Vesuvius plc

On a constant-currency basis, revenue increased 1.5%, trading profit was GBP 74 million, return on sales declined by 10 basis points, and headline EPS was 16.3p, down 0.7%. Free cash flow improved by GBP 41.4 million year on year to an inflow of GBP 27.5 million, working capital intensity fell from 23.6% to 23.1%, and net debt-to-EBITDA improved to 1.9 on a pro forma basis. Management said the Steel Division’s temporary operational issues reduced global results by around GBP 8 million in the first half, and the Vizag ramp-up in India affected trading profit by an estimated GBP 2 million. For FY26, Vesuvius expects full-year trading profit to be slightly ahead of 2025 on a constant-currency basis, and Mark Collis raised CapEx guidance to GBP 75 million to GBP 80 million.

Patrick André framed the half as resilient, with pricing leadership, ongoing cost actions, and a structural steel-market recovery offsetting short-term execution problems. He repeatedly said the operational issues in the U.S. and India are now identified and should be resolved by year-end, allowing the company to benefit more fully from 2027 onward. His tone was confident but measured, especially on Europe and Advanced Refractories, where he acknowledged pricing pressure and said the business is adapting its footprint.

Mark Collis focused on the bridge from revenue to cash and profit: positive pricing of around GBP 21 million more than offset volume declines of GBP 16 million, while trading profit of GBP 74 million was held back by operational issues but supported by self-help. He said cash flow conversion improved to 81% from 33%, free cash flow was GBP 27.5 million versus an outflow of GBP 13.4 million a year ago, and working capital remains a key priority with further opportunity in trade debtors. He also said CapEx will likely be GBP 75 million to GBP 80 million in FY26, structural cost savings are already over GBP 7 million in H1 toward a GBP 10 million full-year target, and the underlying tax rate is now expected to be 27% for 2026 and beyond.

Analysts pressed on the timing of the European steel recovery, the ability to regain lost volumes, MMS integration, and whether pricing pressure in Advanced Refractories could spread beyond Europe. Management said Europe likely starts to benefit from Q4 as inventories of pre-deadline imports clear, while 2027 should show a more meaningful acceleration; they also said Flow Control volume recovery should be relatively quick, helped by backlog and new exclusive-supply contracts, whereas Advanced Refractories may take longer. On MMS, management said integration is ahead of expectations, with synergies starting to flow and additional manufacturing benefits expected over the next 12 to 18 months; they also said they are open to small bolt-on acquisitions if opportunities arise.