Vesuvius Regulatory News (VSVS)

2 August 2013

Half Year Results for the six months ended 30 June 2013

Solid performance in generally stable market conditions

Group highlights (1) :

·; Revenue £773m, (H1 2012: £819m; H2 2012: £729m)

·; Trading profit £71m, (H1 2012: £80m; H2 2012: £51m)

·; Return on sales 9.2% (H1 2012: 9.7%; H2 2012: 7.1%)

·; Headline EPS of 15.9 pence (H1 2012 pro-forma(2) : 16.5 pence)

·; Free cash flow £38.2m (H1 2012: £2.2m)

·; Net debt £273m at 30 June (31 December 2012: £295m)

·; Interim dividend declared of 4.75 pence per share

·; Successful portfolio rationalisation including sale of Precious Metals Processing division for €56.8m

·; Share repurchase programme of up to £30m initiated on 4 June; £19.3m repurchased by 31 July

·; Triennial pension valuation confirms UK Plan fully funded; compulsory contributions ceased

François Wanecq, Chief Executive, commented:

"Vesuvius has delivered a solid performance in the first half, in a trading environment that was generally stable but still operating at a substantially lower level than in the first half of last year. All of our businesses performed better than, or in-line with, their main end-markets.

Trading margins across the Group reflected our revenue performance, as well as the impact of the self-help initiatives we have implemented. Trading margins recovered somewhat following the substantial falls we saw in the second half of last year, although they are still below the levels achieved during the same period last year. In Steel, trading margins benefited from the recent sale of low-margin businesses, and margins in Foundry were enhanced by our decision to exit the loss-making Solar Crucibles business. Today we are announcing further portfolio rationalisation, with the disposal of our low-margin construction and installation business in Canada, following the disposal of VGT Dyko in the first quarter. Our increasing focus on cash and working capital management across all our businesses led to a cash conversion rate in excess of 100%.

Following completion of the sale of the Precious Metals Processing division, Vesuvius is now a focused molten metal engineering company. We are well positioned to deliver revenue growth ahead of our end-markets over the medium term, and we continue to implement a range of actions to improve further our trading margins. I am pleased to announce the first dividend to be declared as Vesuvius. This, together with the share buy-back, confirms our commitment to deliver superior cash returns to shareholders."

(1) Continuing operations, on an as reported basis, excluding all separately reported items and as restated for IAS19 (revised) (Note 1.8). See Note 20 for non-GAAP measures definitions.

(2) 2012 pro-forma, after adjustments to the interest charge to reflect retrospectively the allocation of debt on demerger between Vesuvius and Alent.

Outlook

We will continue to implement a range of operational initiatives across all of our businesses, to improve our trading margins and maintain our strong cash generation, and we believe that over the medium term these actions should help to drive trading margins towards the levels achieved previously.

Visibility remains limited in our end-markets and activity levels after the normal summer shut-downs in Europe in particular will be a major indicator of underlying end-market conditions in the second half.

Returns to shareholders

The Board intends to deliver attractive returns to shareholders, including long-term dividend growth, and has declared an interim dividend of 4.75 pence per share, payable on 7 October 2013 to shareholders on the register at 30 August 2013.

During the period the Company paid £26.4m in dividends, representing the final dividend for 2012, with a further £0.8m being paid to non-controlling interests, and commenced an on-market share repurchase programme to return up to £30m of the proceeds from the Precious Metals Processing division to shareholders. As at 31 July 2013, £19.3m has been returned to shareholders through the share repurchase programme.

CHIEF EXECUTIVE'S STATEMENT

Business overview

The sale of the Precious Metals Processing division at the end of May completed the structural transformation of the Group following the demerger at the end of 2012, and Vesuvius is now a fully focused molten metal engineering company, principally serving the global steel and foundry industries.

The disposal of Precious Metals generated proceeds of €56.8m and, following the Annual General Meeting, at the beginning of June the Group initiated a programme to return up to £30m of cash to shareholders through on-market repurchases of shares. By the end of the first half a total of 2.8 million shares had been purchased for a total consideration of £10.3m; at close of business on 31 July 5 million shares had been purchased for £19.3m.

