified. The Committee has the
discretion to amend the final vesting
level if required.
The Policy, with its focus on three core
elements: fixed pay, Annual Incentive and
Long-Term Incentive, is clear, simple and
easy to understand.
The Committee believes that the
performance-related elements of
remuneration have financial targets
which are transparent, stretching
and clearly align the Executive Directors’
remuneration with the delivery of
the Group’s strategy. The Vesuvius
Share Plan rewards long-term
performance directly linked with the
Group’s strategy and results, ensuring
that only strong performance is
rewarded (see page 117).
The Committee has carefully analysed
the range of possible outcomes of
awards and believes the Policy to be fair
and proportionate, with the clear linkage
to Group profitability mitigating the
potential for excessive rewards and the
reliance on audited profit numbers and
externally verified TSR targets serving to
mitigate behavioural risk. The Committee
has discretion under the Vesuvius Share
Plan to determine the vesting of awards
in accordance with the Code requirement
and malus and clawback provisions
also apply.
The Executive Directors’ incentive
arrangements are consistent with the
Group’s core strategic objective of
delivering long-term sustainable and
profitable growth and support our
performance-orientated culture,
Values and purpose (see page 103).
Clarity
Predictability
Simplicity
Proportionality
Risk
Alignment to culture
Directors’ Remuneration Report
Remuneration Policy design principles
Remuneration Policy design
Vesuvius plc
Annual Report and Financial Statements 2024
108
The Policy set out below contains minor amendments,
as appropriate, to reflect activities undertaken in 2024.
For reference, the Policy, as approved by shareholders at the
AGM on 18 May 2023, can be found on pages 124 to 132 of the
2022 Annual Report, available on the www.vesuvius.com website.
Comparison of Remuneration Policy for Executive Directors
with that for other employees
The Remuneration Policy for Executive Directors is designed in line
with the remuneration philosophy set out in this report – which also
underpins remuneration for the wider Group. However, given that
remuneration structures for other employees need to reflect both
seniority and local market practice, they differ from the policy
for Executive Directors. In particular, Executive Directors receive
a higher proportion of their remuneration in performance-related
pay and share-based payments.
All members of the Group Executive Committee participate in the
Vesuvius Share Plan and receive awards of Performance Shares,
which vest on the basis of the same performance targets set for
the Executive Directors. The level of awards granted to members
of the Group Executive Committee who don’t serve on the Board
are lower than those granted to the Executive Directors.
Middle and senior managers also participate in the Annual
Incentive Plan and, in certain cases, longer-term share or
cash-based plans, with awards predominantly based on
a blend of Group and regional or Business Unit performance
measures appropriate for the scope of participants’
responsibilities. Individual percentages of variable versus
fixed remuneration and participation in share-based
structures increase as seniority increases.
Consideration of conditions elsewhere in the
Group in developing policy
The Non-executive Directors participated in a number of ‘town
hall’ meetings and site visits during the year which provided the
opportunity to engage with the workforce on a wide range of
issues, including executive remuneration where appropriate.
The Remuneration Committee also commissioned an annual
review of workforce remuneration in 2024, which reported on
general remuneration, incentives and benefits practices around
the Group. The Committee takes into account all such detail
regarding the pay and employment conditions of other Group
employees when determining Executive Directors’ remuneration,
particularly when determining base salary increases, when the
Committee will consider the salary increases for other Group
employees in the same jurisdiction.
Consideration of shareholder views
Vesuvius is committed to open and transparent dialogue with
its shareholders on remuneration as well as other governance
matters. The Chair of the Committee welcomes shareholder
engagement and is available for any discussions investors wish
to have on remuneration matters.
Directors’ Remuneration Report
2023 Remuneration Policy
109
Strategic report
Governance
Financial statements
Alignment/purpose
Operation
Opportunity
Performance
S
Base salary
Helps to recruit and
retain key employees.
Reflects the individual’s
experience, role and
contribution within
the Company
Base salary is normally reviewed annually,
with changes effective from 1 January.
Base salary is positioned to be
market competitive when considered
against other global industrial companies,
and relevant international and FTSE 250
companies (excluding investment trusts).
Paid in cash, subject to local tax
and social security regulations.
Salary increases will normally
not exceed the average increase
awarded to other employees in the
Group, although increases may
be made above this level at the
Committee’s discretion in appropriate
circumstances. In considering any
increase in base salary, the Committee
will also take into account:
(i)
The role and value of the individual
(ii)
Changes in job scope or
responsibility
(iii)
Progression in the role
(e.g. for a new appointee)
(iv)
A significant increase in the scale
of role and/or size, value or
complexity of the Group
(v)
The need to maintain market
competitiveness
No absolute maximum has been set
for Executive Director base salaries.
Current Executive Directors’ salaries
are set out in the Annual Report on
Directors’ Remuneration section of
this Remuneration Report.
Any increase will take into account the
individual’s performance, contribution
and increasing experience.
B
Other benefits
Provides normal,
market-aligned
benefits
A range of benefits including, but not
limited to: car allowance, private medical
care (including spouse and dependent
children), life insurance, disability and
health insurance, expense reimbursement
(including costs if a spouse accompanies
an Executive Director on Vesuvius business),
together with relocation allowances and
expatriate benefits, in some instances
grossed up for tax, in accordance with
the Group’s policies, and participation in
any employee share scheme operated by
the Group.
There is no formal maximum as benefit
costs can fluctuate depending on
changes in provider, cost and
individual circumstances.
1
None.
P
Pension
Helps to recruit and
retain key employees
Ensures income
in retirement
An allowance is given as a percentage of
base salary. This may be used to participate
in Vesuvius’ pension arrangements,
invested in own pension arrangements
or taken as a cash supplement (or any
combination of the above options).
Maximum of 17% of base salary
for incumbent Executive Directors
from the end of 2022, in line with
the average of that received by the
majority of the global workforce.
2
The level of allowance for Executive
Directors appointed following the
adoption of this Policy will be aligned
with the post-retirement benefits
applicable to the majority of the
workforce or, where appropriate,
to the majority of the workforce
of the relevant geography.
None.
1.
The Remuneration Committee reserves the right to make any remuneration payments and payments for loss of office (including exercising any discretions
available to it in connection with such payments), notwithstanding that they are not in line with the Policy set out here, where the terms of the payment
were agreed: (i) before the Policy set out here came into effect, provided that the terms of the payment were consistent with the shareholder-approved
Remuneration Policy in force at the time they were agreed; or (ii) at a time when the relevant individual was not a Director of the Company and, in the opinion
of the Remuneration Committee, the payment was not in consideration for the individual becoming a Director of the Company. For these purposes, ‘payments’
include the Remuneration Committee satisfying awards of variable remuneration and, in relation to an award over shares, the terms of the payment are
‘agreed’ at the time the award is granted.
2.
As analysed in the business’s Workforce Retirement Practices review conducted in 2020, as detailed on page 122 of the 2020 Annual Report.
Remuneration Policy Table for Executive Directors
Vesuvius plc
Annual Report and Financial Statements 2024
110
2023 Remuneration Policy
continued
Alignment/purpose
Operation
Opportunity
Performance
AI
Annual Incentive
Incentivises Executive
Directors to achieve
key short-term financial
and strategic targets
of the Group
Additional alignment
with shareholders’
interests through
the operation of
bonus deferral
Normally 33% of any Annual Incentive
earned by Executive Directors will be
deferred into awards over shares under
the Vesuvius Deferred Share Bonus
Plan which normally vest after at least
three years, other than in specified
circumstances, i.e. in cases of dismissal
for cause, as outlined on page 114
in this Policy. These may be cash or
share settled.
The Committee has the discretion to
award participants the equivalent
value of dividends accrued during the
vesting period on any shares that vest.
Subject to malus and clawback.
Below threshold: 0%.
At threshold: Between 0 and 25%
of maximum.
On-target: 50% of the applicable
maximum opportunity in any year.
Maximum: Up to 175% of base salary.
The Remuneration Committee will
normally set the level of maximum
bonus opportunity for each Executive
Director at the start of each year.
Payments start to accrue on meeting
the threshold level of performance,
with payments between threshold and
on-target and between on-target and
maximum made on a pro rata basis.
The Annual Incentive is normally
measured on targets set at the
beginning of each year. In unusual
or exceptional circumstances, for
example where there is exceptional
economic volatility which limits visibility
to set robust 12-month targets, the
Committee may elect to set and
measure targets other than on an
annual basis. The majority of the
Annual Incentive will be determined
by measure(s) of Group financial
performance. The remainder of the
Annual Incentive will be based on
financial, strategic or operational
measures appropriate to the individual
Director. Actual performance targets
will be disclosed after the performance
period has ended. They are not
disclosed in advance due to their
commercial sensitivity.
The Committee may use its discretion to
amend the formulaic outturn upwards
or downwards if it does not consider the
formulaic outcome appropriate.
VSP
Vesuvius Share Plan
(VSP)
Aligns Executive
Directors’ interests with
those of shareholders
through the delivery
of shares. Rewards
Executive Directors for
achieving the strategic
objectives of growth
in shareholder value
and earnings
Assists retention of
Executive Directors
over a three-year
performance period
and the further
two-year holding period
VSP awards to Executive Directors are
granted as Performance Share awards.
These may be cash or share settled.
Awards vest three years after their
award date, other than in specified
circumstances outlined elsewhere in
this Policy, subject to the achievement
of specified conditions. All vested
shares, net of any tax liabilities, are then
subject to a further two-year holding
period after the vesting date, which
will continue to apply notwithstanding
the termination of employment of the
participants during this holding period,
except at the Committee’s discretion in
exceptional circumstances, including
a change of control or where the
participant dies or has left employment
due to ill health, injury or disability.
The Committee has the discretion to
award participants the equivalent value
of dividends accrued during the vesting
period and further two-year holding
period on any shares that vest.
Subject to malus and clawback.
Executive Directors are eligible to
receive an annual award with a face
value of up to 200% of base salary in
Performance Share awards.
Vesting at threshold performance is
between 0 and 25% of the award,
rising to vesting of the full award
at maximum.
Vesting will be subject to performance
conditions as determined by the
Remuneration Committee ahead of
each award. Those conditions will
be disclosed in the Annual Report
on Directors’ Remuneration section
of the Remuneration Report. The
performance conditions for 2025
are relative TSR, post-tax ROIC and
ESG measures, weighted at 40%,
40% and 20%, respectively. The
Remuneration Committee will retain
discretion for future awards to include
additional or alternative performance
conditions which are aligned with the
corporate strategy.
At its discretion, the Committee may
elect to add additional underpinning
performance conditions.
The Company reserves the right
only to disclose certain of the
performance targets after the
performance period has ended,
due to their commercial sensitivity.
Prior to any vesting, the Remuneration
Committee reviews the underlying
financial performance of the Group
over the performance period, and
the non-financial performance of the
Group and participants, to ensure
that the vesting is justified. Following
this review, the Committee has the
discretion to amend the final vesting
level if it does not consider that it
is justified.
111
Strategic report
Governance
Financial statements
Patrick André, Chief Executive
Minimum
On-target
Maximum
Maximum, including
share price appreciation
Fixed elements
Annual variable elements
Long-term variable elements
100%
43%
30%
27%
25%
35%
40%
31%
21%
29%
50%
£992k
£2,297k
£3,912k
£4,691k
Mark Collis, Chief Financial Officer
Minimum
On-target
Maximum
Maximum, including
share price appreciation
100%
48%
29%
23%
30%
35%
35%
25%
30%
45%
£559k
£1,173k
£1,924k
£2,265k
Remuneration illustrations
£000
The charts below show the total remuneration for Executive
Directors for 2025 for minimum, on-target and maximum
performance. The fixed elements of remuneration comprise
base salary, pension and other benefits, using 2025 salary data.
The assumptions on which they are calculated are as follows:
Minimum
Fixed remuneration only.
On-target
Fixed remuneration plus on-target Annual Incentive (made at
87.5% of base salary for Patrick André and 75% for Mark Collis);
and for the Performance Share awards under the Vesuvius Share
Plan, median performance for the TSR element and the midpoint
between threshold and maximum performance for the post-tax
ROIC and ESG performance conditions (with overall vesting at
40% of maximum, based on the vesting schedule detailed on
page 117). No share price appreciation is assumed.
Maximum
Fixed remuneration plus maximum Annual Incentive (being full
achievement of financial and personal targets, made at 175% of
base salary for Patrick André and 150% for Mark Collis) and
100% vesting for Performance Share awards (made at 200%
of base salary for Patrick André and 150% of base salary for
Mark Collis) under the Vesuvius Share Plan. No share price
appreciation is assumed.
Maximum including assumed 50% share price appreciation
This shows the value of the maximum scenario if 50% share price
appreciation is assumed over the three-year performance period
of the Performance Share awards.
Note: In addition, the Committee retains the discretion to award dividends
(either shares or their cash equivalent) on any shares that vest.
Illustration of the application of the Remuneration Policy for 2025
Vesuvius plc
Annual Report and Financial Statements 2024
112
Shareholding guidelines
The Remuneration Committee encourages Executive Directors to
build and hold a shareholding in the Company equivalent in value
to at least 200% of base salary.
Compliance with the shareholding policy is tested at the end of
each year for application in the following year, with the valuation
of any holding being taken at the higher of: (1) the share price
on the date of vesting of any shares derived from a share award,
in respect of those shares only; and (2) the average of the closing
prices of a Vesuvius ordinary share for the trading days in
that December.
Unless exceptionally the Committee determines otherwise, under
the post-employment shareholding guideline the Executive
Directors will remain subject to their shareholding requirement in
the first year after their cessation as an Executive Director and
to 50% of the shares retained in the first year during the second
year after such cessation, recognising that there is no requirement
to purchase additional shares if the shares held when they
cease to be an Executive Director are less than the applicable
shareholding guideline. However, in relation to shares acquired
by an Executive Director in their personal capacity, the Committee
may, where appropriate, exempt such shares from the
post-employment guideline.
Malus/clawback arrangements
The Executive Directors’ variable remuneration is subject to malus
and clawback provisions. These provide the Committee with the
flexibility, if required, to withhold or recover payments made to
Executive Directors under the Annual Incentive Plan (including
deferred awards) and/or to withhold or recover share awards
granted to Executive Directors under the Vesuvius Share Plan,
including any dividends granted on such awards. The
circumstances in which the Committee could potentially elect
to apply malus and clawback provisions include: a material
misstatement in the Group’s financial results; an error in the
calculation of the extent of payment or vesting of an incentive;
gross misconduct by an individual; or significant financial loss or
serious reputational damage to Vesuvius plc resulting from an
individual’s conduct; a material failure of risk management or a
serious breach of health and safety. These malus and clawback
provisions apply for a period of up to three years after the end of
a performance period (or end of the deferral period in respect of
awards made under the Vesuvius Deferred Share Bonus Plan).
Performance measures
In selecting performance measures for the Annual Incentive,
the Committee seeks to reflect key strategic aims and the need
for a rigorous focus on financial performance. Each year,
the Committee agrees challenging targets to ensure that
underperformance is not rewarded. The Company will not
be disclosing the specific financial or personal objectives set
until after the relevant performance period has ended because
of commercial sensitivities. The personal objectives are all
job-specific in nature and track performance against key
strategic, organisational and operational goals.
In selecting performance measures for the Vesuvius Share Plan,
the Committee seeks to focus Executive Directors on the execution
of long-term strategy and also align their rewards with value
created for shareholders. In the Policy period, the Committee will
continually review the performance measures used to ensure that
awards are made on the basis of challenging targets that clearly
support the achievement of the Group’s strategic aims.
The Committee may vary or waive any performance condition(s)
if circumstances occur which cause it to determine that the original
condition(s) have ceased to be appropriate, provided that any
such variation or waiver is fair, reasonable and not materially
less difficult to satisfy than the original condition (in its opinion).
In the event that the Committee were to make an adjustment
of this sort, a full explanation would be provided in the next
Remuneration Report.
Service contracts for Executive Directors
The Committee will periodically review the contractual terms for
new Executive Directors to ensure that these reflect best practice.
Service contracts currently operate on a rolling basis and are
limited to a 12-month notice period.
Patrick André is employed as Chief Executive of Vesuvius plc
pursuant to the terms of a service agreement made with the
Company dated 17 July 2017. Mark Collis is employed as
Chief Financial Officer pursuant to the terms of a service
agreement with Vesuvius plc dated 4 January 2023. Patrick
André’s appointment is terminable by Vesuvius on not less than
12 months’ written notice, and by him on not less than six months’
written notice. Mark Collis’s appointment is terminable by him
and Vesuvius on not less than six months’ written notice.
External appointments of Executive Directors
The Executive Directors do not currently serve as non-executive
directors of any other quoted company outside the Group.
Subject always to consent being granted by the Company for
them to take up such an appointment, were they to so serve,
the Company would allow them to retain any fees they received
for the performance of their duties.
Other
The Committee may: (a) in the event of a variation of the
Company’s share capital, demerger, special dividend or any other
corporate event which it reasonably determines justifies such an
adjustment, adjust; and (b) amend the terms of awards granted
under the share schemes referred to above in accordance with
the rules of the relevant plans.
Share awards may be settled by the issue of new shares or by the
transfer of existing shares. In line with prevailing best practice at
the time this Policy was approved, any issuance of new shares is
limited to 5% of share capital over a rolling ten-year period in
relation to discretionary employee share schemes and 10% of
share capital over a rolling ten-year period in relation to all
employee share schemes.
The Committee may make minor amendments to the Policy
set out in this Policy Report (for regulatory, exchange control,
tax or administrative purposes or to take account of a change
in legislation) without obtaining shareholder approval for
that amendment.
2023 Remuneration Policy
continued
General operation of the Policy for Executive Directors
113
Strategic report
Governance
Financial statements
Typical event
Policy
Executive Director
appointed or promoted
On appointment or promotion of a new Executive Director, the Committee will typically use the
Remuneration Policy in force at the time of the Committee’s decision to determine ongoing remuneration.
Base salary levels will generally be set in accordance with the Remuneration Policy current at the time of
the Committee’s decision, taking into account the experience and calibre of the appointee. Other than in
exceptional circumstances, other elements of annual remuneration will, typically, be set in line with the
Remuneration Policy, including a limit on awards under the Annual Incentive and Vesuvius Share Plan of
375% of salary in aggregate.
First year of appointment
If appropriate the Committee may apply different performance measures and/or targets to a Director’s
first incentive awards in his/her year of appointment.
Service contract agreed
Service contracts will be entered into on terms similar to those for the existing Executive Directors,
summarised in the service contracts of Executive Directors section above.
Appointment
of Chairman or
Non-executive Director
With respect to the appointment of a new Chairman or Non-executive Director, appointment terms will be
consistent with those applicable at the time the appointment is agreed. Variable pay will not be considered.
With respect to Non-executive Directors, fees will be consistent with the Policy at the time the appointment
is agreed. If, in exceptional circumstances, a Non-executive Director was asked to assume an interim
executive role, the Company retains the discretion to pay them appropriate executive compensation,
in line with the Policy.
Individual appointed
on a base salary below
market, contingent
on performance
If it is appropriate to appoint an individual on a base salary initially below what is adjudged to be market
positioning, contingent on individual performance, the Committee retains the discretion to realign base
salary over the one to three years following appointment, which may result in a higher rate of annualised
increase than might otherwise be awarded under the Policy. If the Committee intends to rely on this
discretion, it will be noted in the first Remuneration Report following an individual’s appointment.
Internal appointment
In the event that an internal appointment is made, or where a Director is appointed as a result of transfer
into the Group on an acquisition of another Company, the Committee may continue with existing
remuneration provisions for this individual, where appropriate.
Relocation required
If necessary and appropriate to secure the appointment of a candidate who has to move locations as
a result of the appointment, whether internal or external, the Committee may make additional payments
linked to relocation, above those outlined in the policy table, and would authorise the payment of
a relocation allowance and repatriation, as well as other associated international mobility terms.
Such benefits would be set at a level which the Committee considers appropriate for the role and the
individual’s circumstances.
Buying out compensation
forfeited on leaving
previous employer
In addition to the annual remuneration elements noted above, the Committee may consider buying out
terms, incentives and any other compensation arrangements forfeited on leaving a previous employer that
an individual forfeits in accepting an appointment with Vesuvius. The Committee will have the authority to
rely on Listing Rule 9.3.2 R(2) or to apply the existing limits within the Vesuvius Share Plan to make Restricted
Share awards on recruitment. In making any such awards, the Committee will review the terms of any
forfeited awards, including, but not limited to, vesting periods, the expected value of such awards on
vesting and the likelihood of the performance targets applicable to such awards being met, while retaining
the discretion to make any buy-out award the Committee determines is necessary and appropriate.
The Committee may also require the appointee to purchase shares in Vesuvius to a pre-agreed level
prior to vesting of any such awards. The value of any buy-out award will be capped, to ensure its maximum
value is no higher than the value of the awards that the individual forfeited on joining Vesuvius. Any such
awards will be subject to malus and clawback.
Reimbursement
of other costs
In addition to the elements noted above, the Committee may consider reimbursement of other
demonstrable, specific costs incurred by an individual in relation to their appointment (e.g. legal costs).
Policy for joining and leaving:
Recruitment policy
Vesuvius plc
Annual Report and Financial Statements 2024
114
Vesuvius has the option to make a payment in lieu of part or
all of the required notice period for Executive Directors. Any
such payment in lieu will consist of the base salary, pension
contributions and value of benefits to which the Director would
have been entitled for the duration of the remaining notice period,
net of statutory deductions in each case. Half of any payments in
lieu of notice would be made in a lump sum, the remainder in
equal monthly instalments commencing in the month in which the
midpoint of their foregone notice period falls (and are reduced or
extinguished by salary from any role undertaken by the departing
Executive in this time). Executive Directors are subject to certain
non-compete covenants for a period of nine to 12 months, and
non-solicitation covenants for a period of 12 months, following
the termination of their employment. Their service agreements
are governed by English law.
Executive Directors’ contracts do not contain any change of
control provisions; they do contain a duty to mitigate should
the Director find an alternative paid occupation in any period
during which the Company must otherwise pay compensation
on early termination.
The table below summarises how the awards under the annual
bonus and Vesuvius Share Plan are typically treated in different
leaver scenarios and on a change of control.
Whilst the Committee retains overall discretion on determining
‘good leaver’ status, it typically defines a ‘good leaver’ in
circumstances such as retirement with agreement of the
Company, ill health, disability, death, redundancy, or part of
the business in which the individual is employed or engaged
ceasing to be part of the Group. Final treatment is subject to
the Committee’s discretion.
Event
Timing
Calculation of vesting/payment
Annual Incentive Plan – during period prior to payment
Good leaver
Paid at the same time as to
continuing employees.
Annual bonus is paid only to the extent that any performance
conditions have been satisfied and is pro-rated for the proportion
of the financial year worked before cessation of employment.
In determining the level of bonus to be paid, the Committee may,
at its discretion, take into account performance up to the date of
cessation or over the financial year as a whole based on appropriate
performance measures as determined by the Committee. The bonus
may, at the Committee’s discretion, be paid entirely in cash.
Bad leaver
Not applicable.
Individuals lose the right to their annual bonus.
Change of control
Paid on the effective date
of change of control.
Annual bonus is paid only to the extent that any performance
conditions have been satisfied and is pro-rated for the proportion of
the financial year worked.
Annual Incentive Plan – in respect of any amount deferred into awards over shares under the Vesuvius Deferred Share Bonus Plan
Good leaver
On the date of the event.
Deferred awards vest in full.
Bad leaver
On the date of the event.
Other than dismissal for cause, deferred awards will vest in full.
Change of control
1
Within seven days of the event.
Deferred awards vest in full.
Vesuvius Share Plan
Good leaver
2
On normal release date (or earlier
at the Committee’s discretion).
Unvested awards vest to the extent that any performance conditions
have been satisfied and a pro rata reduction applies to the value of
the awards to take into account the proportion of performance
period not served, unless the Committee decides that the reduction
in the number of vested shares is inappropriate.
Bad leaver
Unvested awards lapse.
Unvested awards lapse on cessation of employment.
Change of control
1
On the date of the event.
Unvested awards vest to the extent that any performance
conditions have been satisfied and a pro rata reduction applies
for the proportion of the vesting period not served, unless the
Committee decides that the reduction in the number of vested
shares is inappropriate.
1.
In certain circumstances, the Committee may determine that unvested awards under the Vesuvius Deferred Bonus Plan and Vesuvius Share Plan will not vest
on a change of control but will instead be replaced by an equivalent grant of a new award, as determined by the Committee, in the new company.
2.
Under the rules of the Vesuvius Share Plan, any vested shares, net of any tax liabilities, are subject to a further two-year holding period after the vesting date.
The holding period may be terminated early at the Committee’s discretion in exceptional circumstances, including a change of control or where the award
holder dies or leaves employment due to ill health, injury or disability.
2023 Remuneration Policy
continued
Policy for joining and leaving:
Exit payment policy
115
Strategic report
Governance
Financial statements
Benefits normally cease to be provided on the date employment
ends. However, the Committee has the discretion to allow some
minor benefits (such as health insurance, tax advice and
repatriation expenses) to continue to be provided for a period
following cessation where this is considered fair and reasonable,
or appropriate on the basis of local market practice. In addition,
the Committee retains discretion to fund other expenses for the
Executive Director; for example, payments to meet legal fees
incurred in connection with termination of employment, or to meet
the costs of providing outplacement support, and de minimis
termination costs up to £5,000 to cover the transfer of mobile
phone or other administrative expenses.
The Committee reserves the right to make any other payments in
connection with a Director’s cessation of office or employment
where the payments are made in good faith in discharge of an
existing legal obligation (or by way of damages for breach of such
an obligation) or by way of a compromise or settlement of any
claim arising in connection with the cessation of a Director’s office
or employment.
In certain circumstances, the Committee may approve new
contractual arrangements with departing Executive Directors,
including (but not limited to) settlement, confidentiality, restrictive
covenants and/or consultancy arrangements. These would be
used only where the Committee believed it was in the best
interests of the Company to do so.
The Company seeks to appoint Non-executive Directors who
have relevant professional knowledge and have gained
experience in a relevant industry and geographical sector,
to support diversity of expertise on the Board and match
the wide geographical spread of the Company’s activities.
Non-executive Directors attend Board, Committee and other
meetings, held mainly in the UK, together with an annual strategy
review to debate the Company’s strategic direction.
All Non-executive Directors are expected to familiarise
themselves with the scale and scope of the Company’s business
and to maintain their specific technical skills and knowledge.
The Board sets the level of fees paid to the Non-executive
Directors after considering the role and responsibilities of each
Director and the practice of other companies of a similar size and
international complexity. The Non-executive Directors do not
participate in Board discussions on their own remuneration.
Alignment/purpose
Operation
Opportunity
Performance
Fees
To attract and
retain Non-executive
Directors of the
necessary skill and
experience by offering
market-competitive fees
Fees are usually reviewed every year by the Board.
Non-executive Directors are paid a base fee for the
performance of their role plus additional fees for roles
that involve significant additional time commitment
and/or responsibility. Such roles could include, but are
not limited to, Committee chairmanship (and, where
appropriate, membership) or acting as the Senior
Independent Director. Fees are paid in cash.
When travelling internationally on Company business,
all Non-executive Directors may also be provided with
additional travel allowance payments, reflecting the
associated time commitment, paid in cash.
The Chairman is paid a single cash fee and receives
administrative support from the Company.
Non-executive Directors and the Chairman will be
paid market-appropriate fees, with any increase
reflecting changes in the market or adjustments to
a specific Non-executive Director’s role.
Any travel allowances payable will be reflective
of travel time incurred as necessary to fulfil
Company business.
No eligibility for bonuses, retirement benefits or to
participate in the Group’s employee share plans.
Base fees paid to Non-executive Directors excluding
the Chairman will, in aggregate, remain within the
aggregate limit stated in our Articles, currently
being £500,000.
None.
Benefits and expenses
To facilitate execution
of responsibilities
and duties required
by the role
All Non-executive Directors are reimbursed for
reasonable expenses incurred in carrying out
their duties (including any personal tax owing on
such expenses).
Should the Board deem it appropriate, additional
benefits can be provided to Non-executive Directors
as required (e.g. liability insurance).
Non-executive Directors’ expenses are paid in
accordance with Vesuvius’ expense procedures.
Provision of additional benefits will be at the
discretion of the Board and will reflect the reasonable
needs of a Non-executive Director in undertaking
Company business.
None.
Remuneration Policy for Non-executive Directors
Vesuvius plc
Annual Report and Financial Statements 2024
116
Terms of service of the Chairman and other
Non-executive Directors
The terms of service of the Chairman and the Non-executive
Directors are contained in letters of appointment. Each
Non-executive Director is appointed subject to their election
at the Company’s first Annual General Meeting following their
appointment and re-election at subsequent Annual General
Meetings. The Chairman is entitled to six months’ notice from the
Company. None of the other Non-executive Directors is entitled
to receive compensation for loss of office at any time.
All Non-executive Directors are subject to retirement, and election
or re-election, in accordance with the Company’s Articles of
Association. The current policy is for Non-executive Directors
to serve on the Board for a maximum of nine years, with review
at the end of three and six years, subject always to mutual
agreement and annual performance evaluation. The Board
retains discretion to extend the tenure of Non-executive Directors
beyond this time, subject to the requirements of Board balance
and independence being satisfied.
The table below shows the date of appointment for each of the Non-executive Directors:
Non-executive Director
Date of appointment
Carl-Peter Forster
1 November 2022
Carla Bailo
1 February 2023
Italia Boninelli
1 June 2024
Dinggui Gao
1 April 2021
Friederike Helfer
4 December 2019
Eva Lindqvist
15 May 2024
Robert MacLeod
1 September 2023
Executive Directors’ remuneration in the year ahead
The table below sets out the phasing of receipt of the various elements of Executive Director remuneration for 2025.
2025
2026
2027
2028
2029
2030
Description and link to strategy
S
Base salary
Salaries are set at an appropriate level to enable the Company
to recruit and retain key employees, and reflect the individual’s
experience, role and contribution within the Company.
B
Benefits
Provides normal market practice benefits.
P
Pension
The pension benefit helps to recruit and retain key employees
and ensures income in retirement.
AI
Annual
Incentive
The Annual Incentive incentivises the Executive Directors
to achieve key short-term financial and strategic targets of
the Group.
AI
Deferred
Annual
Incentive
The deferral of a portion of the Annual Incentive increases
alignment with shareholders.
VSP
Vesuvius
Share Plan
Awards under the Vesuvius Share Plan align Executive
Directors’ interests with those of shareholders through the
delivery of shares and assist in the retention of the Executive
Directors. The VSP rewards the Executive Directors for
achieving the strategic objectives of growth in shareholder
value and earnings and of our three priority long-term
ESG targets.
Holding
period
Directors’ Remuneration Report
Annual Report on Directors’ Remuneration
2023 Remuneration Policy
continued
117
Strategic report
Governance
Financial statements
The table below sets out how the Remuneration Policy will be applied to the Executive Directors’ remuneration for 2025. Further details
about each of the elements of remuneration are set out in the Remuneration Policy.
S
Base salary
Patrick André
£778,680
Mark Collis
£455,000
2024:
£756,000
2024:
£441,000
As explained in the Committee
Chair’s letter, the CEO was
awarded a 3% increase,
effective 1 January 2025.
As explained in the Committee
Chair’s letter, the CFO was
awarded a 3% increase,
effective 1 January 2025.
B
Benefits
Benefits for Executive
Directors may include:
–
Car allowance
–
Private medical care
–
Relocation expenses
–
Tax advice and tax
reimbursement
–
Commuting costs
–
School fees
–
Directors’ spouses’ travel
–
Administrative expenses
P
Pension
17% of base salary, in line with the average received by the majority of the global workforce.
AI
Annual Incentive
Annual Incentive potential for
Patrick André, maximum value
175%
of base salary
Annual Incentive potential for
Mark Collis, maximum value
150%
of base salary
For 2025, the maximum Annual Incentive potential for Patrick André will remain at the level previously available, i.e. 175% of base
salary with target Annual Incentive potential being 87.5% of base salary for the achievement of target performance in all elements.
For Mark Collis, potential will also remain at the level previously available, i.e. 75% at target, and 150% at maximum. Pay-outs will
commence and increase incrementally from 0% once the threshold performance for any of the elements has been met.
33% of any Annual Incentive earned will be deferred into awards over shares, which will vest after a holding period of three years,
except in cases of dismissal for cause.
These incentives are based 50% on Group headline earnings per share, 30% on the Group’s working capital to sales ratio (based on
the 12-month moving average) and 20% on specified personal objectives.
The Company will not be disclosing the targets set until after the relevant performance period has ended because of commercial
sensitivities. Targets will be set and performance assessed so as to exclude approved restructuring costs and any unbudgeted
M&A costs.
The personal objectives for 2025 are focused on long-term strategic objectives or are job-specific in nature and track performance
against the Group’s key strategic, organisational and operational goals with a specific focus on ESG outcomes.
VSP
Vesuvius Share Plan
(VSP)
Patrick André, maximum value
200%
of base salary
Share awards with a maximum value of 200% of salary will be
granted to Patrick André and, for Mark Collis a maximum value
of 150% of salary will be granted. The grant price for the awards
will be determined by reference to the average share price over
the 30 calendar days prior to grant. Vesting of 40% of shares
awarded will be based upon the Company’s TSR performance
relative to that of the constituent companies of the FTSE 250
(excluding investment trusts), 40% on post-tax return on invested
capital (ROIC) and 20% on ESG. Targets are set out overleaf.
Performance will be measured over three years with awards
vesting after three years. There will then be a further two-year
holding period applicable to the awards.
Mark Collis, maximum value
150%
of base salary
Vesuvius plc
Annual Report and Financial Statements 2024
118
Targets for the VSP Awards for the year 2025
TSR ranking relative to FTSE 250 excluding
investment trusts
Weighting
40%
Vesting percentage
(of total LTIP)
Below median
0%
Median
10%
Between median and
upper quintile
Pro rata between
10% and 40%
Upper quintile and above
40%
Post-tax ROIC
1
Weighting
40%
Vesting percentage
(of total LTIP)
2
Average ROIC over
three-year
performance period
Threshold and below
0%
13.1%
Maximum
40%
15.4%
1.
ROIC is defined as Net Operating Profit After Tax (NOPAT), divided by
invested capital (IC). NOPAT is defined as Group trading profit, plus post-
tax share of JV results, less amortisation of intangible assets calculated as
an average over the target period. (The inclusion of amortisation charges
serves to reduce the calculation of ROIC returns though we believe this to be
the most appropriate definition.) Invested capital is defined as total assets
excluding cash and non-interest-bearing liabilities, less the goodwill and
intangibles that arose under IFRS3 in respect of the Foseco acquisition in
2008, calculated as the average of IC at the start and the end of the target
period at constant currency.
2.
Vesting between these points will be on a straight-line basis.
Environment, Social and
Governance
Weighting
20%
Safety:
Average Lost Time Injury Frequency Rate (LTIFR)
1
2025–2027
Vesting percentage
(of total LTIP)
2
Range
Threshold and below
0%
0.80
Maximum
5%
0.50
Energy: CO
2
e:
Reduction in Scope 1 and 2 CO
2
e emission intensity excluding
the dolime process (vs 2019 baseline) in 2027
3
Vesting percentage
(of total LTIP)
2
Range
Threshold and below
0%
-42%
Maximum
10%
-45%
Diversity:
Gender diversity in Senior Leadership Group
4
on 31 Dec 2027
Vesting percentage
(of total LTIP)
2
Range
Threshold and below
0%
20%
Maximum
5%
24%
1.
LTIFR is the Lost Time Injury Frequency Rate, based on the number of
lost time injuries that occur during the performance period per million
hours worked.
2.
Straight-line vesting between threshold and maximum.
3.
Reduction of CO
2
e emissions per metric tonne of product packed
for shipment.
4.
Senior Leadership Group is defined as the Group Executive Committee plus
the most senior Vesuvius managers worldwide, in terms of their contribution
to the Group’s overall results and to the execution of the Group’s strategy.
Explaining the ROIC target range
The Committee has considered the Group strategy over the
period, market conditions, and historic and current estimates
of WACC provided by our financial advisers in determining the
target range.
This year we have transitioned to an ROIC target which excludes
goodwill and intangibles that arose upon the historic acquisition
of Foseco in 2008, as the Committee believes that this approach
removes the distortive effects of that acquisition, and provides
a clearer measure of management performance . This measure
is one of the Company’s KPIs, as set out on page 29. The targets
have been set, and performance will be assessed, excluding
approved restructuring costs. The threshold pay-out level remains
at 0% this year, but may change for future awards.
Adjustments to the ROIC target range may be required should
the Board approve certain mergers, acquisitions or disposals.
For any such event that requires Board approval then
management will assess the potential impact on ROIC as part
of their broader submission, and the Committee will determine
whether any adjustment to targets should be made. In general,
the Committee will have regard to the materiality of the event
and the timing in the life of the award cycle. The intention will
be to maintain fair, stretching but achievable targets, whilst not
providing a disincentive to management to bring forward
proposals for mergers, acquisitions or disposals that are in the
Company’s interest.
Explaining the ESG metrics
The Environment, Social and Governance targets for the 2025
awards represent key strategic priorities for the management
team as well as the Board.
Safety continues to be of paramount cultural importance to
Vesuvius and progressive improvement has been made in
recent years. The targets are considered stretching in the
context of an operationally challenging environment with many
employees working remotely at customer sites. Lost Time Injury
Frequency Rate is a recognised metric, and is measured per
million hours worked.
Energy – the reduction in Scope 1 and 2 emissions is a key feature
of the Company’s sustainability strategy (see pages 35–54) and as
such a measure of CO
2
e emission intensity is used (CO
2
e emissions
per tonne of product packed for shipment). Baseline and current
emissions have been verified by Carbon Footprint Ltd. The targets
have been set relative to the 2024 outturn of 40% (versus the
2019 baseline) which, as outlined on page 51, reflected actual
performance excluding the dolime process. The exclusion of
dolime represents a change compared to the way that this metric
was assessed for target-setting in 2023 and 2024, consistent with
the evolution of our sustainability plans for the short to medium
term as outlined in our Non-Financial and Sustainability
Information Statement on page 48.
Diversity – a focus on gender diversity has seen improvements in
the Senior Leadership Group of c.150 individuals in recent years.
The Committee notes that the market for female talent in the
sector remains extremely tight and, following a review of
estimated market talent pipelines in our industry, it believes
that the target range is appropriately stretching.
Annual Report on Directors’ Remuneration
continued
119
Strategic report
Governance
Financial statements
Single total figure table – audited
The table below sets out the total remuneration received by Executive Directors in the financial year under review:
Patrick André
Mark Collis
1
2024
(£000)
2023
(£000)
2024
(£000)
2023
(£000)
Total salary
756
720
441
315
Taxable benefits
2
78
61
27
30
Pension
3
129
122
75
54
Total fixed pay
4
963
904
543
399
Annual Incentive
5
483
942
240
348
Long-Term Incentives
6,7,8,9
963
628
–
–
Buy-out awards
10,11
–
–
14
178
Total variable pay
12
1,446
1,570
254
526
Total
13
2,409
2,473
797
925
1.
Mark Collis joined Vesuvius as Chief Financial Officer and as an Executive
Director effective 1 April 2023. As such the figures shown for 2023 represent
the actual, pro-rated amounts received during the period served in 2023.
2.
Standard benefits for the Executive Directors include car allowance
and private medical care. In 2023, Patrick André also received external
professional services support, funded by the Company, in relation to EU
Settled Status applications for him and his wife, in line with the approval for
such support granted by the Remuneration Committee in May 2019. The
total cost of this support including gross up of associated taxes was £3,098
in 2023. In 2024, Patrick André also received external professional services
support, funded by the Company, in relation to clarifying his status and
assessing his liabilities associated with the forthcoming implementation
of the Foreign Income and Gains regime.
3.
The pension figures for 2023 and 2024 for Patrick André and Mark Collis
represent the value of all cash allowances and contributions received in
respect of pension benefits, at a rate of 17% of base salary, implemented
in line with the Remuneration Policy from 1 January 2023. In 2024, for
both Patrick André and Mark Collis, pension benefit comprised £10,000
contribution into pension, with the remainder provided as a pension
cash supplement.
4.
The sum of total salary, taxable benefits and pension.
5.
This figure includes the Annual Incentive payments to be made to the
Executive Directors in relation to the year under review. 33% of any Annual
Incentive payments will be deferred into awards over shares, subject to a
three-year vesting period, and subject to no further performance measures.
See page 110 for more details. Leaver and change of control provisions
in relation to these shares are set out in the Policy on page 114.
6.
The 2023 figure represents the Performance Share awards granted to
Patrick André in 2021 under the VSP, which vested in 2024.
7.
The value of the 2023 Long-Term Incentive, relating to the Performance
Share award granted to Patrick André under the VSP in 2021, is reflective of
a share price depreciation of 9.95% between the share price used at grant
(536.9p), versus the vesting share price of 483.5p. The values also include
dividend vesting at 64.55p per vested share.
8.
The 2024 figure represents the Performance Share awards granted to
Patrick André in 2022 under the VSP, which will vest in 2025.
9.
The value of the 2024 Long-Term Incentive, relating to the Performance
Share award granted to Patrick André under the VSP in 2022, is reflective of
a share price depreciation of 1.54% between the share price used at grant
(402.0p), versus the Q4 2024 average share price (395.8p) used as a proxy
for the vesting price. The values also include dividend vesting at 67.35p per
vested share.
10. As detailed on page 126 of the 2023 Annual Report, Mark Collis received
a one-off payment to compensate for the 2022 annual incentive payment
forfeited when leaving his former employer, as well as a combination of
Restricted Share awards and Performance Shares to compensate for
forfeited equity incentives, which the Committee resolved to make in line
with the Remuneration Policy. The figure quoted here for 2023 comprises
the one-off payment value, equivalent to the 2022 payment he had
foregone, equal to £73,261 as well as Restricted Share awards made during
the year with face value totalling £105,034 (as referenced on page 126 and
detailed further on page 129 of the 2023 Annual Report).
11. The figure quoted here for 2024 comprises the two Performance Share
awards, for which the performance period ended on 31 December 2023,
but for which the vesting performance (aligned with that of Mark Collis’s
former employer) was not as yet known at the time of publication of the
2023 Annual Report. The awards, granted on 20 June 2023, comprised
23,820 shares due to vest at earliest on 8 April 2024, and 5,955 shares due
to vest at earliest on 9 March 2026, as detailed further on page 129 of the
2023 Annual Report. The resulting vesting performance of these awards,
as detailed on page 142 of the John Wood Group plc 2023 Annual report,
was 10% of maximum. The value shown here reflects the vested value of
the first of these awards based on the vesting share price of 491.5p on
8 April 2024 (reflecting a share price appreciation of 26.9% versus the share
price used at grant, 387.3p, that being the average closing share price for
the 30 dealing days prior to the Board’s confirmation of his appointment
on 4 January 2023), plus dividend vesting at 6.8p per vested share; plus the
vested value of the second of these awards, due to vest on 9 March 2026,
for which the Q4 2024 average share price (395.8p) has been used as
a proxy for the vesting price.
12. The sum of the value of the Annual Incentive, Long-Term Incentives and Buy-
out awards where the performance period ended during the financial year.
13. The sum of base salary, benefits, pension, Annual Incentive, Long-Term
Incentives and buy-out awards where the performance period ended during
the financial year.
Additional note:
14. Total 2024 Directors’ Remuneration (Executive Directors and Non-executive
Directors) is £4.058m. 2023 Directors’ Remuneration for the Directors who
served during 2023 was £4.238m.
Executive Directors’ remuneration in year under review
Vesuvius plc
Annual Report and Financial Statements 2024
120
Incentive for 2024 performance – audited
The Executive Directors are eligible to receive an Annual Incentive
calculated as a percentage of base salary, based on achievement
against specified financial targets and personal objectives. Each
year, the Remuneration Committee establishes the performance
criteria for the forthcoming year. The financial targets are set by
reference to the Company’s financial budget. The target range is
set to ensure that Annual Incentives are only paid out at maximum
for significantly exceeding performance expectations. The
Remuneration Committee considers that the setting and
attainment of these targets is important in the context of
achievement of the Company’s longer-term strategic goals.
