Vesuvius Plc · LSE:VSVS
Vesuvius — FY2021 Earnings Presentation
32 slides from Vesuvius's earnings presentation, Mar 3, 2022
Slide 1: Full Year 2021 Results
Full Year 2021 Results 03 March 2022 Think beyond. Shape the future.
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
Slide 4: Performance update
Performance update
Slide 5: Solid set of results in 2021
Solid set of results in 2021 Revenue Trading profit Return on sales £1,643m £142.4m 8.7% +13% +40% +170 bps Reported change Reported change Reported change +18% +50% +190 bps Underlying change Underlying change Underlying change Headline EPS Net debt / EBITDA Trade working capital / sales 35.3p 1.4x
Slide 6: Successful implementation of our growth strategy
Successful implementation of our growth strategy Cost inflation fully passed through by year-end ▪ Strong commercial performance • Sales growth of c.21% and strong margin recovery in Steel Flow Control, with material market share gains • Sales growth of c.20% in Foundry achieved despite the weak aut
Slide 7: Significant progress in our sustainability roadmap
Significant progress in our sustainability roadmap KPI Target 2021 vs 2019 Safety <1 1.06 Lost Time Injury Frequency Rate (per million hours worked) Energy Consumption 10% reduction by 2025 -9.0% Energy consumption per metric tonne of product packed for shipment (vs 2019) CO2 Emission 10% reduction
Slide 8: 24% reduction in carbon dioxide equivalent emissions since 2017
24% reduction in carbon dioxide equivalent emissions since 2017 Kilograms CO2e per metric tonne of product packed for shipment 550 527 -24% 500 482 471 450 440 398 400 350 300 250 2017 2018 2019 2020 2021 page 8 CO2e: carbon dioxide equivalent
Slide 9: Further progress on our ESG agenda
Further progress on our ESG agenda Progressive switch to renewable electricity ▪ More than 50% of our electricity came from non-carbon emitting sources in 2021 Systematic use of internal ▪ Carbon pricing integrated into our capex analysis which supports the selection of carbon pricing to assess more
Slide 10: World steel production: positive recovery outside of China
World steel production: positive recovery in the world outside of China 25.0% India Vietnam Crude steel production growth – 2021 /2020 +17.8% 20.0% +18.4% Eu 27+UK +14.8% 15.0% South America +17.9% NAFTA +16.6% 10.0% 5.0% EEMEA ex Iran +9.2% 0.0% 50,000 100,000 150,000 200,000 250,000 1,000,000 Chin
Slide 11: Flow Control sales strongly outperformed the steel market in all regions
Flow Control sales strongly outperformed the steel market in all regions Flow Control sales volume grew by 21% versus steel production growth of 13% in the world excluding China and Iran. 60.0% South America Vesuvius: +46.5% Steel production: +17.9% Flow Control revenue growth 2021/2020 50.0% EU 27
Slide 12: Acquisition of Universal Refractories business
Acquisition of Universal Refractories business ▪ In December 2021, we acquired Universal Refractories, Inc. (“Universal”), a specialty refractory producer in the USA ▪ Universal reinforces Advanced Refractories’ core tundish business and expands our presence amongst electric arc furnace (“EAF”) stee
Slide 13: Divisional performance: Steel
Divisional performance: Steel 2021 performance 2021 2020 Change Underlying (%) change (%) Steel Division ▪ 21% growth in Flow Control sales, which Flow Control 648.7 561.3 +16% +21% outperformed steel production growth both in China and in the world excluding China Advanced Refractories 489.1 458.6
Slide 14: Only partial recovery of Foundry markets as automotive disappointed
Only partial recovery of Foundry markets as automotive disappointed Volume growth in Foundry end markets - 2021 vs 2020 100% NAFTA EEMEA ex Iran EU 27 + UK China India South America 80% 60% 40% 20% 0% -20% -40% Light Medium & Heavy Light & Construction General Power Railway & Vehicles Vehicles Equip
Slide 15: H2 more difficult for Foundry end markets, especially for automotive
H2 more difficult for Foundry end markets, especially for automotive Volume growth in Foundry end markets - H2 2021 vs H1 2021 20% NAFTA EEMEA ex Iran EU 27 + UK China India South America 10% 0% -10% -20% -30% -40% -50% -60% -70% Light Medium & Heavy Light & Construction General Power Railway & Vehi
Slide 16: Divisional performance: Foundry
Divisional performance: Foundry 2021 performance ▪ 20% growth in underlying Foundry sales, Change Underlying despite the weak automotive end market, 2021 2020 (%) change (%) impacted by persistent semi-conductor Foundry shortages Revenue 471.4 412.9 +14% +20% ▪ Strong growth and market share gains i