The trading environment in the first half of 2013 was stable overall, although there were significant geographic and sector variations across both the steel and foundry end-markets. Generally there was no further deterioration in end-market demand, following the sharp falls seen in the third quarter of 2012. Trading did improve noticeably through the second quarter, but this is typically the strongest period for Vesuvius, before customer summer shut-downs in Europe.

At the same time, it is evident that customer confidence has not yet returned fully, and there are no clear signs of re-stocking building up through the supply chain in either steel or foundry markets. Vesuvius has limited forward visibility of demand, and the most important driver of performance for the rest of the year will be the levels of activity seen in September, when major steel and foundry customers in Europe usually resume full operations after the summer.

Steel Flow Control delivered a good performance, in the context of steel production volumes in most markets being lower than in the same period in 2012. This reflected the impact of the 2012 acquisition of Metallurgica, as well as some 2012 price increases, product sales mix improvements, increased penetration of Vesuvius' technology in some markets, and a more stable raw material pricing environment.

Advanced Refractories delivered a solid performance and in most places, excluding the impact of disposals, revenue was ahead of or in line with the underlying end-markets. Revenue was particularly strong in the Indian and South East Asian markets, driven by improvements in the product sales mix.

A small, low margin refractory installation business in Canada was sold shortly after the end of the first half. This operation generated revenue of £9.5m in the first half, and the disposal is in line with the strategy of moving the Advanced Refractories business up the value chain. As part of the disposal, Vesuvius has entered into a materials supply agreement with the purchaser.

Trading margins in the Steel division reflected the year-on-year reductions in revenue in both businesses, significantly offset by the disposal of the low-margin Andreco Hurll and VGT Dyko refractory businesses, as well as the initial impact of the self-help cost management actions initiated in 2012 across the division.

Foundry produced a solid performance, in mixed end-market conditions, and in most places Foundry revenues were in line with the underlying end-market performance. Production of trucks and light vehicles was lower in most markets than in the same period of 2012, although some recovery was seen in certain geographies as the period progressed. However this was offset by weakness seen in other end-markets, such as mining and railways.

Foundry margins benefitted from the closure of the loss-making Solar Crucibles operations in China at the end of 2012. Excluding the impact of Solar Crucibles, Foundry margins broadly reflected the year-on-year reduction in revenues.

A focus on improved cash and working capital management across all Group businesses led to cash inflows from reduced working capital, and significantly improved trading profit cash conversion, compared to the first half of 2012.

The recent triennial valuation of the Group's UK defined benefit pension plan established that this plan was fully funded as at 31 December 2012. This follows the significant de-risking initiatives undertaken over the last ten years, and the Group has therefore agreed with the Trustee that the current cash contributions of £4.7m per annum will cease immediately, to be replaced by voluntary contributions of £2.0m per annum, starting in January 2014.

Group trading performance

Group revenue from continuing operations was £773m, a reduction of 5.7% compared to the same period last year, reflecting the weaker conditions year-on-year in the global steel and foundry end-markets. On an underlying basis, adjusting for all acquisitions, disposals and currency differences, first half Group revenue was 5.5% lower than in the same period last year.

However, Group revenue was 6.1% higher than in the second half of 2012, as end-markets generally stabilised and the rapid de-stocking seen in the steel and foundry industries, following the sharp falls in demand in the second half of 2012, came to an end. On an underlying basis, adjusting for all acquisitions, disposals and currency differences, the Group's revenue in the first half was 3.5% higher than in the second half of last year.

Trading profit from continuing operations in the first half was £71m, a decline of 11% on the first half of 2012 (12% on an underlying basis), but 37% higher than the second half of last year (34% on an underlying basis). The first half trading margin was 9.2%, compared to 9.7% in the first half of last year and 7.1% in the second half of 2012. The impact on margins of the year-on-year decline in revenue was partially offset by the disposal of two low-margin refractory businesses, the decision at the end of 2012 to exit the Solar Crucibles business, and the initial benefit of a range of smaller-scale self-help operational actions. The loss-making Solar Crucibles operations in China ceased activity at the end of 2012.