Pay-outs will commence and increase incrementally from 0% once
the threshold performance for any of the elements has been met.
The Annual Incentive has a target level at which 50% of the
maximum opportunity is payable, and a maximum performance
level at which 100% of the maximum opportunity is earned,
on a pro rata basis.
For 2024, the maximum Annual Incentive potential for the
Executive Directors was 175% of base salary for Patrick André
and 150% for Mark Collis, with their target Annual Incentive
potential being 87.5% and 75% of base salary respectively.
For the Financial Year 2024, the Executive Directors’ Annual
Incentives were based 40% on Group headline EPS, 20% on the
Group’s return on invested capital (post-tax ROIC), 20% on the
Group’s working capital to sales ratio (based on the 12-month
moving average) and 20% on specified personal objectives.
Financial targets and outcomes for the Annual Incentive in 2024
The 2024 Vesuvius Group headline EPS performance targets set out below were set at the December 2023 full-year average foreign
exchange rates, being the rates used for the 2024 budget process.
In assessing the Group’s performance against these targets, the Committee has applied adjustments to ensure a constant currency
approach, including retranslating the full-year 2024 EPS performance at December 2023 full-year average foreign exchange rates to
establish performance, consistent with practice in previous years. Outturns are also adjusted for unbudgeted M&A costs.
Metric
2024 Financial targets
2024 Outcomes
Threshold
Target
Maximum
Metric
outcome
Incentive outturns
(% of salary)
CEO
CFO
Group Headline EPS
45.8p
51.3p
56.8p
47.2p
8.9%
7.6%
Group Post-tax ROIC
8.2%
9.1%
10.0%
8.4%
3.9%
3.3%
Group Working Capital/Sales
24.4%
23.4%
22.4%
22.9%
26.3%
22.5%
Based on the above outcomes, the total incentive outturns related
purely to financial objectives were 39.0% of base salary and
33.5% of base salary for the CEO and CFO respectively.
Personal objectives
In 2024, a proportion (20%) of the Annual Incentive for Executive
Directors (representing 35% of salary for the CEO, and 30%
of salary for the CFO) was based on the achievement of
personal objectives. The Committee sets specific target ranges
for such objectives, against which actual performance is then
measured. A summary of 2024 performance is detailed in the
following tables.
Annual Report on Directors’ Remuneration
continued
121
Strategic report
Governance
Financial statements
Patrick André
Summary of objective
Key objective details
Summary of outcome
Review and implement
Group strategy
–
Monitor and implement road map to facilitate
achievement of enhanced return on sales targets
–
Close at least one attractive external acquisition
in 2024
–
Successful implementation of plans to facilitate local optimisation of
cost and pricing, yielding positive market share gains in the face of
extremely challenging market conditions
–
Acquisition of PiroMET signed after a protracted negotiation process
Drive performance
and deliver results
–
Deliver enhanced cash conversion and market share,
achieve defined cash tax savings, annualised cash
savings in line with 2023 Capital Markets Day
commitment, and optimise gross margin, quality
performance and R&D efficiency
–
Deliver strategic expansion and optimisation of
capex on budget and on time
–
Solid performance in all areas with, for example, achievement above
target for cash conversion, and above maximum in relation to cash
tax savings and annualised cash savings
–
Maximum performance, with all related projects delivered ahead of
targets in 2024
Prepare GEC
succession and
reinforce talent
management
–
Implement smooth succession for BU President
Advanced Refractories by year-end
–
Continue to develop internal succession pipelines
for other GEC roles including CEO, CFO and
BU Presidents
–
Successful, effective and efficient integration of Nitin Jain into the
Group Executive Committee, and significant development and
progression of internal talent pipeline for a range of GEC positions
Improve Vesuvius’
sustainability
performance
–
Drive further reduction in CO
2
emission intensity
and reinforce governance risk management
–
Continued, significant improvements in energy efficiency across the
business and 100% employee uptake of risk management training
programmes to support governance in 2024
In summary, after considering performance as outlined above, the Committee approved an Annual Incentive pay-out of 24.9% of
contractual base salary, out of the maximum potential 35%, in respect of the personal objectives of Patrick André.
Mark Collis
Summary of objective
Key objective details
Summary of outcome
Optimise cash
management
and profitability
–
Deliver enhanced cash conversion, annualised cash
savings and trading profit margin, reduce receivables
and achieve targeted cash tax savings
–
Solid performance in relation to cash conversion and reduction of
trade creditors. Above maximum performance in relation to
annualised cash and cash tax savings
Review investor
relations strategy
–
Attract at least two new long-term global investors
into the shareholder base before the end of 2024
–
Not completed during 2024
Drive IT performance
–
Fully implement learnings from 2023 cyber security
incident, conduct follow-up audits and implement
recommendations
–
Go-live of SAP A1 system in Steel Division in EMEA by
end of 2024
–
Learnings and audit fully implemented with testing underway for
subsequent implementation of recommendations
–
SAP A1 deployment very close to completion for Steel Division as at
end 2024
Drive OPEX reductions
–
Finalise implementation of Finance operating model
in EMEA and NAFTA by end 2024
–
Progress projects to implement consolidation of
EMEA finance invoicing processes and decrease
central finance headcount in line with defined targets
–
Significant progress of implementation in the EMEA region with
NAFTA completion pending
–
Projects fully completed and implemented with performance above
maximum target levels
Improve Vesuvius’
sustainability
performance
–
Drive further reduction in CO
2
emission intensity and
reinforce governance risk management
–
Continued, significant improvements in energy efficiency across the
business and 100% employee uptake of risk management training
programmes to support governance in 2024
In summary, after considering performance as outlined above, the Committee approved an Annual Incentive pay-out of 21.0% of
contractual base salary, out of the maximum potential 30%, in respect of the personal objectives of Mark Collis.
The total Annual Incentive awards payable to Patrick André and Mark Collis, in respect of their service as Executive Directors during
2024, are therefore 63.9% and 54.5% of salary respectively, of which 33% will be deferred into awards over shares, to be held for a
period of three years, with vesting in accordance with the Remuneration Policy. Other than in cases of dismissal for cause, deferred
awards will vest in full.
The Committee considered the appropriateness of this overall AIP payment in the context of the experience of our various stakeholders
during 2024 and was satisfied that no discretionary adjustments were required.
Vesuvius plc
Annual Report and Financial Statements 2024
122
2022 VSP Awards (vesting in 2025) – audited
The performance period applicable to these awards ended on 31 December 2024. Further details on the number of shares awarded are
shown on page 129.
Weighting
0% vesting
25% vesting
50% vesting
100% vesting
Performance achieved
Pay-out level
(% of
maximum)
TSR relative to FTSE 250
excluding investment trusts
1
40%
Below
median
Median
–
Upper
quintile
Between median
and upper quintile
(Ranked 58th)
20.4%
Post-tax ROIC
1
40%
7.5%
–
–
10.0%
9.3%
28.8%3
Safety: Average Lost Time
Injury Frequency Rate (LTIFR)
2022–2024
5%
1.10
–
–
0.90
0.73
5.0%
Energy: CO
2
e: Reduction in
Scope 1 and 2 CO
2
e emission
intensity (vs 2019 baseline)
in 2024
2
10%
-14%
–
–
-20%
-40%
2
10.0%
Diversity: Gender diversity in
the Senior Leadership Group
on 31 Dec 2024
5%
20%
–
–
26%
21%
0.8%
1.
Straight-line vesting applies between the vesting points.
2.
Performance in relation to the Energy targets reflects a change in the way CO
2
e statistics have been calculated in 2024, and now shows the actual performance,
which reflects a reduction in demand for and operation of the dolime process. The targets for the 2022 VSP award were set based on the normal operation of
the dolime process. If the dolime process had continued to operate normally in 2024 (based on average production levels for 2019–2022), i.e. the same basis
for modelling ‘normal’ performance, and the basis upon which the 2022 VSP targets were defined, this would show a proforma outturn of -27%, still beyond
maximum. See page 51 for further information.
3.
Adjusted for unbudgeted M&A costs and approved restructuring costs.
Share awards granted during the financial year – audited
VSP award
An award was granted under the VSP to selected senior executives in April 2024. UK executives receive awards in the form of nil-cost
options with a flexible exercise date. This award is subject to the performance conditions described below and will vest in April 2027
(with a subsequent two-year holding period for any vested shares to April 2029).
Type of award
Date of grant
Maximum
number of
shares
1
Face value
(£)
Face value
(% of salary)
Threshold
vesting
End of
performance period
Patrick André
Nil-cost option
8 April 2024
310,721
£1,511,999
200%
25% of award
31 December 2026
Mark Collis
8 April 2024
135,940
£661,498
150%
1.
In 2024, Patrick André and Mark Collis were entitled to receive allocations of Performance Shares worth 200% and 150% of their base salaries respectively.
Awards were calculated based on the average closing mid-market price of Vesuvius’ shares on the 30 dealing days prior to grant, of £4.8661. The maximum
number of shares quoted excludes any additional shares that may be awarded in relation to dividends accruing during the vesting and holding periods.
Vesting of the VSP awards is subject to satisfaction of the following performance conditions. Any LTIP vesting is at the discretion of the
Remuneration Committee.
Weighting
Threshold
100% vesting
TSR relative to FTSE 250 excluding investment trusts
1
40%
Median
Upper quintile
Group post-tax ROIC
1
40%
8.5%
11.5%
ESG: Safety: Average Lost Time Injury Frequency Rate (LTIFR) 2024–2026
1,2
5%
0.95
0.65
ESG: Energy: CO
2
e: Reduction in Scope 1 and 2 energy CO
2
e
emissions/tonne (vs 2019 baseline) in 2026
1,3
10%
-20%
-26%
ESG: Diversity: Gender diversity in Senior Leadership Group on 31 December 2026
1,4
5%
20%
26%
1.
Straight-line vesting applies between the vesting points. Threshold vesting for the TSR element is 25% of maximum, and 0% of maximum for all other elements.
2.
LTIFR is the Lost Time Injury Frequency Rate, based on the number of Lost Time Injuries that occur during the performance period. The calculation rate is LTIFR
per million hours worked.
3. Reduction of CO
2
e emissions per metric tonne of product packed for shipment.
4.
Senior Leadership Group is defined as the Group Executive Committee plus the most senior Vesuvius managers worldwide, in terms of their contribution to the
Group’s overall results and to the execution of the Group’s strategy. This group comprises circa 150 members (number may slightly fluctuate from one year to
the next based on organisational changes).
Each of the VSP performance measures operates independently. The use of these measures is intended to align Executive Director
remuneration with shareholders’ interests. Prior to vesting, the Remuneration Committee reviews the underlying financial performance
of the Company and non-financial performance of the Company and individuals over the performance period to ensure that the
vesting is justified, and to consider whether to exercise its discretion including consideration of any potential windfall gains.
Annual Report on Directors’ Remuneration
continued
123
Strategic report
Governance
Financial statements
Deferred Share Bonus Plan award
33% of the Annual Incentive earned by Patrick André and Mark Collis in respect of performance in 2023 was deferred into a share
award granted in April 2024 under the Company’s Deferred Share Bonus Plan. There are no additional performance conditions
applicable to these awards. Leaver and change of control provisions in relation to these shares are set out in the Policy on page 114.
Type of award
Date of grant
Number of
shares
Face value
(£)
Vesting date
Patrick André
Conditional
award
8 April 2024
64,560
£314,155
8 April 2027
Mark Collis
8 April 2024
23,854
£116,076
8 April 2027
1.
The number of shares has been calculated using the share price of £4.8661 (average closing share price for the 30 dealing days prior to grant) and excludes any
additional shares that may be awarded in relation to dividends accruing during the vesting period.
Statement of Executive Directors’ shareholding – audited
The interests of Executive Directors and their closely associated
persons in ordinary shares as at 31 December 2024, including any
interests in share options and shares provisionally awarded under
the VSP, are set out below:
Beneficial
holding in
shares
4
Outstanding share incentive awards
Nil-cost options
Conditional
awards
With
performance
conditions
1
Without
performance
conditions
2
Without
performance
conditions
3
Patrick André
435,543
986,220
0
199,946
Mark Collis
47,047
278,739
23,869
23,854
1.
These are Performance Shares granted under the VSP.
2.
These are the remaining, as yet unvested buy-out share awards, awarded
to Mark Collis, which are not subject to any additional performance
conditions, as detailed on page 129 of the 2023 Annual Report. These
include 595 shares which were granted subject to John Wood Group plc
vesting performance, for which the performance period ended at the end
of 2023, but which are not due to vest until 9 March 2026.
3.
These are awards granted under the Deferred Share Bonus Plan.
4.
Mark Collis’s beneficial shareholding includes 6,317 shares, awarded
as part of his buy-out share awards, and comprising: 1,349 shares plus
21 dividend-equivalent shares, which vested on 20 June 2023, which were
exercised on 25 August 2023 at a market value of 432.8 pence per share;
835 shares plus 12 dividend-equivalent shares, which vested and were
exercised on 11 March 2024 at a market value of 480.8 pence per share; and
4,044 shares plus 56 dividend-equivalent shares, which vested and were
exercised on 8 April 2024 at a market value of 491.5 pence per share.
Additional notes:
5.
All outstanding share incentive awards are nil-cost options except awards
made under the Deferred Share Bonus Plan which are conditional awards.
6.
No awards vested without being exercised during the year, and indeed
no nil-cost options at all have vested without being exercised. For further
details please see the Appendix: Supplementary share-related information
section on pages 128 and 129.
7.
None of the other Directors, nor their spouses, nor their minor children,
held non-beneficial interests in the ordinary shares of the Company during
the year.
8.
There were no changes in the interests of Patrick André and Mark Collis in
the ordinary shares of the Company in the period from 1 January 2025 to
the date of this Report.
9.
All awards under the VSP are subject to performance conditions and
continued employment until the relevant vesting date. Full details of VSP
award allocations are set out on page 129.
10. Full details of Directors’ shareholdings and incentive awards are given in the
Company’s Register of Directors’ Interests, which is open to inspection at the
Company’s registered office during normal business hours.
Shareholding guidelines – audited
The Remuneration Committee encourages Executive Directors
to build and hold a shareholding in the Company. Under the 2023
Remuneration Policy, the required holding is 200% of salary for all
Executive Directors. Executive Directors are required to retain at
least 50% (measured as the value after tax) of any shares received
through the operation of share schemes; in addition, permission to
sell shares held – whether acquired through the operation of share
schemes or otherwise – will not be given, other than in exceptional
circumstances, if, following the disposal, the shareholding
requirement is not achieved or is not maintained.
Compliance with the shareholding policy is tested at the end of
each year for application in the following year. Under the 2023
Remuneration Policy, the valuation of any holding is taken at the
higher of: (1) the share price on the date of vesting of any shares
derived from a share award, in respect of those shares only; and
(2) the average of the closing prices of a Vesuvius ordinary share
for the trading days in that December.
As at 31 December 2024, the Executive Directors’ shareholdings
against the shareholding guidelines contained in the Directors’
Remuneration Policy in force on that date (using the Company’s
share price averaged over the trading days of the period
1 December to 31 December 2024, of 425.10 pence per share)
were as follows:
Director
Actual share
ownership
as a percentage
of salary at
31 Dec 2024
Policy share
ownership as a
percentage
of salary
Policy met?
Patrick André
267%
200%
Yes
Mark Collis
46%
200%
In the build-up
period
Payments to past Directors and
loss of office payments – audited
There were no payments made to any Director for loss of office,
nor any payments to past Directors, during the year ended
31 December 2024.
Vesuvius plc
Annual Report and Financial Statements 2024
124
Non-executive Directors
Single total figure table – audited
The table below sets out the total remuneration received by
Non-executive Directors in the financial year under review:
(£000)
2024
2023
Total
fees
1
Taxable
benefits
2
Total
Total
fees
1
Taxable
benefits
2
Total
Carl-Peter
Forster
279
3
281
262
4
266
Carla Bailo
97
6
103
84
4
89
Italia Boninelli
3
62
3
65
–
–
–
Kath Durrant
4
48
3
51
86
6
92
Dinggui Gao
86
7
93
83
7
90
Friederike
Helfer
74
1
76
67
1
68
Douglas Hurt
5
39
2
40
96
1
97
Eva Lindqvist
6
53
2
55
–
–
–
Robert
MacLeod
84
4
88
25
1
26
Total Non-
executive
Director
remuneration
822
31
852
703
24
728
1.
Effective from 2023, total fees for Non-executive Directors now include any
stipend fees paid as a result of intercontinental travel on Vesuvius business.
2.
The UK regulations require the inclusion of benefits for Directors where
these would be taxable in the UK on the assumption that the Director is
tax resident in the UK. The figures in the table therefore include expense
reimbursement and associated tax relating to travel, accommodation
and subsistence for the Director (and, where appropriate, their spouse)
in connection with attendance at Board meetings and other corporate
business during the year, which are considered by HMRC to be taxable in
the UK.
3.
Italia Boninelli joined the Board on 1 June 2024.
4.
Kath Durrant stepped down from the Board on 31 July 2024.
5.
Douglas Hurt stepped down from the Board on 15 May 2024.
6.
Eva Lindqvist joined the Board on 15 May 2024.
Fee structure in 2025
The fee for the Chairman was also reviewed by the Committee
during the year and the fees for the Non-executive Directors by
the Board. Following an assessment of time commitment, roles
and responsibilities it was decided that the fees would increase
with effect from 1 January 2025. The Chairman’s fee was
increased to £270,375; the Non-executive Directors’ fees were
increased to £68,150. Supplementary fees were also increased,
with the supplementary Senior Independent Director fee
increasing to £13,000; supplementary fee for the Chairs of
the Audit and Remuneration Committees to £17,000; and
supplementary fee for the Non-executive Director responsible
for workforce engagement to £12,000. The stipend of £4,000,
payable to Non-executive Directors in respect of each overseas,
intercontinental trip they undertake on Vesuvius business, remains
in place, with the stipend continuing to be payable for a maximum
of five such trips in any calendar year.
Statement of Non-executive Directors’
shareholding – audited
The interests of Non-executive Directors and their closely
associated persons in ordinary shares as at 31 December 2024
are set out below:
Beneficial
holding in
shares
Carl-Peter Forster
–
Carla Bailo
–
Italia Boninelli
1
–
Kath Durrant
2
–
Dinggui Gao
–
Friederike Helfer
3
–
Douglas Hurt
4
18,000
Eva Lindqvist
5
–
Robert MacLeod
14,338
1.
Italia Boninelli was appointed as a Non-executive Director effective
1 June 2024.
2.
Kath Durrant’s shareholding is effective as at the date she stepped down
from the Board, 31 July 2024.
3. Friederike Helfer is a Partner of, and has a financial interest in, Cevian
Capital which held 57,249,896 ordinary shares (22.26% of Vesuvius’ issued
share capital) as at 31 December 2024 and 22.71% as at the date of
this Report.
4.
Douglas Hurt’s shareholding is effective as at the date he stepped down
from the Board, 15 May 2024.
5. Eva Lindqvist was appointed as a Non-executive Director effective
15 May 2024.
Additional notes:
6.
None of the other Directors, nor their spouses, nor their minor children,
held non-beneficial interests in the ordinary shares of the Company during
the year.
7.
There were no changes in the interests of the Non-executive Directors in the
ordinary shares of the Company in the period from 1 January 2025 to the
date of this Report.
8.
Full details of Directors’ shareholdings are given in the Company’s Register
of Directors’ Interests, which is open to inspection at the Company’s
registered office during normal business hours.
Annual Report on Directors’ Remuneration
continued
125
Strategic report
Governance
Financial statements
Annual changes in Executive Directors’ pay versus employee pay
Executive Directors’ pay comparison
The London headquartered salaried employee workforce is presented as a voluntary disclosure of the representative comparator
group for the Vesuvius Group Parent Company as there is only one non-Director employee in the Parent Company.
Year-on-year change in pay for Directors compared to the London headquartered employee average
2024
2023
2022
2021
2020
Salary
2
Bonus
3
Benefits
5
Salary
2
Bonus
3
Benefits
5
Salary
2
Bonus
3
Benefits
5
Salary
2,4
Bonus
3
Benefits
5,6
Salary
2,4
Bonus
3
Benefits
5
London
headquartered
employee
average
1
8%
(40%)
90%
13%
14%
33%
(8%) (12%)
3%
19% 236%
120%
0% 165%
18%
Executive
Directors
Patrick André
5%
(49%)
12%
12%
29%
(22%)
4%
(16%)
11%
11% 469%
(6%)
(7%) 183%
(25%)
Mark Collis
5%
(31%)
22%
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
Non-executive
Directors
15
Fees
2
Benefits
5
Fees
2
Benefits
5
Fees
2
Benefits
5
Fees
2
Benefits
5,6
Fees
2
Benefits
5
Carl-Peter
Forster
7
6%
–
(35%)
0%
–
97%
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
Carla Bailo
8
4%
–
36%
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
Italia Boninelli
9
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
Kath Durrant
10
(4%)
–
(46%)
15%
–
(14%)
25%
–
117%
19%
–
100%
n/a
–
n/a
Dinggui Gao
11
4%
–
1%
38%
–
121%
20%
–
100%
n/a
–
n/a
n/a
–
n/a
Friederike
Helfer
11%
–
16%
12%
–
(36%)
20%
–
(31%)
11%
–
969%
(10%)
–
(60%)
Douglas Hurt
12
1%
–
22%
13%
–
(52%)
21%
–
275%
11%
–
24%
(10%)
–
–
Eva Lindqvist
13
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
Robert
MacLeod
14
35%
–
364%
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
n/a
–
n/a
1.
This is the average percentage change, excluding the Executive Directors. Salaries, bonus and benefits relate to the relevant financial reporting year.
2.
Calculated using annualised salaries/fees. Note that, as of 2023, Non-executive Director fees reflect the inclusion of travel stipends payable for up to five
intercontinental trips on Vesuvius business per year.
3.
Calculated using data from the single figure table in the Annual Report. Note that for Mark Collis, the 2023 figure used for calculation is exclusive of any
buy-out incentives paid in 2023.
4.
During 2020, all Executive and Non-executive Directors took a voluntary 20% pay reduction for six months. Other senior employees in London headquarters
also took a pay reduction between 10% and 20%, depending on their level of seniority. Therefore, the total percentage increase for Patrick André in 2021
was higher than his agreed salary increases, as this increase is compared with actual, partly-reduced salary paid during 2020 rather than full, contractual
base salary.
5.
Calculated using data from the audited Directors’ Emoluments. Benefits relate to taxable travel benefits, and Company pensions in the case of the Executive
Directors. It is calculated as the percentage increase or decrease on the actual figures year-on-year and not annualised or pro-rated for any new starters.
6.
Calculations of 2021 benefits changes have been restated as compared with the 2021 Annual Report, to ensure correct alignment with single figure
remuneration tables.
7.
Carl-Peter Forster joined the Board on 1 November 2022 and took over as Chairman on 1 December 2022.
8.
Carla Bailo joined the Board on 1 February 2023.
9.
Italia Boninelli joined the Board on 1 June 2024 and took over as Remuneration Committee Chair on 31 July 2024.
10. Kath Durrant joined on 1 December 2020 and then became the Remuneration Committee Chair following the 2021 AGM, and it is this change that accounts
for the proportionally higher increase in her salary in 2021. She then stepped down from the Board on 31 July 2024, which accounts for the net reduction in
year-on-year change in 2024.
11. Dinggui Gao joined the Board on 1 April 2021.
12. Douglas Hurt stepped down from the Board on 15 May 2024.
13. Eva Lindqvist joined the Board on 15 May 2024.
14. Robert MacLeod joined the Board on 1 September 2023 and took over as Audit Committee Chair on 15 May 2024, and it is that change which accounts for
the proportionally higher increase in his fees and benefits in 2024.
15. The Non-executive Directors’ fees were reviewed and increased in 2015, 2019, 2022, 2023 and 2024.
Other regulatory disclosure requirements
Vesuvius plc
Annual Report and Financial Statements 2024
126
CEO pay ratio
The UK employee workforce is the representative comparator
group to the Chief Executive, Patrick André, who is based in the
UK (albeit with a global role and responsibilities). Levels of pay
vary widely across the Group depending on geography and
local market conditions.
Year
Method
25th
percentile
50th
percentile
(median)
75th
percentile
2019
Option A ratio
35:1
28:1
17:1
2020
Option A ratio
32:1
24:1
13:1
2021
Option A ratio
53:1
41:1
21:1
2022
Option A ratio
60:1
46:1
24:1
2023
Option A ratio
57:1
43:1
22:1
2024
Option A ratio
50:1
34:1
14:1
2024
Total pay and
benefits (£)
47,816
71,209
167,440
2024
Salary (£)
41,103
65,000
134,159
The table above shows the Chief Executive pay ratios versus our
UK employees for 2019, 2020, 2021, 2022, 2023 and 2024. The pay
ratios compare amounts disclosed in the single total figure table
for the Group Chief Executive to the annual full-time equivalent
remuneration of our UK employees for 2019, 2020, 2021, 2022,
2023 and 2024. The Remuneration Committee is comfortable that
the ratios reported reflect the remuneration principles applied
and represent a valid basis for comparison of remuneration.
A significant proportion of the Chief Executive’s remuneration
is based on performance-related pay, which affects said
remuneration disproportionately when compared with others.
This is reflected in the variation in pay ratio shown over the past
six years.
The data has been calculated in accordance with ‘Option A’ in the
Companies (Miscellaneous Reporting) Regulations 2018, because
it allows the Company to show the total annualised full-time
equivalent remuneration (salary, incentives, allowances, fees,
taxable benefits) and percentiles across the financial year as at
31 December 2019, 2020, 2021, 2022, 2023 and 2024.
Amounts have been annualised for those who joined part way
through the year or who are on part-time arrangements
and exclude those who left the organisation during the
reporting period.
The approach to calculating the pay ratios is consistent with
the prior year and there have not been any changes to the
compensation models in the reporting period.
The Committee is comfortable that the principles applied and the
quantum of compensation are appropriate across the Group’s
employee base. These are regularly benchmarked to ensure
market competitiveness. There is a consistent approach of
measuring against both business and personal performance for
all those who participate in incentive programmes. The Group
continues to monitor the effectiveness of all compensation
practices to identify future opportunities to ensure they remain
fair, consistent and in line with best practice.
Annual spend on employee pay
1
versus shareholder distributions
2
The charts below show the annual spend on all employees (including Executive Directors) compared with distributions made and
proposed to be made to shareholders for 2023 and 2024:
2024
(£m)
2023
(£m)
Change
Employee pay
1
474.3
475.1
(0.2%)
Dividends
2
(based on final proposed dividend) and share buybacks
123.4
63.8
93.4%
1.
Employee pay includes wages and salaries, social security, share-based payments and pension costs, and other post-retirement benefits. See Note 7 to the
Group Financial Statements.
2.
Shareholder distributions/dividends includes interim and final dividends paid in respect of each financial year. In addition, figures quoted for both 2023 and
2024 also reflect share buybacks. See Note 24 of the Group Financial Statements of the 2024 Annual Report.
Annual Report on Directors’ Remuneration
continued
127
Strategic report
Governance
Financial statements
Vesuvius’ total
shareholder return
compared against
total shareholder
return of the
FTSE 250 Index
(excluding
investment
trusts) over the
past ten years
FTSE 250 Index (excluding investment trusts)
Vesuvius plc
31/12/14
50
100
150
200
250
Chief Executive pay –
financial year ended
François Wanecq
1
Patrick André
2
31/12/15
31/12/16
31/12/17
31/12/18
31/12/19
31/12/20
31/12/21
31/12/22
31/12/23
31/12/24
Total remuneration
(single figure (£000))
£752
£1,173
£1,675
1
£465
2
£2,022
£1,220
£936
£1,706
£2,225
£2,473
£2,409
Annual variable pay
(% of maximum)
0%
50%
81%
1
85%
2
83%
11%
20%
94%
76%
75%
37%
Long-term variable pay
(% of maximum)
0%
0%
43.7%
1
n/a
2
100%
63%
0%
0%
48%
50%
65%
1.
Amounts shown in respect of François Wanecq for 2017 reflect payments in respect of his service as Chief Executive from 1 January 2017 to 31 August 2017 and
the full value of his VSP award in relation to the performance period 2015–2017.
2.
Amounts shown in respect of Patrick André for 2017 reflect payments in respect of his service as Chief Executive from 1 September 2017 to 31 December 2017.
Shareholder voting on remuneration resolutions
The 2023 Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy) was approved by shareholders at the AGM
held on 15 May 2024, and the 2023 Directors’ Remuneration Policy was approved by Shareholders at the AGM held on 18 May 2023,
with the following votes:
Votes for
Votes against
Votes withheld
Approval of the Directors’ Remuneration Policy 2023 AGM
234,279,589 (96.7%)
7,890,060 (3.3%)
8,514
Approval of the Directors’ Remuneration Report (excluding
the Directors’ Remuneration Policy) 2024 AGM
229,044,704 (97.1%)
6,947,440 (2.9%)
112,947
The Directors’ Remuneration Report has been approved by the Board and is signed on its behalf by:
Italia Boninelli
Chair of the Remuneration Committee
5 March 2025
TSR performance and Chief Executive pay
The TSR performance graph compares Vesuvius’ TSR performance with that of the same investment in the FTSE 250 Index (excluding
investment trusts). This index has been chosen as the comparator index to reflect the size, international scope and diversity of the
Company. TSR is the measure of the returns that a company has provided for its shareholders, reflecting share price movements and
assuming reinvestment of dividends.
Vesuvius plc
Annual Report and Financial Statements 2024
128
Share usage
Under the rules of the VSP, the Company has the discretion to
satisfy awards either by the transfer of Treasury shares or other
existing shares, or by the allotment of newly issued shares. Awards
made under the Deferred Share Bonus Plan to satisfy shares
awarded to Directors in respect of their Annual Incentive, and
awards made to management of the Company over shares
pursuant to the Medium-Term Incentive Plan, must be satisfied
out of Vesuvius shares held for this purpose by the Company’s
Employee Benefit Trust (EBT).
The decision on how to satisfy awards is taken by the
Remuneration Committee, which considers the most prudent
and appropriate sourcing arrangement for the Company.
At 31 December 2024, the Company held 7,271,174 ordinary
shares in Treasury and the EBT held 3,852,684 ordinary shares.
No additional shares were purchased between 31 December
2024 and the date of this report.
The EBT can be gifted Treasury shares by the Company, can
purchase shares in the open market or can subscribe for newly
issued shares, as required, to meet obligations to satisfy options
and awards that vest.
The VSP complies with the current Investment Association
guidelines on headroom which provide that overall dilution under
all plans over a rolling ten-year period should not exceed 10% of
the Company’s issued share capital, with a further limitation over
a rolling ten-year period of 5% for discretionary share schemes.
These limits remain available in full as headroom for the issue of
new shares or the transfer of Treasury shares for the Company.
No Treasury shares were transferred, or newly issued shares
allotted under the VSP during the year under review.
Deferred Share Bonus Plan allocations – audited
33% of the Annual Incentives earned by Patrick André and Mark Collis in respect of their periods of service as Directors of Vesuvius plc
were deferred into shares under the Company’s Deferred Share Bonus Plan. The following table sets out details of outstanding awards:
Grant and type of award
Total share
allocations as
at 1 Jan 2024
Additional
shares
allocated
during
the year
Allocations
lapsed during
the year
Shares
vested
during
the year
Total share
allocations
as at
31 Dec 2024
Market price
of the
shares on
the day
before
award (p)
Earliest
vesting/
release date
Patrick André
18 March 2021
1 Deferred Bonus Shares
9,430
–
–
(9,430)
0
538
18 Mar 2024
17 March 2022
2 Deferred Bonus Shares
75,207
–
–
–
75,207
385
17 Mar 2025
06 April 2023
3 Deferred Bonus Shares
60,179
–
–
–
60,179
386
06 Apr 2026
08 April 2024
4
Deferred Bonus Shares
–
64,560
–
–
64,560
492
08 Apr 2027
Total
144,816
64,560
–
(9,430)
199,946
Mark Collis
08 April 2024
4
Deferred Bonus Shares
–
23,854
–
–
23,854
492
08 Apr 2027
Total
–
23,854
–
–
23,854
1.
In 2021, Patrick André was awarded an Annual Incentive bonus in respect
of his service as a Director of Vesuvius plc in 2020 of £153,419. 33% of
the bonus was awarded in deferred shares (a conditional award). The
allocation of shares was made on 18 March 2021 and was calculated based
upon the average closing mid-market price of Vesuvius’ shares on the five
dealing days before the award was made, being £5.3690. The total value of
this award based on this share price was £50,628 There were no additional
performance conditions applicable to this award, which therefore vested in
full for Patrick André on the third anniversary of the award date.
2.
In 2022, Patrick André was awarded an Annual Incentive bonus in respect
of his service as a Director of Vesuvius plc in 2021 of £873,604. 33% of
the bonus was awarded in deferred shares (a conditional award). The
allocation of shares was made on 17 March 2022 and was calculated based
upon the average closing mid-market price of Vesuvius’ shares on the five
dealing days before the award was made, being £3.872. The total value of
this award based on this share price was £291,202. There are no additional
performance conditions applicable to this award, which will therefore vest
in full for Patrick André on the third anniversary of the award date.
3.
In 2023, Patrick André was awarded an Annual Incentive bonus in respect
of his service as a Director of Vesuvius plc in 2022 of £731,091. 33% of
this bonus was awarded in deferred shares (a conditional award). The
allocation of shares was made on 6 April 2023 and was calculated based
upon the average closing mid-market price of Vesuvius’ shares on the
30 dealing days before the award was made, being £4.0495. The total
value of this award based on this share price was £243,695. There are no
additional performance conditions applicable to this award, which will
therefore vest in full for Patrick André on the third anniversary of the
award date.
4.
In 2024, Patrick André and Mark Collis were awarded Annual Incentive
bonuses in respect of their service as Directors of Vesuvius plc in 2023 of
£942,480 and £348,233 respectively. 33% of each bonus was awarded in
deferred shares (conditional awards). The allocations of shares were made
on 8 April 2024 and were calculated based upon the average closing mid-
market price of Vesuvius’ shares on the 30 dealing days before the award
was made, being £4.8661. The total value of these awards based on this
share price was £314,155 and £116,076 respectively. There are no additional
performance conditions applicable to these awards, which will therefore
vest in full on the third anniversary of the award date.
Additional note:
5. Mark Collis did not receive an Annual Incentive bonus in 2023, therefore
no bonus was awarded in deferred shares during that year.
6.
The mid-market closing price of Vesuvius’ shares during 2024 ranged
between 357.5 pence and 504.0 pence per share, and on 31 December
2024, the last dealing day of the year, was 423.0 pence per share.
Directors’ Remuneration Report
Appendix: Supplementary share-related information
129
Strategic report
Governance
Financial statements
Vesuvius Share Plan award allocations – audited
The following table sets out outstanding awards that were allocated to Patrick André and Mark Collis under the VSP. All Performance
Share awards detailed below were granted in the form of nil-cost options. For Mark Collis, this table excludes the buy-out share awards
granted during 2023, which are detailed on page 129 of the 2023 Annual Report:
Grant and type of award
Total share
allocations as
at 1 Jan 2024
Additional
shares
allocated
during
the year
Allocations
lapsed
during
the year
Shares vested
and exercised
during the year
including
dividends
Total
share
allocations
as at
31 Dec 2024
Market price
of the shares
on the day
before award
(p)
Performance
period
Earliest
vesting date
End of
holding
period
1
Patrick André
18 March 2021
2
Performance Shares
230,210
–
(115,658)
(129,845)
*
0
**
538
1 Jan 21–
31 Dec 23
18 Mar
2024
18 Mar
2026
17 March 2022
3
Performance Shares
319,900
–
–
–
319,900
385
1 Jan 22–
31 Dec 24
17 Mar
2025
17 Mar
2027
06 April 2023
4
Performance Shares
355,599
–
–
–
355,599
386
1 Jan 23–
31 Dec 25
6 Apr
2026
6 Apr
2028
08 April 2024
5
Performance Shares
–
310,721
–
–
310,721
492
1 Jan 24–
31 Dec 26
8 Apr
2027
8 Apr
2029
Total
905,709
310,721
(115,658)
(129,845)
*
986,220
*
Total shares exercised included 15,293 dividend-equivalent shares. Shares were exercised at the point of vesting, at a market value of 483.5 pence per share.
**
Shareholding as at 31 Dec 2024 is zero, noting that the sum total of shares lapsed and vested/exercised during 2024 exceeds the outstanding allocation as at
1st Jan 2024 due to the inclusion of dividend equivalent shares in the number of shares vested/exercised.
Mark Collis
06 April 2023
4
Performance Shares
142,799
–
–
–
142,799
386
1 Jan 23–
31 Dec 25
6 Apr
2026
6 Apr
2028
08 April 2024
5
Performance Shares
–
135,940
–
–
135,940
492
1 Jan 24–
31 Dec 26
8 Apr
2027
8 Apr
2029
Total
142,799
135,940
–
–
278,739
1.
Performance Shares granted from 2019 onwards are subject to a further
two-year holding period.
2.
In 2021, Patrick André was entitled to receive an allocation of Performance
Shares worth 200% of his base salary. This allocation was calculated based
upon the average closing mid-market price of Vesuvius’ shares on the five
dealing days before the award was made, being £5.3690. The total value of
the award based on this share price was £1,235,997.
3.
In 2022, Patrick André was entitled to receive an allocation of Performance
Shares worth 200% of his base salary. In light of the volatile share price,
the Committee applied its discretion so that the number of shares in
this allocation was capped at a level based upon the average closing
mid-market price of Vesuvius’ shares on the five dealing days before the
February 2022 Remuneration Committee meeting of £4.02. As a result,
Patrick André received an award of 319,900 shares which, at grant, was
equivalent in value to 193% of his base salary (£1,239,653*).
*
Grant values are based on the average closing mid-market price of
Vesuvius’ shares on the five dealing days prior to grant (£3.872).
4.
In 2023, Patrick André and Mark Collis were entitled to receive allocations
of Performance Shares worth 200% and 138% of their base salaries
respectively**. The award was made on 6 April 2023 and was calculated
based upon the average closing mid-market price of Vesuvius’ shares on
the 30 dealing days before the award was made, being £4.0495. As a result,
Patrick André received an award of 355,599 shares which, at grant, was
equivalent in value to 200% of his base salary (£1,439,998) and Mark Collis
received an award of 142,799 shares which, at grant, was equivalent in
value to 138% of his base salary (£578,265).
**
Mark Collis’s entitlement in 2023, of 138%, is reflective of a pro-rated
calculation of the Chief Financial Officer’s normal 150% entitlement,
reflecting his date of joining the Company (1 April 2024), and therefore
reflecting omission of the first three months of the three-year performance
period related to the award.
5.
In 2024, Patrick André and Mark Collis were entitled to receive allocations
of Performance Shares worth 200% and 150% of their base salaries
respectively. The award was made on 8 April 2024 and was calculated
based upon the average closing mid-market price of Vesuvius’ shares on
the 30 dealing days before the award was made, being £4.8661. As a result,
Patrick André received an award of 310,721 shares which, at grant, was
equivalent in value to 200% of his base salary (£1,511,999) and Mark Collis
received an award of 135,940 shares which, at grant, was equivalent in
value to 150% of his base salary (£661,498).
Additional notes:
6.
If the respective performance conditions for Patrick André’s and Mark
Collis’s awards are not met, then the awards will lapse. If the threshold
level of either of the two performance conditions applicable to awards
granted prior to 2022 is met, then 12.50% of the awards will vest. For awards
granted in 2022 and 2023, threshold level performance on TSR would entail
12.5% vesting, while threshold performance on other conditions entails
0% vesting.
7.
The Remuneration Committee also has the discretion to award cash or
shares equivalent in value to the dividend that would have been paid
during the vesting period on the number of shares that vest.
8.
The mid-market closing price of Vesuvius’ shares during 2024 ranged
between 357.5 pence and 504.0 pence per share, and on 31 December
2024, the last dealing day of the year, was 423.0 pence per share.
Vesuvius plc
Annual Report and Financial Statements 2024
130
Directors’ Report
Going concern
Information on the business environment in which the Group operates, including the factors
that are likely to impact the future prospects of the Group, is included in the Strategic Report.
The principal risks and uncertainties that the Group faces throughout its global operations are
shown on pages 72 and 73. The financial position of the Group, its cash flows, liquidity position
and debt facilities are also described in the Strategic Report. In addition, the Group’s Viability
Statement is set out within the Strategic Report on page 71. Note 25 to the Group Financial
Statements sets out the Group’s objectives, policies and processes for managing its capital;
financial risks; financial instruments and hedging activities; and its exposures to credit, market
(both currency and interest rate related) and liquidity risk. Further details of the Group’s cash
balances and borrowings are included in Notes 12, 13 and 25 to the Group Financial Statements.
The Directors have prepared profit and loss, balance sheet and cash flow forecasts for the Group
for a period in excess of 12 months from the date of approval of the 2024 financial statements.
On the basis of the exercise described above, the Directors have prepared a going concern
statement which can be found on page 71.
Events since the
balance sheet date
Following the agreement reached in November 2024, on 28 February 2025 we completed the
acquisition of a 61.65% shareholding in PiroMET, a Turkish refractory company, for €26.2m.
The acquisition will strengthen our Advanced Refractories business in the fast-growing region of
EEMEA and will also allow us to leverage PiroMET’s expertise in robotics and gunning worldwide.
On 21 February 2025 the Group signed a new committed syndicated bank facility for an amount
of £475m and a maturity date of August 2029. The previous committed syndicated bank facility
signed in 2021 for an amount of £385m was cancelled with effect from the same date. This is
considered to be a non-adjusting event.
Future developments
A full description of the activities of the Group, including performance, significant events affecting
the Group in the year and indicative information in respect of the likely future developments in the
Group’s business, can be found in the Strategic Report.
Financial instruments
Information on Vesuvius’ financial risk management objectives and policies can be found in
Note 25 to the Group Financial Statements.
Research and development
The Group’s investment in research and development (R&D) during the year under review
amounted to £37m (representing approximately 2% (2023: 2% on a constant currency basis)
of Group revenue).
Further details of the Group’s R&D activities can be found in the Operating reviews and
Sustainability section of the Strategic Report.
The Directors submit their Annual Report together with the audited consolidated financial statements of the Group and of the
Company, Vesuvius plc, registered in England and Wales No. 8217766, for the year ended 31 December 2024.
The Companies Act 2006 requires the Company to provide a Directors’ Report for Vesuvius plc for the year ended 31 December 2024.
Information incorporated by reference
The information that fulfils this requirement and which is incorporated by reference into, and forms part of, this report is included in
the following sections of the Annual Report:
–
The Section 172(1) Statement
–
The Non-Financial and Sustainability Information Statement
–
The Governance section, including the Corporate Governance Statement
–
Financial instruments: the information on financial risk management objectives and policies contained in Note 25 to the Group
Financial Statements
This Directors’ Report and the Strategic Report contained on pages 1 to 73 together represent the management report for the
purpose of compliance with DTR 4.1.8 R of the Financial Conduct Authority’s Disclosure and Transparency Rules.
131
Strategic report
Governance
Financial statements
Political and
charitable donations
In accordance with Vesuvius policy, the Group did not make any political donations or incur any
political expenditure in relation to any UK or non-UK political parties during 2024 (2023: nil).
The Company made no charitable donations in the UK in 2024 (2023: £2,500).
Task Force on
Climate-related Financial
Disclosures (TCFD)
The Group has reported its climate-related information in accordance with the TCFD framework.
The majority of this information is included in the Non-Financial and Sustainability Information
Statement in the Strategic Report. A schedule of disclosure is included on page 38.
Energy consumption and
efficiency/greenhouse
gas emissions
Information on our reporting of greenhouse gas emissions, and the methodology used to record
these, is set out on page 53 of the Strategic Report. Details of the Group’s energy usage for 2024,
and the efficiency initiatives currently being undertaken, can be found in the Non-Financial and
Sustainability Information Statement in the Strategic Report on pages 37–54.
Branches
A number of the Group’s subsidiary undertakings maintain branches; further details of these
can be found in Note 17.1 to the Group Financial Statements.
