Vesuvius (VSVS) Trading update summary

Market trends and performance

• Steel markets outside China, Russia, Iran, and Ukraine grew 2.5% in Q1, accelerating to 2.9% by April, with positive momentum expected to continue, especially in North America and Europe.

• Foundry markets remained stable overall, with India and China performing well due to strong domestic demand and increased exports, while Europe and North America were softer.

• Revenue and trading profit for the first four months were slightly ahead of last year on a constant currency basis, despite operational issues.

• Steel division volumes were slightly lower due to customer closures in 2025 and supply chain issues in North America.

• Positive pricing developments in both steel and foundry divisions offset cost base increases, maintaining pricing discipline.

Operational issues and recovery

• North American operational issues stemmed from faulty raw materials, causing a temporary but unrecoverable loss of production capacity and a one-off negative trading profit impact.

• Some lost sales will not be recovered, but most customers' postponed deliveries are expected to be fulfilled in coming months.

• The operational issues have been resolved and are not expected to impact the remainder of the year.

• Customer closures in North America led to a one-off market share loss, but this effect will diminish in H2 as comparisons normalize.

Financial outlook and guidance

• Cost reduction program is on track, targeting at least GBP 10 million recurring net cash savings in 2026 and GBP 55 million cumulative by 2028, with potential for slight outperformance.

• Integration of the acquired Morgan Advanced Materials division (MMS) is progressing smoothly, with synergy targets likely to be exceeded.

• Leverage remains stable and is expected to decline in H2, supported by strong cash management and improved earnings.

• Full-year guidance remains unchanged, with H2 expected to be stronger due to market trends and operational recovery.

• FX headwind increased to GBP 5 million, supply chain issues cost GBP 4 million in H1, but recovery is expected through price or volume.