Good day, ladies and gentlemen, and welcome to the Vesuvius plc trading update. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session through the phone lines and instructions will follow at that time. I would like to remind all participants that this call is being recorded. I will now hand over to the CEO of Vesuvius plc, Patrick André, to open the presentation. Please go ahead. Thank you very much. Good morning, everyone. I'm Patrick André, CEO of Vesuvius, and with me this morning is Mark Collis, our Chief Financial Officer. I will give you some update about our trading performance in over the past, over the past four months. The most important message is that despite more difficult market conditions than what we thought three-four months ago, we've performed quite robustly, and thanks to this our outlook for the year remain unchanged and in line with expectations. Starting with market, markets have been weaker, softer than what we thought they would be three-four months ago at the time of our last update. This is particularly the case for the foundry end market outside India and outside of automotive. Automotive has been relatively resilient, but the non-automotive market outside of India have shown clear sign of higher than expected weakness since the end of the summer. And this is continuing as we speak. The area of strongest weakness is Europe and in particular, the northern part of Europe, around Germany and surrounding countries. Steel markets have also been weaker than what we expected three, four months ago, but much less than foundry market. It's more of a softening of this steel market. The areas where the steel market has been softening more is, of course, India and Europe, where steel markets are quite soft as we speak, and to a lesser extent, Southeast Asia and South America. In this globally softening environment, India remains an important exception, and it's important for us. India continues to grow quite healthily, both in steel and in foundry, and we ourselves are significantly outperforming what is already a very robust market in India, growing significantly more than the market in India, in both divisions and particularly in the Steel Division. Globally, worldwide, we have performed robustly, and with both market share gain continuing in Flow Control and in Foundry, and very resilient pricing. And this good internal performance enable us to offset in fact the weaker than expected external market conditions. And this is the reason why we are maintaining our guidance, and we feel comfortable to maintain this guidance towards our expectations. From a cash point of view, we are making good progress. We are generating a good cash flow from operations and also starting to make good progress in the reduction and optimization of our working capital. So thanks to a positive cash generation, we are expecting our net debt to EBITDA ratio to be on or around one at the end of the year. Taking a step back, and even if it is too early at this stage to give any precise guidance on 2024, what is important to note is that we remain convinced that the midterm fundamentals of our markets remain positive. With, in particular, some expected growth in the steel production outside of China going forward. So all our strategic initiatives to position us to benefit from this positive trend are fully on track. First, our R&D effort is continuing to progress well. We have a full pipeline of new products to launch on the market for the next two, three, four years. Our investment in new capacity are progressing well, in particular in India. All of our new capacity investment in Flow Control are now coming online. This is what is enabling us to progress significantly faster than the market in India. This year, our sales in India, group wide, will probably grow on or around 15%, which is close to double the growth rate of the underlying market in India, which is, that's very positive. And, and we expect to continue to outperform the market in India, going forward, as in the rest, as in the rest of the world. So, globally, we are quite positive about the outlook. But again, we will not give guidance on 2024 today, as it would be too early. There are too many moving parts, and, we'll do that rather, when we announce our full year results, in February next year. So, thank you very much, and I propose now to open the floor for question. Thank you. If you are dialed into the call and would like to ask a question, please signal by pressing star and then one on your touchtone phone or on the keypad on your screen. You will hear a confirmation tone that you have joined the queue. If you wish to withdraw your question, you may press star and then two to remove yourself from the question queue. We'll take the first question from Mark Davies Jones of Stifel. Please go ahead. Thank you very much. Morning, Patrick. A couple from me, if I may. Firstly, you said your pricing has held up pretty well. Could you comment on general pricing discipline in the market if volumes are weaker? Are you seeing any signs of people losing their discipline there? And then the second one was on the messaging around foundry. That's obviously a change. You were