Dividends
An interim dividend of 7.1 pence (2023: 6.8 pence) per Vesuvius ordinary share was paid on
13 September 2024 to shareholders on the register at the close of business on 9 August 2024.
The Board is recommending a final dividend in respect of 2024 of 16.4 pence (2023: 16.2 pence)
per ordinary share which, if approved, will be paid on 6 June 2025 to shareholders on the register
at 25 April 2025.
The Trustee of the Group’s employee benefit trust has waived the right to receive any dividends.
Accountability and audit
A responsibility statement of the Directors and a statement by the Auditors about their reporting
responsibilities can be found on pages 138, and 139–146, respectively. The Directors fulfil the
responsibilities set out in their statement within the context of an overall control environment of
central strategic direction and delegated operating responsibility. As at the date of this report,
as far as each Director of the Company is aware, there is no relevant audit information of which
the Company’s Auditors are unaware and each Director hereby confirms that they have taken
all the steps that they ought to have taken as a Director in order to make themselves aware of
any relevant audit information and to establish that the Company’s Auditors are aware of
that information.
Auditors’ reappointment
PricewaterhouseCoopers LLP (PwC) were reappointed as External Auditors for Vesuvius plc for
the year ended 31 December 2024, at the 2024 AGM. PwC have been Vesuvius’ External Auditors
since 2017 and have expressed their willingness to continue in office as Auditors of the Company
for the year ending 31 December 2025. Consequently, resolutions for the reappointment of
PwC as External Auditors of the Company and to authorise the Directors to determine their
remuneration are to be proposed at the 2025 AGM.
Directors
The current Directors of the Company are Patrick André, Carla Bailo, Italia Boninelli, Mark Collis,
Carl-Peter Forster, Dinggui Gao, Friederike Helfer, Eva Lindqvist and Robert MacLeod.
Douglas Hurt retired from the Board at the close of the AGM on 15 May 2024, when Eva Lindqvist
joined the Board. Italia Boninelli joined the Board on 1 June 2024 and Kath Durrant stepped down
from the Board on 31 July 2024.
All the current Directors will offer themselves for election or re-election at the 2025 AGM.
Biographical information for the Directors is given on pages 76 and 77. Further information on the
remuneration of, and contractual arrangements for, the Executive and Non-executive Directors is
given on pages 103–129 in the Directors’ Remuneration Report. The Non-executive Directors do
not have service agreements.
Directors’ indemnities
The Directors have been granted qualifying third-party indemnity provisions by the Company
and the Directors of the Group’s UK Pension Plan’s Trustee Board (none of whom is a Director of
Vesuvius plc) have been granted qualifying pension scheme indemnity provisions by Vesuvius
Pension Plans Trustees Limited. The indemnities for Directors of Vesuvius plc have been in force
since the date of their appointments. The Pension Trustee indemnities were in force throughout
the last financial year and remain in force.
Vesuvius plc
Annual Report and Financial Statements 2024
132
Annual General Meeting
The Annual General Meeting of the Company will be held at the offices of Linklaters LLP,
One Silk Street, London EC2Y 8HQ on Friday 16 May 2025 at 11.00 am.
Amendments of
Articles of Association
The Company may make amendments to the Articles by way of special resolution in accordance
with the Companies Act. The Articles were last amended at the 2021 AGM, to reflect changes in
the law and developments in market practice and technology.
Share capital
As at the date of this report, the Company had an issued share capital of 259,418,940 ordinary
shares of 10 pence each; 7,271,174 of these ordinary shares are held in Treasury. Therefore,
the total number of Vesuvius plc shares with voting rights is 252,147,766.
Further information relating to the Company’s issued share capital can be found in Note 9 to
the Company Financial Statements.
The Company’s Articles specify that, subject to the authorisation of an appropriate resolution
passed at a General Meeting of the Company, Directors can allot relevant securities under
Section 551 of the Companies Act up to the aggregate nominal amount specified by the relevant
resolution. In addition, the Articles state that the Directors can seek the authority of shareholders
in a General Meeting to allot equity securities for cash, without first being required to offer such
shares to existing ordinary shareholders in proportion to their existing holdings under Section
561 of the Companies Act, in connection with a rights issue and in other circumstances up to the
aggregate nominal amount specified by the relevant resolution.
At the AGM on 15 May 2024, the Directors were authorised to issue relevant securities up to an
aggregate nominal amount of £8,936,461, and, in connection with a rights issue, to issue relevant
securities up to a further aggregate nominal amount of £8,936,461.
In addition, the Directors were empowered to allot equity securities, or sell Treasury shares, for
cash in connection with a rights issue or other pre-emptive offer without first being required to
offer such shares to existing shareholders in proportion to their existing holdings. The Directors
were also empowered to allot equity securities, and/or sell Treasury shares, for cash in any case
other than in connection with a rights issue or other pre-emptive offer up to an aggregate nominal
value of £2,680,938, or a follow-on offer, without first being required to offer such shares to
existing shareholders in proportion to their existing holdings, and for the purposes of financing
(or refinancing, if the authority is to be used within 12 months after the original transaction)
a transaction which the Board of the Company determines to be an acquisition or other capital
investment, to allot equity securities, or sell Treasury shares, for cash on a non-pre-emptive basis
up to an additional nominal amount of £2,680,938. Each of the authorities given in these
resolutions expires on 30 June 2025 or the date of the AGM to be held in 2025, whichever is the
earlier. The resolutions were all tabled in accordance with the revised terms of the Pre-Emption
Group’s Statement of Principles. The Directors propose to table similar resolutions at the
2025 AGM.
In the year ahead, other than potentially in respect of Vesuvius’ ability to satisfy rights granted to
employees under its various share-based incentive arrangements, the Directors have no present
intention of issuing any share capital of Vesuvius plc.
Directors’ Report
continued
133
Strategic report
Governance
Financial statements
Authority for purchase
of own shares
Subject to the provisions of company law and any other applicable regulations, the Company may
purchase its own shares. At the AGM on 15 May 2024, Vesuvius shareholders gave authority to the
Company to make market purchases of up to 26,809,383 Vesuvius ordinary shares of 10 pence,
representing 10% of the Company’s issued ordinary share capital as at the latest practicable day
prior to the publication of the Notice of AGM.
On 4 December 2023, the Company announced, consistent with its capital allocation policy to
return surplus cash to shareholders, the commencement of a share buyback programme of up to
£50 million. This programme completed on 22 August 2024. A total of 10,821,465 ordinary shares
were purchased for a consideration of £49,941,234 and at an average price of £4.615 per share.
Between 1 January 2024 and 22 August 2024, 10,145,758 ordinary shares were purchased
under the initial share buyback programme at a cost of £46.8 million excluding transaction costs.
The purchased shares represented a nominal value of £1,014,576 and 3.8% of the Company’s issued
share capital on 31 December 2024.
On 19 November 2024, the Company announced the commencement of a further share buyback
programme of up to £50 million to end no later than 23 July 2025, and targeted to be completed by
late May 2025, subject to regulatory limits and market conditions.
From 19 November 2024 to the end of the financial year on 31 December 2024, the Company had
purchased 3,670,188 ordinary shares, representing a nominal value of £367,019 and 1.4% of the
Company’s issued share capital on 31 December 2024. 3,172,332 of these ordinary shares were
cancelled by 31 December 2024, the 497,856 remaining ordinary shares were cancelled on 2 and
7 January 2025. The cost of the shares purchased between 19 November and 31 December 2024
was £15.5 million excluding transaction costs.
Between 1 January 2024 and 31 December 2024, a total of 13,815,946 ordinary shares were
therefore purchased by the Company under its share buyback programmes, at a cost of
£62.4 million excluding transaction costs. The purchased shares represented a nominal value
of £1,381,595 and 5.2% of the Company’s issued share capital on 31 December 2024.
Between 1 January 2025 and the date of this report, a further 5,037,041 shares, representing
a nominal value of £503,704 and 1.9% of the Company’s issued share capital on 1 January 2025,
have been purchased at a cost of £20.6 million excluding transaction costs. The average price of
shares purchased in 2025 to date is £4.08 per share.
The sole purpose of the share buyback programmes is to reduce Vesuvius’ share capital and the
ordinary shares purchased pursuant to the programmes are being cancelled. The Board considered
the views of the Company’s shareholders and the impact that the purchase would have on other
investors, concluding that it would send a positive public signal that the Company was performing
well and would benefit all of the Group’s stakeholders. A buyback was chosen over, for example,
a tender offer or special dividend, reflecting the preference of shareholders and advice from
brokers, as a structure that equally benefits all shareholders over a sustained period. Over the course
of the programmes, the buyback is expected to be modestly EPS accretive and as such will enhance
TSR in the event that our trading valuation multiple is maintained. The impact of the buyback is
recognised in the Company’s budget and is reflected in the Group’s incentive targets.
In 2013, the Company acquired 7,271,174 ordinary shares, representing a nominal value of £727,117
and 2.6% of the entire called up share capital of the Company prior to the purchase. These shares
were purchased pursuant to the Board’s commitment to return the majority of the net proceeds of
the disposal of the Precious Metals Processing Division to shareholders. These shares are currently
held as Treasury shares and are not eligible to participate in dividends and do not carry any voting
rights. The Company has not subsequently disposed of any of the repurchased shares designated
as Treasury shares. The Company does not have a lien over any of its shares. Further details of
Treasury shares and the share buyback programmes are set out in Note 9 to the Company
Financial Statements.
The Directors’ purchase of own shares authority expires on 30 June 2025 or the date of the AGM
to be held in 2025, whichever is the earlier. The Directors will seek renewal of this authority at the
2025 AGM.
Vesuvius plc
Annual Report and Financial Statements 2024
134
Share plans
Vesuvius operates a number of share-based incentive plans. Under these plans, the Group can satisfy
entitlements by the acquisition of existing shares, the transfer of Treasury shares or by the issue of new
shares. Existing shares are held in an employee benefit trust (EBT). The Trustee of the EBT purchases
shares in the open market as required to enable the Group to meet liabilities for the issue of shares to
satisfy awards that vest. The Trustee does not register votes in respect of these shares at the Company’s
Annual General Meetings and has waived the right to receive any dividends.
At 31 December 2023, the EBT held 1,956,030 ordinary shares of 10 pence each in the Company.
During 2024, the EBT sold/transferred 1,594,809 ordinary shares to satisfy the vesting of awards
under the Company’s share-based incentive plans. It also purchased 3,491,463 ordinary shares
in Vesuvius with a nominal value of £349,146 at a total cost, including transaction costs, of
approximately £17.1m, to hold to satisfy the future vesting of awards under the Company’s share
incentive plans. As at 31 December 2024, the EBT held 3,852,684 ordinary shares. The total
purchases during the year represented 1.3% of the Company’s called up share capital. As at
the date of this report the EBT held 3,852,684 ordinary shares.
Restrictions on transfer
of shares and voting
The Company’s Articles do not contain any specific restrictions on the size of a holding or on
the transfer of shares. The Directors are not aware of any agreements between holders of the
Company’s shares that may result in restrictions on the transfer of securities or voting rights.
No person has any special rights with regard to the control of the Company’s share capital and
all issued shares are fully paid. This is a summary only and the relevant provisions of the Articles
should be consulted if further information is required.
Change of
control provisions
The terms of the Group’s committed bank facility and US Private Placement Loan Notes contain
provisions entitling the counterparties to exercise termination or other rights in the event of
a change of control on takeover of the Company. A number of the arrangements to which the
Company and its subsidiaries are party, such as other debt arrangements and share incentive
plans, may also alter or terminate on a change of control in the event of a takeover. In the context
of the Group as a whole, these other arrangements are not considered to be significant.
Interests in the
Company’s shares
The Company has been advised in accordance with DTR 5 of the Disclosure and Transparency
Rules of the following notifiable interests of 3%, or more, of its issued ordinary shares:
As at
date of
notification
As at
31 Dec 2024
1
As at
4 Mar 2025
2
Cevian Capital
22.01%
22.26%
22.71%
GLG Partners LP
6.26%
6.61%
6.74%
Martin Currie
4.83%
5.10%
5.20%
BlackRock Inc
5.5%
5.58%
–
Aberforth Partners
4.93%
5.19%
5.30%
1.
The notifiable interests have been restated to reflect the change in issued share capital as at 31 December 2024 resulting
from the Share Buyback Programme.
2.
The notifiable interests have been restated to reflect the change in issued share capital as at 4 March 2025 resulting from
the Share Buyback Programme.
The interests of Directors and their connected persons in the ordinary shares of the Company as
disclosed in accordance with the Listing Rules of the Financial Conduct Authority are as set out on
pages 123 and 124 of the Directors’ Remuneration Report and details of the Directors’ Deferred
Share Bonus Plan and Vesuvius Share Plan awards are set out on pages 128 and 129.
Directors’ Report
continued
135
Strategic report
Governance
Financial statements
Suppliers, customers
and others
Information summarising how the Directors have regard to the need to foster the Company’s
business relationships with suppliers, customers and others is included in the Group’s Section 172(1)
Statement on pages 63–66. This also details how that regard impacted the principal decisions
taken by the Directors during the year.
Our approach to business places a significant number of Vesuvius Steel employees at customer
sites on a permanent basis. In the Foundry Division, our success is built on our deep understanding
of customer processes and technical requirements, and our ability to assist them in delivering the
greatest efficiency from their operations.
During the year, our supplier audit programme covered the operations of 269 suppliers.
This approach allows Vesuvius to gain a deep understanding of our suppliers’ operations
to ensure sustainability and quality of supply.
Vesuvius agrees payment terms with its suppliers and seeks to pay in accordance with those terms.
Equal opportunities
employment
Vesuvius is an equal opportunities employer, and decisions on recruitment, development,
training and promotion, and other employment-related issues are made solely on the grounds
of individual ability, achievement, expertise and conduct. These principles are operated on
a non-discriminatory basis, without regard to race, colour, nationality, culture, ethnic origin,
religion, belief, gender, sexual orientation, age, disability or any other reason not related to job
performance or prohibited by applicable law. In cases where employees are injured or disabled
during employment with the Group, support, including appropriate training, is provided to those
employees and workplace adjustments are made as appropriate in respect of their duties and
working environment, supporting recovery and continued employment.
Employee engagement
Information on the mechanisms through which Vesuvius engages with its workforce, including its
UK workforce, is included in the Section 172(1) Statement on pages 63–66 and in the Sustainability
section on pages 55–58 .
Vesuvius plc
Annual Report and Financial Statements 2024
136
Pensions
In each country in which the Group operates, the pension arrangements in place are considered
to be consistent with good employment practice in that particular area. Independent advisers
are used to ensure that the plans are operated in accordance with local legislation and the
rules of each plan. Group policy prohibits direct investment of pension fund assets in the shares
of Vesuvius plc.
The majority of the ongoing pension plans are defined contribution plans, where our only
obligation is to make contributions, with no further commitments on the level of post-retirement
benefits. During 2024, cash contributions of £11.8m (2023: £12.1m) were made into the defined
contribution plans and charged to trading profit.
The Group’s principal defined benefit pension plans are in the UK and the US, the benefits of
which are based upon the final pensionable salaries of plan members. The assets of these plans
are held separately from the Group in trustee-administered funds. The Trustees are required to
act in the best interests of the plans’ beneficiaries. The Group also has defined benefit pension
plans in other territories but, except for those in Germany, these are not individually material in
relation to the Group.
Vesuvius continues to seek ways to de-risk its existing pension plans through a combination of
asset matching, buy-in opportunities and, where prudent, voluntary cash contributions. The total
gross defined benefit obligations at 31 December 2024 were £374.1m funded (2023: £416.3m
funded) and £58.7m unfunded (2023: £62.8m unfunded). After asset funding there was a net
deficit of £37.4m (2023: £46.3m) representing a decrease of £8.9m. The Group’s UK defined
benefits plan (the ‘UK Plan’) and the main US defined benefits plans are closed to new entrants
and have ceased providing future benefits accrual, with all eligible employees instead being
provided with benefits through defined contribution arrangements. For the Group’s closed UK
Plan, a Trustee Board exists comprising employees, former employees and an independent
trustee. The Board currently comprises six trustee Directors, of whom two are member-nominated.
The administration of the UK Plan is outsourced. The Company is mindful of its obligations
under the Pensions Act 2004 and of the need to comply with the guidance issued by the Pensions
Regulator. Regular dialogue is maintained between the Company and the Trustee Board of the
UK Plan to ensure that both the Company and Trustee Board are apprised of the same financial
and other information about the Group and the UK Plan. This is pertinent to each being able
to contribute to the effective functioning of the UK Plan. In November 2021, the Trustee of the
Vesuvius Pension Plan signed a pension insurance buy-in agreement with Pension Insurance
Corporation plc (PIC). This buy-in secured an insurance asset from PIC that matches the remaining
pension liabilities of the UK Plan, with the result that the Company no longer bears any investment,
longevity, interest rate or inflation risks in respect of the UK Plan. All benefits in the UK Plan
(with the exception of a small amount of benefits expected to arise in future as a result of
guaranteed minimum pensions (GMP) equalisation) are now insured with PIC.
The Group has several defined benefit pension plans in the US, providing retirement benefits
based on final salary or a fixed benefit. The Group’s principal US defined benefit pension plans are
closed to new members and to future benefit accrual for existing members. The Group has several
defined benefit pension arrangements in Germany which are unfunded, as is common practice
in that country. In 2016, the main German defined benefit plan was closed for new entrants and
existing members were offered a buy-out of their benefits under this plan. Those who accepted
this buy-out then joined the new defined contribution plan.
Directors’ Report
continued
137
Strategic report
Governance
Financial statements
Listing Rule 6.6.1 R Disclosures
The following disclosures are made in compliance with the Financial Conduct Authority’s Listing
Rule 6.6.1R:
Disclosure requirement under LR 6.6.1 R
Reference/Location
(1)
Interest capitalised by the Group during the year
None
(2)
Publication of unaudited financial information
Not applicable
(3)
Details of any long-term incentive schemes
Pages 117 and 118
(4)
Director waiver of emoluments
Not applicable
(5)
Director waiver of future emoluments
Not applicable
(6)
Allotment for cash of equity securities made
during the year
Not applicable
(7)
Allotment for cash of equity securities made by
a major unlisted subsidiary during the year
Not applicable
(8)
Details of participation of parent undertaking in
any placing made during the year
Not applicable
(9)
Details of relevant material contracts in which
a Director or controlling shareholder was interested
during the year
Not applicable
(10)
Contracts for the provision of services by
a controlling shareholder during the year
Not applicable
(11)
Details of any arrangement under which
a shareholder has waived or agreed to
waive any dividends
Vesuvius plc holds 7,271,174 of its
10 pence ordinary shares as Treasury
shares. No dividends are payable
on these shares. The Trustee of the
Company’s EBT has agreed to waive,
on an ongoing basis, any dividends
payable on shares it holds in trust for
use under the Company’s Employee
Share Plans, details of which can be
found on pages 128, 129 and 134
(12)
Details of where a shareholder has agreed to
waive future dividends
See above
(13)
Statements relating to controlling shareholders
and ensuring company independence
Not applicable
The Directors’ Report has been approved by the Board and is signed, by order of the Board, by the Secretary of the Company.
Henry Knowles
Company Secretary
5 March 2025
Vesuvius plc
Annual Report and Financial Statements 2024
138
Statement of Directors’ Responsibilities in respect of
the Financial Statements
The Directors are responsible for preparing the Annual Report
and Financial Statements in accordance with applicable law
and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the Directors
have prepared the Group financial statements in accordance
with UK-adopted international accounting standards and
the Company financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101
‘Reduced Disclosure Framework’, and applicable law).
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and Company and
of the profit or loss of the Group for that period. In preparing
the financial statements, the Directors are required to:
–
Select suitable accounting policies and then apply
them consistently
–
State whether applicable UK-adopted international
accounting standards have been followed for the Group
financial statements and United Kingdom Accounting
Standards, comprising FRS 101, have been followed for
the Company financial statements, subject to any material
departures disclosed and explained in the financial statements
–
Make judgements and accounting estimates that are
reasonable and prudent and
–
Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and
Company will continue in business
The Directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the financial
statements and the Directors’ Remuneration Report comply with
the Companies Act 2006.
The Directors are responsible for the maintenance and integrity
of the Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and Financial
Statements, taken as a whole, is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Group and Company’s
position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed
below, confirm that, to the best of their knowledge:
–
The Company financial statements, which have been prepared
in accordance with United Kingdom Accounting Standards,
comprising FRS 101, give a true and fair view of the assets,
liabilities and financial position of the Company; and
–
The Group financial statements, which have been prepared
in accordance with UK-adopted international accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Group
–
The Strategic Report includes a fair review of the development
and performance of the business and the position of the Group
and Company, together with a description of the principal risks
and uncertainties that the Group faces
The names and functions of the Directors of Vesuvius plc as at
the date of signing these financial statements are as follows:
Carl-Peter Forster
Chairman
Patrick André
Chief Executive
Mark Collis
Chief Financial Officer
Eva Lindqvist
Non-executive Director and
Senior Independent Director
Carla Bailo
Non-executive Director
Italia Boninelli
Non-executive Director and Chair
of the Remuneration Committee
Dinggui Gao
Non-executive Director
Friederike Helfer
Non-executive Director
Robert MacLeod
Non-executive Director and Chair
of the Audit Committee
On behalf of the Board
Mark Collis
Chief Financial Officer
5 March 2025
139
Strategic report
Governance
Financial statements
Opinion
In our opinion:
–
Vesuvius plc’s group financial statements and company
financial statements (the “financial statements”) give a true and
fair view of the state of the group’s and of the company’s affairs
as at 31 December 2024 and of the group’s profit and the
group’s cash flows for the year then ended;
–
the group financial statements have been properly prepared
in accordance with UK-adopted international accounting
standards as applied in accordance with the provisions of the
Companies Act 2006;
–
the company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting
Standards, including FRS 101 “Reduced Disclosure Framework”,
and applicable law); and
–
the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements, included within
the Annual Report, which comprise: the Group Balance Sheet and
Company Balance Sheet as at 31 December 2024; the Group
Income Statement, the Group Statement of Comprehensive
Income, the Group Statement of Cash Flows, the Group Statement
of Changes in Equity and Company Statement of Changes in
Equity for the year then ended; and the notes to the financial
statements, comprising material accounting policy information
and other explanatory information.
Our opinion is consistent with our reporting to the
Audit Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the
Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We remained independent of the group in accordance with
the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical
Standard, as applicable to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with
these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in Note 5.2 of the Group financial
statements, we have provided no non-audit services to the
company in the period under audit.
Independent auditors’ report to the members of Vesuvius plc
Report on the audit of the financial statements
Vesuvius plc
Annual Report and Financial Statements 2024
140
Independent auditors’ report to the members of Vesuvius plc
continued
Our audit approach
Overview
Audit scope
–
Our audit included full scope audits of 17 components and
specific audit procedures on certain balances and
transactions for 12 additional components.
–
Taken together, the components at which either full scope
audit work or specified audit procedures were performed
enabled us to get coverage on 73% of revenue, and 88%
of profit before tax.
Key audit matters
–
Impairment of goodwill (Group)
–
Impairment of investment in subsidiaries (Company)
Materiality
–
Overall group materiality: £9.1 million (2023: £8.5 million)
based on 5.0% of 3 year average (2023: 5.0% of 3 year
average) profit before tax adjusted for non-recurring
separately reported items (2023: profit before tax).
–
Overall company materiality: £9.1 million (2023: £8.5 million)
based on 1.0% of total assets, capped at the level of overall
Group materiality.
–
Performance materiality: £6.8 million (2023: £6.4 million)
(group) and £6.8 million (2023: £6.4 million) (company).
The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the audit
of the financial statements of the current period and include
the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including
those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Provisions for exposures (legacy matter lawsuits), which was a
key audit matter last year, is no longer included because of the
limited developments on the matter, the consistent judgement
applied and the reduced estimation uncertainty. Otherwise,
the key audit matters below are consistent with last year.
141
Strategic report
Governance
Financial statements
Key audit matter
How our audit addressed the key audit matter
Impairment of goodwill (Group)
At 31 December 2024, the carrying value of goodwill is £616.2 million
(2023: £630.9 million). Goodwill arising from acquisitions has an indefinite
expected useful life and so is not amortised but rather is tested for
impairment at least annually at the cash-generating unit (“CGU”) level.
Management has determined its CGUs to align with the operating segments,
which are Steel Advanced Refractories, Steel Flow Control and Foundry.
Steel Sensors and Probes goodwill was previously impaired and is fully
written down.
Management prepares a Value in Use (VIU) model (discounted cashflow) to
test for impairment of the carrying value of the above CGUs. This is based on
a Board approved 2025 budget supplemented by a 3 year forecast for 2026
through to 2028, on which a terminal value is calculated based on long term
growth rates. The VIU model requires estimation of projected future cash
flows and involves making key assumptions of revenue and trading profit
growth rates, an appropriate discount rate and long term growth rates for
each of the CGUs. In making such future assumptions there is an inherent
level of estimation uncertainty to consider.
Management also considered a valuation from its market capitalisation and
other market data to determine a Fair Value Less Costs of Disposal (‘FVLCD’)
for the Group.
We focused on the valuation of the goodwill due to its material carrying
value, and with regard to the estimation uncertainties arising from the
factors set out above.
Refer to Intangible Assets (Note 15), Impairment of Tangible and Intangible
Assets (Note 16), Critical Accounting Judgements and Estimates (Note 3) and
Significant issues and material judgements in the Audit Committee report.
Our audit procedures included:
–
We obtained management’s VIU models and FVLCD analysis. We
ensured the calculations were mathematically accurate and that the
valuation methodology conformed with the requirements of IAS 36
‘Impairment of Assets’.
–
For key assumptions made by management in respect of forecast revenue
and trading profit growth:
–
We obtained management’s supporting evidence such as the
approved budget and 3 year forecasts. We agreed the forecast
cashflows and underlying assumptions to these and assessed historical
evidence of CGU growth rates. We also challenged the extent to which
climate change considerations had been reflected in management’s
forecast cash flows;
–
We obtained evidence through our own independent research.
This included evidence of forecast production and demand levels for
the CGU’s end customer markets, climate change driven trends and
recovery and growth in cyclical end-markets; and
–
We considered market valuation evidence such as current and target
share price, as well as other market data such as valuation multiples on
recent deals for similar groups.
–
We utilised internal valuations experts to support our audit procedures
over the discount rate and long-term growth rate assumptions used in
the VIU model and sensitised the impacts of changes in the discount rate
within our view of a reasonable range.
–
We sensitised key assumptions including, free cash flow average annual
growth rate, discount rate and long-term growth rate and established the
impact of reasonably possible changes to these assumptions. We ensured
these sensitivities were appropriately disclosed in accordance with IAS 36,
‘Impairment of assets’.
We also instructed our component audit teams to evaluate the
appropriateness of management impairment indicator assessments
performed within the components and to also assess any material impacts
of climate change. Our component teams, under our supervision, did not
identify any additional impairments required or inconsistent findings to our
Group level assessment.
Our findings were discussed with the Audit Committee.
Impairment of investment in subsidiaries (Company)
The Company holds investments in subsidiaries with a total carrying amount
of £1,778.0 million at 31 December 2024 (2023: £1,778.0 million). IAS 36
‘Impairment of assets’ requires management to consider whether there are
any indicators of impairment in respect of the valuation of non-financial
assets. Due to the quantum of the carrying amount, levels of estimation
uncertainty that exist similar to assumptions used in testing for impairment
of goodwill (Group) and the market capitalisation of the Group this was an
area of focus for the audit of the Company. Consistent with the prior year
management performed an impairment test utilising cash flow forecasts
used for testing for impairment of the Group’s goodwill together with
additional considerations of cash flows relevant to the subsidiaries that the
Company owns.
The judgements and estimates required to determine the cash flow forecasts
are aligned with those set out in ‘Impairment of goodwill (Group)’ above,
and adjusted for intercompany cashflows.
Refer to Investments (Note 7) and Critical Accounting Judgements and
Estimates (Note 3) in the Company financial statements, and Significant
issues and material judgements in the Audit Committee report.
Our audit procedures included:
–
Assessing the results of the VIU model and FVLCD analysis used for the
impairment test for goodwill, together with adjustments made to reflect
cash inflows to subsidiaries due from the Company.
–
Testing of the Group VIU model, including procedures performed
over management’s model and evidence obtained in respect of key
assumptions made is set out in Key audit matter ‘Impairment of goodwill
(Group)’. We also compared the carrying value of the investment in
subsidiaries and the Group Value in Use to the market capitalisation
and market valuation expectations.
Our findings were discussed with the Audit Committee.
Vesuvius plc
Annual Report and Financial Statements 2024
142
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
group and the company, the accounting processes and controls,
and the industry in which they operate.
The Vesuvius Group (Vesuvius plc (Company) together with its
subsidiaries) has operations in 40 countries, including 68 sales
offices and has 54 production sites. The Group consolidates
financial information through reporting from its components
which include divisions and functions at these sites.
Our audit scope was determined by considering the significance
of the component by size or risk as per ISA (UK) 600 (Revised).
Components determined to be significant by size or risk were
identified as having events or conditions that give rise to
significant or elevated risks of material misstatement of the group
financial. We also evaluated contribution to profit before tax and
to other individual financial statement line items, with specific
consideration to obtaining sufficient coverage over areas of
heightened risk and locations.
We identified one component (2023: one) as significant due
to size or risk in 2024. The audit scope comprised a further 16
components for which we determined that full scope audits would
need to be performed and 12 components for which specific audit
procedures on certain balances and transactions were performed
by either component teams or the Group team. This collectively
provided audit coverage of 73% of the Group’s revenue and 88%
of the Group’s profit before tax. This, together with the additional
procedures performed at the Group level, including testing the
consolidation process, gave us the evidence we needed for our
opinion on the financial statements as a whole.
In establishing the overall approach to the Group audit, we
determined the type of work that needed to be performed by us,
as the Group audit team, or by component auditors (involving
experts and specialists where required) in both PwC network
firms and other audit firms. Where the work was performed by
component auditors, we determined the level of direction,
review and supervision we needed to have in the audit work at
those components to be able to conclude whether sufficient
appropriate audit evidence had been obtained as a basis for
our opinion on the financial statements as a whole. This was
achieved through:
–
Attendance at audit clearance meetings by senior Group
team members;
–
Interactions with local component management;
–
Our direction and supervision of the audit approach and review
of audit findings;
–
Review of selected audit workpapers of certain components
reporting to us;
–
Engagement of experts and specialists where required and
review of their output, and
–
Site visits for selected components
The Group audit team also performed the audit of the Company
and other procedures over those components of the Group not
subject to full scope audits.
The impact of climate risk on our audit
The ‘Sustainability’ section of the Strategic report sets out the
Group’s climate change risk assessment, the climate related
targets set and evaluation of the potential financial impacts. In
planning and executing our audit we considered management’s
risk assessment and analysis of impacts to the financial
statements. We made enquiries of management to understand
the process adopted by management to assess the extent of the
potential impact of climate related risk and targets established by
management on the Group’s financial statements and support the
disclosures made within the ‘Non-Financial and Sustainability
Information Statement’ section of the Strategic Report and Note
2.6 of the Group financial statements. Management has made
commitments to achieve net zero for the Group’s Scope 1 and
Scope 2 carbon footprint at the latest by 2050 as disclosed in the
‘Sustainability’ section of the Strategic report of the Annual
Report. Management considers the impact of climate risk gives
rise to a potential material financial statement impact in the
medium to long term (between 2035 and 2050).
We understood the key impacts to the Group could include
growth of aluminium casting processes for light vehicle castings,
transition from internal combustion engines to electric vehicles,
transition from blast furnaces converted to direct reduced iron
production or electric arc furnaces (EAF), ability to diversify
business activities and access to new markets. This would most
likely impact the financial statement line items and estimates
associated with future cashflows because the impact of climate
change for the Vesuvius Group is expected to become more
notable in the medium to long term. We considered the following
areas to potentially be materially impacted by climate risk and
consequently we focused our audit work in these areas: carrying
value and the estimation of useful lives of property, plant and
equipment, and goodwill and intangibles, with impairment of
goodwill (Group) determined to be a key audit matter for the
year ended 31 December 2024.
Additionally, we considered the consistency of the disclosures
in relation to climate change (including the disclosures in the
Task Force on Climate-related Financial Disclosures (TCFD)
related reporting within the ‘Sustainability’ section of the
Strategic report, with the financial statements and our knowledge
obtained from our audit. This included considering whether the
assumptions made by management in the TCFD scenario analysis
are consistent with the assumptions used elsewhere in the
financial statements.
We have not noted any issues as part of this work which contradict
the disclosures in the Annual Report or materially impact the
financial statements, or our key audit matters for the year ended
31 December 2024.
Independent auditors’ report to the members of Vesuvius plc
continued
143
Strategic report
Governance
Financial statements
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of
our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group
Financial statements – Company
Overall
materiality
£9.1 million (2023: £8.5 million).
£9.1 million (2023: £8.5 million).
How we
determined it
5.0% of 3 year average (2023: 5.0% of 3 year average) of profit
before tax adjusted for non-recurring separately reported items
(2023: profit before tax).
1.0% of total assets, capped at the level of overall Group
materiality (2023: 1.0% of total assets, capped at the level of
overall Group materiality).
Rationale for
benchmark
applied
We believe that profit before tax adjusted for non-recurring
separately reported items provides us with an appropriate basis
for determining our overall Group audit materiality given it is
a key measure for users of the financial statements. We have
applied 5.0% to a 3 year average of profit before tax adjusted
for non-recurring separately reported items, to take into
consideration the fluctuation in results over the past 3 years.
We believe that total assets is an appropriate basis for
determining materiality for the Company, given this entity is
an investment holding Company and this is an accepted audit
benchmark. The materiality was capped to the level of Group
overall materiality. The Company is not an in-scope component
for our Group audit.
For each component in the scope of our group audit, we allocated
a materiality that is less than our overall group materiality.
The range of materiality allocated across components was
£0.5 million to £8.2 million. Certain components were audited
to a local statutory audit materiality that was also less than our
overall group materiality.
We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality.
Specifically, we use performance materiality in determining the
scope of our audit and the nature and extent of our testing of
account balances, classes of transactions and disclosures,
for example in determining sample sizes. Our performance
materiality was 75% (2023: 75%) of overall materiality, amounting
to £6.8 million (2023: £6.4 million) for the group financial
statements and £6.8 million (2023: £6.4 million) for the company
financial statements.
In determining the performance materiality, we considered
a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness of
controls – and concluded that an amount at the upper end
of our normal range was appropriate.
We agreed with the Audit Committee that we would report
to them misstatements identified during our audit above
£0.45m (group audit) (2023: £0.45m) and £0.45m (company audit)
(2023: £0.4m) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
Vesuvius plc
Annual Report and Financial Statements 2024
144
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the
company’s ability to continue to adopt the going concern basis of
accounting included:
–
Evaluating management’s base case and severe but plausible
downside case for liquidity and debt covenant compliance and
available financial resources and obtaining supporting
evidence for key assumptions. This included agreeing the
underlying cash flow projections to the Board approved
forecast, assessing how these forecasts were compiled and
assessing the historical accuracy of the forecasts. We also
evaluated current performance and available financing
facilities and related liquidity headroom.
–
Checking management’s covenant calculations and
compliance to ensure that the covenant thresholds and
definitions were consistent with the financing agreements.
–
Testing the accuracy and integrity of cash flow models
used to assess available liquidity during the going concern
period disclosed.
–
Considering management’s refinancing arrangements
in the going concern period and ensuring this was factored
into the outcome;
–
Determining alternative sensitivity scenarios to ascertain the
impact of changes in assumptions. These included scaling back
forecasts and increasing working capital as a percentage of
forecast revenue; and
–
Reviewing disclosures in the financial statements and relevant
‘other information’ in the Annual Report, and assessing
consistency with the financial statements and our knowledge
based on our audit.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s and the company’s ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the group’s and
the company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the
UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the directors’ statement in
the financial statements about whether the directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the
other information. Our opinion on the financial statements does
not cover the other information and, accordingly, we do not
express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in
the audit, or otherwise appears to be materially misstated.
If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude
whether there is a material misstatement of the financial
statements or a material misstatement of the other information.
If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact. We have nothing to report based
on these responsibilities.
With respect to the Strategic report and Directors’ report,
we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit,
the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the
audit, the information given in the Strategic report and Directors’
report for the year ended 31 December 2024 is consistent with the
financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the group and
company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the
Strategic report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
Independent auditors’ report to the members of Vesuvius plc
continued
145
Strategic report
Governance
Financial statements
Corporate governance statement
The Listing Rules require us to review the directors’ statements in
relation to going concern, longer-term viability and that part of
the corporate governance statement relating to the company’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review. Our additional responsibilities with
respect to the corporate governance statement as other
information are described in the Reporting on other information
section of this report.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit, and we
have nothing material to add or draw attention to in relation to:
–
The directors’ confirmation that they have carried out a robust
assessment of the emerging and principal risks;
–
The disclosures in the Annual Report that describe those
principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being
managed or mitigated;
–
The directors’ statement in the financial statements about
whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their
identification of any material uncertainties to the group’s
and company’s ability to continue to do so over a period of
at least twelve months from the date of approval of the
financial statements;
–
The directors’ explanation as to their assessment of the group’s
and company’s prospects, the period this assessment covers
and why the period is appropriate; and
–
The directors’ statement as to whether they have a reasonable
expectation that the company will be able to continue in
operation and meet its liabilities as they fall due over the period
of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term
viability of the group and company was substantially less in scope
than an audit and only consisted of making inquiries and
considering the directors’ process supporting their statement;
checking that the statement is in alignment with the relevant
provisions of the UK Corporate Governance Code; and
considering whether the statement is consistent with the financial
statements and our knowledge and understanding of the group
and company and their environment obtained in the course of
the audit.
In addition, based on the work undertaken as part of our audit,
we have concluded that each of the following elements of the
corporate governance statement is materially consistent with
the financial statements and our knowledge obtained during
the audit:
–
The directors’ statement that they consider the Annual Report,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess
the group’s and company’s position, performance, business
model and strategy;
–
The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems; and
–
The section of the Annual Report describing the work of the
Audit Committee.
We have nothing to report in respect of our responsibility to
report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a departure
from a relevant provision of the Code specified under the Listing
Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’
Responsibilities in respect of the Financial Statements, the
directors are responsible for the preparation of the financial
statements in accordance with the applicable framework
and for being satisfied that they give a true and fair view. The
directors are also responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the company’s ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group
or the company or to cease operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
Vesuvius plc
Annual Report and Financial Statements 2024
146
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including
fraud, is detailed below.
Based on our understanding of the group and industry, we
identified that the principal risks of non-compliance with laws
and regulations related to international trade restrictions, health
and safety, environmental, anti-bribery, relevant employment
laws and data protection legislation, and we considered the
extent to which non-compliance might have a material effect
on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements
such as Companies Act 2006, tax legislation and Listing Rules
of the Financial Conduct Authority (FCA). We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of
override of controls), and determined that the principal risks
were related to posting inappropriate journal entries in particular
including unusual account combination in respect of revenue
and management bias in accounting estimates. The group
engagement team shared this risk assessment with the
component auditors so that they could include appropriate
audit procedures in response to such risks in their work.
Audit procedures performed by the group engagement team
and/or component auditors included:
–
Inquiries of Group and local management, those charged with
governance, internal audit and the Group’s legal counsel
(internal and, where relevant, external), including consideration
of known or suspected instances of non-compliance with laws
and regulations and fraud;
–
Evaluating items raised through the Group’s whistle-blowing
arrangements and the results of management’s investigation
of such matters;
–
Inspecting management reports and Board minutes in relation
to health and safety and other compliance matters;
–
Reading and assessing key correspondence with regulatory
authorities;
–
Testing assumptions and judgements made by management
in their critical accounting estimates, in particular relating to
impairment of goodwill (Group) and impairment of investment
in subsidiaries (Company) (see related key audit matters section
of this report); and
–
Identifying and testing journal entries, in particular any journal
entries posted with unusual account combinations including in
respect of journals posted to revenue.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement
due to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations,
or through collusion.
Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited
number of items for testing, rather than testing complete
populations. We will often seek to target particular items for
testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion
about the population from which the sample is selected.
A further description of our responsibilities for the audit
of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and
only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other
purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
–
we have not obtained all the information and explanations we
require for our audit; or
–
adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been
received from branches not visited by us; or
–
certain disclosures of directors’ remuneration specified by law
are not made; or
–
the company financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with
the accounting records and returns; or
–
a corporate governance statement has not been prepared by
the company.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were
appointed by the members on 10 May 2017 to audit the financial
statements for the year ended 31 December 2017 and subsequent
financial periods. The period of total uninterrupted engagement
is 8 years, covering the years ended 31 December 2017 to
31 December 2024.
Other matter
The company is required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rules to include these
financial statements in an annual financial report prepared under
the structured digital format required by DTR 4.1.15R – 4.1.18R
and filed on the National Storage Mechanism of the Financial
Conduct Authority. This auditors’ report provides no assurance
over whether the structured digital format annual financial report
has been prepared in accordance with those requirements.
Darryl Phillips (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
5 March 2025
Independent auditors’ report to the members of Vesuvius plc
continued
Financial Statements
148
Group Income Statement
149
Group Statement of
Comprehensive Income
150
Group Statement of Cash Flows
151
Group Balance Sheet
152
Group Statement of
Changes in Equity
153
Notes to the Group
Financial Statements
208
Company Balance Sheet
209
Company Statement of Changes in Equity
210
Notes to the Company Financial Statements
216
Five-Year Summary: Divisional Results from
Continuing Operations (unaudited)
217
Shareholder Information (unaudited)
219
Glossary
147
Strategic report
Governance
Financial statements
Vesuvius plc
Annual Report and Financial Statements 2024
148
Group Income Statement
For the year ended 31 December 2024
Note(s)
2024
2023
Headline
performance
1
£m
Separately
reported
items
1
£m
Total
£m
Headline
performance
1
£m
Separately
reported
items
1
£m
Total
£m
Revenue
4, 35
Manufacturing costs
(1,316.4 )
(1,316.4 )
(1,391.9 )
(1,391.9 )
Administration, selling and distribution costs
(315.7 )
(315.7 )
(337.5 )
(337.5 )
Trading profit
2
4
Cost reduction programme expenses
6
(14.6 )
(14.6 )
Provision for future water treatment at
disused mine
6
(9.7 )
(9.7 )
Amortisation of acquired intangible assets
15
(10.0 )
(10.0 )
(10.3 )
(10.3 )
Operating profit/(loss)
5
(34.3 )
(10.3 )
Finance expense
8
(27.1 )
(27.1 )
(28.2 )
(28.2 )
Finance income
8
Net finance costs
8
(16.2 )
(16.2 )
(11.6 )
(11.6 )
Share of post-tax profit of joint ventures
and associates
17
Profit/(loss) before tax
(34.3 )
(10.3 )
Income tax (charge)/credit
9
(47.2 )
(38.3 )
(51.9 )
(48.8 )
Profit/(loss) after tax
(25.4 )
(7.2 )
Profit/(loss) attributable to:
Owners of the Parent
10
(25.4 )
(7.2 )
Non-controlling interests
Profit after tax
(25.4 )
(7.2 )
Earnings per share
3
– pence
10
Continuing and total operation
– basic
1
1
– diluted
1
1
1.
Headline performance and separately reported items are non-GAAP measures. Headline performance is defined in Note 35.1 and separately reported items
are defined in Note 2.5.
2. Trading profit is a non-GAAP measure and is defined in Note 35.4.
3. Earnings per share are attributable to the ordinary equity holders of the Parent.
The above results were derived from continuing operations. Manufacturing costs are costs of goods sold. The pre-tax separately
reported items would form part of Administration, selling and distribution costs if classified within headline performance, which
including these amounts would total £350.0 m (2023: £347.8 m).
149
Strategic report
Governance
Financial statements
Group Statement of Comprehensive Income
For the year ended 31 December 2024
Note
2024
£m
2023
£m
Profit after tax
Remeasurement of defined benefit liabilities/assets
27.6
Income tax relating to items not reclassified
9.4
(0.8 )
(2.0 )
Items that will not subsequently be reclassified to Income Statement
Exchange differences on translation of the net assets of foreign operations
(49.1 )
(84.3 )
Exchange differences on translation of net investment hedges
23
Net change in costs of hedging
(0.1 )
Change in the fair value of the hedging instrument
(4.2 )
Amounts reclassified from Net finance costs
(1.2 )
Items that may subsequently be reclassified to Income Statement
(41.8 )
(76.7 )
Other comprehensive loss net of income tax
(39.0 )
(70.3 )
Total comprehensive income
Total comprehensive income attributable to:
Owners of the Parent
Non-controlling interests
Total comprehensive income
The above results were derived from continuing operations.
