Vesuvius plc, a global leader in molten metal flow engineering, releases the following Interim Management Statement covering current trading, its financial position and outlook ahead of today’s Annual General Meeting. This statement covers the period from 1 January to 14 May 2014.
Market conditions have remained broadly unchanged since we announced our 2013 Results at the beginning of March, and the Group’s trading performance for the first four months of this year has been in line with the Board’s expectations. We are making good progress with our self-help initiatives to drive performance improvement regardless of the wider market environment, with margin improvement continuing in 2014.
According to the World Steel Association, global steel production was 2.5% higher in the first quarter of 2014 compared to the same period last year. Whilst the statistics for Europe have been encouraging, showing a 5.9% increase in production volumes, growth elsewhere has been more muted; just 0.8% in the US, 0.4% in Brazil and 1.6% in India. Production in China has increased by 2.4% year on year.
Market conditions in the global foundry industry have continued to be mixed. Although the automotive industry has indicated that truck and light vehicle production has increased in Europe and North America, volumes in Brazil and India have been weaker, and there has been no improvement in the low levels of investment in the mining end market.
There has been no material change in our financial position from that reported at 31 December 2013. We continue to operate with a strong balance sheet and remain cash generative. We are maintaining our focus on working capital management, and are making further progress in reducing inventory days across the Group.
Whilst there have been encouraging signs of increased activity in some end-markets, namely in Europe, conditions in other end markets remain challenging, and we therefore continue to expect the underlying trading environment during 2014 to be broadly similar to that experienced in 2013.
As previously disclosed, a continuation of the current strength of sterling will have a negative impact on our reported results. Despite this, management’s sustained focus on self-help measures to drive operational efficiency, coupled with the strength of our customer relationships and our technical leadership and innovation, is expected to drive further margin improvement during the course of the year. Consequently, the Board remains confident in their expectations for the full year.