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Tuesday, 19 November 2024
Bodycote plc
Resilient performance in challenging end markets
Bodycote, the world's leading provider of heat treatment and specialist thermal
processing services, issues a trading update covering the four month period from
1 July to 31 October 2024 ("the period").
Trading Summary
Revenue for the first ten months of the year was £643.4m, 1.0% higher on an
organic1 basis excluding energy related surcharges, which have fallen by £27m
year to date reflecting lower energy input costs.
In the four month period since 1 July, Group revenues grew by 0.2% organically,
excluding surcharges. Good growth has been delivered in our Aerospace and Energy
focused businesses, while conditions remain soft in Industrial Markets and
Automotive. We retain our focus on cost control and expect to make good progress
in full year headline operating margins. Operating profit for FY 2024 is
expected to be in line with market consensus.2
Organic1 revenue growth July 1 - Oct 31 2024 Year to date
2024
Group (excluding surcharges) 0.2% 1.0%
Group (including surcharges) -2.8% -3.1%
By process (excl. surcharges):
Specialist Technologies 7.1% 7.5%
Classical Heat Treatment -3.3% -2.2%
By market sector (excl. surcharges):
Aerospace & Defence 6.3% 11.4%
Automotive 0.5% -0.5%
Energy 11.9% 11.0%
Industrial Markets -6.3% -7.0%
Consumer, Medical and Other -11.3% -9.8%
The following commentary reflects organic growth1 excluding surcharges.
Growth in the period has been led by Specialist Technologies (+7.1%) with good
progress in S3P, Hot Isostatic Pressing and Surface Technology. We continue to
focus on driving increased penetration in these differentiated, high margin
technologies. Classical Heat Treatment revenues were lower (-3.3%) reflecting
the low level of global industrial activity that has continued in the second
half.
By end market, Aerospace & Defence revenues rose by 6.3% in the period with some
moderation in growth in Civil Aerospace versus the first half, as expected. This
reflected the impact of temporary supply chain rebalancing and the Boeing
strike. Automotive revenues rose 0.5%, outperforming a weak light vehicle
production environment and improving modestly versus the first half. Our Energy
revenues continued to grow strongly, up 11.9%. Industrial Markets remained weak
across all regions (falling 6.3%), while the temporary softness previously
reported in the Medical market has continued in the second half.
As a result, the Group's ADE division delivered growth of +4.2% in the period,
ahead of the 3.1% revenue decline in the AGI division.
Share Buyback and Financial Position
The £60m share buyback has continued, and at the end of the period a total of
6.74m shares have been acquired to date on the programme, for a total
consideration of £45.8m.
Net debt (excluding lease liabilities) at the end of the period was £65.8m,
broadly unchanged when compared to net debt of £68.0m at the half-year. This
reflected the Group's underlying cash generation partly offset by a further £20m
of capital deployed on the share buyback in the period.
The interim dividend of £12.6m was paid on 7 November.
Summary and outlook
Our end market environment remains mixed, with the challenging conditions in
Automotive and Industrial Markets expected to continue into early 2025. Despite
this backdrop, the resilience of our Specialist Technologies businesses and our
ongoing focus on cost control gives us confidence in delivering good progress in
operating margins for the full year (versus 15.9% delivered in FY 2023).
Operating profit for FY 2024 is expected to be in line with market consensus2.
Capital Markets Event
We will be holding a Capital Markets Event in London on 12 December at 2pm for
investors and analysts. The event will include a strategy update from Jim
Fairbairn, Chief Executive Officer, and a series of presentations by senior
management. Further details can be found on the Investors section of the
Bodycote website.
Trading Update Conference Call
Bodycote will be hosting a conference call for analysts and investors at 09:00am
UK GMT today (Tuesday, 19 November 2024).
Participants' dial-in number:
UK: 0800 279 7040
North America: (+1) 800 717 1738
International: +44 800 279 7040
Participants will be asked for names only; no PIN will be required.
For further information, please contact:
Bodycote plc
Jim Fairbairn, Chief Executive Officer
Ben Fidler, Chief Financial Officer
Peter Lapthorn, Investor Relations and FP&A
Tel: +44 1625 505 300
FTI Consulting
Richard Mountain
Susanne Yule
Tel: +44 203 727 1340
1 Organic growth is stated at constant currency and excludes the effects of
acquisitions and disposals
2 The latest company compiled consensus is available at:
https://www.bodycote.com/investors/analyst-consensus/
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Bodycote Plc
Bodycote Plc - Trading Statement
19th November 2024, 07:00
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