29 February
2024
Full Year Results for the
twelve months ended 31 December 2023
Robust trading despite
difficult market conditions
Vesuvius
plc, a global leader in molten metal flow engineering and
technology, announces its audited results for the twelve months
ended 31 December 2023.
Financial summary
|
|
2023
(£m)
|
2022
(£m)
|
Year-on-year change
|
Underlying change(1)
|
Headline (non-statutory)
|
|
|
|
|
|
Revenue
|
|
1,929.8
|
2,047.4
|
(5.7%)
|
(3.1%)
|
Trading Profit (2)
(EBITA)
|
|
200.4
|
227.2
|
(11.8%)
|
(6.7%)
|
Return on Sales
(2)
|
|
10.4%
|
11.1%
|
(70bps)
|
(40bps)
|
Headline basic EPS (2)
(pence)
|
|
46.7
|
56.5
|
(17.3%)
|
(11.9%)
|
Free cash flow
(2)
|
|
128.2
|
123.1
|
4.1%
|
|
Net Debt /
EBITDA(2)
|
|
0.9x
|
0.9x
|
-
|
|
Statutory
|
|
|
|
|
|
Operating Profit
|
|
190.1
|
216.8
|
(12.3%)
|
|
Profit Before Tax
|
|
179.4
|
206.6
|
(13.2%)
|
|
Statutory basic EPS
(pence)
|
|
44.0
|
67.2
|
(34.5%)
|
|
Cash inflow from
operations
|
|
272.0
|
268.3
|
1.4%
|
|
Dividend (pence per
share)
|
|
23.0
|
22.25p
|
3.4%
|
|
(1) Underlying basis is at
constant currency and excludes separately reported items, and the
impact of acquisitions and disposals.
(2) For definitions of non-GAAP
measures, refer to Note 16 in the Condensed Group Financial
Statements.
Highlights
·
Revenue of £1,929.8m, was 3.1% lower on an
underlying basis vs. 2022, reflecting lower volumes in a weaker
market, partially offset by good pricing performance and market
share gains in Flow Control and Foundry
· Robust trading profit of £200.4m, 6.7%
lower on an underlying basis vs. 2022 Return on sales of 10.4%, 40bps
lower than 2022 on an underlying basis
· Increased R&D
investment (£37.4m, up 3.7% vs. 2022 and now 1.9% of sales) leading
to 21 new products launched in 2023 and a strong pipeline of new
products for the coming years
· Strategic expansion
programme in Asia and Flow Control fully on track
·
Strong cash management performance (cashflow
conversion of 93%) with an increase in cash generated from
operations despite reduction of trading profit, due to good
progress on reducing trade working capital, supporting the launch
of our £50m share buy-back programme
·
Strong, stable balance sheet with net debt /
EBITDA of 0.9x (31 December 2023)
·
Proposed final dividend of 16.2p, bringing the
full year dividend to 23.0p, +3.4%
·
Programme to achieve cash cost savings of £30m by
2026 initiated
·
Best ever health and safety performance with our
Lost-Time Injury Frequency Rate down to 0.6
·
Reduction of 20% in CO2e intensity vs.
2019 baseline, reaching 2025 interim target two years earlier than
planned
Comment from Patrick André, CEO:
"Despite the short-term uncertainties in our end steel and
foundry markets, we remain confident in the mid to long term growth
potential of these markets and in particular the steel market
outside of China, which should be a tailwind for
us.
The strength of our technology-based business model should
also enable us to continue simultaneously outperform our underlying
markets in Flow Control and Foundry and maintain a positive pricing
performance for all our business units in the coming
years.
This, coupled with our relentless drive to optimise our cost
base as illustrated by the launch of our new cost optimisation
programme, positions us very well to achieve our objectives of
12.5% return on sales by 2026 and free cash flow generation of
£400m over the next three years."
Presentation of Full Year 2023 Results
Vesuvius management will make a
presentation to analysts and investors on 29 February at 09:00 UK
time at the London Stock Exchange, 10 Paternoster Square, London
EC4M 7LS. For those unable to attend, the event will be
livestreamed and can be accessed by clicking
here. Participants can also
join via an audio conference call. Please click
here to
register. Once registered, you will be provided with the
information needed to join the conference, including dial-in
numbers and passcodes. Be sure to save this information in your
calendar.
For further information, please contact:
|
|
Shareholder/analyst enquiries:
|
|
|
Vesuvius
plc
|
Patrick André, Chief Executive
|
+44 (0)
207 822 0000
|
|
Mark Collis, Chief Financial
Officer
Rachel Stevens, Group Head of
Investor Relations
|
+44 (0)
207 822 0000
+44 (0) 7387 545 271
|
Media enquiries:
|
|
|
MHP Communications
|
Rachel Farrington/Ollie
Hoare
|
+44 (0) 203 128 8570
|
About Vesuvius plc
Vesuvius is a global leader in
molten metal flow engineering and technology principally serving
process industries operating in challenging high‑temperature
conditions.
We develop innovative and
customised solutions, often used in extremely demanding industrial
environments, which enable our customers to make their
manufacturing processes safer, more efficient and more sustainable.
These include flow control solutions, advanced refractories and
other consumable products and increasingly, related technical
services including data capture.
We have a worldwide presence. We
serve our customers through a network of cost-efficient
manufacturing plants located close to their own facilities, and
embed our industry experts within their operations, who are all
supported by our global technology centres.
Our core competitive strengths are
our market and technology leadership, strong customer
relationships, well established presence in developing markets and
our global reach, all of which facilitate the expansion of our
addressable markets.
Our ultimate goal is to create
value for our customers, and to deliver sustainable, profitable
growth for our shareholders giving a superior return on their
investment whilst providing each of our employees with a safe
workplace where they are recognised, developed and properly
rewarded.
We think beyond today to create
solutions that will shape the future.
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. Forward-looking statements can be identified by the use of
terms such as 'intend', 'aim', 'project', 'anticipate', 'estimate',
'plan', 'believe', 'expect', 'forecasts', 'may', 'targets',
'could', 'should', 'will', 'continue' or similar words.
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. Although
Vesuvius makes such statements based on assumptions that it
believes to be reasonable, by their nature, these forward looking
statements are subject to a number of known and unknown risks,
uncertainties and other factors beyond Vesuvius' control 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. In light of
these risks, uncertainties and assumptions, the forward looking
events discussed in this announcement might not occur and such
forward looking statements are not guarantees or predictions of
Vesuvius' future performance. You should not place undue reliance
on such forward looking statements which speak only as of the date
on which they are made. Past performance is no guide to future
performance and persons needing advice should consult an
independent financial adviser.
Neither Vesuvius nor any of its
affiliates, associates, employees, directors, officers or advisers
assumes any responsibility for the accuracy or completeness or
undertakes any obligation, to update or revise any of these
forward-looking statements to reflect any new information or any
changes in events, conditions or circumstances on which any such
forward-looking statement is based save in respect of any
requirement under applicable law or regulation.
Vesuvius plc, 165 Fleet Street,
London EC4A 2AE
Registered in England and Wales
No. 8217766
LEI:
213800ORZ521W585SY02
www.vesuvius.com
Vesuvius
plc
Full Year Results for the
twelve months ended 31 December 2023
In 2023, we delivered robust
results and profitability despite a difficult market environment
and we continued to make good progress in the implementation of our
strategic revenue and profitability growth initiatives.
£m
|
2023
Reported
|
|
2022
Reported
|
currency
|
2022
Underlying
|
|
Reported
Change
|
Underlying Change
|
|
|
Revenue
|
1,929.8
|
|
2,047.4
|
(55.3)
|
1,992.1
|
|
(5.7%)
|
(3.1%)
|
Trading Profit
|
200.4
|
|
227.2
|
(12.5)
|
214.7
|
|
(11.8%)
|
(6.7%)
|
Return on
Sales
|
10.4%
|
|
11.1%
|
|
10.8%
|
|
-70bps
|
-40bps
|
Robust Group trading performance
In 2023, revenue was £1,929.8m, a
decrease of 5.7% compared to 2022, of which 2.6% relates to FX
translation. The fall in revenue was due to volume declines of
5.5%, partially offset by positive pricing of 2.3%. Overall volume
declines in Flow Control and Foundry due to general market decline
and destocking were partially offset by market share gains. In
Advanced Refractories, volume declines were amplified due to our
strategic priority on pricing over volume, in particular, in EMEA
and the Americas. Conversely, Advanced Refractories gained market
share in Asia.
Trading profit was £200.4m, a
decrease of 6.7% on an underlying basis and 11.8% on a reported
basis versus the prior year. The Group achieved a return on sales
of 10.4% in 2023, a decrease of 40bps on an underlying basis. This
robust performance, delivered through resilient pricing in all
business units and market share gains in Flow Control and Foundry,
demonstrates the strength of the technology-based business model of
the Group.
Difficult market background
Our steel markets, after some
limited improvement during H1 2023 from the very low level of H2
2022, weakened again during H2 2023. This was particularly
pronounced in Europe (EU+UK) where steel production declined
overall 7.3% in 2023 as compared with the previous year, 5% below
the worst year of the pandemic in 2020. Steel markets were also
particularly difficult in South America, where production declined
5.8 % as compared with the previous year. India was, in 2023, for
the second year in a row, the only major region in the world to
exhibit strong growth, of 11.8%. Steel production in China was
stable but Chinese net steel exports increased very significantly
during the year, putting pressure on steel producers outside China,
with the exception of those in the US who were insulated by
efficient trade protections. Overall, steel production in the world
excluding China, Russia, Iran and Ukraine declined by 0.7% in 2023,
after a decline of 3.9 % in 2022. (Source:
World Steel Association)
Our foundry markets, with the
exception of India, also remained weak in 2023, in particular in
Europe (specifically in and around Germany), in China and in South
America. Weakness in non-automotive sectors more than offset a
limited recovery in the automotive sector. Destocking of excess
castings inventories accumulated during the pandemic also had a
negative impact on our end markets.
Robust results and profitability thanks to positive pricing
performance in all business units and market share gains in Flow
Control and Foundry
Both the Steel and Foundry
Divisions achieved a positive pricing performance in 2023, sharing
the value we create for our customers with our technology leading
products and solutions and fully compensating for increases in our
cost base from the continuing inflationary environment.
At the same time, both the Flow
Control and the Foundry business units continued to gain market
share in most regions, with the exception of Europe (EU+UK) for
Flow Control where the business unit was negatively impacted by
destocking at certain key customers and where we applied strict
credit limit rules limiting our sales to customers at heightened
risk of insolvency.
This ability to simultaneously
improve market share and prices in both Flow Control and Foundry
was again made possible by the technological differentiation of our
products and solutions, driven by our market-leading investment in
research and development.
In the Advanced Refractories
business unit, however, we lost market share in 2023, particularly
in Europe and in the Americas, as we gave priority to
pricing.
Thanks to this overall positive
pricing performance and to our market share gains in Flow Control
and Foundry, we delivered robust results in 2023 despite the very
challenging market environment. Our revenue reached £1929.8m
(versus £2047.4m in 2022), our trading profit reached £200.4m
(versus £227.2m in 2022), resulting in a return on sales of 10.4%
(11.1% in 2022), demonstrating again the positive impact of the
cost competitiveness and technology strategy we have implemented
for several years.
Successful implementation of our growth generating investment
programme in Flow Control and Asia.
The growth-generating investment
programme we initiated in 2021 continues apace and will support the
progression of our results and profitability in the years to come.
The expansion of our VISO, Slide gate and mould flux production
capacity in Flow Control will be fully operational by mid-2024 and
will support the business unit's expansion in India, South-East
Asia, EEMEA and North America. In China, our new Foundry flux
production line is now fully operational and will enable the
business unit to accelerate its penetration of the fast-growing
aluminium foundry market in the country. In Advanced Refractories,
the expansion of our basic monolithics, AlSi monolithics and
precast capacity at our new flagship plant in Vizag, India, will be
completed by the end of 2024 and will support the profitable growth
of the business unit in India and South-East Asia.
Strong free cash flow
generation
Thanks to our stringent cash
management discipline and in particular good progress in the
management of our trade working capital, our cash conversion ratio
reached 93% in 2023. This enabled us to maintain a very low debt
leverage ratio of 0.9x despite capital expenditure being
temporarily higher than the long-term average, to increase our
dividend and to launch a £50m share buyback programme at the end of
2023.
