Vesuvius plc Prospectus

3 Vesuvius may lose customers to competitors with new or alternative technologies if its businesses do not
adequately adapt to market developments
Vesuvius’ continued success depends upon its ability to continue to develop and produce new and
enhanced products and services on a cost-effective and timely basis in accordance with customer demands.
In addition, the markets for Vesuvius’ products are competitive in terms of pricing, product and service
quality, product development and introduction time, customer service, financing terms and other similar
factors. Vesuvius invests significant amounts in research and development to sustain its competitive
advantage and takes appropriate action to ensure that its cost base remains competitive. If Vesuvius fails to
adequately adapt to market developments related to new products and technology, it could lose customers
to suppliers with better or less costly products. Alternatively or additionally, Vesuvius could fail to achieve
its anticipated returns on the amounts it has invested in research and development. These outcomes could
have a material adverse effect on Vesuvius’ future prospects, financial position and results of operations.
4 If Vesuvius fails or is unable to protect, maintain and enforce its intellectual property, it may lose its
exclusive right to use its technologies and processes
Throughout its operations, Vesuvius relies on a combination of trade marks, copyrights, patents, trade
secrets and confidentiality procedures and agreements to protect its proprietary rights. If Vesuvius fails to,
is unable to protect, maintain and enforce, or is the subject of theft or infringement of, its existing
intellectual property, this may result in the loss of Vesuvius’ exclusive right to use technologies and
processes which are included or used in its businesses. There can be no guarantee that Vesuvius’
procedures and contractual provisions will be adequate to prevent the misappropriation, infringement or
other unauthorised use of Vesuvius’ intellectual property by third parties. In addition, the protection
provided by these intellectual property rights varies between the countries in which Vesuvius operates and
the laws of certain countries in which Vesuvius operates may not protect proprietary rights to the same
extent as those of, for example, the United Kingdom or the United States.
Vesuvius has registered the marks VESUVIUS and FOSECO in the key territories in which it operates.
Vesuvius has also obtained trade mark protection through the registration of individual product brand
names, such as Turbostop ® impact pads, Sedex ® filters, and Solar ® crucibles, in select jurisdictions.
Vesuvius has applied for patents in a number of jurisdictions, including in Europe and the US. These
applications are at various stages in the application process and patents may not be issued, or may be
issued in a form narrower than Vesuvius’ applications. If some of the patents or patent applications are not
granted, expire or are successfully disputed, Vesuvius may be unable to exclude competitors from using
the technology covered by them. Vesuvius has also acquired patents and patent applications from other
parties. Vesuvius could become subject to lawsuits in which it is alleged that it has infringed the
intellectual property rights of others or Vesuvius could commence lawsuits against others whom it believes
are infringing upon its rights. Vesuvius’ involvement in intellectual property litigation could result in
significant expense, materially adversely affecting the development and sale of the challenged product or
intellectual property and/or diverting the efforts of Vesuvius’ technical and management personnel with no
guarantee of success.
5 Vesuvius’ financial condition may be materially adversely affected by any significant liabilities for any
defects of its products or services
A large proportion of Vesuvius’ products are used in the manufacturing processes of Vesuvius’ customers.
If a product of Vesuvius or of one of its customers does not conform to agreed specifications or is
otherwise defective, Vesuvius may be subject to claims by its customers arising from end-product defects,
injury to individuals or property damage or other such claims. Legal claims have been brought against
certain Vesuvius companies by third parties alleging that persons have been harmed by exposure to
hazardous materials used by those companies in the manufacture of industrial and consumer products, and
further claims may be brought in the future. Certain of Vesuvius’ subsidiaries are subject to suits,
predominantly in the United States, relating to a small number of products containing asbestos
manufactured prior to the acquisition of those subsidiaries by Vesuvius. These suits usually also name
many other product manufacturers. To date, Vesuvius is not aware of there being any liability verdicts
against any of these subsidiaries. A number of lawsuits have been withdrawn, dismissed or settled and the
amount paid, including costs, so far has not had a material adverse effect on Vesuvius’ financial position or
results of operations.
Provision is made for amounts payable in respect of known or probable costs. The Board believes that,
taking into account legal advice received, as well as Vesuvius’ insurance arrangements, indemnification
14