Vesuvius (VSVS) H2 2023 earnings summary

Executive summary

• FY23 revenue £1,929.8m, down 3.1% underlying and 5.7% reported; pricing partly offset lower volumes in difficult markets.

• Trading profit £200.4m, down 6.7% underlying and 11.8% reported; strong cash conversion and a 0.9x net debt/EBITDA ratio supported shareholder returns.

Financial highlights

• Headline EPS 46.7p, down 11.9% underlying and 17.3% reported; headline earnings attributable to the parent were £125.7m, down 17.5%.

• Reported profit was £130.6m versus £188.5m; profit before tax was £179.4m versus £206.6m.

• Adjusted operating cash flow was £186.6m; free cash flow was £128.2m, up 4.1% YoY, and cash conversion was 93% versus 82%.

• Proposed FY dividend of 23.0p per share, up 3.4% from 22.25p.

Outlook and guidance

• 2024 underlying, constant-currency performance expected to make moderate progress, excluding estimated £6m one-off restructuring costs; markets remained subdued at the start of the year, with some improvement expected as the year progresses.

• 2024 savings expected at £3m, with a £10m–£15m year-end run-rate; longer-term efficiency programme targets at least £30m recurring cash savings by 2026.

• FY24 guidance: depreciation £65m–£70m; interest expense £9m–£11m; effective tax rate ~27.5%; cash capex ~£100m, including £30m–£35m growth capex.

• Medium-term targets: revenue growth of at least ~4% annually, ROS above 12.5% in 2026 and at least £400m free cash flow in 2024–2026.