Steel division

World steel production in the first half of 2013 was 2.1% higher than during the same period last year, with crude steel production growth of 7.7% in China more than offsetting the 2.7% decline in production outside China. The Europe and NAFTA regions together account for more than 70% of Vesuvius' Steel division revenue, and steel production during the first half of 2013 declined year-on-year by 3.9% in EMEA and by 5.4% in the Americas.

Against this backdrop of lower steel production in its main markets, Vesuvius' Steel division revenues in the first half fell by 3.2% compared to the first half of 2012, to £514m. On an underlying basis, Steel division revenue in the first half was 2.9% lower year-on-year.

The trading profit of the Steel division declined by 16.1% year-on-year to £43m, partially reflecting the reduction in the division's revenue. The trading margin was 8.3%, compared to 9.6% in the same period last year and 6.5% in the second half of 2012. The sequential half-on-half margin improvement partially reflected the disposal of the low-margin Andreco Hurll and VGT Dyko businesses, as well as the impact of the self-help actions implemented following the downturn in mid-2012, such as more efficient capacity utilisation and flexible working practices.

Steel Flow Control

Global steel production represents almost 100% of the end-market for this business. Against the backdrop of lower steel production in its main geographical markets, Vesuvius' Steel Flow Control business revenue in the first half was flat year-on-year at £279m. This mainly reflected the acquisition of Metallurgica in March 2012, while other factors offsetting the decline in steel production included improved penetration of Vesuvius' technology and positive developments in sales mix. On an underlying basis, Steel Flow Control revenue in the first half was 3.6% lower than in the same period last year.

Steel Flow Control revenue in all major regions was broadly flat in the first half, compared to the same period last year.

Steel Flow Control revenue improved by 1.7% in the EMEA region, where crude steel production fell by 3.9% year-on-year. As well as the impact of the Metallurgica acquisition, this reflected some increased penetration of Vesuvius' technology and solutions.

Steel Flow Control also performed well in the Americas region. In South America the fall in steel production was offset by an improved product sales mix. Steel production in NAFTA was 5.8% lower than in the same period in 2012, affected by production outages for maintenance and industrial disputes at some customers and the closure of one producer. However, the impact on Vesuvius revenue in this region was partially mitigated by the continuing benefit of value pricing.

In the Asia region, crude steel production was up in all the main markets except South Korea, and Steel Flow Control revenues in all these markets broadly reflected the underlying market conditions except in China. Revenues were particularly strong in India, where steel production grew by 2.5% and an expansion of steel production capacity utilising Vesuvius' technology and solutions led to a higher value product sales mix.

Steel Flow Control revenue in China was down on the first half of last year but margins improved, with both factors reflecting the new country management's strategy of focusing on the higher quality segments of the Chinese steel production industry, and delivery of a higher value product mix to those customers. Steel Flow Control also benefitted from a more stable raw material pricing environment in China.

Advanced Refractories

Global steel represents around three quarters of the end-market for the Advanced Refractories business, with other high temperature industrial process industries accounting for the remainder of the business's revenue. The strategy for Advanced Refractories is to improve profitability through driving higher value-added solutions for customers, and exiting product lines and businesses where returns are not acceptable.

Vesuvius' Advanced Refractories revenue declined by 7.0% to £235m, mainly reflecting the sale of the Andreco Hurll and VGT Dyko operations in 2012 and early 2013 respectively. On an underlying basis, first half revenue in Advanced Refractories was 2.0% lower than in the same period last year, due to softer markets in Europe and the Americas.

Lower revenue in the EMEA region mainly reflected the disposal of the VGT Dyko operation. In the Americas region, the pending sale of the low-margin construction operation in Canada resulted in reduced revenues.

In the Asia region, the sale of the Andreco Hurll business in 2012 accounted for all of the year-on-year reduction in revenue in the first half, while significantly enhancing the trading margin delivered in the region. The Advanced Refractories business delivered a good revenue and profit performance in India and South East Asia, driven by a successful focus on delivering higher value products to a higher quality customer base.

