REG - Vesuvius plc - Final Results
06/03/2025 07:15
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RNS Number : 5474Z Vesuvius plc 06 March 2025
6 March
2025
THIS ANNOUNCMENT CONTAINS INSIDE INFORMATION
Full Year Results for the twelve months ended 31 December 2024
Vesuvius plc, a global leader in molten metal flow engineering and technology,
announces its audited results for the twelve months ended 31 December 2024.
Financial summary 2024 2023 Underlying change((1)) Year-on-year change
(£m) (£m)
Headline
Revenue 1,820.1 1,929.8 (1.8%) (5.7%)
Trading Profit ((2)) (EBITA) 188.0 200.4 (0.2%) (6.2%)
Return on Sales ((2)) 10.3% 10.4% +10bps -10bps
Headline basic EPS ((2)) (pence) 43.3 46.7 +2.1% (7.2%)
Free cash flow ((2) ) 60.8 128.2 NA (52.6%)
Net Debt / EBITDA((2)) 1.3x 0.9x NA +0.4x
Statutory
Operating Profit 153.7 190.1 (13.8%) (19.1%)
Profit Before Tax 138.6 179.4 (16.3%) (22.7%)
Statutory basic EPS (pence) 33.5 44.0 (16.0%) (23.8%)
Cash inflow from operations 216.7 272.0 NA (20.3%)
Dividend (pence per share) 23.5 23.0 NA +2.2%
( )
( (1)) Underlying basis is at constant currency and excludes separately
reported items, and the impact of acquisitions and disposals.
((2)) For definitions of non-GAAP measures, refer to Note 16 in the Condensed
Group Financial Statements.
Highlights
· Robust Group performance with market share gains in Flow Control and
Foundry, delivered in challenging market conditions
· Together with resilient pricing and cost reductions, this partially
offset weak end markets experienced in the Foundry Division
· Group revenue, trading profit and return on sales stable
year-on-year on an underlying basis
· Good performance by our Steel Division despite weaker markets than
originally anticipated
· Positive net pricing across the year
· Flow Control continues to gain market share
· RoS improved by 110bps (underlying) to 11.4% driven by cost savings
and net positive pricing
· Challenging year for the Foundry Division as markets outside of
India weakened, offsetting strategic progress
· Good market share gains overall
· Accelerated delivery of cost-savings
· Return on sales reduced by 230bps (underlying) to 7.4%, with low
activity in EU+UK, North America and North Asia
· Acceleration of our group-wide cost reduction programme with £13m
delivered in-year and exit run-rate of c. £18m
· New product sales increased further to 19.1%, with 33 new products
launched in 2024 and a strong pipeline of new products for the coming years
· Strategic expansion programme in Asia and Flow Control largely
completed
· Acquired PiroMET, a refractory and robotics business in Turkey, in
February 2025, enhancing our position in the strategically important and
growing EEMEA market
· Trade working capital intensity reducing by 50bps to 22.9%
· Share buyback programmes successfully implemented in 2024, with 5%
of shares in issue bought back during the year. Second programme launched in
November 2024, continuing in 2025
· Strong balance sheet with net debt / EBITDA of 1.3x (31 December
2024)
· Proposed final dividend of 16.4p, bringing the full year dividend
to 23.5p, up 2.2%
· Strong safety performance with a record Lost time injury frequency
rate of 0.52
· Reduction of 27% in CO(2)e intensity vs. 2019 baseline, exceeding
our intermediary target of -20% by 2025
Comment from Patrick André, CEO:
"This has been a challenging year for Vesuvius with Foundry markets in Europe,
North Asia and the Americas weakening significantly and global Steel
production outside China negatively affected by the sharp increase of Chinese
steel exports. Despite this, thanks to significant cost cutting, resilient
pricing and market share gains, we have delivered a robust performance,
maintaining our results at the level of 2023 on an underlying basis,
demonstrating again the strength of our technologically differentiated
business model.
For the year ahead, while we remain confident in our own performance, we are
cautious on market conditions due to the uncertain economic environment
arising from the negative impact of trade tariffs which continue to evolve,
geopolitical volatility and the continuing structural weakness of Steel and
Foundry markets in Europe. We currently anticipate that our trading profit in
2025 will be at a broadly similar level to 2024 on a constant currency basis
and including the contribution from the PiroMET acquisition. We expect that
cashflow for 2025 will be significantly ahead of 2024, benefiting from our
working capital focus and a more normalised level of capex.
Given the near-term uncertain tariff and geopolitical environment and the
decline experienced in Foundry end markets over the last 18 months, we are now
targeting to achieve our mid-term Return on Sales target of at least 12.5% by
2028 and to deliver our cumulative £400m free cash flow target by 2027. This
will be partially dependent on a return to normal conditions in our
end-markets and will be supported by an extension of our cost reduction
programme which we are increasing from £30m to £45m by 2028."
Presentation of Full Year 2024 Results
Vesuvius management will make a presentation to analysts and investors on 6
March 2025 at 09:00 UK time at the London Stock Exchange, 10 Paternoster
Square, London EC4M 7LS. For those unable to attend, the event will be
livestreamed and can be accessed by clicking here
(https://sparklive.lseg.com/Vesuvius/events/7784d170-0f1a-4510-a56e-40c8beb78fd7/vesuvius-plc-full-year-results-2024)
. Participants can also join via an audio conference call. Please click here
(https://registrations.events/direct/LON5200584) to register. Once
registered, you will be provided with the information needed to join the
conference, including dial-in numbers and passcodes. Be sure to save this
information in your calendar.
For further information, please contact:
Vesuvius plc Patrick André, Chief Executive +44 (0) 207 822 0000
Mark Collis, Chief Financial Officer +44 (0) 207 822 0000
+44 (0) 7387 545 271
Rachel Stevens, Group Head of Investor Relations
MHP Communications Rachel Farrington/Ollie Hoare +44 (0) 203 128 8570
The person responsible for arranging the release of this announcement on
behalf of Vesuvius is Mark Collis, Chief Financial Officer.
About Vesuvius plc
Vesuvius is a global leader in molten metal flow engineering and technology
principally serving process industries operating in challenging
high‑temperature conditions.
We develop innovative and customised solutions, often used in extremely
demanding industrial environments, which enable our customers to make their
manufacturing processes safer, more efficient and more sustainable. These
include flow control solutions, advanced refractories and other consumable
products and increasingly, related technical services including data capture.
We have a worldwide presence. We serve our customers through a network of
cost-efficient manufacturing plants located close to their own facilities, and
embed our industry experts within their operations, who are all supported by
our global technology centres.
Our core competitive strengths are our market and technology leadership,
strong customer relationships, well established presence in developing markets
and our global reach, all of which facilitate the expansion of our addressable
markets.
Our ultimate goal is to create value for our customers, and to deliver
sustainable, profitable growth for our shareholders giving a superior return
on their investment whilst providing each of our employees with a safe
workplace where they are recognised, developed and properly rewarded.
We think beyond today to create solutions that will shape the future.
Forward looking statements
This announcement contains certain forward looking statements which may
include reference to one or more of the following: the Group's financial
condition, results of operations, cash flows, dividends, financing plans,
business strategies, operating efficiencies or synergies, budgets, capital and
other expenditures, competitive positions, growth opportunities for existing
products, plans and objectives of management and other matters.
Forward-looking statements can be identified by the use of terms such as
'intend', 'aim', 'project', 'anticipate', 'estimate', 'plan', 'believe',
'expect', 'forecasts', 'may', 'targets', 'could', 'should', 'will', 'continue'
or similar words.
Such forward looking statements, including, without limitation, those relating
to the future business prospects, revenue, working capital, liquidity, capital
needs, interest costs and income, in each case relating to Vesuvius, wherever
they occur in this announcement, are necessarily based on assumptions
reflecting the views of Vesuvius. Although Vesuvius makes such statements
based on assumptions that it believes to be reasonable, by their nature, these
forward looking statements are subject to a number of known and unknown risks,
uncertainties and other factors beyond Vesuvius' control that could cause
actual results, performance or achievements to differ materially from those
expressed or implied by the forward looking statements. Such forward looking
statements should, therefore, be considered in light of various important
factors that could cause actual results to differ materially from estimates or
projections contained in the forward looking statements. These include without
limitation: economic and business cycles; the terms and conditions of
Vesuvius' financing arrangements; foreign currency rate fluctuations;
competition in Vesuvius' principal markets; acquisitions or disposals of
businesses or assets; and trends in Vesuvius' principal industries.
The foregoing list of important factors is not exhaustive. When considering
forward looking statements, careful consideration should be given to the
foregoing factors and other uncertainties and events, as well as factors
described in documents the Company files with the UK regulator from time to
time including its annual reports and accounts. In light of these risks,
uncertainties and assumptions, the forward looking events discussed in this
announcement might not occur and such forward looking statements are not
guarantees or predictions of Vesuvius' future performance. You should not
place undue reliance on such forward looking statements which speak only as of
the date on which they are made. Past performance is no guide to future
performance and persons needing advice should consult an independent financial
adviser.
Neither Vesuvius nor any of its affiliates, associates, employees, directors,
officers or advisers assumes any responsibility for the accuracy or
completeness or undertakes any obligation, to update or revise any of these
forward-looking statements to reflect any new information or any changes in
events, conditions or circumstances on which any such forward-looking
statement is based save in respect of any requirement under applicable law or
regulation.
Vesuvius plc, 165 Fleet Street, London EC4A 2AE
Registered in England and Wales No. 8217766
LEI: 213800ORZ521W585SY02
www.vesuvius.com (http://www.vesuvius.com)
Vesuvius plc
Full Year Results for the twelve months ended 31 December 2024
In 2024, we have shown resilience despite difficult market conditions, thanks
to a strong focus on cost reduction and to the continuing benefits of our
technology strategy.
£m 2024 Reported 2023 Reported currency 2023 Underlying Reported Change Underlying Change
Revenue 1,820.1 1,929.8 (76.0) 1,853.7 (5.7%) (1.8%)
Trading Profit 188.0 200.4 (11.9) 188.4 (6.2%) (0.2%)
Return on Sales 10.3% 10.4% 10.2% -10bps +10bps
Resilient Group trading performance
In 2024, revenue was £1,820.1m, an underlying decrease of 1.8% compared to
2023, and a 5.7% decline on a reported basis, reflecting FX headwinds. The
small underlying decrease in revenue was principally due to lower volumes
(£30.1m), reflecting a weak market that we partially offset by market share
gains, and pricing declines of £3.5m reflecting the lower cost of raw
materials. Revenue in our Steel Division was stable on an underlying basis
reflecting some market share gains in a market which grew only very
moderately, while in Foundry, revenue reduced by 6.3% on an underlying basis,
principally reflecting lower market activity, which we partially offset by
market share gains.
Trading profit was £188.0m, stable on an underlying basis and a decrease of
6.2% on a reported basis versus the prior year reflecting FX headwinds. The
benefits of our £30m cost-saving programme delivered a £13m in-year benefit,
well ahead of our previous expectations resulting from the accelerated
delivery on specific projects, and a further benefit of £6m from short-term
actions. These were mostly offset by the negative profit impact of volume
reductions. Net pricing was essentially neutral for the Group with a modest
consolidated impact of minus £2m on trading profit. The Group achieved a
return on sales of 10.3% in 2024, 10 basis points ahead of 2023 on an
underlying basis. This resilient performance was achieved through the swift
implementation of cost reduction actions and market share gains, particularly
in Flow Control and in Foundry, supported by the differentiation of our
products.
Difficult market background in both Steel and Foundry
Global steel production remained subdued in the world excluding China, Russia,
Iran and Ukraine with growth limited to 0.8% for the full year (Source: World
Steel Association), due to sharply increasing steel exports from China. Steel
production in India continued to exhibit strong growth (+6.3% year-on-year),
as did South-East Asia (+5.3%) and EEMEA (EMEA excluding EU+UK, Iran, Russia
and Ukraine) (+4.1%). Conversely, Steel production declined in the Americas
(-2.9%) and in North Asia (-3.6%). Europe (EU+UK) only modestly recovered
from the very low point of 2023, with growth of +1.2%.
