Vesuvius Plc · LSE:VSVS
Vesuvius — H1 2023 Earnings Presentation
27 slides from Vesuvius's earnings presentation, Jul 27, 2023
Slide 1: Half Year 2023 Results
Half Year 2023 Results 27 July 2023 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: Resilient results in H1 ahead of our expectations, despite difficult market conditions
Resilient results in H1 ahead of our expectations, despite difficult market conditions Revenue Trading Profit Return on Sales £995m £105m 10.5% 0% -3% +14% -18% +130bps (190 bps) vs. H2 22 vs. H1 22 vs. H2 22 vs. H1 22 vs. H2 22 vs. H1 22 underlying underlying underlying underlying underlying underl
Slide 6: Resilient performance despite difficult market conditions
Resilient performance despite difficult market conditions ▪ Steel business performed well, ahead of our expectations, due to pricing resilience > Pricing, in particular in Flow Control, has partially offset the revenue impact on volumes of the declining market ▪ Good recovery of the Foundry business
Slide 7: Strategic expansion programme on track
Strategic expansion programme on track • Flow Control VISO expansion in India fully operational (+50% capacity) • Flow Control flux expansion in India operational mid 2024 • VISO expansion in Poland (+35% capacity) fully operational • Slide Gate expansion in Poland (+50% capacity) operational end of
Slide 8: Our innovations add value to customers' processes and products
Our innovations add value to customers’ processes and products Flow control Advanced Refractories Foundry LTC34 is the latest ladle gate with The Tundish dry vibratable robot Wasco is a water-soluble core binder for integrated tube changer (TDVR) is a new automated system high pressure die casting (
Slide 9: Continued progress in safety and in sustainability
Continued progress in safety and in sustainability Further safety improvement Recognition of the sustainability benefits of our innovative products In our journey towards our goal of zero accidents, we achieved in H1 2023 our best - Semco Coatings safety result ever Lost-time injury frequency rate*
Slide 10: Steel production in H1 2023: Decline in all regions with the exception of India and China
Steel production in H1 2023: Decline in all regions with the exception of India and China Size of bubble represents relative revenue of Vesuvius’ steel division sales in H1 2023. 10
Slide 11: Flow Control has continued to outperform in the majority of our key markets
Flow Control has continued to outperform in the majority of our key markets Size of bubble represents relative revenue of Vesuvius’ Flow Control Division sales in H1 2023 11
Slide 12: Resilient performance of the Steel Division due to robust pricing performance
Resilient performance of the Steel Division due to robust pricing performance H1 2023 performance Steel Division £m H1 2023 H1 2022 Change Underlying reported (%) change (%) ▪ Steel market decline and Ukraine conflict- related sanctions resulted in a volume decline of Steel Flow Control Revenue 402
Slide 13: Foundry end markets have started to recover, with a delayed impact on the division
Foundry end markets have started to recover, with a delayed impact on the division due to destocking Volume growth in Foundry end markets – H1 2023 vs H1 2022 % of 22% 14% 20% 18% 4% 5% Note: 1. The remainder Foundry of Foundry sales are generated from other Revenues1 end-markets 13
Slide 14: Foundry Division: Good recovery, more to come, in coming years
Foundry Division: Good recovery, more to come, in coming years H1 2023 performance Foundry H1 2023 H1 2022 Change Underlying reported (%) change (%) ▪ Volume not yet reflecting the full improvement of Revenue £m 284 272 +4% +3% end markets due to destocking Trading profit £m 30 26 +17% +18% ▪ Positi
Slide 15: Financial review
Financial review 15
Slide 16: Sales reduce as price increases offset by market-driven volume declines
Sales reduce as price increases offset by market-driven volume declines Group revenue down 3% on an underlying basis Revenue (£m) 14 1030 1016 46 995 81 H1 2022 reported FX H1 2022 volume price H1 2023 reported underlying 16
Slide 17: Trading profit impacted by volume decline, pricing robust
Trading profit impacted by volume decline, pricing robust Trading profit (£m) RoS 12.5% RoS 10.5% 17
Slide 18: Profit and RoS performance growing versus H2 2022
Profit and RoS performance growing versus H2 2022 On a constant currency basis 18
Slide 19: Income statement
Income statement H1 2023 H1 2022 Change (%) 1 (£m unless indicated) Actual Actual As reported Underlying Revenue 995 1016 (2%) (3%) Trading Profit 104.9 127.4 (18%) (18%) Return on Sales (ROS %) 10.5% 12.5% (200 bps) (190 bps) Post tax Share of JV Results 0.5 1 Net Finance Costs -5.5 -6.6 Headline P
Slide 20: Continued strong cashflow despite growth capex
Continued strong cashflow despite growth capex Cash conversion in H1 2023 of 67% (£m) Cash conversion: 67% Net capex is net of proceeds from sale of property, plant and equipment and profit on disposal of non-current assets. 20
Slide 21: Working capital / revenue ratio peaked in February and now declining
Working capital / revenue ratio peaked in February and now declining Absolute trade working capital (TWC) has increased while the ratio has started to fall 24.7% 24.7% 24.9% 500 25.0% 23.4% 23.4% 23.3% 480 22.5% 23.0% 460 21.0% 440 19.0% 420 17.0% 400 15.0% Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23
Slide 22: Net debt and gearing stable
Net debt and gearing stable Net debt / 0.9x 1.0x EBITDA Net debt bridge (£m) Note 1: Net debt / EBITDA ratios are post IFRS-16. 22
Slide 23: Outlook
Outlook 23
Slide 24: Outlook
Outlook “Despite difficult market conditions, especially in the steel sector, we have performed well in the first half of the year, exceeding expectations, thanks, in particular, to a very resilient pricing performance. We expect to maintain pricing discipline in the second half of the year, and we
Slide 25: Appendix
Appendix Think beyond. Shape the future. 25
Slide 26: Technical guidance for FY 2023
Technical guidance for FY 2023 ▪ Depreciation c.£55 – 60m ▪ Interest cost c. £14m (income statement) and c. £9m cash cost ▪ Tax - P&L effective rate c. 27.5%, of which cash tax is c. 80% of the P&L charge ▪ Capex c. £100 - 110m ▪ FX – see table below, showing impact of a movement in currency against
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