Our free cashflow generation is
expected to improve further from 2025, when our strategic expansion
programme will be complete, and capex should return to a more
normalised level.
Continued progress in the productivity of R&D and new
product development
We have again increased our
investment in research and development in 2023, spending
£37.4m, an uplift
of 3.7% over 2022 (on a constant currency basis). This was fully
expensed in our profit and loss statement. Our two focus areas
remain: innovation in materials science, with an objective to
continuously improve the performance of our consumables; and, the
development of mechatronics solutions to enable our customers to
substitute the operators who manipulate our consumables with robots
and, by doing so, improve their safety, reliability, cost and
quality performance.
We successfully launched 21 new
products in 2023. Our New Product Sales ratio, defined as the
percentage of our sales realised with products which didn't exist
five years ago, reached 17.6% in 2023, up from 16.4% in
2022.
Thanks to the continuous efforts
we are putting into R&D, we now have a full pipeline of
products under development which will be progressively introduced
in the market over the next three years and will support our
ambition to grow our revenue and profitability.
New cost optimisation programme to deliver £30m recurring
cash savings by 2026
We launched at the end of 2023 a
new cost optimisation programme aiming to deliver £30m recurring
cash savings by 2026. This program will cover all our activities
worldwide and will focus on operational improvement, lean
initiatives, automation and digitalisation as well as further
optimisation of our manufacturing footprint.
Sustainability
While one
of the key attributes of our products is to reduce the carbon
intensity of our customers' processes, we are also focused on what
we can do within our own business. We have set nine sustainability
targets and continue to monitor performance against these. However,
we have identified four key drivers for our sustainability
programme, namely: becoming a zero-accident company; reaching net
zero CO2e emissions (Scope 1 and Scope 2) by 2050;
continuing to help our customers reduce their CO2
emissions; and improving our gender diversity at every level of the
Company.
Best-ever safety
performance
We
achieved our best-ever safety result in 2023, with a Lost Time
Injury Frequency Rate (the number of injuries necessitating a lost
work-shift, per million hours worked) of 0.6, versus 1.08 achieved
in 2022, which now positions us among the
best-in-class companies worldwide. This is the result of many years
of efforts to integrate safety as the number one priority in the
company culture. Our ultimate goal remains for us to be a
zero-accident company and we will intensify our efforts to continue
progressing rapidly towards this objective.
Our journey to net zero
In 2023, we continued to implement
our action plan to decarbonise our activities. In particular, we
reinforced further our energy savings initiatives and our programme
to shift our electricity consumption worldwide to non-carbon
emitting sources. Thanks to these efforts, we reduced our carbon
intensity by 20.2% as compared with our 2019 reference year (versus
a reduction of 18.5% in 2022), achieving our 2025 objective two
years ahead of schedule and setting us on track to achieve our next
intermediary target of 50% reduction by 2035.
Excluding the impact of our rotary
kiln in South Africa, which we do not consider as core to our
long-term strategy, our carbon intensity decreased by 33.2%
worldwide in 2023 as compared with 2019.
Cyber update
On 6 February 2023, we announced
that we had suffered a major cyber security incident. Thanks to the
protective measures implemented in the previous years with the
strong support of the Board, and despite the severity of the
attack, our customers didn't suffer any supply disruption, we
recovered the use of the majority of our systems in a matter of
weeks. The overall cost of this incident was limited to
£3.5m.
We have analysed the event in
detail and derived the necessary leanings. This has enabled us to
improve our protection further and should minimise both the risk
and the impact of any subsequent incident.
Dividend and share buy-back
Our dividend policy aims to
deliver long-term dividend growth via a progressive dividend,
provided this is supported by cashflow and underlying earnings and
is justified in the context of our capital expenditure requirements
and the prevailing market outlook.
The Board has recommended a final
dividend of 16.2 pence, bringing the total dividend for the year to
23.0 pence per share, which is a 3.4% year on year increase on the
total dividend for 2022 of 22.25 pence per share. This represents a
dividend cover of 2.0x compared to adjusted EPS for
2023.
On 4 December 2023 we launched a
share buy-back programme of £50m, which is expected to take 9 to 12
months to complete. This is part of our commitment to return cash
to shareholders where it is not required for additional investment,
while maintaining a strong and prudent balance sheet. During 2023,
shares with a value of £3.1m were acquired (at an average price of
464p per share) and cancelled by the Company.
Medium-term strategic position
In November 2023 we presented our
strategy and medium-term targets to investors at a Capital Markets
Event. We highlighted favourable medium-term trends in our
end-markets, and, through our market leading investment in research
and development, demonstrated our ability to gain both market share
while pricing for the value we generate for our customers. We also
set out a cost reduction programme to
achieve at least £30m of annually recurring costs savings in 2026,
as described above.
On track to achieve our mid-term growth and profitability
objectives
Despite the short-term
uncertainties in our end steel and foundry markets, we remain
confident in the mid to long term growth potential of these markets
and in particular growth in the steel market outside of China,
which should be a tailwind for us.
The strength of our
technology-based business model should also enable us to continue
simultaneously outperform our underlying markets in Flow Control
and Foundry and maintain a positive pricing performance for all our
business units in the coming years.
This, coupled with our relentless
drive to optimise our cost base as illustrated by the launch of our
new cost optimisation programme, positions us very well to achieve
our objectives of 12.5% return on sales by 2026 and cash flow
generation of £400m over the next three years.
Current trading and outlook for 2024
In line with the end of 2023, the
activity level of both our Steel and Foundry markets remained
subdued at the beginning of the year. However, we expect some
improvement in market activity as the year progresses, consistent
with external forecasts.
We expect to continue to
outperform our markets in both Flow Control and Foundry and we are
progressing the implementation of our £30m cost savings programme,
of which we expect to deliver around £3m of in-year savings in 2024
and a run-rate of £10m - £15m by the end of the year.
Overall, on an underlying,
constant currency basis (excluding one off restructuring costs
estimated at £6m), we expect to make moderate progress in 2024.
Beyond 2024 we anticipate delivering stronger progress supported by
the benefits of the cost savings programme together with our
innovation and significant capacity investments in growing
markets.
Board
changes
In 2023,
we had a number of changes to the Board, being joined by Carla
Bailo, Mark Collis and Robert MacLeod and Jane Hinkley and Guy
Young leaving the Board. Having served nine years on the Board,
Douglas Hurt, Senior Independent Director and Audit Committee
Chair, will be stepping down at this year's AGM. We are delighted
that Eva Lindqvist has agreed to join the Board, who will be
standing for election at the AGM. Eva is an engineer with more than
35 years' experience in global industrial and service
businesses.
Operational
Review
Vesuvius comprises two Divisions,
Steel and Foundry. The Steel Division operates as three business
lines, Flow Control, Advanced Refractories and Sensors &
Probes. Changes described are versus 2022 on an underlying basis,
excluding the impact of FX, unless otherwise noted. There were no
acquisitions or disposals in 2023 and hence no adjustments were
required.
Steel
Division
Steel Division
|
|
2023 (£m)
|
2022 (£m)
|
Change
|
Underlying change
|
Flow Control Revenue
|
|
793.0
|
810.9
|
(2.2%)
|
0.6%
|
Advanced Refractories
Revenue
|
|
567.9
|
645.3
|
(12.0%)
|
(9.4%)
|
Steel Sensors & Probes
Revenue
|
|
39.1
|
40.2
|
(2.8%)
|
(0.6%)
|
Total Steel Revenue
|
|
1,400.0
|
1,496.4
|
(6.4%)
|
(3.7%)
|
Total Steel Trading
Profit
|
|
147.6
|
172.7
|
(14.6%)
|
(9.6%)
|
Total Steel Return on
Sales
|
|
10.5%
|
11.5%
|
-100bps
|
-70bps
|
Our Steel Division reported
revenues of £1,400.0m in 2023, a decrease of 3.7%, reflecting a
positive revenue growth of 0.6% in the Flow Control business
despite the difficult market conditions, due to good pricing
performance and market share gains in most markets, and a revenue
decline of 9.4% in Advanced Refractories due to prioritising
pricing over volume in EMEA and Americas, which more than offset
market share gains in Asia. Revenue from Sensors and Probes was
broadly flat due to market share gains offsetting market
decline.
Steel Division trading profit
reduced by 9.6% to £147.6m, due to the negative drop through impact
of reduced volumes in the division, partially compensated by a
positive pricing performance enabling the division's return on
sales to contract only 70bps to 10.5%.
Flow Control
Flow Control Revenue
|
|
2023 (£m)
|
2022 (£m)
|
Change
|
Underlying change
|
Americas
|
|
317.8
|
321.4
|
(1.1%)
|
1.3%
|
Europe, Middle East & Africa
(EMEA)
|
|
252.7
|
275.4
|
(8.2%)
|
(6.2%)
|
Asia-Pacific
|
|
222.4
|
214.1
|
3.9%
|
8.7%
|
Total Flow Control
Revenue
|
|
793.0
|
810.9
|
(2.2%)
|
0.6%
|
In 2023, revenue in the Group's
Flow Control business increased by 0.6% year-on-year to £793.0m,
driven by a strong pricing performance and overall market share
gains, offset by market, destocking and customer-related volume
declines.
In EMEA, revenue declined 6.2%
compared to 2022, broadly in line with declines in steel production
(in EMEA excluding Russia, Ukraine and Iran) of 5%. This comprised
an out-performance in EEMEA (excluding Iran, Russia and Ukraine)
where the steel market was broadly flat and where we gained market
share, offset by volume declines higher than the steel market
evolution in the EU+UK reflecting a combination of the weak market,
destocking by our European customers and voluntary reduction of our
sales to some customers at risk of insolvency. In the Americas, our
underlying revenue grew 1.3% reflecting out-performance of the
market in the US (volumes +1.1% against a market +0.2%) and in
South America (stable sales volumes versus a declining market), and
resilient pricing. This good performance was partly offset by
challenges in Mexico, where a major customer in which we had a very
strong market share ceased operations at the end of 2022. In Asia
Pacific, revenue grew 8.7%, driven by exceptionally strong sales
volume growth in both India and China, materially exceeding market
volume growth in these two countries. We also out-performed the
market in South East Asia, with modest volume growth versus market
volume declines of -6.5%.
Advanced Refractories
Advanced Refractories
Revenue
|
|
2023
(£m)
|
2022
(£m)
|
Change
|
Underlying change
|
Americas
|
|
212.1
|
244.5
|
(13.3%)
|
(11.5%)
|
Europe, Middle East & Africa
(EMEA)
|
|
191.5
|
230.9
|
(17.0%)
|
(15.1%)
|
Asia-Pacific
|
|
164.3
|
169.9
|
(3.3%)
|
1.5%
|
Total Advanced Refractories
Revenue
|
|
567.9
|
645.3
|
(12.0%)
|
(9.4%)
|
Advanced Refractories reported
revenue of £567.9m in 2023, a decrease of 9.4%, principally
reflecting volume declines, with overall stable pricing. Volume
decline was higher than the underlying steel market in both
Americas and EMEA due to market share losses associated with
priority having been given to pricing, and destocking in EMEA.
Market share started to recover in EMEA in the second half. In Asia
Pacific however, revenue grew 1.5% driven by double-digit volume
increases in India and China, materially ahead of the market,
partially offset by more difficult trading conditions in South-East
Asia.
Steel Sensors & Probes
Steel Sensors & Probes
Revenue
|
|
2023
(£m)
|
2022
(£m)
|
Change
|
Underlying change
|
Americas
|
|
28.2
|
29.1
|
(2.9%)
|
0.5%
|
Europe, Middle East & Africa
(EMEA)
|
|
10.2
|
10.7
|
(5.0%)
|
(6.0%)
|
Asia-Pacific
|
|
0.6
|
0.4
|
77.8%
|
85.0%
|
Total Steel Sensors & Probes
Revenue
|
|
39.1
|
40.2
|
(2.8%)
|
(0.6%)
|
Revenue in Steel Sensors &
Probes was £39.1m in 2023, broadly flat year-on-year, reflecting
market share gains offsetting a declining market. We expect our
sales volume in the coming years to continue to outperform the
underlying steel market due in particular to an increased
penetration in Asia where we have been performing several
successful customer trials.