Slide 17: Industry-leading R&D investment supports market share gain and margin improvement
Industry-leading R&D investment supports our market share gain and margin improvement objectives ▪ £30.3m spent on R&D in 2021, up from £26.7m in 2020 ▪ 27 new product launches in 2021, more than double the number launched in 2020 ▪ Increased R&D focus on products helping our customers improve their
Slide 18: Financial review
iy . f e AVESUVIUS ete re par Financial review
Slide 19: Strong recovery in sales
Strong recovery in sales Group revenues up 13% on a reported basis (+18% on an underlying basis). (£m) 251.2 1,640.8 2.1 1,642.9 c.75% volume c.25% price 1,458.3 1,389.6 -68.7 2020 FX 2020 Steel & 2021 Universal 2021 Reported Adjustments Underlying Foundry Underlying acquisition Reported revenue rev
Slide 20: Trading profit up 50% on an underlying basis
Trading profit up 50% on an underlying basis Trading profit up 40% on a reported basis (+50% on an underlying basis). Return-on-sales increased by 170bps (+190bps on an underlying basis). (£m) RoS 8.7% RoS 57.7 4.1 142.6 142.4 7.0% -14.0 -0.2 101.4 94.8 -6.6 2020 FX 2020 Steel and Restructuring Net
Slide 21: Income statement
Income statement 2021 2020 Change (%) (£m unless indicated) Actual Actual As reported Underlying1 Revenue 1,643 1,458 +13% +18% Trading Profit 142.4 101.4 +40% +50% Return on Sales (ROS %) 8.7% 7.0% +170 bps +190 bps Post tax Share of JV Results 1.3 1.1 Net Finance Costs -6.4 -10.9 Headline Profit B
Slide 22: Cash conversion lower at 32% due to investment in trade working capital
Cash conversion lower at 32% due to investment in trade working capital Cash conversion in 2021 of 32%, naturally lower than 171% in 2020, due to growth in trade working capital resulting from recovery in business activity. (£m) Cash conversion: 32% 49.8 142.4 -45.5 0.8 45.6 -96.3 -5.6 2020 Deprecia
Slide 23: Working capital efficiency continues to improve
Working capital efficiency continues to improve Average trade working capital / sales for the prior 12 months improved further to 20.9% at December 2021. Inventory days decreased versus the prior year, but increased during H2 from a low point in June, as we built-up raw material and finished goods i
Slide 24: £277m net debt and 1.4x net debt / LTM EBITDA
£277m net debt and 1.4x net debt1 / LTM EBITDA Net debt at 31 December 2021 increased to £277.1m, from £175.1m at the end of 2020. The acquisition of Universal and the investment in working capital were the key drivers of this increase. 55.5 8.5 277.1 42.6 17.1 175.1 30.1 7.6 -13.8 -45.6 Net debt Ad
Slide 25: Capital allocation during 2021
Capital allocation during 2021 £45.5m £30.3m Organic Cash capital expenditure R&D spend Growth £42.6m Pipeline of potential further Inorganic Universal acquisition acquisitions £55.5m +22% Shareholder returns Increase in the full-year 2021 Dividends paid out to our shareholders dividend page 25
Slide 26: Outlook
Outlook page 26
Slide 27: Outlook
Outlook ▪ Both our end markets of Steel and Foundry remain positively oriented at the start of 2022 ▪ In 2021, Vesuvius demonstrated its ability to successfully pass-through cost inflation through price increases and will continue to do so in 2022, as necessary ▪ Strategic R&D and capacity investmen
Slide 28: Appendix
Appendix Think beyond. Shape the future.
Slide 29: Financial summary (reported)
Financial summary (reported) 2021 2020 Underlying Year-on-year change (£m) (£m) change (1) Revenue 1,642.9 1,458.3 +13% +18% Trading Profit (2) (EBITA) 142.4 101.4 +40% +50% Return on Sales (2) 8.7% 7.0% +170 bps +190 bps Operating Profit 132.7 74.3 +79% Headline Profit Before Tax (2) 137.3 91.6 +50
Slide 30: 5 year history at constant currency
5 year history at constant currency 2016 2017 2018 2019 2020 2021 Revenue (£m) 1,368.4 1,540.1 1,687.7 1,593.2 1,389.6 1,642.9 Steel 919.3 1,051.5 1,161.1 1,113.8 996.5 1,171.5 Foundry 449.1 488.6 526.6 479.4 393.1 471.4 Trading Profit (£m) 130.0 150.1 182.9 164.9 94.8 142.4 Steel 79.0 92.5 124.8 11
Slide 31: Currency ready reckoner
Currency ready reckoner Rule of thumb for impact Dec 2021 of a movement in currency against sterling (1 unit Currency Unit Approximate change in profit (£m) change) ▪ Amounts shown are USD 1 Cent 0.31 movements for each currency EUR 1 Cent 0.03 ▪ Works both for strengthening and INR 1 Rupee 0.17 wea
Slide 32: Think beyond. Shape the future.
For further information, please contact: Euan Drysdale Group Head of Corporate Finance euan.drysdale@vesuvius.com Think beyond. Shape the future.