REG-Bodycote Plc: Trading Statement

BodycoteAnnouncement

19/11/2024 07:15

 
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

 

 

 Organic 1 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/

 4068195_0.jpeg (https://mb.cision.com/Public/22491/4068195/ac3b59a435ae6990_org.jpeg)  



Copyright (c) 2024 PR Newswire Association,LLC. All Rights Reserved