Foundry Division
Foundry Revenue
|
|
2023
(£m)
|
2022
(£m)
|
Change
(%)
|
Underlying change (%)
|
Americas
|
|
136.4
|
145.5
|
(6.2%)
|
(5.8%)
|
Europe, Middle East & Africa
(EMEA)
|
|
215.1
|
224.7
|
(4.3%)
|
(3.0%)
|
Asia-Pacific
|
|
178.3
|
180.8
|
(1.4%)
|
4.2%
|
Total Foundry Revenue
|
|
529.8
|
551.0
|
(3.8%)
|
(1.5%)
|
Total Foundry Trading
Profit
|
|
52.8
|
54.5
|
(3.1%)
|
2.5%
|
Total Foundry Return on
Sales
|
|
10.0%
|
9.9%
|
+10bps
|
+40bps
|
Our Foundry Division reported
revenues of £529.8m in 2023, a decrease of 1.5%, reflecting
revenues contracting in EMEA and the Americas while expanding in
Asia-Pacific. After a positive start of
the year, trading has been difficult in the second half of the year
due to significant market weakness in the northern part of EMEA
(historically an important market area for our Foundry division),
in South America and in China. This market weakness was partially
but not entirely compensated by market share gains in all regions
and a positive pricing performance. Foundry revenues in the Americas fell 5.8% year-on-year,
driven by contraction in South America partially offset by modest
growth in North America. In EMEA, underlying revenues decreased by
3.0%, driven by a slowdown in Germany and more generally Northern
Europe as well as broader regional destocking. Performance in Asia was largely positive with
revenue up 4.2%,
reflecting very strong growth in India and market
share gains in China, progressively
increasing the relative importance of this region in the Foundry
division. This trend should continue in the coming
years.
For the third year in succession,
the Foundry Division delivered an increase in its return-on-sales.
Trading profit increased 2.5% (on an underlying basis) to £52.8m
and return-on-sales increased by 40bps to 10%. This improvement
trend should accelerate when end markets recover, especially in
Northern Europe and South America.
Financial
Review
Basis of Preparation
All references in this financial
review are to headline performance unless stated otherwise. See
Note 16.1 to the Group Financial Statements for the definition of
headline performance.
We also report key metrics on an
underlying basis, where we adjust to ensure appropriate
comparability between periods, irrespective of currency
fluctuations and any business acquisitions and
disposals.
This is done by:
· Restating the previous period's results at the same foreign
exchange (FX) rates used in the current period
· Removing the results of disposed businesses in both the
current and prior years
· Removing the results of acquired businesses in both the
current and prior years
Therefore, for 2023, we
have:
· Retranslated 2022 results at the FX rates used in calculating
the 2023 results
· No
adjustments have been required for acquisitions or
disposals
2023 performance overview
Income statement
£m
Revenue
|
2023
|
|
2022
|
|
%
change
|
Reported
|
|
Reported
|
Currency
|
Underlying
|
|
Reported
|
Underlying
|
Steel
|
1,400.0
|
|
1,496.4
|
(42.0)
|
1,454.5
|
|
(6.4%)
|
(3.7%)
|
Foundry
|
529.8
|
|
551.0
|
(13.3)
|
537.7
|
|
(3.8%)
|
(1.5%)
|
Total Group
|
1,929.8
|
|
2,047.4
|
(55.3)
|
1,992.1
|
|
(5.7%)
|
(3.1%)
|
Trading profit
|
|
|
|
|
|
|
|
|
Steel
|
147.6
|
|
172.7
|
(9.6)
|
163.2
|
|
(14.6%)
|
(9.6%)
|
Foundry
|
52.8
|
|
54.5
|
(3.0)
|
51.5
|
|
(3.1%)
|
2.5%
|
Total Group
|
200.4
|
|
227.2
|
(12.5)
|
214.7
|
|
(11.8%)
|
(6.7%)
|
Return on sales
|
|
|
|
|
|
|
|
|
Steel
|
10.5%
|
|
11.5%
|
|
11.2%
|
|
(100bps)
|
(70bps)
|
Foundry
|
10.0%
|
|
9.9%
|
|
9.6%
|
|
+10bps
|
+40bps
|
Total Group
|
10.4%
|
|
11.1%
|
|
10.8%
|
|
(70bps)
|
(40bps)
|
2023 was a robust year in terms of
trading profit and return on sales, despite the depressed
underlying markets, and we have continued to generate significant
free cashflow. This has enabled the Board to recommend an
attractive final dividend to our shareholders and initiate a share
buy-back, while maintaining investment in strategic
areas.
Revenue for the year decreased by
5.7%, of which 2.6% related to FX headwinds and 3.1% underlying
performance. Underlying revenue was driven by a decline in volume
(-5.5% partially offset by positive pricing of +2.3%). On a
reported basis, the Steel and Foundry Division revenue decreased by
6.4% and 3.8% respectively in the year.
We achieved a trading profit of
£200.4m, down 11.8% on a reported basis of which 6.7% was
underlying and 5.1% related to FX headwinds. Within the underlying
profit changes, there was a £48.4m decline due to the drop-through
from volume declines, partially offset by positive contribution of
£32.1m from net pricing, with the remainder due to the impact of
the February 2023 cyber attack (£3.5m cost) and other non-recurring
one-off items (£5.5m benefit), which largely arose in H2. Return on
sales of 10.4% was down 40bps on an underlying basis.
The reduction in trading profit and Return on
Sales is primarily due to the drop-through impact of volume
declines.
The pattern of trading in the year
was relatively strong in H1, while trading in H2 was somewhat
weaker, reflecting both seasonality and weaker market conditions,
notably in Europe.
The net impact of average 2023
exchange rates compared to 2022 averages has been a headwind of
£12.5m at a trading profit level, in particular, due to the
depreciation of the Turkish Lira, Indian Rupee, Chinese Renminbi
and the Argentine Peso versus Sterling. Translated at FX rates as
at 28 February 2024, FY23 revenue would be c. £1,875m and trading
profit would be c. £191m.
Investment in R&D is central
to our strategy of delivering market-leading product technology and
services to customers. In 2023 we spent £37.4m on R&D
activities (2022: £35.9m), which represents 1.9% of our revenue
(2022: 1.8%).
Net Interest cost for FY23 was
broadly flat year on year at £11.6m (2022: £11.4m), reflecting both
an increase in net interest expense and interest income due to the
higher interest rate environment and some small deposits held in
high inflation-rate countries.
Profit from joint ventures and
associates was broadly flat year on year at £0.9m (2022:
£1.2m).
Headline profit before tax ("PBT")
was £189.7m, down 12.6% versus last year on a reported basis.
Including amortisation (£10.3m), PBT of £179.4m was 13.2% lower
than last year.
A key measure of tax performance
is the Headline Effective Tax Rate ("ETR"), which is calculated on
the income tax associated with headline performance, divided by the
headline profit before tax and before the Group's share of post-tax
profit of joint ventures. The Group's headline ETR, based on the
income tax costs associated with headline performance of £51.9m
(2022: £57.2m), was 27.5% (2022: 26.5%).
The Group's total income tax costs
for the period include a credit within separately reported items of
£3.1m (2022: £39.1m) which primarily relates to deferred tax on
intangible assets.
A tax charge reflected in the
Group Statement of Comprehensive Income in the year amounted to
£2.0m (2022: £8.2m charge) which primarily relates to tax on net
actuarial gains and losses on pensions.
We expect the Group's effective
tax rate on headline profit before tax and before the share of
post-tax profits from joint ventures to be around 27.5%, dependent
on profit mix, in 2024.
Non-controlling interests
principally comprise the minority holdings in Indian subsidiaries
for the Steel and Foundry businesses. This increased to £12.1m in
2023 (2022: £7.4m) reflecting the strong growth in profit in those
subsidiaries.
Headline EPS from continuing
operations at 46.7p was 11.9% lower on an underlying basis than
2022, reflecting both the lower profit and the higher level of
non-controlling interests.
Dividend
The Board has recommended a final
dividend of 16.2 pence per share to be paid, subject to shareholder
approval, on 31 May 2024 to shareholders on the register at 19
April 2024. When added to the 2023 interim dividend of 6.8
pence per share paid on 15 September 2023, this represents a
full-year dividend of 23.0 pence per share. The last date for
receipt of elections from shareholders for the Vesuvius Dividend
Reinvestment Plan will be 9 May 2024.
Cost saving programme
We have initiated an efficiency
programme to realise recurring savings of £30m per annum by 2026,
of which c. £3m is expected to be delivered in 2024. We expect to
achieve a run-rate of c. £10 - 15m savings by the end of 2024. The
programme costs are expected to be c. £40m, estimated to be split
£30m / £10m to capex and operating expense respectively, of which
c. £6m of operating expense is expected to be incurred in 2024.
Material restructuring costs will be excluded from underlying
performance, allowing for a clear measure of our operating
performance.
Cash-flow and balance sheet
Our cash management performance
was robust, achieving an 93% cash conversion (2022: 82%), thanks to
a good operational performance and an in-flow from trade working
capital, partially offset by a continued investment in strategic
capacity expansion. As a result, we have
reduced our net debt position and maintained our leverage ratio of
net debt to EBITDA at 0.9x at 31 December
2023.
We measure working capital both in
terms of actual cash flow movements, and as a percentage of sales
revenue. Trade working capital as a percentage of sales in 2023
improved to 23.4% (2022: 23.8%), measured on a 12-month moving
average basis. In absolute terms on a constant currency basis trade
working capital decreased by £20.9m in 2023 to £420.3m. The
reduction was principally due to a fall in inventory days (from
89.9 to 88.9, 12m average, December 2022 to 2023), broadly flat
debtor days (78.0 to 77.6, 12m average, December 2022 to 2023) and
flat creditor days (64.9 days, 12m average). The 12-month rolling
average measurement masks the phasing in the year, with working
capital peaking in H1 and then falling progressively in Q3 and Q4
as a percentage of revenue. We intend to continue to reduce our
working capital intensity in 2024.
Free cash flow from continuing
operations was £128.2m in 2023 (2022: £123.1m).
Capital
expenditure
Cash capital expenditure in 2023
was £92.6m (2022: £89.2m) (£125.3m including capitalised leases) of
which £93.2m was in the Steel Division (2022: £85.2m) and £32.1m in
the Foundry Division (2022: £18.7m). Capital expenditure on
revenue-generating customer installation assets, primarily in
Steel, was approximately £9m (2022: £8m) and we spent c. £30m in
2023 on growth capex, largely focused on expansion in Flow Control
worldwide and, more specifically, in Asia for all three divisions.
Total cash capex in 2024 is expected to be c. £100m, of which
growth capex is expected to be c. £30-35m. Capital expenditure will
then revert to more normalized levels from 2025 onwards.
The Group had committed borrowing
facilities of £685.8m as of 31st December 2023 (2022: £721.9m), of
which £333.4m was undrawn (2022: £322.5m).
Net debt
Net debt on 31 December 2023 was
£237.5m, a £17.5m decrease from £255.0m on 31 December 2022, due to
significant free cash flow partially offset by a return to
shareholders of £63.8m by way of dividends and share buy-back, by
right of use asset additions of £31.2m and by a foreign exchange
adjustment of £11.3m.
At the end of 2023, the net debt
to EBITDA ratio was 0.9x (2022: 0.9x) and EBITDA to interest was
31.5x (2022: 29.8x). These ratios are monitored regularly to ensure
that the Group has sufficient financing available to run the
business and fund future growth.
The Group's debt facilities have
two financial covenants: the ratios of net debt to EBITDA (maximum
3.25x limit) and EBITDA to interest (minimum 4x limit). Certain
adjustments are made to the net debt calculations for bank covenant
purposes, the most significant of which is to exclude the impact of
IFRS 16.
Return on invested capital
(ROIC)
Our ROIC for 2023 was 8.9% (2022:
10.7%). Excluding goodwill on our balance sheet from the
acquisition of Foseco in 2008, ROIC for 2023 would be 14.3%. ROIC
is our key measure of return from the Group's invested capital,
calculated as trading profit less amortisation of acquired
intangibles plus share of post-tax profit of joint ventures and
associates for the previous 12 months after tax, divided by the
average (being the average of the opening and closing balance
sheet) invested capital (defined as: total assets excluding cash
plus non-interest-bearing liabilities), at the average foreign
exchange rate for the year).