talking about some recovery coming through in a quite encouraging trend in the first half. Obviously, PMIs in Germany have been weak for some time. What has changed there? Why do you think we've seen this sort of sudden deterioration? Thank you. Regarding your first question on pricing, yes, we have a good and resilient pricing in all three divisions. Regarding our competition, I would say that we see some of our competition trying to put pressure on pricing in Flow Control and in Foundry. There, of course, it's an important phenomenon, but we are relatively comfortable with that because of the technology differentiation of our product. So, we are, of course, always providing fair pricing to our customers, but sharing value with them. But, the price pressure of our some of our peers on the Flow Control is not disturbing too much today our own pricing strategy. In Advanced Refractory, if you remember well, we have lost some market share in H1, because we have been, I would say, more resilient. We have targeted for a more resilient pricing than most of our competitors. As the technological differentiation is less pronounced in Advanced Refractory than it is in the two other business units, we've lost market share in H1, in Advanced Refractory. We plan to recover. We have started to recover some market share in Advanced Refractory in H2, but less than we were expecting. We have not recovered. We will not recover fully in H2 what we've lost in H1, which is also an indication that the discipline of other players, and again, you have a very different situation there, and you have some players being disciplined, some others less so. But on average, the discipline of the players in Advanced Refractory is probably a little bit less than one would like it to be. And as a consequence, prices in the Advanced Refractory world are adapting, and I would say also normally adapting, yeah, to the decline of raw material prices. Thank you very much. On the Foundry question? Regarding Foundry, we see a deterioration in Germany. So independently of the macro indicators that you mentioned, we clearly see a deterioration in Germany since summer. So the mood was already not very good before summer, but the fact on the ground has been deteriorating since mid-year. We really see a slowdown in real activity on the ground with the orders received by our customers and the orders received by our customers from their own customers on a downward trend since mid-year. And clearly, there is a decline in the top line of the Foundry Division, as compared not only with Q2, but even as compared with Q1. So, the downturn in the northern part of Europe is quite important for the Foundry Division. Okay, thank you. Do you think that sort of inventory in their channels is being sorted out, or is just underlying weakness in, say, China- Uh, uh, as, as- Through the system? As we mentioned, we believe that part of the overall weakness in the foundry market is due to destocking. It was already true in H1. It continues to be true in H2. We believe that destocking should be mostly over by the end of the year, so it's not making things better on the foundry side, the destocking. But we think that the destocking movement should be over, mostly by the end of the year. In steel, if you remember, the destocking is over, was over by mid-year. In foundry, I think it will be over by the end of the year. So for the year 2024, we should not have any negative impact from destocking anymore, both in steel and foundry. The uncertainty, in particular in foundry, relates to the real underlying demand. We feel we are at a low point, and today it's probably difficult to go much lower than what we are now. But how long will it take for the real demand, especially in Europe, for the foundry product to go back up, is a question mark today. That's the reason why we are not giving a detailed guidance on 2024. We'll do that in two, three months when we announce our full year results. ... Thank you very much. It's very helpful. The next question we have is from Andrew Douglas of Jefferies. Please go ahead. Good morning, everyone. You kind of answered my question on risks to destocking in steel, so that's good to hear that. Can I just ask on the softness that you've seen in both divisions, do you think any of this is structural rather than cyclical? And does that mean you have to take out cost if you're slightly worried about more structural challenges in your own markets, or is this just like a cyclical phenomena? And the second question is just on the M&A outlook. You know, strong balance sheets. I know there's a couple of players out there who just, you know, buy anything that moves. What are you seeing on your side, and is this now just an ongoing kind of question of the pricing, or is it the core to the assets which you're concerned about? Thank you. Thank you, Andy. First, your question about cyclical versus structural. I think that most of it is cyclical, especially in the steel sector, we see that as a purely short-term cyclical phenomena. We believe that steel production outside of China will structurally grow significantly, and not only in India, also outside of India, going forward. So we