Despite steel production in China contracting by 1.7%, the level of net
exports continued to rise during the year, reaching 104 million tonnes, an
increase of c. 20 million tonnes versus 2023, due to an even sharper decline
in domestic steel consumption. These increasing exports put steel production
outside of China under strong pressure and depressed steel prices worldwide.
Foundry markets, with the exception of India, remained very weak throughout
2024, in particular in Europe, North Asia and in the Americas, as declining
industrial activity impacted the end markets of our customers. All
industrial end markets outside of China were affected, including the light
vehicle industry which had performed well in 2023. The foundry market decline
was particularly severe in EU+UK and in North Asia important regions for our
Foundry Division, and we now do not expect them to return to their
pre-pandemic levels in the near future.
Good performance in our Steel Division
Despite adverse market conditions, the Steel Division performed well in 2024.
On an underlying basis, the Steel Division revenue remained broadly stable
(-0.1%) while profit grew by 9.9%, resulting in return on sales increasing by
110bps. Revenue growth was driven by market share gains offsetting slightly
negative market volumes evolution overall due to our overweight market
position in North America, where Steel production declined in 2024.
Overall, we gained market share across the Steel Division, with gains across
the Flow Control business and in Advanced Refractories in the growing regions
of Asia and EEMEA, which more than offset some limited Advanced Refractories
market share losses in EU+UK and the Americas.
Headline pricing decreased slightly, reflecting a decline in raw materials
costs. Pricing net of cost inflation (raw materials and labour), however,
remained positive.
Steel Division profits were also supported by the strong cost reduction
actions undertaken as part of the group-wide £30m cost-saving programme.
Performance of the Foundry Division negatively impacted by the short-term
market conditions, despite good underlying progress
Severe market decline, in particular in EU+UK and North Asia which represents
c. 40% of the Foundry Division turnover, reduced overall Foundry Division
revenue by c. 10%. The division was, however able to mitigate this general
market downturn with market share gains of c. 5%.
Headline pricing also decreased during the year, reflecting a decline of raw
materials prices. Pricing net of cost inflation (labour and raw materials) was
slightly negative as labour inflation was not fully compensated by price
increases.
The division reacted strongly to this challenging environment, successfully
implementing cost-reduction actions and accelerating production and resources
transfers from EU+UK to lower cost and faster growing areas.
We expect this this strong action plan will pave the way for an improvement of
the Foundry Division results going forward despite the continuing difficult
market conditions in Europe and North Asia.
Capacity-expansion investment programme in Flow Control and in Asia nearing
completion
The investment programme to expand capacity and support the growth of Flow
Control worldwide and Advanced Refractories and Foundry in Asia, initiated in
2021, is now largely complete and will underpin the progression of our results
and profitability in the years to come. The expanded production capacity for
VISO, Slide Gate and Mould Flux in Flow Control is now largely operational and
will support the business unit's expansion in India, South-East Asia, EEMEA
and North America.
In Advanced Refractories, the expansion of our Basic monolithic and AlSi
monolithic capacity at our new flagship plant in Vizag is nearing completion
and will support profitable growth of the business unit in India going
forward.
In Foundry, our non-ferrous flux production line in China is now fully
operational and will enable the business unit to accelerate its penetration of
the fast-growing aluminium foundry market.
This three-year capex programme of capacity expansion will be mostly completed
by the end of H1 2025. Following this, capex is expected to revert towards
normalised levels.
Good cash generation and strong balance sheet
The business delivered adjusted operating cashflow of £130.3m in 2024, which
represented a 69% cash conversion rate for the year. Free cashflow was
£60.8m, after cash capex of £100.8m (2023: £92.6m). We maintained a strict
focus on working capital management and were able to reduce our trade working
capital intensity further, which was 22.9% at the year end, versus 23.4% last
year.
Our balance sheet remained strong with a debt leverage ratio of 1.3x (31
December 2023: 0.9x), at the lower end of our 1.0 - 2.0x range. This reflects
the free cashflow described above, £63.4m of payments relating to the share
buybacks executed during the year and dividends of £61.1m.
In February 2025 we concluded the refinancing of our RCF facility, extended to
£475m, with a syndicate of 10 banks for a term of 4.5 years.
Continued progress in the productivity of R&D and new product development
We increased our investment in research and development in 2024 (on a constant
currency basis), spending £36.9m, equating to 2.0% of revenue. This was fully
expensed in our income statement. Our two focus areas remain: (1) innovation
in materials science, with an objective to continuously improve the
performance of our consumables, and (2) the development of mechatronics
solutions to enable our customers to substitute the operators who manipulate
our consumable refractories with robots and, by doing so, improve their
safety, reliability, cost and quality performance.
Our New Product Sales ratio, defined as the percentage of our sales realised
from products which didn't exist five years ago, reached 19.1% for the Group
in 2024 (and was over 20% in our Flow Control business). This is up from 17.6%
in 2023 and well on track towards our group target of over 20% by 2026. We
launched 33 new products in 2024 and have an extensive pipeline of products
under development which will be progressively introduced in the market over
the coming years and will support our ambition to grow our revenue and
profitability.
Our robotics business is also accelerating, with orders for robotic systems
for Flow Control growing from 5 projects in 2023 up to 9 in 2024. We also saw
a considerable increase in robots shipped, up to 6 in the year versus one in
2023, reflecting the significant positive momentum in orders over the last two
years.
Cost optimisation programme delivering above expectations
Our cost optimisation programme, launched in late 2023, initially aimed to
deliver £30m of annually recurring cash savings by 2026. This program covers
all of our worldwide activities and focuses on operational improvement, lean
initiatives, automation and digitalisation as well as optimisation of our
manufacturing footprint.
In 2024, we delivered cost savings under this programme of £13m with an
annualised exit run-rate of £18m. Of the savings delivered in-year, slightly
under half were in the Foundry Division, reflecting swift action taken to
address costs in a challenging environment. The cost savings achieved to date
have been weighted towards headcount reductions. We expect to deliver
incremental in-year cost savings of £12m - £14m in 2025.
The one-off costs to deliver these savings are shown as separately reported
items, and in FY24 were £14.6m charged to the income statement with a
cashflow impact of £7.9m. We anticipate one-off costs in 2025 in the region
£7-10m and retain our guidance that the total programme will cost c. £40m,
including associated capex costs.
Given this good progress in 2024, we are now raising our cash cost savings
objective from £30m of recurring annual savings by 2026 to £45m of recurring
annual savings by 2028, with an incremental cost of delivery of c. £20m.
Acquisition in Turkey
Following the agreement reached in November 2024, on 28 February 2025 we
completed the acquisition of a 61.65% shareholding in PiroMET, a Turkish
refractory company, for €26.2m. The acquisition will strengthen our Advanced
Refractory business in the fast-growing region of EEMEA and will also allow us
to leverage PiroMET's expertise in robotics and gunning worldwide.
Best ever safety performance
In 2024 we achieved a further improvement in safety, with a Lost Time Injury
Frequency Rate (the number of injuries necessitating a lost work-shift, per
million hours worked) of 0.52, our best result ever, having achieved 0.60 in
2023. This positions Vesuvius among the best-in-class companies worldwide and
is the result of many years of efforts to integrate safety as the number one
priority in the company culture. We remain committed to our goal of zero
accidents, and we will strive towards this objective.
Significant progress on our journey to net zero
We continued to implement our action plan to progressively decarbonise our
activities. As a result, we have reduced our carbon intensity (CO(2)e tonnes
per million tonnes product sold) by 27% as compared with our 2019 reference
year, on a pro forma basis (-40% on a reported basis), significantly ahead of
our 2025 objective of a 20% reduction. This has been achieved through
decarbonising our electricity, improving energy efficiency, and moving from
higher to lower carbon-emitting energy sources. As part of this initiative,
our plant in Rio de Janeiro, Brazil, became our first carbon-free major
manufacturing site operating exclusively on renewable electricity and
biomethane.
Dividend and share buy-backs
Vesuvius has a progressive dividend policy. As a minimum we will maintain
our dividend per share year-on-year and increase it, through the cycle, in
line with earnings per share growth. In addition, where cash is not required
for additional investment in the business and while maintaining a strong and
prudent balance sheet, we will return cash to shareholders via other means,
such as share buy-backs.
The Board has recommended a final dividend of 16.4 pence per share, which
together with the interim dividend paid of 7.1 pence per share, brings the
total dividend for the year to 23.5 pence per share, which is a 2.2% year on
year increase on the total dividend for 2023 of 23.0 pence per share. This
represents a dividend cover of 1.8x compared to headline EPS for 2024.
Over 2024 we completed our first £50m share buyback (initiated in December
2023) and started a second £50m tranche in November 2024, resulting in a
total cash outflow on share repurchases of £62.4m in FY24 (£63.4m inclusive
of costs), with £34.5m remaining under the announced programme. In total
13.8m shares were repurchased during the year, reducing our shares in issue by
c. 5%.
Current trading and outlook
This has been a challenging year for Vesuvius with Foundry markets in Europe,
North Asia and the Americas weakening significantly and global Steel
production outside China negatively affected by the sharp increase in Chinese
steel exports during the year. Despite this, thanks to significant cost
cutting, resilient pricing and market share gains, we have delivered a robust
performance, maintaining our results at the level of 2023 on an underlying
basis, demonstrating again the strength of our technologically differentiated
business model.
For the year ahead, while we remain confident in our own performance, we are
cautious on market conditions due to the uncertain economic environment
arising from the negative impact of trade tariffs which continue to evolve,
geopolitical volatility and the continuing structural weakness of Steel and
Foundry markets in Europe. We currently anticipate that our trading profit in
2025 will be at a broadly similar level to 2024 on a constant currency basis
and including the contribution from the PiroMET acquisition. We expect that
cashflow for 2025 will be significantly ahead of 2024, benefiting from our
working capital focus and a more normalised level of capex.
Medium-term strategic position
In November 2023 we presented our strategy and medium-term targets to
investors at a Capital Markets Event. We highlighted favourable medium-term
trends in our end-markets, and, through our market leading investment in
research and development, demonstrated our ability to gain both market share
while pricing for the value we generate for our customers. We also set out a
cost reduction programme to achieve at least £30m of annually recurring costs
savings in 2026.
Over the past year, we have implemented our programme and delivered on the
cost reduction actions, as set out above. We have also seen the benefit of our
technology-led business model, with our differentiation driving market share
gains in Flow Control and Foundry. The market backdrop, however, has been
challenging, particularly in our Foundry Division where the decline in market
activity has been significant, such that the benefit of cost savings in FY24
has largely been offset by this market decline. Despite the short-term
uncertainties in our end markets, we remain confident in the mid to long term
growth potential of these markets and in particular growth in the steel market
outside of China. The strength of our technology-based business model should
also enable us to continue outperforming our underlying markets in Flow
Control and Foundry.
Given the near-term uncertain tariff and geopolitical environment and the
decline experienced in Foundry end markets over the last 18 months, we are now
targeting to achieve our mid-term Return on Sales target of at least 12.5% by
2028 and to deliver our cumulative £400m free cash flow target by 2027. This
will be partially dependent on a return to normal conditions in our
end-markets and will be supported by an extension of our cost reduction
programme which we are increasing from £30m to £45m by 2028.
Operational Review
Vesuvius comprises two Divisions, Steel and Foundry. The Steel Division
operates as three business lines, Flow Control, Advanced Refractories and
Sensors & Probes. Changes described are versus 2023 on an underlying
basis, excluding the impact of FX, unless otherwise noted. There were no
acquisitions or disposals in 2024 and hence no adjustments were required.
