TIDMVSVS
RNS Number : 6961M
Vesuvius plc
13 May 2020
13 May 2020
AGM Trading Update
Vesuvius plc ("Vesuvius", the "Group"), a global leader in
molten metal flow engineering and technology, releases the
following update in conjunction with its Annual General Meeting
being held today.
Safety and impact on operations of COVID-19
Vesuvius' priority remains the health and safety of our
employees and their families, along with our customers, suppliers
and other stakeholders. We are complying with the instructions of
governments and health authorities in the countries where we
operate, and guidelines from the World Health Organization, in
order to protect our employees and prevent the further spread of
infection. Across the Vesuvius network, we have made changes to our
processes where necessary to maintain social distancing and we
continue to take all necessary actions to maintain a safe working
environment including global sourcing of PPE and facilitating
technology-enabled remote working.
As of 1 May we have reopened operations in South Africa,
Malaysia, Argentina and India after their temporary closure due to
national lockdowns. All of our plants are now operational albeit at
reduced levels as we align with weaker demand and operate with
re-configured layouts and processes to allow safe distancing
between employees. The excess capacity across the Group positions
us well for when the market returns to its long-term growth
path.
Trading Update
Our first quarter performance was marginally ahead of the
previous quarter, reflecting the subdued market environment that
has persisted since the end of 2019 and little of the COVID-19
impact. The World Steel Association reported that during the first
quarter, worldwide steel production declined 1.4% year-on-year
(-4.1% excluding China). During the same period, steel production
in the US declined by 1%, while weak demand persisted in the EU28,
where steel production declined by 10%. In Foundry, the market
environment remained challenging, with most end-markets still
showing year-on-year declines with the exception of South
America.
In recent weeks, the measures imposed by governments to contain
the COVID-19 outbreak have resulted in significant disruption to
our business and the wider economy, as reflected in our April 2020
sales, which declined by 28% compared to April 2019. As highlighted
in our announcement on 6 April 2020, there remains considerable
uncertainty in the trading environment and as a result, we have
withdrawn financial guidance for the year. We will provide an
update when the outlook becomes clearer.
Mitigating actions announced on 6 April in our 'Statement on
COVID-19'
In response to the pandemic, we have implemented several cost
reduction plans to deliver savings of around GBP10m per quarter
during the crisis, starting in Q2, in addition to the GBP19.4m of
recurring savings from our ongoing restructuring programme which we
are targeting to deliver this year. We have also reduced our
planned capital expenditures by 30% in 2020 (GBP20m). These plans
are progressing well, and we are fully on track to deliver on our
cost reduction programmes.
Increased Liquidity
We have further boosted our liquidity, which stood at GBP375m at
the end of March 2020, by an additional GBP314m through the
issuance of US Private Placement (USPP) notes and accessing the
Bank of England's Covid Corporate Financing Facility (CCFF)
programme. The USPP issuance is intended to repay the US$140m
(GBP114m) notes which mature in December 2020. Our access to the
CCFF programme has further reinforced our liquidity position in
light of the financial uncertainty created by the pandemic.
Following repayment of the USPP notes maturing in December 2020,
our covenant threshold will increase from 3.0x to 3.25x net
debt/EBITDA, further widening our financial headroom. Furthermore,
the Group's annualised interest expense will decline relative to
the period prior to these fundraisings, predominantly as a result
of the new USPP notes being at more favourable rates.
Finally, as announced on 6 April, we also took the precautionary
step to preserve cash by withdrawing the payment of the 2019 final
dividend of 14.3p per share (GBP38m).
Financial Position
Net debt has increased marginally since December due to the
impact of translating non-GBP denominated debt at a weaker GBP
exchange rate and the typical first quarter increase in working
capital from the year-end low point.
Comment from Patrick Andr é , Chief Executive:
"Our first priority in the current crisis is the health and
safety of our employees, as reflected in the actions we have taken
across the Group. In parallel, whilst the extent of the impact of
COVID-19 on our business remains uncertain, we are confident that
the measures we have taken to aggressively cut costs and preserve
liquidity not only ensure that we can operate through a prolonged
downturn but also emerge stronger once end markets recover."
Conference call
Patrick André (Chief Executive) and Guy Young (Chief Financial
Officer) will be hosting a conference call for analysts and
investors today at 08.30 GMT.
To participate, please register at least 30 minutes prior to the
start of the call
http://emea.directeventreg.com/registration/9959045
FUTURE EVENTS
Vesuvius' half year results for the six months ending 30 June
2020 are expected to be announced on Thursday, 30 July 2020.
For further information, please contact:
Shareholder/analyst
enquiries:
Euan Drysdale, Group Head of Corporate +44 (0) 7584
Finance 641315
Pamela Antay, Head of Investor +44 (0) 7827
Vesuvius plc Relations 802277
Media enquiries:
Andrew Jaques/ Ollie Hoare/ Peter +44 (0) 7710
MHP Communications Lambie 032 657
About Vesuvius plc
Vesuvius is a global leader in molten metal flow engineering and
technology, 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 improve their manufacturing processes, enhance product
quality and reduce energy consumption. 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 low-cost 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 he or she is recognised,
developed and properly rewarded.
Forward looking statements
This announcement contains certain forward-looking statements
which may include reference to one or more of the following: the
Group's financial condition, results of operations, cash flows,
dividends, financing plans, business strategies, operating
efficiencies or synergies, budgets, capital and other expenditures,
competitive positions, growth opportunities for existing products,
plans and objectives of management and other matters.
Statements in this announcement that are not historical facts
are hereby identified as "forward-looking statements". Such forward
looking statements, including, without limitation, those relating
to the future business prospects, revenue, working capital,
liquidity, capital needs, interest costs and income, in each case
relating to Vesuvius, wherever they occur in this announcement, are
necessarily based on assumptions reflecting the views of Vesuvius
and involve a number of known and unknown risks, uncertainties and
other factors that could cause actual results, performance or
achievements to differ materially from those expressed or implied
by the forward looking statements. Such forward looking statements
should, therefore, be considered in light of various important
factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking
statements. These include without limitation: economic and business
cycles; the terms and conditions of Vesuvius' financing
arrangements; foreign currency rate fluctuations; competition in
Vesuvius' principal markets; acquisitions or disposals of
businesses or assets; and trends in Vesuvius' principal
industries.
The foregoing list of important factors is not exhaustive. When
considering forward looking statements, careful consideration
should be given to the foregoing factors and other uncertainties
and events, as well as factors described in documents the Company
files with the UK regulator from time to time including its annual
reports and accounts.
You should not place undue reliance on such forward-looking
statements which speak only as of the date on which they are made.
Except as required by the Rules of the UK Listing Authority and the
London Stock Exchange and applicable law, Vesuvius undertakes no
obligation to update publicly or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this
announcement might not occur.
Vesuvius plc, 165 Fleet Street, London EC4A 2AE
Registered in England and Wales No. 8217766
LEI: 213800ORZ521W585SY02
www.vesuvius.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
AGMATMPTMTJBBFM
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