Vesuvius delivered a strong topline print... Under the backdrop of improving steel production trends and an easy comp (-18% organic sales declines in H1 20) Vesuvius delivered 18% Group organic sales growth in H1''21. Sales beat Consensus expectations by 7%, with both divisions contributing to the beat. Further, we estimate that organic sales growth in Q2''21 was c.31%, implying that Group sales in Q2''21 were only c.3% below Q2''19 on an organic basis (Q1''21 sales were c.6% below Q1''19). ...however freight costs weighed on profitability Despite the stronger topline print, headline profit narrowly missed Consensus expectations (1% below) as surging freight costs weighed on margins (particularly in Steel). Vesuvius called out a GBP10m headwind related to freight costs in H1 and cautioned that freight rates are likely to remain elevated in H2. Encouragingly, however, it is putting through price increases and seems to be managing the situation better than peers (RHI). Vesuvius has already put though a first round of price increases (with full benefits expected to flow through in H2) and are now also introducing a second round of increases, with the CEO on the conference call even suggesting that there may be scope for a third increase, if inflationary pressures intensify. Looking forward, the demand outlook remains positive Looking beyond current elevated freight rates, which in our view, are unlikely to be sustained through ''22 (we currently expect a partial reversal in our FY''22 profit bridge), the demand backdrop remains encouraging. Steel inventories are at historical lows, whilst end user demand remains elevated and above steel production, this should bode well for an eventual restocking cycle playing out and could support stronger H2 demand than Consensus expects or guidance implies. We update our estimates for latest trading; our TP moves to 630p (from 640p) We update our estimates for latest trading and FX leading to c.-5/+2%...