1 August
2024
Half Year Results for the
six months ended 30 June 2024
Resilient results in line
with expectations, despite subdued market
conditions
Vesuvius
plc, a global leader in molten metal flow engineering and
technology, announces its unaudited results for the six months
ended 30 June 2024.
|
Financial summary
|
|
H1 2024
(£m)
|
H1 2023
(£m)
|
Underlying change
(1)
|
Year-on-year change
|
|
Headline (non-statutory)
|
|
|
|
|
|
|
Revenue
|
|
936.5
|
995.3
|
(2.0%)
|
(5.9%)
|
|
Trading Profit (2)
(adjusted EBITA)
|
|
97.2
|
104.9
|
(0.9%)
|
(7.4%)
|
|
Return on Sales
(2)
|
|
10.4%
|
10.5%
|
+10bps
|
(20 bps)
|
|
Headline basic EPS (2)
(pence)
|
|
21.8
|
24.5
|
(2.9%)
|
(11.2%)
|
|
Free cash-flow
(2)
|
|
17.8
|
42.1
|
NA
|
(57.7%)
|
|
Net Debt / EBITDA
(2)
|
|
1.2x
|
1.0x
|
NA
|
+0.2x
|
|
Statutory
|
|
|
|
|
|
|
Operating Profit
|
|
84.1
|
99.7
|
(9.4%)
|
(15.6%)
|
|
Profit Before Tax
|
|
76.7
|
94.7
|
(11.3%)
|
(19.0%)
|
|
Statutory basic EPS
(pence)
|
|
18.1
|
23.2
|
(14.2%)
|
(22.0%)
|
|
Cash generated from
operations
|
|
94.0
|
106.8
|
NA
|
(12.0%)
|
|
Dividend (pence per
share)
|
|
7.1
|
6.8
|
NA
|
4.4%
|
(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 Note 15 in the Condensed Group Financial
Statements.
NB. The above table and other tables in this results
statement contains amounts and percentages derived from source data
which was then rounded. The margins and percentage change figures
are based on source data, not the rounded
figures.
Highlights
·
End markets weaker than
anticipated, in particular Foundry
·
Good performance of the Steel Division despite
weak markets
o
Positive net pricing performance
overall
o
Flow Control continues
to gain market share
o
Advanced Refractories achieved market share gains
in Asia, with 17% of sales now from India
o
Return on Sales increased to 11.2%
·
Lower performance of the
Foundry division despite progress in strategic
initiatives
o
Positive net pricing overall
o
Market share gains in all major
regions
o
Significantly lower volumes reduced Return on
Sales to 8.2%
·
Good progress in the
implementation of our cost reduction programme; in-year savings
estimate increasing to £6m, 2024 exit rate confirmed at
£10-15m and projects fully identified to support
our £30m target in 2026
·
Working capital intensity has improved in H1
reducing to 23.2% vs. 24.1%
·
Capacity expansion programme on track and will be
largely complete by the end of the year
·
Continued progress in R&D efficiency with
Group new product sales ratio up to 17.9% with Flow Control now
exceeding 20%
· Continued progress towards our CO2e intensity
reduction targets with the inauguration of our first entirely
carbon neutral manufacturing plant for Flow Control and Advanced
Refractories products in Brazil
·
Strong Safety performance in H1 with a record low
level of accidents confirming the structural improvements achieved
in our operations
·
Interim dividend per share of 7.1p, +4.4%
reflecting confidence in the business
Comment from Patrick André,
CEO:
"Our end
markets remained subdued during the first half with, in particular,
significant weakness in Foundry. Despite these unfavourable market
conditions, the Steel Division achieved a good performance,
demonstrating the strength of its business model with continued
market share gains in Flow Control and positive net pricing
performance overall. In the Foundry Division however, good
performances in market share gains, pricing management and cost
reductions could not offset the negative impact of volume reduction
due to market conditions.
We no longer expect a significant
improvement in our end markets in the second half, with most
external forecasts predicting end market recovery being postponed
to 2025. Accordingly, we now expect our full year headline trading
profit for the year to be only slightly ahead of last year on a
constant currency basis(*).
Beyond 2024, we remain confident
in the growth potential of our steel and foundry markets and remain
very well positioned to benefit from the recovery in these markets
once it materialises. Irrespective of the timing of market
recovery, we continue to anticipate progress in our results
supported by the growing benefits of our cost reduction programme,
our continued investment in innovation and our capacity investments
in India. For these reasons, we remain confident in the achievement
of our 2026 objectives as communicated during our Capital Market
Day last November."
(*) FY23 trading profit was £200m
reported and is £192m retranslated at H1 2024 FX rates.
Presentation of Half Year 2024 Results
Vesuvius management will make a
presentation to analysts and investors on 1 August 2024 at 09:00 UK
time at the London Stock Exchange, 10 Paternoster Square, London
EC4M 7LS. For those unable to attend, the event will be
livestreamed and can be accessed by clicking
here. Participants can also join via an audio conference call. Please
click here to
register. Once registered, you will be provided with the
information needed to join the conference, including dial-in
numbers and passcodes. Be sure to save this information in your
calendar.
|
For further information, please contact:
|
|
|
Shareholder/analyst enquiries:
|
|
|
|
Vesuvius
plc
|
Patrick André, Chief Executive
|
+44 (0)
207 822 0000
|
|
|
Mark Collis, Chief Financial
Officer
Rachel Stevens, Head of Investor
Relations
|
+44 (0)
207 822 0000
+44 (0)
7387 545 271
|
|
Media enquiries:
|
|
|
|
MHP Communications
|
Rachel Farrington/Ollie
Hoare
|
+44 (0) 203 128 8570
|
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
for everyone.
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
Vesuvius
plc
Half Year Results for the
six months ended 30 June 2024
Resilient results in line
with expectations, despite subdued market
conditions
|
£m
|
H1 2024
Reported
|
H1 2023
Reported
|
Currency
|
H1 2023
Underlying
|
H2 2023
Underlying
|
%
Change
H1 '24
vs. H1 '23
|
|
Underlying
|
Reported
|
|
Revenue
|
936.5
|
995.3
|
(40.1)
|
955.2
|
923.0
|
(2.0%)
|
(5.9%)
|
|
Trading Profit
|
97.2
|
104.9
|
(6.8)
|
98.1
|
94.1
|
(0.9%)
|
(7.4%)
|
|
Return on
Sales
|
10.4%
|
10.5%
|
-
|
10.3%
|
10.2%
|
+10bps
|
(20bps)
|
End markets remained weak
As anticipated, Steel markets
remained weak in H1. Steel production in the world excluding China,
Iran, Russia and Ukraine, which accounts for approximately 90% of
Vesuvius' Steel Division sales, marginally improved by 1.4% in H1
2024 compared with the prior period.
Steel market production varied by
region. India was the stand-out growth region, up 7.4% on the
comparative half-year period. South-East Asia also showed
consistent growth in the half-year period, up 12.2% vs. prior year.
North America and North Asia showed declines of -3.3% and -3.8% vs
H1 2023, respectively. In EMEA, EU27+UK remained broadly
flat, while EEMEA excluding Russia, Iran and Ukraine grew +8.4% in
H1 vs prior year, although Turkish volume growth was measured
against a depressed Q1 2023 due to the earthquake there. (Source:
World Steel Association)
Foundry end markets remained
challenging and worse than anticipated in all regions except India.
The EU+UK, North America, and North Asia markets, which
together account for approximately 60% of Foundry sales, showed
significant weakness. The automotive end market, which until now
had shown better resilience than other Foundry end markets also
weakened during the first half.
Group trading performance
Market share gains in both the Steel and Foundry
divisions
In this weak market environment,
the business performed well, with the Group generating revenue of
£936.5m, a decrease of 2.0% on an underlying basis compared to H1
2023 and 5.9% on a reported basis. The Steel Division performed
particularly well, with Flow Control gaining market share overall
and in all major regions except the EU+UK where we continue to
manage our exposure carefully to certain customers assessed to be a
credit risk. In Advanced Refractories, our market share has
increased in Asia with a particularly strong performance in India
and China. In Foundry, we gained market share in most regions, but
this was not sufficient to offset the very negative market impact
on volumes.
Positive pricing performance in both
divisions
We achieved a positive
contribution from net pricing in both the Steel and Foundry
Divisions, reflecting the value-added by our technologically
differentiated products and the clear value proposition that these
provide to our customers. This continues the same trend seen in
2022 and 2023, which sits alongside ongoing market share
gains.
Implementation of our cost savings programme fully on
track
The programme to deliver £30m
annual cost savings in FY26, announced at our Capital Markets Day
in November 2023, continues at pace, and we are on track to deliver
an initial £6m in 2024, and to achieve a run-rate of £10m - 15m by
the end of this financial year. We remain confident of delivering
the target of £30m annualised saving by 2026.
Resilient results
As a result of these good
performances in market share gains, pricing and cost reductions,
our trading profit (adjusted EBITA) in H1
2024 was in line with our expectations despite the unfavourable
market conditions. Our trading profit, at £97.2m, shows a reduction
of 0.9% on an underlying basis as compared with H1 2023 and a
reduction of 7.4% on a reported basis. The Group delivered a Return
on Sales of 10.4%, up 10bps on an underlying basis and within this,
the Steel division increased its RoS to 11.2% while the Foundry RoS
fell to 8.2%.
