REG - Bodycote PLC - Trading Update

BodycoteAnnouncement

18/11/2022 07:00

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RNS Number : 8303G  Bodycote PLC  18 November 2022

 

 

 
Friday 18 November 2022

 

Bodycote plc

Strong revenue growth in Q3; on track to meet full year expectations

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 2022 ("the period").

 

Trading

 

Total Group revenue for the period grew by 29% on last year to £258m (up 22%
at constant currency). AGI revenues, at £148m, were 24% higher than last year
(up 21% at constant currency), while ADE revenues, at £110m, were 35% higher
than last year (up 24% at constant currency). Volume contributed 7% to revenue
growth with foreign exchange translation contributing 7%.

 

The revenue figure benefits from price increases and energy surcharges of
approximately 15% in total. We introduced energy surcharges at the end of last
year with the intention of covering the highly volatile costs of electricity
and gas we have been experiencing. While there was initially a lag when these
were first introduced, our price increases and surcharges have successfully
covered all of our cost inflation in the period.

 

As gas and electricity price increases have varied significantly between
countries, the impact of surcharges on our revenues has differed in the same
way. The AGI businesses are weighted more towards Western and Eastern Europe,
where the highest increases in gas and electricity prices have been
experienced. ADE businesses are weighted towards North America and our
relatively lower energy-consuming Specialist Technologies. As a result, the
impact on revenues during the period for the AGI businesses was 19%, whereas
the impact for the ADE businesses was 10%. Underlying volumes in AGI grew 2%
while volumes in ADE grew 14%.

The following review of the Group's revenues by end market quotes all
movements based on growth in the period against the same period in 2021, at
constant currency:

Automotive revenues were up 18%. This increase was entirely due to the impact
of price increases and energy surcharges. Volumes were flat versus last year,
as well as versus the first half of this year, despite supply chain issues
easing in a number of areas.

 

General Industrial revenues grew 25%, with volumes continuing to hold up well,
supported by stronger performance in market sectors where a higher proportion
of the work is for capital investment. The energy end market now comprises 17%
of General Industrial and grew 30%.

 

Aerospace & Defence revenues grew 19%. Civil air travel continues to
strengthen and OEM production is ramping up; defence volumes were flat.

 

Emerging market revenues were up 47%, reflecting the highest level of energy
surcharges in the Group, as well as double digit volume recovery in China and
Mexico. Slovakia and Turkey volumes continued to grow at double digits.

 

Specialist Technologies' revenues grew 22% (18% on an organic basis), with
solid volume growth, particularly in the ADE focused Specialist Technologies.

 

Financial position and liquidity

 

Net debt as at 31 October 2022 was £59m, reflecting good underlying cash
flows, partially offset by higher working capital, directly related to the
higher level of trade receivables from surcharge-fuelled higher revenues.

Summary and Outlook

Civil aerospace volumes continue to grow strongly, with General Industrial
volumes growing more modestly and automotive volumes flat. Our approach to
using surcharges to cover the highly volatile gas and electricity prices has
proven to be successful.

 

The Board expects the Group to deliver a full year result for 2022 in-line
with market expectations.

 

Trading Update Conference Call

The Company will be hosting a conference call for analysts and investors at
08.30am today (Friday 18 November 2022).

Participants' dial-in number:

United Kingdom Toll: +44 33 3300 9273

 

Participants will be asked for names only; no PIN will be required

 

For further information, please contact:

 

Bodycote plc

Stephen Harris, Group Chief Executive

Dominique Yates, Chief Financial Officer

Tel No +44(0) 1625 505300

FTI Consulting

Richard Mountain

Susanne Yule

Tel No +44 (0) 2037271340

 

 

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