Vesuvius cuts 2026 expectations as Steel division problems bite

What has Vesuvius announced?

Vesuvius has warned that temporary operational problems in its Steel division are having a greater impact than management previously expected.

The molten metal flow engineering specialist now expects trading profit of approximately £74 million for the first half of 2026. It also says full-year trading profit should be only slightly ahead of the 2025 result on a constant-currency basis.

Constant currency means comparing performance using consistent foreign exchange rates, removing the effect of currency movements. This is important for Vesuvius because it has a worldwide manufacturing and customer network.

The updated guidance represents a more cautious outlook than investors received at the company's previous trading update on 28 May 2026. Alongside the Steel division's operational difficulties, the Advanced Refractories business is facing a challenging market, particularly in Europe.

Vesuvius's key figures

Measure	Figure
Expected H1 2026 trading profit	Approximately £74 million
FY2025 reported revenue	£1,809.5 million
FY2025 re-translated revenue	£1,800.9 million
FY2025 reported trading profit	£151.1 million
FY2025 re-translated trading profit	£147.0 million
FY2025 reported return on sales	8.4%
FY2025 re-translated return on sales	8.2%
New FY2026 guidance	Trading profit slightly ahead of FY2025 at constant currency

The re-translated 2025 figures use a hybrid exchange rate. Vesuvius has applied average H1 2026 foreign exchange rates for six months and the spot rates at 30 June 2026 for the other six months.

That produces a more relevant comparison for the current guidance. Rather than comparing 2026 with reported FY2025 trading profit of £151.1 million, the company is pointing investors towards the re-translated figure of £147.0 million.

Why the profit outlook has weakened

There are two separate pressures in the update.

Steel division operational issues

Vesuvius says operational issues in its Steel division have continued since the May update and are causing more damage than anticipated.

The announcement does not disclose the exact nature of these problems, their location or their individual financial cost. That lack of detail makes it difficult to judge how straightforward the repair work will be.

Management describes the issues as temporary, says they are being addressed and expects them to be resolved by the end of 2026. That is reassuring, but it also suggests the effects could remain visible through much of the second half.

For investors, execution is now a central issue. The important test will be whether management can demonstrate steady operational improvement without the resolution timetable slipping again.

A difficult market for Advanced Refractories

Advanced Refractories is also experiencing challenging trading conditions, particularly in Europe.

Refractories are heat-resistant products used to protect industrial equipment operating at very high temperatures. They are consumable products, meaning customers need to replace them over time, but demand can still be influenced by activity levels across the industries Vesuvius serves.

The announcement does not quantify the decline in demand, identify individual countries or provide divisional revenue and profit figures. It also does not say when management expects the European trading environment to improve.

This part of the update may therefore be harder for Vesuvius to control than its internal operational problems. The company can act directly on manufacturing and execution issues, whereas weaker external markets depend on customer activity.

How demanding is the second half?

Expected H1 trading profit of approximately £74 million is just over half of the re-translated FY2025 total of £147.0 million.

To finish slightly ahead of that 2025 benchmark, Vesuvius will need a second-half contribution broadly around the first-half level, with the precise requirement depending on what management means by "slightly ahead".

That does not suggest an extreme second-half recovery is required. However, it leaves limited room for additional disruption, especially if Steel division problems continue towards the end of the year or European demand weakens further.

The guidance also does not quantify the expected full-year trading profit. Investors have been given a direction of travel rather than a firm numerical range.

What looks positive for shareholders?

There are still several constructive points in the announcement:

• Vesuvius expects full-year trading profit to remain slightly above FY2025 on a constant-currency basis.
• Management believes the Steel division problems are temporary rather than structural.
• The company expects those operational issues to be resolved by the end of 2026.
• Expected H1 trading profit of approximately £74 million means Vesuvius remains profitable despite the disruption and difficult markets.

The company's global footprint and position in specialised, high-temperature industrial processes also remain central to its business model. Vesuvius supplies customised flow-control products, advanced refractories, consumables and related technical services.

However, the update does not provide evidence that these competitive strengths are currently offsetting the operational and market pressures. That assessment will need to wait for the detailed interim results.

What are the main risks?

The most immediate risk is that the Steel division's operational issues take longer to fix or cost more than currently anticipated. The impact has already proved greater than management expected at the time of the May update.

A second risk is continued weakness in Advanced Refractories, particularly in Europe. No recovery timetable has been disclosed.

Currency movements are another factor. The full-year guidance is given on a constant-currency basis, so the eventual reported result could differ after translating overseas earnings into sterling.

The announcement does not disclose H1 revenue, cash flow, net debt, exceptional costs, dividend plans or divisional profitability. Investors therefore have only a partial picture of the group's financial performance.

What to watch in the half-year results

Vesuvius is due to publish its half-year results at 7.00am on Thursday 30 July 2026.

The most useful details will be the causes and financial cost of the Steel division problems, evidence that corrective actions are working, and the expected pace of improvement during H2.

Investors should also look for divisional margin data, regional commentary on Advanced Refractories and a clearer indication of what "slightly ahead" means for full-year trading profit.

Cash generation and the balance sheet will matter too, particularly if the operational fixes require additional spending or working capital. None of those figures was disclosed in this trading statement.

For now, Vesuvius is still guiding for modest constant-currency profit growth in 2026. The concern is that its room for further disappointment appears narrower, making the upcoming results and year-end resolution target especially important.