Steel Division
Steel Division 2024 (£m) 2023 (£m) Underlying change Change
Flow Control Revenue 769.0 793.0 1.3% (3.0%)
Advanced Refractories Revenue 535.6 567.9 (2.6%) (5.7%)
Steel Sensors & Probes Revenue 39.2 39.1 7.0% 0.4%
Total Steel Revenue 1,343.8 1,400.0 (0.1%) (4.0%)
Total Steel Trading Profit 153.0 147.6 9.9% 3.7%
Total Steel Return on Sales 11.4% 10.5% +110bps +90bps
Our Steel Division reported revenues of £1,343.8m in 2024, flat on an
underlying basis (-0.1%) and a decrease of 4.0% on a reported basis,
reflecting currency headwinds. The flat performance reflects an increase in
revenue of 1.3% in Flow Control offset by a 2.6% reduction in Advanced
Refractories. Revenue from Sensors and Probes grew 7% due to market share
gains. The impact of the underlying steel market performance was negative
given our mix of business, as a result of our strong position in the North
America market where Steel production declined during the year, which we
partially offset by market share gains.
Steel Division trading profit grew by 9.9% on an underlying basis to £153.0m.
The profit impact from volume declines was greater than usual reflecting some
plant underutilisation in recently expanded sites. The impact of these
negative volumes was offset by a combination of modestly positive net pricing
and accelerated cost savings, both as part of our group-wide cost-saving
programme, and additional one-off benefits. The rise in trading profit on
broadly flat revenue has resulted in the divisional return on sales reaching
11.4%, an increase of 110bps.
Flow Control
Flow Control Revenue 2024 (£m) 2023 (£m) Underlying change Change
Americas 297.8 317.8 (1.1%) (6.3%)
Europe, Middle East & Africa (EMEA) 241.3 252.7 (1.2%) (4.5%)
Asia-Pacific 230.0 222.4 7.8% 3.4%
Total Flow Control Revenue 769.0 793.0 1.3% (3.0%)
In 2024, revenue in the Group's Flow Control business increased by 1.3% on an
underlying basis to £769.0m (a decline of 3.0% on a reported basis after FX
headwinds). This performance was driven by positive pricing and overall market
share gains, partially offset by market-driven volume declines.
In the Americas, overall underlying revenue declined 1.1%, made up of a small
out-performance of the market in North America (volumes reducing 3% against a
market decline of 4%) but with modestly positive pricing and a slight decline
in South America with sales volumes declining moderately while steel
production volumes were broadly flat, in part due to a significant destocking
effect at our Argentinian customers. Pricing in South America reduced
slightly.
In EMEA, revenue declined 1.2% compared to 2023. In EEMEA (excluding Iran,
Russia and Ukraine) where steel production grew c. 4%, we gained market share
with volume growth significantly ahead of the market. This was offset by
moderate volume declines in the EU+UK, slightly behind a flat market, due to a
voluntary reduction of our sales to some customers at risk of insolvency.
Pricing over the region was broadly flat.
In Asia Pacific, revenue grew 7.8%, driven by double-digit sales volume growth
in India, well ahead of market volume growth and high-single-digit growth in
China despite the steel market contracting in this region.
Advanced Refractories
Advanced Refractories Revenue 2024 2023 Underlying change Change
(£m) (£m)
Americas 188.2 212.1 (7.6%) (11.2%)
Europe, Middle East & Africa (EMEA) 167.6 191.5 (10.9%) (12.5%)
Asia-Pacific 179.7 164.3 13.9% 9.4%
Total Advanced Refractories Revenue 535.6 567.9 (2.6%) (5.7%)
Advanced Refractories reported revenue of £535.6m in 2024, a decrease of
2.6%. This was broadly evenly split between pricing declines (partly
reflecting input cost decreases) and some volume decline. Sales volume decline
was higher than the underlying steel market in both the Americas and the EU+UK
region of EMEA, due to market share losses at customers where we had
historically given priority to pricing. Market share in these areas has now
stabilised. In Asia Pacific, revenue grew 13.9% driven by very significant
double-digit volume increases in India and China, materially ahead of the
market, reflecting both demand for our high-quality products and the benefit
of new capacity coming on stream in these regions.
Sensors & Probes
Steel Sensors & Probes Revenue 2024 2023 Underlying change Change
(£m) (£m)
Americas 28.3 28.2 8.4% 0.2%
Europe, Middle East & Africa (EMEA) 10.5 10.2 5.8% 3.2%
Asia-Pacific 0.4 0.6 (32.2%) (34.8%)
Total Steel Sensors & Probes Revenue 39.2 39.1 7.0% 0.4%
Revenue in Sensors & Probes was £39.2m in 2024, up 7% year-on-year on an
underlying basis. Growth has been driven mainly by robust market demand in
South America during the first half of the year, increased sales of new
high-value products, and by winning new customers in EEMEA.
Foundry Division
Foundry Revenue 2024 2023 Underlying change Change
(£m) (£m)
Americas 119.3 136.4 (7.8%) (12.6%)
Europe, Middle East & Africa (EMEA) 183.6 215.1 (12.7%) (14.6%)
Asia-Pacific 173.4 178.3 2.7% (2.7%)
Total Foundry Revenue 476.3 529.8 (6.3%) (10.1%)
Total Foundry Trading Profit 35.0 52.8 (28.9%) (33.6%)
Total Foundry Return on Sales 7.4% 10.0% -230bps -260bps
Our Foundry Division experienced a difficult trading environment, with
reported revenues of £476.3m in 2024, an underlying decrease of 6.3%,
reflecting contracting revenues in EMEA (-12.7%) and the Americas (-7.8%),
which we partially offset by growth in Asia-Pacific (+2.7%) including India
(+12%) and China (+6%). The underlying fall in revenue was largely due to c.
10% market volume declines - partially offset by c. 5% revenue growth from
market share gains - and modestly negative sales price. The market contraction
described was driven by double-digit declines in our markets in EU+UK and
North Asia and a high-single-digit market decline in North America. Against
this backdrop, India continued its strong and sustained growth trend. Market
share gains were largest in EMEA, India and China, with the latter being
supported by our new capacity in the region. Foundry markets have now
stabilised at the level of H2 2024.
Trading profit and return on sales contracted 28.9% and 230bps respective,
both on an underlying basis, reflecting the negative impact of significant
volume declines, particularly in our traditionally most profitable regions.
This was partially offset by accelerated cost savings as part of the
group-wide plan to deliver £30m savings by 2026.
Financial Review
Basis of Preparation
All references in this financial review are to headline performance unless
stated otherwise. See Note 16.1 to the Group Financial Statements for the
definition of headline performance.
We also report key metrics on an underlying basis, where we adjust to ensure
appropriate comparability between periods, irrespective of currency
fluctuations and any business acquisitions and disposals.
This is done by:
· Restating the previous period's results at the same foreign exchange
(FX) rates used in the current period
· Removing the results of disposed businesses in both the current and
prior years
· Removing the results of acquired businesses in both the current and
prior years
Therefore, for 2024, we have:
· Retranslated 2023 results at the FX rates used in calculating the
2024 results
· No adjustments have been required for acquisitions or disposals
2024 performance overview
Income statement
£m 2024 2023 % change
Revenue
Reported Reported Currency Underlying Underlying Reported
Steel 1,343.8 1,400.0 (54.7) 1,345.2 (0.1%) (4.0%)
Foundry 476.3 529.8 (21.3) 508.5 (6.3%) (10.1%)
Total Group 1,820.1 1,929.8 (76.0) 1,853.7 (1.8%) (5.7%)
Trading profit
Steel 153.0 147.6 (8.4) 139.2 9.9% 3.7%
Foundry 35.0 52.8 (3.5) 49.3 (28.9%) (33.6%)
Total Group 188.0 200.4 (11.9) 188.4 (0.2%) (6.2%)
Return on sales
Steel 11.4% 10.5% 10.3% +110bps +90bps
Foundry 7.4% 10.0% 9.7% -230bps -260bps
Total Group 10.3% 10.4% 10.2% +10bps -10bps
2024 was a stable year in terms of underlying trading profit and return on
sales overall, despite depressed underlying markets in Foundry in particular,
and we have continued to generate good free cashflow. This has enabled the
Board to recommend an attractive final dividend to our shareholders and
commence a second share buy-back, while maintaining investment in strategic
areas.
Revenue for the year decreased by 5.7%, of which 3.9% related to FX headwinds
and 1.8% underlying performance. Underlying revenue performance was driven by
a decline in volume of1.6% and a reduction in pricing of 0.2%. On a reported
basis, the Steel and Foundry Division revenue decreased by 4.0% and 10.1%,
respectively, in the year.
We achieved a trading profit of £188.0m, down 6.2% on a reported basis of
which 0.2% was underlying performance and 6.0% related to FX headwinds. Within
the underlying profit changes, there was a £15.1m decline due to the
drop-through from volume declines, and a £2.0m decline from net pricing. In
addition, there was a further contribution from our ongoing cost-saving
programme of £13m plus a £6.0m benefit relating to lower management
incentives based on FY24 financial performance, and a net -£2.4m relating to
other one-off items. Return on sales of 10.3% was up 10bps on an underlying
basis.
The net impact of average 2024 exchange rates compared to 2023 averages has
been a headwind of £11.9m at a trading profit level, in particular, due to
the depreciation of the Brazilian Real, the US Dollar and the Indian Rupee
versus Sterling. Translated at FX rates on 27 February 2025, 2024 revenue
would have been c. £1799.9m and trading profit would be c. £185.2m, giving
currency headwinds of £20m and £2.8m, respectively.
Investment in R&D is central to our strategy of delivering market-leading
product technology and services to customers. In 2024 we spent £36.9m on
R&D activities (2023: £37.4m), which represents 2.0% of our revenue
(2023: 2.0%, on a constant currency basis) and a small increase in expenditure
on a constant currency basis.
Net Interest cost for FY24 increased to £16.2m (2023: £11.6m), principally
related to a reduction in finance income from £16.6m to £10.9m due to a
reduction in deposits held in Argentina that were accruing a high interest
rate. This reduction in deposits arose following the successful repatriation
of surplus cash which would have otherwise devalued relative to Sterling.
Profit from joint ventures and associates was broadly flat year on year at
£1.1m (2023: £0.9m).
Separately reported items of £34.3m were recognised in FY24 compared to
£10.3m in FY23. £10.0m relates to amortisation of acquired intangible
assets, which is consistently excluded from our adjusted profit measure (FY23:
£10.3m). In addition, one-off costs of £14.6m were incurred relating to our
cost saving programme, and in addition a provision for site remediation works
was increased by £9.7m, reflecting a reassessment of the duration of the
related liability. Due to the one-off nature of both these charges, they are
shown as separately reported.
Headline profit before tax ("PBT") was £172.9m, down 8.9% versus last year
(£189.7m) on a reported basis. Including separately reported items, PBT of
£138.6m was 22.7% lower than last year.
A key measure of tax performance is the Headline Effective Tax Rate ("ETR"),
which is calculated on the income tax associated with headline performance,
divided by the headline profit before tax and before the Group's share of
post-tax profit of joint ventures. The Group's headline ETR, based on the
income tax costs associated with headline performance of £47.2m (2023:
£51.9m), was 27.5% (2023: 27.5%).
The Group's total income tax costs for the period include a credit within
separately reported items of £8.9m (2023: £3.1m) which primarily relates to
deferred tax on intangible assets and restructuring costs.
A tax charge reflected in the Group Statement of Comprehensive Income in the
year amounted to £0.8m (2023: £2.0m charge) which primarily relates to tax
on net actuarial gains and losses on pensions.
We expect the Group's effective tax rate in 2025 on headline profit before tax
and before the share of post-tax profits from joint ventures to be in line
with that in 2024, dependent on profit mix and any one-off items.