Further improvement in our health and safety
performance
The protection of the health and
safety of our employees and contractors remains our first priority
and we have an overall objective of zero accidents. In the
half-year, we achieved a Lost Time Injury Frequency Rate (LTIFR)
per million hours worked of 0.64, a further reduction compared to
0.72 in H1 2023, itself a significant reduction versus our historic
performance.
Efficient R&D drives technological differentiation and
value to customers
Our focused and efficient R&D
is key to maintaining technological differentiation. This is
critical to our value-add proposition to customers and
to growing market share and margin. We launched
18 new products in the period and delivered a new product sales
ratio (defined as the percentage of sales derived from products
launched in the previous 5 years) of 17.9%. This is a further
improvement compared to 17.6% delivered in FY 2023 and has been
driven in particular by Flow Control, which is now deriving over
20% of its sales
from new products.
In addition, the interest of our
customer base in our robotics offering is accelerating, with 6
projects agreed in the past 6 months vs. 7 in FY 23. These
installations add significant value to customers by improving the
quality of their steel output, the efficiency of their operations,
and the safety of their employees.
Capital investment projects continue at pace, to support
growth
2024 is the final year of
the growth capex programme which was
initiated in 2021. In the coming years, this investment will
support our long-term growth in the fastest growing regions of the
world, especially in India South-East Asia and Middle East
Africa.
Our strategic expansion in Flow
Control is progressing well. In addition to the VISO capacity in
Kolkata (India) and in Skawina (Poland) completed in 2023, the
slide gate capacity increase in Skawina (Poland) and the mould flux
site in Vizag (India) will be fully operational in the second half
of the year. The new Advanced Refractories AlSi monolithics and
basic monolithics lines in Vizag will also be operational in the
second half.
Capex, excluding leases, in FY24
is expected to be c. £100 - 120m (>1.6x depreciation) of which
approximately half is allocated to growth projects and customer
installations, the latter driving the use of our
refractories.
Cost saving programme on track
We incurred costs of £8.0 million
in H1 relating to the cost-saving programme, which are
non-recurring and therefore a separately reported item. The
majority relate to redundancy costs; we took the decision to close
our last plant in the UK, a Foundry site. The expected total cash
cost of the cost-saving programme remains at £40m, with the total
one-off cash costs relating to the programme in 2024 expected to be
between £8m and £10m.
Robust cashflow
Working capital intensity
continues to improve, with the 12-month average trade working
capital to sales ratio to 30 June 2024 at 23.2%, down 20bps from 31
December 2023 and down 90bps from 30 June 2023. The improvement was
particularly driven by focused debtor and inventory management in
our Advanced Refractories business unit. In H1, there was a cash
outflow in respect of trade working capital of £34.2m (H1 2023:
£31.3m), reflecting business seasonality.
The Group generated adjusted
operating cashflow of £47.9m, representing cash conversion of 49%.
We continued to have elevated levels of capital expenditure in the
period (H1 2024: £50.5m vs. H1 2023: £41.9m), from our ongoing
investment expenditure in growth projects. This investment for the
growth programme is expected to complete in 2024, at which point
capex will reduce.
Free cashflow of £17.8m (H1 2023:
£42.1m) reflects the additional capital investment in the period,
as described above.
The share buyback of up to £50m,
which began in December 2023, has continued steadily and £33.1m of
the programme was completed by 30 June 2024 (of which £30.2m fell
in H1 2024). £16.9m remains to be executed before December
2024.
As at 30 June 2023, net debt stood
at £315.2m (31 December 2023: £237.5m) and net debt / EBITDA at
1.2x (31 December 2023: 0.9x), reflecting the reduced free
cashflow, the cash outflow from the share buy-back, and the H1
payment of the full year dividend.
Interim Dividend
The Board has declared an interim
dividend of 7.1 pence per share, which is a 4.4% increase on the
interim dividend for 2023 of 6.8 pence per share.
The interim dividend will be paid
on 13 September 2024 to shareholders on the register at the close
of business on 9 August 2024. The ex-dividend date will be 8 August
2024. Any shareholder wishing to participate in the Vesuvius
Dividend Reinvestment Plan (DRIP) needs to have submitted their
election to do so by 23 August 2024. The DRIP is provided by
Equiniti Financial Services Limited and enables the Company's
shareholders to elect to have their cash dividend payments used to
purchase the Company's shares. More information can be found
at
www.shareview.co.uk/info/drip
Current trading and outlook
Our end markets remained subdued
during the first half, with in particular significant weakness in
Foundry. Despite these unfavourable market conditions, the Steel
Division achieved a good performance, demonstrating the strength of
its business model with continued market share gains in Flow
Control and positive net pricing performance overall. In the
Foundry Division however, good performances in market share gains,
pricing management and cost reductions could not offset the
negative impact of volume reduction due to market
conditions.
We no longer expect a significant
improvement in our end markets in the second half, with most
external forecasts predicting end market recovery being postponed
to 2025. Accordingly, we now expect our full year headline trading
profit for the year to be only slightly ahead of last year on a
constant currency basis.
Beyond 2024, we remain confident
in the growth potential of our steel and foundry markets and remain
very well positioned to benefit from the recovery in these markets
once it materialises. Irrespective of the timing of market
recovery, we continue to anticipate progress in our results
supported by the growing benefits of our cost reduction programme,
our continued investment in innovation and our capacity investments
in India. For these reasons, we remain confident in the achievement
of our 2026 objectives as communicated during our Capital Market
Day last November.
Operating and Financial
Review
Operating review
Vesuvius comprises two Divisions,
Steel and Foundry. The Steel Division operates as three business
units, Flow Control, Advanced Refractories and Sensors &
Probes. Changes described are versus H1 2023 on an underlying
basis, excluding the impact of FX, unless otherwise noted. There
were no acquisitions or disposals in 2023 or H1 2024 and hence no
such adjustments were required.
See Note 15.1 to the Group
Financial Statements for the definition of headline performance and
Note 15.2 to the Group Financial Statements for the definition of
underlying performance.
Steel
Division
|
Steel Division
|
|
H1 2024
(£m)
|
H1 2023
(£m)
reported
|
H1 2023
(£m)
underlying
|
Change
% underlying
|
|
Flow Control Revenue
|
|
393.7
|
401.8
|
383.6
|
2.6%
|
|
Advanced Refractories
Revenue
|
|
270.3
|
289.6
|
279.3
|
(3.2%)
|
|
Steel Sensors & Probes
Revenue
|
|
21.7
|
20.1
|
19.6
|
10.9%
|
|
Total Steel Revenue
|
|
685.7
|
711.5
|
682.5
|
0.5%
|
|
Steel Trading profit
|
|
|
76.5
|
74.8
|
69.7
|
9.7%
|
|
Steel RoS
|
|
|
11.2%
|
10.5%
|
10.2%
|
+100bps
|
Steel revenue grew modestly
reflecting volume growth of c. 1% partially offset by declines in
pricing, reflecting reductions in raw material prices.
Revenue growth in the Steel Division was
principally driven by Flow Control, which gained market share, with
a contribution from Sensors and Probes, which improved
profitability. Revenue in Advanced Refractories fell, reflecting
the pass-back of reduced raw material costs.
Trading profit in Steel grew 9.7%
principally reflecting positive net pricing and cost savings. As a
result, Return on Sales for the Steel Division increased 100bps to
11.2%
Flow Control
|
Flow Control Revenue
|
|
H1 2024
(£m)
|
H1 2023
(£m) reported
|
H1 2023
(£m) underlying
|
Change %
underlying
|
|
Americas
|
|
157.6
|
163.0
|
154.7
|
1.9%
|
|
Europe, Middle East & Africa
(EMEA)
|
|
123.7
|
126.8
|
122.7
|
0.8%
|
|
Asia-Pacific
|
|
112.4
|
112.1
|
106.1
|
5.9%
|
|
Total Flow Control
Revenue
|
|
393.7
|
401.8
|
383.6
|
2.6%
|
Flow Control grew revenue and
gained market share in all major regions apart from the EU+UK.
In North America, the market contracted by
3.3% in the period, while our sales volumes contracted by a smaller
amount, and in South America the market contracted modestly while
Vesuvius grew volume. In EMEA, we outperformed the market in the
fast-growing EEMEA area (EMEA excluding EU+UK, Russia, Iran and
Ukraine) but underperformed the market in EU+UK where we
selectively chose to reduce our presence with customers with a high
credit risk.
In Asia-Pacific we out-performed
in the major markets of India and China. In India, the market grew
+7.4%, which we materially exceeded. In China, we grew volumes by
mid-single-digit despite the market contracting, reflecting our
focus on higher-quality steel production. (Market data source:
World Steel Association)
Advanced Refractories
|
Advanced Refractories Revenue
|
|
H1 2024
(£m)
|
H1 2023
(£m) reported
|
H1 2023
(£m) underlying
|
Change
% underlying
|
|
Americas
|
|
98.5
|
113.7
|
109.7
|
(10.2%)
|
|
Europe, Middle East & Africa
(EMEA)
|
|
83.5
|
94.4
|
92.5
|
(9.7%)
|
|
Asia-Pacific
|
|
88.3
|
81.5
|
77.1
|
14.4%
|
|
Total Advanced Refractories
Revenue
|
|
270.3
|
289.6
|
279.3
|
(3.2%)
|
In Advanced Refractories our
market share was positive in Asia, both in India and China, and in
EEMEA, which was offset by a slight market share decline in North
America and EU+UK.