Vesuvius plc
Annual Report and Financial Statements 2024
150
Group Statement of Cash Flows
For the year ended 31 December 2024
Note(s)
2024
£m
2023
£m
Cash flows from operating activities
Cash generated from operations
11
Interest paid
(20.9 )
(16.8 )
Interest received
Income taxes paid
(46.1 )
(52.8 )
Net cash inflow from operating activities
Cash flows from investing activities
Purchases of property, plant & equipment
(88.1 )
(84.6 )
Purchases of intangible assets
(12.7 )
(8.0 )
Proceeds from the sale of property, plant and equipment
Proceeds from the sale of associates
Dividends received from joint ventures
Net cash outflow from investing activities
(95.4 )
(86.2 )
Net cash inflow before financing activities
Cash flows from financing activities
Proceeds from borrowings
13
Repayment of borrowings
13
(13.0 )
(37.1 )
Payment of lease liabilities
13, 26
(18.2 )
(24.2 )
Purchase of ESOP shares
22
(17.1 )
(1.1 )
Share buyback
21, 22
(63.4 )
(3.1 )
Dividends paid to owners of the Parent
22
(61.1 )
(60.7 )
Dividends paid to non-controlling shareholders
(2.5 )
(2.1 )
Net cash outflow from financing activities
(40.5 )
(128.3 )
Net increase in cash and cash equivalents
13
Cash and cash equivalents at 1 January
Effect of exchange rate fluctuations on cash and cash equivalents
13
(5.0 )
(21.0 )
Cash and cash equivalents at 31 December
12
Alternative performance measure (non-statutory):
Note
2024
£m
2023
£m
Free cash flow
Net cash inflow from operating activities
Purchases of property, plant & equipment
(88.1 )
(84.6 )
Purchases of intangible assets
(12.7 )
(8.0 )
Proceeds from the sale of property, plant and equipment
Proceeds from the sale of associates
Dividends received from joint ventures
Dividends paid to non-controlling shareholders
(2.5 )
(2.1 )
Free cash flow
1
35.11
1.
For definitions of alternative performance measures, refer to Note 35.
151
Strategic report
Governance
Financial statements
Group Balance Sheet
As at 31 December 2024
Note
2024
£m
2023
restated
1
£m
Assets
Property, plant and equipment
14
Intangible assets
15
Interests in joint ventures and associates
17
Deferred tax assets
9
Other receivables
18
Investments
25
Derivative financial instruments
25
Employee benefits – surpluses
27
Total non-current assets
Cash and short-term deposits
12
Trade and other receivables
18
Inventories
19
Income tax receivable
9
Derivative financial instruments
25
Total current assets
Total assets
Equity
Issued share capital
21
Retained earnings
22
Other reserves
23
(1,503.7 )
(1,464.6 )
Equity attributable to the owners of the Parent
Non-controlling interests
Total equity
Liabilities
Interest-bearing borrowings
1
25
Other payables
29
Provisions
30
Deferred tax liabilities
9
Employee benefits – liabilities
27
Total non-current liabilities
Interest-bearing borrowings
1
25
Trade and other payables
29
Income tax payable
9
Provisions
30
Derivative financial instruments
25
Total current liabilities
Total liabilities
Total equity and liabilities
1.
Following the amendments to IAS1, amounts due under the committed syndicated bank facility have been reclassified as non-current, refer to Note 2.8.
Company number 8217766
their behalf by:
Patrick André
Mark Collis
Chief Executive
Vesuvius plc
Annual Report and Financial Statements 2024
152
Group Statement of Changes in Equity
For the year ended 31 December 2024
Issued
share
capital
£m
Other
reserves
£m
Retained
earnings
£m
Owners of
the Parent
£m
Non-
controlling
interests
£m
Total
equity
£m
As at 1 January 2023
(1,391.4 )
Profit
Remeasurement of defined benefit liabilities/assets
Income tax relating to items not reclassified
(2.0 )
(2.0 )
(2.0 )
Exchange differences on translation of the
net assets of foreign operations
(80.8 )
(80.8 )
(3.5 )
(84.3 )
Exchange differences on translation of
net investment hedges
Net change in costs of hedging
Change in the fair value of the hedging instrument
(4.2 )
(4.2 )
(4.2 )
Amounts reclassified from Net finance costs
Other comprehensive income/(loss) net of income tax
(73.2 )
(66.8 )
(3.5 )
(70.3 )
Total comprehensive income/(loss)
(73.2 )
Recognition of share-based payments
Purchase of ESOP shares
(1.1 )
(1.1 )
(1.1 )
Share buyback
(0.1 )
(3.0 )
(3.1 )
(3.1 )
Dividends paid (Note 24)
(60.7 )
(60.7 )
(2.1 )
(62.8 )
Total transactions with owners
(0.1 )
(57.5 )
(57.6 )
(2.1 )
(59.7 )
As at 31 December 2023
(1,464.6 )
As at 1 January 2024
(1,464.6 )
Profit
Remeasurement of defined benefit liabilities/assets
Income tax relating to items not reclassified
(0.8 )
(0.8 )
(0.8 )
Exchange differences on translation of the
net assets of foreign operations
(47.8 )
(47.8 )
(1.3 )
(49.1 )
Exchange differences on translation of
net investment hedges
Net change in costs of hedging
(0.1 )
(0.1 )
(0.1 )
Change in the fair value of the hedging instrument
Amounts reclassified from Net finance costs
(1.2 )
(1.2 )
(1.2 )
Other comprehensive income/(loss) net of income tax
(40.5 )
(37.7 )
(1.3 )
(39.0 )
Total comprehensive income/(loss)
(40.5 )
Recognition of share-based payments
Purchase of ESOP shares
(17.1 )
(17.1 )
(17.1 )
Share buyback
(1.3 )
(63.5 )
(63.4 )
(63.4 )
Dividends paid (Note 24)
(61.1 )
(61.1 )
(2.5 )
(63.6 )
Total transactions with owners
(1.3 )
(135.5 )
(135.4 )
(2.5 )
(137.9 )
As at 31 December 2024
(1,503.7 )
153
Strategic report
Governance
Financial statements
Notes to the Group Financial Statements
General Information
Company and its subsidiary and joint venture companies (‘the Group’) is set out in the Strategic Report on pages 1 to 73.
Basis of Preparation
Basis of accounting
The Group financial statements have been prepared in accordance with UK-adopted international accounting standards (IFRS)
and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The financial
statements have been prepared under the historical cost convention, with the exception of fair value measurement applied to
Basis of consolidation
The Group financial statements incorporate the financial statements of the Company and entities controlled directly and
indirectly by the Company (its ‘subsidiaries’). Control exists when the Company has the power to direct the relevant activities of an
entity that significantly affect the entity’s return so as to have rights to the variable return from its activities. In assessing whether
control exists, potential voting rights that are currently exercisable are taken into account. The results of subsidiaries acquired
or disposed of during the year are included in the Group Income Statement from the effective date of acquisition or up to the
effective date of disposal, as appropriate.
The principal accounting policies applied in the preparation of these Group financial statements are set out in the Notes. These
policies have been consistently applied to all of the years presented, unless otherwise stated. Where necessary, adjustments are
made to the financial statements of subsidiaries to bring their accounting policies into line with those detailed herein to ensure that
the Group financial statements are prepared on a consistent basis. All intra-Group transactions, balances, income and expenses
are eliminated on consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s interest therein.
Non-controlling interests consist of the amount of those interests at the date of the original business combination together with
the non-controlling interests’ share of profit or loss, each component of other comprehensive income, less dividends paid since
the date of the combination. Total comprehensive income is attributed to the non-controlling interests, even if this results in the
Going concern
The Group’s available liquidity stood at £389m at year-end 2024, down from £488m at year-end 2023. The Directors have
prepared cash flow forecasts for the Group for the period to 30 June 2026. These forecasts reflect an assessment of current
and future end-market conditions, which are expected to be challenging in 2025 (as set out in the ‘outlook’ statement in the
Chief Executive’s Strategic Review in this document), and their impact on the Group’s future trading performance.
The Directors have also considered a severe but plausible downside scenario, based on an assumed volume decline and loss of
profitability over the period. This downside scenario assumes:
–
A decline in business activity level in 2025 and 2026 by 3% compared to 2024 performance
–
A decline in profitability (Return on Sales) of 2.1% compared to 2024 performance
–
Working capital as a percentage of sales deteriorating by 1.0% compared to 2024
On a full-year basis relative to 2024, this implies a c.23% decline in Trading Profit.
The Group has two covenants; net debt/EBITDA (under 3.25x) and an interest cover requirement of at least 4.0x. In this downside
scenario, the forecasts show that the Group’s maximum net debt/EBITDA (pre-IFRS 16 in-line with the covenant calculation)
does not exceed 1.9x, compared to a leverage covenant of 3.25x, and the minimum interest cover reached is 17x compared to
a covenant minimum of 4.0x.
The forecasts show that the Group will be able to operate within its current committed debt facilities and show continued
compliance with the Group’s financial covenants. On the basis of the exercise described above and the Group’s available
committed debt facilities, the Directors consider that the Group and the Company have adequate resources to continue in
operational existence for a period of at least 12 months from the date of signing of these financial statements and that there is no
material uncertainty in respect of going concern. On 21 February 2025 the Group obtained a new committed syndicated bank
facility of £475m reaching maturity in August 2029, replacing the previous one in place (see Note 25.2.d) with the same covenants.
This is considered to be a non-adjusting event after balance sheet date. Accordingly, they continue to adopt a going concern basis
2.4
Presentational currency
The financial statements are presented in millions of pounds sterling, which is the presentational currency of the Group and the
Company and rounded to one decimal place. Foreign operations are included in accordance with the policies set out in Note 25.1.
154
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
2.
Basis of Preparation
continued
2.5
Disclosure of separately reported items
Columnar presentation
The Group has adopted a columnar presentation for its Group Income Statement, to separately identify headline performance
results, as the Directors consider that this gives a useful view of the core results of the ongoing business. As part of this presentation
format, the Group has adopted a policy of disclosing separately on the face of its Group Income Statement, within the column
entitled ‘Separately reported items’, the effect of any components of financial performance for which the Directors consider
separate disclosure would assist users both in a useful understanding of the financial performance achieved for a given year
and in making projections of future results.
Separately reported items
Both materiality and the nature of the components of income and expense are considered in deciding upon such presentation.
Such items may include, inter alia, the financial effect of exceptional items which occur infrequently, such as major restructuring
activity, cost reduction programme expenses, and items reported separately for consistency, such as amortisation charges
relating to acquired intangible assets, profits or losses arising on the disposal of continuing or discontinued operations and the
taxation impact of the aforementioned items reported separately.
The amortisation charge in respect of intangible assets recognised on business combinations is excluded from the trading results
of the Group since they are non-cash charges and are not considered reflective of the core trading performance of the Group.
As headline results include the benefits of major acquisitions but exclude this amortisation charge, they should not be regarded
as a complete picture of the Group’s financial performance, which is presented in its total results.
In its adoption of this policy, the Group and the Company apply an even-handed approach to both gains and losses and aim to
be both consistent and clear in their accounting and disclosure of such items. The exclusion of other separately reported items may
result in headline earnings being materially higher or lower than total earnings.
2.6
Consideration of climate change
As well as considering the implications of climate change on the Group’s operations and activities, the Directors have considered
the impact on the financial statements in accordance with the Task Force on Climate-related Financial Disclosures (TCFD)
recommendations. In preparing the financial statements, we have considered the impact of climate change, particularly in the
context of the disclosures included in the Sustainability Report this year.
Further detail on our sustainability and climate change-based management incentives is included in the Board oversight section
of our Sustainability Report.
Climate change is not considered to have a material impact on the Group’s financial reporting judgements and estimates, nor is it
expected to have a detrimental impact on the viability of the Group in the medium term.
Specifically, we note that we have considered the impact of climate change on the carrying value and the estimation of useful lives
of property, plant and equipment (see Note 14) and goodwill and intangibles (see Note 15). The impact of climate change on
impairment of goodwill is disclosed in Note 16.2.
Changes in accounting policies
There have been no changes in accounting policies during the year, except for the change in presentation resulting from
2.8
New and revised IFRS
Certain new accounting amendments and interpretations have been published that are not mandatory for 31 December 2024
reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these amendments
and interpretations is that they are not expected to have a significant impact on the Group’s financial position, performance,
cash flows and disclosures.
Developments in the Group tax position
The Group is within the scope of the OECD Pillar Two model rules, and it applies the IAS 12 exception to recognising and disclosing
information about deferred tax assets and liabilities related to Pillar Two income taxes. The Group will incur top-up taxes due to
Pillar Two legislation that became effective 1 January 2024 in the UK. Under the legislation, the Group is liable to pay top-up tax
for the differences between its GloBE effective tax rate in each jurisdiction and the 15% minimum rate.
The Group has estimated that the effective tax rates exceed 15% in all jurisdiction in which it operates, except for United Arab
Emirates where we have two subsidiaries. However, the amount is immaterial at less than £0.1m and has been included within
income tax in the Income Statement. There are no significant impacts on the Group’s financial position, performance, cash flows
and earnings per share.
Strategic report
Governance
Financial statements
155
2.
Basis of Preparation
continued
2.8
New and revised IFRS
continued
Amendments to IAS 7 and IFRS 7 – Supplier finance arrangements
The amendments seek to enhance the transparency of supplier finance arrangements and their effects on a company’s
liabilities, cash flows and exposure to liquidity risk. The application by the Group does not have a material impact on the
recognition of supplier finance arrangements and the Group disclosures are amended according to the amended requirements.
The amendment does not require comparative information for any reporting periods presented before the beginning of the
current annual reporting. The Group’s assessment of the impact of this amendment is that it has no significant impact on the
Group’s financial position, performance, cash flows and earnings per share. Disclosure on supplier finance arrangements is
included in Note 29.3.
Amendments to IAS 1 – Presentation of Financial Statements, and Non-current Liabilities with Covenants
The amendments clarify how conditions with which an entity must comply within twelve months after the reporting period
affect the classification of a liability. The Group has reclassified amounts due under its committed syndicated bank facility as
non-current as it had the right to roll over the obligations for at least 12 months after the reporting date and was compliant with
all relevant covenant requirements at the reporting date. Comparatives for the year ended 31 December 2023 in these financial
statements have been restated on the same basis. There are no impacts on the financial statements other than the reclassification
to non-current liabilities. The amount reclassified as non-current liabilities in the comparative period was £51.6m.
2023 | 2023 | |
Restated | Published | |
£m | £m | |
Interest-bearing borrowings – current | 24.2 | 75.8 |
Interest-bearing borrowings – non-current | 378.0 | 326.4 |
Total interest-bearing borrowings | 402.2 | 402.2 |
Critical Accounting Judgements and Estimates
Determining the carrying amount of some assets and liabilities and amounts recognised as reported profit requires judgement
and/or estimation of the effect of uncertain future events. The major sources of judgement and estimation uncertainty that have
a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities and amounts recognised
as reported profit are noted below. As part of the evaluation of critical accounting judgements and key sources of estimation
uncertainty, the Group has considered the implications of climate change on its operations and activities. All other accounting
policies are included within the respective Notes to the Financial Statements.
3.1
Separately reported items (judgement)
In accordance with IAS 1, the Group has adopted a policy of disclosing separately on the face of its Group Income Statement,
within the column entitled ‘Separately reported items’, the effect of any components of financial performance for which the
Directors consider separate disclosure would assist both in a useful understanding of the financial performance achieved for
a given year and in making projections of future results. The judgement considers both materiality and the nature of the
components of income and expense in deciding upon such presentation. Such items may include, inter alia, the financial effect of
exceptional items which occur infrequently, such as major restructuring activity, and items reported separately for consistency,
such as amortisation charges relating to acquired intangible assets, profits or losses arising on the disposal of continuing or
discontinued operations and the taxation impact of the aforementioned exceptional items and other items reported separately.
3.2
Deferred tax asset recognition (judgement and estimate)
The level of deferred tax recognised is dependent on subjective judgements as to the interpretation of complex international
tax regulations together with the ability of the Group to utilise tax attributes within the time limits imposed by the relevant tax
legislation. The value of deferred tax assets and liabilities is an area involving inherent uncertainty and estimation and balances
are therefore subject to risk of change as a result of underlying assumptions and judgements. In recognising deferred tax
assets, the Group considers the future profitability based upon approved budgets and business plans, and the Group models
proportionate increases and decreases in relation to future income to determine future deferred tax recoverability. It is impractical
to disclose the extent of the possible effects of profitability assumptions on the Group’s deferred tax assets. It is reasonably
possible that to the extent that actual outcomes differ from management’s estimates, material income tax charges or credits,
and changes in current and deferred tax assets or liabilities, may arise within the next financial years and in future periods.
Reportable segments for continuing operations (judgement)
The Steel Flow Control, Steel Advanced Refractories, and Steel Sensors & Probes operating segments are aggregated into the
Steel reportable segment. In determining that aggregation is appropriate, judgement is applied which takes into account the
economic characteristics of these operating segments, which include a similar nature of products, customers, production
processes and margins.
156
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
3.
Critical Accounting Judgements and Estimates
continued
3.3
Reportable segments for continuing operations (judgement)
continued
The Group’s operating segments are determined taking into consideration how the Group’s components are reported to the
Group’s Chief Executive, who makes the key operating decisions and is responsible for allocating resources and assessing
performance of the component. Taking into account the Group’s management and internal reporting structure, the operating
segments are Steel Flow Control, Steel Advanced Refractories, Steel Sensors & Probes, and the Foundry Division. The principal
Employeebenefits(estimate)
The Group’s financial statements include the costs and obligations associated with the provision of pension and other post-
retirement benefits to current and former employees. It is the Directors’ responsibility to set the assumptions used in determining
the key elements of the costs of meeting such future obligations. These assumptions are set after consultation with the Group’s
actuaries and include those used to determine regular service costs and the financing elements related to the plans’ assets and
liabilities. Whilst the Directors believe that the assumptions used are appropriate, a change in the assumptions could affect the
Group’s profit and financial position. The pension obligations are most sensitive to a change in the discount rate and mortality
assumptions and therefore could materially change in the next financial year if the discount rate changes significantly. Sensitivity
disclosures are included in Note 27.3.
3.5
Impairment testing of goodwill (estimate)
Determining whether goodwill is impaired requires an estimation of the recoverable amount, which is the higher of value in use
and fair value less cost to sell, of the cash-generating units to which these assets have been allocated. The value in use calculation
requires estimation of future cash flows expected to arise for the cash-generating unit, the selection of suitable discount rates and
the estimation of long-term growth rates. As determining such assumptions is inherently uncertain and subject to future factors,
there is the potential these may differ in subsequent periods and therefore materially change the conclusions reached. In light of
this, consideration is made each year as to whether sensitivity disclosures are required for reasonably possible changes to
assumptions. Sensitivity disclosures are included in Note 16.2.
3.6
Provisions (judgement and estimate)
Vesuvius has extensive international operations and is subject to various legal and regulatory regimes, including those covering
taxation and environmental matters. Some of the Group’s subsidiaries are parties to legacy matter and other lawsuits, certain
of which are insured claims, which have arisen in the ordinary course of the operations of the company involved. Some of these
provisions relate to businesses that are closed or have been disposed of. Provisions are made for the expected amounts payable
in respect of known or probable costs resulting both from these third-party lawsuits or other regulatory requirements. To the
extent insurance is in place, an asset is recognised in other receivables in respect of associated insurance reimbursements.
As the resolution of many of the potential obligations for which provision is made is subject to legal or other regulatory process,
it requires estimation of the timing, quantum and amount of associated outflows, which are subject to some uncertainty. The
Directors use their judgement, using historical evidence, current information and expert experience, to determine whether to
recognise a provision, and make appropriate estimates of provisions in the financial statements for amounts relating to such
matters. Assessment of claim costs is considered to be a critical estimate. Associated assets for insurance recoverable are
recognised, which involves assessing the likelihood of insurance being paid, which is a critical judgement. The Directors have
considered the available cover and the historical evidence to determine whether this is virtually certain. Estimating the amount
of provisions and insurance receivable is subject to estimation uncertainty. See Note 30 for further information.
3.7
Supplier finance arrangements (judgement)
Vesuvius has supply chain finance programmes in place. Management has assessed these arrangements and determined that
outstanding balances under the supplier financing arrangements are to be classified as trade payables. Additionally, related
cash flows are presented within operating cash flows, as the financing agreements are established between the supplier and the
funding providers. The judgement considers materiality, the nature and purpose of the arrangements, as well as their terms and
conditions in determining the appropriate classification and presentation in the financial statements. Disclosure on supplier
Strategic report
Governance
Financial statements
157
Segment Information
The segment information contained in this Note refers to several alternative performance measures, definitions of which can
be found in Note 35. The Group has considered climate change in making segmental and revenue disclosures. Opportunities
and risks for the reported segments are further explained in the Sustainability section.
4.1
Business segments
Operating segments for continuing operations
The Group’s operating segments are determined taking into consideration how the Group’s components are reported to the
Group’s Chief Executive, who makes the key operating decisions and is responsible for allocating resources and assessing
performance of the component. Taking into account the Group’s management and internal reporting structure, the operating
segments are Steel Flow Control, Steel Advanced Refractories, Steel Sensors & Probes, and the Foundry Division. The principal
activities of each of these segments are described in the Strategic Report.
The Steel Flow Control, Steel Advanced Refractories, and Steel Sensors & Probes operating segments are aggregated into the
Steel reportable segment. In determining that aggregation is appropriate, judgement is applied which takes into account the
economic characteristics of these operating segments which include a similar nature of products, customers, production
processes and margins.
Segment revenue represents revenue from external customers (inter-segment revenue is not material). Trading profit includes
items directly attributable to a segment as well as those items that can be allocated on a reasonable basis.
Accounting policy – revenue recognition
The Group derives all of its revenue from contracts with customers. The Group enters into contracts to provide one or multiple
products to customers in the steel, foundry and other industries globally.
Revenue recognition at a point in time
Where the Group provides consumable products only, one performance obligation is present. The performance obligation is
to deliver consumables to the customer and is satisfied upon delivery of these items. Similarly, where a contract is for the supply
of standard equipment, there is one performance obligation and revenue is primarily recognised at a point in time, being upon
delivery of these items. The form of a contract is typically a purchase order from a customer.
Revenue recognition at a point in time
The Group also enters into some contracts with customers in the steel industry under which it primarily provides consumable items,
but also equipment and/or technical assistance (‘service contracts’) to facilitate these customers’ steel production processes.
The customer benefits from the combined output of these contracts, being the use of Vesuvius consumables, equipment and
technicians to support the customer’s production of steel. The individual elements of these contracts are not distinct because
Vesuvius is compensated by the efficient use of refractory material, optimised through a combination of the consumable itself
and its application by experienced technicians. The performance obligations are therefore bundled into a single performance
obligation and revenue is recognised at a point in time, on confirmation of steel production volume by customers.
Approximately 85% (2023: 86%) of the aforementioned revenue relates to the sale of consumables and equipment only.
Approximately 15% (2023: 14%) of revenue relates to contracts that contain multiple performance obligations, which are
bundled into a single performance obligation and revenue is recognised at a point in time based on the steel production volume
of Vesuvius customers.
Revenue recognition over time
The Group enters into bespoke equipment design and build (and installation in some cases) contracts with customers.
Performance obligations are usually defined by milestones agreed with the customers in the contract. The customer usually does
not have a right to a refund as work progresses towards achieving the milestones in the contract. Revenue is recognised over time
by measuring the progress of completion or achievement of a milestone for each performance obligation identified within the
contract, usually with reference to cost inputs incurred against overall estimated costs for the contract. This does not typically
entail estimation or judgements as the contracts are usually not material in isolation and do not span more than 12 months.
This approach to revenue recognition is considered to reflect faithfully the value and timing of goods or services transferred and
the rights of Vesuvius to revenue.
Determining and allocating the transaction price to performance obligations
For revenue recognised at a point in time, the transaction price is determined and allocated with reference to the individual prices
of consumables or equipment specified in the contract or customer purchase order. If a stand-alone selling price is not available,
the Group will estimate the selling price with reference to the price that would be charged for the goods or services if they were
sold separately. This estimate is not considered complex.
158
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
4.
Segment Information
continued
4.2
Accounting policy – revenue recognition
continued
For service contracts the bundled performance obligation is deemed to be the provision of consumables and, in some cases,
labour to facilitate production of customer steel. The transaction price is determined and allocated with reference to either an
agreed price list for each of the consumables input or, for some contracts, the transaction price is determined and allocated as
an amount per unit of customer steel output.
For revenue recognised over time, the transaction price is determined with reference to the prices set out in the contract. For
bespoke equipment builds, the transaction price is allocated to performance obligations (milestones) within the contract and the
payment schedules agreed with the customer that align to these milestones. For installations, the transaction price is allocated
with reference to the progress of completion. Where payment schedules include customer advance payments (i.e. not aligned
with a milestone/performance obligation), the amounts received are included within contract liabilities until the performance
obligation to which they relate is satisfied.
Contracts are to be settled in cash. They do not typically contain any variable consideration, discounts, refunds, rebates,
warranties or significant financing components.
Duration and costs of obtaining contracts
The duration of the Group’s contracts with customers is typically less than one year and accordingly the Group has taken the
practical expedient within IFRS 15 to not disclose the transaction price allocated to unsatisfied (whole or partially) performance
obligations as at the end of the reporting period. Service contracts may span over more than one year as they remain in effect up
to a specified level of customer production of steel. However, the choice to purchase from Vesuvius under the contract remains
with the customer and therefore there is no commitment for the customer/Vesuvius to purchase/produce up to the specified level.
Costs of obtaining contracts are not considered significant and these are expensed as incurred.
Customer credit risk and payment terms
The Group assesses customer credit risk and recognises revenue when such risk is considered low and the consideration cash flows
due are reasonably expected to flow to the Group. Typically, the Group will not transact with customers where credit risk concerns
are identified and therefore there is no material unrecognised revenue as a result of credit risk. For trade receivables and contract
assets in respect of revenue recognised, an expected credit loss allowance is determined.
Customer payment terms are set out in revenue contracts and do not exceed one year. Customer payments typically follow the
satisfaction of performance obligations at which point revenue is recognised and invoiced. Accordingly, trade receivables and
contract assets are expected to derive cash inflows for the Group within less than 12 months.
A contract asset is recorded when revenue is recognised but an invoice has not been raised to the customer. Contract assets are
short-term and typically are invoiced in the following month.
Customer advance payments are included in contract liabilities. These are typically not material and relate to over time revenue
Uncertainties
There are no uncertainties involving economic factors, estimation or judgements (other than as disclosed above) in respect of
revenue recognition. Credit risk relating to the collection of cash inflows from revenue recognised is addressed through an
allowance for expected credit losses, as set out in the trade and other receivables accounting policy.
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
2024 | 2023 | |
£m | £m | |
Receivables, which are included in ‘Trade and other receivables’ | 341.7 | 356.9 |
Contract assets, which are included in ‘Trade and other receivables’ | 1.2 | 1.6 |
Contract liabilities, which are included in ‘Trade and other payables’ | 1.6 | 2.3 |
Contract liabilities of £1.6m (2023: £2.3m) include advances received from customers that precede the satisfaction of
performance obligations by the Group. £2.3m (2023: £2.5m) of the contract liabilities recognised in the prior year was recognised
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159
4.
Segment Information
continued
4.3
Segmental analysis
The reportable segment results from continuing operations for 2024 and 2023 are presented below.
| 2024 | |||||||
Flow | Advanced | Sensors | |||||
Control | Refractories | & Probes | Total Steel | Foundry | Total | ||
Note | £m | £m | £m | £m | £m | £m | |
Segment revenue | 769.0 | 535.6 | 39.2 | 1,343.8 | 476.3 | 1,820.1 | |
– at a point in time | 1,339.9 | 476.3 | 1,816.2 | ||||
– over time | 3.9 | – | 3.9 | ||||
Segment adjusted EBITDA | 197.2 | 53.0 | 250.2 | ||||
Segment depreciation and amortisation | (44.2) | (18.0) | (62.2) | ||||
Segment trading profit | 153.0 | 35.0 | 188.0 | ||||
Return on sales margin | 11.4% | 7.4% | 10.3% | ||||
Cost reduction programme expenses | 6 | (5.8) | (8.8) | (14.6) | |||
Provision for future water treatment at | |||||||
disused mine | 6 | (9.7) | |||||
Amortisation of acquired intangible assets | (10.0) | ||||||
Operating profit | 153.7 | ||||||
| Net finance costs | 8 | (16.2) | |||||
Share of post-tax profit of joint ventures | 17.2 | 1.1 | |||||
Profit before tax | 138.6 | ||||||
Capital expenditure additions | 92.2 | 23.9 | 116.1 | ||||
Inventory | 19 | 241.7 | 53.7 | 295.4 | |||
Trade debtors | 18 | 259.7 | 82.0 | 341.7 | |||
Trade payables | 29 | (180.1) | (61.6) | (241.7) | |||
| 2023 | |||||||
Flow | Advanced | Sensors | |||||
Control | Refractories | & Probes | Total Steel | Foundry | Total | ||
Note | £m | £m | £m | £m | £m | £m | |
Segment revenue | 793.0 | 567.9 | 39.1 | 1,400.0 | 529.8 | 1,929.8 | |
– at a point in time | 1,396.6 | 529.8 | 1,926.4 | ||||
– over time | 3.4 | – | 3.4 | ||||
Segment adjusted EBITDA | 187.9 | 70.3 | 258.2 | ||||
Segment depreciation and amortisation | (40.3) | (17.5) | (57.8) | ||||
Segment trading profit | 147.6 | 52.8 | 200.4 | ||||
Return on sales margin | 10.5% | 10.0% | 10.4% | ||||
Amortisation of acquired intangible assets | (10.3) | ||||||
Operating profit | 190.1 | ||||||
| Net finance costs | 8 | (11.6) | |||||
Share of post-tax profit of joint ventures | 17.2 | 0.9 | |||||
Profit before tax | 179.4 | ||||||
Capital expenditure additions | 93.2 | 32.1 | 125.3 | ||||
Inventory | 19 | 239.5 | 51.5 | 291.0 | |||
Trade debtors | 18 | 267.6 | 89.3 | 356.9 | |||
| Trade payables | 29 | (177.7) | (58.7) | (236.4) | |||
The Chief Operating Decision Maker does not review non-current assets and non-current liabilities at a segmental level so these
disclosures are not included.
160
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
4.
Segment Information
continued
4.4
Geographical analysis
External revenue | Non-current assets | |||
2024 | 2023 | 2024 | 2023 | |
£m | £m | £m | £m | |
EMEA | 603.1 | 669.6 | 510.7 | 515.8 |
Asia | 583.5 | 565.6 | 244.9 | 233.0 |
North America | 487.8 | 528.7 | 410.7 | 404.1 |
South America | 145.7 | 165.9 | 45.1 | 52.1 |
1,820.1 | 1,929.8 | 1,211.4 | 1,205.0 | |
External revenue disclosed in the table above is based upon the geographical location from which the products and services are
invoiced. Non-current assets exclude employee benefits net surpluses, deferred tax assets and financial instruments. Information
relating to the Group’s products and services is given in the Strategic Report. The Group is not dependent on any single customer
for its revenue and no single customer, for either of the years presented in the table above, accounts for more than 10% of the
Group’s total external revenue. £50.7m (2023: £66.5m) of revenue was generated from the UK, and total non-current assets in the
5.
Operating Profit
Operating profit is stated after charging/(crediting)
2024 | 2023 | ||
Notes(s) | £m | £m | |
Cost of materials recognised as an expense | 19 | 807.9 | 853.5 |
Research and development | 36.9 | 37.4 | |
Employee expenses | 7 | 474.3 | 475.1 |
Depreciation | 14 | 60.9 | 57.4 |
Amortisation | 15 | 11.3 | 10.7 |
Operating lease charges | 26 | 3.0 | 3.0 |
Expected credit loss allowances credit | 25.2 | (2.9) | (2.6) |
Other expenses | 275.0 | 305.1 |
Other expenses mainly include sales and distribution costs, energy costs, repairs and maintenance costs, travel costs, external
Amounts payable to PricewaterhouseCoopers LLP and their associates
2024 | 2023 | |
£m | £m | |
Fees payable to the Company’s auditors and their associates for the audit | ||
of the Parent Company and Consolidated Financial Statements | 1.0 | 1.0 |
Fees payable to the Company’s auditors and their associates for other services: | ||
Audit of the Company’s subsidiaries | 1.1 | 1.1 |
Audit-related assurance services | 0.2 | 0.2 |
Total auditors’ remuneration | 2.3 | 2.3 |
Total auditors’ remuneration of £2.3m in 2024 all related to continuing operations, of which £2.1m related to audit fees and £0.2m
to non-audit fees, in respect of the Group’s half-year financial statements, quarterly reviews and tax form audits in India and
Mexico (2023: £2.3m, including £2.1m of audit fees and £0.2m of non-audit fees, the latter in respect of the Group’s half-year
review fee and quarterly reviews and tax form audits in India, as required by regulation). In 2024, a total of £0.1m (2023: £0.2m)
of audit overruns were incurred in respect of the 2023 year-end audit and not included in the total auditors’ remuneration of £2.3m
for 2023 (2022: £2.3m). It is the Group’s policy not to use the Group’s auditors for non-audit services other than for audit-related
services that are required to be performed by auditors.
5.3
Amounts payable to Mazars LLP
Mazars LLP acts as external auditors of the non-material entities and three material entities within the Group. Total remuneration
Strategic report
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Financial statements
161
Separately Reported Items
Cost reduction programme expenses
In November 2023, the Group initiated an efficiency programme with the aim of realising recurring cash cost savings of £30m
per annum by 2026. The programme covers all of the Group’s activities worldwide and focuses on operational improvement,
lean initiatives, automation and digitalisation as well as further optimisation of the manufacturing footprint.
Cost reduction programme expenses are excluded from underlying performance, allowing for a clear measure of the Group’s
operating performance. They are shown as a separately reported item outside of Trading Profit and shown on the face of the
Income Statement below Trading Profit.
During 2024, cost reduction programme expenses reported as separately reported items were £14.6m (2023: £nil). The charges
reflect redundancy costs £10.8m (2023: £nil), plant closure costs £2.2m (2023: £nil), and non-cash asset impairments £1.6m
(2023: £nil). The net tax credit attributable to these cost reduction programme expenses was £2.6m (2023: £nil).
Provision for future water treatment at disused mine
In 1999, the Group acquired Premier Refractories which owned a disused clay mine in the United States. In 2018, wastewater
containing pollutants was discovered and in 2022 a water treatment facility was installed. Reflecting the future expected
operating costs of 10 years, a provision was established for £6.0m during the year ended 2020. In 2024, the forecast annual
operating cost is £0.8m and the remaining period for which water treatment will be required was reassessed to be 20 years,
resulting in an increase in the provision and a charge to the Income Statement for £9.7m (2023: £nil). The charge has been reported
Employees
7.1
Employee expenses
2024 | 2023 | ||
Note | £m | £m | |
Wages and salaries | 390.8 | 392.2 | |
Social security costs | 60.5 | 58.3 | |
Share-based payments | 28 | 6.2 | 7.3 |
Pension costs – defined contribution pension plans | 27 | 11.8 | 12.1 |
– defined benefit pension plans | 27 | 4.8 | 4.7 |
Other post-retirement benefits | 27 | 0.2 | 0.5 |
Total employee expenses | 474.3 | 475.1 |
7.2
Monthly average number of employees
2024 | 2023 | |
no. | no. | |
Steel | 9,061 | 9,057 |
Foundry | 2,214 | 2,455 |
Total monthly average number of employees | 11,275 | 11,512 |
As at 31 December 2024, the Group had 11,133 employees (2023: 11,376).
7.3
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each
of the categories specified in IAS 24 Related Party Disclosures. Details of the Directors’ remuneration are disclosed in the Directors’
Remuneration Report on pages 103 to 129.
2024 | 2023 | |
£m | £m | |
Short-term employee benefits | 2.0 | 2.5 |
Post-employment benefits | 0.2 | 0.2 |
Share-based payments | 1.5 | 1.5 |
Total remuneration of key management personnel | 3.7 | 4.2 |
162
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
Net Finance Costs
2024 | 2023 | |
£m | £m | |
Interest payable on borrowings | ||
Loans and overdrafts | 19.3 | 20.1 |
Interest on lease liabilities | 3.0 | 2.4 |
Amortisation of capitalised arrangement fees | 1.0 | 1.0 |
Total interest payable on borrowings | 23.3 | 23.5 |
Interest on net retirement benefit obligations | 1.6 | 2.3 |
Adjustment to discounts on provisions and other liabilities | 2.2 | 2.4 |
Adjustment to discounts on receivables | (1.2) | (1.3) |
Financial income | (9.7) | (15.3) |
Total net finance costs | 16.2 | 11.6 |
Income Tax Charge
Accounting policy
Tax expense represents the sum of current tax and deferred tax. Current and deferred tax are recognised in profit or loss except
to the extent that they relate to items charged or credited in the Group Statement of Comprehensive Income or Group Statement
of Changes in Equity, in which case the associated tax is also recognised in those statements.
Current tax
Current tax is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the Group Income
Statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates and laws that have been
enacted, or substantively enacted, by the balance sheet date.
A provision is recognised when the Group considers it has a present tax obligation as the result of a past event and it is probable
that the Group will be required to settle that obligation. Provisions established for such uncertain tax positions are made using
a best estimate of the tax expected to be paid, based on a qualitative and quantitative assessment of all relevant information.
Such a provision is typically required where the underlying tax issue is subject to interpretation and remains to be agreed,
and therefore is uncertain as to outcome. Principally, the uncertain tax positions for which a provision is made relate to the
interpretation of tax legislation and guidance regarding transfer pricing arrangements that have been entered into in the normal
course of business. In accordance with IAS 12, tax provisions are included as income tax payable on the face of the Group Balance
Sheet, and movements in tax provisions are included within income tax charges or credits in the Group Income Statement.
In assessing any appropriate provision requirements for uncertain tax items, the Group considers progress made in discussions
with the tax authorities, expert advice on the likely outcome and any recent developments in case law. Due to the uncertainty
associated with such tax items, it is possible that at a future date, on conclusion of the open matters, the final outcome may
vary materially. Any such variations will affect the financial results in the year in which such a determination is made.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit. Deferred tax is calculated at the tax rates that are expected to apply in
the period when the liability is settled or the asset is realised, based on tax rates and laws that have been enacted, or substantively
enacted, by the balance sheet date.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and interests in joint
ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the
asset to be recovered. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group
Strategic report
Governance
Financial statements
163
9.
Income Tax Charge
continued
9.2
Income tax charge
2024 | 2023 | |
£m | £m | |
Current tax | ||
UK taxation | – | – |
Overseas taxation | 42.1 | 38.9 |
Adjustments in respect of prior years | (0.6) | 6.7 |
Total current tax, continuing operations | 41.5 | 45.6 |
Deferred tax | ||
Origination and reversal of temporary taxable differences | 0.1 | 6.2 |
Adjustments in respect of prior years | (3.3) | (3.0) |
Total deferred tax, continuing operations | (3.2) | 3.2 |
Total income tax charge | 38.3 | 48.8 |
Total income tax charge attributable to: | ||
Continuing operations – headline performance | 47.2 | 51.9 |
| – separately reported | (8.9) | (3.1) |
Total income tax charge | 38.3 | 48.8 |
Included in the Group’s total income tax charge are charges and credits meeting the criteria set out in Note 2.5 to be treated as
separately reported items, as analysed in the following table:
2024 | 2023 | |
Separately reported items | £m | £m |
Current tax deductions with respect to restructuring and strategic programmes | (2.6) | – |
Amortisation and utilisation of acquired intangibles | (2.6) | (2.7) |
Recognition of deferred tax asset on acquired intangibles | – | (0.4) |
Utilisation of operating losses | (1.3) | – |
Other temporary differences | (2.4) | – |
Total tax credit separately reported | (8.9) | (3.1) |
The net tax debit reflected in the Group Statement of Comprehensive Income in the year amounted to a £0.8m charge
(2023: £2.0m charge) in both years primarily for net actuarial gains and losses on the employee benefits plans.
9.3
Reconciliation of income tax charge to profit before tax
2024 | 2023 | |
£m | £m | |
Profit before tax | 138.6 | 179.4 |
Tax at the UK corporation tax rate of 25.0% (2023: 23.5%) | 34.6 | 42.1 |
Overseas tax rate differences | 1.2 | 0.6 |
Withholding taxes | 5.5 | 6.4 |
(Income)/expenses not (taxable)/deductible for tax purposes | 1.1 | (4.6) |
(Utilisation)/Creation of deferred tax assets not recognised in the period | (0.2) | 0.6 |
Tax rate changes | – | – |
Adjustments in respect of prior years | (3.9) | 3.7 |
Total income tax charge | 38.3 | 48.8 |
164
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
9.
Income Tax Charge
continued
Deferred tax
Other | Other | |||||
operating | Pension | Intangible | temporary | |||
Interest | losses | costs | assets | differences | Total | |
£m | £m | £m | £m | £m | £m | |
As at 1 January 2023 | 41.3 | 46.4 | 6.7 | (22.6) | 26.9 | 98.7 |
Exchange adjustments | (1.8) | 0.6 | (0.2) | 0.8 | (1.8) | (2.4) |
Other net charge to Group Statement of | ||||||
Comprehensive Income | – | – | (2.0) | – | – | (2.0) |
Other net (charge)/credit to Group Income Statement | (5.7) | (4.3) | (1.5) | 3.7 | 4.6 | (3.2) |
As at 31 December 2023 | 33.8 | 42.7 | 3.0 | (18.1) | 29.7 | 91.1 |
Exchange adjustments | 0.2 | (0.5) | (0.2) | 0.1 | 0.5 | 0.1 |
Other net charge to Group Statement of | ||||||
Comprehensive Income | – | – | (0.8) | – | – | (0.8) |
Other net (charge)/credit to Group Income Statement | (5.7) | 1.0 | (1.9) | 1.0 | 8.8 | 3.2 |
As at 31 December 2024 | 28.3 | 43.2 | 0.1 | (17.0) | 39.0 | 93.6 |
2024 | 2023 | |
£m | £m | |
Recognised in the Group Balance Sheet as: | ||
Non-current deferred tax assets | 109.9 | 114.6 |
Non-current deferred tax liabilities | (16.3) | (23.5) |
Net total deferred tax assets | 93.6 | 91.1 |
The Group has modelled proportionate increases and decreases in relation to the expected taxable income based on the
approved budget and the results do not have a material impact on the deferred tax asset balance. The Group remains confident
of the recovery of these assets.
Tax loss carry-forwards and other temporary differences with a tax value of £5.6m (2023: £22.0m) were recognised by
jurisdictions reporting a loss. Based on approved business plans of these subsidiaries, the Directors consider it probable that
the tax loss carry-forwards and temporary differences can be offset against future taxable profits of these subsidiaries.
The total deferred tax assets not recognised as at 31 December 2024 were £167.0m (2023: £161.8m), as analysed below.
In accordance with the accounting policy in Note 9.1, these items have not been recognised as deferred tax assets on the basis
that their future economic benefit is not probable. In total, there was an increase of £5.2m (2023: £13.3m decrease) in net
unrecognised deferred tax assets during the year, primarily driven by a prior year true-up to UK deferred tax assets.
Included in these deferred tax assets and liabilities are net amounts expected to be utilised in 2025 of £4.3m (2023: £6.2m estimate
of 2024).
2024 | 2023 | |
£m | £m | |
Operating losses (further described below) | 92.6 | 91.6 |
Unrelieved US interest (may be carried forward indefinitely) | – | 0.7 |
Capital losses available to offset future UK capital gains (may be carried forward indefinitely) | 45.5 | 45.5 |
UK ACT credits (may be carried forward indefinitely) | 19.3 | 19.3 |
Other temporary differences | 9.6 | 4.7 |
Total deferred tax assets not recognised | 167.0 | 161.8 |
Strategic report
Governance
Financial statements
165
9.
