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Vesuvius Plc reports financial results of H1 2021

2021-07-30

Jul. 30, 2021 - Vesuvius plc, a global leader in molten metal flow engineering and technology, announces its unaudited results for the six months ended 30 June 2021.


Vesuvius delivered a strong commercial performance in H1 2021, supported by the continued improvement in end markets and market share gains in Steel Flow Control and Foundry.


According to the World Steel Association (WSA), crude steel production in the world excluding China and Iran increased by 18.3% in H1 2021, which is 0.3% ahead of H1 2019. Foundry end-markets across all regions also posted significant growth, with production in the global light vehicle, medium & heavy commercial vehicle and mining & construction end markets up 29.7%, 20.3% and 16.4%, respectively, according to IHS and Oxford Economics data. Compared to H1 2019, global light vehicle production is down 12.3%, whilst medium & heavy commercial vehicles is up 2.1% and mining & construction is up 6.1%. The lagging recovery versus 2019 levels in the light vehicles market reflects the global shortage of semi-conductors, which has constrained the ability of OEMs to ramp-up production.


Trading performance


In the first half of 2021, the Group generated revenues of £808.1m, an increase of 12% compared to H1 2020, on a reported basis. Underlying Group revenue, adjusted for the effects of currency translation, increased by 18%. Trading profit (adjusted EBITA) was £73.3m, an increase of 43% on a reported basis and 54% on an underlying basis. The Group achieved return on sales of 9.1% in H1 2021, an increase of 200bps (220bps on an underlying basis). This strong performance was achieved despite the unwinding of the majority of temporary Covid-related cost savings and the impact of excess freight costs.


On an underlying basis, adjusted for the effects of currency translation, the Group revenues remain 3.3% below the level achieved in H1 2019. This is due to the exposure of our Steel Division to NAFTA and the EU 27 + UK where production remains below H1 2019 levels and the exposure of the Foundry Division to light vehicles which is lagging broader market growth due to the semi-conductor shortage.


Comment from Patrick André, CEO:


"Vesuvius delivered a strong commercial performance in H1 2021, supported by the continued improvement in end markets and market share gains in Steel Flow Control and Foundry. While we continue to experience inflationary pressure in certain raw materials and freight, this will be offset in H2 through incremental selling price increases currently being implemented. Consequently, trading profit in the second half is expected to be similar to the first half. Overall, our expectation for the full year is unchanged.


Looking beyond the ongoing transition period of the pandemic recovery, we expect continuing structural growth in our end markets of steel and foundry to present attractive organic growth opportunities, supported by the strategic expansion of our Steel Flow Control production capacities in Asia and EMEA.


We remain confident that we will deliver further meaningful improvement in our financial performance in the coming years, based on our optimised manufacturing footprint, our ongoing R&D investment and new product pipeline, as well as our entrepreneurial and decentralised business model."

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