Foundry division

The heavy truck and light vehicle industries together represent almost half of the end-market for the Foundry division, with construction, power generation, agricultural and mining equipment and general engineering accounting for the remainder. The weakness in foundry end-markets seen in the second half of last year continued into early 2013. Excluding China, global production of light vehicles declined by 2.4% year-on-year in the first half, and heavy truck production is estimated to have fallen by almost 8%. Some casting end-markets began to show signs of improvement over the period, although foundries serving the mining industry started to report significantly softer market conditions towards the end of the period.

The Foundry division includes the Fused Silica business, which accounted for less than 10% of the division's total revenue in the first half. This included the Solar Crucibles business, which the Group decided to exit earlier this year. The loss-making business in China ceased activity at the end of 2012 and closed fully at the end of March. In the first half of 2012 Solar Crucibles accounted for revenue of £6m and incurred a trading loss of £6m; in the same period this year, Solar Crucibles revenue was £3m, and the winding down of the activities resulted in a break even position.

Foundry division revenue in the first half, excluding Solar Crucibles, was £256m, down 9.5% compared to the same period in 2012, reflecting the reduction in end-market activity. Trading profit was £28m, 19% lower than the first half of 2012 (excluding Solar Crucibles) due to the normal operational leverage seen in this business, but also reflecting some cost reductions and a better product sales mix. The Foundry trading margin was 10.9% compared to 12.2% (excluding Solar Crucibles) in the same period in 2012.

Vesuvius' regional Foundry revenues broadly reflected the trading conditions in the regional end-markets.

Heavy truck production in the first half in Europe is estimated to have fallen by around 10% year-on-year, and light vehicle production fell by 7.1%. The fall in vehicle production was particularly marked in the important Northern European markets, which represent the largest proportion of Foundry division sales in this region, and consequently Foundry division revenue in EMEA in the first half was down by 8.7% year-on-year.

Revenue in the Americas region was down by 11.2%, in line with the overall trading conditions in end-markets. Substantially reduced activity in the mining and railroad sectors in particular more than offset the growth seen in some of the region's vehicle markets. Revenue in the Asia region was down by 11.5%, again in line with the overall trading conditions in the end-markets.

The new Foundry division global R&D facility in the Netherlands, which will include an experimental foundry, remains on track to become fully operational by mid-2014.

FINANCIAL REVIEW

Restructuring

A restructuring charge of £3.0m was reported in the first half of 2013, representing mainly trailing costs related to the decision to exit the Solar Crucible business. A restructuring charge of £46.3m was incurred in 2012 in respect of the Solar Crucibles business.

Total cash spend on restructuring was £7.3m in the first half of 2013. The remaining provision for restructuring cash costs at the end of the period stood at £14.2m, of which approximately £5m is expected to be spent by the end of 2013.

Divestments

Completion of the sale of the Precious Metals Processing division to Heimerle + Meule GmbH, a subsidiary of L.Possehl & Co, mbH, was announced on 3 June 2013. The cash consideration of €56.8m was received on completion and is subject to customary closing balance sheet adjustments. The results of the Precious Metals Processing division, together with the net profit arising on the disposal, are reported within discontinued operations.

Capital expenditure additions

Capital expenditure on continuing businesses in the first half of 2013 was £18.9m (H1 2012: £19.1m), comprising £13.3m in the Steel division (H1 2012: £14.6m) and £5.6m in Foundry (H1 2012: £4.5m). Capital expenditure in the period represented a reinvestment rate of 1.0 times depreciation of £19.5m.

Net finance costs

Net interest payable on borrowings in the first half was £6.5m, a reduction of £4.5m compared with the first half of 2012, reflecting the reduction in the Group's overall debt level on demerger, together with a reduction in the average interest rate on borrowings following the repayment in May 2012 of US$190m of the Group's US Private Placement loan notes, which attracted an interest rate of 8.1%.

