Vesuvius plc Prospectus

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Element Disclosure requirement E.3 Terms and conditions of the offer Not applicable. This document does not constitute an offer or invitation to any person to subscribe for or purchase any shares in Vesuvius. It is intended solely for holders of Cookson Shares. E.4 Material interests Certain of the Vesuvius Directors have shareholding interests in Cookson. So far as the Vesuvius Directors are aware, no other person involved in the Scheme or the Demerger has any interest, including conflicting ones, that is material to the Scheme or the Demerger. E.5 Selling shareholder and lock-ups Not applicable. There are no selling shareholders or lock-up arrangements in connection with the Proposals. E.6 Resulting dilution Not applicable. E.7 Estimated expenses charged to the investor by the Company Not applicable. 12
PART II RISK FACTORS In addition to the other information set out in this document, the following risk factors should be carefully considered. If one or more of the following risks were to arise, Vesuvius’ business, results of operations, financial condition, prospects and/or Vesuvius plc’s share price could be materially and adversely affected to the detriment of Vesuvius plc and its shareholders, and investors could lose all or part of their investment. The risks set out below may not be exhaustive and do not necessarily comprise all of the risks associated with an investment in Vesuvius plc and the Vesuvius Shares. Additional risks and uncertainties not currently known to Vesuvius or which Vesuvius currently deems immaterial may arise or become material in the future and may have a material adverse effect on the financial condition or business of Vesuvius. During the period between the Scheme Effective Time and the Demerger Effective Time (which is expected to be a period of three days), Alent will be part of Vesuvius. A description of certain risks relating to Alent is incorporated into this document by reference to Part II: “Risk Factors” of the Alent Prospectus and the related definitions contained in Part XV “Definitions” of the Alent Prospectus. Alent will no longer be part of Vesuvius with effect from the Demerger Effective Time. You should consult a legal adviser, an independent financial adviser duly authorised under the FSMA or a tax adviser for legal, financial or tax advice. SECTION A: RISKS RELATING TO VESUVIUS 1 The financial performance and financial position of Vesuvius may be adversely affected by a significant weakening in demand in its core end-markets and general macro-economic conditions The global macro-economic environment is increasingly uncertain. Average monthly steel production volumes in July and August experienced a decline that was more pronounced than the normal seasonal downturn. Furthermore, in September, rather than the normal seasonal strengthening, there were signs of some further weakening in steel production volume trends, particularly in the US, Europe and Brazil. The foundry market has experienced a further general slowdown since the end of the second quarter of 2012. In addition to clear evidence of slowing worldwide economic growth, concerns about the stability of the Eurozone and the European financial/banking system have intensified. It is, as yet, unclear to what extent the seeming insolvency of Greece and the fiscal weakness of other countries such as Ireland, Italy, Portugal and Spain will impact the euro currency and the banking system. There is therefore considerable uncertainty as to how the Eurozone crisis, the global financial crisis and the wider economic situation will develop over time. Vesuvius supplies predominantly consumable products, on short lead times, to the global steel, foundry and precious metals industries. As such, Vesuvius’ expectations of future trading are based upon the Directors’ assessment of end-market conditions, which conditions are subject to some uncertainty. In the event that end-market conditions suffer significant deterioration, Vesuvius may experience reductions in trading activity, a lower share price, the financial failure of one or more of its key customers and suppliers, asset impairments, lower profitability and/or a material adverse impact on its financial position. 2 Vesuvius’ financial position and trading results may be adversely affected by fluctuations in exchange rates, interest rates or the rate of inflation Vesuvius has no control over changes in foreign currency exchange rates, or inflation and interest rates. In the normal course of business, many transactions are carried out by Vesuvius’ businesses in currencies other than their reporting currency, leading to transactional foreign exchange risk, although this is not material for Vesuvius overall. Vesuvius is exposed to the effect of translating the results and net assets of its overseas subsidiaries into sterling. Significant fluctuations in the value of currencies in which it operates, in interest rates or in rates of inflation may adversely impact Vesuvius’ financial position and results of operations. It is Vesuvius’ policy that foreign currency transaction exposures that are material at an individual operating unit level are hedged using appropriate instruments such as forward foreign exchange contracts. Vesuvius does not currently hedge translational impact on the income statements of overseas subsidiaries. While Vesuvius attempts to manage transactional and balance sheet translation risks associated with currency exchange rate fluctuations through its hedging and funding policies, fluctuations in the value of currencies in which it operates may nevertheless adversely impact Vesuvius’ financial position and results of operations. Where appropriate, Vesuvius manages its interest rate exposures using interest rate swap agreements or other instruments. 13
Page 1 and 2: Prospectus dated 1 November 2012 TH
Page 3 and 4: The Vesuvius Shares have not been a
Page 5 and 6: PART I SUMMARY Summaries are made u
Page 7 and 8: Element Disclosure requirement B.6
Page 9 and 10: Element Disclosure requirement SUMM
Page 11: Element Disclosure requirement Sect
Page 15 and 16: provided by former owners of certai
Page 17 and 18: will remain with Vesuvius and all p
Page 19 and 20: things, taxes and transitional serv
Page 21 and 22: PART III IMPORTANT INFORMATION Pres
Page 23 and 24: (b) determine that such Vesuvius Sh
Page 25 and 26: (2) If either the Court Meeting or
Page 27 and 28: SPONSOR AND FINANCIAL ADVISER Roths
Page 29 and 30: PART VII INFORMATION ON VESUVIUS Yo
Page 31 and 32: 80 70 60 50 40 30 20 10 0 Source WS
Page 33 and 34: Foundry division sales (£ per tonn
Page 35 and 36: extreme thermo-mechanical stresses
Page 37 and 38: facilities in, for example, Poland,
Page 39 and 40: customer base is evidenced by the f
Page 41 and 42: 28 per cent. of Vesuvius’ revenue
Page 43 and 44: 2.2.4 Funding of PMP inventory In l
