Vesuvius plc half year results for 2017

2017-08-09

Aug. 9, 2017 – Vesuvius plc, a global leader in molten metal flow engineering, published its half year results on Jul. 27, 2017.

Group revenue from our continuing operations was £831.5m, an increase of 24.4% compared to the first half of 2016 on a reported basis. Underlying Group revenue, adjusted for the effects of acquisitions and currency translation, increased by 9.6%. Trading profit for the first half was £86.3m, up 46.0% on a reported basis (H1 2016: £59.1m) and up 26.7% on an underlying basis. Return on sales increased by 160 basis points on a reported basis and 140 basis points on an underlying basis to 10.4% in the first half of 2017 (H1 2016: 8.8%).

Vesuvius comprises two divisions, Steel and Foundry. The Steel division operates as three business lines, Steel Flow Control, Advanced Refractories and Digital Services (formerly Technical Services).

Steel Division

Revenue in the Steel division increased by 27% on a reported basis. On an underlying basis, Steel Division revenue was up 11.7%. This higher growth rate relative to global steel production, reflects market share gains in EMEA, the US and also in our key strategic growth markets of China and India.

Trading profit improved 55.5% year on year. On an underlying basis, trading profit increased 37.1%, with return on sales increasing by 170bps.

Foundry Division

Vesuvius’ Foundry division, trading as Foseco, is a world leader in the supply of consumable products, solutions and associated services related to the foundry industry.

Revenue in the Foundry division increased 19.4% to £268.8m on a reported basis, whilst underlying revenue increased by 5.5%. Trading profit improved by 14.1% ahead of H1 2016 on an underlying basis. This reflected business gains in certain areas, the successful launch of new products with higher margins and the ongoing benefits of restructuring initiatives.

François Wanecq, Chief Executive of Vesuvius, commented:

“We had a strong H1 2017, delivering our best half-year Revenue, Trading Profit and Return on Sales since demerger on a reported basis. We also further demonstrated our ability to outperform underlying markets and I was especially pleased at our progress in recovering market position in the US. I am also happy to announce that we have identified a further £15m per annum of restructuring savings, which we expect to realise over the next three years.”

“Whilst the trading environment in H1 was strong, we are cautious about H2 as global steel production is slowing and the second half is seasonally weaker in Foundry. Despite some short-term headwinds, we remain confident in our ability to improve trading margins in 2018.”