Sensors & Probes
|
Sensors & Probes Revenue
|
|
H1 2024 (£m)
|
H1 2023 (£m) reported
|
H1 2023 (£m) underlying
|
Change % underlying
|
|
Americas
|
|
15.3
|
13.9
|
13.5
|
13.4%
|
|
Europe, Middle East & Africa
(EMEA)
|
|
6.1
|
5.9
|
5.8
|
6.7%
|
|
Asia-Pacific
|
|
0.2
|
0.3
|
0.3
|
(20.5%)
|
|
Total Sensors & Probes
Revenue
|
|
21.7
|
20.1
|
19.6
|
10.9%
|
Sensors and Probes has had a
strong H1 trading period with high revenue growth reflecting a
number of new projects in the Americas and the EMEA
region.
Foundry Division
|
Foundry Division
|
|
H1 2024
(£m)
|
H1 2023
(£m) reported
|
H1 2023
(£m) underlying
|
Change
% underlying
|
|
Americas
|
|
63.7
|
73.0
|
71.1
|
(10.3%)
|
|
Europe, Middle East & Africa
(EMEA)
|
|
101.6
|
120.5
|
117.7
|
(13.7%)
|
|
Asia-Pacific
|
|
85.5
|
90.3
|
84.0
|
1.8%
|
|
Total Foundry Revenue
|
|
250.8
|
283.8
|
272.8
|
(8.0%)
|
|
Foundry Trading Profit
|
|
20.7
|
30.1
|
28.4
|
(27.1%)
|
|
Foundry Return on Sales
|
|
8.2%
|
10.6%
|
10.4%
|
-220bps
|
Foundry end markets were negative
in all major regions with the exception of India. Consistent with
third party data, we estimate there were double-digit percentage
market declines in EMEA and North America, our largest regions.
North Asia, another key region for us, also saw significant market
declines, with a drop in ferrous castings of 8.4% in the period.
The light vehicle end market, which up until now had been more
resilient than the other Foundry end markets, also showed signs of
weakness in all regions.
As a consequence of these negative
market conditions and despite market share gains in all regions,
Foundry revenue fell 8.0% as compared with H1 2023.
Positive performance in net
pricing and cost reduction efforts could not compensate for the
large negative volume impact and the Division's trading profit fell
27.1% versus H1 2023 and Return on Sales reduced to
8.2%.
Financial
Review
H1 2024 performance overview
Income statement
Group revenue of £936.5m is down
5.9% on a reported basis (H1 2023: £995.3m) and trading profit fell
7.4% on a reported basis to £97.2m (H1 2023: £104.9m), as set out
in the operating review above.
Operating profit decreased 15.6%
on a reported basis to £84.1m (H1 2023: £99.7m), reflecting the
changes in trading profit described above, net of amortisation of
acquired intangible assets of £5.1m (H1 2023: £5.2m) and
cost-reduction programme expenses, treated as a separately reported
item, of £8.0m (H1 2023: £nil). In H1
2023, we spent £19.7m on R&D activities (H1 2023: £18.0m),
which represents 2.1% of our revenue (H1 2023: 1.8%).
Headline PBT was £89.8m (H1 2023:
£99.9m), a reduction of 10.1% on a reported basis, reflecting the
reduction in operating profit and an increase in net finance cost.
The net finance cost of £8.0m vs. £5.5m in H1 2023 increased
principally due to a reduction in finance income, reflecting a drop
in finance income from deposits held in Argentina, due both to
lower rates this financial period and a lower cash balance in that
country.
PBT including amortisation of
acquired intangibles was £76.7m (H1 2023: £94.7m), 19.0% lower on a
reported basis.
Headline EPS from continuing
operations fell 11.0% to 21.8p (H1 2023: 24.5p) on a reported
basis, reflecting the lower trading profit described above and the
increase in the non-controlling interest from £6.6m in H1 2023 to
£7.6m in H1 2024, which principally relates to our growing business
in India. This was partially offset by a reduction in our average
number of shares in issue from 269.1m to 264.7m, due to the ongoing
£50m share buy-back.
Taxation
The Group's effective tax rate is
the income tax associated with headline performance of H1 2024:
£24.5m, (H1 2023: £27.3m), divided by the headline profit before
tax and before the Group's share of post-tax profit of joint
ventures. The Group's headline effective tax rate was 27.5% in H1
2024 as previously guided (H1 23: 27.5%). We expect the Group's
effective tax rate to be 27.5% for the full year 2024.
Cash flow
The Group generated adjusted
operating cash flows of £47.9m, representing a 32% decrease versus
H1 2023 (£70.7m). This implies a cash conversion rate in H1 2024 of
49% (H1 23: 67%). H1 2024 cash conversion reflected continued
planned higher levels of investment in capex of £50.5m (H1 23:
£41.9m). Free cash flow was £17.8m in H1 2024 (H1 23:
£42.1m).
Working
capital
Trade working capital, measured as
a percentage of sales on a 12-month moving average basis, has shown
progressive improvement, at 23.2% as at 30 June 2024 (30 June 2023:
24.1%; 31 Dec 2023 23.4%). On a 3-month moving average basis, this
ratio has fallen from 23.5% at 31 December 2023 to 22.4% at 30 June
2024 reflecting the progress made in the half-year.
In absolute terms, on a constant
currency basis, trade working capital increased by £29.4m in H1
2024 to £439.1m compared to the balance as at 31 December
2023. The increase was due to a rise
in inventory (+£23.2m) and debtors (+£21.4m), partially offset by
an increase in creditors (+£15.2m).
Capital
expenditure
Cash capital expenditure in H1
2024 was £50.5m (H1 2023: £41.9m). After also taking into
account additional fixed assets resulting from capitalised leases
and the net repayment of capital expenditure creditors, total
capital expenditure additions were £47.9m (H1 2023: £45.2m), of
which £39.2m (H1 2023: 33.5m) related to the Steel Division and
£8.7m (H1 2023: £11.7m) related to the Foundry Division.
Balance sheet
Financial
position
At 30 June 2024, Net Debt was
£315.2m, (31 December 2023: £237.5m), as free cash flow of £17.8m
was offset by dividend payments (£44.2m), the share buyback
(£30.2m), purchases for the ESOP (£17.1m), additional right-of-use
assets (£7.6m) and other factors including FX (£3.6m).
The net debt to EBITDA ratio
increased slightly to 1.2x versus 31 December 2023 (0.9x),
principally reflecting the increase in net debt, and to a lesser
extent, the fall in EBITDA. EBITDA to interest was 23.2x (31
December 2023: 31.5x). The Group had committed borrowing facilities
of £672.6m as at 30th June 2024 (31 December 2023: £685.8m), of
which £222.7m was undrawn (31 December 2023: £333.4m). Liquidity
stood at £402.7m on 30 June 2024 (31 December 2023: £487.6m),
defined as undrawn committed debt facilities plus our cash on
balance sheet, less cash used as collateral against
loans.
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.
Return on Invested
Capital
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. In the period, ROIC was 8.4%, down from
8.9% at 31 December 2023, principally reflecting the reduction in
rolling 12-month trading profit.
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. In the funded UK plan, an insurance asset
from PIC 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 this UK
Plan. The Group's net pension liability on 30 June 2024 was £38.5m
(2023 full year: £46.3m). There is no one driver for the
reduction in liability as movements in all plans remained
relatively flat.
Principal Risks and Uncertainties
The Board exercises oversight of
the Group's Principal Risks and reviews the way in which the Group
manages those risks. The Board takes overall responsibility
for establishing and maintaining a system of risk management and
internal control and for reviewing its effectiveness.
The Board has reviewed the
Principal Risks and Uncertainties facing the Group and consider
that these remain unchanged compared with those published in the
Annual Report for the year ended 31 December 2023.
The Principal Risks which could
have a material impact on the Group's performance for the remainder
of the financial year are as follows:
-
End-market risks
-
Protectionism and globalisation
-
Product quality failure
-
Complex and changing regulatory environment
-
Failure to secure innovation
-
Business interruption
-
People, culture and performance
-
Health and safety
-
Environmental, Social and Governance criteria
Further information on these
Principal Risks and the way in which the Group manages them is
detailed on pages 72-78 of the 2023 Annual Report.
Risk update
Whilst there are no changes to the
Principal Risks and Uncertainties facing the Group, it is noted
that current geo-political risk remains elevated and the threat
from cyber security attacks continues to evolve. Each of
these risks has the potential to impact the Principal Risks facing
the Group; specifically End-market risks, Protectionism and
globalisation, Complex and changing regulatory environment and the
risk of Business interruption.
Half Year Results for the six months ended 30 June
2024
Directors' responsibility statement
The Directors confirm that these
condensed interim financial statements have been prepared in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority and that the interim management report includes a
fair review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
1) an
indication of important events that have occurred during the first
six months and their impact on the condensed set of financial
statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
2) material related-party transactions in the first six months
and any material changes in the related-party transactions
described in the last annual report.