Income Tax Charge
continued
9.4
Deferred tax
continued
The Group has significant net operating losses with a tax value of £135.9m (2023: £134.3m), only £43.3m (2023: £42.7m) of which
meet the criteria set out in Note 9.1 to be recognised on the Group Balance Sheet.
Operating | Operating | Operating | Operating | |||
losses | losses not | losses | losses not | |||
recognised | recognised | Total | recognised | recognised | Total | |
2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
£m | £m | £m | £m | £m | £m | |
UK (may be carried forward indefinitely) | 35.8 | 74.2 | 110.0 | 34.4 | 72.1 | 106.5 |
US (due to expire 2025–2031) | 1.5 | – | 1.5 | 1.4 | – | 1.4 |
ROW (may be carried forward indefinitely) | 6.0 | 18.4 | 24.4 | 6.9 | 19.5 | 26.4 |
43.3 | 92.6 | 135.9 | 42.7 | 91.6 | 134.3 |
The £24.4m (2023: £26.4m) operating losses available to set against future income in the rest of the world arise in a number of
countries, reflecting the spread of the Group’s operations.
A liability of £nil (2023: £0.7m) has been recognised in respect of withholding taxes that will be due on a repatriation of funds from
the Group’s Chinese subsidiaries.
Deferred tax is not recognised in respect of the value of the Group’s unremitted earnings in subsidiaries and interests in joint
ventures where we are able to control the timing of the reversal of the temporary differences and it is probable that such
differences will not reverse in the foreseeable future. The main tax that would apply to unremitted earnings is dividend WHT
that would be deducted by the payer of these dividends.
The estimate for dividend withholding tax on unremitted earnings which has not been recorded in the accounts is £20.7m
Income tax payable and recoverable
2024 | 2023 | |
£m | £m | |
Liabilities for income tax payable | (2.6) | (3.5) |
Provisions for uncertain tax positions | (4.0) | (6.3) |
(6.6) | (9.8) | |
Plus: Income tax recoverable within one year | 12.9 | 11.5 |
Net asset/(liability) | 6.3 | 1.7 |
Provisions for uncertain tax positions are calculated in accordance with the policy outlined in Note 9.1, and are treated as income
tax payable in accordance with IAS 12.
These provisions cover litigated tax matters as well as provisions for other risks where the Group believes it is more likely than not
that there would be a successful challenge by a tax authority to positions it has taken in its tax filings. By its nature, litigation can
result in sharp fluctuations in cash flow, both in and out, relating to taxes. Currently, management does not expect any material
adjustments to these provisions in 2025.
During the year the provisions for uncertain tax positions have reduced to £4.0m (2023: £6.3m). The decrease of £2.3m
(2023: £0.5m) can be explained by the expiration of the statute of limitations on certain exposures and the conclusion of an
166
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
9.
Income Tax Charge
continued
9.6
Key factors impacting the sustainability of the headline effective tax rate are as follows:
Material changes in the geographic mix of profits
The Group’s headline effective tax rate is sensitive to changes in the geographic mix of profits and level of profits and reflects
a combination of higher rates in certain jurisdictions such as Brazil, Germany, India, Mexico and the US and a lower headline
effective tax rate in jurisdictions like China and Poland.
Changes in tax rates, tax reform and its interpretation
Changes in tax rates and laws in the jurisdictions in which the Group operates could have a material effect on the Group’s headline
effective tax rate.
Availability of tax advantaged rates
Vesuvius in China qualifies for a tax advantaged rate of 15% (rather than the headline rate of 25%) on part of its profits due to the
high-technology nature of its business.
Resolution of tax judgements
At any one time, the Group can be subject to a number of challenges by tax authorities in the jurisdictions in which it operates.
The outcome of these challenges is inherently uncertain, potentially resulting in a different tax charge from the amounts
Earnings per Share (EPS)
10.1
Earnings for EPS
Basic and diluted EPS from continuing operations are based upon the profit attributable to owners of the Parent, as reported
in the Group Income Statement. The table below reconciles these different profit measures.
2024 | 2023 | |
£m | £m | |
Profit attributable to owners of the Parent | 87.2 | 118.5 |
Adjustments for separately reported items: | ||
Cost reduction programme expenses | 14.6 | – |
Provision for future water treatment at disused mine | 9.7 | – |
Amortisation of acquired intangible assets | 10.0 | 10.3 |
Income tax credit | (8.9) | (3.1) |
Headline profit attributable to owners of the Parent | 112.6 | 125.7 |
10.2
Weighted average number of shares
2024 | 2023 | |
millions | millions | |
For calculating basic and headline EPS | 260.0 | 269.1 |
Adjustment for potentially dilutive ordinary shares | 3.7 | 3.0 |
For calculating diluted and diluted headline EPS | 263.7 | 272.1 |
For the purposes of calculating diluted and diluted headline EPS, the weighted average number of ordinary shares is adjusted to
include the weighted average number of ordinary shares that would be issued on the conversion of all potentially dilutive ordinary
shares expected to vest, relating to the Company’s share-based payment plans. Potential ordinary shares are only treated as
dilutive when their conversion to ordinary shares would decrease EPS or increase loss per share.
Strategic report
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Financial statements
167
10.
Earnings per Share (EPS)
continued
10.3
Per share amounts
2024 | 2023 | |
pence | pence | |
Earnings per share | ||
– reported basic | 33.5 | 44.0 |
– reported diluted | 33.1 | 43.6 |
– headline basic 1 | 43.3 | 46.7 |
– headline diluted 1 | 42.7 | 46.2 |
1.
Cash Generated from Operations
2024 | 2023 | ||
Notes | £m | £m | |
Operating profit | 153.7 | 190.1 | |
Adjustments for: | |||
Amortisation of acquired intangible assets | 15 | 10.0 | 10.3 |
Cost reduction programme expenses | 6 | 14.6 | – |
Provision for future water treatment at disused mine | 6 | 9.7 | – |
Trading profit | 188.0 | 200.4 | |
Gain on disposal of non-current assets | (2.2) | (2.5) | |
Depreciation and amortisation | 14 | 62.2 | 57.8 |
Defined benefit retirement plans net charge | 27 | 5.0 | 5.2 |
Net (increase)/decrease in inventories | (14.3) | 9.9 | |
Net decrease in trade receivables | 1.9 | 2.6 | |
Net increase in trade payables | 11.8 | 8.3 | |
Net increase in other working capital | (16.6) | (0.5) | |
Outflow related to restructuring charges | (1.0) | (0.8) | |
Defined benefit retirement plans cash outflows | 27 | (9.4) | (7.4) |
Cost reduction programme cash outflows | 6 | (7.9) | – |
Water treatment at disused mine cash outflows | (0.8) | (1.0) | |
Cash generated from operations | 216.7 | 272.0 |
Cash and Cash Equivalents
Accounting policy
Cash and short-term deposits in the Group balance sheet consist of cash at bank and in hand, and short-term deposits with
original maturity of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the
Group’s cash management are included as a component of cash and cash equivalents for the purpose of the Group Statement
of Cash Flows.
Certain of the Group’s cash and overdrafts are subject to cash pooling arrangements, some of which involve the offsetting of
credit and debit balances.
2024 | 2023 | |
£m | £m | |
Cash at bank and in hand | 186.4 | 164.2 |
Bank overdrafts | (7.8) | (3.4) |
Cash and cash equivalents in the Group Statement of Cash Flows | 178.6 | 160.8 |
Cash is held both centrally and in operating territories. There is no restricted cash. For certain territories including Argentina,
168
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
Reconciliation of Movement in Net Debt
Balance | Balance | |||||
as at | Foreign | Fair value | as at | |||
1 January | exchange | gains/ | Non-cash | Cash | 31 December | |
2024 | adjustments | (losses) | movements * | flow ** | 2024 | |
£m | £m | £m | £m | £m | £m | |
Cash and cash equivalents | ||||||
Cash at bank and in hand | 164.2 | (5.1) | – | – | 27.3 | 186.4 |
Bank overdrafts | (3.4) | 0.1 | – | – | (4.5) | (7.8) |
160.8 | (5.0) | – | – | 22.8 | 178.6 | |
Borrowings, excluding bank overdrafts | (400.6) | 9.2 | – | (18.2) | (103.6) | (513.2) |
Capitalised arrangement fees | 1.8 | – | – | (1.0) | – | 0.8 |
Derivative financial instruments | 0.5 | – | 4.1 | – | – | 4.6 |
Net debt | (237.5) | 4.2 | 4.1 | (19.2) | (80.8) | (329.2) |
Balance | Balance | |||||
as at | Foreign | as at | ||||
1 January | exchange | Fair value | Non-cash | Cash | 31 December | |
2023 | adjustments | losses | movements * | flow ** | 2023 | |
£m | £m | £m | £m | £m | £m | |
Cash and cash equivalents | ||||||
Cash at bank and in hand | 184.2 | (21.1) | – | – | 1.1 | 164.2 |
Bank overdrafts | (4.4) | 0.1 | – | – | 0.9 | (3.4) |
179.8 | (21.0) | – | – | 2.0 | 160.8 | |
Borrowings, excluding bank overdrafts | (440.2) | 11.9 | – | (33.6) | 61.3 | (400.6) |
Capitalised arrangement fees | 2.7 | – | – | (0.9) | – | 1.8 |
Derivative financial instruments | 2.7 | – | (2.2) | – | – | 0.5 |
Net debt | (255.0) | (9.1) | (2.2) | (34.5) | 63.3 | (237.5) |
*
£15.2m (2023: £31.2m) of new leases were entered into during the year.
** Borrowings, excluding bank overdrafts include proceeds from borrowings, repayment of borrowings and payment of lease liabilities.
Net debt is a measure of the Group’s net indebtedness to banks and other external financial institutions and comprises the total
of cash and short-term deposits, current and non-current interest-bearing borrowings, derivative financial instruments and
lease liabilities.
The Group routinely rolls over the principal of borrowings drawn under the committed syndicated bank facility. The procedure
Property, Plant and Equipment
Accounting policy
Freehold land and construction in progress are carried at cost less accumulated impairment losses. The Group recognises
a right-of-use asset at the lease commencement date. The asset is initially measured as the present value of the lease payments
that are not paid at the commencement date, discounted using the interest rate implicit in the lease, and depreciated using the
straight-line method over the lease term. Other items of property, plant and equipment are carried at cost less accumulated
depreciation and accumulated impairment losses. Costs are capitalised only when it is probable that they will result in future
economic benefits flowing to the Group and when they can be measured reliably. Costs are capitalised to construction in progress
where an asset is being developed. This is then transferred to the relevant asset class and depreciated when the asset is ready
for use. All other repairs and maintenance expenditures are charged to the Group Income Statement in the period in which they
are incurred.
Freehold land is not depreciated as it has an infinite life. Depreciation on other items of property, plant and equipment begins
when the asset is available for use and is charged to the Group Income Statement on a straight-line basis so as to write off the
cost less the estimated residual value of the asset over its estimated useful life as follows:
Strategic report
Governance
Financial statements
169
14.
Property, Plant and Equipment
continued
14.1
Accounting policy
continued
Asset category | Estimated useful life | |
Freehold property | between 10 and 50 years | |
Leasehold property | the term of the lease | |
Right-of-use assets | shorter of the asset’s useful life and lease term | |
Plant and equipment | – motor vehicles and information technology equipment | between 1 and 5 years |
– other | between 3 and 15 years |
The depreciation method used, residual values and estimated useful lives are reviewed annually and changed, if appropriate.
As described in Note 16.1, an asset’s carrying amount is immediately written down to its recoverable amount if its carrying amount
is greater than its estimated recoverable amount. Gains and losses arising on disposals are determined by comparing sales
14.2
Movement in net book value
Right-of-use | Right-of-use | ||||||
assets – land | assets – plant | ||||||
Freehold | Leasehold | & buildings | & equipment | Plant and | Construction | ||
property | property | (Note 26.2) | (Note 26.2) | equipment | in progress | Total | |
£m | £m | £m | £m | £m | £m | £m | |
Cost | |||||||
As at 31 December 2022 and 1 January 2023 | 269.1 | 0.7 | 45.2 | 35.4 | 643.3 | 75.8 | 1,069.5 |
Exchange adjustments | (8.3) | – | (3.3) | (1.7) | (22.6) | (0.8) | (36.7) |
Capital expenditure additions | 15.8 | – | 15.3 | 16.0 | 45.6 | 24.6 | 117.3 |
Acquisitions through business combinations | – | – | – | – | – | – | – |
Disposals | (3.9) | (0.6) | (3.6) | (6.2) | (18.8) | (0.2) | (33.3) |
Reclassifications | 6.1 | – | – | – | 10.1 | (16.2) | – |
As at 31 December 2023 and 1 January 2024 | 278.8 | 0.1 | 53.6 | 43.5 | 657.6 | 83.2 | 1,116.8 |
Exchange adjustments | (8.9) | – | (1.6) | (1.6) | (20.8) | (4.0) | (36.9) |
Capital expenditure additions | 7.5 | 0.7 | 4.0 | 11.2 | 25.4 | 54.6 | 103.4 |
Disposals | (2.9) | – | (1.6) | (5.4) | (16.6) | (0.5) | (27.0) |
Reclassifications | 8.5 | – | – | – | 33.7 | (42.2) | – |
As at 31 December 2024 | 283.0 | 0.8 | 54.4 | 47.7 | 679.3 | 91.1 | 1,156.3 |
Accumulated depreciation and impairment losses | |||||||
As at 31 December 2022 and 1 January 2023 | 137.5 | 0.7 | 15.6 | 20.9 | 477.2 | – | 651.9 |
Exchange adjustments | (3.3) | – | (1.5) | (1.0) | (17.1) | – | (22.9) |
Depreciation charge | 7.6 | – | 5.8 | 8.4 | 35.6 | – | 57.4 |
Impairment | – | – | – | – | – | – | – |
Disposals | (2.9) | (0.6) | (3.4) | (5.3) | (18.2) | – | (30.4) |
Reclassifications | 1.7 | – | – | – | (1.7) | – | – |
As at 31 December 2023 and 1 January 2024 | 140.6 | 0.1 | 16.5 | 23.0 | 475.8 | – | 656.0 |
Exchange adjustments | (4.3) | – | (0.6) | (1.0) | (13.5) | – | (19.4) |
Depreciation charge | 10.4 | – | 6.1 | 9.5 | 34.9 | – | 60.9 |
Impairment | – | – | 0.8 | – | 0.8 | – | 1.6 |
Disposals | (2.7) | – | (2.2) | (4.7) | (15.8) | – | (25.4) |
Reclassifications | (0.2) | – | – | – | 0.2 | – | – |
As at 31 December 2024 | 143.8 | 0.1 | 20.6 | 26.8 | 482.4 | – | 673.7 |
Net book value as at 31 December 2024 | 139.2 | 0.7 | 33.8 | 20.9 | 196.9 | 91.1 | 482.6 |
Net book value as at 31 December 2023 | 138.2 | – | 37.1 | 20.5 | 181.8 | 83.2 | 460.8 |
Net book value as at 31 December 2022 | 131.6 | – | 29.6 | 14.5 | 166.1 | 75.8 | 417.6 |
170
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
14.
Property, Plant and Equipment
continued
14.2
Movement in net book value
continued
Capital expenditure on customer-installation assets was £11.0m (2023: £8.4m).
Capital commitments as at 31 December 2024 were £26.7m (31 December 2023: £25.9m).
The impact of climate change has been considered in the review of carrying values to consider whether there are indications of
material impairment arising from the potential physical risks arising from climate change. We have not impaired any assets this
year as a result of this exercise. We have also considered the impact of climate change on the estimation of useful lives and no
Intangible Assets
Intangible assets comprise goodwill, other intangible assets that have been acquired through business combinations, and
software costs.
Accounting policy
Goodwill arising in a business combination is initially recognised as an asset at cost, measured as the excess of the aggregate of
the acquisition-date fair value of the consideration transferred and the amount of any non-controlling interest acquired over the
net of the acquisition-date fair value amounts of the identifiable assets acquired and liabilities assumed. When the excess is
negative, a bargain purchase gain is recognised immediately in profit or loss. Goodwill is subsequently measured at cost less
accumulated impairment losses, with impairment testing carried out annually, or more frequently when there is an indication
that the cash-generating unit (CGU) to which the goodwill has been allocated may be impaired. On disposal of a business,
(b) Other intangible assets
Intangible assets other than goodwill are recognised on business combinations if they are separable, or if they arise from
contractual or other legal rights, and their value can be measured reliably. They are initially measured at cost, which is equal to
the acquisition-date fair value, and subsequently measured at cost less accumulated amortisation charges and accumulated
impairment losses. Other intangible assets are subject to impairment testing when there is an indication that an impairment loss
may have been incurred and are amortised over their estimated useful lives. Amortisation of acquired intangible assets would
form part of Administration, selling and distribution costs if classified within headline performance on the Income Statement.
The Group’s research activity involves long-range, ‘blue sky’ investigation, the findings from which may be used in the future to
develop new or substantially improved products. Expenditure on research activities is recognised in the Group Income Statement
as an expense in the year in which it is incurred.
Development is the application of research findings for the production of new or substantially improved products, processes
and services before the start of commercial production. Development expenditure is capitalised only if the expenditure can be
measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the
Group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in
the Group Income Statement as an expense in the year in which it is incurred. Capitalised development expenditure, where there is
any, is stated at cost less accumulated amortisation and impairment losses.
In determining whether development expenditure is capitalised as an intangible asset, management considers whether the
strict intangible asset recognition criteria set out in IAS 38 Intangible Assets have been met at the time the expenditure is incurred.
In making this determination, management recognises that a significant amount of the development expenditure undertaken
by the Group is focused on dealing with local customer technical support issues and incremental developments to existing
products as opposed to new or substantially improved products, and that at the time the feasibility of the project is determined,
a significant proportion of the development expenditure for that project has already been incurred. In 2024 and 2023, no projects
(d) Software
The costs of ERP system implementations, including the purchase cost of the software and the time costs of employees directly
Strategic report
Governance
Financial statements
171
15.
Intangible Assets
continued
Movement in net book value
Other | Other | ||||||||
acquired | acquired | ||||||||
intangible | 2024 | intangible | 2023 | ||||||
Goodwill | assets | Software | total | Goodwill | assets | Software | total | ||
Note | £m | £m | £m | £m | £m | £m | £m | £m | |
Cost | |||||||||
As at 1 January | 630.9 | 287.3 | 18.8 | 937.0 | 657.9 | 292.9 | 10.8 | 961.6 | |
Exchange adjustments | (14.7) | (5.7) | (1.1) | (21.5) | (27.0) | (5.6) | 0.2 | (32.4) | |
Capital expenditure additions | – | – | 12.7 | 12.7 | – | – | 8.0 | 8.0 | |
Disposals | – | – | – | – | – | – | (0.2) | (0.2) | |
As at 31 December | 616.2 | 281.6 | 30.4 | 928.2 | 630.9 | 287.3 | 18.8 | 937.0 | |
Accumulated amortisation | |||||||||
and impairment losses | |||||||||
As at 1 January | – | 228.0 | 3.0 | 231.0 | – | 221.1 | 3.0 | 224.1 | |
Exchange adjustments | – | (4.9) | (0.1) | (5.0) | – | (3.4) | (0.2) | (3.6) | |
Amortisation charge | |||||||||
for the year | – | 10.0 | 1.3 | 11.3 | – | 10.3 | 0.4 | 10.7 | |
Disposals | – | – | – | – | – | – | (0.2) | (0.2) | |
As at 31 December | – | 233.1 | 4.2 | 237.3 | – | 228.0 | 3.0 | 231.0 | |
Net book value as at | |||||||||
31 December | 616.2 | 48.5 | 26.2 | 690.9 | 630.9 | 59.3 | 15.8 | 706.0 |
Of the £30.4m (2023: £18.8m) software cost as at 31 December 2024, £12.5m (2023: £14.2m) was in the course of construction.
Amortisation charge of £10.0m (2023: £10.3m) in respect of other acquired intangible assets includes £5.1m (2023: £5.3m)
recognised in respect of Foseco customer relationships, £3.6m (2023: £3.6m) in respect of the Foseco trade name and £1.3m
(2023: £1.4m) in respect of North American Advanced Refractories intangible assets.
The impact of climate change has been considered in the review of carrying values to consider whether there are indications of
material impairment arising from risks of climate change. We have not impaired any intangible assets this year as a result of this
exercise. We have also considered the impact of climate change on the estimation of useful lives and no material impacts were
Analysis of goodwill by cash-generating unit (CGU)
Goodwill acquired in a business combination is allocated to each of the Group’s CGUs expected to benefit from the synergies of
the combination. For the purposes of impairment testing, the Directors consider that the Group has four CGUs: Steel Advanced
Refractories, Steel Flow Control, Steel Sensors & Probes, and the Foundry Division. These CGUs represent the lowest level within
the Group at which goodwill is monitored (Note 16.2).
2024 | 2023 | |
£m | £m | |
Steel Flow Control | 268.0 | 275.1 |
Steel Advanced Refractories | 143.8 | 146.1 |
Foundry | 204.4 | 209.7 |
Total goodwill | 616.2 | 630.9 |
172
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
15.
Intangible Assets
continued
15.4
Analysis of other acquired intangible assets
Other acquired intangible assets are amortised on a straight-line basis over their estimated useful lives. The assets acquired and
their remaining useful lives are shown below.
Net book | Net book | ||
Remaining | value as at | value as at | |
useful life | 31 Dec 2024 | 31 Dec 2023 | |
years | £m | £m | |
Steel Flow Control, Steel Advanced Refractories & Foundry | |||
– Foseco customer relationships (useful life: 20 years) | 3.3 | 16.3 | 22.5 |
– Foseco trade name (useful life: 20 years) | 3.3 | 11.7 | 15.4 |
Steel Advanced Refractories | |||
– URI customer relationships (useful life: 20 years) | 17.0 | 5.7 | 5.9 |
– URI know-how (useful life: 20 years) | 17.0 | 4.6 | 4.7 |
– CCPI customer relationships (useful life: 20 years) | 14.2 | 10.2 | 10.8 |
Total | 48.5 | 59.3 |
15.5
Analysis of software
Software comprises Enterprise Resource Planning tools in use and being developed. The software is installed on Vesuvius’ servers
Impairment of Tangible and Intangible Assets
Accounting policy
The Directors regularly review the performance of the business and the external business environment to determine whether there
is any indication that the Group’s tangible and intangible assets have suffered an impairment loss. If such indication exists, the
higher of the value in use and the fair value less costs to sell off the asset is estimated and compared with the carrying value in
order to determine the extent, if any, of the impairment loss. Where it is not feasible to estimate the recoverable amount of an
individual asset, the Directors estimate the recoverable amount of the CGU to which the asset belongs. In addition, goodwill is
tested for impairment on an annual basis. Goodwill acquired in a business combination is allocated to each of the Group’s CGUs
expected to benefit from the synergies of the combination and the Directors carry out annual impairment testing of the carrying
value of each CGU, to assess the need for any impairment of the carrying value of the associated goodwill and other intangible
and tangible assets.
For the purpose of impairment testing, the recoverable amount of an asset or CGU is the higher of (i) its fair value less costs to
sell and (ii) its value in use. If the recoverable amount of a CGU is less than its carrying amount, the resulting impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU pro
rata on the basis of the carrying amount of each asset in the CGU. An impairment loss recognised for goodwill is not reversed in
a subsequent period. An impairment loss recognised in a prior year for an asset other than goodwill may be reversed where there
has been a sustained change in the estimates used to measure the asset’s recoverable amount since the impairment loss was
16.2
Key assumptions and methodology
The key assumptions in determining value in use are projected cash flows, growth rates and discount rates. These are disclosed
as critical accounting estimates in Note 3.5.
Projected cash flows for the next four years have been based on the latest Board-approved budgets and strategic plans. They
reflect management’s expectations of revenue, EBITDA growth, capital expenditure, working capital and adjusted operating
cash flows, based on past experience and future expectations of business performance, and take into account the cyclicality
of the business in which the CGU operates. Cash flows beyond the period of the strategic plans have been extrapolated using
a perpetuity growth rate of 2.5% (2023: 2.5%). The growth rate has been calculated using GDP growth forecasts published by the
International Monetary Fund for the Group’s end-markets. These GDP growth forecasts have been weighted to reflect the Group’s
weighted average sales in each end-market during 2024.
The cash flows have been discounted to their current value using pre-tax discount rates, that reflect current market assessments of
the time value of money and the risks specific to the cash-generating unit. The assumptions used in the calculation of the discount
rates for each CGU have been benchmarked to externally available data. These are industry-specific beta coefficients, risk-free
rates and equity risk premiums.
Strategic report
Governance
Financial statements
173
16.
Impairment of Tangible and Intangible Assets
continued
16.2
Key assumptions and methodology
continued
The pre-tax discount rates used for the Steel Flow Control and Steel Advanced Refractories was 12.5% (2023: 12.3%–12.6%)
and for the Foundry CGU was 13.8% (2023: 13.6%). There is no goodwill or intangible assets in the Steel Sensors & Probes CGU.
The Group carried out its annual goodwill impairment test as at 31 October 2024 (2023: 31 October 2023) using the discount rates
above and applying them to the latest Board-approved cash flows to calculate a value in use (‘VIU’) . The Group also considered
a valuation from its market capitalisation and other market data to determine a Fair Value Less Costs to Disposal (‘FVLCD’).
The recoverable amount (higher of VIU and FVLCD) of each CGU significantly exceeded its carrying value, therefore no
impairment charges have been recognised. The recoverable amount of each CGU was also checked against its carrying
value as at 31 December 2024 and no impairment triggers were identified.
The Directors have considered the impact of climate change on expected future cash flows, including the modelling of impact of
climate change scenarios set out in the Sustainability section in the Strategic Report and expected capital expenditure required
to achieve the Group’s net zero targets and other assumptions used for goodwill impairment testing. This did not result in an
impairment scenario for goodwill.
Sensitivity of impairment reviews
Steel Flow Control (FC), Steel Advanced Refractories (AR) and the Foundry Division are the key CGUs. There is no goodwill or
intangible assets in the Steel Sensors & Probes CGU. The recoverable amount of all CGUs exceeded their carrying value on the
basis of the assumptions set out above and any reasonably possible changes thereof, except for AR and Foundry, where a
reasonably possible change could lead to an impairment. A sensitivity analysis was carried out using reasonably possible changes
to the key assumptions as set out in the table below. The following decreases to the recoverable amount of the Group’s goodwill
and intangible assets were observed:
Decrease in | |||
Key assumption | Relevant CGU | Sensitivity | recoverable value, £m |
Annual free cash flow | AR | Decrease the annual free cash flows by 20% | (103.8) |
Pre-tax discount rate | AR | Increase by 1.5% | (69.3) |
Combination of both key assumptions above | AR | Combination of both sensitivities above | (159.2) |
Annual free cash flow | Foundry | Decrease the annual free cash flows by 20% | (122.6) |
Pre-tax discount rate | Foundry | Increase by 1.5% | (73.0) |
Combination of both key assumptions above | Foundry | Combination of both sensitivities above | (181.0) |
A 20% decrease in annual free cash flows or a 1.5% increase in pre-tax discount rate would not result in an impairment of any
of the CGUs. A combination of both sensitivities above would result in impairment of the AR CGU of £48.3m.
A 1.5% increase in pre-tax discount rate and a 9.0% decrease in annual free cash flows would result in the AR CGU having
a recoverable amount equal to its carrying value.
A 1.5% increase in pre-tax discount rate and a 23.0% decrease in annual free cash flows would result in the Foundry CGU
174
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
Investments in Subsidiaries, Joint Ventures and Associates
Investment in subsidiaries
A subsidiary is an entity over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and can affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
The subsidiaries of Vesuvius plc and the countries in which they are incorporated are set out below. With the exception of
Vesuvius Holdings Limited, whose ordinary share capital was directly held by Vesuvius plc, the ordinary capital of the companies
listed below was wholly owned by a Vesuvius plc subsidiary as at 31 December 2024. Details of the joint ventures and associates
are disclosed in Note 17.2.
Company | ||
legal name | Registered office address | Jurisdiction |
Advent Process | 333 Prince Charles Drive, | Canada |
Engineering Inc. | Welland, Ontario, | (Ontario) |
L3B 5P4, Canada | ||
BMI Refractory | 600 N 2nd Street, Suite 401, | US |
Services Inc. | Harrisburg, PA 17101-1071, | (Pennsylvania) |
United States | ||
Brazil 1 Limited | 165 Fleet Street, London, | England |
EC4A 2AE, England | ||
CCPI Inc. | Suite 201, 910 Foulk Road, | US |
Wilmington, New Castle, | (Delaware) | |
DE 19803, United States | ||
Cookson | Km 7 1/2, Autopista San Isidro, | Dominican |
Dominicana, | Edificio Modelo A, Zona Franca | Republic |
SRL | San Isidro, Santo Domingo | |
Oeste, Dominican Republic | ||
Flo-Con | CT Corporation, 1209 Orange | US |
Holding, Inc. | Street, The Corporation Trust | (Delaware) |
Company, Wilmington, | ||
DE 19801, United States | ||
Foseco (FS) | 165 Fleet Street, London, | England |
Limited | EC4A 2AE, England | |
Foseco (Jersey) | 44 Esplanade, St Helier, | Jersey |
Limited | JE4 9WG, Jersey | |
Foseco (UK) | 165 Fleet Street, London, | England |
Limited | EC4A 2AE, England | |
Foseco Canada | 181 Bay Street, Suite 1800, | Canada |
Limited | Toronto, Ontario, M5J 2T9, Canada (Ontario) | |
Foseco Espanola | 5, Barrio Elizalde, Izurza, | Spain |
S.A. | Bizkaia, 48213, Spain | |
Foseco Foundry | Room 819, Shekou Zhaoshang | China |
(China) | Building, Nanshan District, | |
Co. Limited | Shenzhen, Guangdong, | |
518067, China | ||
Foseco | 5, Barrio Elizalde, | Spain |
Fundición Holding | Izurza, Bizkaia, | |
(Espanola), S.L. | 48213, Spain | |
Foseco Holding | 165 Fleet Street, London, | England |
(Europe) Limited | EC4A 2AE, England | |
Foseco Holding | 12 Bosworth Street, | South Africa |
(South Africa) | Alrode, Alberton, 1449, | |
(Pty) Limited | South Africa | |
Foseco | Rivium Boulevard 301, | Netherlands |
Holding BV | Capelle aan den Ijssel, Rotterdam | |
2909LK, Netherlands | ||
Foseco Holding | 165 Fleet Street, London, | England |
Limited | EC4A 2AE, England | |
Foseco Holding | 165 Fleet Street, London, | England |
International | EC4A 2AE, England | |
Limited | ||
Foseco Industrial e | Km 15, Rodovia Raposo | Brazil |
Comercial Ltda | Tavares, Butanta Cep, | |
São Paulo, 05577-100, Brazil | ||
Foseco | 170/69, 22nd Floor Ocean | Thailand |
International | Tower 1, Ratchadapisek Road, | |
Holding | Klongtoey, Bangkok, | |
(Thailand) Limited | 10110, Thailand |
Company | ||
legal name | Registered office address | Jurisdiction |
Foseco | 165 Fleet Street, London, | England |
International | EC4A 2AE, England | |
Limited | ||
Foseco Japan | 9th Floor, Orix Kobe Sannomiya | Japan |
Limited | Building, 6-1-10, Goko dori, Chuo- | |
ku, Kobe Hyogo, 651-0087, Japan | ||
Foseco Korea | 74 Jeongju-ro, Bucheon-si, | Republic of |
Limited | Gyeonggi-do, 14523, South Korea | Korea |
Foseco | 165 Fleet Street, London, | England |
Limited | EC4A 2AE, England | |
Foseco | CT Corporation, 1209 Orange | US |
Metallurgical Inc. | Street, The Corporation Trust | (Delaware) |
Company, Wilmington, | ||
DE 19801, United States | ||
Foseco | Binnenhavenstraat 20, 7553 GJ | Netherlands |
Nederland BV | Hengelo (OV), Netherlands | |
Foseco Overseas | 165 Fleet Street, London, | England |
Limited | EC4A 2AE, England | |
Foseco Portugal | Rua Manuel Pinto de Azevedo, | Portugal |
Produtos Para | No 626 4100-320 Porto, | |
Fundiçâo Lda | Portugal | |
Foseco S.A.S. | Le Newton C, 7 Mail Barthélémy | France |
Thimonnier, 77185 Lognes, France | ||
Foseco Steel | 1 Midland Way, Central Park, | England |
(UK) Limited | Barlborough Links, Derbyshire, | |
S43 4XA, England | ||
Foseco | 165 Fleet Street, London, | England |
Technology | EC4A 2AE, England | |
Limited | ||
J.H. France | CT Corporation, 1209 Orange | US |
Refractories | Street, The Corporation Trust | (Delaware) |
Company | Company, Wilmington, | |
DE 19801, United States | ||
John G. Stein & | 1 Midland Way, Central Park, | England |
Company Limited | Barlborough Links, Derbyshire, | |
S43 4XA, England | ||
Mainsail | Victoria Place, 5th Floor, | Bermuda |
| Insurance Company | 31 Victoria Street, Pembroke, | |
Limited | Hamilton, HM 10, Bermuda | |
New Foseco | 1 Midland Way, Central Park, | England |
(UK) Limited | Barlborough Links, Derbyshire, | |
S43 4XA, England | ||
Process Metrix, | 6622 Owens Drive, Pleasanton, | US (California) |
LLC | CA 94588, United States | |
PT Foseco | Jl Rawa Gelam 2/5, Kawasan | Indonesia |
Indonesia | Industri, Pulogadung, Jakarta, | |
13930, Indonesia | ||
PT Foseco | Jl Rawa Gelam 2/5, Kawasan | Indonesia |
Trading Indonesia | Industri, Pulogadung, Jakarta, | |
13930, Indonesia | ||
Realisations 789, | CT Corporation, 1209 Orange | US (Delaware) |
LLC | Street, The Corporation Trust | |
Company, Wilmington, | ||
DE 19801, United States |
Strategic report
Governance
Financial statements
175
17.
Investments in Subsidiaries, Joint Ventures and Associates
continued
17.1
Investment in subsidiaries
continued
Company | ||
legal name | Registered office address | Jurisdiction |
S G Blair & | 1 Midland Way, Central Park, | England |
Company Limited | Barlborough Links, Derbyshire, | |
S43 4XA, England | ||
SIDERMES Inc. | 175 montée Calixa-Lavallée, | Canada |
Vesuvius Sensors | Verchêres, Québec J0L2R0, | (Ontario) |
and Probes | Canada | |
SIR | Siegener Strasse 152, | Germany |
Feuerfestprodukte | Kreuztal, D-57223, | |
GmbH | Germany | |
SOLED S.A.S. | Centre d’Activités Economiques | France |
Vesuvius Sensors | Zone Industrielle de Franchepré | |
and Probes France | 54240 Joeuf, France | |
Vesuvius | 170/69, 22nd Floor Ocean Tower 1, | Thailand |
(Thailand) | Ratchadapisek Road, Klongtoey, | |
Co., Limited | Bangkok, 10110, Thailand | |
Vesuvius | Street Urquiza, 919, Floor 2, Rosario, | Argentina |
(V.E.A.R.) S.A. | Provincia de Santa Fé, Argentina | |
Vesuvius Advanced | Xiaotaizi Village, Ningyuan | China |
Ceramics (Anshan) | Town, Qianshan District, Anshan, | |
Co., Limited | Liaoning Province, 114011, China | |
Vesuvius | 221 Xing Ming Street, | China |
Advanced | China-Singapore Suzhou Ind Park, | |
Ceramics (China) | Suzhou, Jiangsu Province, | |
Co., Limited | 215021, China | |
Vesuvius | 1209 Orange Street, Wilmington, | US |
America, Inc. | DE 19801, United States | (Delaware) |
Vesuvius Australia | 40–46 Gloucester Boulevarde, | Australia |
(Holding) Pty | Port Kembla, NSW, 2505, | |
Limited | Australia | |
Vesuvius Australia | 40–46 Gloucester Boulevarde, | Australia |
Pty Limited | Port Kembla, NSW, 2505, Australia | |
Vesuvius | Zandvoordestraat 366, Oostende, | Belgium |
Belgium N.V. | B-8400, Belgium | |
Vesuvius | 181 Bay Street, Suite 1800, | Canada |
Canada Inc | Toronto, Ontario, M5J 2T9, Canada | (Ontario) |
Vesuvius Ceramics | 165 Fleet Street, London, | England |
Limited | EC4A 2AE, England | |
Vesuvius China | 86/F International Commerce | Hong Kong |
Holdings | Centre, 1 Austin Road West, | |
Co. Limited | Kowloon, Hong Kong | |
Vesuvius | 165 Fleet Street, London, | England |
China Limited | EC4A 2AE, England | |
Vesuvius Colombia | Calle 90 No. 13 A 31, Piso 6, | Colombia |
S.A.S. | Bogota City, 110911, Colombia | |
Vesuvius | Via Nassa 17, Lugano, | Switzerland |
Corporation S.A. | CH 6900, Switzerland | |
Vesuvius | ul. Jasnogórska 11, | Poland |
CSD Sp z.o.o. | Kraków, 31-358, Poland | |
Vesuvius | Warehouse No: 1J-09/3, | United Arab |
Emirates FZE | P O Box 49261, | Emirates |
Hamriyah Free Zone, Sharjah, | ||
United Arab Emirates | ||
Vesuvius | Gelsenkirchener Strasse 10, | Germany |
Europe GmbH | Borken, D-46325, Germany | |
Vesuvius | 17 Rue de Douvrain, Ghlin, | Belgium |
Europe S.A. | 7011, Belgium | |
Vesuvius | 41, Boulevard Marcel Sembat, | France |
Europe S.A.S. | 69200, Venissieux, France | |
Vesuvius Financial | 165 Fleet Street, London, | England |
1 Limited | EC4A 2AE, England | |
Vesuvius | Pajamäentie 8D7, | Finland |
Finland OY | 00360 Helsinki, Finland |
Company | ||
legal name | Registered office address | Jurisdiction |
Vesuvius Foundry | 12 Wei Wen Road, | China |
Products (Suzhou) | China-Singapore Suzhou Ind Park, | |
Co. Limited | Suzhou, Jiangsu Province, | |
215122, China | ||
Vesuvius Foundry | 2 Changchun Road, | China |
Technologies | Economic Development Area, | |
(Jiangsu) Co. | Changshu, Jiangsu, | |
Limited | 215537, China | |
Vesuvius | Rue Paul Deudon 68, Boite Postale 19, | France |
France S.A. | Feignies 59750, France | |
Vesuvius | Gelsenkirchener Strasse 10, | Germany |
GmbH | Borken, D-46325, Germany | |
Vesuvius | 165 Fleet Street, London, | England |
Group Limited | EC4A 2AE, England | |
Vesuvius | 17 Rue de Douvrain, Ghlin, | Belgium |
Group S.A. | 7011, Belgium | |
Vesuvius Holding | Gelsenkirchener Strasse 10, | Germany |
Deutschland | Borken, D-46325, | |
GmbH | Germany | |
Vesuvius Holding | 68 Rue Paul Deudon, Boite Postale 19, | France |
France S.A.S. | Feignies 59750, France | |
Vesuvius Holding | Via Mantova 10, | Italy |
Italia – Società a | 20835 Muggio | |
Responsabilità | MB, Italy | |
Limitata | ||
Vesuvius | 165 Fleet Street, London | England |
Holdings Limited | EC4A 2AE, England | |
Vesuvius Ibérica | Capitán Haya, 56 – 1ºH, | Spain |
Refractarios S.A. | 28020 Madrid, Spain | |
Vesuvius | CT Corporation, 1209 Orange Street, | US |
International | The Corporation Trust Company, | (Delaware) |
Corporation | Wilmington, DE 19801, United States | |
Vesuvius | 165 Fleet Street, | England |
Investments | London, EC4A 2AE, | |
Limited | England | |
Vesuvius Istanbul | Gebze OSB2 Mh. 1700., | Turkey |
Refrakter Sanayi | Sok No:1704/1, Cayirova, | |
ve Ticaret AS | Kocaeli, 41420, Turkey | |
Vesuvius IT and | 10th Floor, Unit No. 2, Fountainhead- | India |
Shared Services | Tower 3, B Wing, Phoenix Market City, | |
Private Limited | Viman nagar, Pune, Pune- 411014, | |
Maharashtra, India | ||
Vesuvius Italia | Via Mantova 10, | Italy |
S.p.A. | 20835 Muggio MB, Italy | |
Vesuvius | 9th Floor, Orix Kobe Sannomiya | Japan |
Japan Inc. | Building 6-1-10, Goko dori, | |
Chou-ku, Kobe Hyogo, 651-0087, | ||
Japan | ||
Vesuvius K.S.R. | 1 Midland Way, Central Park, | England |
Limited | Barlborough Links, Derbyshire, | |
S43 4XA, England | ||
Vesuvius Life Plan | 165 Fleet Street, London, | England |
Trustee Limited | EC4A 2AE, England | |
Vesuvius LLC | 502, 5th floor, 1 Myasicsheva str., | Russia |
Zhukovsky, Moscow region, | ||
140180, Russian Federation | ||
Vesuvius | Unit 30-01, Level 30 Tower A, | Malaysia |
Malaysia | Vertical Business Suite Avenue 3, | |
Sdn Bhd | Bangsar South, No 8 Jalan Kerinchi, | |
Kuala Lumpur Wilayah Persekutuan, | ||
59200, Malaysia | ||
Vesuvius | 165 Fleet Street, London, | England |
Management | EC4A 2AE, England | |
Services Limited |
176
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Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
17.