On a pro forma basis, finance costs for 2012 represent the estimated finance costs that would have been attributable to the Vesuvius' continuing operations had the demerger occurred on 1 January 2012. These were £8.2m for the first half and £14.4m for the full year.

Taxation

Based on the tax charge on ordinary activities from continuing operations of £16.5m, the Group's headline effective tax rate for the first half of 2013 was 26.5%.

Pensions

The significant amount of de-risking initiatives undertaken in relation to the Group's UK defined benefit plan ("the UK Plan") over the last ten years, culminating in the pensioner buy-in for £320m in 2012, has resulted in the UK plan being fully funded as at 31 December 2012, according to the latest triennial valuation recently approved by the UK Plan Trustee. As a consequence of this, the additional cash contributions of £4.7m per annum being paid by the Company ceased at the end of July 2013. However, the Company has agreed with the UK Plan Trustee to make voluntary contributions of £2.0m per annum, commencing in 2014, to continue to strengthen the position of the UK plan.

The total net deficit in all of the Group's pension and other post-retirement arrangements as at 30 June 2013 was £58m (31 December 2012: £69m).

The Group has adopted IAS19 (revised), Employee Benefits, and has restated prior year comparatives to reflect the position had the revised standard been in place throughout 2012. Administration costs previously reported as part of the Group's interest charge are now charged against trading profit, whilst the interest charge related to the Group's net pension liabilities has increased under the revised standard. The impact on the results previously reported for the first half of 2012 has been to reduce trading profit by £0.5m and to increase the interest charge by £0.1m.

The pension expense charged to trading profit in the first half of 2013 was £2.9m (H1 2012: £2.2m) and the net interest charge was £0.9m (H1 2012: £0.1m).

Working capital

The drive to reduce the level of working capital across all of Vesuvius' businesses continued into 2013, and in the first half there was a cash inflow from reduced working capital of £2.5m (HY 2012: £42.3m cash outflow). Average trade working capital to sales for the trailing twelve month period was 25.8%.

Cash flow

Free cash flow from continuing operations was £38.2m in the first half, compared to £2.2m in the same period in 2012.

Cash generated from continuing operations in the first half of 2013 (after capital expenditure but before outflows for restructuring, demerger costs and additional pension funding contributions) was £72.4m (H1 2012: £40.4m) which represents a cash conversion rate, relative to trading profit, of 102% (H1 2012: 51%; FY 2012: 100%).

Capital structure

On the completion of the disposal of its Precious Metals Processing division, the Group initiated an on-market share repurchase programme, to return up to £30m to shareholders. As at 30 June, £10.3m had been spent on the repurchase of 2.8m shares, at an average price of 369 pence per share.

As a consequence of entering into an irrevocable agreement with the Group's broker for the repurchase of up to £15m of shares during the Close Period which commenced on 30 June 2013, the Group financial statements include an accrual for the repurchase of £15m of shares, estimated to represent some 4.1m shares. These additional shares have been taken into account when calculating the weighted average number of shares used in the calculation of earnings per share for the period, although this had no impact on the reported EPS for the period.

Funding position and liquid resources

The Group is well funded, with £589m of committed debt facilities available, of which £229m was undrawn at 30 June. Of this, £425m is a syndicated revolving credit facility with 16 banks which expires in 2016. The remainder comprises US Private Placement notes, of which US$110m are repayable in 2017, with the remaining US$140m repayable in 2020.

Net debt at 30 June was £273m (31 December 2012: £295m). Net debt therefore remains well within existing banking covenants of 3.0 x EBITDA.