see the current movement in steel, which by the way, is not that pronounced, and softening is not as mostly cyclical. Regarding foundry, I think it's what we see is cyclical, is to talk about about Southeast Asia or North America, or or even North America. The point where there is more of a structural element, I believe, is the foundry market in Northern Europe. The foundry market in Northern Europe, I believe, the weakening, the softening there are probably is not only cyclical. There is an element of cycle, but it's not only that. I think that there is clearly a structural decline of the foundry market in this northern part of Europe. I don't see Germany going back to what they were historically. There are some switch, and but you have other areas in in Europe or in the rest of the world, which are substituting. You see, Turkey, for example, is growing very fast in the foundry world. So the northern part of Europe is losing, the other parts are gaining, and we are reorienting our sales effort, commercial teams in the Foundry Division, as we've done in the Steel Division long ago. Yeah. We are reorienting our effort toward the fast-growing part of the world and away from the slower-growing one. Yeah. Regarding M&A, we keep an appetite, but I would say a disciplined and selective appetite on M&A. Mm-hmm. So, we are looking at a few opportunities, but the only opportunities we are looking at are those which can complement our current portfolio, either from a geographical point of view, and/or from a technological point of view. So, this is the filter that we are applying to screen opportunities, so we are not interested to buy anything which is potentially on offer. We are very selective. There is no guarantee that something will happen, but we have an appetite, and we have the balance sheet to do it in case there will be opportunities. We are proactively looking at opportunities, but our main priority remains our organic growth strategy. Understood. That's very kind. Thank you very much. Ladies and gentlemen, just a reminder, if you would like to ask a question, you're welcome to press star then one. The next question we have is from Lushanthan Mahendrarajah of J.P. Morgan. Please go ahead. Morning. Thanks for taking my question. I've got a couple, I think. Just going back to that, that foundry point and, and some of those structural issues, particularly in Northern Europe, I think EMEA was, I think, 40% or so of, of the foundry business last year. I mean, how big is Northern Europe within, within that? Is it, is it the majority, or just think, just think about what the impact could be longer term there? Northern Europe is historically the most important part of the EMEA business for the Foundry Division. So, it's close to the majority of the business. So, in fact, Northern Europe is an important business historically for the Foundry Division as a whole. So the weakness in Northern Europe is disproportionately impacting the Foundry Division, and one of the key strategic push of the Foundry Division is, of course, to progressively decrease the relative importance of Northern Europe in the overall foundry business, which has been the case over the past three or four years, and will continue in the coming years. So our investment are disproportionately in other areas, in the growing area, not only in the growing area of India, Turkey and so on, but also in the growing other areas, in Asia in particular. Okay, thank you. And the second one, just on pricing in Flow Control and foundries, presumably raw materials are deflationary. Is it the same? Prices have been coming down in the second half? Can you sort of give us a rough guide in terms of what you're doing with your pricing and what you think your peers are doing in terms of a number? As you know, we have a general policy in terms of pricing to that raw material prices are passed through. So we are increasing and decreasing our prices based on fluctuations, taking into account fluctuations in raw materials, but also taking into account the value that our products are creating in our customer processes. So you have two elements. The first one is that raw materials are going down, so this will normally as a normal pass-through to our customers, as we have always done, will have a tendency to bring prices down. But at the same time, as we are proposing to our customers more and more value adding solutions, creating values in their processes, and we are discussing with our customers a fair sharing of this additional value creation, as a consequence our prices, because of the value creation sharing component, are declining less than raw materials. Okay, thank you. But just in terms of, you know, are they sort of down low single digits or is it flat? Just trying to get an idea of sort of the quantum of the change? Today, prices in are, I would say, I'm not talking Advanced Refractories, which is different, but are very slightly declining. Okay. Okay. Thank you. That's very clear. The next question we have is from Harry Phillips of Peel Hunt. Please go ahead. Yeah, hello. Good morning, everyone. A couple of questions, please. Just, you gave an interesting statistic on India capex, which