Investments in Subsidiaries, Joint Ventures and Associates
continued
17.1
Investment in subsidiaries
continued
Company | ||
legal name | Registered office address | Jurisdiction |
Vesuvius Mexico | Av. Ruiz Cortinez, Num. 140, Colonia | Mexico |
S.A. de C.V. | Jardines de San Rafael, Guadalupe, | |
Nuevo León, CP 67119, Mexico | ||
Vesuvius | 56, St 15, Apt 103, Maadi, | Egypt |
Mid-East Limited | Cairo, 11728, Egypt | |
Vesuvius Moravia, | Konska c.p. 740, Trinec, | Czech |
s.r.o. | 739 61, Czech Republic | Republic |
Vesuvius Mulheim | Gelsenkirchener Strasse 10, | Germany |
GmbH | Borken, D-46325, Germany | |
Vesuvius NC, LLC | Corporation Trust Center, | US |
1209 Orange Street, Wilmington, | (Delaware) | |
New Castle County, DE 19801, | ||
United States | ||
Vesuvius New | Level 5 Deloitte Centre, | New |
Zealand Limited | 1 Queen Street, Auckland, | Zealand |
1010, New Zealand | ||
Vesuvius Overseas | 165 Fleet Street, London, | England |
Investments | EC4A 2AE, England | |
Limited | ||
Vesuvius Overseas | 165 Fleet Street, London, | England |
Limited | EC4A 2AE, England | |
Vesuvius Penn | Corporation Trust Center, | US |
Corporation | 1209 Orange Street, Wilmington, | (Delaware) |
DE 19801, United States | ||
Vesuvius Pension | 165 Fleet Street, London, | England |
Plans Trustees | EC4A 2AE, England | |
Limited | ||
Vesuvius Peru | Calle Dean Valdivia 148, piso 11 – | Peru |
S.A.C. | oficina 1134, Edificio Platinum Plaza – | |
San Isidro, Lima, Peru | ||
Vesuvius Poland | Ul Tyniecka 12, Skawina, | Poland |
Sp z.o.o. | 32-050, Poland | |
Vesuvius Process | 41, Boulevard Marcel Sembat, | France |
Metrix S.A.S. | 69200, Venissieux, France | |
Vesuvius Ras Al | Street No. F14, RAK Investment | United |
Khaimah FZ-LLC | Authority Free Zone, Al Hamra, | Arab |
Ras Al Khaimah, PO Box 86408, | Emirates | |
United Arab Emirates | ||
Vesuvius | Street San Martin 870, | Chile |
Refractarios de | Room 308, Tower B, | |
Chile S.A. | Concepcion, Chile | |
Vesuvius | Galati, Marea Unire avenue 107, | Romania |
Refractories S.r.l. | Galati county, 800329, Romania | |
Vesuvius | Room No. 9, 3rd Floor, 7 Ganesh | India |
Refractory India | Chandra Avenue, Kolkata, | |
Private Limited | WB 700013, India | |
Vesuvius | Avenida Brasil 49550, Distrito Industrial | Brazil |
Refratários | de Palmares, Campo Grande, Rio de | |
Ltda | Janeiro, 23065-480, Brazil |
Company | ||
legal name | Registered office address | Jurisdiction |
Vesuvius | 4, Forradsgatan, Amal, S-662 34, | Sweden |
Scandinavia AB | Sweden | |
Vesuvius Sensors | 10 Via Mantova, Muggio, | Italy |
& Probes Europe | Monza e Brianza, | |
S.p.A. | 20835, Italy | |
Vesuvius Services | Calle Dean Valdivia 148, piso 11 – | Peru |
Peru S.A.C. | oficina 1134, Edificio Platinum Plaza – | |
San Isidro, Lima, Peru | ||
Vesuvius Solar | 1/F Building 3, No 12 Weiwen Road, | China |
Crucible (Suzhou) | China-Singapore Suzhou Ind Park, | |
Co. Ltd | Suzhou, Jiangsu Province, 215122, | |
China | ||
Vesuvius South | Pebble Lane, Private Bag X2, | South |
Africa (Pty) Limited | Olifantsfontein, Gauteng | Africa |
Province, 1665, South Africa | ||
Vesuvius | ul. Jasnogórska 11, Kraków, | Poland |
Sp z.o.o. | 31-358, Poland | |
Vesuvius SSC | ul. Jasnogórska 11, Kraków, | Poland |
Sp z.o.o. | 31-358, Poland | |
Vesuvius UK | 165 Fleet Street, London, | England |
Limited | EC4A 2AE, England | |
Vesuvius Ukraine | 27, Udarnykiv Street, City of | Ukraine |
LLC | Dnipropetrovsk, 49000, Ukraine | |
Vesuvius USA | CT Corporation, 208 South LaSalle | US (Illinois) |
Corporation | Street, Chicago, Cook County, | |
IL 60604, United States | ||
Vesuvius VA | 165 Fleet Street, London, | England |
Limited | EC4A 2AE, England | |
Vesuvius Vietnam | 7th Floor, Peakview Tower Building, | Vietnam |
Limited | No.36 Hoang Cau Street, O Cho Dua | |
Ward, Don Da District, Hanoi City, | ||
Vietnam | ||
Vesuvius Zyarock | 1/F, building 3, No. 12, Weiwen | China |
Ceramics (Suzhou) | Road China-Singapore Suzhou | |
Co., Limited | Ind Park, Suzhou, Jiangsu Province, | |
215122, China | ||
Vesuvius-Premier | 165 Fleet Street, London, | England |
Refractories | EC4A 2AE, England | |
(Holdings) | ||
Limited | ||
Vesuvius-SERT | 41, Boulevard Marcel Sembat, | France |
S.A.S. | 69200, Venissieux, France | |
Wilkes-Lucas | 165 Fleet Street, London, | England |
Limited | EC4A 2AE, England | |
Yingkou Bayuquan | Cui Tun Village, Hai Dong Office, | China |
Refractories Co., | Bayuquan District, Liaoning Province, | |
Limited | YingKou, 115007, China | |
Yingkou YingWei | 50 Wanghai New District, Bayuquan | China |
Magnesium Co., | District, Yinkou City, Liaoning Province, | |
Ltd | 115007, China |
Strategic report
Governance
Financial statements
177
17.
Investments in Subsidiaries, Joint Ventures and Associates
continued
17.1
Investment in subsidiaries
continued
The following subsidiary companies have branches registered in the named countries: Foseco (Jersey) Limited in England,
Investment in joint ventures and associates
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the joint venture. Joint control is the contractually agreed sharing of control of the arrangement, which exists only when
decisions about the relevant activities require unanimous consent of the parties sharing control. An associate is an entity over
which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy
decisions of an entity, but is not control or joint control over those policies.
The Group’s investments in its associates and joint ventures are accounted for using the equity method from the date significant
influence/joint control is deemed to arise until the date on which significant influence/joint control ceases to exist or when the
interest becomes classified as an asset held for sale. The Group Income Statement reflects the Group’s share of profit after tax
of the related associates and joint ventures. Investments in associates and joint ventures are carried in the Group Balance Sheet
at cost adjusted in respect of post-acquisition changes in the Group’s share of net assets, less any impairment in value.
2024 | 2023 | |
£m | £m | |
As at 1 January | 11.3 | 13.0 |
Share of post-tax profit of joint ventures and associates | 1.1 | 0.9 |
Dividends received from joint ventures and associates | (0.7) | (1.0) |
Disposals | (0.5) | – |
Foreign exchange | (0.2) | (1.6) |
As at 31 December | 11.0 | 11.3 |
The investment in joint ventures and associates includes £11.0m (2023: £10.8m) in respect of joint ventures and £nil (2023: £0.5m)
in respect of associates. Dividends received from joint ventures consists of £0.1m (2023: £0.1m) from Wuhan Wugang-Vesuvius
Advanced CCR Co., Limited and £0.6m (2023: £0.9m) from Wuhan Wugang-Vesuvius Advanced Ceramics Co., Limited.
Joint ventures
Set out below is the summarised financial information in respect of joint ventures.
2024 | 2023 | |
£m | £m | |
Revenue | 44.8 | 46.0 |
Depreciation | (1.2) | (0.7) |
Trading profit | 2.9 | 2.3 |
Net finance costs | – | – |
Profit before tax | 2.9 | 2.3 |
Income tax expense | (0.7) | (0.6) |
Profit after tax | 2.2 | 1.7 |
Non-current assets | 7.5 | 6.8 |
Current assets | 21.7 | 22.0 |
Non-current liabilities | – | – |
Current liabilities | (7.2) | (7.1) |
Net assets | 22.0 | 21.7 |
178
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Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
17.
Investments in Subsidiaries, Joint Ventures and Associates
continued
17.2
Investment in joint ventures and associates
continued
Set out below is the summarised financial information for Wuhan Wugang-Vesuvius Advanced Ceramics Co., Limited, a joint
venture that has transactions and balances which are material to the Group.
2024 | 2023 | |
£m | £m | |
Revenue | 39.4 | 40.6 |
Depreciation | (1.1) | (0.7) |
Trading profit | 2.4 | 2.0 |
Net finance costs | – | – |
Profit before tax | 2.4 | 2.0 |
Income tax expense | (0.6) | (0.5) |
Profit after tax | 1.8 | 1.5 |
Non-current assets | 6.8 | 6.5 |
Current assets 1 | 14.4 | 14.3 |
Non-current liabilities | (0.1) | – |
Current liabilities | (5.9) | (5.9) |
Net assets | 15.2 | 14.9 |
1.
Included in current assets are cash and cash equivalents of £2.5m (2023: £1.8m).
The purpose of the Chinese joint venture companies is to research, develop, manufacture and sell refractory products. The role of
Vesuvius is to provide technical personnel, training and access to the Group’s international sales network.
2024 | 2023 | |||
Name of entity | Registered address | Jurisdiction | % ownership | % ownership |
Wuhan Wugang-Vesuvius | Gongnong Village Qingshan District, Wuhan, | China | 50 | 50 |
Advanced CCR Co., Limited | Hubei Province, 430082, China | |||
Wuhan Wugang-Vesuvius | Gongnong Village Qingshan District, Wuhan, | China | 50 | 50 |
Advanced Ceramics Co., | Hubei Province, 430082, China | |||
Limited |
Associates
2024 | 2023 | |||
Name of entity | Registered address | Jurisdiction | % ownership | % ownership |
Sapotech Oy | Paavo Havaksen tie 5 D, 90570 Oulu, Finland | Finland | – | 14.9 |
Newshelf 480 | 144 Oxford Road, Rosebank, Melrose, | South Africa | 45 | 45 |
Proprietary Limited | Johannesburg, 2196, South Africa |
Strategic report
Governance
Financial statements
179
17.
Investments in Subsidiaries, Joint Ventures and Associates
continued
Non-controlling interests
Non-controlling interests represent the portion of the equity of a subsidiary not attributable either directly or indirectly to the
Parent Company and are presented separately in the Group Income Statement and within equity in the Group Balance Sheet,
distinguished from Parent Company shareholders’ equity.
The total profit attributable to non-controlling interests for the year ended 31 December 2024 is £13.1m (2023: £12.1m) of which
£11.1m relates to Vesuvius India Limited (2023: £9.3m). The profit attributable to non-controlling interests in respect of the Group’s
other subsidiaries is not considered to be material.
2024 | 2023 | ||||
Name of entity | Registered address | Jurisdiction | Shares | % ownership | % ownership |
Vesuvius India Limited | P-104 Taratala Road, Kolkata, | India | Ordinary | 55.57 | 55.57 |
700 088, India | |||||
Foseco India Limited | 922/923, Gat, Sanaswadi, Taluka, | India | Equity | 74.98 | 74.98 |
Shirur, Pune, 412208, India | |||||
Foseco Golden Gate | 6 Kung Yeh 2nd Road, Ping Tung | Taiwan | Ordinary | 51 | 51 |
Company Limited | Dist, Ping Tung, 90049, Taiwan | ||||
Foseco (Thailand) Limited | 170/69, 22nd Floor Ocean Tower 1, | Thailand | Group A | 100 | 100 |
Ratchadapisek Road, Klongtoey, | Group B | 49 | 49 | ||
Bangkok, 10110, Thailand | |||||
Vesuvius Ceska | Prumyslová 726, Konská, Trinec, | Czech | Ordinary | 60 | 60 |
Republika, a.s. | 739 61, Czech Republic | Republic |
As with Vesuvius plc, all of the above companies have a 31 December year-end. The summarised financial information for
Vesuvius India Limited is presented below:
2024 | 2023 | |
£m | £m | |
Summarised balance sheet | ||
Current assets | 111.2 | 106.6 |
Current liabilities | (35.0) | (32.0) |
Current net assets | 76.2 | 74.6 |
Non-current assets | 62.2 | 42.3 |
Non-current liabilities | (4.1) | (3.9) |
Non-current net assets | 58.1 | 38.4 |
Net assets | 134.3 | 113.0 |
Accumulated non-controlling interests | (60.0) | (50.5) |
Summarised statement of comprehensive income | ||
Revenue | 169.1 | 155.0 |
Profit after tax | 25.0 | 21.0 |
Profit allocated to non-controlling interests | 11.1 | 9.3 |
Dividends paid to non-controlling interests | (1.1) | (0.7) |
Summarised cash flows | ||
Cash flows from operating activities | 27.1 | 10.9 |
Cash flows from investing activities | (22.6) | (20.8) |
Cash flows from financing activities | (2.9) | (0.1) |
Net increase/(decrease) in cash and cash equivalents | 1.6 | (10.0) |
180
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
Trade and Other Receivables
Accounting policy
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost, using the effective
Analysis of trade and other receivables (current)
2024 | 2023 | |||||||
ECL | ECL | ECL | ECL | |||||
Gross | provision | Net | provision | Gross | provision | Net | provision | |
£m | £m | £m | coverage 1 | £m | £m | £m | coverage 1 | |
Trade receivables | ||||||||
– current | 287.2 | (0.3) | 286.9 | 0.1% | 308.9 | (0.7) | 308.2 | 0.2% |
– 1 to 30 days past due | 35.6 | (0.2) | 35.4 | 0.6% | 34.7 | (0.3) | 34.4 | 0.9% |
– 31 to 60 days past due | 9.9 | (0.2) | 9.7 | 2.0% | 10.1 | (0.7) | 9.4 | 6.9% |
– 61 to 90 days past due | 3.3 | (0.2) | 3.1 | 6.1% | 2.5 | (0.3) | 2.2 | 12.0% |
– over 90 days past due | 27.8 | (21.2) | 6.6 | 76.3% | 27.3 | (24.6) | 2.7 | 90.1% |
Trade receivables | 363.8 | (22.1) | 341.7 | 383.5 | (26.6) | 356.9 | ||
Other receivables | 66.6 | 78.4 | ||||||
Prepayments | 30.6 | 25.2 | ||||||
Total trade and other receivables | 438.9 | 460.5 |
1.
ECL (Note 25.2 (c) (ii)) provision coverage is expected credit loss provision divided by gross trade receivables.
There is no significant difference between the fair value of the Group’s trade and other receivables balances and the amount at
which they are reported in the Group Balance Sheet.
Historical experience has shown that the Group’s trade receivable provisions are maintained at levels that are sufficient to absorb
actual bad debt write-offs, without being excessive. The Group considers the credit quality of financial assets that are neither past
due nor impaired as good.
Included within Other receivables are banker’s drafts of £24.9m (2023: £37.6m). The majority of these notes relate to customers in
China and have typical maturities of six months from the issuing date. The full amount of revenue is recognised from the customer
when performance obligations are satisfied in accordance with IFRS 15. Other receivables also include VAT receivables of
£31.0m (2023: £28.0m) and insurance reimbursements (see Note 30.2) of £1.9m (2023: £2.2m).
18.3
Other receivables (non-current)
Non-current other receivables of £26.7m (2023: £26.8m) include insurance reimbursements (see Note 30.2) of £21.1m
(2023: £21.4m) and prepaid taxes of £1.9m (2023: £1.7m).
The Group applies the expected credit loss model under IFRS 9 to these other receivables. The expected credit loss for other
receivables is immaterial.
18.4
Impairment of trade and other receivables
Strategic report
Governance
Financial statements
181
Inventories
Accounting policy
Inventories are stated at the lower of cost and net realisable value. Cost comprises expenditure incurred in purchasing or
manufacturing inventories together with all other costs directly incurred in bringing the inventory to its present location and
condition and, where appropriate, attributable production overheads based on normal activity levels.
The standard cost method is used for measurement of the cost of inventories in some locations. Standard costs are regularly
reviewed and, if necessary, revised in light of current conditions. Other locations measure the cost of inventories using actual costs.
Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in
marketing, selling and distribution. The amount of any write-down of inventories to net realisable value is recognised as an
expense in the year in which the write-down occurs.
The Group differentiates between work in progress (inventory that will be used in manufacturing processes and is not normally
sold to third parties) and semi-finished goods (inventory that is considered as partially complete in end-to-end manufacturing
19.2
Analysis of inventories
2024 | 2023 | |
£m | £m | |
Raw materials | 93.4 | 96.9 |
Work in progress | 23.5 | 20.6 |
Semi-finished goods | 23.3 | 24.4 |
Finished goods | 155.2 | 149.1 |
Total inventories | 295.4 | 291.0 |
The cost of materials recognised as an expense and included in manufacturing costs of continuing operations in the Group Income
Statement during the year was £807.9m (2023: £853.5m).
The net inventories of £295.4m (2023: £291.0m) include a provision for obsolete stock of £16.7m (2023: £19.7m). There were
Acquisitions and Divestments
The Group did not acquire any material interests in any companies during the year ended 31 December 2024. There was no
contingent consideration paid during the year ended 31 December 2024.
On 15 November 2024 the Group signed an agreement to acquire a 61.65% stake in PiroMET AS, a Turkish business for €26.2m.
Following the agreement reached in November 2024, on 28 February 2025 we completed the acquisition of a 61.65% shareholding
in PiroMET, a Turkish refractory company, for €26.2m. The acquisition will strengthen our Advanced Refractory business in the
Issued Share Capital
Accounting policy
Where shares are redeemed or purchased as part of a share buyback programme, a sum equal to the amount by which the
Company’s share capital is diminished on cancellation of the shares is transferred to the capital redemption reserve.
21.2
Analysis of issued share capital
2024 | 2023 | |||
Nominal | Nominal | |||
Number | value | Number | value | |
Allotted, issued and fully paid ordinary shares of 10p each | m | £m | m | £m |
As at 1 January | 277.9 | 27.7 | 278.5 | 27.8 |
Share buyback | (13.4) | (1.3) | (0.6) | (0.1) |
As at 31 December | 264.5 | 26.4 | 277.9 | 27.7 |
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Notes to the Group Financial Statements
continued
Retained Earnings
Other | |||||
Reserve | Share | retained | Total | ||
for own | option | earnings | retained | ||
shares | reserve | restated * | earnings | ||
Notes | £m | £m | £m | £m | |
As at 31 December 2022 and 1 January 2023 | (40.2) | 8.0 | 2,656.0 | 2,623.8 | |
Profit for the year | – | – | 118.5 | 118.5 | |
Remeasurement of defined benefit liabilities/assets | – | – | 8.4 | 8.4 | |
Recognition of share-based payments | – | 7.3 | – | 7.3 | |
Release of share option reserve on exercised | |||||
and lapsed options | 3.2 | (3.2) | – | – | |
Income tax on items recognised in other | |||||
comprehensive income | – | – | (2.0) | (2.0) | |
Purchase of ESOP shares | (1.1) | – | – | (1.1) | |
Share buyback | – | – | (3.0) | (3.0) | |
Dividends paid | 24 | – | – | (60.7) | (60.7) |
As at 31 December 2023 and 1 January 2024 | (38.1) | 12.1 | 2,717.2 | 2,691.2 | |
Profit for the year | – | – | 87.2 | 87.2 | |
Remeasurement of defined benefit liabilities/assets | – | – | 3.6 | 3.6 | |
Recognition of share-based payments | – | 6.2 | – | 6.2 | |
Release of share option reserve on exercised | |||||
and lapsed options | 6.7 | (6.7) | – | – | |
Income tax on items recognised in other | |||||
comprehensive income | – | – | (0.8) | (0.8) | |
Purchase of ESOP shares | (17.1) | – | – | (17.1) | |
Share buyback | – | – | (63.5) | (63.5) | |
Dividends paid | 24 | – | – | (61.1) | (61.1) |
As at 31 December 2024 | (48.5) | 11.6 | 2,682.6 | 2,645.7 |
*
Comparative figures for other retained earnings have been restated to correctly present the amount relating to share buyback. There has been no
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Financial statements
183
Other Reserves
Capital | Cash flow | ||||
Other | redemption | hedge | Translation | Total other | |
reserves | reserve | reserve | reserve | reserves | |
£m | £m | £m | £m | £m | |
As at 31 December 2022 and 1 January 2023 | (1,499.3) | – | (0.3) | 108.2 | (1,391.4) |
Exchange differences on translation of the net assets | |||||
of foreign operations | – | – | – | (80.8) | (80.8) |
Exchange differences on translation of net investment hedges | – | – | – | 7.9 | 7.9 |
Net change in costs of hedging | – | – | 0.4 | – | 0.4 |
Change in the fair value of the hedging instrument | – | – | (4.2) | – | (4.2) |
Amounts reclassified from Net finance costs | – | – | 3.5 | – | 3.5 |
As at 31 December 2023 and 1 January 2024 | (1,499.3) | – | (0.6) | 35.3 | (1,464.6) |
Exchange differences on translation of the net assets | |||||
of foreign operations | – | – | – | (47.8) | (47.8) |
Exchange differences on translation of net investment hedges | – | – | – | 7.1 | 7.1 |
Net change in costs of hedging | – | – | (0.1) | – | (0.1) |
Change in the fair value of the hedging instrument | – | – | 1.5 | – | 1.5 |
Amounts reclassified from Net finance costs | – | – | (1.2) | – | (1.2) |
Share buyback | – | 1.4 | – | – | 1.4 |
As at 31 December 2024 | (1,499.3) | 1.4 | (0.4) | (5.4) | (1,503.7) |
Within other reserves as at 31 December 2024 is £1,499.0m (2023: £1,499.0m) arising from the demerger of Cookson Group plc,
being the excess of the Vesuvius plc share capital of £1,777.9m over the total share capital and share premium of Cookson Group
plc as at 14 December 2012 of £278.9m.
The translation reserve in the table above comprises foreign exchange differences attributable to the owners of the Parent.
These exchange differences arise from the translation of the financial statements of foreign operations and from the translation
of financial instruments that hedge the Group’s net investment in foreign operations. In addition to foreign exchange differences
attributable to the owners of the Parent, the Group Statement of Comprehensive Income includes foreign exchange differences
attributable to non-controlling interests.
Of the closing balance in the translation reserve, an £11.9m debit (2023: £8.5m debit) relates to net investment hedging
arrangements put in place on or after 1 January 2018 but discontinued as at the date of the Balance Sheet. The full closing
balance in the cash flow hedge reserve relates to continuing hedges.
184
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Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
Dividends paid to Equity Shareholders
2024 | 2023 | |
£m | £m | |
Amounts recognised as dividends and paid to equity shareholders during the year | ||
Final dividend for the year ended 31 December 2022 of 15.75p per ordinary share | – | 42.4 |
Interim dividend for the year ended 31 December 2023 of 6.80p per ordinary share | – | 18.3 |
Final dividend for the year ended 31 December 2023 of 16.20p per ordinary share | 42.7 | – |
Interim dividend for the year ended 31 December 2024 of 7.10p per ordinary share | 18.4 | – |
61.1 | 60.7 |
In addition to the above dividends, since year-end the Directors have recommended the payment of a final dividend of 16.40 pence
(2023: 16.20 pence) per ordinary share (TDIM: VSVS and ISIN: GB00B82YXW83).
This is subject to approval by shareholders at the Company’s Annual General Meeting on 16 May 2025. If approved by
shareholders, the aggregate amount of the proposed dividend expected to be paid on 6 June 2025 out of retained earnings
at 31 December 2024, but not recognised as a liability at year-end, to holders of ordinary shares on the register on 25 April 2025
is £40.0m (31 May 2024: £42.7m).
The ordinary shares will be quoted ex-dividend on 24 April 2025. Any shareholder wishing to participate in the Vesuvius Dividend
Financial Risk Management
Accounting policy
The Group’s financial assets and liabilities are measured as appropriate either at amortised cost or at fair value through other
comprehensive income or at fair value through profit and loss.
IFRS 13 Fair Value Measurement requires classification of financial instruments within a hierarchy that prioritises the inputs
to fair value measurement. The three levels of the fair value hierarchy are:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly
Level 3 – Inputs that are not based on observable market data
Trade receivables and other receivables are amounts due for goods sold or services performed in the ordinary course of business.
Trade receivables are recognised initially at their fair value, which is the amount of consideration that is unconditional. The Group
holds the trade receivables and other receivables with the objective of collecting the contractual cash flows (held to collect) and
therefore measures them at amortised cost.
Derivatives which do not meet the hedge accounting criteria are classified as fair value through profit and loss (held for trading).
The cross-currency interest rate swaps (see Note 25.2) which meet the hedging criteria are measured at fair value through other
comprehensive income.
The individual financial statements of each Group entity are prepared in their functional currency, which is the currency of the
primary economic environment in which that entity operates. For the purpose of the Group Financial Statements, the results
Transactions in currencies other than the entity’s functional currency are initially recorded at the rates of exchange prevailing
at the end of the preceding month or on the date of the transaction itself. At each subsequent balance sheet date:
(i)
Foreign currency monetary items are retranslated at the rates prevailing at the balance sheet date. Exchange differences
arising on the settlement or retranslation of monetary items are recognised either in the Group Income Statement or the
Group Statement of Comprehensive Income
(ii)
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Governance
Financial statements
185
25.
Financial Risk Management
continued
25.1
Accounting policy
continued
(b) Foreign currencies
continued
Translation from functional currency to presentational currency
When the functional currency of a Group entity is different from the Group’s presentational currency, its results and financial
position are translated into the presentational currency as follows:
(i)
Assets and liabilities are translated using exchange rates prevailing at the balance sheet date
(ii)
Income and expense items are translated at average exchange rates for the year, except where the use of such average rates
does not approximate the exchange rate at the date of a specific transaction, in which case the transaction rate is used
(iii)
All resulting exchange differences are recognised in other comprehensive income and presented in the translation reserve
in equity. They are reclassified to profit or loss in the period in which the foreign operation is disposed of or liquidated.
Net investment in foreign operations
Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation
are initially recognised in other comprehensive income and presented in the translation reserve in equity and reclassified to
profit or loss on disposal of the net investment.
The Group uses derivative financial instruments (‘derivatives’) to manage the financial risks associated with some of its underlying
activities and the financing of those activities. Derivatives are measured at fair value using market prices at the balance sheet
date. Any derivatives which form part of a hedge accounting relationship are designated as such on the date on which they
are executed. Any derivatives which do not form part of a designated hedge accounting relationship are classified as ‘held for
trading’ for accounting purposes and are accounted for at fair value through profit or loss. They are presented as current assets
(d)Cash flow hedges
Changes in the fair value of derivatives designated as cash flow hedges are recognised in other comprehensive income to the
extent that the hedges are effective. Any ineffective portion would immediately be recognised in net finance costs in the profit or
loss. If a forecast transaction is no longer expected to occur, the amounts previously recognised in other comprehensive income
would be transferred to net finance costs in the profit or loss.
The Group designates certain of its borrowings and derivatives as net investment hedges of its foreign operations. As with cash
flow hedges, the effective portion of the gain or loss on hedging instruments is recognised in other comprehensive income whilst
any ineffective portion would immediately be recognised in net finance costs in the profit or loss. In the event a foreign operation
25.2
Financial risk factors
The Group’s Treasury department, acting in accordance with policies approved by the Board, is principally responsible for
managing the financial risks faced by the Group. The Group’s activities expose it to a variety of financial risks, the most significant
of which are market risk and liquidity risk.
The following table summarises Vesuvius’ financial instruments measured at fair value and shows the level within the fair value
hierarchy in which the financial instruments have been classified.
2024 | 2023 | |||
Assets | Liabilities | Assets | Liabilities | |
£m | £m | £m | £m | |
Investments (Level 2) | 0.2 | – | 0.3 | – |
Derivatives not designated for hedge accounting purposes (Level 2) | 0.1 | (0.1) | – | (0.1) |
Derivatives designated for hedge accounting purposes (Level 2) | 4.6 | – | 0.6 | – |
(a) Derivative financial instruments
The Group uses derivatives in the form of forward foreign currency contracts to manage the effects of its exposure to foreign
exchange risk on trade receivables, trade payables and cash. Derivatives are only used for economic hedging purposes and not
as speculative investments.
186
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
25.
Financial Risk Management
continued
25.2
Financial risk factors
continued
(a) Derivative financial instruments
continued
In 2020, the Group executed a US$86m cross-currency interest rate swap (CCIRS). The effect of this is to convert the $86m Private
Placement Notes issued in 2020 into €76.6m. US dollar cash flows under the CCIRS exactly mirror those of the Private Placement
Notes and the maturity date of the CCIRS matches the repayment date of the Notes. The CCIRS would by default be revalued
through the Income Statement; however, as it is in a designated hedging relationship, it is revalued through other comprehensive
income. The US dollar exposure is designated as a cash flow hedge of the Private Placement Notes and the euro exposure is
designated as a net investment hedge of the Group’s foreign operations. The CCIRS is presented as a non-current asset or liability
as it is expected to be settled more than 12 months after the end of the reporting period.
With the exception of the CCIRS, the fair value of derivatives outstanding at the year-end has been booked through the Income
Statement in 2024. All of the fair values shown in the table above are classified under IFRS 13 as Level 2 measurements which have
been calculated using quoted prices from active markets, where similar contracts are traded and the quotes reflect actual
transactions in similar instruments. All the derivative assets and liabilities not designated for hedge accounting purposes reported
above will mature in 2025.
Derivative financial instruments are subject to International Swaps and Derivatives Association (ISDA) agreements. Derivatives
designated for hedge accounting purposes are presented net £4.6m (2023: £0.6m), of which £4.6m are gross assets and £nil are
gross liabilities (2023: gross assets £0.8m and gross liabilities £0.2m).
Market risk is the risk that either the fair values or the cash flows of the Group’s financial instruments may fluctuate because
of changes in market prices. The Group is principally exposed to market risk through fluctuations in exchange rates and
interest rates.
Currency risk
The Group Income Statement is exposed to currency risk on monetary items that are denominated in currencies other than the
functional currency of the companies in which they are held. The currency profile of these financial assets and financial liabilities
is shown in the table below.
| 2024 | 2023 | |||||
Euro | US dollar | Other | Euro | US dollar | Other | |
£m | £m | £m | £m | £m | £m | |
Trade receivables * | 40.3 | 31.3 | 2.6 | 66.7 | 55.5 | 3.3 |
Cash at bank | 15.9 | 8.3 | 1.9 | 6.5 | 12.1 | 2.6 |
Trade payables * | (33.6) | (40.4) | (7.9) | (35.6) | (38.1) | (11.1) |
Private Placement Notes | (163.9) | (92.7) | – | (171.7) | (91.1) | – |
Bank loans and overdrafts | (83.5) | (92.7) | – | (42.7) | – | – |
Lease liabilities | (0.2) | – | (1.5) | (1.3) | – | (1.8) |
Cross-currency interest rate swaps | (63.4) | 68.7 | – | (66.4) | 67.6 | – |
Foreign currency forward contracts | ||||||
– Buy foreign currency | 1.3 | 1.2 | – | 0.5 | 2.4 | 0.1 |
– Sell foreign currency | (23.2) | (16.0) | – | (26.5) | (27.6) | – |
(310.3) | (132.3) | (4.9) | (270.5) | (19.2) | (6.9) | |
*
Comparative period figures were restated to exclude items not classified as financial assets or financial liabilities.
The Group has £nil (2023: £(1.3)m) of exchange differences recognised in the Income Statement of which £(0.4)m arose on the
revaluation of derivatives (2023: £(0.3)m).
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Governance
Financial statements
187
25.
Financial Risk Management
continued
25.2
Financial risk factors
continued
(b) Market risk
continued
The tables below show the net unhedged monetary assets and liabilities of Group companies that are not denominated in their
functional currency and which could give rise to exchange gains and losses in the Group Income Statement.
| Net unhedged monetary (liabilities)/assets | ||||
Euro | US dollar | Other | Total | |
£m | £m | £m | £m | |
Functional currency | ||||
Sterling | (315.5) | (115.6) | 1.0 | (430.1) |
Other | 4.9 | (16.0) | (5.7) | (16.8) |
As at 31 December 2024 | (310.6) | (131.6) | (4.7) | (446.9) |
| Net unhedged monetary (liabilities)/assets | ||||
Euro | US dollar | Other | Total | |
£m | £m | £m | £m | |
Functional currency | ||||
Sterling | (281.7) | (22.4) | 1.5 | (302.6) |
Other | 7.4 | 4.1 | (6.8) | 4.7 |
As at 31 December 2023 | (274.3) | (18.3) | (5.3) | (297.9) |
As at 31 December 2024, €298.0m and $146.0m (2023: €246.0m and $30.0m) of borrowings were designated as hedges of
net investments in €298.0m and $146.0m (2023: €246.0m and $30.0m) worth of foreign operations. In addition, the €76.6m
(2023: €76.6m) CCIRS liability has been designated as a net investment hedge of a further €76.6m (2023: €76.6m) worth of
foreign operations.
As the value of the borrowings and the CCIRS liability exactly matches the designated hedged portion of the net investments, the
relevant hedge ratio is 1:1. The net investment hedges are therefore highly effective. It is noted that hedge ineffectiveness would
arise in the event there were insufficient euro-denominated foreign operations to be matched against the €76.6m CCIRS liability.
The total retranslation impact of the borrowings and CCIRS designated as net investment hedges was a gain of £7.1m
(2023: a gain of £7.9m).
The $86.0m CCIRS asset has been designated as a cash flow hedge of the $86.0m USPP Notes issued in 2020. As all principal and
interest cash flows under the CCIRS exactly mirror those under the USPP Notes, the cash flow hedge is highly effective. It is noted
that hedge ineffectiveness would arise in the event of a change in the contractual terms of either the USPP Notes or the CCIRS.
Hedge effectiveness is determined at inception of the hedge relationship and through periodic effectiveness assessments,
to ensure that an economic relationship exists between the hedged item and hedging instrument.
Interest rate risk
The Group’s interest rate risk principally arises in relation to its borrowings. Where borrowings are held at floating rates of interest,
fluctuations in interest rates expose the Group to variability in the cash flows associated with its interest payments, and where
borrowings are held at fixed rates of interest, fluctuations in interest rates expose the Group to changes in the fair value of its
borrowings. The Group’s policy is to maintain an appropriate mix of fixed and floating rate borrowings based on the Vesuvius
trading environment, market conditions and other economic factors.
As at 31 December 2024, the Group had $116.0m, €198.0m and £28.0m (£284.6m in total) of US Private Placement (USPP)
Notes outstanding (2023: $116.0m, €198.0m and £28.0m (£290.8m in total)), which carry a fixed rate of interest, representing
60% (2023: 82%) of the Group’s total borrowings outstanding at that date. The interest rate profile of the Group’s borrowings is
detailed in the tables below.
Financial liabilities (net borrowings) | |||
Fixed | Floating | ||
rate | rate | Total | |
£m | £m | £m | |
Sterling | 28.0 | 11.7 | 39.7 |
US dollar | 92.7 | 92.8 | 185.5 |
Euro | 163.9 | 82.8 | 246.7 |
Other | – | 2.9 | 2.9 |
Capitalised arrangement fees | (0.4) | (0.4) | (0.8) |
As at 31 December 2024 | 284.2 | 189.8 | 474.0 |
188
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
25.
Financial Risk Management
continued
25.2
Financial risk factors
continued
(b) Market risk
continued
Financial liabilities (net borrowings) | |||
Fixed | Floating | ||
rate | rate | Total | |
£m | £m | £m | |
Sterling | 28.0 | 21.5 | 49.5 |
US dollar | 91.1 | 0.1 | 91.2 |
Euro | 171.7 | 43.4 | 215.1 |
Capitalised arrangement fees | (0.7) | (1.1) | (1.8) |
As at 31 December 2023 | 290.1 | 63.9 | 354.0 |
Information in respect of the currency risk management of $86.0m of US dollar-denominated fixed rate financial liabilities is
provided above in Note 25.2(a).
The floating rate financial liabilities shown in the tables above bear interest at a market convention reference rate appropriate to
each currency plus a margin. The fixed rate gross financial liabilities of £284.6m (2023: £290.8m) have a weighted average interest
rate of 3.1% (2023: 3.1%) and a weighted average period for which the rate is fixed of 3.5 years (2023: 4.5 years).
The financial assets attract floating rate interest.
Based upon the interest rate profile of the Group’s financial liabilities shown in the tables above, a 1% increase in market interest
rates would increase the finance costs charged in the Group Income Statement and the interest paid in the Group Statement of
Cash Flows by £1.9m (2023: £0.6m), and a 1% reduction in market interest rates would decrease the finance costs charged in the
Credit risk arises from cash and cash equivalents, derivative financial assets and deposits with banks and financial institutions,
as well as credit exposures to customers, including outstanding receivables and other receivables.
(i) Risk management
For banks and financial institutions, apart from certain limited circumstances, Group policy is that only independently rated
entities with a minimum rating of ‘A-’ are accepted as counterparties. In addition, the Group’s operating companies have policies
and procedures in place to assess the creditworthiness of the customers with whom they do business.
The Group subjects trade receivables from sales of inventory and from the provision of services to the expected credit loss model.
Whilst cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss
was immaterial.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance for all trade receivables and contract assets. The expected loss rates are based on the payment profiles of sales over
a period of 60 months before 31 December 2023 and the corresponding historical credit losses experienced within this period.
The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting
the ability of the customers to settle the receivables. The Group has identified the current state of the economy (such as market
interest rates or growth rates) and particular industry issues in the countries in which it sells its goods and services to be the most
relevant factors, and accordingly adjusts the historical loss rates based on expected changes in these factors.
Strategic report
Governance
Financial statements
189
25.
Financial Risk Management
continued
25.2
Financial risk factors
continued
(c) Credit risk
continued
Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in
making a contractual payment. Where objective evidence exists that a trade receivable balance may be impaired, provision is
made for the difference between its carrying amount and the present value of the estimated cash that will be recovered.
Evidence of impairment may include such factors as a change in credit risk profile of the customer, the customer being in default
on a contract, or the customer entering bankruptcy or financial reorganisation proceedings. All significant balances are reviewed
individually for evidence of impairment.
Trade receivables and contract assets are written off when there is no reasonable expectation of recovery. Indicators that there
is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the
Group, and a failure to make contractual payments for a period of greater than 120 days past due. Where loans or receivables
have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due.
Where recoveries are made, these are recognised within the Income Statement.
The closing expected credit loss allowance for trade receivables as at 31 December 2024 and as at 31 December 2023 reconciles
to the opening loss allowances as follows:
2024 | 2023 | |
£m | £m | |
As at 1 January | 26.6 | 32.8 |
Decrease in expected credit loss allowance recognised in the Income Statement during the year | (2.9) | (2.6) |
Receivables written off during the year as uncollectable | (1.1) | (2.6) |
Exchange adjustments | (0.5) | (1.0) |
As at 31 December | 22.1 | 26.6 |
The debit for the year shown in the table above is recorded within administration, selling and distribution costs in the Group
Income Statement.
Historical experience has shown that the Group’s trade receivable provisions are maintained at levels that are sufficient to absorb
actual bad debt write-offs, without being excessive. The Group considers the credit quality of financial assets that are neither past
due nor impaired as good.
The Group also applies the expected credit loss model under IFRS 9 to other receivables. If, at the reporting date, the credit risk
of the receivables has not increased significantly since initial recognition, the Group measures the loss allowance at an amount
equal to 12-month expected credit losses. If the credit risk on that receivable has increased significantly since initial recognition,
the Group measures the loss allowance at an amount equal to the lifetime expected credit losses. The expected credit loss on
Liquidity risk is the risk that the Group might have difficulties in meeting its financial obligations. The Group manages this by
ensuring it maintains sufficient levels of committed borrowing facilities and cash, and cash equivalents to meet its operational
cash flow requirements and maturing financial liabilities, whilst at all times operating within its financial covenants. The level of
operational headroom provided by the Group’s committed borrowing facilities is reviewed at least annually as part of the Group’s
three-year planning process. Where this process indicates a need for additional finance, this is addressed on a timely basis by
means of either additional committed bank facilities or raising finance in the capital markets.
As at 31 December 2024, the Group had committed borrowing facilities of £669.6m (2023: £685.8m), of which £202.5m
(2023: £333.4m) were undrawn. 100% of these undrawn facilities was due to expire in 2026. On 21 February 2025, the Group
signed a new committed syndicated bank facility for an amount of £475.0m and with maturity date of August 2029. The previous
committed syndicated bank facility signed in 2021 for an amount of £385.0m was cancelled with effect from the same date.
The Group’s borrowing requirements are therefore met by the USPP and a committed syndicated bank facility of £475.0m
(2023: £385.0m). This is considered to be a non-adjusting event after balance sheet date.
USPP Notes issued as at 31 December 2024 amounted to £284.6m ($116.0m, €198.0m and £28.0m) and had a weighted average
period to maturity of 3.5 years. €15.0m and $60.0m are repayable in 2025, €100.0m and $26.0m in 2027, $30.0m in 2028, €50.0m
in 2029 and €33.0m and £28.0m in 2031. The maturity analysis of the Group’s gross borrowings (including interest) is shown in the
tables below. The cash flows shown are undiscounted.
190
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
25.
Financial Risk Management
continued
25.2
Financial risk factors
continued
(d) Liquidity risk
continued
Between | Between | Total | ||||
Within | 1 and 2 | 2 and 5 | Over | contractual | Carrying | |
1 year | years | years | 5 years | cash flows | amount | |
As at 31 December 2024 | £m | £m | £m | £m | £m | £m |
Trade payables | 241.7 | – | – | – | 241.7 | 241.7 |
Loans and overdrafts | 76.0 | 188.7 | 178.8 | 57.3 | 500.8 | 474.8 |
Lease liabilities | 15.0 | 11.9 | 15.7 | 18.2 | 60.8 | 46.2 |
Capitalised arrangement fees | – | – | – | – | – | (0.8) |
Derivative liability | 0.1 | – | – | – | 0.1 | 0.1 |
Total financial liabilities | 332.8 | 200.6 | 194.5 | 75.5 | 803.4 | 762.0 |
Between | Between | Total | ||||
Within | 1 and 2 | 2 and 5 | Over | contractual | Carrying | |
1 year | years | years | 5 years | cash flows | amount | |
As at 31 December 2023 | £m | £m | £m | £m | £m | £m |
Trade payables | 236.4 | – | – | – | 236.4 | 236.4 |
Loans and overdrafts | 22.3 | 68.0 | 196.9 | 103.9 | 391.1 | 355.8 |
Lease liabilities | 13.5 | 12.2 | 17.0 | 19.4 | 62.1 | 48.2 |
Capitalised arrangement fees | – | – | – | – | – | (1.8) |
Derivative liability | 0.1 | – | – | – | 0.1 | 0.1 |
Total financial liabilities | 272.3 | 80.2 | 213.9 | 123.3 | 689.7 | 638.7 |
Capitalised arrangement fees shown in the tables above, which have been recognised as a reduction in borrowings in the Financial
Statements, amounted to £0.8m as at 31 December 2024 (31 December 2023: £1.8m), of which £0.4m (2023: £0.6m) related to the
USPP and £0.4m (2023: £1.2m) related to the Group’s syndicated bank facility.
The carrying amount of lease liabilities falling due within one year was £15.0m (2023: 13.5m). The carrying amount of lease
liabilities falling due after more than one year was £31.2m (2023: £34.7m).
Presented within interest-bearing borrowings of £520.2m (2023: £402.2m) are loans and overdrafts of £474.8m (2023: £355.8m),
25.3
Capital management
The Company considers its capital to be equal to the sum of its total equity, disclosed on the Group Balance Sheet, and net debt
(Note 13). It monitors its capital using a number of KPIs, including free cash flow, average working capital to sales ratios, net debt
to EBITDA ratios and ROIC (Note 35). The Group’s objectives when managing its capital are:
–
To ensure that the Group and all of its businesses are able to operate as going concerns and ensure that the Group operates
within the financial covenants contained within its debt facilities
–
To have available the necessary financial resources to allow the Group to invest in areas that may deliver acceptable future
returns to investors
–
To maintain sufficient financial resources to mitigate against risks and unforeseen events
–
To maximise shareholder value through maintaining an appropriate balance between the Group’s equity and net debt
The Group’s committed debt facilities are subject to two covenants – net debt/EBITDA (under 3.25x) and an interest cover ratio
(at least 4.0x). The Group operated within the requirements of its debt covenants throughout the year and has sufficient liquidity
headroom within its committed debt facilities. Details of the Group’s covenant compliance and committed debt facilities can be
Strategic report
Governance
Financial statements
191
Leases
Accounting policy
Lease liabilities are recognised at the present value of the remaining lease payments, discounted using the interest rate implicit in
the lease if that rate can be readily determined. If that rate cannot be readily determined, the lessee’s incremental borrowing rate
is used, calculated as the local government bond rate plus an interest rate spread. In cases where there was an option to terminate
or extend a lease, the duration of the lease assumed for this purpose reflected the Group’s existing intentions regarding such
options. Lease liabilities include the net present value of the following lease payments:
–
Fixed payments (including in-substance fixed payments), less any lease incentives receivable
–
Variable lease payments that are based on an index or a rate
–
Amounts expected to be payable by the lessee under residual value guarantees
–
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option
–
Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option
Cash flows from leases are presented within ‘Repayment of borrowings’ in the Group Statement of Cash Flows.
Leases of low-value assets and short-term leases (shorter than 12 months) are classified as operating leases and neither the asset
nor the corresponding liability to the lessor is recognised in the Group Balance Sheet. Rentals payable under operating leases are
charged to the Group Income Statement on a straight-line basis over the term of the lease. Benefits received and receivable as an
26.2
Lease liabilities
The lease liabilities at 31 December 2024 were £46.2m (2023: £48.2m). The cash payments for leases during the year were £18.2m
(2023: £24.2m). The maturity analysis of the lease liabilities is disclosed in Note 25.2 (d).
The net book value of the Group’s right-of-use assets under lease contracts at 31 December 2024 was £54.7m (2023: £57.6m)
which comprises property £33.8m (2023: £37.1m) and plant and equipment £20.9m (2023: £20.5m) (Note 14).