Page 45 and 46: PART VIII OPERATING AND FINANCIAL R
Page 47 and 48: Vesuvius’ products are largely si
Page 49 and 50: Net sales value Net sales value is
Page 51 and 52: For the year ending 31 December 201
Page 53 and 54: continued into 2012 with demand for
Page 55 and 56: Following the Demerger, the UK Plan
Page 57 and 58: 1.4 Results of operations FY 2009 F
Page 59 and 60: The Foundry business facility in Pi
Page 61 and 62: Vesuvius has a policy of broadly ma
Page 63 and 64:
Headline profit before tax Headline
Page 65 and 66:
in the historical financial informa
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Net profit on disposal of continuin
Page 69 and 70:
3 Liquidity and capital resources T
Page 71 and 72:
Acquisition of subsidiaries: a cash
Page 73 and 74:
3.1.3 Comparison of the year ended
Page 75 and 76:
3.3 Indebtedness HY 2011 (unaudited
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4.3 Liquidity risk Liquidity risk i
Page 79 and 80:
stream of income exactly matching f
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PART IX HISTORICAL FINANCIAL INFORM
Page 83 and 84:
Statement of comprehensive income H
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Balance sheet Notes HY 2011 HY 2012
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Notes to the condensed financial st
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6 Amortisation of intangible assets
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For the purposes of calculating dil
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15 Exchange rates Vesuvius reports
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SECTION B: AUDITED CONSOLIDATED FIN
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Statement of cash flows FY 2009 FY
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Changes in invested capital FY 2009
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2.2 Other principles applied In add
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• The estimates and underlying as
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(b) Deferred tax Vesuvius has recog
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5.2 Business segments For reporting
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5.4 Geographic analysis of external
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10 Finance costs and finance income
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FY 2009 FY 2010 FY 2011 (£m) Excep
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From 1 April 2012, the UK corporati
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15 Reconciliation of movement in ne
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Freehold property Leasehold propert
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FY 2009 FY 2010 FY 2011 (£m) Steel
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historical loss experience. Histori
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ate swaps designated as cash flow h
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• to have available the necessary
Page 129 and 130:
The tables below show the net unhed
Page 131 and 132:
charged in the income statement and
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In July 2010 the UK government anno
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(b) Other principal actuarial valua
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25.4 Defined benefit obligation The
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Defined benefit pension plans Other
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26 Share-based payments In accordan
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28.2 Operating lease commitments FY
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31 Dividends FY 2009 FY 2010 FY 201
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The acquisition of Metallurgica was
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(2) The annual incentive bonuses aw
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Allocations outstanding as at 1 Jan
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Nick Salmon Allocations outstanding
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mid-market closing price of Cookson
Page 157 and 158:
Declaration For the purposes of Pro
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Notes: (1) The financial informatio
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Our work has not been carried out i
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Non-United Kingdom resident shareho
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is subject to US federal income tax
Page 167 and 168:
PART XII DIRECTORS, RESPONSIBLE PER
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3 Directors’ interests 3.1 Direct
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The overall intention is that this
Page 173 and 174:
François Wanecq François Wanecq i
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7.3 Board committees The principal
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Vesuvius Director Current directors
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PART XIII ADDITIONAL INFORMATION 1
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as if section 561(1) of the Compani
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2.10 The Vesuvius Shares are in reg
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meeting of the holders of the share
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Vesuvius Directors may be appointed
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Any Director who holds any executiv
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6.2 Save as disclosed in this parag
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9.1.4 Cookson stakeholder scheme Th
Page 195 and 196:
There are two types of award that t
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discretionary bonus under any discr
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Participants who, at the request of
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Restricted share awards These are s
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If a participant ceases employment
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consigned precious metals is establ
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14 Significant subsidiaries and joi
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18.5 Rothschild, whose address is N
Page 211 and 212:
PART XV DEFINITIONS The following d
Page 213 and 214:
Cookson Shares the ordinary shares
Page 215 and 216:
Pension Insurance Corporation Pensi
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Vesuvius Articles the articles of a
Page 219 and 220:
SOLAR CRUCIBLE a brand name for a l
Page 222:
Printed by RR Donnelley 410488
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Vesuvius plc Prospectus

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