The names and functions of the
Directors of Vesuvius plc are as follows:
|
Carl-Peter Forster
|
Chairman
|
|
Patrick André
|
Chief Executive
|
|
Mark Collis
|
Chief Financial Officer
|
|
Eva Lindqvist
|
Independent Non-executive Director
and
Senior Independent
Director
|
|
Kath Durrant
|
Independent Non-executive Director
and
Chair of the Remuneration
Committee
|
|
Robert MacLeod
|
Independent Non-executive Director
and
Chair of the Audit
Committee
|
|
Carla Bailo
Italia Boninelli
Dinggui Gao
|
Independent Non-executive
Director
Independent Non-executive
Director
Independent Non-executive
Director
|
|
Friederike Helfer
|
Non-executive Director
|
|
|
|
On behalf of the Board
Mark Collis
Chief Financial Officer
31 July 2024
Independent review report to Vesuvius plc
Report on the condensed consolidated interim
financial statements
Our conclusion
We have reviewed Vesuvius plc's
condensed consolidated interim financial statements (the "interim
financial statements") in the Half Year Results of Vesuvius plc for
the 6 month period ended 30 June 2024 (the
"period").
Based on our review, nothing has
come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The interim financial statements
comprise:
·
the Condensed Group Balance Sheet as at
30 June 2024;
·
the Condensed Group Income Statement and
Condensed Group Statement of Comprehensive Income for the period
then ended;
·
the Condensed Group Statement of Cash Flows for
the period then ended;
·
the Condensed Group Statement of Changes in
Equity for the period then ended; and
·
the explanatory notes to the interim financial
statements.
The interim financial statements
included in the Half Year Results of Vesuvius plc have been
prepared in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
Basis for conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410, 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial
Reporting Council for use in the United Kingdom ("ISRE (UK) 2410").
A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
A review is substantially less in
scope than an audit conducted in accordance with International
Standards on Auditing (UK) and, consequently, does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information
contained in the Half Year Results and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the interim financial
statements.
Conclusions relating to going concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors
have inappropriately adopted the going concern basis of accounting
or that the directors have identified material uncertainties
relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the group to cease to continue as a going
concern.
Responsibilities for the interim financial
statements and the review
Our responsibilities and those of the directors
The Half Year Results, including
the interim financial statements, is the responsibility of, and has
been approved by the directors. The directors are responsible for
preparing the Half Year Results in accordance with the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the Half Year Results,
including the interim financial statements, the directors are
responsible for assessing the group'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 to cease
operations, or have no realistic alternative but to do
so.
Our responsibility is to express a
conclusion on the interim financial statements in the Half Year
Results based on our review. Our conclusion, including our
Conclusions relating to going concern, is based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the company for the
purpose of complying with the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct
Authority and for no other purpose. We do not, in giving this
conclusion, 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.
PricewaterhouseCoopers LLP
Chartered Accountants
London
31 July 2024
Condensed
Group Statement of Changes in Equity (continued)
For the six months ended 30 June
2024
|
|
Issued share
capital
|
Other
reserves
|
Retained
earnings
|
|
Owners of the
parent
|
Non-controlling
interests
|
Total
equity
|
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
As at 1 January
2023
|
27.8
|
(1,391.4)
|
2,623.8
|
|
1,260.2
|
59.4
|
1,319.6
|
|
Profit
|
-
|
-
|
62.3
|
|
62.3
|
6.6
|
68.9
|
|
Remeasurement of defined benefit
assets/liabilities
|
-
|
-
|
3.8
|
|
3.8
|
-
|
3.8
|
|
Income
tax relating to items not reclassified
|
-
|
-
|
(1.1)
|
|
(1.1)
|
-
|
(1.1)
|
|
Exchange
differences on translation of the net assets of foreign
operations
|
-
|
(80.1)
|
-
|
|
(80.1)
|
(2.5)
|
(82.6)
|
|
Exchange
differences arising on translation of net investment
hedges
|
-
|
10.4
|
-
|
|
10.4
|
-
|
10.4
|
|
Net
change in costs of hedging
|
-
|
(1.2)
|
-
|
|
(1.2)
|
-
|
(1.2)
|
|
Change in
the fair value of the hedging instrument
|
-
|
(2.0)
|
-
|
|
(2.0)
|
-
|
(2.0)
|
|
Amounts
reclassified from Net finance costs
|
-
|
3.4
|
-
|
|
3.4
|
-
|
3.4
|
|
Other comprehensive
income/(loss), net of income tax
|
-
|
(69.5)
|
2.7
|
|
(66.8)
|
(2.5)
|
(69.3)
|
|
Total comprehensive
income/(loss)
|
-
|
(69.5)
|
65.0
|
|
(4.5)
|
4.1
|
(0.4)
|
|
Recognition of share-based payments
|
-
|
-
|
4.3
|
|
4.3
|
-
|
4.3
|
|
Purchase
of ESOP shares
|
-
|
-
|
(1.1)
|
|
(1.1)
|
-
|
(1.1)
|
|
Dividends
paid (Note 7)
|
-
|
-
|
(42.4)
|
|
(42.4)
|
(1.4)
|
(43.8)
|
|
Total transactions with
owners
|
-
|
-
|
(39.2)
|
|
(39.2)
|
(1.4)
|
(40.6)
|
|
As at 30 June
2023
|
27.8
|
(1,460.9)
|
2,649.6
|
|
1,216.5
|
62.1
|
1,278.6
|
Within
other reserves as at 30 June 2024 is £1,499.0m (2023: 30 June and
31 December, £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.
Notes to
the Condensed Group Financial Statements
1. Basis of
preparation
1.1 Basis of
accounting
These Condensed Group Financial
Statements of Vesuvius plc ("Vesuvius" or the "Company") and its
subsidiary and joint venture companies (the "Group") have been
prepared in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
These Condensed Group Financial
Statements have been prepared using the same accounting policies as
used in the preparation of the Group's Annual financial statements
for the year ended 31 December 2023, except for taxes on income in
the interim period which are accrued using the tax rate that would
be applicable to the expected total annual profit or loss. The
assessment of the Group's critical accounting estimates and
judgements remain consistent with the 2023
Annual Report and Financial Statements. The Group's Annual report and financial statements
for the year ended 31 December 2023 were prepared in accordance
with UK-adopted international accounting standards (IFRS) and the
requirements of the Companies Act 2006.
The Condensed Group Financial
Statements do not include all of the information required for full
annual financial statements, and should be read in conjunction with
the consolidated financial statements of the Group for the
year-ended 31 December 2023. The financial information presented in
this document is unaudited but has been reviewed by the Company's
auditor.
The comparative figures for the
financial year ended 31 December 2023 have been extracted from the
Group's Annual Report and Financial
Statements for that financial year. Those
accounts have been reported on by the Company's auditor and
delivered to Companies House. The report of the auditor was
unqualified, did not include reference to any matters to which the
auditor drew attention by way of emphasis without qualifying its
report and did not contain a statement under section 498(2) or (3)
of the Companies Act 2006. These sections address whether proper
accounting records have been kept, whether the Company's accounts
are in agreement with those records and whether the auditor has
obtained all the information and explanations necessary for the
purposes of its audit.
1.2 Basis of
consolidation
The Condensed Group Financial
Statements incorporate the financial statements of the Company and
entities controlled 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 period
are included in the Condensed 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 Condensed 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
Condensed 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 and each component of other
comprehensive income less their dividends since the date of the
combination. Their share of comprehensive income/(loss) is
attributed to the non-controlling interests even if this results in
the non-controlling interests having a deficit balance.
1.3 Going
concern
The Directors have prepared cash
flow scenarios for the Group for a period of at least 12 months
from the date of approval of the 2024 Interim Condensed Financial
Statements. These forecasts reflect an assessment of current and
future end market conditions, and their impact on the Group's
future trading performance.
The analysis includes a severe but
plausible downside scenario which assumes for H2 2024 a 6% decline
in business activity combined with a reduction of Return on Sales
to 8.0% and an increase in working capital intensity as a % of
sales. For the period in 2025, the H2 2024 performance was
annualised. Debt maturing during the period is assumed to be
re-financed, a consistent level of dividend payments continues, and
the current share buyback programme is completed.
In this scenario, the forecast
shows that the Group maintains considerable headroom against its
pre-IFRS 16 covenants. The Net debt / EBITDA leverage ratio never
exceeds 1.4x, compared to a covenant of 3.25x and the interest
coverage covenant (EBITDA / interest, never falls below 14.8x
compared to a covenant of 4.0x. The analysis also included a stress
test to determine how much the Group's revenues could decrease
before breaching at least one of the debt covenants.
Based on the exercise described
above and the Group's available committed liquidity which currently
stands at £402.7m, 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 Interim Condensed Financial Statements.
Accordingly, they continue to adopt a going concern basis in
preparing the Condensed Financial statements of the Group and the
Company.
1.4 Functional and
presentational currency
The financial statements are
presented in millions of pounds sterling, which is the functional
currency of the Company, and rounded to one decimal
place.
1.5 Disclosure of
"separately reported items"
Columnar presentation
The Group has adopted a columnar
presentation for its Condensed Group Income Statement, to
separately identify headline performance results, as the Directors
consider that this gives a useful view of the underlying 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 (which may require more than
one year to complete), significant movement in the Group's deferred
tax balances, 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.
In its adoption of this policy,
the Company applies an even-handed approach to both gains and
losses and aims to be both consistent and clear in its accounting
and disclosure of such items.
1.6 New and revised
IFRS
Certain new accounting standards and
interpretations have been published that are applicable for periods
commencing 1 January 2024 and others that are not mandatory for
reporting periods commencing on 1 January 2024 and have not been
early adopted by the Group.
The new standards applicable for
periods commencing 1 January 2024 are not expected to have a
significant impact on the Group's financial position, performance,
cash flows and disclosures.