The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
26.3
Operating lease commitments
The future aggregate minimum lease payments under non-cancellable operating leases are payable as follows:
2024 | 2023 | |
£m | £m | |
Not later than one year | 0.4 | 0.6 |
Later than one year and not later than five years | 0.1 | – |
Later than five years | – | – |
Total operating lease commitments | 0.5 | 0.6 |
The cost incurred by the Group in the year in respect of assets held under operating leases, all of which was charged within trading
profit, amounted to £3.0m (2023: £3.0m), of which £2.4m (2023: £2.3m) related to short-length leases and £0.6m (2023: £0.7m)
192
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
Employee Benefits
Accounting policy
The net liability or net surplus recognised in the Group Balance Sheet for the Group’s defined benefit plans is the present value of
the defined benefit obligation at the balance sheet date, less the fair value of the plan assets. The defined benefit obligation is
calculated by independent actuaries using the projected unit credit method and by discounting the estimated future cash flows
using interest rates on high-quality corporate bonds that have durations approximating the terms of the related pension liability.
Any asset recognised in respect of a surplus arising from this calculation is limited to the asset ceiling, where this is the present value
of any economic benefits available in the form of refunds or reductions in future contributions in respect of the plans. The Group
has an unconditional right to a refund of the UK surplus, as defined under IFRIC 14, and considers that the possibility that a surplus
could be reduced or extinguished by discretionary actions by the Trustee does not affect the existence of the asset at the end of the
reporting period. The Group therefore recognises a pension asset with respect to the scheme valued on an IAS 19 basis. No liability
is recognised with respect to further funding contributions.
The expense for the Group’s defined benefit plans is recognised in the Group Income Statement as shown in Note 27.8. Actuarial
gains and losses arising on the assets and liabilities of the plans are reported within the Group Statement of Comprehensive
Income; and gains and losses arising on settlements and curtailments are recognised in the Group Income Statement in the
same line as the item that gave rise to the settlement or curtailment or, if material, separately reported as a component of
27.2
Group post-retirement plans
The Group operates a number of pension plans around the world, both defined benefit and defined contribution, and accounts
for them in accordance with IAS 19. There are also some jubilee arrangements (other long-term benefits plans) which, while
they do not need to be included in the detailed disclosures under IAS 19, have been included in the analysis below.
The Group’s principal defined benefit pension plans are in the UK and the US, the benefits of which are based upon the final
pensionable salaries of plan members. The assets of these plans are held separately from the Group in trustee-administered
funds. The Trustees are required to act in the best interests of the plans’ beneficiaries. The Group also has defined benefit pension
plans in other territories but, except for those in Germany, these are not individually material in relation to the Group.
(a) Defined benefit pension plans – UK
The Group’s main defined benefit pension plan in the UK (‘the UK Plan’) is closed to new members and to future benefit accrual.
The existing plan was established under a trust deed and is subject to the Pensions Act 2004 and guidance issued by the UK
Pensions Regulator.
In November 2021, the Trustee of the Vesuvius Pension Plan signed a pension insurance buy-in agreement with Pension Insurance
Corporation plc (PIC). This buy-in secured an insurance asset from PIC that matches the remaining pension liabilities of the UK
Plan, with the result that the Company no longer bears any investment, longevity, interest rate or inflation risks in respect of the
UK Plan. All benefits in the UK Plan (with the exception of a small amount of benefits expected to arise in future as a result of
guaranteed minimum pensions (GMP) equalisation) are now insured with PIC.
There is a ‘long-term scheme-specific funding standard’ in Part 3 of the Pensions Act 2004. In terms of Part 3, the UK Plan is subject
to a requirement (‘the statutory funding objective’) that it must have sufficient and appropriate assets to cover its technical
provisions. Such technical provisions are determined as part of the triennial valuation. Under the rules of the UK Plan, the Trustee,
after consultation with the Company, has the power to set the funding contributions taking into account the results of the triennial
valuation and the Pension Act 2004 legislation. Following the buy-in referred to above, no further contributions are expected
to be paid to the UK Plan by the Company, and the cost of GMP equalisation will be met out of the surplus UK Plan assets.
(b) Defined benefit pension plans – US
The Group has several defined benefit pension plans in the US, providing retirement benefits based on final salary or a fixed
benefit. The Group’s principal US defined benefit pension plans are closed to new members and to future benefit accrual for
existing members. Actuarial valuations of the US defined benefit pension plans are carried out every year and the last full
valuation was carried out as at 31 December 2024. At that date, the market value of the plan assets was $50.0m, representing
a funding level of 88.4% of funded accrued plan benefits at that date (using the projected unit method of valuation) of $56.6m.
Funding levels for the Group’s US defined benefit pension plans are based upon annual valuations carried out by independent
qualified actuaries and are governed by US Government regulations.
The Group’s US qualified defined benefit pension plan is subject to the minimum contribution requirements of the Internal Revenue
Code Sections 412 and 430. Contributions are determined by trustees, in consultation with the Company, based on the annual
valuations which are submitted to the Internal Revenue Service. During the fiscal year beginning 1 January 2024, total minimum
required contributions were $3.2m. Under these funding laws and based on the plan deficit, the required minimum annual
contribution for the 2025 fiscal year is expected to be $2.1m and the required annual contributions for the period 2026–2027
are expected to be in the $1.2m to $1.4m range. Contributions of $3.2m (2023: $nil) were made during 2024.
Strategic report
Governance
Financial statements
193
27.
Employee Benefits
continued
27.2
Group post-retirement plans
continued
(c) Defined benefit pension plans – Germany
The Group has several defined benefit pension arrangements in Germany which are unfunded, as is common practice in that
country. The main plan was closed to new entrants on 31 December 2016 and replaced by a defined contribution plan for new
joiners. The German defined benefit plan contains mainly direct pension promises based on works council agreements as well
as on some individual pension promises. The legal framework is the German Company Pensions Act (‘Betriebsrentengesetz’).
The plan is unfunded (book reserved) and the Company pays all benefit payments when they fall due.
(d) Defined benefit pension plans – rest of the world and other post-retirement benefits
The Group has several defined benefit pension arrangements across the rest of the world (ROW), the largest of which are in
Belgium. The net liability of the ROW plans at 31 December 2024 was £8.7m (2023: £8.3m). The Group also has liabilities relating
to medical insurance arrangements and termination plans which provide for benefits to be paid to employees on retirement.
The net liability of these other post-retirement benefits as at 31 December 2024 was £9.3m (2023: £9.9m).
(e) Defined contribution pension plans
The total expense for the Group’s defined contribution plans in the Group Income Statement amounted to £11.8m (2023: £12.1m)
and represents the contributions payable for the year by the Group to the plans.
(f) Multi-employer plans
Due to collective agreements, Vesuvius in the US participates, together with other enterprises, in union-run multi-employer
pension plans for temporary workers hired on sites. These are accounted for as defined contribution plans.
27.3
Post-retirement liability valuation
The main assumptions used in calculating the costs and obligations of the Group’s defined benefit pension plans, as detailed
below, are set by the Directors after consultation with independent professionally qualified actuaries and include those used
to determine regular service costs and the financing elements related to the plans’ assets and liabilities. It is the Directors’
responsibility to set the assumptions used in determining the key elements of the costs of meeting such future obligations.
Whilst the Directors believe that the assumptions used are appropriate, a change in the assumptions used could affect the
Group’s profit and financial position.
(a) Mortality assumptions
The mortality assumptions used in the actuarial valuations of the Group’s UK, US and German defined benefit pension liabilities
are summarised in the table below and have been selected to reflect the characteristics and experience of the membership of
those plans.
For the UK Plan, the assumptions used have been derived from the Self-Administered Pension Schemes (‘SAPS S3’) All table, with
future longevity improvements in line with the ‘core’ mortality improvement tables published in 2023 by the Continuous Mortality
Investigation (CMI), with a long-term rate of improvement of 1.25% per year. For the Group’s US plans, the assumptions used have
been based on the Pri-2012 mortality tables and MP-2021 projection scale. The Group’s major plans in Germany have been valued
using the modified Heubeck Richttafeln 2018G mortality tables. In respect of the life expectancy tables below, current pensioners
are assumed to be 65 years old, while future pensioners are assumed to be 45 years old.
| 2024 | 2023 | |||||
UK | US | Germany | UK | US | Germany | |
Life expectancy of pension plan members | years | years | years | years | years | years |
Age to which current pensioners are expected to live: | ||||||
– Men | 86.8 | 85.7 | 85.9 | 86.8 | 85.6 | 85.8 |
– Women | 88.6 | 87.7 | 89.3 | 88.6 | 87.6 | 89.2 |
Age to which future pensioners are expected to live: | ||||||
– Men | 87.0 | 87.2 | 88.6 | 87.0 | 87.1 | 88.5 |
– Women | 90.1 | 89.1 | 91.5 | 90.0 | 89.0 | 91.4 |
194
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
27.
Employee Benefits
continued
27.3
Post-retirement liability valuation
continued
(b) Other main actuarial valuation assumptions
| 2024 | 2023 | |||||
UK | US | Germany | UK | US | Germany | |
% p.a. | % p.a. | % p.a. | % p.a. | % p.a. | % p.a. | |
Discount rate | 5.50 | 5.35 | 3.40 | 4.55 | 4.70 | 3.30 |
Price inflation – using RPI for UK | 3.10 | 2.50 | 2.00 | 3.05 | 2.50 | 2.25 |
– using CPI for UK | 2.60 | n/a | n/a | 2.45 | n/a | n/a |
Rate of increase in pensionable salaries | n/a | n/a | 2.75 | n/a | n/a | 3.00 |
Rate of increase to pensions in payment | 2.90 | n/a | 2.00 | 2.85 | n/a | 2.25 |
The discount rate used to determine the liabilities of the UK Plan for IAS 19 accounting purposes is required to be determined by
reference to market yields on high-quality corporate bonds. The UK discount rate in the above table is based on analysis using the
expected future cash flows of the Vesuvius Pension Plan and the AON AA yield curve; the US discount rate is based on the FTSE
pension discount curve; and the Germany discount rate is based on AA corporate bond yields included in the iBoxx Euro AA
corporate bond indices.
The assumptions for UK price inflation are set by reference to the difference between yields on longer-term conventional
government bonds and index-linked bonds, except for CPI, for which no appropriate bonds exist, which is assumed to be 0.5 points
lower (2023: 0.6 points lower) than RPI-based inflation.
(c) Sensitivity analysis of the impact of changes in significant IAS 19 actuarial assumptions
The US pensions are not inflation linked. The rate of increase in pensionable salaries and of pensions in payment is therefore not
significant to the valuation of the Group’s overall pension liabilities.
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Assumption | Change in assumption | UK 1 | US | Germany |
Discount rate | Increase/decrease by 0.1% | |||
– impact on plan liabilities | Decrease/increase by | Decrease/increase | Decrease/increase | |
£3.1m (2023: £3.7m) | by £0.4m (2023: £0.5m) | by £0.6m (2023: £0.6m) | ||
– impact on plan assets | Decrease/increase by | n/a | n/a | |
£3.1m (2023: £3.7m) | ||||
Price inflation | Increase/decrease by 0.1% | |||
– impact on plan liabilities | Increase/decrease by | n/a | Increase/decrease | |
£2.2m (2023: £2.6m) | by £0.2m (2023: £0.2m) | |||
– impact on plan assets | Increase/decrease by | n/a | n/a | |
£2.2m (2023: £2.6m) | ||||
Mortality | Increase by one year | |||
– impact on plan liabilities | Increase by £12.0m | Increase by £1.9m | Increase by £1.2m | |
(2023: £15.1m) | (2023: £2.0m) | (2023: £1.3m) | ||
– impact on plan assets | Increase by £12.0m | n/a | n/a | |
(2023: £15.1m) |
1.
The UK Plan Trustee has entered into a pension insurance buy-in agreement with the Pension Insurance Corporation (PIC). This buy-in secured an
insurance asset from PIC that matches the remaining pension liabilities of the UK Plan, with the result that the Company no longer bears any investment,
longevity, interest rate or inflation risks in respect of the UK Plan.
Strategic report
Governance
Financial statements
195
27.
Employee Benefits
continued
27.4
Defined benefit obligation
The average duration of the obligations to which the liabilities of the Group’s principal pension plans relate is 11 years for the UK,
15 years for Germany and 9 years for the US.
Other post- | |||||||
| Defined benefit pension plans | retirement & | ||||||
long-term | |||||||
benefit | |||||||
UK | US | Germany | ROW | Total | plans | Total | |
£m | £m | £m | £m | £m | £m | £m | |
Present value as at 1 January 2024 | 328.4 | 56.4 | 41.3 | 43.1 | 469.2 | 9.9 | 479.1 |
Exchange differences | – | 1.0 | (1.9) | (2.0) | (2.9) | (0.7) | (3.6) |
Current service cost | – | – | 0.4 | 3.2 | 3.6 | 0.6 | 4.2 |
Past service gain | – | – | – | (0.1) | (0.1) | (0.4) | (0.5) |
Settlement gain | – | – | – | – | – | (0.2) | (0.2) |
Interest cost | 14.5 | 2.5 | 1.3 | 1.7 | 20.0 | 0.5 | 20.5 |
Losses arising over the year that are | |||||||
recognised in P&L | – | – | – | – | – | 0.2 | 0.2 |
Remeasurement of liabilities: | |||||||
– demographic changes | (1.4) | – | – | 0.1 | (1.3) | (0.1) | (1.4) |
– financial assumptions | (28.8) | (2.8) | (0.9) | 0.5 | (32.0) | 0.1 | (31.9) |
– experience losses/(gains) | (1.1) | (0.7) | (0.3) | 0.3 | (1.8) | (0.1) | (1.9) |
Benefits paid | (22.1) | (4.3) | (1.8) | (3.0) | (31.2) | (0.5) | (31.7) |
Present value as at 31 December 2024 | 289.5 | 52.1 | 38.1 | 43.8 | 423.5 | 9.3 | 432.8 |
Other post- | |||||||
| Defined benefit pension plans | retirement & | ||||||
long-term | |||||||
benefit | |||||||
UK | US | Germany | ROW | Total | plans | Total | |
£m | £m | £m | £m | £m | £m | £m | |
Present value as at 1 January 2023 | 325.2 | 59.9 | 38.4 | 43.3 | 466.8 | 9.4 | 476.2 |
Exchange differences | – | (3.0) | (0.8) | (1.5) | (5.3) | 0.3 | (5.0) |
Current service cost | – | – | 0.6 | 3.0 | 3.6 | 0.5 | 4.1 |
Interest cost | 15.1 | 2.7 | 1.2 | 1.7 | 20.7 | 0.6 | 21.3 |
Gains arising over the year that are | |||||||
recognised in P&L | – | – | – | – | – | – | – |
Remeasurement of liabilities: | |||||||
– demographic changes | (5.5) | – | – | 0.1 | (5.4) | – | (5.4) |
– financial assumptions | 5.9 | 0.9 | 3.0 | (0.4) | 9.4 | (0.1) | 9.3 |
– experience losses/(gains) | 8.8 | 0.4 | 0.5 | 0.5 | 10.2 | (0.1) | 10.1 |
Benefits paid | (21.1) | (4.5) | (1.6) | (3.6) | (30.8) | (0.7) | (31.5) |
Present value as at 31 December 2023 | 328.4 | 56.4 | 41.3 | 43.1 | 469.2 | 9.9 | 479.1 |
27.5
Fair value of plan assets
| 2024 | 2023 | |||||||
UK | US | ROW | Total | UK | US | ROW | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | |
As at 1 January | 359.8 | 38.2 | 34.8 | 432.8 | 348.6 | 37.4 | 34.1 | 420.1 |
Exchange differences | – | 0.8 | (1.9) | (1.1) | – | (2.0) | (1.5) | (3.5) |
Interest income | 15.9 | 1.7 | 1.3 | 18.9 | 16.1 | 1.7 | 1.2 | 19.0 |
Return on plan assets | (32.7) | 0.9 | 0.2 | (31.6) | 16.6 | 5.2 | 0.6 | 22.4 |
Contributions from employer | – | 2.5 | 3.4 | 5.9 | – | – | 3.8 | 3.8 |
Administration expenses paid | (0.7) | (0.6) | – | (1.3) | (0.6) | (0.5) | – | (1.1) |
Benefits paid | (22.0) | (3.5) | (2.7) | (28.2) | (20.9) | (3.6) | (3.4) | (27.9) |
As at 31 December | 320.3 | 40.0 | 35.1 | 395.4 | 359.8 | 38.2 | 34.8 | 432.8 |
The Group’s pension plans in Germany are unfunded, as is common practice in that country, and accordingly there are no assets
associated with these plans.
196
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
27.
Employee Benefits
continued
27.6
Remeasurement of defined benefit liabilities/assets
2024 | 2023 | |
total | total | |
£m | £m | |
Remeasurement of liabilities/assets: | ||
– demographic changes | 1.4 | 5.4 |
– financial assumptions | 31.9 | (9.3) |
– experience gains/(losses) | 1.9 | (10.1) |
Return on plan assets | (31.6) | 22.4 |
Total movement | 3.6 | 8.4 |
The remeasurement of defined benefit liabilities and assets is recognised in the Group Statement of Comprehensive Income.
27.7
Balance sheet recognition
The amount recognised in the Group Balance Sheet in respect of the Group’s defined benefit pension plans and other post-
retirement and long-term benefit plans is analysed in the following tables, which all relate to continuing operations. All equity
securities and bonds have quoted prices in active markets.
Other post- | |||||||
Defined benefit pension plans | retirement & | ||||||
long-term | |||||||
benefit | 2024 | ||||||
UK | US | Germany | ROW | Total | plans | total | |
£m | £m | £m | £m | £m | £m | £m | |
Equities | 19.3 | 4.2 | – | 2.6 | 26.1 | – | 26.1 |
Bonds | – | 33.6 | – | 2.4 | 36.0 | – | 36.0 |
Annuity insurance contracts | 282.5 | – | – | 28.4 | 310.9 | – | 310.9 |
Other assets | 18.5 | 2.2 | – | 1.7 | 22.4 | – | 22.4 |
Fair value of plan assets | 320.3 | 40.0 | – | 35.1 | 395.4 | – | 395.4 |
Present value of funded obligations | (288.5) | (45.3) | – | (40.3) | (374.1) | – | (374.1) |
31.8 | (5.3) | – | (5.2) | 21.3 | – | 21.3 | |
Present value of unfunded obligations | (1.0) | (6.8) | (38.1) | (3.5) | (49.4) | (9.3) | (58.7) |
Total net surpluses/(liabilities) | 30.8 | (12.1) | (38.1) | (8.7) | (28.1) | (9.3) | (37.4) |
Recognised in the Group Balance Sheet as: | |||||||
Net surpluses | 31.8 | – | – | 2.3 | 34.1 | – | 34.1 |
Net liabilities | (1.0) | (12.1) | (38.1) | (11.0) | (62.2) | (9.3) | (71.5) |
Total net surpluses/(liabilities) | 30.8 | (12.1) | (38.1) | (8.7) | (28.1) | (9.3) | (37.4) |
Other post- | |||||||
Defined benefit pension plans | retirement & | ||||||
| long-term | |||||||
benefit | 2023 | ||||||
UK | US | Germany | ROW | Total | plans | total | |
£m | £m | £m | £m | £m | £m | £m | |
Equities | 18.5 | 3.9 | – | 2.8 | 25.2 | – | 25.2 |
Bonds | – | 32.8 | – | 2.2 | 35.0 | – | 35.0 |
Annuity insurance contracts | 321.3 | – | – | 27.8 | 349.1 | – | 349.1 |
Other assets | 20.0 | 1.5 | – | 2.0 | 23.5 | – | 23.5 |
Fair value of plan assets | 359.8 | 38.2 | – | 34.8 | 432.8 | – | 432.8 |
Present value of funded obligations | (327.3) | (49.1) | – | (39.9) | (416.3) | – | (416.3) |
32.5 | (10.9) | – | (5.1) | 16.5 | – | 16.5 | |
Present value of unfunded obligations | (1.1) | (7.3) | (41.3) | (3.2) | (52.9) | (9.9) | (62.8) |
Total net surpluses/(liabilities) | 31.4 | (18.2) | (41.3) | (8.3) | (36.4) | (9.9) | (46.3) |
Recognised in the Group Balance Sheet as: | |||||||
Net surpluses | 32.5 | – | – | 2.1 | 34.6 | – | 34.6 |
Net liabilities | (1.1) | (18.2) | (41.3) | (10.4) | (71.0) | (9.9) | (80.9) |
Total net surpluses/(liabilities) | 31.4 | (18.2) | (41.3) | (8.3) | (36.4) | (9.9) | (46.3) |
Strategic report
Governance
Financial statements
197
27.
Employee Benefits
continued
27.7
Balance sheet recognition
continued
(a) UK Plan asset allocation
As at 31 December 2024, of the UK Plan’s total assets, 88.2% (2023: 89.3%) were represented by the annuity insurance contracts
covering the UK Plan’s pension liabilities; 6.0% (2023: 5.1%) were allocated to equities and 5.8% (2023: 5.6%) to cash.
The UK Plan Trustee has entered into a pension insurance buy-in agreement with the Pension Insurance Corporation (PIC),
whereby the UK Plan Trustee has paid insurance premiums to PIC to insure all of the UK Plan’s liabilities. Under this arrangement,
the value of the PIC insurance contract matches the value of the liabilities for current benefits because the inflation, interest rate,
investment and longevity risks for Vesuvius in respect of these liabilities are eliminated. The buy-in agreement ensures that the
UK pension plan obligations in respect of all its members and their approved dependants are insured.
As at 31 December 2024, the IAS 19 valuation of the PIC insurance contract value associated with the bought-in liabilities was
£282.5m (2023: £321.3m). The policy and the associated valuation are updated annually to reflect retirements and mortality.
(b) US Plan asset allocation
All of the assets in the main US Plan have a quoted market price in an active market. The Plan mitigates exposure to interest rates
by employing a liability matching investment strategy. All non-derivative assets are invested in liability matching bonds with
a similar average duration to the liabilities of the Plan. Since 2018, the investment allocation has been de-risked from an allocation
of 72% liability matching and 28% return seeking assets, to an allocation of 100% liability matching. The Plan retains equity risk
through use of equity derivative contracts, which provide equity market exposure with some level of equity downside protection.
(c) Defined benefit contributions in 2025
In 2025, the Group is expected to make direct benefit payments and contributions into its defined benefit pension and other
post-retirement and long-term benefits plans of around £9.2m. Specific payments and contributions of approximately £2.6m,
£1.9m and £2.2m are anticipated for the US Plans, German Plans and Belgian Plans respectively.
27.8
Income statement recognition
The expense recognised in the Group Income Statement in respect of the Group’s defined benefit retirement plans and other
post-retirement and long-term benefit plans is shown below:
| 2024 | 2023 | |||||
Other post- | Other post- | |||||
Defined | retirement & | Defined | retirement & | |||
benefit | long-term | benefit | long-term | |||
pension | benefit | pension | benefit | |||
plans | plans | Total | plans | plans | Total | |
£m | £m | £m | £m | £m | £m | |
Current service cost | 3.6 | 0.6 | 4.2 | 3.6 | 0.5 | 4.1 |
Past service gain | (0.1) | (0.4) | (0.5) | – | – | – |
Settlement gain | – | (0.2) | (0.2) | – | – | – |
Losses arising over the year that are recognised in P&L | – | 0.2 | 0.2 | – | – | – |
Administration expenses | 1.3 | – | 1.3 | 1.1 | – | 1.1 |
Net interest cost | 1.1 | 0.5 | 1.6 | 1.7 | 0.6 | 2.3 |
Total net charge | 5.9 | 0.7 | 6.6 | 6.4 | 1.1 | 7.5 |
The total net charge of £6.6m (2023: £7.5m), recognised in the Group Income Statement in respect of the Group’s defined benefit
pension plans and other post-retirement and long-term benefits plans, is analysed in the following table:
2024 | 2023 | ||
£m | £m | ||
In arriving at trading profit | – within other manufacturing costs | 1.1 | 1.3 |
– within administration, selling and distribution costs | 3.9 | 3.9 | |
In arriving at profit before tax | – within net finance costs | 1.6 | 2.3 |
Total net charge | 6.6 | 7.5 |
Virgin Media vs NTL Pension Trustee case
In June 2023, the High Court judged in the Virgin Media vs NTL Pension Trustee case that certain amendments made to the NTL
Pension Plan were invalid because the scheme’s actuary had not provided the necessary confirmations (Section 37 Certificates).
This decision was upheld in July 2024. It could have wider ranging implications affecting other schemes that were contracted-out
on a salary-related basis and made amendments between April 1997 and April 2016.
The Trustee has taken legal advice on the impact of the Virgin Media case on the Plan and intends to keep the position under
review, taking into account any further legal developments during 2025.
198
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Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
27.
Employee Benefits
continued
27.8
Income statement recognition
continued
GMP equalisation
A UK High Court ruling was made on 26 October 2018 in respect of the gender equalisation of guaranteed minimum pensions
(GMPs) for occupational pension schemes. The impact of GMP equalisation as at 31 December 2018 was estimated to be £4.5m.
A second UK High Court GMP equalisation ruling was issued on 20 November 2020. This second ruling considered the treatment
of historical transfers out, i.e. those members who had transferred out before 26 October 2018. The 2020 ruling covers both
individual and bulk transfers out. It does not revisit any of the issues addressed in the 2018 ruling. The impact of GMP equalisation
for the second ruling was estimated to be £0.8m as at 31 December 2020.
The increase in pension liabilities resulting from these judgements have been treated for IAS 19 purposes as plan amendments
and resulted in an increase in the pension deficit in the balance sheet and a corresponding past service cost in the Income
Statement. These amendments have previously been treated as separately reported items so that there has been no impact
on headline performance. We are working with the Trustee of our UK pension plan and our actuarial and legal advisers to
understand the extent to which these judgements crystallise additional liabilities for the UK pension plan.
27.9
Risks to which the defined benefit pension plans expose the Group
The principal risks faced by these plans comprise: (i) the risk that the value of the plan assets is not sufficient to meet all plan
liabilities as they fall due; (ii) the risk that plan beneficiaries live longer than envisaged, causing liabilities to exceed the available
plan assets; and (iii) the risk that the market-based factors used to value plan liabilities and assets change materially adversely
to increase plan liabilities over the value of available plan assets. Further details are given below.
Following the UK Plan pension insurance buy-in agreement, the inflation, interest rate, investment and longevity risks for
Vesuvius in respect of the UK Plan are virtually eliminated. The following risks relate to the other plans operated by the Group:
Counterparty risk
This is mitigated by using a diversified range of counterparties of high standing and ensuring positions are collateralised
as required.
Asset volatility
The liabilities are calculated using a discount rate set with reference to corporate bond yields; if assets underperform against this
yield, this will create a deficit. To reduce this risk, the pension plans are largely invested in government and corporate bonds.
Changes in bond yields
A decrease in corporate bond yields will increase the scheme liabilities, although this will be partially offset by an increase in the
value of the schemes’ bond holdings.
Inflation risk
Most of the plans’ benefit obligations outside the US are linked to inflation, and higher inflation will lead to higher liabilities.
Life expectancy
The majority of the plans’ obligations are to provide benefits for the life of the member and in some cases their spouse on death
of the member, so increases in life expectancy will result in an increase in the liabilities.
In August 2016, the pensions for the majority of current pensioners in the US main plan were bought out with an insurance
company, removing all responsibility and risk related to these pensions from the Group. In recent years, a number of further
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199
Share-based Payments
Accounting policy
The Group operates an equity-settled share-based payment arrangement for its employees. Equity-settled share-based
payments are measured at fair value at the date of grant. For grants with market-based conditions attached to them, such as total
shareholder return, fair value is measured using a form of stochastic option pricing model. For grants with non-market-based
conditions, such as growth in return on invested capital (ROIC), environmental, social and governance criteria (ESG) and headline
earnings per share (EPS), fair value is measured using the Black-Scholes option pricing model. The fair value is expensed on
a straight-line basis over the vesting period with a corresponding increase in equity. The cumulative expense recognised is
28.2
Income statement recognition
The total expense recognised in the Group Income Statement is shown below:
2024 | 2023 | |
£m | £m | |
Long-Term Incentive Plan | 1.8 | 2.2 |
Other plans | 4.4 | 5.1 |
Total expense | 6.2 | 7.3 |
The Group operates a number of different share-based payment plans, the most significant of which is the Long-Term Incentive
Plan (LTIP), details of which can be found in the Directors’ Remuneration Report.
28.3
Details of outstanding options
| Number of outstanding awards | ||||||
As at | Forfeited/ | As at | ||||
1 Jan 2024 | Granted | Exercised | lapsed | Expired | 31 Dec 2024 | |
LTIP | 2,181,881 | 935,066 | (259,607) | (371,889) | nil | 2,485,451 |
Weighted average exercise price | nil | nil | nil | nil | nil | nil |
Other plans | 2,566,949 | 1,300,623 (1,182,573) | (217,901) | nil | 2,467,098 | |
Weighted average exercise price | nil | nil | nil | nil | nil | nil |
For the awards exercised during 2024, the market value at the date of exercise ranged from 365.5 pence to 491.5 pence per share.
| Number of outstanding awards | ||||||
As at | Forfeited/ | As at | ||||
1 Jan 2023 | Granted | Exercised | lapsed | Expired | 31 Dec 2023 | |
LTIP | 2,145,335 | 1,097,274 | (283,402) | (777,326) | nil | 2,181,881 |
Weighted average exercise price | nil | nil | nil | nil | nil | nil |
Other plans | 1,722,689 | 1,486,666 | (439,041) | (203,365) | nil | 2,566,949 |
Weighted average exercise price | nil | nil | nil | nil | nil | nil |
For the options exercised during 2023, the market value at the date of exercise ranged from 392.4 pence to 432.8 pence per share.
Details of market performance conditions are included in the Directors’ Remuneration Report.
200
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
28.
Share-based Payments
continued
28.3
Details of outstanding options
continued
2024 | 2023 | |||||
Weighted | Weighted | |||||
average | average | |||||
Awards | outstanding | Awards | outstanding | |||
exercisable | contractual | Range of | exercisable | contractual | Range of | |
as at | life of | exercise | as at | life of | exercise | |
31 Dec 2024 | awards | prices | 31 Dec 2023 | awards | prices | |
no. | years | pence | no. | years | pence | |
LTIP | – | 8.4 | – | 8.4 | ||
Weighted average exercise price | – | n/a | – | n/a | ||
Other plans | – | 0.6 | – | 0.6 | ||
Weighted average exercise price | – | n/a | – | n/a | ||
28.4
Options granted during the year
| 2024 | |||
LTIP ROIC/ | LTIP TSR | ||
ESG element | element | Other plans | |
Fair value of options granted | 492p | 290p | 492p |
Share price on date of grant | 492p | 492p | 492p |
Expected volatility | n/a | 29.2% | n/a |
Risk-free interest rate | n/a | 4.1% | n/a |
Exercise price (per share) | nil | nil | nil |
Expected term (years) | 3 | 3 | 2 |
Expected dividend yield | nil | nil | nil |
2023 | |||
LTIP ROIC/ | LTIP TSR | ||
ESG element | element | Other plans | |
Fair value of options granted | 386p | 238p | 386p |
Share price on date of grant | 386p | 386p | 386p |
Expected volatility | n/a | 34.6% | n/a |
Risk-free interest rate | n/a | 3.3% | n/a |
Exercise price (per share) | nil | nil | nil |
Expected term (years) | 3 | 3 | 2 |
Expected dividend yield | nil | nil | nil |
For the LTIP awards issued in 2021, vesting of 50% of shares awarded was based on the Group’s three-year total shareholder
return (TSR) performance relative to that of the constituent companies of the FTSE 250 (excluding investment trusts) and vesting
of the remaining 50% of shares awarded is based on headline EPS growth.
For the LTIP awards issued in 2022, 2023 and 2024, vesting of 40% of shares awarded is based on the Group’s three-year total
shareholder return (TSR) performance relative to that of the constituent companies of the FTSE 250 (excluding investment trusts)
and vesting of the remaining 60% of shares awarded is based on ROIC and ESG targets.
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the 2.8 years
(2023: 2.8 years) prior to the grant date for the April 2024 grant. The risk-free rate of return was assumed to be the yield to
maturity on a UK fixed gilt with the term to maturity equal to the expected life of the option. At the discretion of the Remuneration
Committee, award holders receive the value of dividends that would have been paid on their vested shares in the period between
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Financial statements
201
Trade and Other Payables
Accounting policy
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost, using the effective
Analysis of trade and other payables
2024 | 2023 | |
£m | £m | |
Non-current | ||
Accruals and other payables | 6.9 | 9.1 |
Total non-current other payables | 6.9 | 9.1 |
Current | ||
Trade payables | 241.7 | 236.4 |
Other taxes and social security | 36.7 | 36.5 |
Accruals and other payables | 85.0 | 104.9 |
Total current trade and other payables | 363.4 | 377.8 |
There is no significant difference between the fair value of the Group’s trade and other payables balances and the amount at
which they are reported in the Group Balance Sheet.
29.3
Supplier finance arrangements
The Group has supply chain finance programmes in place. The programmes act as an alternative source of financing for the
suppliers who have the option to trade their invoices with funding providers in order to receive cash earlier than the invoice due
dates. The payment terms offered to suppliers who are party to the supply chain finance programmes are within standard
supplier payment terms and agreed directly with the supplier. The carrying amount of the liabilities for which suppliers have
already received payment from finance providers was £23.2m.
Balances outstanding under the supplier financing arrangements are classified as trade payables, and cash flows are included
in operating cash flows, since the financing arrangements are agreed between the supplier, the funding providers and the
third-party platform providers. The Group does not provide additional credit enhancement nor obtain any working capital
benefit from the arrangements. The Group is not charged any interest cost or fee in respect of the agreements.
Included in trade payables are amounts of £31.2m (2023: £31.9m) drawn by suppliers who are party to the supply chain
The analysis below details the range of payment due dates of trade payables which are part of supplier financing arrangements
and of comparable trade payables which are not part of supplier financing arrangements in the same region.
Trade payables which are part of supplier financing arrangements
2024 | 2024 | 2024 | 2024 | 2024 | |
£m | £m | £m | £m | £m | |
30 days | Between 31 | Between 61 | More than | ||
and less | and 60 days | and 90 days | 91 days | Total | |
Region | |||||
Brazil | 1.9 | – | – | – | 1.9 |
China | 6.6 | – | – | – | 6.6 |
Europe | 8.4 | – | – | – | 8.4 |
India | 3.1 | – | – | – | 3.1 |
North America | 11.2 | – | – | – | 11.2 |
Total trade payables which are part of supplier | |||||
financing arrangements | 31.2 | – | – | – | 31.2 |
Comparable trade payables which are not part of supplier financing arrangements
2024 | 2024 | 2024 | 2024 | 2024 | |
£m | £m | £m | £m | £m | |
30 days | Between 31 | Between 61 | More than | ||
and less | and 60 days | and 90 days | 91 days | Total | |
Region | |||||
Brazil | 5.2 | 3.1 | 1.3 | 0.4 | 10.0 |
China | 24.3 | 2.1 | 1.2 | 0.5 | 28.1 |
Europe | 32.0 | 1.4 | 0.2 | – | 33.6 |
India | 18.6 | 2.9 | 2.2 | 2.2 | 25.9 |
North America | 16.3 | 4.0 | 1.5 | 0.5 | 22.3 |
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Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
Accounting policy
Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that the Group will be
required to settle that obligation. Provisions are measured at the Directors’ best estimate of the expenditure required to settle the
obligation at the balance sheet date. Where the effect of the time value of money is material, provisions are discounted using a
pre-tax discount rate that reflects both the current market assessment of the time value of money and the specific risks associated
30.2
Analysis of provisions
Disposal, | |||
closure and | |||
environmental | |||
costs | Other | Total | |
£m | £m | £m | |
As at 31 December 2022 and 1 January 2023 | 57.7 | 9.0 | 66.7 |
Exchange adjustments | (2.6) | (0.2) | (2.8) |
Charge to Group Income Statement – trading profit | 1.5 | 7.0 | 8.5 |
Charge to Group Income Statement – separately reported items | – | – | – |
Adjustment to discount | 2.3 | – | 2.3 |
Cash spend | (7.0) | (9.1) | (16.1) |
As at 31 December 2023 and 1 January 2024 | 51.9 | 6.7 | 58.6 |
Exchange adjustments | 1.2 | (0.2) | 1.0 |
(Release)/charge to Group Income Statement – trading profit | (0.6) | 7.5 | 6.9 |
Charge to Group Income Statement – separately reported items | 9.7 | 2.6 | 12.3 |
Adjustment to discount | 2.2 | – | 2.2 |
Cash spend | (5.4) | (10.5) | (15.9) |
As at 31 December 2024 | 59.0 | 6.1 | 65.1 |
Of the total provision balance as at 31 December 2024 of £65.1m (2023: £58.6m), £54.8m (2023: £47.6m) is recognised in the
Group Balance Sheet within non-current liabilities and £10.3m (2023: £11.0m) within current liabilities.
Disposal, closure and environmental charges
The provision for disposal, closure and environmental costs includes the Directors’ current best estimate of the amounts to be
payable in respect of known or probable costs resulting from third-party claims, including legacy matter lawsuits.
There remains inherent uncertainty associated with estimating the future costs of legacy matter lawsuits. In assessing the
probable costs and realisation certainty of these provisions, or related assets, management has made reasonable assumptions,
including projections of the number of future claims, the approximate average cost of those claims (including legal costs and
infrequent larger value claims) and the length of time taken to resolve such claims. The provision reflects the Directors’ best
estimate of the future liability and the value of the corresponding asset. By nature, these assumptions are uncertain and therefore
changes to the assumptions used could significantly alter the Directors’ assessment of the value, volume of claims, timing or
certainty of the costs or related amounts. Sensitivity analyses have been conducted using variations to the key assumptions listed
above and indicatively show that a 25% increase in the average cost of claims would impact the gross provision by approximately
£6.2m and the corresponding asset for insurance cover by approximately £4.9m.
Changes in discount rates may have a significant impact on gross provisions and related assets for insurance cover.
Assumptions are determined with reference to historical information and trends experienced to date, combined with specialist
views on future outlook. As assumptions can vary individually or in combination, over the longer term there can be no guarantee
that the assumptions used to estimate the provision will result in an accurate prediction of the actual costs that may be incurred.
As the resolution of many of the obligations for which provision is made is subject to legal or other regulatory process, the timing of
the associated cash outflows is also subject to some uncertainty. However, the majority of the amounts provided are expected to
be utilised over the next ten years. The provision, underlying estimates of costs and associated insurance estimates are regularly
assessed, to reflect any changed circumstances with regard to individual matters. Any movements impacting the Income
Statement are included within headline performance.
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Financial statements
203
30. Provisions
continued
30.2
Analysis of provisions
continued
Disposal, closure and environmental charges
continued
As set out above, where insurance cover exists for any of these known or probable costs, a related asset is recognised in the
Group Balance Sheet only when its value can be reliably measured and reimbursement is considered to be virtually certain
by management. As at 31 December 2024, £23.0m (2023: £23.6m) was recorded in other receivables in respect of associated
insurance reimbursements, of which £21.1m (2023: £21.4m) is non-current. A debit of £0.4m was recorded during 2024
(2023: debit £0.7m) to reflect the decrease (2023: decrease) in assets for insurance cover which is included in the ‘Administration,
selling and distribution costs’ line in the Income Statement. This is offset by a credit of £0.4m in 2024 (2023: £0.7m) to reflect
a decrease in provisions for related claims in the same line of the Income Statement.
In addition, this provision covers the estimate of costs to be payable both in the fulfilment of obligations incurred in connection with
former Group businesses, resulting from either disposal or closure, together with those related to the demolition and clean-up of
closed sites.
In 1999, the Group acquired Premier Refractories which owned a disused clay mine in the United States. In 2018, wastewater
containing pollutants was discovered and in 2022 a water treatment facility was installed. Reflecting the future expected
operating costs of 10 years, a provision was established for £6.0m during the year ended 2020. In 2024, the forecast annual
operating cost was £0.8m and the remaining period for which water treatment will be required was reassessed to be 20 years,
resulting in an increase in the provision and a charge to the Income Statement of £9.7m (2023: £nil). The charge is reported as
a separately reported item. The Directors use their judgement to determine both the annual expected operating cost and the
period over which the operating cost will continue to be incurred. Sensitivity analyses show that if the remaining period for which
water treatment is needed is extended by a further 10 years, the provision would increase by £6.0m.
Other
Other provisions comprise amounts payable in respect of known or probable costs resulting both from legal or other regulatory
requirements, workers’ compensation and medical claims, and from third-party claims. As the settlement of many of the
obligations for which provision is made is subject to reasonable assumptions, legal or other regulatory process, the timing of the
associated outflows is subject to some uncertainty, but the majority of amounts provided are expected to be utilised over the next
two years and the underlying estimates of costs are regularly updated to reflect changed circumstances with regard to individual
matters. During 2024, the Group recognised net charges of £7.3m (2023: £7.3m) in the Group Income Statement to provide for
various medical benefits and other claims.
Other provisions includes amounts payable in respect of probable costs relating to the Group’s cost reduction programme.
During 2024, provisions of £2.6m (2023: £nil) were established for these.
The Group has considered the impact of climate change on provisions including decommissioning or environmental rehabilitation
Off-Balance Sheet Arrangements
In compliance with current reporting requirements, certain arrangements entered into by the Group in its normal course of
business are not reported in the Group Balance Sheet. Of such arrangements, the largest amounts are future lease payments
Contingent Liabilities
Details of guarantees given by the Company, on behalf of the Group, are given in Note 11 to the Company Financial Statements.
Vesuvius has extensive international operations and is subject to various legal and regulatory regimes, including those covering
taxation and environmental matters.
Certain of Vesuvius’ subsidiaries are subject to legacy matter lawsuits, predominantly in the US, relating to a small number of
products containing asbestos manufactured prior to the acquisition of those subsidiaries by Vesuvius. These suits usually also
name many other product manufacturers. To date, Vesuvius is not aware of there being any liability verdicts against any of these
subsidiaries. Each year, a number of these lawsuits are withdrawn, dismissed or settled.
As the settlement of many of the obligations for which reserve is made is subject to legal or other regulatory process, the timing
and amount of the associated outflows is subject to some uncertainty (see Note 30 for further information). The amount paid,
including costs in relation to this litigation, has not had a material effect on Vesuvius’ financial position or results of operations in
204
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
Related Parties
All transactions with related parties are conducted on an arm’s-length basis and in accordance with normal business terms.
Transactions between related parties that are Group subsidiaries are eliminated on consolidation.
The related parties identified by the Directors include joint ventures, associates and key management personnel. To enable users
of our financial statements to form a view on the effects of related party relationships on the Group, we disclose the related party
relationship irrespective of whether there have been transactions between the related parties.
33.1
Transactions with joint ventures and associates
All transactions with joint ventures and associates are in the normal course of business. Transactions between the Group and
its joint ventures and associates are disclosed below:
2024 | 2023 | |
£m | £m | |
Sales to joint ventures | 4.2 | 4.3 |
Purchases from joint ventures | 27.1 | 30.1 |
Dividends received | 0.7 | 1.0 |
Trade payables owed to joint ventures | 8.1 | 10.3 |
Trade receivables due from joint ventures | 1.0 | 1.0 |
Trade payables owed to joint ventures are settled net of trade receivables due from joint ventures 90 days after the delivery
of goods or services. There are no loans to and from joint ventures.
Transactions with key management personnel
The Group Executive Committee members, as outlined on page 78, are included in determining who qualifies as key management
personnel of the Group.
There have been no transactions with key management personnel of the Group or members of their close families, other than
payments in respect of executive remuneration and the reimbursement of business expenses. Directors’ remuneration is disclosed
33.3
Transactions with other related parties
There are no controlling shareholders of the Group as defined by IFRS.
The Company announced the commencement of a share buyback programme of up to £50 million on 4 December 2023 which
completed on 22 August 2024. The commencement of a further share buyback programme of up to £50 million was announced
by the Company on 19 November 2024.
Disclosure of the transactions during the year are disclosed in Note 9.2 of the Company Financial Statements. There have been
no other material transactions with the shareholders of the Group.
Pension contributions to Group schemes are disclosed in Note 27 to the Group Financial Statements.
