2015 Half Year Results
Margin improvement in challenging market conditions
Vesuvius plc, a global leader in molten metal flow engineering, announces its results for the six months ended 30 June 2015.
|Return on Sales
|Headline EPS(3) (pence)
|Statutory EPS (pence)
(1) Underlying basis is at constant currency and excludes separately reported items and the impact of acquisitions and disposals
(2) For definitions of non-GAAP measures, refer to the notes in the financial statements
(3) Headline results refer to continuing operations and exclude separately reported items
- Lower revenues and profits driven by a decline in global steel production and inventory volumes
- Cash conversion ratio of 84%
- Return on sales increased to 10% as a result of management actions to improve productivity and reduce cost
- Underlying increase in profitability in the Foundry division of 165 basis points driven by new management actions
- Strong balance sheet, with long-term bank facilities in place to 2022. Net debt of £296m reflects acquisition of Sidermes
- Interim dividend up 3% to 5.15 pence per share (H1 2014: 5.00 pence) to be paid on 25 September 2015
- Continued improvement in profitability from self-help initiatives
- Restructuring programme commenced to address structural changes in end markets
- Delivery of margin improvement continues
- Revenue up year-on-year in Asia-Pacific in all businesses despite adverse trading conditions
- Outperformance in China and India – strategically important markets for long-term growth
- Continued focus on products and services where value-add is rewarded
- Sidermes acquisition expands our Technical Services offering – an important medium-term growth opportunity
François Wanecq, Chief Executive of Vesuvius, commented:
“In recent months, we have seen challenging end markets with a global decline in crude steel production, particularly in the US, our largest market. Against this backdrop, Vesuvius has made further strategic and operational progress. We are pleased to report revenue and margin progression in the major long-term markets of China and India and further progress in building our Technical Services business.
As a consequence of the structural change in our end markets, we have commenced a global restructuring programme and have currently identified actions which will result in a total charge of around £20m in 2015 and 2016 with full year cost savings in excess of £10m in 2017. Some early benefits from this programme are expected to be seen this year, and as a result, we remain confident that performance will be broadly in line with market expectations for the full year.
This programme is designed to better align our group with our end markets and capitalise on the further growth of our addressable markets as outlined at our Capital Markets Day in June.”
For further information please contact:
François Wanecq, Chief Executive
+44 (0) 207 822 0000
Chris O’Shea, Chief Financial Officer
+44 (0) 207 822 0000
Nicolas Matheï, Group Head of Corporate Finance
+44 (0) 207 822 0000
Virginia Skroski, Investor Relations Manager
+44 (0) 207 822 0016
John Olsen/ Tim Roundtree/ Jamie Ricketts
+44 (0) 203 128 8100
Vesuvius management will make a presentation to analysts and investors on 31 July 2015 at 10.00am (GMT) at Bank of America Merrill Lynch, 2 King Edward Street, London EC1A 1HQ. For those unable to attend in person, an audio webcast and conference call will also be available (UK participant dial in +44(0)20 3364 5721; US participant dial in +1 646 254 3362; confirmation code 7676096). This presentation will be broadcast live on Vesuvius’ website, http://investors.vesuvius.com/investor-relations and an archive version of the presentation will be available on the website later that day.
About Vesuvius plc
Vesuvius is a global leader in molten metal flow engineering principally serving the steel and foundry industries.
We develop innovative and customised solutions, often used in extremely demanding industrial environments, which enable our customers to improve their manufacturing processes, enhance product quality and reduce energy consumption. These include flow control solutions, advanced refractories and other consumable products and – increasingly – related technical services including data capture.
We have a worldwide presence. We serve our customers through a network of low-cost manufacturing plants located close to their own facilities, and embed our industry experts within their operations, who are all supported by our global technology centres.
Our core competitive strengths are our market and technology leadership, strong customer relationships, well established presence in developing markets and our global reach, all of which facilitate the expansion of our addressable markets.
Our ultimate goal is to create value for our customers, and to deliver sustainable, profitable growth for our shareholders giving a superior return on their investment whilst providing each of our employees with a safe workplace where he or she is recognised, developed and properly rewarded.
Forward looking statements
This announcement contains certain forward looking statements which may include reference to one or more of the following: the Group’s financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies or synergies, budgets, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives of management and other matters.
Statements in this announcement that are not historical facts are hereby identified as "forward looking statements". Such forward looking statements, including, without limitation, those relating to the future business prospects, revenue, working capital, liquidity, capital needs, interest costs and income, in each case relating to Vesuvius, wherever they occur in this announcement, are necessarily based on assumptions reflecting the views of Vesuvius and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward looking statements. 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. These include without limitation: economic and business cycles; the terms and conditions of Vesuvius’ financing arrangements; foreign currency rate fluctuations; competition in Vesuvius’ principal markets; acquisitions or disposals of businesses or assets; and trends in Vesuvius’ principal industries.
The foregoing list of important factors is not exhaustive. When considering forward looking statements, careful consideration should be given to the foregoing factors and other uncertainties and events, as well as factors described in documents the Company files with the UK regulator from time to time including its annual reports and accounts.
You should not place undue reliance on such forward looking statements which speak only as of the date on which they are made. Except as required by the Rules of the UK Listing Authority and the London Stock Exchange and applicable law, Vesuvius undertakes no obligation to update publicly or revise any forward looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward looking events discussed in this announcement might not occur.
Vesuvius plc, 165 Fleet Street, London EC4A 2AE
Registered in England and Wales No. 8217766