I missed around, sort of. There was a 16% number in there, which sort of caught my ear. And then just secondly, in terms of sort of line speed and under- recovery, which you were talking about at the half-year, how is that playing out at the current time, and has that sort of lasted longer than you anticipated, thinking particularly with reference to your comments around foundry? Thanks, Harry. A good question. First, starting with India. Yeah, we are growing quite fast in India. If you remember, our growth strategy in India is not M&A, it's really organic growth, and we have been investing over the past two years now in new capacity in India. Both Flow Control, mostly Flow Control over the past two years, and but also a little bit in Advanced Refractories, and we are very, very happy to have done so, because the growth in India is not only more steel, but it's more demanding steel, more sophisticated steel. The consequence is that thanks to this new investment in capacity, which we are starting to use, our isostatic new capacity came on stream in February this year, and we are already using a good part of it. This is what enable us to grow even faster than the underlying steel market in India. Our growth in India this year will be close to. The year is not over, but probably on or around 15% this year, which is significantly higher than the underlying market growth. And, we are also now not only continuing to increase our capacity in Flow Control, but we are also, I was in India myself last week, to, for, a first stone laying ceremony for expansion in Advanced Refractories. So we are also increasing our capacity in Advanced Refractories. We have been increasing our capacity in Foundry also, with the new filter, Foundry filter line, which is now fully operational. So we have strong ambitions both in steel and foundry in India. And this year will grow nearly double the rate of the market. I will not promise we will grow double the rate of the market every year, but clearly we'll try. So yes, we are making very good progress in India, with a very, very strong team, good products corresponding to what the market is asking for. We have initial discussions now, even in India, regarding automation and robotics. And this, because you can say, yes, India is a low-cost country, but even in India, now the level of sophistication of steel customers, in particular, is driving them, as the rest of the world, toward robotics and automation solutions. So we are quite optimistic, and if I may, aggressively optimistic about our performance in India, going forward. Regarding the under-r ecovery, we had announced that we were expecting between GBP 5 million and GBP 10 million under- recovery, negative impact because we were reducing on inventory. We're probably closer to five than to 10 this year, so which translates the fact that we are making progress, and especially now in the second half, we are making progress. But I would like our progress to be even more than that, together with Mark. And so, out of the 10 we were and are still planning to do, probably we'll have on or around 5 this year, meaning there will be a little bit left for next year. ... Fantastic. I think just maybe a final question, you talked about the new capacity coming on stream in India, and you've outlined that with a whole lot of new capacity coming on around the world, you have that slide in the interim, so you talk about potentially adding GBP 40 million of EBITDA by 2026, 2027. That sort of program is all still on track, and I guess we'll get more on that in a couple of days time. Yeah. So the program is completely on track, completely on track, and I will confirm that later this week. If I may, we are generating new ideas, but yeah, the program is completely on track. Fantastic. Thanks very much. You're welcome, Harry. The next question we have is from Bruno Luszcz of BNP Paribas. Please go ahead. Thanks for taking the question. I just could we perhaps talk about the sequential trading profit bridge? It sounds this volume may be lower in the H2 bridge when compared to H1 than previously expected. What's been the positive offset that's given you the confidence to reiterate the guidance? Is it, I guess, underrecovery assumption is a lower impact, but is there anything else? I think it's, we have lower volume, you're right, but we have better pricing. We have better pricing, and the better pricing, the fact that volumes are less than what we were expecting, but less than the market decline, and because we are gaining a bit of market share. So, but still, it's lower than what we thought, but pricing is better than what we thought, so this is offsetting. Understood. That's very clear. Just a quick clarification on India, could you remind us of your sales exposure to that country today, and give us a rough sense of growth you expect to come in the years ahead? Well, I think India was on or around 9% of our sales last year. It will be on or around 10% this year, and I expect this percentage to continue to grow. Understood. And just finally- We probably this year, however, it will be a close time, but we probably this year for the first time, I think, sell more in India