Non-controlling interests principally comprise the minority holdings in Indian
subsidiaries for the Steel and Foundry businesses. This increased to £13.1m
in 2024 (2023: £12.1m) reflecting the ongoing strong growth in profit in
those subsidiaries.
Headline EPS from continuing operations at 43.3p was 7.2% lower on an
underlying basis than 2023 (46.7p), reflecting both the lower earnings and the
higher level of non-controlling interests, partially offset by a reduction in
average shares in issue from 269.1m to 260.0m (basic), reflecting both the two
share buyback programmes undertaken in 2024, and the purchase of shares into
the ESOP. Statutory EPS of 33.5p is 23.8% lower than the prior year (2023:
44.0p) reflecting the factors just described and higher separately reported
costs.
Dividend
The Board has recommended a final dividend of 16.4 pence per share to be paid,
subject to shareholder approval, on 6 June 2025 to shareholders on the
register at 25 April 2025. When added to the 2024 interim dividend of 7.1
pence per share paid on 13 September 2024, this represents a full-year
dividend of 23.5 pence per share. The last date for receipt of elections from
shareholders for the Vesuvius Dividend Reinvestment Plan will be 15 May 2025.
Cost saving programme
At the start of 2024 we initiated an efficiency programme to realise recurring
savings of £30m per annum by 2026, of which £13m has been delivered in 2024,
significantly ahead of schedule as we accelerated our savings in response to
the difficult trading environment. We expect to deliver further cost savings
of £12 - 14m in 2025. The programme costs are expected to be c. £40m,
including capex and operating expense, of which c. £14.6m of operating
expense has been incurred in 2024 with a further £7-10m expected in 2025. As
set out above, these restructuring costs are excluded from underlying
performance, allowing for a clear measure of our operating performance.
Cash-flow and balance sheet
Our cash management performance was solid, achieving an 69% cash conversion
(2023: 93%), reflecting broadly flat trade working capital and continued
investment in strategic capacity expansion.
We measure working capital both in terms of actual cash flow movements, and as
a percentage of sales revenue. Trade working capital as a percentage of sales
in 2024 improved to 22.9% (2023: 23.4%), measured on a 12-month moving average
basis. The improvement was principally due to a reduction in debtor days on a
12 -month average basis by 1.3 days, an increase in creditor days by 1.9 days
and flat inventory days.
Free cash flow from continuing operations was £60.8m in 2024 (2023:
£128.2m).
Capital expenditure
Capital expenditure in 2024 was £100.8m in cash outflow (2023: £92.6m) and
£116.1m including capitalised leases (2023: £125.3m) of which £92.2m was in
the Steel Division (2023: £93.2m) and £23.9m in the Foundry Division (2023:
£32.1m). Capital expenditure on revenue-generating customer installation
assets, almost entirely in Steel, was £11.0m (2023: £8.4m) and we spent c.
£39m in 2024 on growth capex, also principally in Steel. Total cash capex in
2025 is expected to be c. £80 -85m, reflecting a modest level of growth capex
which is being concluded in H1 2025. Capital expenditure will then revert to
more normalized levels.
Net debt
Net debt on 31 December 2024 was £329.2m, a £91.7m increase compared to
£237.5m on 31 December 2023, due to free cash flow of £60.8m offset
principally by dividends of £61.1m, share buybacks of £63.4m and purchases
of shares for our ESOP trust of £17.1m.
At the end of 2024, the net debt to EBITDA ratio was 1.3x (2023: 0.9x) and
EBITDA to interest was 18.4x (2023: 31.5x). These ratios are monitored
regularly to ensure that the Group has sufficient financing available to run
the business and fund future growth.
The Group's debt facilities have two financial covenants: the ratios of net
debt to EBITDA (maximum 3.25x limit) and EBITDA to interest (minimum 4x
limit). Certain adjustments are made to the net debt calculations for bank
covenant purposes, the most significant of which is to exclude the impact of
IFRS 16.
The Group had committed borrowing facilities of £669.6m as of 31st December
2024 (2023: £685.8m), of which £202.5m was undrawn (2023: £333.4m).
Return on invested capital (ROIC)
Our ROIC for 2024 was 8.4% (2023: 8.9%). Excluding goodwill on our balance
sheet from the acquisition of Foseco in 2008, ROIC for 2024 would be 14.3%.
ROIC is our key measure of return from the Group's invested capital,
calculated as trading profit less amortisation of acquired intangibles plus
share of post-tax profit of joint ventures and associates for the previous 12
months after tax, divided by the average (being the average of the opening and
closing balance sheet) invested capital (defined as: total assets excluding
cash plus non-interest-bearing liabilities), at the average foreign exchange
rate for the year).
Pensions
The Group has a limited number of historical defined benefit plans located
mainly in the UK, USA, Germany and Belgium. The main plans in the UK and USA
are closed to further benefits accrual. All of the liabilities in the UK were
insured following a buy-in agreement with Pension Insurance Corporation plc
("PIC") in 2021. This buy-in agreement secured an insurance asset from PIC
that matches the remaining pension liabilities of the UK Plan, with the result
that the Company no longer bears any investment, longevity, interest rate or
inflation risks in respect of the UK Plan.
The Group's net pension liability at 31 December 2024 was £37.4m (2023:
£46.3m liability).
Technical guidance for 2025
Depreciation in 2025 is expected to be in the range £65m - £70m and the net
finance charge is expected to be c. £18 - 20m.
Financial Risk Factors
The Group's approach to risk management, including the mitigations in place
for our principal risks, is detailed below. We consider the main financial
risk faced by the Group to be a material business interruption incident
leading to reduced revenue and profit. We also manage broad financial risks
such as cost inflation, bank financing and capital market activity and to a
lesser extent foreign exchange and interest rate movements (see Note 25 to the
Group Financial Statements). We mitigate liquidity risk by financing using
both the bank and private placement debt markets and we mitigate refinancing
risk by seeking to avoid a concentration of debt maturities in any one
calendar year.
Principal Risks and Uncertainties
The Board exercises oversight of the Group's Principal Risks and reviews the
way in which the Group manages those risks. The Board takes overall
responsibility for establishing and maintaining a system of risk management
and internal control and for reviewing its effectiveness.
The Board reviewed the Principal Risks and Uncertainties facing the Group
during 2024 and considers that they remain unchanged compared with those
published in the Annual Report for the year ended 31 December 2023. The
Principal Risks which could have a material impact on the Group's performance
are as follows:
- End market risk
- Protectionism and globalization
- Product quality failure
- Complex and changing regulatory environment
- Failure to secure innovation
- Business interruption
- People, culture and performance
- Health and safety
- Environmental, Social and Governance criteria
Risk update
Whilst there are no changes to the Principal Risks and Uncertainties facing
the Group, the level geopolitical risk remains elevated, our end markets have
been challenging, and global trade dynamics are in flux. In addition,
workforce demographics are changing and the potential threat from cyber
security attacks continues to evolve. Each of these risks has the potential to
impact the Principal Risks facing the Group; specifically End market risk;
Protectionism and globalisation; Complex and changing regulatory environment;
People, culture and performance; and the risk of Business interruption.
Further information on these Principal Risks and the way in which the Group
manages them are detailed in the 2024 Annual Report.
6 March 2025
Group Income Statement 2024 2023
For the year ended 31 December 2024
((1)) Headline performance ((1)) Separately reported items Total ((1)) Headline performance ((1)) Separately reported items Total
Notes £m £m £m £m £m £m
Revenue 2 1,820.1 - 1,820.1 1,929.8 - 1,929.8
Manufacturing costs (1,316.4) - (1,316.4) (1,391.9) - (1,391.9)
Administration, selling and distribution costs (315.7) - (315.7) (337.5) - (337.5)
Trading profit((2)) 2 188.0 - 188.0 200.4 - 200.4
Cost reduction programme expenses 3 - (14.6) (14.6) - - -
Provision for future water treatment at disused mine 3 - (9.7) (9.7) - - -
Amortisation of acquired intangible assets 2 - (10.0) (10.0) - (10.3) (10.3)
Operating profit/(loss) 188.0 (34.3) 153.7 200.4 (10.3) 190.1
Finance expense (27.1) - (27.1) (28.2) - (28.2)
Finance income 10.9 - 10.9 16.6 - 16.6
Net finance costs 4 (16.2) - (16.2) (11.6) - (11.6)
Share of post-tax income of joint ventures and associates 1.1 - 1.1 0.9 - 0.9
Profit/(loss) before tax 172.9 (34.3) 138.6 189.7 (10.3) 179.4
Income tax (charge)/credits 5 (47.2) 8.9 (38.3) (51.9) 3.1 (48.8)
Profit/(loss) after tax 125.7 (25.4) 100.3 137.8 (7.2) 130.6
Profit/(loss) attributable to:
Owners of the parent 112.6 (25.4) 87.2 125.7 (7.2) 118.5
Non-controlling interests 13.1 - 13.1 12.1 - 12.1
Profit/(loss) 125.7 (25.4) 100.3 137.8 (7.2) 130.6
Earnings per share((3)) - pence 6
Continuing and total operations - basic 43.3((1)) 33.5 46.7 ((1)) 44.0
42.7((1)) 33.1 46.2 ((1)) 43.6
- diluted
(1) Headline performance and separately reported items are non-GAAP
measures. Headline performance is defined in Note 16.1 and separately reported
items are defined in Note 1.5.
(2) Trading profit is a non-GAAP measure and is defined in Note
16.4.
(3) Earnings per share are attributable to the ordinary equity holders of
the parent.
The above results were derived from continuing operations. Manufacturing costs
are costs of goods sold. The pre-tax separately reported items would form part
of Administration, selling & distribution costs if classified within
headline performance, which including these amounts would total £350.0m
(2023: £347.8m
Group Statement of Comprehensive Income
For the year ended 31 December 2024
2024 2023
£m £m
Profit after tax 100.3 130.6
Remeasurement of defined benefit assets/liabilities 3.6 8.4
Income tax relating to items not reclassified (0.8) (2.0)
Items that will not subsequently be reclassified to income statement 2.8 6.4
Exchange differences on translation of the net assets of foreign operations (49.1) (84.3)
Exchange differences on translation of net investment hedges 7.1 7.9
Net change in costs of hedging (0.1) 0.4
Change in the fair value of the hedging instrument 1.5 (4.2)
Amounts reclassified from Net finance costs (1.2) 3.5
Items that may subsequently be reclassified to income statement (41.8) (76.7)
Other comprehensive loss net of income tax (39.0) (70.3)
Total comprehensive income 61.3 60.3
Total comprehensive income attributable to:
Owners of the parent 49.5 51.7
Non-controlling interests 11.8 8.6
Total comprehensive income 61.3 60.3
The above results were derived from continuing operations.
