Strong profitability improvements in first year following demerger. Significant portfolio realignment.
Vesuvius plc, a global leader in molten metal flow engineering, announces its preliminary audited results for the year ended 31 December 2013, its first full year of independence following the demerger of Cookson Group plc in December 2012.
Highlights
Revenue of £1,511m, down 2.4%; down 0.8% on an underlying basis(1) (2012: £1,548m)
Trading profit(2) of £140.0m, up 6.6% on a reported basis, 10.9% on an underlying basis(1) (2012: £131.3m(4))
Return on sales(2) improved by 80 basis points to 9.3%; a 100 basis point improvement on an underlying basis(1)
Significant realignment of portfolio including disposal of Precious Metals Processing division and exit from noncore low-margin businesses
Share repurchase programme of £30m completed in September 2013
Year-end net debt(2) reduced to £256m: positive operating cashflow(2) of £150m, cash conversion rate of 107%
Headline(3) earnings per share of 31.9 pence; up 18.1% (2012: 27.0 pence(4))
Final dividend of 10.25 pence per share recommended
François Wanecq, Chief Executive of Vesuvius, commented:
“In our first complete year as an independent company, we have successfully initiated the recovery of margins across the Group despite an unfavourable economic environment. Market conditions remained challenging in 2013, continuing from the reduced levels of activity seen in the second half of 2012, and Sterling strengthened substantially in the second half of 2013, impacting our reported growth numbers. “Against this backdrop we have taken a disciplined approach to implementing our stated strategy. We streamlined our business portfolio and activities, exiting non-core low-margin businesses, further improved the quality of our products and services, and implemented self-help measures to increase the productivity of our own businesses. “The result is improved profitability, strong cash flow, and a more focused Group. This gives us a strong platform from which to pursue our growth strategy.”
Full Year Results :
Outlook
We expect the underlying trading environment during 2014 to be broadly similar to that experienced in 2013. We are progressing with our plan to improve operational efficiency across the Group. These actions should continue to drive improvement in our trading margins and working capital performance in 2014. If the recent strength of Sterling continues it will have a negative impact on our reported growth in 2014.
Our primary objectives for the medium-term are to:
improve margins further;
increase investment in research and development;
sustain our global leadership in our core businesses;
grow further our presence in China;
retain a strong balance sheet in order to give us financial flexibility; and
progress our overall strategy of providing superior technical products and services for the steel and foundry industries.
- Underlying basis is at constant currency and excludes separately reported items and the impact of acquisitions and disposals
- For definitions of non-GAAP measures, refer to note 18 of the financial statements
- Headline results refer to continuing operations and exclude separately reported items
- 2012 results have been restated as a result of IAS 19 (Revised) Employee Benefits. Refer to note 1.7 of the financial statements
FOR FURTHER INFORMATION PLEASE CONTACT:
Shareholder/analyst enquiries:
Vesuvius plc
François Wanecq,
Chief Executive
+44 (0) 207 822 0000
Chris O’Shea,
Chief Financial Officer
+44 (0) 207 822 0000
Tony Harrison,
Group Head of Corporate Finance
+44 (0) 207 822 0000
Maddy Cox-Smith,
Investor Relations Manager
+44 (0) 207 822 0016
Media enquiries:
MHP Communications
John Olsen/Vicky Watkins
+44 (0) 203 128 8100
Copies of Vesuvius’ 2013 Annual Report are due to be posted to shareholders of the Company who have elected to receive a hard copy on 07 April 2014 and are also expected to be available on the Company's website and at the Registered Office of the Company on or before this date.
Vesuvius management will make a presentation to analysts and investors on 04 March 2014 at 10.00am (UK time). This will be broadcast live on Vesuvius’ website, investors.vesuvius.com/investor-relations and an archive version of the presentation will be available on the website later that day.
About Vesuvius plc
Vesuvius operates in the steel and foundry casting industries, with market and technology leadership across a range of mission critical products and services supplied to these sectors, including flow control solutions, advanced refractories and other consumable products.
We have a worldwide presence in both Steel and Foundry. We serve our customers through a low-cost network of manufacturing plants located close to their own facilities, and by embedding our industry experts within their operations, all supported by our global technology centres.
Vesuvius’ core competitive strengths are our leading technology and innovation, strong customer relationships, well established presence in developing markets, low-cost manufacturing base, and our global reach, all of which enable us to expand our addressable markets.
Forward looking statements
This announcement contains certain forward looking statements which may include reference to one or more of the following: the Group’s financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies or synergies, budgets, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives of management and other matters.
Statements in this announcement that are not historical facts are hereby identified as "forward looking statements". Such forward looking statements, including, without limitation, those relating to the future business prospects, revenue, working capital, liquidity, capital needs, interest costs and income, in each case relating to Vesuvius, wherever they occur in this announcement, are necessarily based on assumptions reflecting the views of Vesuvius and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward looking statements. Such forward looking statements should, therefore, be considered in light of various important factors that could cause actual results to differ materially from estimates or projections contained in the forward looking statements. These include without limitation: economic and business cycles; the terms and conditions of Vesuvius’ financing arrangements; foreign currency rate fluctuations; competition in Vesuvius’ principal markets; acquisitions or disposals of businesses or assets; and trends in Vesuvius’ principal industries.
The foregoing list of important factors is not exhaustive. When considering forward looking statements, careful consideration should be given to the foregoing factors and other uncertainties and events, as well as factors described in documents the Company files with the UK regulator from time to time including its annual reports and accounts.
You should not place undue reliance on such forward looking statements which speak only as of the date on which they are made. Except as required by the Rules of the UK Listing Authority and the London Stock Exchange and applicable law, Vesuvius undertakes no obligation to update publicly or revise any forward looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward looking events discussed in this announcement might not occur.
Vesuvius plc, 165 Fleet Street, London EC4A 2AE
Registered in England and Wales No. 8217766
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2013 Full Year Results.pdf
