Vesuvius Plc · LSE:VSVS
Vesuvius — H1 2022 Earnings Presentation
27 slides from Vesuvius's earnings presentation, Jul 28, 2022
Slide 1: Half Year 2022 Results
Half Year 2022 Results 28 July 2022 Think beyond. Shape the future. 1
Slide 2: Disclaimer
Disclaimer This presentation (which includes this document, the oral presentation of this document, any question-and-answer session that follows that oral presentation and any other materials distributed at, or in connection with, such presentation), which has been prepared by Vesuvius plc (the “Com
Slide 3: Contents
Contents • Performance update • Financial review • Outlook • Appendix 3
Slide 4: Performance update
Performance update 4
Slide 5: Strongest ever half year performance
Strongest ever half year performance Revenue Trading Profit Return on Sales £1,016m £127.4m 12.5% +26% +74% +340 bps Reported change Reported change Reported change +21% +69% +350 bps Underlying change Underlying change Underlying change Trade working capital Headline EPS Net debt / EBITDA / sales 3
Slide 6: Full mitigation of inflationary pressures and market share gains
Full mitigation of inflationary pressures and market share gains ▪ Inflationary pressures mitigated in full through adjusted selling prices to cover cost increases • Adjustment of selling prices and successful recovery of cost inflation incurred in 2021 and 2022 in both the Steel and Foundry divisio
Slide 7: Strategic initiatives are on track to support future growth
Strategic initiatives are on track to support future growth Universal • Performance remains ahead of our expectations Refractories • Consolidation of both Advanced Refractories and Foundry production lines will drive synergy integration realisation during 2022 and 2023 • Strategic capacity expansion
Slide 8: Industry-leading robotic solutions
Industry-leading robotic solutions New Flow Control robotics solution for New Advanced Refractories high-speed robotic ladle make-up area gunning solution for Basic Oxygen Furnace 8
Slide 9: Upgraded carbon footprint reduction target for 2025 and 2035
We have upgraded our carbon footprint reduction target for 2025 to 20% and set an ambitious target of 50% reduction by 2035 Target emission intensity (Kg CO2e per tonne of product packed for shipment) 500 Roadmap to net zero Old target -10% ▪ Initial target of -10% by 2025 was exceeded in 2021 400 N
Slide 10: Supporting the efforts of our customers to improve their CO2 footprint
Supporting the efforts of our customers to improve their CO2 footprint ▪ Our products drive efficiency in manufacturing, which help reduce our customers’ global carbon emissions Case study: Lasers measurement of refractory wear in ladles ▪ Project: to increase EAF steel-plant capacity and refractory
Slide 11: World steel production: Declines in all regions except India
World steel production: Declines in all regions except India 15% Crude steel production growth – H1 2022/ H1 2021 India 10% +8.8% 5% NAFTA South America -2.2% 0% -2.9% EU+UK -6.6% China -6.5% -5% Vietnam -7.3% -10% EEMEA (excluding Iran) -9.4% -15% - 20,000 40,000 60,000 80,000 100,000 Crude steel p
Slide 12: Flow Control volumes outperformed the underlying steel market
Flow Control volumes again significantly outperformed the underlying steel market due to technological differentiation 15.0% India Crude steel production growth – H1 2022/ H1 2021 10.0% FC division: +12.5% Production growth: 8.8% 5.0% EU+UK NAFTA FC division: -4.4% FC division: +13.4% Production gro
Slide 13: Divisional performance: Steel
Divisional performance: Steel H1 2022 performance Change Underlying Steel Division H1 2022 H1 2021 (%) change (%) ▪ Flow Control continued to gain market share through technological differentiation Steel Flow Control Revenue 402.6 315.5 +28% +25% Steel Advanced Refractories Revenue 320.8 238.6 +34%
Slide 14: Volume decline in Foundry Division due to weakness in automotive end markets
Volume decline in Foundry Division due to continued weakness in automotive end markets Volume growth in Foundry end markets – H1 2022 vs H1 2021 page 14 % of 22% 14% 18% 16% 5% 4% Note: 1. The remainder Foundry of Foundry sales are generated from other Revenues1 end-markets 14
Slide 15: Divisional performance: Foundry
Divisional performance: Foundry H1 2022 performance Change Underlying Foundry H1 2022 H1 2021 (%) change (%) ▪ Improved trading profit due to successful price increases fully compensating for cost increases Revenue 271.8 237.8 +14% +13% Trading Profit 25.7 23.9 +7% +9% ▪ Return on sales decline as c
Slide 16: Financial review
Financial review 16
Slide 17: Sales growth driven by price rises to offset inflation
Sales growth driven by price rises to offset inflation Group revenues up 26% on a reported basis (+21% on an underlying basis). (£m) >95% price <5% volume page 17 17
Slide 18: Trading profit up 69% on an underlying basis
Trading profit up +69% on an underlying basis Trading profit up 74% on a reported basis (+69% on an underlying basis). RoS Return-on-sales increased by +340bps (+350bps on an underlying basis). RoS 12.5% 9.1% +10.3 124.5 +2.9 127.4 +34.5 (£m) 73.3 73.6 +6.1 +0.3 H1 2021 FX H1 2021 Steel and Net pric
Slide 19: Income statement
Income statement H1 2022 H1 2021 Change (%) 1 (£m unless indicated) Actual Actual As reported Underlying Revenue 1,016 808 +26% +21% Trading Profit 127.4 73.3 +74% +69% Return on Sales (ROS %) 12.5% 9.1% +340bps +350bps Post tax Share of JV Results 1.0 0.6 Net Finance Costs -6.6 -3.6 Headline Profit
Slide 20: Cash conversion at 26% due to investment in trade working capital
Cash conversion at 26% due to investment in trade working capital Cash conversion in H1 2022 of 26%, due to investment in trade working capital. (£m) Cash conversion: 26% Net capex is net of proceeds from sale of property, plant and equipment. 20
Slide 21: Inventories have peaked and will reduce in the coming months
Inventories have peaked and will reduce in the coming months We have continued to see working capital growth in early 2022, largely driven by higher inventories. Trade working capital / sales increased to 22.8% (12m average) versus 20.9% at year-end 2021. A reduction of working capital is contingent
Slide 22: £327.7m net debt and 1.3x net debt / LTM EBITDA
£327.7m net debt and 1.3x net debt1 / LTM EBITDA Net debt at 30 June 2022 increased to £327.7m, from £277.1m at the end of 2021. The 2021 final dividend and the investment in working capital were the key drivers of this increase. (£m) page 22 Note 1: Net debt / EBITDA ratios are post IFRS-16. 22
Slide 23: Outlook
Outlook 23 page
Slide 24: Outlook
Outlook ▪ In the coming months, we expect a further deterioration of our market environment. Vesuvius is, however, well prepared to confront this temporary slowdown thanks to our lean, entrepreneurial and decentralised organisation. This, together with the positive results of the first half, make us
Slide 25: Appendix
Appendix Think beyond. Shape the future. 25
Slide 26: Currency ready reckoner
Currency ready reckoner Rule of thumb for impact of June 2022 a movement in currency Approximate change in trading profit against sterling (1 unit change) Currency Unit (£m) ▪ Amounts shown are movements for each currency USD 1 Cent 1.0 ▪ Works both for strengthening EUR 1 Cent and weakening of curr
Slide 27: Think beyond. Shape the future.
For further information, please contact: Rachel Stevens Head of Investor Relations Rachel.stevens@vesuvius.com Think beyond. Shape the future. 27