Group Statement of Cash Flows
For the year ended 31 December 2024
2024 2023
Notes £m £m
Cash flows from operating activities
Cash generated from operations 9 216.7 272.0
Interest paid (20.9) (16.8)
Interest received 9.0 14.1
Income taxes paid (46.1) (52.8)
Net cash inflow from operating activities 158.7 216.5
Cash flows from investing activities
Purchases of property, plant & equipment (88.1) (84.6)
Purchases of intangible assets (12.7) (8.0)
Proceeds from the sale of property, plant and equipment 4.3 5.4
Proceeds from the sale of associates 0.4 -
Dividends received from joint ventures 0.7 1.0
Net cash outflow from investing activities (95.4) (86.2)
Net cash inflow before financing activities 63.3 130.3
Cash flows from financing activities
Proceeds from borrowings 134.8 -
Repayment of borrowings (13.0) (37.1)
Payment of lease liabilities (18.2) (24.2)
Purchase of ESOP shares (17.1) (1.1)
Share buyback (63.4) (3.1)
Dividends paid to owners of the Parent 7 (61.1) (60.7)
Dividends paid to non-controlling shareholders (2.5) (2.1)
Net cash outflow from financing activities (40.5) (128.3)
Net increase in cash and cash equivalents 8 22.8 2.0
Cash and cash equivalents at 1 January 160.8 179.8
Effect of exchange rate fluctuations on cash and cash equivalents 8 (5.0) (21.0)
Cash and cash equivalents at 31 December 178.6 160.8
Free cash flow
Net cash inflow from operating activities 158.7 216.5
Purchases of property, plant & equipment (88.1) (84.6)
Purchases of intangible assets (12.7) (8.0)
Proceeds from the sale of property, plant and equipment 4.3 5.4
Proceeds from the sale of associates 0.4 -
Dividends received from joint ventures 0.7 1.0
Dividends paid to non-controlling shareholders (2.5) (2.1)
Free cash flow(1) 16 60.8 128.2
(1) For definitions of alternative performance measures, refer to Note 16
Group Balance Sheet 2024 2023
As at 31 December 2024 restated(1)
Notes £m £m
Assets
Property, plant and equipment 482.6 460.8
Intangible assets 690.9 706.0
Interests in joint ventures and associates 11.0 11.3
Deferred tax assets 109.9 114.6
Other receivables 26.7 26.8
Investments 15 0.2 0.3
Derivative financial instruments 1.1 0.6
Employee benefits - net surpluses 10 34.1 34.6
Total non-current assets 1,356.5 1,355.0
Cash and short-term deposits 8 186.4 164.2
Trade and other receivables 438.9 460.5
Inventories 295.4 291.0
Income tax receivable 12.9 11.5
Derivative financial instruments 15 3.6 -
Total current assets 937.2 927.2
Total assets 2,293.7 2,282.2
Equity
Issued share capital 26.4 27.7
Retained earnings 2,645.7 2,691.2
Other reserves (1,503.7) (1,464.6)
Equity attributable to the owners of the parent 1,168.4 1,254.3
Non-controlling interests 75.2 65.9
Total equity 1,243.6 1,320.2
Liabilities
Interest-bearing borrowings(1) 8 439.8 378.0
Other payables 6.9 9.1
Provisions 14 54.8 47.6
Deferred tax liabilities 16.3 23.5
Employee benefits - net liabilities 10 71.5 80.9
Total non-current liabilities 589.3 539.1
Interest-bearing borrowings(1) 8 80.4 24.2
Trade and other payables 363.4 377.8
Income tax payable 6.6 9.8
Provisions 14 10.3 11.0
Derivative financial instruments 15 0.1 0.1
Total current liabilities 460.8 422.9
Total liabilities 1,050.1 962.0
Total equity and liabilities 2,293.7 2,282.2
(1) Following the amendments to IAS1, amounts due under the committed
syndicated bank facility have been reclassified as non-current, refer to Note
15 .
Group Statement of Changes in Equity
For the year ended 31 December 2024 Issued share capital Other reserves Retained earnings Owners of the parent Non-controlling interests Total equity
£m £m £m £m £m £m
As at 1 January 2023 27.8 (1,391.4) 2,623.8 1,260.2 59.4 1,319.6
Profit - - 118.5 118.5 12.1 130.6
Remeasurement of defined benefit liabilities/assets - - 8.4 8.4 - 8.4
Income tax relating to items not reclassified - - (2.0) (2.0) - (2.0)
Exchange differences on translation of the net assets of foreign operations - (80.8) - (80.8) (3.5) (84.3)
Exchange differences on translation of net investment hedges - 7.9 - 7.9 - 7.9
Net change in costs of hedging - 0.4 - 0.4 - 0.4
Change in the fair value of the hedging instrument - (4.2) - (4.2) - (4.2)
Amounts reclassified from Net finance costs - 3.5 - 3.5 - 3.5
Other comprehensive income/(loss), net of income tax - (73.2) 6.4 (66.8) (3.5) (70.3)
Total comprehensive income/(loss) - (73.2) 124.9 51.7 8.6 60.3
Recognition of share-based payments - - 7.3 7.3 - 7.3
Purchase of ESOP shares - - (1.1) (1.1) - (1.1)
Share buyback (0.1) - (3.0) (3.1) - (3.1)
Dividends paid (Note 7) - - (60.7) (60.7) (2.1) (62.8)
Total transactions with owners (0.1) - (57.5) (57.6) (2.1) (59.7)
As at 31 December 2023 27.7 (1,464.6) 2,691.2 1,254.3 65.9 1,320.2
Profit - - 87.2 87.2 13.1 100.3
Remeasurement of defined benefit liabilities/assets - - 3.6 3.6 - 3.6
Income tax relating to items not reclassified - - (0.8) (0.8) - (0.8)
Exchange differences on translation of the net assets of foreign operations - (47.8) - (47.8) (1.3) (49.1)
Exchange differences on translation of net investment hedges - 7.1 - 7.1 - 7.1
Net change in costs of hedging - (0.1) - (0.1) - (0.1)
Change in the fair value of the hedging instrument - 1.5 - 1.5 - 1.5
Amounts reclassified from Net finance costs - (1.2) - (1.2) - (1.2)
Other comprehensive income/(loss), net of income tax - (40.5) 2.8 (37.7) (1.3) (39.0)
Total comprehensive income/(loss) - (40.5) 90.0 49.5 11.8 61.3
Recognition of share-based payments - - 6.2 6.2 - 6.2
Purchase of ESOP shares - - (17.1) (17.1) - (17.1)
Share buyback (1.3) 1.4 (63.5) (63.4) - (63.4)
Dividends paid (Note 7) - - (61.1) (61.1) (2.5) (63.6)
Total transactions with owners (1.3) 1.4 (135.5) (135.4) (2.5) (137.9)
As at 31 December 2024 26.4 (1,503.7) 2,645.7 1,168.4 75.2 1,243.6
Notes to the Group Financial Statements
1 Basis of preparation
1.1 Basis of preparation
The financial information in this preliminary announcement has been extracted
from the audited Group Financial Statements for the year ended 31 December
2024 and does not constitute statutory accounts within the meaning of section
434 of the Companies Act 2006. The Group Financial Statements and this
preliminary announcement were approved by the Board of Directors on March
2025.
The auditors have reported on the Group Financial Statements for the years
ended 31 December 2023 and 31 December 2022 under section 495 of the Companies
Act 2006. The auditors' reports are unqualified and do not contain a statement
under section 498(2) or (3) of the Companies Act 2006. The Group's statutory
financial statements for the year ended 31 December 2023 have been filed with
the Registrar of Companies and those for the year ended 31 December 2024 will
be filed following the Company's Annual General Meeting.
The Group financial statements have been prepared in accordance with
UK-adopted international accounting standards (IFRS) and with the requirements
of the Companies Act 2006 as applicable to companies reporting under those
standards. The financial statements have been prepared under the historical
cost convention, with the exception of fair value measurement applied to
defined benefit pension plans, investments, share based payments and
derivative financial instruments.
The same accounting policies, presentation and computation methods are
followed in this preliminary announcement as in the preparation of the Group
Financial Statements. The accounting policies have been applied consistently
by the Group.
1.2 Basis of consolidation
The Group Financial Statements incorporate the financial statements of the
Company and entities controlled by the Company (its 'subsidiaries'). Control
exists when the Company has the power to direct the relevant activities of an
entity that significantly affect the entity's return so as to have rights to
the variable return from its activities. In assessing whether control exists,
potential voting rights that are currently exercisable are taken into account.
The results of subsidiaries acquired or disposed of during the year are
included in the Group Income Statement from the effective date of acquisition
or up to the effective date of disposal, as appropriate.
The principal accounting policies applied in the preparation of these Group
Financial Statements are set out in the Notes. These policies have been
consistently applied to all of the years presented, unless otherwise stated.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with those detailed
herein to ensure that the Group Financial Statements are prepared on a
consistent basis. All intra-Group transactions, balances, income and expenses
are eliminated on consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries are
identified separately from the Group's interest therein. Non-controlling
interests consist of the amount of those interests at the date of the original
business combination together with the non-controlling interests' share of
profit or loss and each component of other comprehensive income, and dividends
since the date of the combination. Total comprehensive income is attributed to
the non-controlling interests even if this results in the non-controlling
interests having a deficit balance.
1.3 Going concern
The Group's available liquidity stood at £389m at year-end 2024, down from
£488m at year-end 2023. The Directors have prepared cash flow forecasts for
the Group for the period to 30 June 2026. These forecasts reflect an
assessment of current and future end-market conditions, which are expected to
be challenging in 2025 (as set out in the "outlook" statement in the Chief
Executive's Strategic Review in this document), and their impact on the
Group's future trading performance.
The Directors have also considered a severe but plausible downside scenario,
based on an assumed volume decline and loss of profitability over the period.
This downside scenario assumes:
· a decline in business activity level in 2025 and 2026 by 3%
compared to 2024 performance,
· a decline in profitability (Return on Sales) of 2.1% compared to
2024 performance,
· working capital as a percentage of sales deteriorating by 1.0%
compared to 2024.
On a full-year basis relative to 2024, this implies a c.23% decline in Trading
Profit.
The Group has two covenants; net debt / EBITDA (under 3.25x) and an interest
cover requirement of at least 4.0x. In this downside scenario, the forecasts
show that the Group's maximum net debt / EBITDA (pre-IFRS 16 in-line with the
covenant calculation) does not exceed 1.9x, compared to a leverage covenant of
3.25x, and the minimum interest cover reached is 17x compared to a covenant
minimum of 4.0x.
The forecasts show that the Group will be able to operate within its current
committed debt facilities and show continued compliance with the Group's
financial covenants. On the basis of the exercise described above and the
Group's available committed debt facilities, the Directors consider that the
Group and the Company have adequate resources to continue in operational
existence for a period of at least 12 months from the date of signing of these
financial statements and that there is no material uncertainty in respect of
going concern. On 21 February 2025 the Group obtained a new committed
syndicated bank facility of £475m reaching maturity in August 2029, replacing
the previous one in place (see note 15) with the same covenants. This is
considered to be a non-adjusting event after balance sheet date. Accordingly,
they continue to adopt a going concern basis in preparing the financial
statements of the Group and the Company.
1.4 Presentational currency
The financial statements are presented in millions of pounds sterling, which
is the presentational currency of the Group and the Company and rounded to one
decimal place. Foreign operations are included in accordance with the policies
set out in Note 15.
1.5 Disclosure of "separately reported items"
Columnar presentation
The Group has adopted a columnar presentation for its Group Income Statement,
to separately identify headline performance results, as the Directors consider
that this gives a useful view of the core results of the ongoing business. As
part of this presentation format, the Group has adopted a policy of disclosing
separately on the face of its Group Income Statement, within the column
entitled 'Separately reported items', the effect of any components of
financial performance for which the Directors consider separate disclosure
would assist users both in a useful understanding of the financial performance
achieved for a given year and in making projections of future results.
1.6 Disclosure of "separately reported items" (continued)
Separately reported items
Both materiality and the nature of the components of income and expense are
considered in deciding upon such presentation.
Such items may include, inter alia, the financial effect of exceptional items
which occur infrequently, such as major restructuring
activity, cost reduction programme expenses, and items reported separately for
consistency, such as amortisation charges
relating to acquired intangible assets, profits or losses arising on the
disposal of continuing or discontinued operations and the
taxation impact of the aforementioned items reported separately.
The amortisation charge in respect of intangible assets recognised on business
combinations is excluded from the trading results
of the Group since they are non-cash charges and are not considered reflective
of the core trading performance of the Group. As headline results include the
benefits of major acquisitions but exclude this amortisation charge, they
should not be regarded as a complete picture of the Group's financial
performance, which is presented in its total results.
In its adoption of this policy, the Company applies an even-handed approach to
both gains and losses and aims to be both consistent and clear in its
accounting and disclosure of such items. The exclusion of other separately
reported items may result in headline earnings being materially higher or
lower than total earnings.