Pensions
The Group has a limited number of
historical defined benefit plans located mainly in the UK, USA,
Germany and Belgium. The main plans in the UK and USA are closed to
further benefits accrual. All of the liabilities in the UK were
insured following a buy-in agreement with Pension Insurance
Corporation plc ("PIC") in 2021. This buy-in agreement secured an
insurance asset from PIC that matches the remaining pension
liabilities of the UK Plan, with the result that the Company no
longer bears any investment, longevity, interest rate or inflation
risks in respect of the UK Plan.
The Group's net pension liability
at 31 December 2023 was £46.3m (2022: £56.1m
liability).
Financial Risk Factors
The Group's approach to risk
management, including the mitigations in place for our principal
risks, is detailed below. We consider the main financial risk
faced by the Group to be a material business interruption incident
leading to reduced revenue and profit. We also manage broad
financial risks such as cost inflation, bank financing and capital
market activity and to a lesser extent foreign exchange and
interest rate movements (see Note 24 to the Group Financial
Statements). We mitigate liquidity risk by financing using
both the bank and private placement debt markets and we mitigate
refinancing risk by seeking to avoid a concentration of debt
maturities in any one calendar year.
Principal Risks and Uncertainties
Risk Management
The Board exercises oversight of
the Group's principal risks and reviews the way in which the Group
manages those risks. As part of this process the Board (i) understands which individuals within the
business are responsible for managing each principal risk; and (ii)
reviews and, where appropriate,
updates, the Group's appetite for each
principal risk and assesses the adequacy of the steps taken to
mitigate them.
The Board takes overall
responsibility for establishing and maintaining a system
of risk
management and
internal control
and for reviewing its effectiveness. The Group undertakes a
continuous process to identify and review risk and this assessment
undergoes a formal review at half-year and at year-end. The risks
identified by the business are compiled centrally to deliver a
coordinated picture of the Group's key risks. These risks are then
reviewed by the Group Executive Committee.
An integral part of the Group's
risk management process is for each Non-executive Director to contribute their view on the principal risks facing the Group, the risk appetite the Group should have for each of these risks and what emerging
risks the Group might face in the future. These contributions are
overlaid on the Group's assessment of risks to build a
comprehensive analysis of existing and emerging risks. In this way,
the Directors' views on each of the principal risks and on emerging
risks in general, are independently gathered and integrated into
management discussions and actions taken on risk.
The Group's risk process covers
both financial and non-financial
risks, and
considers the risks associated with the impact of
the Group's activities on employees,
customers, suppliers, the environment, local
communities and
wider society.
The Directors undertake regular,
individual site
visits and
they believe
this direct
engagement with employees is an effective way to hear firsthand
about issues, concerns and potential risks.
Risk mitigation
Each principal risk is owned by
specific members of senior management who actively manage the risk
as well as contributing to the analysis of
its likelihood and impact, and continually monitoring the process for mitigation. This analysis is reported to the Board. Risks are analysed in the context
of our business structure which protects against certain of our
principal risks with diverse currencies, a widespread customer base
and local production matching the diversity of our markets. Additionally, we mitigate risk through
employee training and our contractual terms. Our processes are not
designed to eliminate risk, but to
identify our principal risks and to reduce them to a
reasonable level in the context of delivering the Group's
strategy.
Principal risks
The Board has not identified any
new principal risks or any material changes to the Group's
previously identified principal risks and uncertainties. The risks
identified and are those the Board considers to be most relevant in
terms of their potential impact on the Group achieving its
strategic objectives. Each principal risk could materially affect
the Group, its businesses, future operations and financial
condition, and could cause actual results to differ materially from
expected or historical results. Principal risks are not the only
ones that the Group faces or will face. Some risks are not yet
known and some currently not deemed to be material could become
so.
Changes to risk in 2023
We detail below changes during
2023 to the scale or nature of risks facing the Group. As in
previous years, certain aspects of the Group's principal risks
materialised, noting that in each case the business impact was
limited by the mitigations already in place and by the Group's risk
management processes. We also detail the emerging risks facing the
Group to which we remain vigilant.
Geopolitical tension
Increasing geopolitical tensions
during the year adversely impacted two of our principal risks:
business interruption and the regulatory environment. The war in
Ukraine continued to promote increased regulatory activity in the
UK, EU and USA, which continued to impact the business and was
closely monitored to ensure that we reflected these new
developments in our business. Additionally, the conflict in the
Middle East (including the recent impact on shipping in the Red
Sea) increased the risk of an interruption to our supply chain.
This impacted the cost and timing of certain inbound and outbound
freight and we worked closely with our intermediaries and insurers
to understand and minimise the impact on our business.
During the year we also paid close
attention to wider geopolitical dynamics, as these could push
certain of the countries in which we operate to adopt a more
protectionist approach. We capture this in our principal risk of
protectionism and globalisation.
Cyber
Cyber security remains a critical
component of our business interruption risk. As previously
disclosed, in February 2023, the Group was the subject of a cyber
incident involving unauthorised access to our IT systems. We shut
down our systems on a precautionary basis and our sites implemented
their business continuity plans; as a result we incurred only a
minimal level of business interruption.
In order to mitigate further the
business interruption risk arising from this constantly evolving
threat we have accelerated the implementation of our cyber security
strategy and in 2023, we upgraded our third-party access solutions,
further developed our network infrastructure and implemented
additional layers of protection for our systems.
During the year we worked with
leading cyber security experts to enhance our systems and expanded
the scale and scope of our security verifications. We also
conducted a range of additional tests and simulations to improve
the control environment. We continued to work on cyber security
awareness through ongoing employee training and conducted
additional training during the year to ensure that the correct
behaviours in terms of cyber risk are clearly
understood.
Recruitment
Post pandemic challenges remain in
many of our labour markets, including the ability to recruit high
calibre individuals in a competitive environment, particularly for
manufacturing roles. We also continue to see a reduction in the
promotion of material science teaching within our developed
markets; this may further reduce the availability of suitably
qualified candidates going forward.
End-markets
The underlying strength of our
end-markets was discussed extensively at our recent Capital Markets
Day. Whilst short-term volatility in our markets is likely to
continue, we believe that our end-markets of Steel and Foundry are
structurally set to grow in the longer term. The Group is well
placed to manage short-term impacts with its flexible manufacturing
footprint, geographically diversified revenue streams and strong
financial position.
Emerging risks
We are focused on the increased
use of artificial intelligence as part of our wider strategy on
digitalisation, to ensure we leverage the benefits to the fullest
extent whilst minimising any adverse impact.
As detailed at our Capital Markets
Day, we believe that future growth will come from outside our
traditional developed markets. We will continue to focus on this
emerging trend, investing in markets with high future growth and
ensuring that we remain sufficiently dynamic and responsive to take
advantage of future growth opportunities.
Consumers, employees and other
stakeholders in many countries are increasingly focused on the
impact of businesses on society and the environment. With this
there is a growing regulatory demand on businesses for transparency
in this area. Vesuvius already has a set of broad Environmental,
Social and Governance (ESG) commitments and has long been focused
on driving efficiency in our customers' processes, with our
products now clearly seen as having environmental/climate benefits.
However, the reporting obligations in this area and the increasing
pressure on the need for external assurance in these areas, are
expected to increase in both cost and complexity in the coming
years.
At the end of 2023 we committed to
make annualised cost savings of £30m by 2026 and we will remain
disciplined to ensure this saving is achieved. Part of this
efficiency saving is enabled by the ongoing implementation of a new
Enterprise Resource Planning (ERP) system in certain countries. The
Group is aware of the challenges associated with an ERP
implementation and will manage these closely to minimise the risk
of business interruption and cost overruns and to ensure that the
operational efficiencies envisaged are delivered on a timely
basis.
All of these issues could
represent disruptors to our business. We remain focused on each of
them through our risk identification and management processes as
well as on the management of any other new risks that emerge during
2024.
Cyber Security
The processes and controls to
manage the constantly evolving cyber security threat are a
significant area of focus for the Group. Members of the GEC, Group
IT and senior management meet regularly to manage operational cyber
risks. These risks were thrown into sharp focus for the Group in
2023, as a result of the cyber attack we suffered in
February.
The Board oversees the Group's
control systems for managing cyber risk and together with the Audit
Committee receives regular updates on the Group's activities in
this respect.
Cyber risks are integrated within
the Group's risk management processes and
form part
of its
Business Continuity Plan (BCP). The
Group also maintains a Disaster Recovery Plan to address any
network, data
centre or
IT infrastructure
issue. The Group's Incident Handling and Response Policy ensures we
maintain appropriate visibility of all network infrastructure.
The Group takes a holistic
approach to addressing cyber challenges, focusing on improving our
IT infrastructure, including our OT
environments, as well as our IT procedures and data governance. We run regular training programmes
on cyber security and conduct regular
cyber security risk assessments, including scenario analysis to
mitigate the business impact of any downtime, and increase
awareness of social engineering fraud and system access through
poor security behaviour. We also perform in-house and externally conducted vulnerability/ penetrative testing,
comparing the
results with industry benchmarks to
improve our processes and undertake an ongoing external assessment
of our
cyber security
resilience and maturity.
Climate change
The Group's risk management
processes consider the potential impact of climate-related risks.
The Group does not regard climate change itself to represent a
material stand-alone risk to the Group's operations.
Whilst a significant proportion of
the Group's revenue is generated from steel manufacture and
automotive castings, industries that are under transition as a
result of the focus on improving environmental performance, we
believe these changes will, overall, be positive for the Group. The
Group's business strategy is based on helping our customers improve
their manufacturing efficiency and the quality of their products
thereby reducing their climate impact. We also envisage benefits
for the Group from the acceleration of the energy transition, as
this will create continued demand for the high-quality steel
produced using Vesuvius' products and solutions.
One of the Group's principal risks
is Environmental, Social and Governance criteria. This captures our
sustainability performance and our customers' sustainability
transition and recognises the impact Vesuvius can have on reducing
the environmental impact of our customers. The Group recognises
that climate change could present uncertainty for the Group in
terms of increased regulation and the evolution of the geographical
distribution of our customer base.
