14 November 2023

Vesuvius plc - Trading Update:

Resilient trading with 2023 results expected to be in line with previous guidance

Vesuvius plc, a global leader in molten metal flow engineering and technology, announces the following update covering trading in the period 1 July to 31 October 2023.

Summary

·      We maintain our trading expectations for FY 2023 as set out in our half year announcement

·      We have performed robustly in the period due to our differentiated offering, market share gains and resilient pricing, despite a weakening of markets relative to H1 2023

·      General slowdown in Foundry markets outside of India, most notably in Northern Europe

·      Steel markets outside of India are also softer, and we expect this to persist throughout the remainder of Q4

·      Good cash flow generation and progress on working capital, with an improvement compared to the position at H1 2023. Leverage ratio at year-end expected at or around 1.0x

·      Mid to long-term market fundamentals remain attractive, and our growth initiatives remain on track

Resilient trading in weak end markets

We have seen a gradual deterioration in most Foundry end markets outside of India, particularly in Northern Europe. Steel production levels outside of India have weakened relative to H1 in EMEA, South-East Asia and South America.

Despite this, we continue to perform robustly, with our differentiated solutions supporting both good pricing performance and market share gains. We are particularly pleased with the performance of our India business, which exposes us to one of the fastest growing Steel and Foundry production regions worldwide. We are continuing to gain share in that region enabled by our investments in high quality manufacturing facilities. 

Mid to long-term market fundamentals are strong and growth initiatives remain on track

The medium-term fundamentals for the Steel and Foundry markets remain positive and we continue to implement our strategic initiatives. The capacity expansions in our higher-margin Flow Control business are close to completion and will support the growth regions of India, South-East Asia, Turkey, and Middle East and Africa.  Capacity expansions in Advanced Refractories in India are also progressing well.

Working capital

Cash generation in the second half of the year to date has been good as we continue to focus on reducing our working capital balances compared to the half year. We are seeing progress across inventory and debtors with both reducing in absolute amounts. As such we expect to see net debt / EBITDA on or around 1.0x at the year end.

Outlook

The resilience of our business gives us confidence that we will continue to meet our full year 2023 expectations despite weaker market conditions relative to the first half of 2023.

CONFERENCE CALL

Patrick André (Chief Executive) and Mark Collis (Chief Financial Officer) will be hosting a conference call for analysts and investors at 08:00 (UK time) today.

To participate, please register at least 30 minutes prior to the start of the call by following the link here

A replay of the call will be available for one week on the following numbers:

UK: 0203 608 8021 

USA: 1 412 317 0088 

South Africa: 010 500 4108 

Australia: 073 911 1378 

International: +27 10 500 4108 

Passcode: 45352

About Vesuvius plc

Vesuvius is a global leader in molten metal flow engineering and technology principally serving process industries operating in challenging high‑temperature conditions.

We develop innovative and customised solutions, often used in extremely demanding industrial environments, which enable our customers to make their manufacturing processes safer, more efficient and more sustainable. 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 cost-efficient 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 they are recognised, developed and properly rewarded.

We think beyond today to create solutions that will shape the future.

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

LEI: 213800ORZ521W585SY02

www.vesuvius.com