2 Segment information
Operating segments for continuing operations
The Group's operating segments are determined taking into consideration how
the Group's components are reported to the Group's Chief Executive Officer,
who make the key operating decisions and are responsible for allocating
resources and assessing performance of the component. Taking into account the
Group's management and internal reporting structure, the operating segments
are Steel Flow Control, Steel Advanced Refractories, Steel Sensors &
Probes and Foundry division. The principal activities of each of these
segments are described in the Operational Review.
Steel Flow Control, Steel Advanced Refractories and Steel Sensors & Probes
operating segments are aggregated into the Steel reportable segment. In
determining that aggregation is appropriate, judgement is applied which takes
into account the economic characteristics of these operating segments which
include a similar nature of products, customers, production processes and
margins.
Revenue from contracts with customers
Revenue comprises the fair value of the consideration received or receivable
for goods supplied and services rendered to customers after deducting rebates,
discounts and value-added taxes, and after eliminating sales within the Group.
Revenue from contracts with customers is recognised when control of the goods
or services are transferred to the customer, upon the completion of specified
performance obligations, at an amount that reflects the considerations to
which the Group expects to be entitled to in exchange for these consumable
products and associated services.
Segmental analysis
2024
Flow Control Advanced Refractories Sensors Steel Foundry Total
& Probes
£m £m £m
Segment revenue 769.0 535.6 39.2 1,343.8 476.3 1,820.1
at a point in time 1,339.9 476.3 1,816.2
Over time 3.9 - 3.9
Segment adjusted EBITDA * 197.2 53.0 250.2
Segment depreciation and amortisation (44.2) (18.0) (62.2)
Segment trading profit 153.0 35.0 188.0
Return on sales margin 11.4% 7.4% 10.3%
Cost reduction programme expenses (5.8) (8.8) (14.6)
Provision for future water treatment at disused mine (9.7)
Amortisation of acquired intangible assets (10.0)
Operating profit 153.7
Net finance costs (16.2)
Share of post-tax profit of joint ventures 1.1
Profit before tax 138.6
Capital expenditure additions 92.2 23.9 116.1
Inventory 241.7 53.7 295.4
Trade debtors 259.7 82.0 341.7
Trade payables (180.1) (61.6) (241.7)
2023
Flow Control Advanced Refractories Sensors Steel Foundry Total
& Probes
£m £m £m
Segment revenue 793.0 567.9 39.1 1,400.0 529.8 1,929.8
at a point in time 1,396.6 529.8 1,926.4
Over time 3.4 - 3.4
Segment adjusted EBITDA * 187.9 70.3 258.2
Segment depreciation and amortisation (40.3) (17.5) (57.8)
Segment trading profit 147.6 52.8 200.4
Return on sales margin 10.5% 10.0% 10.4%
Amortisation of acquired intangible assets (10.3)
Operating profit 190.1
Net finance costs (11.6)
Share of post-tax profit of joint ventures 0.9
Profit before tax 179.4
Capital expenditure additions 93.2 32.1 125.3
Inventory 239.5 51.5 291.0
Trade debtors 267.6 89.3 356.9
Trade payables (177.7) (58.7) (236.4)
* Adjusted EBITDA is defined in note 16.13
3 Separately reported items
Cost reduction programme expenses
In November 2023 the Group initiated an efficiency programme with the aim of
realising recurring cash cost savings of £30m per
annum by 2026. The programme covers all of the Group's activities worldwide
and focuses on operational improvement, lean
initiatives, automation and digitalisation as well as further optimisation of
the manufacturing footprint.
Cost reduction programme expenses are excluded from underlying performance,
allowing for a clear measure of the Group's
operating performance. They are shown as a separately reported item outside of
Trading Profit and shown on the face of the
Income statement below Trading Profit.
During 2024, cost reduction programme expenses reported as separately reported
items were £14.6m (2023: £nil). The charges reflect redundancy costs £10.8m
(2023: £nil), plant closure costs £2.2m (2023: £nil), and non-cash asset
impairments £1.6m (2023: £nil). The net tax credit attributable to these
cost reduction programme expenses was £2.6m (2023: £nil).
Provision for future water treatment at disused mine
In 1999 the Group acquired Premier Refractories which owned a disused clay
mine in the United States. In 2018, wastewater
containing pollutants was discovered and in 2022 a water treatment facility
was installed. Reflecting the future expected
operating costs of 10 years, a provision was established for £6.0m during the
year-ended 2020. In 2024, the forecast annual
operating cost is £0.8m and the remaining period for which water treatment
will be required was reassessed to be 20 years, resulting in an increase in
the provision and a charge to the income statement for £9.7m (2023: nil). The
charge has been reported as a separately reported item. The net tax credit
attributable to these cost in respect of disused mine was £2.3m (2023:
£nil).
4 Net finance costs
2024 2023
£m £m
Interest payable on borrowings
Loans, overdrafts and factoring arrangements 19.3 20.1
Interest on lease liabilities 3.0 2.4
Amortisation of capitalised borrowing costs 1.0 1.0
Total interest payable on borrowings 23.3 23.5
Interest on net retirement benefits obligations 1.6 2.3
Adjustments to discounts on provisions and other liabilities 2.2 2.4
Adjustments to discounts on receivables (1.2) (1.3)
Financial income (9.7) (15.3)
Total net finance costs 16.2 11.6
Within the table above, total finance costs are £27.1m (2023: £28.2m) and
total finance income is £10.9m (2023: £16.6m).
5 Income tax
The Group's headline effective tax rate, based on the income tax costs
associated with headline performance of £47.2m (2023: £51.9m), was 27.5%
(2023: 27.5%).
The Group's total income tax costs include a credit on separately reported
items of £8.9m (2023: £3.1m), which primarily relates to the amortisation of
acquired intangible assets, cost reduction programme expenses and provision
for future water treatment at a disused mine.
The net tax charge reflected in the Group Statement of Comprehensive Income in
the year amounted to £0.8m (2023: £2.0m), which primarily relates to tax on
net actuarial gains and losses on pensions.
6 Earnings per share ("EPS")
6.1 Earnings for EPS
Basic and diluted EPS from continuing operations are based upon the profit
attributable to owners of the parent, as reported in the Group Income
Statement. The table below reconciles these different profit measures.
2024 2023
£m £m
Profit attributable to owners of the parent 87.2 118.5
Adjustments for separately reported items:
Cost reduction programme expenses 14.6 -
Provision for future water treatment at disused mine 9.7 -
Amortisation of acquired intangible assets 10.0 10.3
Income tax (credit)/charge (8.9) (3.1)
Headline profit attributable to owners of the parent 112.6 125.7
6.2 Weighted average number of shares
2024 2023
millions millions
For calculating basic and headline EPS 260.0 269.1
Adjustment for potentially dilutive ordinary shares 3.7 3.0
For calculating diluted and diluted headline EPS 263.7 272.1
For the purposes of calculating diluted and diluted headline EPS, the weighted
average number of ordinary shares is adjusted to include the weighted average
number of ordinary shares that would be issued on the conversion of all
potentially dilutive ordinary shares expected to vest, relating to the
Company's share-based payment plans. Potential ordinary shares are only
treated as dilutive when their conversion to ordinary shares would decrease
EPS or increase loss per share.
6.3 Per share amounts
2024 2023
pence pence
Earnings per share - reported basic 33.5 44.0
- 33.1 43.6
reported diluted
- 43.3 46.7
headline basic((1))
- headline diluted((1)) 42.7 46.2
((1)) For definition of headline earnings per share, refer to Note 16.
7 Dividends
2024 2023
£m £m
Amounts recognised as dividends and paid to equity holders during the period
Final dividend for the year ended 31 December 2022 of 15.75p per ordinary - 42.4
share
Interim dividend for the year ended 31 December 2023 of 6.80p per ordinary - 18.3
share
Final dividend for the year ended 31 December 2023 of 16.20p per ordinary 42.7 -
share
Interim dividend for the year ended 31 December 2024 of 7.10p per ordinary 18.4 -
share
61.1 60.7
In addition to the above dividends, since year end the directors have
recommended the payment of a final dividend of 16.40 pence (2023: 16.20 pence)
per ordinary share (TDIM: VSVS and ISIN: GB00B82YXW83).
This is subject to approval by shareholders at the Company's Annual General
Meeting on 16 May 2025. If approved by shareholders, the aggregate amount of
the proposed dividend expected to be paid on 6 June 2025 out of retained
earnings at 31 December 2024, but not recognised as a liability at year end,
to holders of ordinary shares on the register on 25 April 2025 is £40.0m (31
May 2024: £42.7m).
The ordinary shares will be quoted ex-dividend on 24 April 2025. Any
shareholder wishing to participate in the Vesuvius Dividend Reinvestment Plan
needs to have submitted their election to do so by 15 May 2025.
8 Reconciliation of movement in net debt
Balance as at Foreign exchange adjustments Fair value Non-cash movements((1)) Cash flow((2)) Balance as at 31 Dec 2024
1 Jan 2024 gains/
(losses)
£m £m £m £m £m
Cash and cash equivalents
Cash at bank and in hand 164.2 (5.1) - - 27.3 186.4
Bank overdrafts (3.4) 0.1 - - (4.5) (7.8)
160.8 (5.0) - - 22.8 178.6
Borrowings, excluding bank overdrafts (400.6) 9.2 - (18.2) (103.6) (513.2)
Capitalised arrangement fees 1.8 - - (1.0) - 0.8
Derivative financial instruments 0.5 - 4.1 - - 4.6
Net debt (237.5) 4.2 4.1 (19.2) (80.8) (329.2)
(1) £15.2m (2023: £31.2m) of new leases were entered into during the
year.
(2) Borrowings, excluding bank overdrafts include proceeds from
borrowings, repayment of borrowings and payment of lease liabilities.
Balance as at Foreign exchange adjustments Fair value Non-cash movements Cash flow((2)) Balance as at 31 Dec 2023
1 Jan 2023 gains/
(losses)
£m £m £m £m £m
Cash and cash equivalents
Cash at bank and in hand 184.2 (21.1) - - 1.1 164.2
Bank overdrafts (4.4) 0.1 - - 0.9 (3.4)
179.8 (21.0) - - 2.0 160.8
Borrowings, excluding bank overdrafts (440.2) 11.9 - (33.6) 61.3 (400.6)
Capitalised arrangement fees 2.7 - - (0.9) - 1.8
Derivative financial instruments 2.7 - (2.2) - - 0.5
Net debt (255.0) (9.1) (2.2) (34.5) 63.3 (237.5)
Net debt is a measure of the Group's net indebtedness
to banks and other external financial institutions and comprises the total of
cash and short-term deposits, current and non-current interest-bearing
borrowings, derivative financial instruments and lease liabilities.
The Group routinely rolls over the principal of borrowings drawn under the
committed syndicated bank facility. The procedure may be repeated, depending
on liquidity requirements of the Group, until maturity date of the credit
facility.
9 Cash generated from operations
2024 2023
£m £m
Operating profit 153.7 190.1
Adjustments for:
Cost reduction programme expenses 14.6 -
Provision for future water treatment at disused mine 9.7 -
Amortisation of acquired intangible assets 10.0 10.3
Trading Profit 188.0 200.4
Gain on disposal of non-current assets (2.2) (2.5)
Depreciation and amortisation 62.2 57.8
Defined benefit retirement plans net charge 5.0 5.2
Net (increase)/decrease in inventories (14.3) 9.9
Net decrease in trade receivables 1.9 2.6
Net increase in trade payables 11.8 8.3
Net increase in other working capital (16.6) (0.5)
Outflow related to restructuring charges (1.0) (0.8)
Defined benefit retirement plans cash outflows (9.4) (7.4)
Cost reduction programme cash outflows (7.9) -
Water treatment at disused mine cash outflows (0.8) (1.0)
Cash generated from operations 216.7 272.0
10 Employee benefits
The net employee benefits liability as at 31 December 2023 was £37.4m (2023:
£46.3m) derived from an actuarial valuation of the Group's defined benefit
pension and other post-retirement obligations as at that date.
