Interim Management Statement
Vesuvius plc, a global leader in molten metal flow engineering, releases the following Interim Management Statement covering trading in the period from 1 July to 23 October 2014.
The Group’s trading performance for the third quarter of this year has been in line with the Board’s expectations, despite some softening in market conditions in certain regions since the announcement of our 2014 Half Year Results in August. We continue to implement a range of strategic and operational initiatives across all business lines to improve trading margins across the Group, and we remain resolutely focused on cash generation. Further to the announcement made in August, we are pleased to announce the completion of the acquisitions of the technical services businesses, Ecil Met Tec and Process Metrix, for an aggregate consideration of approximately £30m.
Therefore, the Board’s expectations for the full year performance remain unchanged.
The rate of year on year growth in the global steel industry has reduced in the third quarter to just over 1%, resulting in global growth of 2.1% in the first 9 months of the year. Nevertheless, Vesuvius continues to outperform the global steel market with underlying revenue growth ahead of the market, driven by the delivery of our Group strategy to invest in technology and to focus on segments where customers recognise the value we add to their manufacturing processes in terms of efficiency, reliability and safety.
Market conditions in the global foundry industry remain challenging. Whilst truck and light vehicle production remains above the levels seen in 2013, most notably in North America, the rate of growth has slowed recently and there has been no sign of improvement in the low levels of investment in the high value mining end market.
There has been no material change in our financial position from that reported in our Half Year results on 1 August 2014. We continue to operate with a strong balance sheet and remain cash generative. We are maintaining our focus on working capital management, and continue to make progress in reducing inventory and debtor days across the Group.
Whilst there have been signs of increased activity in some end-markets, namely in the US, Europe has seen weaker growth over the period and conditions in end markets in South America and Asia remain challenging. We expect these conditions to continue for the remainder of the year. As previously disclosed, a continuation of the current strength of sterling will have a negative impact on our reported results. It is expected that Management’s sustained focus on driving operational efficiency, coupled with the strength of our customer relationships and our technical leadership and innovation, will drive further margin improvement. Consequently, the Board’s expectations for the Group’s full year performance remain unchanged.
François Wanecq (Chief Executive) and Chris O’Shea (Chief Financial Officer) will be hosting a conference call for analysts and investors at 09.00 a.m. (UK time) today (24 October).
To join the call, please use the dial in number below:
+44 (0)20 3427 1915 all participants
Confirmation code: 7689809
A replay of the call will be available approximately one hour after the event for two weeks on the following number:
+44 (0)20 3427 0598 non-US participants
+1 347 366 9565 US participants
Confirmation code: 7689809
Vesuvius’ preliminary announcement of results for the year ending 31 December 2014 is expected to be made on Tuesday 3 March 2015.