Sales recovered in Q3 and the Group made an encouraging start to Q4... Group organic sales growth recovered in Q3, with YoY declines moderating to -14% (compared to -26% in Q2). In addition, it should be noted that YoY sales only declined 7.5% in October, with Vesuvius highlighting on its Q3 conference call that it expects November to trend similarly, and that its end markets were clearly in ''recovery mode''. ...yet Vesuvius only guides to EBITA that is in-line with Consensus expectations Despite the encouraging start to Q4, Vesuvius only guides to Headline EBITA20e that is ''broadly in-line'' with Consensus expectations (c. GBP99mn). Considering that Consensus models c.14% organic sales decline for H2, and that organic sales only declined by c. 7% YoY in October, full year guidance seems rather conservative. Indeed, should we consider a scenario where Vesuvius is able to contain drop through to a level that is similar to that seen in H1 (c.30% / 50% excluding cost savings) then we think that sales would have to decline by c.-17% across November-December to prevent Vesuvius from beating the new guidance. Alternatively, Vesuvius would need to fall short of its targeted cost savings. We view both scenarios as less than likely and hence believe Vesuvius should beat at the full year print. Inventory levels at customers are low; Vesuvius could benefit from a restocking cycle In another encouraging sign, Vesuvius commented that refractory inventory levels at its customers are low. Management highlighted that the level of steel inventories at producers is also low. Taken together this implies that Vesuvius should benefit relatively quickly from underlying demand improving in its end markets. Further, the potential for customer restocking, whilst downplayed by Management, should not be ruled out; this could become a further tailwind in early 2021. Updating estimates; Outperform rating reiterated; TP moves up to 500p We update our estimates...