Vesuvius plc Prospectus

9 Vesuvius may suffer losses if a counterparty were to fail to perform as contracted or if a material
customer failed to renew a contract on expiry of the contracted term
Vesuvius transacts business with and through a number of counterparties, including customers, suppliers
and insurers. The financial failure of one or more of Vesuvius’ key customers and suppliers may result in
financial loss, loss of future business and a shortage of raw material supplies. In managing the risks
inherent in its operations, Vesuvius transfers risk to insurers where cost effective and, accordingly, the
financial failure of one or more insurers used by Vesuvius may result in a financial loss to Vesuvius. Any
default by a material customer, supplier or insurer may have a material adverse effect on Vesuvius’ future
prospects, results of operations and financial condition. Vesuvius enters into contracts of various duration
with its customers. The failure by a material customer to renew a contract on expiry of the contracted term
may have a material adverse effect on Vesuvius’ future prospects, results of operations and financial
condition.
10 Future expenditure on compliance with environmental and health and safety laws and regulations may
materially adversely affect Vesuvius’ future prospects, financial position and results of operations
Vesuvius is subject to applicable laws and regulations in all of the jurisdictions in which it operates,
including those relating to pollution, the protection of the environment, human health and safety, the
manufacture of chemicals, the disposal of hazardous substances and waste materials and remediation of
any land or water contaminated by such substances. Violations of legal or other regulatory requirements
could result in restrictions on operations, the imposition of more stringent permitting conditions, damages,
fines or other sanctions, all of which may have a material adverse effect on Vesuvius’ future prospects,
financial position and results of operations. While the Vesuvius Board believes that the current and
expected expenditures and risks connected with these and potential future liabilities are unlikely to impair
Vesuvius’ financial position materially, there can be no assurance that the costs related to such liabilities
will not exceed current or future financial and insurance provisions which may result in a material adverse
effect on Vesuvius’ future prospects, financial position and results of operations.
11 The loss of key personnel or the failure to attract, develop or retain skilled or qualified employees could
negatively impact Vesuvius’ business
Vesuvius depends on the capabilities and performance of its executive officers and employees. The failure
to attract or retain qualified employees could impact Vesuvius’ business and have a material adverse effect
on its financial condition and operating results. Further, the loss of key personnel, particularly where any
such personnel join an existing or newly established competitor of Vesuvius, may negatively impact
Vesuvius’ business.
12 Vesuvius may be adversely affected by changes to tax legislation or its interpretation or increases in
effective tax rates in the jurisdictions in which Vesuvius operates
Vesuvius operates in multiple jurisdictions and its profits are taxed according to the tax laws of such
jurisdictions. Vesuvius’ effective tax rate may be affected by changes in, or interpretations of, tax laws in
any given jurisdiction, including those relating to the utilisation of tax credit carry forwards, changes in
geographical allocation of income and expense, and changes in the Board’s assessment of matters such as
the ability to realise deferred tax assets. Vesuvius’ effective income tax rates in a given financial year
reflect a variety of factors that may not be present in the succeeding financial year or years.
13 The funding level of Vesuvius’ pension plans may be detrimentally affected by adverse changes in the
actuarial assumptions underlying the plan liabilities and/or a decline in the market value of plan
investments
Vesuvius operates defined benefit pension plans worldwide, but principally in the UK and the US, the total
worldwide valuation of which resulted in a net deficit, calculated on an IAS 19 basis, of £54.7 million as at
30 June 2012. Vesuvius also operates defined contribution pension schemes for its current and former UK,
US and overseas employees. The funding position of the defined benefit pension plans will fluctuate
depending on market conditions, investment performance, changes to actuarial funding assumptions,
changes in the rate of inflation and interest rates and Vesuvius’ financial position.
Vesuvius’ largest defined benefit pension plans are in the UK and the US, each of which is closed to new
members and closed to further benefit accrual for existing members. Vesuvius’ most significant UK
pension plan is the Cookson Group Pension Plan (the “UK Plan”). Following the Demerger, the UK Plan
16