Slide 1: Full Year 2020 Results
Full Year 2020 Results 04 March 2021 LEADING THE WORLD OF MOLTEN METAL FLOW ENGINEERING
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
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Slide 5: Summary financials
Summary financials Revenue Trading profit Return on sales £1,458.3m £101.4m 7.0% -14.7% -44.1% -360 bps Reported change Reported change Reported change -12.7% -43.3% -370 bps Underlying change Underlying change Underlying change Headline EPS Net debt / EBITDA Cash conversion 23.2p 1.2x 173% -48.6% D
Slide 6: Decisive response enables Vesuvius to emerge stronger from the crisis
Decisive response enables Vesuvius to emerge stronger from the crisis Optimised plant network geared for growth after successful restructuring ▪ Delivered £20.6m of recurring savings in 2020 with a further £4.3m to be realised in 2021 ▪ Global production capacity preserved despite plant closures, re
Slide 7: New Group Sustainability Initiative
New Group Sustainability Initiative Objective to reach NET ZERO carbon footprint by 2050 at the latest Progress follow-up: Intermediate Targets ▪ 9 intermediate targets Energy Energy CO2e 1 consumption 2 emissions 3 Wastewater ▪ 56 KPIs monitored Recovered & ▪ Establishment of the Vesuvius 4 Solid w
Slide 8: Positive momentum on our intermediate targets
Positive momentum on our intermediate targets KPI Target Progress in 2020 Energy Consumption 10% reduction by 2025 -3.4% Energy consumption per metric tonne of product packed for shipment (vs 2019) CO2 Emission 10% reduction by 2025 -3.9% Energy CO2e emissions per metric tonne of product packed for
Slide 9: We help our customers improve their sustainability performance
We help our customers improve their sustainability performance Our area of expertise The product Key product feature Value creation for customer ▪ Improve safety Multiple reuse Material Duraflex and long-lasting ▪ Reduce raw materials Science ladle shrouds consumption refractory material ▪ Reduce CO
Slide 10: Crude steel production growth 2020
World steel production: Recovery in H2 2020 across all regions 20.0% Vietnam 15.0% +11.6% China +5.2% Crude steel production growth 2020 10.0% Turkey 5.0% Middle East1 +6.0% CIS2 2.7% +1.0% 0.0% Crude steel production volume 2020 EU 27 +UK -5.0% India -11.8% -10.6% Crude Steel Production H1 2020 H2
Slide 11: Steel division sales outperformed the steel market in most regions
Steel division sales outperformed the steel market in most regions Steel division sales volume was 1.1% above steel production in the world excluding China & Iran Average price impact on Steel Division sales -1.7% 40.0% Turkey Vesuvius: +36.7% WSA: +6.0% Steel Division revenue growth 2020/2019 Vietn
Slide 12: Divisional performance: Steel
Divisional performance: Steel 2020 performance Key Financials Steel sales volume outperformed steel production Reported Underlying in the world (ex-China and Iran) by 1.1% change 2020 2019 Change • Market outperformance in EU 27+UK and NAFTA Revenue 1,045.4 1,195.3 -12.5% -10.4% • Strong performance
Slide 13: Foundry end-market volumes: Recovery since Q4 2020
Foundry end-market volumes: Recovery since Q4 2020 after unprecedented declines 30.0% EEMEA Europe (EU 27 + UK) NAFTA India South America China 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% -60.0% -70.0% Medium & Heavy Light Vehicles Mining and General Engineering Railway and Marine Power Gene
Slide 14: Foundry excluding Fused Silica Performance
Our Foundry division outperformed light vehicle volumes in most markets Light Vehicles represent c.22% of foundry revenues 20% China Foundry excluding Fused Silica (FS) Performance South America Foundry ex-FS Sales: +10% 10% Foundry ex-FS Sales: -1% LV Production: -5% LV Production: -31% 0% Vehicle
Slide 15: Divisional performance: Foundry
Divisional performance: Foundry 2020 performance Key Financials Performance of the Foundry division reflects Reported Underlying diverse end-market exposure and market share change 2020 2019 Change gains in some regions • China: 10% Foundry revenue growth reflects Revenue 412.9 515.1 -19.8% -17.9% i
Slide 16: R&D investment maintained to support future organic growth
R&D investment maintained to support future organic growth Vesuvius maintained its industry-leading level of R&D investment, supporting future R&D as % of revenues new product launches and top-line growth 1.9% 1.9% ▪ New VISO Research Centre commissioned 1.7% ▪ Expansion and modernisation of Mechatr
Slide 17: Flow Control – Duraflex
Focus on value-creating solutions: Flow Control – Duraflex Breakthrough generation of ladle shrouds ▪ Custom-designed for direct connection between ladle and tundish • Increases steel quality • Increases operator safety ▪ Longer life ▪ Increases process efficiency ▪ Reduces carbon footprint during p
Slide 18: Advanced Refractories – NextGen Tundish Smart Robot
Focus on value-creating solutions: Advanced Refractories – NextGen Tundish Smart Robot Fully-integrated spray application system solution ▪ Computer-controlled robot ensures formula and application consistency at all times • Improves quality • Reduces waste ▪ Digital data recording, tracking and rem
Slide 19: Foundry – Diamant degassing rotors
Focus on value-creating solutions: Foundry – Diamant degassing rotors New suite of degassing consumables ▪ Patented rotor design ▪ Optimised hydrogen removal from aluminium melts ▪ Reduces gas consumption ▪ Service life increase of up to 200% ▪ More consistent degassing performance over time ▪ Reduc
