Half Year 2024 Vesuvius plc Earnings Call Transcript
Key Points
- Vesuvius PLC (FRA:V4S) maintained a robust trading profit with only a 0.9% decline despite challenging market conditions.
- The company achieved a slight increase in return on sales by 10 basis points to 10.4%.
- Net debt to EBITDA ratio remained low at 1.2 times, despite high strategic expansion CapEx and share buyback program.
- The company launched 18 new products in the first half of 2024, with a new product sales ratio progressing to 17.9%.
- Vesuvius PLC (FRA:V4S) proposed an interim dividend of 7.1p per share, a 4.4% increase compared to last year.
- Revenues declined by 2% on an underlying basis due to significant volume decline in the foundry division.
- The foundry division's trading profit reduced by 27.1%, with return on sales decreasing by 220 basis points to 8.2%.
- Steel production in key regions like EU + UK and the Americas remains significantly below normal levels.
- The company does not expect significant improvement in end markets in the second half of 2024, with recovery likely only in 2025.
- Higher leverage and reduced interest income impacted finance costs, contributing to a marginal decline in headline EPS by 2.9% on an underlying basis.
Good morning, ladies and gentlemen. Welcome to Vesuvius half year 2024 results presentation. My name is Patrick Andre, I'm the Chief Executive. And with me this morning is the Mark Collis, Chief Financial Officer. I will start with some update on our performance during the first six months of the year before Mark gives you more details on our financials. I will then conclude with some perspective on the full year 2024 before opening the floor for questions.
Our results for the first half were in line with our expectations despite weaker market conditions than expected. Our revenues declined 2% on an underlying basis with a positive volume growth in steel, only partially compensating a significant volume decline in foundry. Our trading profit remained robust with a decline limited to 0.9% on an underlying basis. Despite the difficult market conditions, we could slightly increase our return on sales by 10 basis point to 10.4%.
We also continue to make progress in the management of our cash with a further reduction
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