Principal risks and uncertainties
Risk
|
Potential
impact
|
Mitigation
|
End market
risks
Vesuvius
suffers an unplanned drop in demand, revenue and/ or margin because
of market volatility beyond its control
|
• Unplanned drop in demand and/or revenue due to
reduced production by our customers
• Margin reduction
• Customer failure leading to increased bad
debts
• Loss of market share to competition
• Cost pressures at customers leading to use of
cheaper solutions
|
• Geographic diversification of
revenues
• Product innovation and service offerings
securing long-term revenue streams and maintaining performance
differential
• Increase in service and product lines by the
development of the Technical Services offering
• R&D includes assessment of emerging
technologies
• Manufacturing capacity rationalisation and
flexible cost base
• Diversified customer base: no customer is
greater than 10% of revenue
• Robust credit and working capital control to
mitigate the risk of default by counterparties
|
Protectionism
and globalisation
The Vesuvius
business model cannot adapt or respond quickly enough to threats
from protectionism and globalisation
|
• Restricted access to market due to enforced
preference of local suppliers
• Increased barriers to entry for new businesses
or expansion
• Increased costs from import duties, taxation
or tariffs
• Loss of market share
|
• Highly diversified manufacturing footprint
with manufacturing sites located in 26 countries
• Strong local management with delegated
authority to run their businesses and manage customer
relationships
• Cost flexibility
• Tax risk management and control framework
together with a strong control of inter-company trading
|
Product quality
failure
Vesuvius
staff/contractors are injured at work or customers, staff or third
parties suffer physical injury or financial loss because of
failures in Vesuvius products
|
• Injury to staff and contractors
• Product or application failures lead to
adverse financial impact or loss of reputation as technology
leader
• Incident at customer plant caused
manufacturing downtime or damage to infrastructure
• Customer claims from product quality
issues
|
• Quality management programmes including
stringent quality control standards, monitoring and
reporting
• Experienced technical staff knowledgeable in
the application of our products and technology
• Targeted global insurance programme
• Experienced internal legal function
controlling third-party contracting
|
Complex and
changing regulatory environment
Vesuvius
experiences a contracting customer base or increased transaction
and administrative costs due to compliance with changing regulatory
requirements
|
• Revenue reduction from reduced end-market
access
• Disruption of supply chain and route to
market
• Increased internal control
processes
• Increased frequency of regulatory
investigations
• Trading restrictions
• Reputational damage
|
• Compliance programmes and training across the
Group
• Internal Audit function
• Experienced internal legal function including
dedicated compliance specialists
• Global procurement category management of
strategic raw materials
|
Failure to
secure innovation
Vesuvius fails
to achieve continuous improvement in its products, systems and
services
|
• Product substitution by customers
• Increased competitive pressure through lack of
differentiation of Vesuvius offering
• Commoditisation of product portfolio through
lack of development
• Lack of response to changing customer
needs
• Loss of intellectual property
protection
|
• Enduring and significant investment in
R&D, with market-leading research
• A shared strategy for innovation throughout
the Group, deployed via our R&D centres
• Stage gate process from innovation to
commercialisation to foster innovation and increase alignment with
strategy
• Programme of manufacturing and process
excellence
• Quality programme, focused on quality and
consistency
• Stringent intellectual property registration
and defence
|
Business
interruption
Vesuvius loses
production capacity or experiences supply chain disruption due to
physical site damage (accident, fire, natural disaster, terrorism)
or other events such as industrial action, cyber attack or global
health crises
|
• Loss/closure of a major plant temporarily or
permanently impairing our ability to serve our customers
• Damage to or restriction in our ability to use
assets
• Denial of access to critical systems or
control processes
• Disruption of manufacturing
processes
• Inability to source critical raw
materials
• Loss of data, leading to confidentiality,
regulatory and reputational issues
|
• Diversified manufacturing footprint
• Disaster recovery planning
• Business continuity planning with strategic
maintenance of excess capacity
• Physical and IT access controls, security
systems and training
• Cyber risks integrated into wider
risk-management structure
• Well-established global insurance
programme
• Group-wide safety management
programmes
• Dual sourcing strategy and development of
substitutes
|
People, culture
and performance
Vesuvius is
unable to attract and retain the right calibre of staff, fails to
instil an appropriate culture or fails to embed the right systems
to drive personal performance in pursuit of the Group's long-term
growth
|
• Organisational culture of high performance is
not achieved
• Staff turnover in growing economies and
regions
• Stagnation of ideas and development
opportunities
• Loss of expertise and critical business
knowledge
• Reduced management pipeline for succession to
senior positions
|
• Internal focus on talent development and
training, with tailored career-stage programmes and clear
performance management strategies
• Contacts with universities to identify and
develop talent
• Career path planning and global opportunities
for high-potential staff
• Internal programmes for the structured
transfer of technical and other knowledge
• Clearly defined Values underpin business
culture
• Growing focus on enhancing gender
diversity
|
Health and
safety
Vesuvius staff
or contractors are injured at work because of failures in Vesuvius'
operations, equipment or processes
|
• Injury to staff and contractors
• Health and safety breaches
• Lack of staff availability and operational
downtime
• Inability to attract and retain the necessary
workforce
• Reputational damage
|
• Active safety programmes, with ongoing
wide-ranging monitoring and safety training
• Independent safety audit team
• Quality management programmes including
stringent manufacturing process control standards, monitoring and
reporting
|
Environmental,
social and governance (ESG) criteria
Vesuvius fails
to capitalise on the opportunity to help its customers
significantly reduce their carbon emissions as environmental
pressure grows on the Steel Industry or Vesuvius fails to meet the
expectations of its various stakeholders including employees and
investors
|
• Loss of opportunity to grow sales
• Loss of opportunity to increase
margin
• Loss of stakeholder confidence including
Investors
• Reputational damage
|
• Development and implementation of a new
Sustainability initiative, which includes stretching targets
focused on reducing the Group's energy usage, CO2
emissions and waste, and increasing recycled materials
• R&D focus on products that assist
customers to reduce carbon emissions and improve their own
sustainability measures
• Skilled technical sales force to develop
efficient solutions for our customers
• Globally disseminated Code of Conduct sets out
standards of conduct expected and ABC Policy adopted with a zero
tolerance regarding bribery and corruption
• Internal Speak up mechanisms to allow
reporting of concerns
• Extensive use of due diligence to assess
existing and potential business partners and customers
|
Notes to the Group Financial
Statements
1
Basis of preparation
1.1 Basis of
preparation
The financial information in this
preliminary announcement has been extracted from the audited Group
Financial Statements for the year ended 31 December 2023 and does
not constitute statutory accounts within the meaning of section 434
of the Companies Act 2006. The Group Financial Statements and this
preliminary announcement were approved by the Board of Directors on
29 February 2024.
The auditors have reported on the
Group Financial Statements for the years ended 31 December 2023 and
31 December 2022 under section 495 of the Companies Act 2006. The
auditors' reports are unqualified and do not contain a statement
under section 498(2) or (3) of the Companies Act 2006. The Group's
statutory financial statements for the year ended 31 December 2022
have been filed with the Registrar of Companies and those for the
year ended 31 December 2023 will be filed following the Company's
Annual General Meeting.
The Group financial statements
have been prepared in accordance with UK-adopted international
accounting standards (IFRS) and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those
standards. The financial statements have been prepared under the
historical cost convention, with the exception of fair value
measurement applied to defined benefit pension plans, investments
and derivative financial instruments.
The same accounting policies,
presentation and computation methods are followed in this
preliminary announcement as in the preparation of the Group
Financial Statements. The accounting policies have been applied
consistently by the Group.
1.2 Basis of
consolidation
The Group Financial Statements
incorporate the financial statements of the Company and entities
controlled by the Company (its 'subsidiaries'). Control exists when
the Company has the power to direct the relevant activities of an
entity that significantly affect the entity's return so as to have
rights to the variable return from its activities. In assessing
whether control exists, potential voting rights that are currently
exercisable are taken into account. The results of subsidiaries
acquired or disposed of during the year are included in the Group
Income Statement from the effective date of acquisition or up to
the effective date of disposal, as appropriate.
The principal accounting policies
applied in the preparation of these Group Financial Statements are
set out in the Notes. These policies have been consistently applied
to all of the years presented, unless otherwise stated. Where
necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with
those detailed herein to ensure that the Group Financial Statements
are prepared on a consistent basis. All intra-Group transactions,
balances, income and expenses are eliminated on
consolidation.
Non-controlling interests in the
net assets of consolidated subsidiaries are identified separately
from the Group's interest therein. Non-controlling interests
consist of the amount of those interests at the date of the
original business combination together with the non-controlling
interests' share of profit or loss and each component of other
comprehensive income, and dividends since the date of the
combination. Total comprehensive income is attributed to the
non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
1.3 Going
concern
The Group's available committed
liquidity stood at £488m at year-end 2023, down from £494m at
year-end 2022. The Directors have prepared
cash flow forecasts for the Group for the period to 30 June 2025.
These forecasts reflect an assessment of current and future end
market conditions, which are expected to be challenging in 2024 and
to recover thereafter (as set out in the "outlook" statement in
this document) and their impact on the Group's future trading
performance.
The Directors have also considered
a severe but plausible downside scenario, based on an assumed
volume decline and loss of profitability over the period. This
downside scenario assumes:
· a
reduction in trading profit by 35%, equating to £70m in both 2024
and 2025 relative to 2023. This is through an assumed decline in
revenue of 4% and a reduction in the Return on Sales margin by
3.3%, from 10.4% to 7.1 %, and;
· working capital as a percentage of sales deteriorating by
0.6% compared to 2023.
The Group has two covenants; net
debt/EBITDA (under 3.25x) and an interest cover requirement of at
least 4.0x. In this downside scenario, the forecasts show that the
Group's maximum net debt/EBITDA (pre-IFRS 16 in-line with the
covenant calculation) does not exceed 1.6x, compared to a leverage
covenant of 3.25x, and the minimum interest cover reached is 18x
compared to a covenant minimum of 4x.
The forecasts show that the Group
will be able to operate within the current committed debt
facilities and show continued compliance with the Company's
financial covenants. On the basis of the exercise described above
and the Group's available committed debt facilities, the Directors
consider that the Group and the Company have adequate resources to
continue in operational existence for a period of at least 12
months from the date of signing of these financial statements and
that there is no material uncertainty in respect of going concern.
Accordingly, they continue to adopt a going concern basis in
preparing the financial statements of the Group and the
Company.
1.4 Functional and presentational
currency
The financial statements are
presented in millions of pounds sterling, which is the functional
currency of the Company, and rounded to one decimal
place.
1.5 Disclosure of "separately
reported items"
Columnar presentation
The Group has adopted a columnar
presentation for its Group Income Statement, to separately identify
headline performance results, as the Directors consider that this
gives a useful view of the core results of the ongoing business. As
part of this presentation format, the Group has adopted a policy of
disclosing separately on the face of its Group Income Statement,
within the column entitled 'Separately reported items', the effect
of any components of financial performance for which the Directors
consider separate disclosure would assist users both in a useful
understanding of the financial performance achieved for a given
year and in making projections of future results.
Separately reported items
Both materiality and the nature of
the components of income and expense are considered in deciding
upon such presentation. Such items may include, inter alia, the
financial effect of exceptional items which occur infrequently,
such as major restructuring activity (which may require more than
one year to complete), significant movement in the Group's deferred
tax balances, such as that caused by the material recognition of
previously unrecognised deferred tax assets, items reported
separately for consistency, such as amortisation charges relating
to acquired intangible assets, profits or losses arising on the
disposal of continuing or discontinued operations and the taxation
impact of the aforementioned items reported separately.
The amortisation charge in respect
of intangible assets recognised on business combinations is
excluded from the trading results of the Group since they are
non-cash charges and are not considered reflective of the core
trading performance of the Group.
In its adoption of this policy,
the Company applies an even-handed approach to both gains and
losses and aims to be both consistent and clear in its accounting
and disclosure of such items.
2
Segment information
Operating segments for
continuing operations
The Group's operating segments are
determined taking into consideration how the Group's components are
reported to the Group's Chief Executive Officer,
who make the key operating decisions and are
responsible for allocating resources and assessing performance of
the component. Taking into account the Group's management and
internal reporting structure, the operating segments are Steel Flow
Control, Steel Advanced Refractories, Steel Sensors & Probes and Foundry
division. The principal activities of each of these segments are
described in the Operational Review.
Steel Flow Control, Steel Advanced
Refractories and Steel Sensors &
Probes operating segments are aggregated
into the Steel reportable segment. In determining that aggregation
is appropriate, judgement is applied which takes into account the
economic characteristics of these operating segments which include
a similar nature of products, customers, production processes and
margins.
Revenue from contracts with
customers
Revenue comprises the fair value
of the consideration received or receivable for goods supplied and
services rendered to customers after deducting rebates, discounts
and value-added taxes, and after eliminating sales within the
Group. Revenue from contracts with customers is recognised when
control of the goods or services are transferred to the customer,
upon the completion of specified performance obligations, at an
amount that reflects the considerations to which the Group expects
to be entitled to in exchange for these consumable products and
associated services.