Risks and uncertainties

Throughout its global operations, Vesuvius faces various risks, both internal and external, which could have a material impact on the Group's long-term performance. Vesuvius manages the risks inherent in its operations in order to mitigate exposure to all forms of risk, where practical, and to transfer risk to insurers, where cost effective. On pages 58 to 61 of its 2012 Annual Report (a copy of which is available on Vesuvius' website at www.vesuvius.com), the Company sets out what the Directors regarded as being the principal risks and uncertainties facing the Group as at 28 March 2013 and which could have a material impact on the Group's long-term performance. Following the disposal of the Group's Precious Metals Processing division in May 2013, the former risk associated with the withdrawal or reduction of precious metal consignment arrangements, or increased precious metal prices, has now been removed. The Directors continue to regard the remaining principal risks and uncertainties therein noted as being those facing the Group which might impact the Group's operations during the remainder of the second half of 2013. These can be summarised as risks associated with:

• Significant weakening in demand in the Group's core end-markets;

• Fluctuations in exchange rates, interest rates or the rate of inflation;

• Loss of customers to competitors if its businesses do not adapt to market developments or protect, maintain and enforce their intellectual property;

• Significant liabilities for any defects of its products or services; and

• Adverse political, legal, regulatory and other developments in countries in which the Group operates.

For further information please contact:

Shareholder/analyst enquiries:

Vesuvius plc François Wanecq, Chief Executive +44 (0) 207 822 0000

Chris O'Shea, Chief Financial Officer +44 (0) 207 822 0000

Maddy Cox-Smith, Investor Relations Manager +44 (0) 207 822 0016

Tony Harrison, Group Head of Corporate Finance +44 (0) 207 822 0000

Media enquiries:

MHP Communications John Olsen/Ian Payne +44 (0) 203 128 8100

Vesuvius management will make a presentation to analysts and investors on 2 August 2013 at 9.00am (UK time). This will be broadcast live on Vesuvius' website, http://investors.vesuvius.com/investor-relations and an archive version of the presentation will be available on the website later that day. To participate in the conference call, please use the following dial in details:  +44(0)20 3427 1902; confirmation code 2370873.

Forward looking statements

This announcement contains certain forward looking statements which may include reference to one or more of the following: the Group's financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies or synergies, budgets, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives of management and other matters.

Statements in this announcement that are not historical facts are hereby identified as "forward looking statements". Such forward looking statements, including, without limitation, those relating to the future business prospects, revenue, working capital, liquidity, capital needs, interest costs and income, in each case relating to Vesuvius, wherever they occur in this announcement, are necessarily based on assumptions reflecting the views of Vesuvius and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward looking statements. Such forward looking statements should, therefore, be considered in light of various important factors. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward looking statements include without limitation: economic and business cycles; the terms and conditions of Vesuvius' financing arrangements; foreign currency rate fluctuations; competition in Vesuvius' principal markets; acquisitions or disposals of businesses or assets; and trends in Vesuvius' principal industries.

The foregoing list of important factors is not exhaustive. When relying on forward looking statements, careful consideration should be given to the foregoing factors and other uncertainties and events, as well as factors described in documents the Company files with the UK regulator from time to time including its annual reports and accounts.

Such forward looking statements speak only as of the date on which they are made. Except as required by the Rules of the UK Listing Authority and the London Stock Exchange and applicable law, Vesuvius undertakes no obligation to update publicly or revise any forward looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward looking events discussed in this announcement might not occur.

Vesuvius plc, 165 Fleet Street, London EC4A 2AE

Registered in England and Wales No. 8217766

www.vesuvius.com

Directors' responsibility statement

We confirm that to the best of our knowledge:

(a) The condensed financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU; and

(b) This half-yearly financial report includes a fair review of the information required by:

·; DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·; DTR 4.2.8R of the Disclosure and Transparency Rules, being related parties' transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the Group during that period; and any changes in the related parties' transactions described in the last annual report that could do so.

On behalf of the Board

Chris O'Shea

Chief Financial Officer

2 August 2013

Independent review report to Vesuvius plc

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-year financial report for the six months ended 30 June 2013 which comprises the condensed Group income statement, the condensed Group statement of comprehensive income, the condensed Group statement of cash flows, the condensed Group balance sheet, the condensed Group statement of changes in equity and the related explanatory notes. We have read the other information contained in the half-year financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.

Paul Korolkiewicz

for and on behalf of KPMG LLP

Chartered Accountants

15 Canada Square

London, E14 5GL

2 August 2013