Events after the Balance Sheet date
On 21 February 2025 the Group signed a new committed syndicated bank facility for an amount of £475m and a maturity date of
August 2029. The previous committed syndicated bank facility signed in 2021 for an amount of £385m was cancelled with effect
from the same date. This is considered to be a non-adjusting event.
Following the agreement reached in November 2024, on 28 February 2025 we completed the acquisition of a 61.65% shareholding
in PiroMET, a Turkish refractory company, for €26.2m. The acquisition will strengthen our Advanced Refractory business in the
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205
Alternative Performance Measures
The Company uses a number of alternative performance measures (APMs) in addition to those reported in accordance with IFRS.
The Directors believe that these APMs, listed below, are important when assessing the underlying financial and operating
performance of the Group and its divisions, providing management with key insights and metrics in support of the ongoing
management of the Group’s performance and cash flow. A number of these align with Key Performance Indicators (KPIs) and
other key metrics used in the business and therefore are considered useful to also disclose to the users of the financial statements.
The following APMs do not have a standard definition prescribed by IFRS and therefore may not be directly comparable with
similar measures presented by other companies.
35.1
Headline performance
Headline performance, reported separately on the face of the Group Income Statement, is from continuing operations and before
items reported separately on the face of the Group Income Statement.
35.2
Underlying revenue, underlying trading profit and underlying return on sales
Underlying revenue, underlying trading profit and underlying return on sales are the headline equivalents of these measures after
adjustments to exclude the effects of changes in exchange rates, business acquisitions and disposals. Reconciliations of underlying
revenue and underlying trading profit can be found in the Financial review. Underlying revenue growth is one of the Group’s KPIs
and provides an important measure of organic growth of Group businesses between reporting periods by eliminating the impact
of exchange rates, acquisitions and disposals.
35.3
Return on sales (ROS)
ROS is calculated as trading profit divided by revenue. It is one of the Group’s KPIs and is used to assess the trading performance of
Group businesses. ROS is disclosed in Note 4.3.
35.4
Trading profit/adjusted EBITA
Trading profit/adjusted EBITA is defined as operating profit before separately reported items. It is used to assess the trading
performance of Group businesses.
35.5
Headline profit before tax
Headline profit before tax, reported separately on the face of the Group Income Statement, is calculated as the net total of trading
profit, plus the Group’s share of post-tax profit of joint ventures and total net finance costs associated with headline performance.
It is used to assess the financial performance of the Group as a whole.
35.6
Headline effective tax rate (ETR)
The Group’s headline ETR is calculated on the income tax costs associated with headline performance, divided by headline profit
before tax and before the Group’s share of post-tax profit of joint ventures and associates.
35.7
Headline earnings
Headline earnings is profit after tax before separately reported items attributable to owners of the Parent.
35.8
Headline earnings per share
Headline earnings per share is calculated by dividing headline profit before tax less associated income tax costs, attributable to
owners of the Parent by the weighted average number of ordinary shares in issue during the year. It is one of the Group’s KPIs and
is used to assess the earnings performance of the Group as a whole. It is also used as one of the targets against which the annual
bonuses of certain employees are measured. Headline earnings per share is disclosed in Note 10.
206
Vesuvius plc
Annual Report and Financial Statements 2024
Notes to the Group Financial Statements
continued
35.
Alternative Performance Measures
continued
35.9
Adjusted operating cash flow
Adjusted operating cash flow is cash generated from operations before restructuring and vacant site remediation costs but after
deducting capital expenditure net of asset disposals. It is used in calculating the Group’s cash conversion.
2024 | 2023 | ||
Note | £m | £m | |
Cash generated from operations | 11 | 216.7 | 272.0 |
Add: Outflows relating to restructuring charges | 1.0 | 0.8 | |
Add: Outflows relating to cost reduction programme expenses | 7.9 | – | |
Add: Outflows relating to water treatment at disused mine | 0.8 | 1.0 | |
Less: Purchases of property, plant & equipment | (88.1) | (84.6) | |
Less: Purchases of intangible assets | (12.7) | (8.0) | |
Add: Proceeds from the sale of property, plant and equipment | 4.3 | 5.4 | |
Add: Proceeds from the sale of associates | 0.4 | – | |
Adjusted operating cash flow | 130.3 | 186.6 | |
Trading profit | 188.0 | 200.4 | |
Cash conversion | 69% | 93% |
35.10 Cash conversion
Cash conversion is calculated as adjusted operating cash flow from continuing operations divided by trading profit. It is useful for
measuring the rate at which cash is generated from trading profit. It is also used as one of the targets against which the annual
bonuses of certain employees are measured. The calculation of cash conversion is detailed in Note 35.9 above.
35.11 Free cash flow
Free cash flow is defined as net cash flow from operating activities after net outlays for the purchase and sale of property, plant
and equipment, dividends from joint ventures and dividends paid to non-controlling shareholders. It is one of the Group’s KPIs and
is used to assess the underlying cash generation of the Group and is one of the measures used in monitoring the Group’s capital.
A reconciliation of free cash flow is included underneath the Group Statement of Cash Flows.
35.12
Average trade working capital to sales ratio
The average trade working capital to sales ratio is calculated as the percentage of average trade working capital balances to
the total revenue for the previous 12 months, at constant currency. Average trade working capital (comprising inventories, trade
receivables and trade payables) is calculated as the average of the 13 previous month-end balances. It is one of the Group’s KPIs
and is useful for measuring the level of working capital used in the business and is one of the measures used in monitoring the
Group’s capital. It is also used as one of the targets against which the annual bonuses of certain employees are measured.
2024 | 2023 | |
£m | £m | |
Average trade working capital | 416.5 | 451.8 |
Total revenue | 1,820.1 | 1,929.8 |
Average trade working capital to sales ratio | 22.9% | 23.4% |
35.13 Adjusted earnings before interest, tax, depreciation and amortisation (adjusted EBITDA)
Adjusted EBITDA is calculated as the total of trading profit before depreciation and amortisation of non-acquired intangible
assets. It is used in the calculation of the Group’s interest cover and net debt to adjusted EBITDA ratios. A reconciliation of adjusted
EBITDA is included in Note 4.3.
Net interest payable on borrowings is calculated as total interest payable on borrowings less finance income, excluding interest on
net retirement benefit obligations, adjustments to discounts and any item separately reported. It is used in the calculation of the
Group’s interest cover ratio.
2024 | 2023 | ||
Note | £m | £m | |
Total interest payable on borrowings | 8 | 23.3 | 23.5 |
Finance income | 8 | (9.7) | (15.3) |
Net interest payable on borrowings | 13.6 | 8.2 |
Strategic report
Governance
Financial statements
207
35.
Alternative Performance Measures
continued
35.15 Interest cover
Interest cover is the ratio of adjusted EBITDA for the last 12 months to net interest payable on borrowings for the last 12 months.
It is one of the Group’s KPIs and is used to assess the financial position of the Group and its ability to fund future growth.
2024 | 2023 | ||
Note | £m | £m | |
Adjusted EBITDA | 4 | 250.2 | 258.2 |
Net interest payable on borrowings | 13.6 | 8.2 | |
Interest cover | 18.4x | 31.5x |
35.16 Net debt
Net debt comprises the net total of current and non-current interest-bearing borrowings (including IFRS 16 lease liabilities),
cash and short-term deposits and derivative financial instruments. Net debt is a measure of the Group’s net indebtedness to
banks and other external financial institutions. A reconciliation of the movement in net debt is included in Note 13.
35.17 Net debt to adjusted EBITDA
Net debt to adjusted EBITDA is the ratio of net debt at the year-end to adjusted EBITDA for that year. It is one of the Group’s KPIs
and is used to assess the financial position of the Group and its ability to fund future growth and is one of the measures used in
monitoring the Group’s capital.
2024 | 2023 | ||
Note | £m | £m | |
Net debt | 13 | 329.2 | 237.5 |
Adjusted EBITDA | 4 | 250.2 | 258.2 |
Net debt to adjusted EBITDA | 1.3x | 0.9x |
35.18 Return on invested capital (ROIC)
The Group has adopted ROIC as its key measure of return from the Group’s invested capital. It is also used as one of the targets
against which the annual bonuses of certain employees are measured. ROIC is calculated as trading profit less amortisation of
acquired intangibles plus share of post-tax profit of joint ventures and associates for the previous 12 months after tax, divided by
the average (being the average of the opening and closing balance sheet) invested capital (defined as: total assets excluding cash
plus non-interest-bearing liabilities), at the average foreign exchange rate for the year.
2024 | 2023 | |
£m | £m | |
Average invested capital | 1,556.2 | 1,558.5 |
Trading profit (Note 35.4) | 188.0 | 200.4 |
Amortisation of acquired intangible assets | (10.0) | (10.3) |
Share of post-tax profit from joint ventures and associates | 1.1 | 0.9 |
Tax on trading profit and amortisation of acquired intangible assets | (48.9) | (52.3) |
130.2 | 138.7 | |
ROIC | 8.4% | 8.9% |
35.19 Constant currency
Figures presented at constant currency represent 2023 amounts retranslated at average 2024 exchange rates.
35.20 Liquidity
Liquidity is the Group’s cash and short-term deposits plus undrawn committed debt facilities less cash used as collateral on loans
and any gross up of cash in notional cash pools.
2024 | 2023 | |
£m | £m | |
Cash | 186.4 | 164.2 |
Undrawn committed debt facilities | 202.5 | 333.4 |
Cash used as collateral on loans | – | (10.0) |
Gross up of cash in notional pools | 0.1 | – |
Liquidity | 389.0 | 487.6 |
208
Vesuvius plc
Annual Report and Financial Statements 2024
Company Balance Sheet
As at 31 December 2024
2024 | 2023 | ||
total | total | ||
Note | £m | £m | |
Fixed assets | |||
Investments | 7 | 1,778.0 | 1,778.0 |
Deferred tax | 4.3 | 4.3 | |
Total non-current assets | 1,782.3 | 1,782.3 | |
Current assets | |||
Debtors – amounts falling due within one year | 4.7 | 6.0 | |
Cash at bank and in hand | – | 0.1 | |
Total current assets | 4.7 | 6.1 | |
Creditors – amounts falling due within one year | |||
Bank loans and overdrafts | – | – | |
Other creditors including taxation and social security | 8 | (686.3) | (566.9) |
Net current liabilities | (681.6) | (560.8) | |
Total assets less current liabilities | 1,100.7 | 1,221.5 | |
Net assets | 1,100.7 | 1,221.5 | |
Equity capital and reserves | |||
Called up share capital | 9 | 26.4 | 27.7 |
Retained earnings | 9 | 1,072.9 | 1,193.8 |
Other reserves | 9 | 1.4 | – |
Total shareholders’ funds | 1,100.7 | 1,221.5 |
Company number 8217766
Under Section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own Income Statement.
During 2024, the Company recognised a profit of £14.6m (2023: £509.2m profit).
The Financial Statements on pages 208 to 215 were approved and authorised for issue by the Directors on 5 March 2025 and signed on
their behalf by:
Patrick André
Mark Collis
Chief Executive
Chief Financial Officer
Strategic report
Governance
Financial statements
209
Called up | Total | ||||
share | Other | Retained | shareholders’ | ||
capital | reserves | earnings | funds | ||
Note | £m | £m | £m | £m | |
As at 1 January 2023 | 27.8 | – | 742.1 | 769.9 | |
Total comprehensive income recognised for the year | – | – | 509.2 | 509.2 | |
Recognition of share-based payments | 10 | – | – | 7.3 | 7.3 |
Share buyback | 9 | (0.1) | – | (3.0) | (3.1) |
Purchase of ESOP shares | – | – | (1.1) | (1.1) | |
Dividend paid | 6 | – | – | (60.7) | (60.7) |
As at 31 December 2023 | 27.7 | – | 1,193.8 | 1,221.5 | |
As at 1 January 2024 | 27.7 | – | 1,193.8 | 1,221.5 | |
Total comprehensive income recognised for the year | – | – | 14.6 | 14.6 | |
Recognition of share-based payments | 10 | – | – | 6.2 | 6.2 |
Share buyback | 9 | (1.3) | 1.4 | (63.5) | (63.4) |
Purchase of ESOP shares | – | – | (17.1) | (17.1) | |
Dividend paid | 6 | – | – | (61.1) | (61.1) |
As at 31 December 2024 | 26.4 | 1.4 | 1,072.9 | 1,100.7 |
Company Statement of Changes in Equity
For the year ended 31 December 2024
Vesuvius plc
Annual Report and Financial Statements 2024
210
1.
General Information
Vesuvius plc (‘Vesuvius’ or ‘the Company’) is a public company limited by shares. It is incorporated and domiciled in England
and Wales, United Kingdom, and listed on the London Stock Exchange. The nature of the Company is a holding company.
The address of its registered office is 165 Fleet Street, London EC4A 2AE.
2.
Basis of Preparation
2.1
Basis of accounting
The financial statements of the Company have been prepared in accordance with Financial Reporting Standard 101 Reduced
Disclosure Framework (FRS 101) and the Companies Act 2006 as applicable to companies using FRS 101. The financial
statements have been prepared under the historical cost convention, with the exception of fair value measurement applied
to defined benefit pension plans, investments, share based payments and derivative financial instruments.
The results of the Company are included in the preceding Group Financial Statements.
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following
disclosures:
–
A cash flow statement and related notes (IAS 1 para 10(d) and IAS 7)
–
Disclosures in respect of capital management and financial instruments (IAS 1 paras 134–136 and IFRS 7)
–
Disclosures in respect of related party transactions with wholly owned members of the Vesuvius plc Group (IAS 24)
–
Disclosures in respect of the compensation of key management personnel (IAS 24 para 17)
–
Disclosures in respect of share-based payments (details of the number and weighted average exercise prices of share options,
and how the fair value of goods or services received was determined) (IFRS2 paras 45(b) and 46 to 52)
–
Disclosures in respect of fair value measurements (IFRS 13 paras 91–99)
–
IFRS 7 Financial instruments: Disclosures
–
The effects of new but not yet effective IFRSs (IAS 8 paras 30–31)
Under Section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own profit and
loss account.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these
financial statements.
2.2
Going concern
The Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in
operational existence for a period of at least 12 months from the date of approval of these financial statements (disclosed in
Note 2.3 to the Group Financial Statements) and that there is no material uncertainty in respect of going concern. The net current
liabilities result from amounts owed to subsidiary undertakings, therefore the Directors do not believe that they will affect the
Company’s ability to continue in operational existence. Accordingly, they continue to adopt a going concern basis in preparing
the financial statements of the Group and the Company.
2.3
Accounting policy
Taxation
Both current and deferred tax are calculated using tax rates and laws that have been enacted, or substantively enacted, by the
balance sheet date.
Deferred taxation is recognised, without discounting, in respect of all temporary differences that have originated, but not
reversed, at the balance sheet date, with the exception that deferred taxation assets are only recognised if it is considered more
likely than not that there will be suitable future profits from which the reversal of the underlying temporary differences can be
deducted. Provision is made for the tax that would arise on remittance of the retained earnings of overseas subsidiaries only to
the extent that, at the balance sheet date, dividends have been accrued as receivable. All other accounting policies are set out
within the respective notes.
3.
Critical Accounting Judgements and Estimates
Impairment of investment in subsidiaries and other companies (estimate and judgement)
For the below estimate, the Group does not have any key assumptions concerning the future, or other key sources of estimation
uncertainty in the reporting period, that are reasonably expected to have a significant risk of causing a material adjustment to the
carrying amounts of assets/liabilities within the next financial year. Nonetheless, this estimate has the potential to materially vary
over time and is therefore highlighted.
Notes to the Company Financial Statements
211
Strategic report
Governance
Financial statements
3.
Critical Accounting Judgements and Estimates
continued
Impairment of investment in subsidiaries and other companies (estimate and judgement)
continued
The Company assesses its investments in subsidiaries and other companies for impairment shortly before the Company’s
year-end or whenever events or changes in circumstances indicate that the recoverable amount of the investment could be less
than the carrying amount of the investment. If this is the case, the investment is considered to be impaired and is written down to its
recoverable amount. Judgement is required in the determination of the recoverable amount as the Company evaluates various
factors related to the operational and financial position of the relevant investee business, appropriate discounting and long-term
growth rates. The annual investment impairment test is described in Note 7.3 below.
4.
Employee Benefits Expense
2024
£m
2023
£m
Wages and salaries
3.1
3.4
Social security costs
0.6
0.7
Share-based payments
1.6
1.7
Total employee benefits expense
5.3
5.8
The total average number of employees for 2024 was 3 (2023: 3). As at 31 December 2023, the Company had 3 (2023: 3) employees.
Details of the Directors’ remuneration are disclosed in the Directors’ Remuneration Report on pages 103 to 129.
5.
Audit and Non-Audit Fees
Amounts payable to PricewaterhouseCoopers LLP in relation to audit and non-audit fees are disclosed within Note 5 to the
Group Financial Statements.
6.
Dividends paid to Equity Shareholders
2024
£m
2023
£m
Amounts recognised as dividends and paid to equity shareholders during the year
Final dividend for the year ended 31 December 2022 of 15.75p per ordinary share
–
42.4
Interim dividend for the year ended 31 December 2023 of 6.80p per ordinary share
–
18.3
Final dividend for the year ended 31 December 2023 of 16.20p per ordinary share
42.7
–
Interim dividend for the year ended 31 December 2024 of 7.10p per ordinary share
18.4
–
61.1
60.7
In addition to the above dividends, since year-end the Directors have recommended the payment of a final dividend of 16.40 pence
(2023: 16.20 pence) per ordinary share (TDIM: VSVS and ISIN: GB00B82YXW83).
This is subject to approval by shareholders at the Company’s Annual General Meeting on 16 May 2025. If approved by
shareholders, the aggregate amount of the proposed dividend expected to be paid on 6 June 2025 out of retained earnings
at 31 December 2024, but not recognised as a liability at year-end, to holders of ordinary shares on the register on 25 April 2025
is £40.0m (31 May 2024: £42.7m).
The ordinary shares will be quoted ex-dividend on 24 April 2025. Any shareholder wishing to participate in the Vesuvius Dividend
Reinvestment Plan needs to have submitted their election to do so by 15 May 2025.
7.
Investments
7.1
Accounting policy
Shares in subsidiaries, associates and joint ventures are stated at cost less any impairment in value. Impairment is assessed in
accordance with Note 16.1 to the Group Financial Statements.
7.2
Analysis of investments
Shares in
subsidiaries
£m
As at 1 January 2024 and 31 December 2024
1,778.0
The subsidiaries, joint ventures and associates of Vesuvius plc, their country of incorporation and percentage ownership are set
out in Note 17 to the Group Financial Statements. With the exception of Vesuvius Holdings Limited, whose ordinary share capital
was directly held by Vesuvius plc, the ordinary share capital of the other companies was owned by a Vesuvius plc subsidiary as at
31 December 2024.
Vesuvius plc
Annual Report and Financial Statements 2024
212
Notes to the Company Financial Statements
continued
7.
Investments
continued
7.3
Impairment of investment in subsidiaries, associates and joint ventures
The Group carried out its investment impairment test as at 31 October 2024. The recoverable amount of the investment exceeded
its carrying value, therefore no impairment charges have been recognised. No further impairment indicators were identified up to
31 December 2024.
The cash flow predictions are based on financial budgets and strategic plans approved by the Board. These assume a level of
revenue and profits which are based on both past performance and expectations for future market development and take into
account the cyclicality of the business in which the Group operates. In assessing the cash flows of the Parent’s investment in its
subsidiaries, the amounts payable by the Parent to subsidiaries are also taken into account. A sensitivity analysis was carried out
using reasonably possible changes to the key assumptions set out in Note 16.2 to the Group Financial Statements. No scenarios of
impairment were identified.
8.
Other Creditors including Taxation and Social Security
2024
£m
2023
£m
Amounts owed to subsidiary undertakings
683.8
563.7
Accruals and other creditors
2.5
3.2
Total amounts falling due within one year
686.3
566.9
Interest on the loan from another UK company within the Vesuvius Group, Vesuvius Holdings Limited, is charged at Bank of
England base rate +2% and the balance is repayable on demand.
9.
Called Up Share Capital, Retained Earnings and Other Reserves
9.1
Accounting policy
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Where shares are redeemed or purchased as part of a share buyback programme, a sum equal to the amount by which the
Company’s share capital is diminished on cancellation of the shares is transferred to the capital redemption reserve.
9.2
Analysis of called up share capital
Allotted, issued and fully paid ordinary shares of 10p each
2024
2023
Number
m
Nominal
value
£m
Number
m
Nominal
value
£m
As at 1 January
277.9
27.7
278.5
27.8
Share buyback
(13.4)
(1.3)
(0.6)
(0.1)
As at 31 December
264.5
26.4
277.9
27.7
The allotted, issued and fully paid ordinary share capital of the Company as at 31 December 2024 was 264,491,274 shares of
£0.10 each (31 December 2023: 277,854,424 shares of £0.10 each).
7,271,174 (2023: 7,271,174) ordinary shares of £0.10 each were held in Treasury and therefore carry no right to receive dividends or
other distributions and have no voting rights.
The total number of ordinary shares as at 31 December 2024 with rights including voting at Shareholder Meetings of the
Company, distribution of dividends and repayment of capital voting was 257,220,100 (2023: 270,583,250). All shareholders enjoy
the same rights in relation to these shares. Included in this number are 3,852,684 (2023: 1,956,030) shares held by the Vesuvius
Group employee share ownership plan trust (ESOP) and the ESOP elects to waive the right to receive dividends on its shareholding.
On 4 December 2023, the Company announced the commencement of a share buyback programme of up to £50 million.
This programme was completed on 22 August 2024. A total of 10,821,465 ordinary shares were purchased for a consideration
of £49.9m (excluding transaction costs). All ordinary shares were cancelled.
On 19 November 2024, the Company announced the commencement of a further share buyback programme of up to £50 million
to end no later than 23 July 2025, albeit targeted to be completed by late May 2025, subject to regulatory limits and market
conditions. There is no minimum committed quantity of shares to be bought back and the Company is able to terminate the
arrangement at its discretion and without any penalty. From 19 November 2024 to 31 December 2024, the Company had
purchased 3,670,188 ordinary shares of 10 pence, representing a nominal value of £0.4m. 3,172,332 of these ordinary shares were
cancelled by 31 December 2024, the 497,856 remaining ordinary shares were cancelled on 2 and 7 January 2025. The cost of the
ordinary shares purchased was £15.5m excluding transaction costs.
The nominal value of share capital cancelled between 4 December 2023 and 31 December 2024 was £1.4m; this has been
credited to a capital redemption reserve which comprises Other Reserves in these financial statements.
213
Strategic report
Governance
Financial statements
9.
Called Up Share Capital, Retained Earnings and Other Reserves
continued
9.3
Distributable reserves
The Company had distributable reserves in excess of £1,063m as at 31 December 2024 (2023: in excess of £1,183m), subject to
filing these financial statements with Companies House. When making a distribution to shareholders, the Directors determine
profits available for distribution by reference to guidance on realised and distributable profits under the Companies Act 2006
issued by the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland in
April 2017. The profits of the Company have been received in the form of dividends from subsidiaries and through court-approved
capital reduction. The availability of distributable reserves in the Company is dependent on those dividends meeting the definition
of qualifying consideration within the guidance and on available cash resources of the Group and other accessible sources of
funds. The distributable reserves are subject to any future restrictions or limitations at the time such distribution is made.
10.
Recognition of Share-based Payments
10.1
Accounting policy
The Company operates an equity-settled share-based payment arrangement for its employees. Equity-settled share-based
payments are measured at fair value at the date of grant. For grants with market-based conditions attached to them, such as total
shareholder return, fair value is measured using a form of stochastic option pricing model. For grants with non-market-based
conditions, such as growth in return on invested capital (ROIC), environmental, social and governance criteria (ESG) and headline
earnings per share (EPS), fair value is measured using the Black-Scholes option pricing model. The fair value is expensed on
a straight-line basis over the vesting period with a corresponding increase in equity. The cumulative expense recognised is
adjusted for the best estimate of the shares that will eventually vest.
The Company recharges its subsidiaries for the IFRS 2 expense relating to their employees on an annual basis.
10.2
Profit and loss account recognition
The Company operates a number of different share-based payment schemes, the main features of which are detailed in the
Directors’ Remuneration Report and Note 28 to the Group Financial Statements. A total of £1.6m was charged to the profit and
loss account in the year with regard to share-based payments (2023: £1.7m).
10.3
Details of outstanding options
Number of outstanding awards
Awards
exercisable
as at
31 Dec
2024
Weighted
average
outstanding
contractual
life of
awards
years
Range of
exercise
prices
pence
As at
1 Jan 2024
Granted
Exercised
Forfeited/
lapsed Expired
As at
31 Dec 2024
LTIP
1,257,157 516,532 (141,861)
(142,363)
nil 1,489,465
–
8.4
n/a
Weighted average exercise price
nil
nil
nil
nil
nil
nil
–
n/a
Other plans
144,816
88,414
(9,430)
nil
nil
223,800
–
1.3
n/a
Weighted average exercise price
nil
nil
nil
nil
nil
nil
–
n/a
For the awards exercised during 2024, the market value at the date of exercise was 483.5 pence per share.
Number of outstanding awards
Awards
exercisable
as at
31 Dec
2023
Weighted
average
outstanding
contractual
life of
awards
years
Range of
exercise
prices
pence
As at
1 Jan 2023
Granted
Exercised
Forfeited/
lapsed Expired
As at
31 Dec 2023
LTIP
1,424,266 578,407 (169,944)
(575,572)
nil
1,257,157
–
8.5
n/a
Weighted average exercise price
nil
nil
nil
nil
nil
nil
–
n/a
Other plans
149,354
60,179
(64,717)
nil
nil
144,816
–
1.6
n/a
Weighted average exercise price
nil
nil
nil
nil
nil
nil
–
n/a
For options exercised during 2023, the market value at the date of exercise was 406.0 pence per share.
Details of market performance conditions are included in the Directors’ Remuneration Report.
Vesuvius plc
Annual Report and Financial Statements 2024
214
Notes to the Company Financial Statements
continued
10.
Recognition of Share-based Payments
continued
10.3
Details of outstanding options
continued
As at 31 December 2024, the total options exercisable by all Group employees over the £0.10 ordinary shares and capable of
being satisfied through new allotments of shares or through shares held by the Company’s ESOP were as follows:
2024
Years of
award/grant
Option
prices
Latest year
of exercise/
vesting
Number
of options/
allocations
outstanding
Long-Term Incentive Plan
2022–2024
nil
2034
1,489,465
Deferred Share Bonus Plan
2022–2024
nil
2027
223,800
2023
Years of
award/grant
Option
prices
Latest year
of exercise/
vesting
Number
of options/
allocations
outstanding
Long-Term Incentive Plan
2021–2023
nil
2033
1,257,157
Deferred Share Bonus Plan
2021–2023
nil
2026
144,816
Fair value of options granted under the LTIP during the year:
2024
2023
ROIC/ESG
element
TSR element
ROIC/ESG
element
TSR element
Fair value of options granted
492p
290p
386p
238p
Share price on date of grant
492p
492p
386p
386p
Expected volatility
n/a
29.2%
n/a
34.6%
Risk-free interest rate
n/a
4.1%
n/a
3.3%
Exercise price (per share)
nil
nil
nil
nil
Expected term (years)
3
3
3
3
Expected dividend yield
nil
nil
nil
nil
For the LTIP awards, vesting of 40% of shares awarded is based on the Group’s three-year total shareholder return (TSR)
performance relative to that of the constituent companies of the FTSE 250 (excluding investment trusts) and vesting of the
remaining 60% of shares awarded is based on ROIC and ESG targets.
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the 2.8 years (2023: 2.8 years)
prior to the grant date for the April 2024 grant. The risk-free rate of return was assumed to be the yield to maturity on a UK fixed
gilt with the term to maturity equal to the expected life of the option. At the discretion of the Remuneration Committee, award
holders receive the value of dividends that would have been paid on their vested shares in the period between grant and vesting.
Accordingly, there is no discount to the valuation for dividends foregone during the vesting period.
11.
Financial Guarantees
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its Group,
the Company applies IFRS9 Financial instruments. At the balance sheet date there is nothing to recognise in the Company’s
Financial Statements. Guarantees provided by the Company as at 31 December 2024 in respect of the liabilities of its subsidiary
companies amounted to £473.2m (2023: £344.7m), which includes guarantees of $116.0m, €198.0m and £28.0m (2023: $116m,
€198m and £28m) in respect of US Private Placement Loan Notes; £182.5m (2023: £51.6m) in respect of drawings under the
syndicated bank facility; £0.1m (2023: £0.1m) in respect of guarantees issued to certain banks covering their exposure on
derivative contracts governed by ISDA agreements; and £6.0m (2023: £2.1m) in respect of overdraft facilities utilised by certain
of the Company’s subsidiary companies.
12.
Contingent Liabilities
Vesuvius has extensive international operations and is subject to various legal and regulatory regimes, including those covering
taxation and environmental matters. Several of the Company’s subsidiaries are parties to legal proceedings, certain of which
are insured claims arising in the ordinary course of the operations of the company involved, and are aware of a number of issues
which are, or may be, the subject of dispute with tax authorities. Whilst the outcome of litigation and other disputes can never
be predicted with certainty, having regard to legal advice received and the insurance arrangements of the Company and its
subsidiaries, the Directors believe that none of these matters will, either individually or in the aggregate, have a materially adverse
effect on the Company’s financial condition or results of operations.
215
Strategic report
Governance
Financial statements
13.
Related Parties
All transactions with related parties are conducted on an arm’s-length basis and in accordance with normal business terms.
The Company has taken advantage of the exemption contained in FRS 101 and has therefore not disclosed transactions or
balances with wholly owned Company subsidiaries.
The related parties identified by the Directors include joint ventures, associates and key management personnel. To enable users
of our financial statements to form a view on the effects of related party relationships on the Company, we disclose the related
party relationship, irrespective of whether there have been transactions between the related parties.
Transactions with joint ventures and associates
All transactions with joint ventures and associates are in the normal course of business. Further details of joint ventures and
associates are included in Note 17 to the Group Financial Statements.
Transactions with key management personnel
There have been no transactions with key management personnel of the Company other than the Directors’ remuneration.
Directors’ remuneration is disclosed in the Annual Report on Directors’ Remuneration.
Transactions with other related parties
There are no controlling shareholders of the Company as defined by IFRS. There have been no material transactions with the
shareholders of the Company.
Pension contributions are disclosed in Note 27 to the Group Financial Statements.
Other than the parties disclosed above, the Company has no other material related parties.
Vesuvius plc
Annual Report and Financial Statements 2024
216
2024
2023
2022
2021
2020
Steel Division
Revenue
£m
1,343.8
1,400.0
1,496.4
1,171.5
1,045.4
Trading profit
£m
153.0
147.6
172.7
102.0
76.4
Return on sales
%
11.4
10.5
11.5
8.7
7.3
Employees: year-end
no.
9,028
9,228
8,719
8,323
7,619
Foundry Division
Revenue
£m
476.3
529.8
551.0
471.4
412.9
Trading profit
£m
35.0
52.8
54.5
40.4
25.0
Return on sales
%
7.4
10.0
9.9
8.6
6.1
Employees: year-end
no.
2,105
2,463
2,415
2,881
2,735
Five-Year Summary: Divisional Results from Continuing Operations (unaudited)
217
Strategic report
Governance
Financial statements
Shareholder Information (unaudited)
Enquiries
The Company’s share registrar is Equiniti who can be contacted
if you have any questions about your Vesuvius shareholding.
Equiniti Limited
Aspect House, Spencer Road
Lancing, West Sussex, BN99 6DA
United Kingdom
Telephone
*
: +44 (0)371 384 2335
Website: www.shareview.co.uk
For the hard of hearing, Equiniti can also be contacted using
the Relay UK website at www.relayuk.bt.com.
Any shareholder enquiries not related to the share register should
be sent by email to shareholder.information@vesuvius.com or
by letter to the Company Secretary at the registered office.
Registered Office and Group Head Office
Vesuvius plc
165 Fleet Street
London EC4A 2AE
United Kingdom
Telephone: +44 (0)20 7822 0000
Registered in England and Wales No. 8217766
LEI: 213800ORZ521W585SY02
Vesuvius Website
Shareholder and other information about the Company,
including details of the current and historical share price,
can be accessed on the Vesuvius website: www.vesuvius.com.
You can view the online Annual Report 2024 on the website.
Shareview and Electronic Communication
Equiniti’s website, www.shareview.co.uk, enables shareholders
to register online to view details of their shareholdings. To access
online information on your shareholding, you will require your
shareholder reference number, which can be found at the top
of your share certificate or on your dividend confirmation.
The Shareview website provides answers to frequently asked
questions and information useful for the management of
investments, including indicative share valuations and
dividend payment details.
Shareholders can register on Shareview to receive shareholder
communications electronically, including the Company’s Annual
Report and Financial Statements, rather than receiving them in
paper form. The registration process requires shareholders to
input their shareholder reference number. To receive shareholder
communications in electronic form, shareholders should select
‘email’ as their mailing preference. Once registered, shareholders
will receive an email notifying them each time a shareholder
communication has been published on the Vesuvius website.
Share Dealing Service
The Company’s shares can be traded through most banks,
building societies or stockbrokers. UK resident shareholders
can also buy and sell shares by telephone or online using
Equiniti’s Shareview dealing service.
Telephone 0345 603 7037 between 8.00 am and 4.30 pm on any
business day (excluding public holidays in England and Wales).
Website: www.shareview.co.uk/dealing
The shareholder reference number (at the top of your share
certificate or on your dividend confirmation) is required to use
the dealing service.
ShareGift
ShareGift, the charity share donation scheme, is a free service
for shareholders wishing to give shares to a wide range of UK
charitable causes. It is particularly useful for those shareholders
who may wish to dispose of a small quantity of shares in
a charitable way where the market value makes it uneconomic
to sell on a commission basis. Further information can be
obtained from ShareGift.
Telephone: +44 (0)20 7930 3737
Website: www.sharegift.org
Email: help@sharegift.org
Dividend Reinvestment Plan
Equiniti offers a dividend reinvestment plan through which
shareholders can use their Vesuvius cash dividends to buy
additional shares in Vesuvius. Further details, including
how to sign up and the terms and conditions of the plan,
are available from the Share Dividend Helpline.
Telephone
*
: 0371 384 2335
(or +44 371 384 2335 if calling from outside the UK)
Website: www.shareview.co.uk
Overseas Payment Service
Equiniti provides a dividend payment service in over 90 countries
that automatically converts dividend payments into local currency
and pays the funds into a shareholder’s bank account. Further
details, including an application form and the terms and
conditions of the service, are available from Equiniti.
Telephone
*
: +44 371 384 2335
Website: www.shareview.co.uk
By post: Equiniti, Aspect House, Spencer Road, Lancing,
West Sussex, BN99 6DA, United Kingdom
Please quote Overseas Payment Service, the Company’s name
and your shareholder reference number.
Financial Calendar
2025 Annual General Meeting
Friday 16 May 2025
*
Lines are open Monday to Friday 8.30 am to 5.30 pm (excluding public holidays in England and Wales).
Vesuvius plc
Annual Report and Financial Statements 2024
218
Analysis of Ordinary Shareholders
As at 31 December 2024
Investor type
Total
Shareholdings
Private
Institutional
and other
1–1,000
1,001–
50,000
50,001–
500,000
500,001+
Number of holders
2,226
448
2,674
2,046
441
124
63
Percentage of holders
83.25%
16.75%
100%
76.51%
16.49%
4.64%
2.36%
Percentage of shares held
0.62%
99.38%
100%
0.11%
1.61%
7.81%
90.47%
Share Fraud – Spot the Warning Signs
Investment scams are designed to look like genuine investments.
Have you been…
–
Contacted out of the blue
–
Promised tempting returns and told the investment is safe
–
Called repeatedly
–
Told the offer is only available for a limited time?
If so, you might have been contacted by fraudsters.
How to Avoid Share Fraud
1. Reject cold calls
If you have been contacted by telephone, email or post, or via
a third party or at a seminar or exhibition, with an offer to buy
or sell shares, the chances are that it’s a high-risk investment
or a scam. You should treat any offer with extreme caution.
The safest thing to do is to ignore the approach and if you
were contacted by phone to hang up on the call.
2. Check if the firm is authorised by the Financial Conduct
Authority (FCA) and recorded on the Financial Services register
at register.fca.org.uk
The Financial Services Register is a public record of all the firms
and individuals in the financial services industry that are, or have
been, regulated by the Prudential Regulation Authority and/or
the FCA. If there are no contact details on the Register or if the firm
claims the Register is out of date, call the FCA Consumer Helpline
on 0800 111 6768.
If you’re dealing with an overseas firm, you should check with the
regulator in that country and also check the scam warnings from
foreign regulators.
3. Get impartial advice
Think about getting impartial financial advice before you hand
over any money. Seek advice from someone unconnected to the
firm that has approached you.
Reporting a Scam
If you suspect that you have been approached by fraudsters,
please tell the FCA Consumer Helpline by contacting them on
0800 111 6768 (or +44 20 7066 1000 from outside the UK) or by
using the share fraud reporting form at www.fca.org.uk/scams,
where you can find out more about investment scams. For calls
using next generation text relay, please call the FCA Consumer
Helpline on (18001) 0207 066 1000.
If you have lost money to investment fraud, you should report it
to Action Fraud on 0300 123 2040 (or +44 300 123 2040 from
outside the UK) or online at www.actionfraud.police.uk.
Find out more at www.fca.org.uk/scamsmart.
Identity Theft
We offer the following advice to shareholders on protecting their
personal information and Vesuvius shares:
–
Keep all Vesuvius correspondence in a safe place, or destroy
correspondence by shredding
–
When changing address, inform the registrar, Equiniti.
If a letter is received from Equiniti regarding a change of
address and there has been no change of address, contact
the registrar immediately using the contact information on
the opposite page
–
Have your dividends paid directly into a bank or building
society account. This will reduce the risk of a cheque being
intercepted or lost in the post
–
On changing a bank or building society account, inform Equiniti
of the details of the new account and respond, as requested,
to any letters Equiniti send regarding this matter
Shareholder Information (unaudited)
continued
219
Strategic report
Governance
Financial statements
Glossary
8D
Eight Disciplines: an eight-step
methodology to resolve customer,
supplier and internal quality issues
AGM
Annual General Meeting
BMC
Bayuquan Magnesium Co acquired
in October 2022 and now trading
through the legal entity Yingkou
YingWei Magnesium Co., Ltd
Capex
Capital expenditure
CEO
Chief Executive
CFO
Chief Financial Officer
CG Statement
The Corporate Governance Statement
CO
2
Carbon dioxide
CO
2
e
Carbon dioxide equivalent
Code
The 2018 UK Corporate Governance Code
Company
Vesuvius plc
CORE Values
or Values
The Group’s key values of Courage,
Ownership, Respect and Energy
DRI
Direct Reduced Iron (DRI) is produced
from the direct reduction of iron ore (in the
form of lumps, pellets, or fines) into iron
by a reducing gas or elemental carbon
produced from natural gas or coal
DSBP
Deferred Share Bonus Plan
DTR
The Disclosure and Transparency Rules
of the UK Financial Conduct Authority
EAF
Electric Arc Furnace
EBITDA
Trading profit before depreciation
and amortisation of non-acquired
intangible charges
ECL
Expected credit loss
EEMEA
Eastern Europe, Middle East and Africa
EMEA
Europe, Middle East and Africa
EPS
Earnings per share
ESOP
Employee share ownership plan
EU
European Union
EU27
The 27 European Union countries
FRC
Financial Reporting Council
FRS
Financial Reporting Standards
FTSE 250
Equity index whose constituents are the
101st to 350th largest companies listed
on the London Stock Exchange in terms
of their market capitalisation
FX
Foreign exchange
GEC
Group Executive Committee
GHG
Greenhouse gas
Group
Vesuvius plc and its subsidiary companies
HeaTt
Vesuvius e-learning programme
HPDC
High Pressure Die Casting
IAS
International Accounting Standards
IFRS
International Financial Reporting Standards
JKANZ
Japan, Korea, Australia and New Zealand
KPI
Key Performance Indicator
LPDC
Low Pressure Die Casting
LTI
Lost time injury
LTIFR
Lost time injury frequency rate, a KPI
which calculates the number of LTIs
per million hours worked
Mechatronic
The integration of mechanical systems
with electronics and software to create
more functional and efficient products
and processes
Median
The middle number in a sorted list
of numbers
MTI
Medically treated injury
MTIFR
Medically treated injury frequency rate
PwC
PricewaterhouseCoopers LLP
NAFTA
Canada, Mexico and USA
Offshore Area
The area around the United Kingdom as
specified in the Accounts Regulations
Schedule 7, paragraph 15
Ordinary share
An ordinary share of 10 pence in the capital
of the Company
R&D
Research and development
Scope 1
emissions
CO
2
and CO
2
e emissions from fuels used in
our factories and offices, fugitive emissions
and non-fuel process emissions
Scope 2
emissions
CO
2
and CO
2
e from indirect emissions
resulting from the generation of
electricity, heat, steam and hot water
we purchase to supply our offices
and factories
Scope 3
emissions
All other indirect CO
2
and CO
2
e emissions
that occur in the Company’s value chain
Senior
Leadership
Group
The Group Executive Committee plus
the most senior Vesuvius managers
worldwide. This group comprises between
140 and 170 members
Share buyback
Share buyback programmes announced on
4 December 2023 and 19 November 2024
to return £50 million per programme of
surplus cash to shareholders
TSR
Total shareholder return
UK GAAP
UK Generally Accepted
Accounting Principles
UN
United Nations
UN SDGs
United Nations Sustainable
Development Goals
Universal
Refractories
The trade and assets of Universal
Refractories, Inc. acquired in December
2021 and now trading through the legal
entity Vesuvius Penn Corporation
USMCA
United States, Mexico and Canada
VISO
Vesuvius Isostatic
VSP
Vesuvius Share Plan
Vesuvius plc
Annual Report and Financial Statements 2024
220
Forward-looking statements
This Annual Report contains certain forward-looking
statements which may include reference to one or more of the
following: with respect to operations, strategy, performance,
financial condition, financing plans, cash flows, capital and
other expenditures and growth opportunities of the Vesuvius
Group. Forward-looking statements can be identified by the
use of terminology such as ‘target’, ‘intend’, ‘aim’, ‘project’,
‘anticipate’, ‘estimate’, ‘plan’, ‘believe’, ‘expect’, ‘forecasts’,
‘may’, ‘could’, ‘should’, ‘will’ or similar words.
Although the Company makes such statements based on
assumptions that it believes to be reasonable, by their nature,
these statements involve uncertainty and are based on
assumptions and involve risks, uncertainties and other factors
that could cause actual results and developments to differ
materially from those implied by the forward-looking
statements anticipated.
Such forward-looking statements should, therefore, be
considered in light of various important factors that could
cause actual results to differ materially from estimates or
projections contained in the forward-looking statements.
The forward-looking statements reflect knowledge and
information available at the date of preparation of this
Annual Report and, other than in accordance with its
legal and regulatory obligations, the Company undertakes
no obligation to update these forward-looking statements.
Nothing in this Annual Report should be construed as
a profit forecast or a guarantee of the Vesuvius Group’s
future performance.
Designed and produced by
Friend
www.friendstudio.com
Print: Pureprint Group
Printed by a CarbonNeutral® company with an Environmental
Management System certified to ISO 14001. This document
is printed on paper using wood fibre from well-managed,
FSC®-certified forests and other controlled sources.
100% of the inks used are HP Indigo ElectroInk which complies
with RoHS legislation and meets the chemical requirements
of the Nordic Ecolabel (Nordic Swan) for printing companies,
and 100% of any waste associated with this production has
been recycled or diverted from landfill.
The paper is Carbon Balanced with World Land Trust, an
international conservation charity, who offset carbon emissions
through the purchase and preservation of high conservation
value land. Through protecting standing forests, under threat of
clearance, carbon is locked-in that would otherwise be released.
The imagery included in this Annual Report aims to capture
the many different aspects of Vesuvius and our team around
the world. The photographer Samuel Dhote shot most of these
images. www.samueldhote.com
CBP00019082504183028
Vesuvius plc
165 Fleet Street
London
EC4A 2AE
T
+44 (0)20 7822 0000
www.vesuvius.com
Visit our online Annual Report at
report2024.vesuvius.com