OECD Pillar two model
The Group is within the scope of the
OECD Pillar two model rules. Pillar two legislation was recently
substantively enacted in some of the territories in which the Group
operates and came into effect in these territories from 1 January
2024. The Group will continue to monitor the development and
implementation of these rules globally. Based upon our latest
understanding, the current estimate of additional tax payable is
not expected to have a material impact on the Group.
On 20 June 2023, Finance (No.2) Act
2023 was substantively enacted in the UK, introducing a global
minimum effective tax rate of 15%. The legislation implements a
domestic top-up tax and a multinational top-up tax, effective for
accounting periods starting on or after 31 December 2023. The Group
does not account for deferred tax on top-up taxes and therefore,
there was no impact on the recognition and measurement of deferred
tax balances as a result of the legislation being substantively
enacted.
2
Segment information
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 Officer, who makes the key
operating decisions and is responsible for allocating resources and
assessing performance of the components. 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 Operating
Review.
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.
Revenue from contracts with
customers
Revenue comprises the fair value of
the consideration received or receivable for goods supplied and
services rendered to customers after deducting rebates, discounts
and value-added taxes, and after eliminating sales within the
Group. Revenue from contracts with customers is recognised when
control of the goods or services are transferred to the customer,
upon the completion of specified performance obligations, at an
amount that reflects the considerations to which the Group expects
to be entitled to in exchange for these consumable products and
associated services.
The revenue recognition policy
applicable to the current and comparative periods and information
about the Group's performance obligations was disclosed in Note 4
of the 2023 Annual Report and Financial Statements.
Segmental
analysis
|
|
|
Unaudited Half Year
2024
|
|
|
|
Flow
Control
|
Advanced
Refractories
|
Sensors
&
Probes
|
Steel
|
Foundry
|
Total
|
|
|
|
|
|
|
£m
|
£m
|
£m
|
|
Segment
revenue
|
|
393.7
|
270.3
|
21.7
|
685.7
|
250.8
|
936.5
|
|
at a point in
time
|
|
|
|
|
684.4
|
250.8
|
935.2
|
|
Over
time
|
|
|
|
|
1.3
|
-
|
1.3
|
|
|
|
|
|
|
|
|
|
|
Segment
adjusted EBITDA (1)
|
|
|
|
|
98.0
|
29.4
|
127.4
|
|
Segment
depreciation and amortisation
|
|
|
|
|
(21.5)
|
(8.7)
|
(30.2)
|
|
Segment trading
profit
|
|
|
|
|
76.5
|
20.7
|
97.2
|
|
Return on sales
% (2)
|
|
|
|
|
11.2%
|
8.2%
|
10.4%
|
|
|
|
|
|
|
|
|
|
|
Amortisation of acquired intangible assets
|
|
|
|
|
|
|
(5.1)
|
|
Cost
reduction programme expenses
|
|
|
|
|
|
|
(8.0)
|
|
Vacant
site remediation costs
|
|
|
|
|
|
|
-
|
|
Operating
profit
|
|
|
|
|
|
|
84.1
|
|
Net
finance costs
|
|
|
|
|
|
|
(8.0)
|
|
Share of
post-tax profit of joint ventures
|
|
|
|
|
|
|
0.6
|
|
Profit before
tax
|
|
|
|
|
|
|
76.7
|
|
Capital
expenditure additions
|
|
|
|
|
39.2
|
8.7
|
47.9
|
|
Inventory
|
|
|
|
|
256.9
|
52.2
|
309.1
|
|
Trade
debtors
|
|
|
|
|
278.2
|
93.0
|
371.2
|
|
Trade
creditors
|
|
|
|
|
(186.3)
|
(60.5)
|
(246.8)
|
|
|
|
Unaudited Half Year
2023
|
|
|
|
Flow
Control
|
Advanced
Refractories
|
Sensors
&
Probes
|
Steel
|
Foundry
|
Total
|
|
|
|
|
|
|
£m
|
£m
|
£m
|
|
Segment
revenue
|
|
401.8
|
289.6
|
20.1
|
711.5
|
283.8
|
995.3
|
|
at a point in
time
|
|
|
|
|
710.7
|
283.8
|
994.5
|
|
Over
time
|
|
|
|
|
0.8
|
-
|
0.8
|
|
|
|
|
|
|
|
|
|
|
Segment
adjusted EBITDA (1)
|
|
|
|
|
94.3
|
38.6
|
132.9
|
|
Segment
depreciation and amortisation
|
|
|
|
|
(19.5)
|
(8.5)
|
(28.0)
|
|
Segment trading
profit
|
|
|
|
|
74.8
|
30.1
|
104.9
|
|
Return on sales
% (2)
|
|
|
|
|
10.5%
|
10.6%
|
10.5%
|
|
|
|
|
|
|
|
|
|
|
Amortisation of acquired intangible assets
|
|
|
|
|
|
|
(5.2)
|
|
Operating
profit
|
|
|
|
|
|
|
99.7
|
|
Net
finance costs
|
|
|
|
|
|
|
(5.5)
|
|
Share of
post-tax profit of joint ventures
|
|
|
|
|
|
|
0.5
|
|
Profit before
tax
|
|
|
|
|
|
|
94.7
|
|
Capital
expenditure additions
|
|
|
|
|
33.5
|
11.7
|
45.2
|
|
Inventory
|
|
|
|
|
259.5
|
58.9
|
318.4
|
|
Trade
debtors
|
|
|
|
|
286.4
|
103.0
|
389.4
|
|
Trade
creditors
|
|
|
|
|
(183.5)
|
(62.3)
|
(245.8)
|
|
|
|
Full Year
2023
|
|
|
|
Flow
Control
|
Advanced
Refractories
|
Sensors
&
Probes
|
Steel
|
Foundry
|
Total
|
|
|
|
|
|
|
£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 (1)
|
|
|
|
|
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
% (2)
|
|
|
|
|
10.5%
|
10.0%
|
10.4%
|
|
|
|
|
|
|
|
|
|
|
Amortisation of acquired intangible assets
|
|
|
|
|
|
|
(10.3)
|
|
Operating
profit
|
|
|
|
|
|
|
190.1
|
|
Net
finance costs
|
|
|
|
|
|
|
(11.6)
|
|
Share of
post-tax profit of joint ventures
|
|
|
|
|
|
|
0.9
|
|
Profit before
tax
|
|
|
|
|
|
|
179.4
|
|
Capital
expenditure additions
|
|
|
|
|
93.2
|
32.1
|
125.3
|
|
Inventory
|
|
|
|
|
239.5
|
51.5
|
291.0
|
|
Trade
debtors
|
|
|
|
|
267.6
|
89.3
|
356.9
|
|
Trade
creditors
|
|
|
|
|
(177.7)
|
(58.7)
|
(236.4)
|
(1) Adjusted EBITDA is
defined in note 15.13
(2) Return on sales is
defined in note 15.3
|
|
External revenue
|
|
Non-current assets
|
|
|
|
Unaudited Half
year
|
|
Unaudited Half year
|
|
Full
year
|
|
Unaudited Half
year
|
|
Unaudited Half year
|
|
Full
year
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
2024
|
|
2023
|
|
2023
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
EMEA
|
315.0
|
|
347.5
|
|
669.6
|
|
510.9
|
|
486.0
|
|
500.0
|
|
|
Asia
|
286.4
|
|
284.2
|
|
565.6
|
|
232.2
|
|
216.7
|
|
237.2
|
|
|
North
America
|
254.4
|
|
277.9
|
|
528.7
|
|
407.3
|
|
410.0
|
|
384.3
|
|
|
South
America
|
80.7
|
|
85.7
|
|
165.9
|
|
46.2
|
|
50.1
|
|
44.3
|
|
|
Continuing
operations
|
936.5
|
|
995.3
|
|
1,929.8
|
|
1,196.6
|
|
1,162.8
|
|
1,165.8
|
|
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 derivative
financial instruments. Information relating to the Group's products
and services is given in the Strategic Report as disclosed in the
2023 Annual Report and Financial Statements. The Group is not
dependent on any single customer for its revenue and no single
customer, for the periods / years presented in the tables above,
accounts for more than 10% of the Group's total external revenue.
£29.7m (2023 half year £34.8m; 2023 full year £66.5m) of revenue
was generated from the UK, and total non-current assets in the UK
amounted to £89.1m (2023 half year £76.4m; 2023 full year
£101.5m).
3
Cost reduction
programme expenses
In November 2023 we initiated an
efficiency programme with the aim of realising recurring cash cost
savings of £30m per annum by 2026.
The programme will cover all of
our activities worldwide and will focus on operational improvement,
lean initiatives, automation and digitalisation as well as further
optimisation of the manufacturing footprint.
Cost saving programme expenses are
excluded from underlying performance, allowing for a clear measure
of our operating performance. These 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 £8.0m
(2023 half year £nil; full year: £nil). The charges reflect
redundancy costs £4.9m (2023 half year £nil; full year: £nil),
plant closure costs £2.3m (2023 half year £nil; full year: £nil),
and non-cash asset impairments £0.8m (2023 half year £nil; full
year: £nil). The net tax credit attributable to these cost
reduction programme expenses was £1.9m (2023 half year £nil; full
year: £nil).