Income statement
|
|
2023
|
|
|
Flow
Control
|
Advanced
Refractories
|
Sensors
&
Probes
|
Steel
|
Foundry
|
Total
|
|
|
|
|
|
£m
|
£m
|
£m
|
Segment
revenue
|
|
793.0
|
567.9
|
39.1
|
1,400.0
|
529.8
|
1,929.8
|
at a point in
time
|
|
|
|
|
1,396.6
|
529.8
|
1,926.4
|
Over
time
|
|
|
|
|
3.4
|
-
|
3.4
|
|
|
|
|
|
|
|
|
Segment
adjusted EBITDA *
|
|
|
|
|
187.9
|
70.3
|
258.2
|
Segment
depreciation and amortisation
|
|
|
|
|
(40.3)
|
(17.5)
|
(57.8)
|
Segment trading
profit
|
|
|
|
|
147.6
|
52.8
|
200.4
|
Return on sales
margin
|
|
|
|
|
10.5%
|
10.0%
|
10.4%
|
|
|
|
|
|
|
|
|
Amortisation of acquired intangible assets
|
|
|
|
|
|
|
(10.3)
|
Operating
profit
|
|
|
|
|
|
|
190.1
|
Net
finance costs
|
|
|
|
|
|
|
(11.6)
|
Share of
post-tax profit of joint ventures
|
|
|
|
|
|
|
0.9
|
Profit before
tax
|
|
|
|
|
|
|
179.4
|
Capital
expenditure additions
|
|
|
|
|
93.2
|
32.1
|
125.3
|
Inventory
|
|
|
|
|
239.5
|
51.5
|
291.0
|
Trade
debtors
|
|
|
|
|
267.6
|
89.3
|
356.9
|
Trade
creditors
|
|
|
|
|
(177.7)
|
(58.7)
|
(236.4)
|
|
|
2022
|
|
|
|
Flow
Control
|
Advanced
Refractories
|
Sensors
&
Probes
|
Steel
|
Foundry
|
Total
|
|
|
|
|
|
|
£m
|
£m
|
£m
|
|
Segment
revenue
|
|
810.9
|
645.3
|
40.2
|
1,496.4
|
551.0
|
2,047.4
|
|
at a point in
time
|
|
|
|
|
1,493.7
|
551.0
|
2,044.7
|
|
Over
time
|
|
|
|
|
2.7
|
-
|
2.7
|
|
|
|
|
|
|
|
|
|
|
Segment
adjusted EBITDA *
|
|
|
|
|
210.6
|
72.1
|
282.7
|
|
Segment
depreciation
|
|
|
|
|
(37.9)
|
(17.6)
|
(55.5)
|
|
Segment trading
profit
|
|
|
|
|
172.7
|
54.5
|
227.2
|
|
Return on sales
margin
|
|
|
|
|
11.5%
|
9.9%
|
11.1%
|
|
|
|
|
|
|
|
|
|
|
Amortisation of acquired intangible assets
|
|
|
|
|
|
|
(10.4)
|
|
Operating
profit
|
|
|
|
|
|
|
216.8
|
|
Net
finance costs
|
|
|
|
|
|
|
(11.4)
|
|
Share of
post-tax profit of joint ventures
|
|
|
|
|
|
|
1.2
|
|
Profit before
tax
|
|
|
|
|
|
|
206.6
|
|
Capital
expenditure additions
|
|
|
|
|
85.2
|
18.7
|
103.9
|
|
Inventory
|
|
|
|
|
259.6
|
56.4
|
316.0
|
|
Trade
debtors
|
|
|
|
|
288.0
|
92.8
|
380.8
|
|
Trade
creditors
|
|
|
|
|
(177.2)
|
(62.3)
|
(239.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Adjusted EBITDA is defined in
note 16.13
3
Restructuring charges
There were no restructuring
charges in 2023 (2022: £nil).
Cash costs of £0.8m (2022: £1.5m)
(Note 14) were incurred in the year in respect of previously
announced restructuring
programmes, leaving provisions
made but unspent of £2.4m (Note 14) as at 31 December 2023 (2022:
£3.6m).
4
Net finance costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
£m
|
|
£m
|
Interest payable on
borrowings
|
|
|
|
|
|
Loans,
overdrafts and factoring arrangements
|
|
|
20.1
|
|
15.4
|
Interest
on lease liabilities
|
|
|
2.4
|
|
1.9
|
Amortisation of capitalised borrowing costs
|
|
|
1.0
|
|
1.0
|
Total interest payable on
borrowings
|
|
|
23.5
|
|
18.3
|
Interest
on net retirement benefits obligations
|
|
|
2.3
|
|
1.4
|
Adjustments to discounts on provisions and other
liabilities
|
|
|
2.4
|
|
1.1
|
Adjustments to discounts on receivables
|
|
|
(1.3)
|
|
(0.6)
|
Finance
income
|
|
|
(15.3)
|
|
(8.8)
|
Total net finance
costs
|
|
|
11.6
|
|
11.4
|
Within the table above, total
finance costs are £28.2m (2022: £20.8m) and total finance income is
£16.6m (2022: £9.4m).
5
Income tax
The Group's headline effective tax
rate, based on the income tax costs associated with headline
performance of £51.9m (2022: £57.2m), was 27.5% (2022:
26.5%).
The Group's total income tax costs
include a credit on separately reported items of £3.1m (2022:
£39.1m), comprising a credit of £2.7m (2022: £2.7m credit) relating
to the amortisation of intangible assets, a credit of £0.4m (2022:
£nil) relating to the recognition of a deferred tax asset relating
to France and Italy intangible assets and a credit of £nil (2022:
£36.4m) relating to the recognition of previously unrecognised
deferred tax assets.
The net tax charge reflected in
the Group Statement of Comprehensive Income in the year amounted to
£2.0m (2022: £8.2m), comprising: A £2.0m charge (2022: £6.7m) in
respect of tax on net actuarial gains and losses on the employee
benefits and a charge of £nil (2022: £1.5m) in respect of deferred
tax rate changes.
6
Earnings per share ("EPS")
6.1
Earnings for EPS
Basic and diluted EPS from
continuing operations are based upon the profit attributable to
owners of the parent, as reported in the Group Income Statement.
The table below reconciles these different profit
measures.
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
£m
|
|
£m
|
Profit attributable to
owners of the parent
|
|
|
|
|
118.5
|
|
181.1
|
Adjustments for separately reported items:
|
|
|
|
|
|
|
|
Amortisation of intangible assets
|
|
|
|
|
10.3
|
|
10.4
|
Restructuring charges
|
|
|
|
|
-
|
|
-
|
Vacant
site remediation costs
|
|
|
|
|
-
|
|
-
|
GMP
equalisation charge
|
|
|
|
|
-
|
|
-
|
Income
tax (credit)/charge
|
|
|
|
|
(3.1)
|
|
(39.1)
|
Headline profit attributable
to owners of the parent
|
|
|
|
|
125.7
|
|
152.4
|
6.2 Weighted average
number of shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
millions
|
|
millions
|
For calculating basic and
headline EPS
|
|
|
269.1
|
|
269.6
|
Adjustment for dilutive potential ordinary shares
|
|
|
3.0
|
|
1.9
|
For calculating diluted and
diluted headline EPS
|
|
|
272.1
|
|
271.5
|
For the purposes of calculating
diluted and diluted headline EPS, the weighted average number of
ordinary shares is adjusted to include the weighted average number
of ordinary shares that would be issued on the conversion of all
potentially dilutive ordinary shares expected to vest, relating to
the Company's share-based payment plans. Potential ordinary shares
are only treated as dilutive when their conversion to ordinary
shares would decrease EPS or increase loss per share.
6.3 Per share amounts
|
|
|
|
|
|
|
2023
|
2022
|
|
|
|
|
|
|
|
pence
|
pence
|
Earnings per share - reported
basic
|
|
|
|
|
|
|
44.0
|
67.2
|
- reported diluted
|
|
|
|
|
|
|
43.6
|
66.7
|
|
|
|
|
|
|
|
|
|
- headline basic
|
|
|
|
|
|
|
46.7
|
56.5
|
- headline diluted
|
|
|
|
|
|
|
46.2
|
56.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
£m
|
|
£m
|
Amounts recognised as
dividends and paid to equity holders during the
period
|
|
|
|
|
|
Final
dividend for the year ended 31 December 2021 of 15.0p per ordinary
share
|
|
|
-
|
|
40.5
|
Interim
dividend for the year ended 31 December 2022 of 6.5p per ordinary
share
|
|
|
-
|
|
17.6
|
Final
dividend for the year ended 31 December 2022 of 15.75p per ordinary
share
|
|
|
42.4
|
|
-
|
Interim
dividend for the year ended 31 December 2023 of 6.8p per ordinary
share
|
|
|
18.3
|
|
-
|
|
|
|
60.7
|
|
58.1
|
A proposed final dividend for the
year ended 31 December 2023 of £43.3m (2022: £42.3m), equivalent to
16.20 pence (2022: 15.75 pence) per ordinary share (TDIM: VSVS and
ISIN: GB00B82YXW83), is subject to approval by shareholders at the
Company's Annual General Meeting on 15 May 2024 and has not been
included as a liability in these financial statements. If approved
by shareholders, the dividend will be paid on 31 May 2024 to
holders of ordinary shares on the register on 19 April 2024.
The ordinary shares will be quoted ex-dividend on 18 April
2024. Any shareholder wishing to participate in the Vesuvius
Dividend Reinvestment Plan needs to have submitted their election
to do so by 9 May 2024.
8
Reconciliation of movement in net debt
|
|
Balance as
at
1 Jan 2023
|
Foreign exchange
adjustments
|
Fair value
gains/
(losses)
|
Non-cash
movements(1)
|
Cash flow
|
Balance as at 31 Dec
2023
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
Cash at
bank and in hand
|
|
184.2
|
(21.1)
|
-
|
-
|
1.1
|
164.2
|
Bank
overdrafts
|
|
(4.4)
|
0.1
|
-
|
-
|
0.9
|
(3.4)
|
|
|
179.8
|
(21.0)
|
-
|
-
|
2.0
|
160.8
|
Borrowings, excluding bank
overdrafts
|
|
(440.2)
|
11.9
|
-
|
(33.6)
|
61.3
|
(400.6)
|
|
|
|
|
|
|
|
|
Capitalised borrowing costs
|
|
2.7
|
-
|
-
|
(0.9)
|
-
|
1.8
|
Derivative financial instruments
|
|
2.7
|
-
|
(2.2)
|
-
|
-
|
0.5
|
Net debt
|
|
(255.0)
|
(9.1)
|
(2.2)
|
(34.5)
|
63.3
|
(237.5)
|
(1) £31.2m of new
leases were entered into during the year.
|
|
Balance as
at
1 Jan 2022
|
Foreign exchange
adjustments
|
Fair value
gains/
(losses)
|
Non-cash
movements(1)
|
Cash flow
|
Balance as at 31 Dec
2022
|
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
Cash at
bank and in hand
|
|
169.1
|
0.1
|
-
|
-
|
15.0
|
184.2
|
Bank
overdrafts
|
|
(6.7)
|
(0.3)
|
-
|
-
|
2.6
|
(4.4)
|
|
|
162.4
|
(0.2)
|
-
|
-
|
17.6
|
179.8
|
Borrowings, excluding bank
overdrafts
|
|
(440.3)
|
(25.4)
|
-
|
(11.5)
|
37.0
|
(440.2)
|
|
|
|
|
|
|
|
|
Capitalised borrowing costs
|
|
3.3
|
-
|
-
|
(0.6)
|
-
|
2.7
|
Derivative financial instruments
|
|
(2.5)
|
-
|
5.2
|
-
|
-
|
2.7
|
Net debt
|
|
(277.1)
|
(25.6)
|
5.2
|
(12.1)
|
54.6
|
(255.0)
|
(1) £11.5m of new
leases were entered into during the year.
9
Cash generated from operations
|
|
|
|
|
|
|
|
|
|
|
2023
|
2022
|
|
|
|
|
£m
|
£m
|
Operating
profit
|
|
|
|
190.1
|
216.8
|
Adjustments for:
|
|
|
|
|
|
Amortisation of intangible assets
|
|
|
|
10.3
|
10.4
|
Restructuring charges
|
|
|
|
-
|
-
|
Vacant
site remediation costs
|
|
|
|
-
|
-
|
Trading
Profit
|
|
|
|
200.4
|
227.2
|
|
|
|
|
|
|
(Profit)/Loss on disposal of non-current assets
|
|
|
|
(2.5)
|
(0.1)
|
Depreciation and amortisation
|
|
|
|
57.8
|
55.5
|
Defined
benefit retirement plans net charge
|
|
|
|
5.2
|
5.6
|
Net
decrease/(increase) in inventories
|
|
|
|
9.9
|
2.2
|
Net
increase in trade receivables
|
|
|
|
2.6
|
(9.2)
|
Net
(decrease)/increase in trade payables
|
|
|
|
8.3
|
(28.0)
|
Net
decrease/(increase) in other working capital
|
|
|
|
(0.5)
|
24.7
|
Outflow
related to restructuring charges
|
|
|
|
(0.8)
|
(1.5)
|
Defined
benefit retirement plans cash outflows
|
|
|
|
(7.4)
|
(6.3)
|
Vacant
site remediation costs paid
|
|
|
|
(1.0)
|
(1.8)
|
|
|
|
|
|
|
Cash generated from
operations
|
|
|
|
272.0
|
268.3
|
|
|
|
|
|
|
|
|
10
Employee benefits
The net employee benefits
liability as at 31 December 2023 was £46.3m (2022: £56.1m) derived
from an actuarial valuation of the Group's defined benefit pension
and other post-retirement obligations as at that date.
All the liabilities in the UK were
insured following a buy-in agreement with Pension Insurance
Corporation plc ("PIC") in 2021. This buy-in agreement secured an
insurance asset from PIC that matches the remaining pension
liabilities of the UK Plan, with the result that the Company no
longer bears any investment, longevity, interest rate or inflation
risks in respect of the UK Plan.
