Vesuvius (VSVS) H1 2026 earnings summary

Executive summary

• Revenue increased 1.5% year-over-year at constant currency to £913.7m, with trading profit stable at £74.0m and resilient performance despite operational disruptions in North America and India, which are being addressed with resolution expected by year-end.

• Free cash flow improved to £27.5m from an outflow last year, driven by better working capital discipline and operating cash generation.

• Strong net pricing and structural cost reductions, especially in the Steel Division, offset temporary operational challenges.

• Foundry Division delivered significant revenue (+8.7%) and trading profit (+32.7%) growth, aided by successful MMS integration.

• Interim dividend maintained at 7.1p per share, reflecting confidence in ongoing cash generation.

Financial highlights

• Adjusted trading profit: £74.0m (down 3.9% reported, flat at constant currency); return on sales: 8.1% (down 40bps reported, 10bps at constant currency).

• Headline/adjusted EPS: 16.3p (down 0.7% at constant currency); statutory EPS: 6.8p (down 45%).

• Operating cash flow conversion rose to 81% from 33% year-over-year.

• Net debt/EBITDA improved to 1.9x, with net debt at £429.6m.

• CapEx guidance increased to £75–80m for FY 2026.

Outlook and guidance

• Full-year trading profit expected to be slightly ahead of FY25 on a constant currency basis.

• Structural recovery in steel markets outside China is expected to continue, with European recovery anticipated from Q4 2026 and significant acceleration in 2027.

• Market share losses in Flow Control and Advanced Refractories are expected to be regained as operational issues are resolved.

• Ongoing cost reduction program targets £55m savings by 2028, with £7.4m delivered in H1.

• Foundry division performance expected to remain strong, supported by MMS acquisition and cost measures.