Half Year 2026 Vesuvius plc Earnings Call Transcript
Key Points
- Revenue slightly increased by 1.5% on a constant currency basis, demonstrating resilience despite operational disruptions.
- Free cash flow generation improved significantly by 41.4 million pounds year-on-year to 27.5 million pounds, driven by better working capital discipline.
- Structural cost reduction program is ahead of schedule, with 7.4 million pounds in savings delivered in H1, on track for the 55 million pound target by 2028.
- Foundry division performed strongly, with revenue up 8.7% and trading profit up 32.7%, supported by successful MMS acquisition integration.
- Steel market outside China shows structural recovery with 3.8% growth, expected to accelerate in H2 and beyond, benefiting from new EU regulations.
- Operational challenges, including a graphite quality defect and maintenance issues in US plants, impacted global results by approximately 6 million pounds in H1.
- Ramp-up difficulties at new Vizag plants in India reduced trading profits by an estimated 2 million pounds, limiting growth in the steel division.
- Advanced refractories business faced pricing pressure in Europe from Chinese imports and operational issues, leading to a significant profit decline year-on-year.
- Temporary market share pressure in steel division due to operational issues, customer site closures, and tight credit controls, with lost revenue estimated at 12.6 million pounds.
- Full-year CapEx guidance increased to 75-80 million pounds, 5 million higher than initially communicated, due to investments in automation and North America.
(audio in progress) Mark will give you more details on our financials.
I will conclude at the end of the meeting with some perspectives for the full year 2026 and beyond before opening the floor for questions.
Our performance for the half year was resilient and in line with last year's. Driven by self-help actions offsetting temporary operational disruptions.
Our revenues slightly increased by 1.5% on a constant currency basis.
Our trading profit at 74 million pounds was similar to last year's also on a constant currency basis.
Our return on sales decreased marginally. By 10 basis points as compared to last year on a constant currency basis.
As expected, our free cash flow generation increased significantly by 41.4 million pounds year-on-year to a total of 27.5 million pounds driven by improved working capital discipline and stronger operating cash generation.
Working capital intensity declined from 23.6% to 23.1% and is expected to improve further in the second
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