4 Net
finance costs
|
|
Unaudited Half
year
|
|
Unaudited Half year
|
|
Full
year
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
£m
|
|
£m
|
|
£m
|
|
Interest payable on
borrowings
|
|
|
|
|
|
|
Loans and
overdrafts
|
9.3
|
|
8.9
|
|
20.1
|
|
Interest
on lease liabilities
|
1.5
|
|
1.0
|
|
2.4
|
|
Amortisation of capitalised arrangement costs
|
0.5
|
|
0.5
|
|
1.0
|
|
Total interest payable on
borrowings
|
11.3
|
|
10.4
|
|
23.5
|
|
Interest
on net retirement benefits obligations
|
0.8
|
|
1.1
|
|
2.3
|
|
Adjustments to discounts on provisions and other
liabilities
|
1.2
|
|
1.2
|
|
2.4
|
|
Adjustments to discounts on receivables
|
(0.6)
|
|
(0.7)
|
|
(1.3)
|
|
Finance
income
|
(4.7)
|
|
(6.5)
|
|
(15.3)
|
|
Total net finance
costs
|
8.0
|
|
5.5
|
|
11.6
|
Within the table above, total
finance costs are £13.3m (2023 half year: £12.7m, 2023 full year:
£28.2m) and total finance income is £5.3m (2023 half year: £7.2m,
2023 full year: £16.6m).
5
Income tax
A key measure of the Group's tax
burden is the headline effective tax rate, which the Group
calculates on the income tax associated with headline performance,
divided by the headline profit before tax excluding the Group's
share of post-tax profit of joint ventures. The Group's headline
effective tax rate was in-line with expectations at 27.5% in H1
2024 (2023 half year 27.5%; 2023 full year 27.5%) based on the
income tax charge associated with headline performance of £24.5m
(2023 half year £27.3m; 2023 full year £51.9m).
The Group's total net income tax
charge reflected in the Condensed Group Income Statement includes a
credit of £3.2m (2023 half year £1.5m; 2023 full year £3.1m)
relating to separately reported items comprising a credit of
£1.3m (2023 half year £1.5m; 2023 full year £2.7m) relating to the
amortisation of intangible assets and the rest relating to the
anticipated current and deferred tax impact of accrued cost
reduction programme expenses.
The Group's total net income tax
charge reflected in the Condensed Group Statement of Comprehensive
Income was £2.5m (2023 half year £1.1m; 2023 full year: £2.0m). It
was in respect of tax on net actuarial gains and losses on employee
benefits.
6
Earnings per share ("EPS")
6.1 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 Condensed Group Income
Statement. The table below reconciles these different profit
measures.
|
|
|
|
Unaudited Half
year
|
|
Unaudited Half year
|
|
Full
year
|
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
Profit attributable to
owners of the parent
|
|
|
47.8
|
|
62.3
|
|
118.5
|
|
Adjustments for separately reported items:
|
|
|
|
|
|
|
|
|
Cost
reduction programme expenses
|
|
|
8.0
|
|
-
|
|
-
|
|
Amortisation of acquired intangible assets
|
|
|
5.1
|
|
5.2
|
|
10.3
|
|
Income
tax (credit)/charge
|
|
|
(3.2)
|
|
(1.5)
|
|
(3.1)
|
|
Headline profit attributable
to owners of the parent
|
|
|
57.7
|
|
66.0
|
|
125.7
|
6.2 Weighted average
number of shares
|
|
Unaudited Half
year
|
|
Unaudited Half year
|
|
Full
year
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
millions
|
|
millions
|
|
millions
|
|
For calculating basic and
headline EPS
|
264.7
|
|
269.0
|
|
269.1
|
|
Adjustment for potentially dilutive ordinary
shares
|
3.0
|
|
2.1
|
|
3.0
|
|
For calculating diluted and
diluted headline EPS
|
267.7
|
|
271.1
|
|
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 were all outstanding share
options to vest in full, 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.
6.3 Per share
amounts
|
|
|
|
Unaudited Half
year
|
Unaudited Half year
|
Full
year 2023
|
|
|
|
|
2024
|
2023
|
|
|
|
|
|
Pence
|
Pence
|
pence
|
|
Earnings per share - reported
basic
|
|
|
18.1
|
23.2
|
44.0
|
|
- reported diluted
|
|
|
17.9
|
23.0
|
43.6
|
|
|
|
|
|
|
|
|
- headline basic(1)
|
|
|
21.8
|
24.5
|
46.7
|
|
- headline diluted(1)
|
|
|
21.6
|
24.3
|
46.2
|
(1) For definition of headline
earnings per share, refer to Note 15.8
7
Dividends
|
|
Unaudited Half
year
|
|
Unaudited Half year
|
|
Full
year
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
£m
|
|
£m
|
|
£m
|
|
Amounts recognised as
dividends and paid to equity shareholders
during the
period
|
|
|
|
|
|
Final
dividend for the year ended 31 December 2022 of 15.75p per ordinary
share
|
-
|
|
42.4
|
|
42.4
|
|
Interim
dividend for the year ended 31 December 2023 of 6.8p per ordinary
share
|
-
|
|
-
|
|
18.3
|
|
Final
dividend for the year-ended 31 December 2023 of 16.20p per ordinary
share
|
42.7
|
|
-
|
|
-
|
|
|
42.7
|
|
42.4
|
|
60.7
|
The Directors have declared an
interim dividend of 7.1p in respect of the year-ending 31 December
2024.
8
Reconciliation of movement in net debt
|
|
Balance as
at
1 Jan 2024
|
Foreign exchange
adjustments
|
Fair value
gains/
(losses)
|
Non-cash
movements*
|
Cash
flow**
|
Balance as at 30 June
2024
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
Cash at
bank and in hand
|
164.2
|
(3.2)
|
-
|
-
|
19.0
|
180.0
|
|
Short
term deposits
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Bank
overdrafts
|
(3.4)
|
-
|
-
|
-
|
2.1
|
(1.3)
|
|
|
160.8
|
(3.2)
|
-
|
-
|
21.1
|
178.7
|
|
|
|
|
|
|
|
|
|
Borrowings, excluding bank
overdrafts
|
(400.6)
|
5.6
|
-
|
(9.1)
|
(93.3)
|
(497.4)
|
|
|
|
|
|
|
|
|
|
Capitalised arrangement costs
|
1.8
|
-
|
-
|
(0.5)
|
-
|
1.3
|
|
Derivative financial instruments
|
0.5
|
-
|
1.7
|
-
|
-
|
2.2
|
|
Net debt
|
(237.5)
|
2.4
|
1.7
|
(9.6)
|
(72.2)
|
(315.2)
|
* £7.6m (2023 half year: £10.8m) of new leases were entered
into during the period.
** Borrowings, excluding bank overdrafts include proceeds
from borrowings, repayment of borrowings and payment of lease
liabilities.
|
|
Balance as
at
1 Jan 2023
|
Foreign exchange
adjustments
|
Fair value
gains/
(losses)
|
Non-cash
movements*
|
Cash
flow**
|
Balance as at 30 June
2023
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
Cash at
bank and in hand
|
184.2
|
(13.4)
|
-
|
-
|
2.4
|
173.2
|
|
Short
term deposits
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Bank
overdrafts
|
(4.4)
|
0.1
|
-
|
-
|
1.4
|
(2.9)
|
|
|
179.8
|
(13.3)
|
-
|
-
|
3.8
|
170.3
|
|
|
|
|
|
|
|
|
|
Borrowings, excluding bank
overdrafts
|
(440.2)
|
14.5
|
-
|
(10.8)
|
(5.2)
|
(441.7)
|
|
|
|
|
|
|
|
|
|
Capitalised arrangement costs
|
2.7
|
-
|
-
|
(0.4)
|
-
|
2.3
|
|
Derivative financial instruments
|
2.7
|
-
|
(1.6)
|
-
|
-
|
1.1
|
|
Net debt
|
(255.0)
|
1.2
|
(1.6)
|
(11.2)
|
(1.4)
|
(268.0)
|
* £10.8m (2022 half year: £5.5m) of new leases were entered
into during the period.
** 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.
Cash is held both centrally and in
operating territories. There is no restricted cash. For certain
territories including Argentina, China, Egypt, India and Russia
cash is more readily used locally than for broader group
purposes.
9 Cash
Generated from Operations
|
|
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
Half year
|
|
Half
year
|
|
Full
year
|
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
Operating
profit
|
|
|
84.1
|
|
99.7
|
|
190.1
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
Amortisation of acquired intangible assets
|
|
|
5.1
|
|
5.2
|
|
10.3
|
|
Cost
reduction programme expenses
|
|
|
8.0
|
|
-
|
|
-
|
|
Trading
Profit
|
|
|
97.2
|
|
104.9
|
|
200.4
|
|
|
|
|
|
|
|
|
|
|
Profit on
disposal of non-current assets
|
|
|
(0.4)
|
|
(2.3)
|
|
(2.5)
|
|
Depreciation and amortisation
|
|
|
30.2
|
|
28.0
|
|
57.8
|
|
Defined
benefit retirement plans net charge
|
|
|
2.9
|
|
3.0
|
|
5.2
|
|
Net
increase in inventories
|
|
|
(24.5)
|
|
(18.1)
|
|
9.9
|
|
Net
increase in trade receivables
|
|
|
(24.3)
|
|
(31.3)
|
|
2.6
|
|
Net
increase in trade payables
|
|
|
14.6
|
|
18.1
|
|
8.3
|
|
Net
decrease in other working capital
|
|
|
5.5
|
|
9.3
|
|
(0.5)
|
|
Outflow
related to cost reduction programme
|
|
|
(3.2)
|
|
-
|
|
-
|
|
Outflow
related to restructuring charges
|
|
|
(0.1)
|
|
(1.0)
|
|
(0.8)
|
|
Defined
benefit retirement plans cash outflows
|
|
|
(3.4)
|
|
(3.2)
|
|
(7.4)
|
|
Vacant
site remediation costs paid
|
|
|
(0.5)
|
|
(0.6)
|
|
(1.0)
|
|
|
|
|
|
|
|
|
|
|
Cash generated from
operations
|
|
|
94.0
|
|
106.8
|
|
272.0
|
10 Employee
benefits
The net employee benefits
liability as at 30 June 2024 was £38.5m (2023 half year: £50.8m;
2023 full year: £46.3m) derived from an actuarial valuation of the
Group's defined benefit pension and other post-retirement
obligations as at that date.