All the liabilities in the UK were insured following a buy-in agreement with
Pension Insurance Corporation plc ("PIC") in 2021. This buy-in agreement
secured an insurance asset from PIC that matches the remaining pension
liabilities of the UK Plan, with the result that the Company no longer bears
any investment, longevity, interest rate or inflation risks in respect of the
UK Plan.
As disclosed in note 27 of the 2024 Annual Report and Financial Statements,
the above amounts may materially change in the next 12 months if there is a
change in assumptions.
2024 2023
£m £m
Employee benefits - net surpluses
UK defined benefit pension plans 31.8 32.5
ROW defined benefit pension plans 2.3 2.1
Net surpluses 34.1 34.6
Employee benefits - net liabilities
UK defined benefit pension plans (1.0) (1.1)
US defined benefit pension plans (12.1) (18.2)
Germany defined benefit pension plans (38.1) (41.3)
ROW defined benefit pension plans (11.0) (10.4)
Other post-retirement long-term benefit plans (9.3) (9.9)
Net liabilities (71.5) (80.9)
Total net liabilities (37.4) (46.3)
The expense recognised in the Group Income Statement in respect of the Group's
defined benefit retirement plans and other post-retirement benefit plans is
shown below.
2024 2023
£m £m
In arriving at trading profit - within other manufacturing costs 1.1 1.3
(as defined in Note 16.4)
- within administration, selling and distribution costs 3.9 3.9
In arriving at profit before tax - within net finance costs 1.6 2.3
Total net charge 6.6 7.5
11 Contingent liabilities
Vesuvius has extensive international operations and
is subject to various legal and regulatory regimes, including those covering
taxation and environmental matters.
Certain of Vesuvius' subsidiaries are subject to legacy matter
lawsuits, predominantly in the US, relating to a small number of products
containing asbestos manufactured prior to the acquisition of those
subsidiaries by Vesuvius. These suits usually also name many other product
manufacturers. To date, Vesuvius is not aware of there being any liability
verdicts against any of these subsidiaries. Each year a number of these
lawsuits are withdrawn, dismissed or settled. The amount paid, including
costs, in relation to this litigation has not had a material adverse effect on
Vesuvius' financial position or results of operations.
As the settlement of many of the obligations for which reserve is made is
subject to legal or other regulatory process, the timing and amount of the
associated outflows is subject to some uncertainty (see Note 32 of the 2024
Annual Report and Financial Statements for further information). The amount
paid, including costs in relation to this litigation, has not had a material
effect on Vesuvius' financial position or results of operations in the current
year.
12 Related parties
The nature of related party transactions in 2024 are in line with those
transactions disclosed in Note 33 of the 2024 Annual Report and Financial
Statements. All transactions with related parties are conducted on an arm's
length basis and in accordance with normal business terms. Transactions with
joint ventures and associates are consistent with those disclosed in Note 32
of the 2023 Annual Report and Financial Statements. Transactions between
related parties that are Group subsidiaries are eliminated on consolidation.
2024 2023
Transactions with joint ventures and associates £m £m
Sales to joint ventures 4.2 4.3
Purchases from joint ventures 27.1 30.1
Dividends received 0.7 1.0
Trade payables owed to joint ventures 8.1 10.3
Trade receivables due from joint ventures 1.0 1.0
13 Acquisitions and divestments
The Group did not acquire any material interests in any companies during the
year ended 31 December 2024. There was no contingent consideration paid during
the year ended 31 December 2024.
On 15 November 2024 the Group signed an agreement to acquire a 61.65% stake in
PiroMET AS, a Turkish business for €26.2m. Following the agreement reached
in November 2024, on 28 February 2025 we completed the acquisition of a 61.65%
shareholding in PiroMET, a Turkish refractory company, for €26.2m. The
acquisition will strengthen our Advanced Refractory business in the
fast-growing region of EEMEA and will also allow us to leverage PiroMET's
expertise in robotics and gunning worldwide.
14 Provisions
Disposal, closure and environmental costs Other Total
£m £m £m
As at 1 January 2023 57.7 9.0 66.7
Exchange adjustments (2.6) (0.2) (2.8)
Charge to Group Income Statement - trading profit 1.5 7.0 8.5
Charge to Group Income Statement - separately reported items - - -
Adjustment to discount 2.3 - 2.3
Cash spend (7.0) (9.1) (16.1)
As at 31 December 2023 51.9 6.7 58.6
Disposal, closure and environmental costs Other Total
£m £m £m
As at 1 January 2024 51.9 6.7 58.6
Exchange adjustments 1.2 (0.2) 1.0
(Release)/charge to Group Income Statement - trading profit (0.6) 7.5 6.9
Charge to Group Income Statement - separately reported items 9.7 2.6 12.3
Adjustment to discount 2.2 - 2.2
Cash spend (5.4) (10.5) (15.9)
As at 31 December 2024 59.0 6.1 65.1
In assessing the probable costs and realisation certainty of provisions, or
related assets, reasonable assumptions are made. Changes to the assumptions
used could significantly alter the Directors' assessment of the value, timing
or certainty of the costs or related amounts.
15 Financial instruments
The Group's financial assets and liabilities are measured as appropriate
either at amortised cost or at fair value through other comprehensive income
or at fair value through profit and loss.
IFRS 13 Fair Value Measurement requires classification of financial
instruments within a hierarchy that prioritises the inputs to fair value
measurement. The three levels of the fair value hierarchy are:
Level 1 - Unadjusted quoted prices in active markets for identical assets or
liabilities;
Level 2 - Inputs other than quoted prices that are observable for the asset or
liability, either directly or indirectly;
Level 3 - Inputs that are not based on observable market data.
The following table summarises Vesuvius' financial instruments measured at
fair value, and shows the level within the fair value hierarchy in which the
financial instruments have been classified:
2024 2023
Assets Liabilities Assets Liabilities
£m £m £m £m
Investments (Level 2) 0.2 - 0.3 -
Derivatives not designated for hedge accounting purposes (level 2) 0.1 (0.1) - (0.1)
Derivatives designated for hedge accounting purposes (level 2) 4.6 - 0.6 -
All of the derivative financial instruments not designated for hedge
accounting purposes reported in the table above will mature within a year of
the balance sheet date. There were no transfers between fair value hierarchies
during the period. The method for determining the hierarchy and for valuing
the financial instruments is consistent with that disclosed in Note 25 of the
2024 Annual Report and Financial Statements. Fair value disclosures have not
been made in respect of other financial assets and liabilities on the basis
that the carrying amount is deemed to be a reasonable approximation of fair
value.
The Group's Treasury department, acting in accordance with policies approved
by the Board, is principally responsible for managing the financial risks
faced by the Group. The Group's activities expose it to a variety of financial
risks, the most significant of which are market risk and liquidity risk. The
condensed financial statements do not include all financial risk management
information and disclosures required in the annual financial statements; they
should be read in conjunction with the Group's 2024 Annual Report and
Financial Statements, in which further details of these financial risks were
disclosed in Note 25. There have been no changes in the risk management
policies since year-end.
In 2020, the Group executed a US$86m cross-currency interest rate swap
(CCIRS). The effect of this is to convert the $86m Private Placement Notes
issued in 2020 into €76.6m. US dollar cash flows under the CCIRS exactly
mirror those of the Private Placement Notes and the maturity date of the CCIRS
matches the repayment date of the Notes. The CCIRS would by default be
revalued through the Income Statement; however, as it is in a designated
hedging relationship, it is revalued through other comprehensive income. The
US dollar exposure is designated as a cash flow hedge of the Private Placement
Notes and the euro exposure is designated as a net investment hedge of the
Group's foreign operations. The CCIRS is presented as a non-current asset or
liability as it is expected to be settled more than 12 months after the end of
the reporting period.
With the exception of the CCIRS, the fair value of derivatives outstanding at
the year-end has been booked through the Income Statement. All of the fair
values shown in the table above are classified under IFRS 13 as Level 2
measurements which have been calculated using quoted prices from active
markets, where similar contracts are traded and the quotes reflect actual
transactions in similar instruments. All the derivative assets and liabilities
not designated for hedge accounting purposes reported above will mature in
2025.
Derivative financial instruments are subject to International Swaps and
Derivatives Association (ISDA) agreements. Derivatives designated for hedge
accounting purposes are presented net £4.6m (2023: £0.6m), of which £4.6m
are gross assets and nil are gross liabilities (2023: gross assets £0.8m and
gross liabilities £0.2m).
As at 31 December 2024, €298.0m and $146.0m (2023: €246.0m and $30.0m) of
borrowings were designated as hedges of net investments in €298.0m and
$146.0m (2023: €246.0m and $30.0m) worth of foreign operations. In addition,
the €76.6m (2023: €76.6m) CCIRS liability has been designated as a net
investment hedge of a further €76.6m (2023: €76.6m) worth of foreign
operations.
As the value of the borrowings and the CCIRS liability exactly matches the
designated hedged portion of the net investments, the relevant hedge ratio is
1:1. The net investment hedges are therefore highly effective. It is noted
that hedge ineffectiveness would arise in the event there were insufficient
euro-denominated foreign operations to be matched against the €76.6m CCIRS
liability.
The total retranslation impact of the borrowings and CCIRS designated as net
investment hedges was a gain of £7.1m (2023: a gain of £7.9m).
The $86.0m CCIRS asset has been designated as a cash flow hedge of the $86.0m
USPP Notes issued in 2020. As all principal and interest cash flows under the
CCIRS exactly mirror those under the USPP Notes, the cash flow hedge is highly
effective. It is noted that hedge ineffectiveness would arise in the event of
a change in the contractual terms of either the USPP Notes or the CCIRS.
Hedge effectiveness is determined at inception of the hedge relationship and
through periodic effectiveness assessments, to ensure that an economic
relationship exists between the hedged item and hedging instrument.
As at 31 December 2024, the Group had $116.0m, €198.0m and £28.0m (£284.6m
in total) of US Private Placement (USPP) Notes outstanding (2023: $116.0m,
€198.0m and £28.0m (£290.8m in total)), which carry a fixed rate of
interest, representing 60% (2023: 82%) of the Group's total borrowings
outstanding at that date. Maturities of the corresponding USPP Notes were
disclosed in Note 25 to the 2024 Annual Report and Financial Statements.
The currency and interest rate profile of the Group's borrowings is detailed
in the tables below.
Fixed rate Floating rate Total
£m £m £m
Sterling 28.0 11.7 39.7
US dollar 92.7 92.8 185.5
Euro 163.9 82.8 246.7
Other - 2.9 2.9
Capitalised arrangement fees (0.4) (0.4) (0.8)
As at 31 December 2024 284.2 189.8 474.0
Sterling 28.0 21.5 49.5
US dollar 91.1 0.1 91.2
Euro 171.7 43.4 215.1
Other - - -
Capitalised arrangement fees (0.7) (1.1) (1.8)
As at 31 December 2023 290.1 63.9 354.0
Following adoption of amendments to IAS 1, the Group has reclassified amounts
due under its committed syndicated bank facility as non-current as it had the
right to roll over the obligations for at least 12 months after the reporting
date and was compliant with all relevant covenant requirements at the
reporting date. Comparatives for the year ended 31 December 2023 in these
financial statements have been restated on the same basis. The amount
reclassified as non-current liabilities in the comparative period was £51.6m.
As at 31 December 2024, the Group had committed borrowing facilities of
£669.6m (2023: £685.8m), of which £202.5m (2023: £333.4m) were undrawn.