As disclosed in note 26 of the
2023 Annual Report and Financial Statements, the above amounts may
materially change in the next 12 months if there is a change in
assumptions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
£m
|
|
£m
|
Employee benefits -
net surpluses
|
|
|
|
|
|
UK defined benefit pension
plans
|
|
|
32.5
|
|
24.5
|
ROW defined benefit pension
plans
|
|
|
2.1
|
|
1.7
|
Net surpluses
|
|
|
34.6
|
|
26.2
|
|
|
|
|
|
|
Employee benefits -
net liabilities
|
|
|
|
|
|
UK defined benefit pension
plans
|
|
|
(1.1)
|
|
(1.1)
|
US defined benefit pension
plans
|
|
|
(18.2)
|
|
(22.5)
|
Germany defined benefit pension
plans
|
|
|
(41.3)
|
|
(38.4)
|
ROW defined benefit pension
plans
|
|
|
(10.4)
|
|
(10.9)
|
Other post-retirement benefit
plans
|
|
|
(9.9)
|
|
(9.4)
|
Net liabilities
|
|
|
(80.9)
|
|
(82.3)
|
|
|
|
|
|
|
Total liabilities
|
|
|
(46.3)
|
|
(56.1)
|
The expense recognised in the Group
Income Statement in respect of the Group's defined benefit
retirement plans and other post-retirement benefit plans is shown
below.
|
|
|
|
2023
|
|
2022
|
|
|
|
|
£m
|
|
£m
|
In
arriving at trading profit
(as
defined in Note 16)
|
- within
other manufacturing costs
|
|
|
1.3
|
|
1.7
|
- within
administration, selling and distribution costs
|
|
|
3.9
|
|
3.9
|
In
arriving at profit before tax
|
- within
net finance costs
|
|
|
2.3
|
|
1.4
|
Total net
charge
|
|
|
7.5
|
|
7.0
|
11
Contingent liabilities
Vesuvius has extensive international operations and is subject to
various legal and regulatory regimes, including those covering
taxation and environmental matters.
Certain of Vesuvius' subsidiaries are subject to legacy matter
lawsuits, predominantly in the US, relating to a small number of
products containing asbestos manufactured prior to the acquisition
of those subsidiaries by Vesuvius. These suits usually also name
many other product manufacturers. To date, Vesuvius is not aware of
there being any liability verdicts against any of these
subsidiaries. Each year a number of these lawsuits are withdrawn,
dismissed or settled. The amount paid, including costs, in relation
to this litigation has not had a material adverse effect on
Vesuvius' financial position or results of operations.
As the settlement of many of the
obligations for which reserve is made is subject to legal or other
regulatory process, the timing and amount of the associated
outflows is subject to some uncertainty (see Note 30 of the 2021
Annual Report and Financial Statements for further information).
The amount paid, including costs in relation to this litigation,
has not had a material effect on Vesuvius' financial position or
results of operations in the current period.
12
Related parties
The nature of related party
transactions in 2023 are in line with those transactions disclosed
in Note 33 of the 2023 Annual Report and Financial Statements. All
transactions with related parties are conducted on an arm's length
basis and in accordance with normal business terms. Transactions
with joint ventures and associates are consistent with those
disclosed in Note 34 of the 2023 Annual Report and Financial
Statements. Transactions between related parties that are Group
subsidiaries are eliminated on consolidation.
|
2023
|
2022
|
Transactions with joint
ventures and associates
|
£m
|
£m
|
Sales to
joint ventures
|
4.3
|
5.3
|
Purchases
from joint ventures
|
30.1
|
32.3
|
Purchases
from associates
|
-
|
-
|
Dividends
received from joint ventures
|
1.0
|
1.3
|
Trade
payables owed to joint ventures
|
10.3
|
6.7
|
Trade
receivables from joint ventures
|
1.0
|
0.7
|
13
Acquisitions and divestments
There were no acquisitions or
divestments in the period.
14
Provisions
|
|
Disposal and closure
costs
|
Restructuring
charges
|
Other
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
As at 1 January
2022
|
|
41.7
|
5.0
|
4.0
|
50.7
|
Exchange
adjustments
|
|
5.0
|
0.6
|
0.3
|
5.9
|
Charge to
Group Income Statement - trading profit
|
|
16.7
|
-
|
11.4
|
28.1
|
Adjustment to discount
|
|
1.1
|
-
|
-
|
1.1
|
Cash
spend
|
|
(6.8)
|
(1.5)
|
(10.3)
|
(18.6)
|
Transferred (to)/from other balance sheet accounts
|
|
-
|
(0.5)
|
-
|
(0.5)
|
As at 31 December
2022
|
|
57.7
|
3.6
|
5.4
|
66.7
|
|
|
Disposal and closure
costs
|
Restructuring
charges
|
Other
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
As at 1 January
2023
|
|
57.7
|
3.6
|
5.4
|
66.7
|
Exchange
adjustments
|
|
(2.6)
|
(0.1)
|
(0.1)
|
(2.8)
|
Charge to
Group Income Statement - trading profit
|
|
1.5
|
(0.3)
|
7.3
|
8.5
|
Adjustment to discount
|
|
2.3
|
-
|
-
|
2.3
|
Cash
spend
|
|
(7.0)
|
(0.8)
|
(8.3)
|
(16.1)
|
As at 31 December
2023
|
|
51.9
|
2.4
|
4.3
|
58.6
|
In assessing the probable costs
and realisation certainty of provisions, or related assets,
reasonable assumptions are made. Changes to the assumptions used
could significantly alter the Directors' assessment of the value,
timing or certainty of the costs or related amounts.
15
Financial instruments
The Group's financial assets and
liabilities are measured as appropriate either at amortised cost or
at fair value through other comprehensive income or at fair value
through profit and loss.
IFRS 13 Fair Value Measurement
requires classification of financial instruments within a hierarchy
that prioritises the inputs to fair value measurement. The three
levels of the fair value hierarchy are:
Level 1 - Unadjusted quoted prices
in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted
prices that are observable for the asset or liability, either
directly or indirectly;
Level 3 - Inputs that are not
based on observable market data.
The following table summarises
Vesuvius' financial instruments measured at fair value, and shows
the level within the fair value hierarchy in which the financial
instruments have been classified:
|
|
2023
|
|
2022
|
|
|
|
Assets
|
Liabilities
|
|
Assets
|
Liabilities
|
|
|
|
£m
|
£m
|
|
£m
|
£m
|
Investments (Level 2)
|
0.3
|
-
|
|
0.5
|
-
|
Derivatives not designated for hedge accounting purposes
(level 2)
|
-
|
(0.1)
|
|
0.1
|
(0.1)
|
Derivatives designated for hedge accounting purposes (level
2)
|
0.6
|
-
|
|
2.7
|
-
|
All of the derivative financial
instruments not designated for hedge accounting purposes reported
in the table above will mature within a year of the balance sheet
date. There were no transfers between fair value hierarchies during
the period. The method for determining the hierarchy and for
valuing the financial instruments is consistent with that disclosed
in Note 24 of the 2023 Annual Report and Financial
Statements. Fair value disclosures have not been made in
respect of other financial assets and liabilities on the basis that
the carrying amount is deemed to be a reasonable approximation of
fair value.
The Group's Treasury department,
acting in accordance with policies approved by the Board, is
principally responsible for managing the financial risks faced by
the Group. The Group's activities expose it to a variety of
financial risks, the most significant of which are market risk and
liquidity risk. The condensed financial statements do not include
all financial risk management information and disclosures required
in the annual financial statements; they should be read in
conjunction with the Group's 2023 Annual Report and Financial
Statements, in which further details of these financial risks were
disclosed in Note 24. There have been no changes in the risk
management policies since year-end.
In 2020, the Group executed a
US$86m cross-currency interest rate swap (CCIRS). The effect of
this is to convert the $86m Private Placement Notes issued in 2020
into €76.6m. US dollar cash flows under the CCIRS exactly mirror
those of the Private Placement Notes and the maturity date of the
CCIRS matches the repayment date of the Notes. The CCIRS would by
default be revalued through the Income Statement; however, as it is
in a designated hedging relationship, it is revalued through other
comprehensive income. The US dollar exposure is designated as a
cash flow hedge of the Private Placement Notes and the euro
exposure is designated as a net investment hedge of the Group's
foreign operations. The CCIRS is presented as a non-current asset
or liability as it is expected to be settled more than 12 months
after the end of the reporting period.
With the exception of the CCIRS, the
fair value of derivatives outstanding at the year-end has been
booked through the Income Statement in 2023. All of the fair values
shown in the table above are classified under IFRS 13 as Level 2
measurements which have been calculated using quoted prices from
active markets, where similar contracts are traded and the quotes
reflect actual transactions in similar instruments. All the
derivative assets and liabilities not designated for hedge
accounting purposes reported above will mature in 2024.
As at 31 December 2023, €246.0m
(2022: €246.0m) and $30.0m (2022: $60.0m) of borrowings were
designated as hedges of net investments in €246.0m (2022: €246.0m)
and $30.0m (2022: $60.0m) worth of overseas foreign operations. In
addition, the €76.6m (2022: €76.6m) CCIRS liability has been
designated as a net investment hedge of a further €76.6m (2022:
€76.6m) worth of overseas foreign operations. As the value of the
borrowings and the CCIRS liability exactly matches the designated
hedged portion of the net investments, the relevant hedge ratio is
1:1. The net investment hedges are therefore highly effective. It
is noted that hedge ineffectiveness would arise in the event there
were insufficient euro-denominated overseas foreign operations to
be matched against the €76.6m CCIRS liability.
As at 31 December 2023, the Group
had $116.0m (2022: $146.0m), €198.0m (2022: €198.0m) and £28.0m
(2022: £28.0m) of US Private Placement Loan Notes (USPP)
outstanding, which carry a fixed rate of interest, representing 82%
(2022: 81%) of the Group's total borrowings outstanding at that
date. The Group had £20.0m (2022: £33.0m) and €48.0m (2022: €48.0m)
short-term drawdowns in relation to its committed bank facilities,
which carry floating rates of interest, representing 18% (2022:
19%) of the Group's total borrowings outstanding at 31 December
2023. Maturities of the corresponding USPP Notes were disclosed in
Note 24 to the 2023 Annual Report and Financial
Statements.
The currency and interest rate
profile of the Group's borrowings is detailed in the tables
below.
|
|
Fixed rate
|
Floating
rate
|
Total
|
|
|
£m
|
£m
|
£m
|
Sterling
|
|
28.0
|
21.5
|
49.5
|
US
dollar
|
|
91.1
|
0.1
|
91.2
|
Euro
|
|
171.7
|
43.4
|
215.1
|
Capitalised arrangement fees
|
|
(0.7)
|
(1.1)
|
(1.8)
|
As at 31 December
2023
|
|
290.1
|
63.9
|
354.0
|
|
|
|
|
|
Sterling
|
|
28.0
|
33.3
|
61.3
|
US
dollar
|
|
120.7
|
1.9
|
122.6
|
Euro
|
|
175.2
|
44.8
|
220.0
|
Capitalised arrangement fees
|
|
(0.9)
|
(1.8)
|
(2.7)
|
As at 31
December 2022
|
|
323.0
|
78.2
|
401.2
|
In May 2023, the Group exercised its
option to request a one-year extension to the maturity of the
£38.5m component of its £385m committed bank facility not
previously extended. Following the request 100% of the £385m
facility now matures in August 2026. At the time of the extension
the reference to USD LIBOR was replaced with reference to
SOFR.
In 2023, the Group did not hold any
borrowings for which the interest payable referenced LIBOR
benchmarks.
As at 31 December 2023, the Group
had committed borrowing facilities of £685.8m (2022: £721.9m), of
which £333.4m (2022: £322.5m) were undrawn. 100% of these undrawn
facilities expire in 2026. The Group's borrowing requirements
are met by USPP, a committed syndicated bank facility of £385.0m
(2022: £385.0m) and a bilateral bank facility of £10.0m (2022:
£13.0m) which is fully collateralised against a portion of the
Group's cash balance in China.
The maturity analysis of the
Group's non-derivative financial liabilities is shown in the tables
below.
