Vesuvius Full-Year Profit Exceeds Expectations Despite Weakening Margins

Investing.com – Vesuvius Plc (LON:VSVS) announced on Thursday that its preliminary results for fiscal year 2025 met or exceeded analyst expectations. The company expects performance to improve in the second half of 2026 as protective trade measures take effect.

This industrial materials company reported sales of £1.81 billion for 2025, flat on a reported basis, and up 1% on an organic constant currency basis compared to the previous year.

EBITDA was £151.1 million, down 17% year-over-year on a fixed currency basis, but above analysts’ forecasts of £147 million to £151 million.

Pre-tax profit reached £133.7 million, down 23% from 2024 but slightly above the market consensus of £133 million. Earnings per share were 34.2 pence, down 21% year-over-year but 3% higher than expected.

The company’s EBITDA margin was 8.4%, down 170 basis points from the previous year.

Adjusted for IFRS, net debt at year-end totaled £452 million, slightly above the forecast of £439 million, due to increased capital expenditure, foreign exchange effects, and cash tax payments. On a pre-EBITDA basis, net debt to EBITDA ratio was 2.0x.

In the steel division, which accounts for most of revenue, sales increased 1.4% year-over-year on a fixed currency basis, while EBITDA declined 18% to £120 million. The EBITDA margin in this division contracted 210 basis points to 8.9%.

Flow control sales were flat, with positive pricing offset by roughly stable volumes. Advanced refractory sales grew 3.9%, driven by positive pricing, volume growth, and market share gains.

The foundry division reported a 2% decline in fixed currency sales, reflecting decreases in volume and prices in the Americas and EMEA, partially offset by a 3% growth in Asia-Pacific, mainly driven by India and China. EBITDA in this division fell 11% to £31.1 million, with margin down 70 basis points to 6.7%.

Management stated that 2026 will mark a transition toward recovery for both divisions, especially as the year progresses. EBITDA for 2026 is expected to benefit from cost savings, acquisitions, and moderate volume growth.

The company’s guidance indicates that, on a fixed currency basis, EBITDA will meet expectations.

Vesuvius continues to target an EBITDA margin of 12.5% and sustained long-term free cash flow, supported by improving end markets. Analysts expect that, after the earnings release, the market consensus for 2026 EBITDA of £174 million will remain largely unchanged.

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