Vesuvius (VSVS) H1 2024 earnings summary

Executive summary

• H1 2024 revenue declined 2.0% underlying to £936.5m, with trading profit down 0.9% underlying to £97.2m, reflecting resilience amid subdued markets.

• Return on sales improved by 10bps to 10.4%, and headline EPS was 21.8p, down 2.9% underlying.

• Market share gains achieved in both Steel and Foundry, with cost savings, innovation, and R&D investment supporting performance.

• Interim dividend increased by 4.4% to 7.1p per share, reflecting confidence in business resilience.

• No significant end-market recovery expected in H2 2024; full-year headline trading profit forecasted to be only slightly ahead of last year at constant currency.

Financial highlights

• Revenue: £936.5m (down 2.0% underlying), trading profit: £97.2m (down 0.9% underlying), return on sales: 10.4% (up 10bps), headline EPS: 21.8p (down 2.9% underlying).

• Net debt/EBITDA: 1.2x, with net debt at £315.2m–£350m, reflecting expansion and shareholder returns.

• Working capital intensity: 23.2% (down 90bps year-on-year), progressing toward 21% target.

• Capex for H1: £50–£50.5m, focused on expansion and automation projects.

• Cash conversion: 49%, impacted by growth capex and seasonal working capital.

Outlook and guidance

• No significant market recovery expected in H2 2024; recovery now anticipated in 2025.

• Full-year headline trading profit expected to be only slightly ahead of last year on a constant currency basis.

• Confident in achieving 2026 targets: 12.5% return on sales and £400m free cash flow over three years.

• Continued progress expected from cost reduction, innovation, and India capacity investments.