than in China. Oh, wow. Okay. And just on market share, could you perhaps expand on those market share gains within a particular regional business that's driving that in trading period, and expand on that a little bit, I guess? Yes. In Flow Control, we are continuing to gain market share, we say, across the board. It's interesting to note, for example, that even in China, where as you know, the steel market is not very good, we are continuing to grow our Flow Control business in China, in absolute terms, because we are continuing to gain market share there, and we are continuing to have a good business, a quite good business in China, for Flow Control. So across the board, worldwide, I would say there is nearly no exception. We are continuing to grow market share everywhere, and we intend to continue doing that. We have some very, very promising and very advanced leads to continue to do that in 2024 and the year forward. Knowing that we have a full pipeline of new projects, new products, we, the business model of Flow Control is working very, very well, both in terms of pricing, resilience, and in terms of market share gains simultaneously. Regarding Foundry. Foundry, it's a bit of a pity that the Foundry Division is operating in a market which is not what we would like, because they have a good performance. They also with relatively resilient pricing, and at the same time, now some market share gain, and but with an environment which is more difficult, but good performance in terms of market share gain of the Foundry Division. Advanced Refractories, as you know, we've lost market share, as if you remember, during the first half. We because we've been, I would say, probably relatively ambitious in terms of pricing, probably a bit over ambitious in terms of pricing. We've started recovering some of this market share in the second half, but not all, because we remain very disciplined in terms of pricing. But I'm confident that even if we will not regain the second half, everything we lost in the first half, which means that overall, year-on-year, we will lose market share in Advanced Refractories, to be very clear. We believe that, as happened already a few years ago, we will continue to recover some market share in 2024, but we want to do it progressively without doing stupid things on prices. So, it will take more than one semester to compensate fully the market share we lost in the first half. Got it. That's very clear. And just, just one final one on market share, in terms of the market share in different regions of your Foundry business, is your market positioning stronger in Northern Europe? Do you dominate more of that market than, say, other countries, or is that not the case? I would never say we dominate the market, because we have competitors everywhere, including in Northern Europe. But historically, yes, the Foundry Division is as a the Northern Europe was and is a particular area of strength and presence. This is where we have our biggest plant worldwide, the Borken plant in Germany. A long tradition of a close relationship with some of the most important customers in Germany. So this is where we have also; it's one of the area where we have the strongest result. We have other areas of the world where we have strong presence, in South America, now growing very rapidly in India, and, so but, but yes, it is one of the regions where we have the importance of our presence is above average. Understood. That's very clear. Thank you. Thank you. The next question we have is from Mark Fielding of RBC. Please go ahead. Yes, morning. Just actually a quick follow-up to the answer you gave earlier when talking about M&A. I suppose, can you, you know, revisit your thoughts on the fact that, obviously, your net debt-to-EBITDA is gonna be below your target range at the year-end? And, and just more generally, how you think about future capital allocation. Thank you, Mark. I think the answer is in the question, if you allow me. So we have, as I said earlier, very disciplined, so we don't want to force ourselves to do M&A if there is no opportunity which fits our criteria. So, probably, relatively rapidly now, we will make a decision in terms of capital allocation, depending of if there are or not attractive M&A opportunities available. But we will not want to wait forever for this opportunity to be available. So we are probably nearing to the point where, together with the board, of course, we will make a choice. But it's a choice which we have been preparing for quite some time. And if in relatively close future no attractive M&A opportunity will present themselves, we'll probably think about how to get some money back to our shareholders, to bring back our net debt to EBITDA ratio a little bit closer to our comfort range. Thank you. There are no further questions on the conference line. I will now hand over to the management for closing remarks. Thank you very much for all of you for your attendance today. As usual, Mark and I remain with Rachel at your disposal if you have any questions. I wish you a very nice day, and I hope to see you all at our Capital Markets Day later this week on Thursday. Thank you very much, and goodbye.