Business summary
Lower revenues and profits driven by a decline in global steel production and inventory volumes
Cash conversion ratio of 84%
Return on sales increased to 10% as a result of management actions to improve productivity and reduce cost
Underlying increase in profitability in the Foundry division of 165 basis points driven by new management actions
Strong balance sheet, with long-term bank facilities in place to 2022. Net debt of £296m reflects acquisition of Sidermes
Interim dividend up 3% to 5.15 pence per share (H1 2014: 5.00 pence) to be paid on 25 September 2015
Continued improvement in profitability from self-help initiatives
Restructuring programme commenced to address structural changes in end markets
Strategic progress
Delivery of margin improvement continues
Revenue up year-on-year in Asia-Pacific in all businesses despite adverse trading conditions
Outperformance in China and India - strategically important markets for long-term growth
Continued focus on products and services where value-add is rewarded
Sidermes acquisition expands our Technical Services offering - an important medium-term growth opportunity
François Wanecq, Chief Executive of Vesuvius, commented:
"In recent months, we have seen challenging end markets with a global decline in crude steel production, particularly in the US, our largest market. Against this backdrop, Vesuvius has made further strategic and operational progress. We are pleased to report revenue and margin progression in the major long-term markets of China and India and further progress in building our Technical Services business.
As a consequence of the structural change in our end markets, we have commenced a global restructuring programme and have currently identified actions which will result in a total charge of around £20m in 2015 and 2016 with full year cost savings in excess of £10m in 2017. Some early benefits from this programme are expected to be seen this year, and as a result, we remain confident that performance will be broadly in line with market expectations for the full year.
This programme is designed to better align our group with our end markets and capitalise on the further growth of our addressable markets as outlined at our Capital Markets Day in June."