All 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.
As disclosed in note 25 of the
2023 Annual Report and Financial Statements, the above amounts may
materially change in the next 12 months if there is a change in
assumptions.
|
|
|
|
|
|
|
|
|
Unaudited
Half year
|
|
Unaudited
Half
year
|
|
Full
year
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
£m
|
|
£m
|
|
£m
|
|
Employee benefits -
net surpluses
|
|
|
|
|
|
|
UK defined benefit pension
plans
|
33.7
|
|
26.7
|
|
32.5
|
|
ROW defined benefit pension
plans
|
1.8
|
|
1.6
|
|
2.1
|
|
|
35.5
|
|
28.3
|
|
34.6
|
|
|
|
|
|
|
|
|
Employee benefits -
net liabilities
|
|
|
|
|
|
|
UK defined benefit pension
plans
|
(1.1)
|
|
(1.1)
|
|
(1.1)
|
|
US defined benefit pension
plans
|
(14.3)
|
|
(19.8)
|
|
(18.2)
|
|
Germany defined benefit pension
plans
|
(38.2)
|
|
(37.2)
|
|
(41.3)
|
|
ROW defined benefit pension
plans
|
(10.7)
|
|
(11.2)
|
|
(10.4)
|
|
Other post-retirement benefit
plans
|
(9.7)
|
|
(9.8)
|
|
(9.9)
|
|
|
(74.0)
|
|
(79.1)
|
|
(80.9)
|
|
|
|
|
|
|
|
|
Net liabilities
|
(38.5)
|
|
(50.8)
|
|
(46.3)
|
The expense recognised in the
Condensed Group Income Statement in respect of the Group's defined
benefit retirement plans and other post-retirement benefit plans is
shown below.
|
|
|
|
|
|
|
|
|
|
|
Unaudited Half year
2024
|
|
Unaudited Half year 2023
|
|
Full
year 2023
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
In
arriving at trading profit
(as
defined in Note 15.4)
|
- within
other manufacturing costs
|
0.6
|
|
0.7
|
|
1.3
|
|
- within
administration, selling and distribution costs
|
2.3
|
|
2.3
|
|
3.9
|
|
In
arriving at profit before tax
|
- within
net finance costs
|
0.8
|
|
1.1
|
|
2.3
|
|
Total net
charge
|
3.7
|
|
4.1
|
|
7.5
|
|
|
|
|
|
|
|
|
11 Contingent
liabilities
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. The
amount paid, including costs, in relation to this litigation has
not had a material adverse effect on Vesuvius' financial position
or results of operations.
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 29 of the 2023
Annual Report and Financial Statements 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 the current period.
12 Related
parties
The nature of related party
transactions in H1 2024 are in line with those transactions
disclosed in Note 33 of the 2023 Annual Report and Financial
Statements. All transactions with related parties are conducted on
an arm's length basis and in accordance with normal business terms.
Transactions with joint ventures and associates are consistent with
those disclosed in Note 32 of the 2023 Annual Report and Financial
Statements. Transactions between related parties that are Group
subsidiaries are eliminated on consolidation.
|
|
Unaudited Half year
2024
|
Unaudited Half year
2023
|
|
Transactions with joint
ventures and associate
|
£m
|
£m
|
|
Sales to
joint ventures
|
2.0
|
2.1
|
|
Purchases
from joint ventures
|
13.6
|
14.5
|
|
Dividends
received from joint ventures
|
-
|
-
|
|
Trade
payables owed to joint ventures
|
12.1
|
9.9
|
|
Trade
receivables owed by joint ventures
|
1.3
|
1.0
|
13
Provisions
|
|
Disposal, closure and
environmental costs
|
Restructuring
charges
|
Other
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
|
As at 1 January
2024
|
51.9
|
2.4
|
4.3
|
58.6
|
|
Exchange
adjustments
|
0.4
|
-
|
-
|
0.4
|
|
Charge to
Condensed Group Income Statement
|
2.6
|
(0.2)
|
4.1
|
6.5
|
|
Adjustment to discount
|
1.1
|
-
|
-
|
1.1
|
|
Cash
spend
|
(2.7)
|
(0.1)
|
(4.4)
|
(7.2)
|
|
Transferred to other balance sheet accounts
|
(0.5)
|
-
|
-
|
(0.5)
|
|
As at 30 June
2024
|
52.8
|
2.1
|
4.0
|
58.9
|
|
|
Disposal, closure and
environmental costs
|
Restructuring
charges
|
Other
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
|
As at 1 January
2023
|
57.7
|
3.6
|
5.4
|
66.7
|
|
Exchange
adjustments
|
(2.7)
|
0.2
|
(0.1)
|
(2.6)
|
|
Charge to
Condensed Group Income Statement
|
0.6
|
-
|
4.1
|
4.7
|
|
Adjustment to discount
|
1.2
|
-
|
-
|
1.2
|
|
Cash
spend
|
(2.7)
|
(1.0)
|
(3.7)
|
(7.4)
|
|
As at 30 June
2023
|
54.1
|
2.8
|
5.7
|
62.6
|
Of the total provision balance at
30 June 2024 of £58.9m (30 June 2023: £62.6m), £48.0m (30 June
2023: £47.7m) is recognised in the Group Balance Sheet within
non-current liabilities and £10.9m (30 June 2022: £14.9m) within
current liabilities.
In assessing the probable costs
and realisation certainty of provisions, reasonable assumptions are
made. Changes to the assumptions used could significantly alter the
Directors' assessment of the value, timing or certainty of the
costs. The nature of the provisions held remains consistent
with those held at 31 December 2023 and further description is set
out within Note 29 of the 2023 Annual Report and Financial
Statements.
14 Financial
instruments
The condensed interim financial
statements do not include all financial risk management information
and disclosures required in the annual financial statements; they
should be read in conjunction with the Group's 2023 Annual Report
and Financial Statements, in which further details of these
financial risks were disclosed in Note 24. There have been no
changes in the risk management policies and in the method in which
financial assets and financial liabilities are measured and
presented since year end.
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:
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
Half year
2024
|
|
Half
year 2023
|
|
Full
year 2023
|
|
|
Assets
|
Liabilities
|
|
Assets
|
Liabilities
|
|
Assets
|
Liabilities
|
|
|
£m
|
£m
|
|
£m
|
£m
|
|
£m
|
£m
|
|
Investments (Level 2)
|
0.7
|
-
|
|
0.7
|
-
|
|
0.3
|
-
|
|
Derivatives not designated for hedge
accounting purposes (Level 2)
|
-
|
(0.2)
|
|
0.1
|
(0.2)
|
|
-
|
(0.1)
|
|
Derivatives designated for hedge
accounting purposes (Level 2)
|
2.4
|
-
|
|
1.2
|
-
|
|
0.6
|
-
|
All of the derivative financial
instruments not designated for hedge accounting purposes reported
in the table above will mature within a year of the balance sheet
date and have been booked through the Income Statement. There were
no transfers between fair value hierarchies during the period. Fair
value disclosures have not been made in respect of other financial
assets and liabilities on the basis that the carrying amount is
deemed to be a reasonable approximation of fair value.
The fair value attributable to the
Group's $86m CCIRS of £1.8m is presented within current assets
(2023 half year: nil; full year: nil) with the remaining £0.6m
presented within non-current assets (2023 half year: £1.2m; full
year: £0.6m).
As at 30 June 2024, €338.6m (2023
half year: €320.6m; full year: €322.6m) and $30.0m (2023 half year:
$60.0m; full year: $30.0m) of borrowings were designated as hedges
of net investments in overseas foreign operations of equivalent
worth. All net investment hedges are 100% effective with no
ineffectiveness.
As at 30 June 2024, the Group had an
equivalent of £287.6m (2023 half year: £313.0m; full year: £290.8m)
of US Private Placement Loan Notes (USPP) outstanding, which carry
a fixed rate of interest, representing 64% (2023 half year: 78%;
full year: 82%) of the Group's total borrowings outstanding at that
date.
15 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 KPI's 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 standardised meaning prescribed by IFRS and
therefore may not be directly comparable to
similar measures presented by other companies.
15.1 Headline performance
Headline performance, reported
separately on the face of the Condensed Group Income Statement, is
from continuing operations and before items reported separately on
the face of the Condensed Group Income Statement.
15.2 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 Summary. Underlying
revenue growth is one of the Group's key performance indicators and
provides an important measure of organic growth of Group businesses
between reporting periods, by eliminating the impact of exchange
rates, acquisitions and disposals.
