Vesuvius (VSVS) Trading Update summary

Trading environment and market outlook

• Steel and foundry markets remain stable at low levels, with medium-term prospects improving due to healthy global steel consumption outside China and potential stabilization or decline in Chinese net steel exports, benefiting non-Chinese markets.

• Over 60 countries have imposed restrictions on Chinese steel imports, and new EU measures could boost European steel production by over 10 million tons, raising utilization rates from 65% to 85% by mid-2026.

• Foundry markets are stable at low levels, with expectations that lower interest rates could drive demand recovery in 2026.

• Medium-term outlook is more positive due to increasing protection measures against unfair steel trade, especially in Europe and the Americas.

• Inventories of steel and refractories in Europe are currently low, suggesting that any demand recovery will be amplified by restocking needs.

Financial performance and cost management

• Revenue in H2 has been broadly in line with expectations, supported by market share gains in both steel and foundry divisions.

• Price increases have been successfully implemented globally (except China), helping offset cost inflation; net price effect for the year remains negative but is improving.

• GBP 18 million in recurring cash cost savings will be delivered this year, with a cumulative target of over GBP 55 million by 2028 on track to be exceeded.

• Temporary manufacturing issues in the foundry division will impact H2 trading profit by GBP 2–3 million but are expected to be resolved by year-end.

• Trading profits for the full year are anticipated to be broadly in line with previous guidance.

Market share and regional dynamics

• Market share gains continue in both steel and foundry divisions, with Advanced Refractories regaining lost share in North America and Europe, focusing on profitability over aggressive growth.

• Flow Control division is gaining market share globally, except for a slight loss in North America due to plant closures by a major customer.

• In India, price discipline is prioritized over market share gains, while competitors may be more aggressive on pricing.

• EMEA steel production declined by 2.1%, with EU27+UK down 5% and EEMEA up 2%.

• North America was flat overall, with US up 2% but declines in Mexico and Canada; India and Southeast Asia showed strong growth.