Vesuvius plc announces revenue increase 25% in 2022

2023-03-02

Mar. 2, 2023 - Vesuvius plc, a global leader in molten metal flow engineering and technology, announces its audited results for the twelve months ended 31 December 2022.

Full Year 2022 Highlights

Revenue of £2,047m, +18% (underlying) reflecting improved mix and successful execution of pricing strategy to fully recover input cost rises

Record trading profit and return on sales of £227m (+50% underlying) and 11.1% (+240bps), respectively

Market share gains alongside price rises in all regions for Flow Control and in most regions for Foundry and Advanced Refractories

R&D programme and strategic capex to drive volume and margin growth in coming years fully on track:

capacity expansion in Flow Control

Additional VISO capacity in India and Poland now operational

Additional Slide Gate capacity in Poland on track to begin production later in 2023

New Flux plant in India to serve India and South-East Asia, operational in 2024

Development of new flagship greenfield plant in Vizag, India, to pave the way for the Steel Division long term expansion in Asia

+ 18% R&D spend in 2022 (fully expensed) to drive technological differentiation and value-add of our products

Good progress in H2 on reducing inventory levels, in particular raw materials

Free cash flow of £123m despite £89m spent on capex

Net debt/EBITDA of 0.9x (31 December 2022), provides flexibility to invest in organic and inorganic opportunities

Proposed final dividend of 15.75p, bringing the full year dividend to 22.25p, +5%

Target to achieve net zero carbon by 2050; on track for a20% reduction by 2025 and new detailed plan for a 50% reduction by 2035

Comment from Patrick André, CEO:

“2022 was a record year for Vesuvius despite difficult market conditions in the second half. This performance was made possible by the technological differentiation of our products and solutions, which enabled us to simultaneously compensate for all cost inflation with price increases and gain market share. These record results are higher than those ever achieved pre-pandemic, despite materially lower volumes, in both the Steel and Foundry divisions, as our end markets have not fully recovered since that period. This shows that our objective of a 12.5% return on sales is achievable in the medium-term on normalised volumes.

Looking forward, we expect to continue to successfully achieve market share gains through technological differentiation and new product launches. We are also confident in our ability to cover cost increases with pricing. Steel and Foundry markets have remained weak at the beginning of 2023, and we anticipate the rate of recovery to be slow and only to improve later in the year. We will also be impacted in the first half by a negative fixed cost absorption related to the reduction of our inventory level and by the impact of the cyber incident. Despite this, we are confident that our 2023 results will be in-line with our expectations. Looking beyond 2023, we expect the positive impact of our investment in R&D, long-term growth initiatives, and development of our capacity in fast growing regions, will result in accelerated growth and profitability.”