As at 31 December
2023
|
|
Within one
year
£m
|
Between 1-2
years
£m
|
Between 2-5
years
£m
|
Over 5
years
£m
|
Total contractual cash
flows
£m
|
Carrying
amount
|
|
Trade
payables
|
|
236.4
|
-
|
-
|
-
|
236.4
|
236.4
|
Loans
& overdrafts
|
|
22.3
|
68.0
|
196.9
|
103.9
|
391.1
|
355.8
|
Lease
liabilities
|
|
13.5
|
12.2
|
17.0
|
19.4
|
62.1
|
48.2
|
Capitalised arrangement fees
|
|
-
|
-
|
-
|
-
|
-
|
(1.8)
|
Derivative liability
|
|
0.1
|
-
|
-
|
-
|
0.1
|
0.1
|
Total
financial liabilities
|
|
272.3
|
80.2
|
213.9
|
123.3
|
689.7
|
638.7
|
As at 31
December 2022
|
|
Within
one year
£m
|
Between
1-2
years
£m
|
Between
2-5
years
£m
|
Over 5
years
£m
|
Total
contractual cash flows
£m
|
Carrying
amount
|
Trade
payables
|
|
239.5
|
-
|
-
|
-
|
239.5
|
239.5
|
Loans
& overdrafts
|
|
52.6
|
9.2
|
255.3
|
133.4
|
450.5
|
403.9
|
Lease
liabilities
|
|
12.3
|
9.2
|
13.2
|
13.5
|
48.2
|
40.8
|
Capitalised arrangement fees
|
|
-
|
-
|
-
|
-
|
-
|
(2.7)
|
Derivative liability
|
|
0.1
|
-
|
-
|
-
|
0.1
|
0.1
|
Total
financial liabilities
|
|
304.5
|
18.4
|
268.5
|
146.9
|
738.3
|
681.6
|
16
Alternative performance measures
The Company uses a number of
alternative performance measures (APMs) in addition to those
reported in accordance with IFRS. The Directors believe that these
APMs, listed below, are important when assessing the underlying
financial and operating performance of the Group and its divisions,
providing management with key insights and metrics in support of
the ongoing management of the Group's performance and cash flow. A
number of these align with KPIs and other key metrics used in the
business and therefore are considered useful to also disclose to
the users of the financial statements. The following APMs do
not have standardised meaning
prescribed by IFRS as adopted by the EU and therefore may not be
directly comparable with similar measures presented by other
companies.
16.1
Headline performance
Headline performance, reported
separately on the face of the Group Income Statement, is from
continuing operations and before items reported separately on the
face of the Group Income Statement.
16.2
Underlying revenue, underlying trading profit and underlying return
on sales
Underlying revenue, underlying
trading profit and underlying return on sales are the headline
equivalents of these measures after adjustments to exclude the
effects of changes in exchange rates, business acquisitions and
disposals. Reconciliations of underlying revenue and underlying
trading profit can be found in the Financial Summary. Underlying
revenue growth is one of the Group's key performance indicators and
provides an important measure of organic growth of Group businesses
between reporting periods, by eliminating the impact of exchange
rates, acquisitions, disposals and significant business
closures.
16.3 Return on
sales ('ROS')
ROS is calculated as trading
profit divided by revenue. It is one of the
Group's key performance indicators and is used to assess the
trading performance of Group businesses. A reconciliation of ROS is
included in Note 2.
16.4 Trading profit/adjusted
EBITA
Trading profit/adjusted EBITA is
defined as operating profit before separately reported items. It is
one of the Group's key performance indicators and is used to assess
the trading performance of Group businesses. It is also used as one
of the targets against which the annual bonuses of certain
employees are measured.
16.5 Headline profit before
tax
Headline profit before tax is
calculated as the net total of trading profit, plus the Group's
share of post-tax profit of joint ventures and total net finance
costs associated with headline performance. It is one of the
Group's key performance indicators and is used to assess the
financial performance of the Group as a whole.
16.6 Headline effective tax rate
('ETR')
The Group's headline ETR is
calculated on the income tax costs associated with headline
performance, divided by headline profit before tax and before the
Group's share of post-tax profit of joint ventures.
16.7 Headline
earnings
Headline earnings is profit after
tax before separately reported items attributable to owners of the
parent.
16.8 Headline earnings per
share
Headline earnings per share is
calculated by dividing headline profit before tax less associated
income tax costs, attributable to owners of the parent by the
weighted average number of ordinary shares in issue during the
year. It is one of the Group's key performance indicators and is
used to assess the underlying earnings performance of the Group as
a whole. It is also used as one of the targets against which the
annual bonuses of certain employees are measured. Headline earnings per share is disclosed in Note
6.
16.9 Adjusted operating cash
flow
Adjusted operating cash flow is
cash generated from operations before restructuring and vacant site
remediation costs but after deducting capital expenditure net of
asset disposals. It is used in calculating the Group's cash
conversion.
|
|
2023
£m
|
2022
£m
|
Cash generated from operations
|
|
272.0
|
268.3
|
|
|
|
|
Add: Outflows relating to
restructuring charges
|
|
0.8
|
1.5
|
Less: Capital
expenditure
|
|
(92.6)
|
(89.2)
|
Add: Vacant site remediation
costs
|
|
1.0
|
1.8
|
Add: Proceeds from the sale of
property, plant and equipment
|
|
5.4
|
3.1
|
Adjusted operating cash flow
|
|
186.6
|
185.5
|
|
|
|
|
Trading Profit
|
|
200.4
|
227.2
|
Cash Conversion
|
|
93%
|
82%
|
16.10
Cash conversion
Cash conversion is calculated as
adjusted operating cash flow divided by trading profit. It is
useful for measuring the rate at which cash is generated from
trading profit. It is also used as one of the targets against which
the annual bonuses of certain employees are measured. The
calculation of cash conversion is detailed in Note 16.9
above
16.11
Free cash flow
Free cash flow is defined as net
cash flow from operating activities after net outlays for the
purchase and sale of property, plant and equipment, dividends from
joint ventures and dividends paid to non-controlling shareholders.
It is one of the Group's KPIs and is used to assess the underlying
cash generation of the Group and is one of the measures used in
monitoring the Group's capital. A reconciliation of free cash flow
is included underneath the Group Statement of Cash
Flows.
16.12
Average trade working capital to sales ratio
The average trade working capital
to sales ratio is calculated as the percentage of average trade
working capital balances to the total revenue for the previous 12
months, at constant currency. Average trade working capital
(comprising inventories, trade receivables and trade payables) is
calculated as the average of the 13 previous month-end balances. It
is one of the Group's key performance indicators and is useful for
measuring the level of working capital used in the business and is
one of the measures used in monitoring the Group's
capital.
|
|
2023
£m
|
2022
£m
|
Average trade working
capital
|
|
451.8
|
487.3
|
Total revenue
|
|
1,929.8
|
2,047.4
|
Average trade working capital to
sales ratio
|
|
23.4%
|
23.8%
|
16.13
Adjusted earnings before interest, tax, depreciation and
amortisation (adjusted EBITDA)
Adjusted EBITDA is calculated as
the total of trading profit before depreciation and amortisation of
non-acquired intangibles charges. It is used in the calculation
of the Group's interest cover and net debt to
adjusted EBITDA ratios. A reconciliation of adjusted EBITDA is
included in Note 2.
16.14
Net interest payable on borrowings
Net interest payable on borrowings
is calculated as total interest payable on borrowings less finance
income, excluding interest on net retirement benefit obligations,
adjustments to discounts and any item separately reported. It is
used in the calculation of the Group's interest cover
ratio.
|
|
2023
£m
|
2022
£m
|
Total interest payable on
borrowings (note 4)
|
|
23.5
|
18.3
|
Finance income (note 4)
|
|
(15.3)
|
(8.8)
|
Net interest payable on
borrowings
|
|
8.2
|
9.5
|
16.15
Interest cover
Interest cover is the ratio of
adjusted EBITDA to net interest payable on borrowings for the last
12 months. It is one of the Group's key performance indicators and
is used to assess the financial position of the Group and its
ability to fund future growth. This measure is also a component of
the Group's covenant calculations.
|
|
2023
£m
|
2022
£m
|
Adjusted EBITDA (note
2)
|
|
258.2
|
282.7
|
Net interest payable on
borrowings
|
|
8.2
|
9.5
|
Interest cover
|
|
31.5x
|
29.8x
|
16.16
Net debt
Net debt comprises the net total
of current and non-current interest-bearing borrowings (including
IFRS16 lease liabilities), cash and short-term deposits and
derivative financial instruments. Net debt is a measure of the
Group's net indebtedness to banks and other
external financial institutions. A reconciliation of the movement
in net debt is included in Note 8.
16.17
Net debt to adjusted EBITDA
Net debt to adjusted EBITDA is the
ratio of net debt at the year-end to adjusted EBITDA for the last
12 months. It is one of the Group's key performance indicators and
is used to assess the financial position of the Group and its
ability to fund future growth and is one of the measures used in
monitoring the Group's capital.
|
|
2023
£m
|
2022
£m
|
Net debt (note 8)
|
|
237.5
|
255.0
|
Adjusted EBITDA (note
2)
|
|
258.2
|
282.7
|
Net debt to adjusted
EBITDA
|
|
0.9x
|
0.9x
|
16.18
Return on invested capital (ROIC)
The Group has adopted ROIC as its
key measure of return from the Group's invested capital. The RONA
performance measure has been replaced with ROIC which provides a
more complete measure of Vesuvius's returns. ROIC is calculated as
trading profit less amortisation of acquired intangibles plus share
of post-tax profit of joint ventures and associates for the
previous 12 months after tax, divided by the average (being the
average of the opening and closing balance sheet) invested capital
(defined as: total assets excluding cash plus non-interest-bearing
liabilities), at the average foreign exchange rate for the
year.
|
|
2023
£m
|
2022
£m
|
Average invested
capital
|
|
1,558.5
|
1,503.6
|
|
|
|
|
Trading profit (note
16.4)
|
|
200.4
|
227.2
|
Amortisation of acquired
intangible assets
|
|
(10.3)
|
(10.4)
|
Share of post-tax profit from
joint ventures and associates
|
|
0.9
|
1.2
|
Tax on trading profit and
amortisation of acquired intangible assets
|
|
(52.3)
|
(57.5)
|
|
|
138.7
|
160.5
|
ROIC
|
|
8.9%
|
10.7%
|
16.19
Constant currency
Figures presented at constant
currency represent 2022 amounts retranslated at average 2023
exchange rates.
16.20
Liquidity
Liquidity is the Group's cash and
short term deposits plus undrawn committed debt facilities less
cash used as collateral on loans.
|
|
2023
£m
|
2022
£m
|
Cash
|
|
164.2
|
184.2
|
Undrawn committed debt
facilities
|
|
333.4
|
322.5
|
Cash used as collateral on
loans
|
|
(10.0)
|
(13.0)
|
Gross up of cash in notional
pools
|
|
-
|
(0.1)
|
Liquidity
|
|
487.6
|
493.6
|
16.21
Last twelve months ('LTM')
Some results are presented or
calculated using data from the last twelve months from the
reference date.
17
Exchange rates
The Group reports its results in
pounds sterling. A substantial portion of the Group's revenue and
profits are denominated in currencies other than pounds sterling.
It is the Group's policy to translate the income statements and
cash flow statements of its overseas operations into pounds
sterling using average exchange rates for the year reported (except
when the use of average rates does not approximate the exchange
rate at the date of the transaction, in which case the transaction
rate is used) and to translate balance sheets using year-end rates.
The principal exchange rates used were as follows:
|
Income and
expense
|
|
Assets and
liabilities
|
|
Average
rates
|
|
Year-end
rates
|
|
2023
|
2022
|
Change
|
|
2023
|
2022
|
Change
|
US Dollar
|
1.24
|
1.24
|
(0.0%)
|
|
1.27
|
1.21
|
5.0%
|
Euro
|
1.15
|
1.17
|
(1.7%)
|
|
1.15
|
1.13
|
1.8%
|
Chinese
Renminbi
|
8.82
|
8.31
|
6.1%
|
|
9.07
|
8.37
|
8.4%
|
Japanese
Yen
|
174.87
|
161.86
|
8.0%
|
|
179.56
|
158.60
|
13.2%
|
Brazilian
Real
|
6.21
|
6.38
|
(2.7%)
|
|
6.18
|
6.39
|
(3.3%)
|
Indian
Rupee
|
102.68
|
96.99
|
5.9%
|
|
105.89
|
100.06
|
5.8%
|
South African
Rand
|
22.95
|
20.16
|
13.8%
|
|
23.27
|
20.57
|
13.1%
|