Slide 20: Financial review
FSUVIUS ete Financial review
Slide 21: Sales impacted by Covid-19 crisis
Sales impacted by Covid-19 crisis Group revenues down 14.7% on a reported basis (-12.7% on an underlying basis) (£m) - 41.7 - 23.6 1,710.4 - 208.9 1,645.1 + 22.1 1,436.2 1,458.3 2019 Reported FX Adjustments CCPI acquisition 2019 Underlying Steel & Foundry 2020 Underlying CCPI acquisition 2020 Report
Slide 22: Decisive actions partially offset impact of sales decline
Decisive actions partially offset impact of sales decline RoS 10.6% (£m) - 7.0 - 2.5 - 84.3 181.4 171.9 7.0% + 18.3 + 4.0 - 8.5 97.5 101.4 2019 Reported FX Adjustments CCPI 2019 Underlying Steel & Foundry One-off costs Restructuring 2020 Underlying CCPI 2020 Reported trading profit acquisition tradi
Slide 23: Income statement
Income statement 2020 2019 Change (%) (£m unless indicated) Actual Actual As reported Underlying Revenue 1,458.3 1,710.4 -14.7% -12.7% Trading Profit 101.4 181.4 -44.1% -43.3% ROS % 7.0% 10.6% -360 bps -370 bps Post tax Share of JV Results 1.1 1.0 Net Finance Costs -10.9 -11.0 Headline Profit Before
Slide 24: Track record of strong cash generation
Track record of strong cash generation Since 2016, our adjusted operating cash flow has grown 41% (2016-2020 CAGR of 8.8%) Adjusted Operating Cash Flow £250.0 m 200% Cash Conversion Ratio % 173% £200.0 m 150% 120% £150.0 m 94% 104% £m 91% 100% £100.0 m 50% £50.0 m £125.0 m £171.5 m £179.4 m £217.7 m
Slide 25: Cash conversion of 173%
Cash conversion of 173% Focus on working capital management and capex reductions supported 173% cash conversion (2019: 120%), demonstrating our ability to generate cash through the cycle + 23.8 + 1.6 + 50.6 - 39.5 + 37.5 175.2 101.4 2020 Reported Depreciation Net Capex 1 Trade Working Other Working
Slide 26: Strong working capital performance
Strong working capital performance Improved working capital / sales ratio due to strong discipline in manufacturing network to adjust production to sales without building significant excess inventory Trade working capital / Sales (12m Trade working capital1 (£m) average actuals) 26.6% 424.6 404.9 34
Slide 27: £175.1m net debt and 1.2x net debt / LTM EBITDA
£175.1m net debt and 1.2x net debt1 / LTM EBITDA Net debt down £70m at £175.1m, versus £245.8m at year end 2019 (£m) - 175.2 15.7 2.7 17.6 16.7 8.4 27.5 2.3 245.8 13.7 175.1 Net debt at year Adjusted Net interest Income taxes JV / Non Restructuring Dividends paid FX Impact Right of Use Others Net de
Slide 28: Outlook
Outlook page 28
Slide 29: Outlook
Outlook ▪ Clear signs of recovery are now apparent in both our Steel and Foundry end markets. We believe that this recovery should accelerate in the second half of 2021, supported by the lifting of most pandemic-related restrictions by then ▪ Vesuvius is emerging from this difficult period stronger
Slide 30: Appendix
Appendix LEADING THE WORLD OF MOLTEN METAL FLOW ENGINEERING
Slide 31: Environmental performance – long term CO2e emissions evolution
Environmental performance – long term CO2e emissions evolution (Scope 1 and 2) Our total CO2e emissions (energy + process) per Tonne of product packed per shipment have been reduced by 18.0% since 2015 CO2e emission evolution per tonne produced (Scope 1 and 2) 600 kg CO2e per metric tonne of product
Slide 32: We help our customers improve their sustainability
We help our customers improve their sustainability Reduce exposure to hot metal Reduce consumption of refractory material per tonne of steel Reduce CO2 emissions per tonne of steel produced Improve metal yield (tonne of finished product per tonne of molten metal) page 32
Slide 33: Priority ESG Actions
ISO 14001 certification of Environmental impact manufacturing sites analysis of Capex Sustainability assessments Internal price of CO2 emissions of suppliers at €30/t in 2021, reviewed every year 10 Switch to green electricity Support for education for women on our sites whenever in scientific field
Slide 34: 5 year history at constant currency
5 year history at constant currency 2016 2017 2018 2019 2020 Revenue (£m) 1,431.2 1,610.6 1,766.3 1,668.8 1,458.3 Steel 961.1 1,098.7 1.213.9 1,165.6 1,045.4 Foundry 470.1 511.9 552.4 503.2 412.9 Trading Profit (£m) 137.1 157.8 191.9 174.4 101.4 Steel 81.3 96.4 124.8 116.0 76.4 Foundry 55.8 61.4 67.
Slide 35: Currency ready reckoner
Currency ready reckoner Dec 2020 Rule of thumb for impact of a movement in currency against Currency Unit Approximate change in annual profit (£m) sterling (1 unit change) USD 1 Cent 0.34 ▪ Amounts shown are movements EUR 1 Cent (0.14) for each currency INR 1 Rupee 0.13 ▪ Works both for strengthenin
Slide 36: Solid liquidity with significant balance sheet headroom
Solid liquidity with significant balance sheet headroom Net debt/EBITDA1 and headroom to covenant (pre-IFRS 16) ▪ Reduced net debt on the back of strong cash generation ▪ Wide headroom versus covenant2 ▪ Stronger liquidity than at the start of the crisis 1.2 x ( £437m at end Dec 2020 versus £354m at
Slide 37: For further information, please contact
For further information, please contact: Euan Drysdale Group Head of Corporate Finance euan.drysdale@vesuvius.com Pamela Antay Head of Investor Relations pamela.antay@vesuvius.com LEADING THE WORLD OF MOLTEN METAL FLOW ENGINEERING