15.3 Return on Sales
('ROS')
ROS is calculated as trading profit
divided by revenue. It is one of the Group's key performance
indicators and is used to assess the trading performance of Group
businesses. A calculation of ROS is included in Note 2.
15.4 Trading profit/adjusted
EBITA
Trading profit/adjusted EBITA is
defined as operating profit before separately reported items. It is
one of the Group's key performance indicators and is used to assess
the trading performance of Group businesses. It is also used as one
of the targets against which the annual bonuses of certain
employees are measured.
15.5 Headline profit before
tax
Headline profit before tax 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 one of the
Group's key performance indicators and is used to assess the
financial performance of the Group as a whole.
15.6 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.
15.7 Headline earnings
Headline earnings is profit after
tax before separately reported items
attributable to owners of the parent.
15.8 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 key performance indicators and is
used to assess the underlying 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 6.
15.9 Adjusted operating cash
flow
Adjusted operating cash flow is cash
generated from operations before restructuring, cost reduction
programme expenses and vacant site remediation costs but after
deducting capital expenditure net of asset disposals. It is used in
calculating the Group's cash conversion.
|
|
|
Unaudited Half
year
|
Unaudited Half year
|
Full
year
|
|
|
|
2024
£m
|
2023
£m
|
2023
£m
|
|
Cash generated from continuing operations
|
|
94.0
|
106.8
|
272.0
|
|
|
|
|
|
|
|
Add: Outflows relating to
restructuring charges
|
|
0.1
|
1.0
|
0.8
|
|
Add: Outflows relating to cost
reduction programme expenses
|
|
3.2
|
-
|
-
|
|
Add: Vacant site remediation costs
paid
|
|
0.5
|
0.6
|
1.0
|
|
Less: Capital
expenditure
|
|
(50.5)
|
(41.9)
|
(92.6)
|
|
Add: Proceeds from the sale of
property, plant and equipment
|
|
0.6
|
4.2
|
5.4
|
|
Adjusted operating cash flow
|
|
47.9
|
70.7
|
186.6
|
|
|
|
|
|
|
|
Trading Profit
|
|
97.2
|
104.9
|
200.4
|
|
Cash Conversion
|
|
49%
|
67%
|
93%
|
15.10 Cash conversion
Cash conversion is calculated as
adjusted operating cash flow 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 15.9
above.
15.11 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 key performance indicators 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 Condensed Group Statement of Cash
Flows.
15.12 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 key performance indicators 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.
|
|
|
Unaudited Half
year
2024
£m
|
Unaudited Half year
2023
£m
|
Full
year
2023
£m
|
|
Average trade working
capital
|
|
431.5
|
480.4
|
451.8
|
|
Last 12 months total
revenue
|
|
1,859.6
|
1,989.9
|
1,929.8
|
|
Average trade working capital to
sales ratio
|
|
23.2%
|
24.1%
|
23.4%
|
15.13 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 2.
15.14 Net interest payable on
borrowings
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.
|
|
|
Unaudited Half
year
2024
£m
|
Unaudited Half year
2023
£m
|
Full
year
2023
£m
|
|
Total interest payable on
borrowings (note 4)
|
|
11.3
|
10.4
|
23.5
|
|
Finance income (note 4)
|
|
(4.7)
|
(6.5)
|
(15.3)
|
|
Net interest payable on
borrowings
|
|
6.6
|
3.9
|
8.2
|
15.15 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. This measure is also a component
of the Group's covenant calculations.
|
|
|
Unaudited Half
year
2024
£m
|
Unaudited Half year
2023
£m
|
Full
year
2023
£m
|
|
Last 12 months adjusted
EBITDA
|
|
252.7
|
262.0
|
258.2
|
|
Last 12 months net interest
payable on borrowings
|
|
10.9
|
7.7
|
8.2
|
|
Interest cover
|
|
23.2x
|
34.0x
|
31.5x
|
15.16 Net debt
Net debt comprises the net total
of current and non-current interest-bearing borrowings (including
IFRS16 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 8.
15.17 Net debt to adjusted EBITDA
Net debt to adjusted EBITDA is the
ratio of net debt at the period-end to adjusted EBITDA for the last
12 months. It is one of the measures used in monitoring the Group's
capital measure and is also a component of
the Group's covenant calculations.
|
|
|
Unaudited Half
year
2024
£m
|
Unaudited Half year
2023
£m
|
Full
year
2023
£m
|
|
Net debt (note 8)
|
|
315.2
|
268.0
|
237.5
|
|
Last 12 months adjusted
EBITDA
|
|
252.7
|
262.0
|
258.2
|
|
Net debt to adjusted
EBITDA
|
|
1.2x
|
1.0x
|
0.9x
|
15.18 Return on invested capital
(ROIC)
The Group has
adopted ROIC as its key measure of return from the Group's invested
capital. The RONA performance measure has been replaced with ROIC
which provides a more complete measure of Vesuvius's returns. 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.
|
|
|
Unaudited
|
Unaudited
|
Full
year
|
|
|
|
Half year
|
Half
year
|
|
|
|
|
2024
£m
|
2023
£m
|
2023
£m
|
|
Average invested
capital
|
|
1,574.2
|
1,574.4
|
1,558.5
|
|
Trading
profit (note 15.4)
|
|
191.2
|
196.8
|
200.4
|
|
Amortisation of acquired intangible assets
|
|
(10.1)
|
(10.4)
|
(10.3)
|
|
Share of
post-tax profit of joint ventures and associates
|
|
0.9
|
0.7
|
0.9
|
|
Tax on
trading profit and amortisation of acquired intangible
assets
|
|
(49.8)
|
(51.3)
|
(52.3)
|
|
|
|
132.2
|
135.8
|
138.7
|
|
ROIC
|
|
8.4%
|
8.6%
|
8.9%
|
15.19 Constant currency
Figures presented at constant
currency represent 2023 amounts retranslated at average 2024
exchange rates.
15.20 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.
|
|
|
Unaudited Half
year
2024
£m
|
Unaudited Half year
2023
£m
|
Full
year
2023
£m
|
|
Cash and short term
deposits
|
|
180.0
|
173.2
|
164.2
|
|
Undrawn committed debt
facilities
|
|
222.7
|
309.5
|
333.4
|
|
Cash used as collateral on
loans
|
|
-
|
(11.5)
|
(10.0)
|
|
Liquidity
|
|
402.7
|
471.2
|
487.6
|
16
Exchange
rates
The Group reports its results in
pounds sterling. A substantial portion of the Group's revenue and
profits are denominated in currencies other than pounds sterling.
It is the Group's policy to translate the income statements and
cash flow statements of its overseas operations into pounds
sterling using average exchange rates for the year reported (except
when the use of average rates does not approximate the exchange
rate at the date of the transaction, in which case the transaction
rate is used) and to translate balance sheets using period end
rates. The principal exchange rates used were as
follows:
|
|
|
Income and
expense
|
|
|
|
|
Average
rates
|
|
|
|
|
Half year
2024
|
Half year
2023
|
Full year
2023
|
Half year to Half year
change
|
Full year to Half year
change
|
|
|
US
Dollar
|
|
1.27
|
1.23
|
1.24
|
3.3%
|
2.4%
|
|
|
Euro
|
|
1.17
|
1.14
|
1.15
|
2.6%
|
1.7%
|
|
|
Chinese
Renminbi
|
|
9.14
|
8.56
|
8.82
|
6.8%
|
3.6%
|
|
|
Japanese
Yen
|
|
192.54
|
166.52
|
174.87
|
15.6%
|
10.1%
|
|
|
Brazilian
Real
|
|
6.43
|
6.25
|
6.21
|
2.9%
|
3.5%
|
|
|
Indian
Rupee
|
|
105.27
|
101.37
|
102.68
|
3.8%
|
2.5%
|
|
|
South
African Rand
|
|
23.68
|
22.48
|
22.95
|
5.3%
|
3.2%
|
|
|
|
|
Assets and
liabilities
|
|
|
|
|
Period end
rates
|
|
|
|
|
Half year
2024
|
Half year
2023
|
Full year
2023
|
Half year to Half year
change
|
Full year to Half year
change
|
|
|
US
Dollar
|
|
1.26
|
1.27
|
1.27
|
-0.8%
|
-0.8%
|
|
|
Euro
|
|
1.18
|
1.16
|
1.15
|
1.7%
|
2.6%
|
|
|
Chinese
Renminbi
|
|
9.23
|
9.23
|
9.07
|
0.0%
|
1.8%
|
|
|
Japanese
Yen
|
|
203.32
|
183.34
|
179.56
|
10.9%
|
13.2%
|
|
|
Brazilian
Real
|
|
7.07
|
6.08
|
6.18
|
16.3%
|
14.4%
|
|
|
Indian
Rupee
|
|
105.38
|
104.29
|
105.89
|
1.0%
|
-0.5%
|
|
|
South
African Rand
|
|
22.99
|
23.92
|
23.27
|
-3.9%
|
-1.2%
|
|
17
Events after the
balance sheet date
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.
Due to the timing of the Appeals
judgment, the Group and the Trustees of the Group's UK Pension Plan
have not investigated the potential implications (if any) in detail
and hence no allowance for this case has been made in calculating
the defined benefit obligations at the reporting date. The Group
and the Trustees will consider the Appeals judgment in due course
and investigate the potential implications (if any) of this ruling
for the year-end reporting.