100% of these undrawn facilities was due to expire in 2026. On 21 February
2025 the Group signed a new committed syndicated bank facility for an amount
of £475.0m and with maturity date of August 2029. The previous committed
syndicated bank facility signed in 2021 for an amount of £385.0m was
cancelled with effect from the same date. The Group's borrowing requirements
are therefore met by the USPP and a committed syndicated bank facility of
£475.0m (2023: £385.0m). This is considered to be a non-adjusting event
after balance sheet date.
The maturity analysis of the Group's non-derivative financial liabilities is
shown in the tables below.
As at 31 December 2024 Within one year Between 1-2 years Between 2-5 years Over 5 years Total contractual cash flows Carrying amount
£m
£m £m £m £m
Trade payables 241.7 - - - 241.7 241.7
Loans & overdrafts 76.0 188.7 178.8 57.3 500.8 474.8
Lease liabilities((1)) 15.0 11.9 15.7 18.2 60.8 46.2
Capitalised arrangement fees - - - - - (0.8)
Derivative liability 0.1 - - - 0.1 0.1
Total financial liabilities 332.8 200.6 194.5 75.5 803.4 762.0
As at 31 December 2023 Within one year Between Between Over 5 years Total contractual cash flows Carrying amount
1-2 years 2-5 years £m
£m £m
£m £m
Trade payables 236.4 - - - 236.4 236.4
Loans & overdrafts 22.3 68.0 196.9 103.9 391.1 355.8
Lease liabilities((1)) 13.5 12.2 17.0 19.4 62.1 48.2
Capitalised arrangement fees - - - - - (1.8)
Derivative liability 0.1 - - - 0.1 0.1
Total financial liabilities 272.3 80.2 213.9 123.3 689.7 638.7
((1))The lease liabilities at 31 December 2024 were £46.2 (2023: £48.2m).
The cash payments for leases during the year were
£18.2 (2023: £24.2m) and the interest on lease liabilities was £3.0m (2023:
£2.4m). The net book value of the Group's property, plant and equipment
assets held as right-of-use assets under lease contracts at 31 December 2024
was £54.7m (2023: £57.6m) and the depreciation on these assets during the
year was £15.6m (2023: £14.2m).
Presented within interest-bearing borrowings of £520.2m (2023: £402.2m) are
loans and overdrafts of £474.8m (2023: £355.8m), finance lease liabilities
of £46.2m (2023: £48.2m) and capitalised arrangement fees of £(0.8)m (2023:
£(1.8)m).
16 Alternative performance measures
The Company uses a number of alternative performance measures (APMs) in
addition to those reported in accordance with IFRS. The Directors believe that
these APMs, listed below, are important when assessing the underlying
financial and operating performance of the Group and its divisions, providing
management with key insights and metrics in support of the ongoing management
of the Group's performance and cash flow. A number of these align with KPIs
and other key metrics used in the business and therefore are considered useful
to also disclose to the users of the financial statements. The following APMs
do not have a standard definition prescribed by IFRS and therefore may not be
directly comparable with similar measures presented by other companies.
16.1 Headline performance
Headline performance, reported separately on the face of the Group Income
Statement, is from continuing operations and before items reported separately
on the face of the Group Income Statement.
16.2 Underlying revenue, underlying trading profit and underlying return on sales
Underlying revenue, underlying trading profit and underlying return on sales
are the headline equivalents of these measures after adjustments to exclude
the effects of changes in exchange rates, business acquisitions and disposals.
Reconciliations of underlying revenue and underlying trading profit can be
found in the Financial Summary. Underlying revenue growth is one of the
Group's KPIs and provides an important measure of organic growth of Group
businesses between reporting periods by eliminating the impact of exchange
rates, acquisitions and disposals.
16.3 Return on sales ('ROS')
ROS is calculated as trading profit divided by revenue. It is one of the
Group's key performance indicators and is used to assess the trading
performance of Group businesses. A reconciliation of ROS is included in Note
2.
16.4 Trading profit/adjusted EBITA
Trading profit/adjusted EBITA is defined as operating profit before separately
reported items. It is one of the Group's key performance indicators and is
used to assess the trading performance of Group businesses.
16.5 Headline profit before tax
Headline profit before tax, reported separately on the face of the Group
Income Statement, is calculated as the net total of trading profit, plus the
Group's share of post-tax profit of joint ventures and total net finance costs
associated with headline performance. It is used to assess the financial
performance of the Group as a whole.
16.6 Headline effective tax rate ('ETR')
The Group's headline ETR is calculated on the income tax costs associated with
headline performance, divided by headline profit before tax and before the
Group's share of post-tax profit of joint ventures and associates.
16.7 Headline earnings
Headline earnings is profit after tax before separately reported items
attributable to owners of the parent.
16.8 Headline earnings per share
Headline earnings per share is calculated by dividing headline profit before
tax less associated income tax costs, attributable to owners of the parent by
the weighted average number of ordinary shares in issue during the year. It is
one of the Group's key performance indicators and is used to assess the
underlying earnings performance of the Group as a whole. It is also used as
one of the targets against which the annual bonuses of certain employees are
measured. Headline earnings per share is disclosed in Note 6.
16.9 Adjusted operating cash flow
Adjusted operating cash flow is cash generated from operations before
restructuring and vacant site remediation costs but after deducting capital
expenditure net of asset disposals. It is used in calculating the Group's cash
conversion.
2024 2023
£m £m
Cash generated from operations 216.7 272.0
Add: Outflows relating to restructuring charges 1.0 0.8
Add: Outflows relating to cost reduction programme expenses 7.9 -
Add: Outflows relating to water treatment at disused mine 0.8 1.0
Less: Purchases of property, plant & equipment (88.1) (84.6)
Less: Purchases of intangible assets (12.7) (8.0)
Add: Proceeds from the sale of property, plant and equipment 4.3 5.4
Add: Proceeds from the sale of associates 0.4 -
Adjusted operating cash flow 130.3 186.6
Trading Profit 188.0 200.4
Cash Conversion 69% 93%
16.10 Cash conversion
Cash conversion is calculated as adjusted operating cash flow divided by
trading profit. It is useful for measuring the rate at which cash is generated
from trading profit. It is also used as one of the targets against which the
annual bonuses of certain employees are measured. The calculation of cash
conversion is detailed in Note 16.9 above
16.11 Free cash flow
Free cash flow is defined as net cash flow from operating activities after net
outlays for the purchase and sale of property, plant and equipment, dividends
from joint ventures and dividends paid to non-controlling shareholders. It is
one of the Group's KPIs and is used to assess the underlying cash generation
of the Group and is one of the measures used in monitoring the Group's
capital. A reconciliation of free cash flow is included underneath the Group
Statement of Cash Flows.
16.12 Average trade working capital to sales ratio
The average trade working capital to sales ratio is calculated as the
percentage of average trade working capital balances to the total revenue for
the previous 12 months, at constant currency. Average trade working capital
(comprising inventories, trade receivables and trade payables) is calculated
as the average of the 13 previous month-end balances. It is one of the Group's
key performance indicators and is useful for measuring the level of working
capital used in the business and is one of the measures used in monitoring the
Group's capital. It is also used as one of the targets against which the
annual bonuses of certain employees are measured.
2024 2023
£m £m
Average trade working capital 416.5 451.8
Total revenue 1,820.1 1,929.8
Average trade working capital to sales ratio 22.9% 23.4%
16.13 Adjusted earnings before interest, tax, depreciation and amortisation (adjusted EBITDA)
Adjusted EBITDA is calculated as the total of trading profit before
depreciation and amortisation of non-acquired intangibles charges. It is used
in the calculation of the Group's interest cover and net debt to adjusted
EBITDA ratios. A reconciliation of adjusted EBITDA is included in Note 2.
16.14 Net interest payable on borrowings
Net interest payable on borrowings is calculated as total interest payable on
borrowings less finance income, excluding interest on net retirement benefit
obligations, adjustments to discounts and any item separately reported. It is
used in the calculation of the Group's interest cover ratio.
2024 2023
£m £m
Total interest payable on borrowings (note 4) 23.3 23.5
Finance income (note 4) (9.7) (15.3)
Net interest payable on borrowings 13.6 8.2
16.15 Interest cover
Interest cover is the ratio of adjusted EBITDA to net interest payable on
borrowings for the last 12 months. It is one of the Group's key performance
indicators and is used to assess the financial position of the Group and its
ability to fund future growth. This measure is also a component of the Group's
covenant calculations.
2024 2023
£m £m
Adjusted EBITDA (note 2) 250.2 258.2
Net interest payable on borrowings 13.6 8.2
Interest cover 18.4x 31.5x
16.16 Net debt
Net debt comprises the net total of current and non-current interest-bearing
borrowings (including IFRS16 lease liabilities), cash and short-term deposits
and derivative financial instruments. Net debt is a measure of the Group's net
indebtedness to banks and other external financial institutions. A
reconciliation of the movement in net debt is included in Note 8.
16.17 Net debt to adjusted EBITDA
Net debt to adjusted EBITDA is the ratio of net debt at the year-end to
adjusted EBITDA for the last 12 months. It is one of the Group's key
performance indicators and is used to assess the financial position of the
Group and its ability to fund future growth and is one of the measures used in
monitoring the Group's capital.
2024 2023
£m £m
Net debt (note 8) 329.2 237.5
Adjusted EBITDA (note 2) 250.2 258.2
Net debt to adjusted EBITDA 1.3x 0.9x
16.18 Return on invested capital (ROIC)
The Group has adopted ROIC as its key measure of return from the Group's
invested capital. It is one of the Group's key performance indicators and is
used to assess the financial performance of the Group as a whole. ROIC is
calculated as trading profit less amortisation of acquired intangibles plus
share of post-tax profit of joint ventures and associates for the previous 12
months after tax, divided by the average (being the average of the opening and
closing balance sheet) invested capital (defined as: total assets excluding
cash plus non-interest-bearing liabilities), at the average foreign exchange
rate for the year.
2024 2023
£m £m
Average invested capital 1,556.2 1,558.5
Trading profit (note 16.4) 188.0 200.4
Amortisation of acquired intangible assets (10.0) (10.3)
Share of post-tax profit from joint ventures and associates 1.1 0.9
Tax on trading profit and amortisation of acquired intangible assets (48.9) (52.3)
130.2 138.7
ROIC 8.4% 8.9%
16.19 Constant currency
Figures presented at constant currency represent 2023 amounts retranslated at
average 2024 exchange rates.
16.20 Liquidity
Liquidity is the Group's cash and short-term deposits plus undrawn committed
debt facilities less cash used as collateral on loans and any gross up of cash
in notional cash pools. .
2024 2023
£m £m
Cash 186.4 164.2
Undrawn committed debt facilities 202.5 333.4
Cash used as collateral on loans - (10.0)
Gross up of cash in notional pools 0.1 -
Liquidity 389.0 487.6
17 Exchange rates
The Group reports its results in pounds sterling. A substantial portion of the
Group's revenue and profits are denominated in currencies other than pounds
sterling. It is the Group's policy to translate the income statements and cash
flow statements of its overseas operations into pounds sterling using average
exchange rates for the year reported (except when the use of average rates
does not approximate the exchange rate at the date of the transaction, in
which case the transaction rate is used) and to translate balance sheets using
year-end rates. The principal exchange rates used were as follows:
Income and expense Assets and liabilities
Average rates Year-end rates
2024 2023 Change 2024 2023 Change
US Dollar 1.28 1.24 3.2% 1.25 1.27 (1.6%)
Euro 1.18 1.15 2.6% 1.21 1.15 5.2%
Chinese Renminbi 9.21 8.82 4.4% 9.18 9.07 1.2%
Japanese Yen 193.57 174.87 10.7% 196.65 179.56 9.5%
Brazilian Real 6.89 6.21 11.0% 7.74 6.18 25.2%
Indian Rupee 106.92 102.68 4.1% 107.04 105.89 1.1%
South African Rand 23.41 22.95 2.0% 23.58 23.27 1.3%
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