REG-Bodycote Plc: Trading in line with expectations - FY26 outlook maintained

BodycoteAnnouncement

Today 07:02

Bodycote plc

Trading in line with expectations - FY26 outlook maintained

 

Bodycote, the world's leading provider of specialist thermal processing
services, issues a trading update covering the four-month period from 1
January to 30 April 2026 ("the period").

 

Highlights
*            Core revenue growth of 9.0% at constant currency (-5% in prior
year), led by Specialist Technologies, with strong growth in Aerospace &
Defence and Industrial Gas Turbines          
*            Group revenue growth of +1.9% at constant currency (-6% in prior
year) reflecting good growth in the Core business offset by plant exits under
the Optimise programme          
*            Optimise programme on-track. Spectrum acquisition performing well
and integration largely completed, further strengthening our Aerospace &
Defence capabilities          
*            FY outlook maintained. Continue to expect to deliver Core organic
revenue growth (moderating in H2 as comparators become more challenging),
improved operating margins and strategic progress; political and economic
uncertainty remains elevated
 

Trading Summary

Bodycote delivered Group revenue growth of 1.9% in the first four months. Core
revenues rose by 9.0% in the period, which was against a soft prior year
comparator (-5%) and reflected continued strong progress in Aerospace &
Defence and accelerating growth in Industrial Gas Turbines (IGT). Industrial
Markets revenue was flat year-on-year in the period, with a good performance
in Europe offset by weaker volumes in the US. Automotive revenue declined in
the period, reflecting the reduction in global light vehicle production.
Excluding the contribution from the Spectrum acquisition, which was completed
in January 2026, Core revenue grew by 8.4% organically.

 

By Division, organic revenue growth was led by Specialist Technologies at
+16.5% with Precision Heat Treatment up 4.8%. The faster growth in Specialist
Technologies reflects its more favourable end market mix as well as a softer
prior year comparator (-11%) which reflected specific headwinds in the Oil &
Gas and Medical markets in 2025 which have not repeated.

 

We continue to execute well on the Group's Optimise, Perform and Grow
strategy. In Optimise, we expect to exit around 90% of the 31 Non-Core plants
by the end of the year. At the end of April, 21 sites have been fully exited
with a further 3 having ceased operations. Both execution costs and the level
of revenue transfers to our Core business are on plan. In Perform, the
roll-out of the operational excellence programme is underway, with good
progress at a number of key `lighthouse' plants. In Grow, the changes to our
sales and marketing capability are now in place and we are progressing well
with a number of major investment projects focused predominantly on Aerospace
& Defence, IGT and Specialist Technologies. Following the acquisition of
Spectrum, we are continuing to evaluate and progress additional bolt-on
opportunities in our M&A pipeline.

 

Share buyback programme

At our Full Year Results on 11 March 2026, a new £80m share buyback programme
was announced which is expected to complete no later than the end of 2027.
Between 11 March 2026 and 30 April 2026, 1.0m shares were purchased for a
total consideration of £6.6m (volume-weighted average price of 660p).

 

Summary and outlook

Our full year outlook is maintained. Trading year-to-date and continued
strategic progress underpin our expectation to deliver Core organic revenue
growth and improved operating margins for the full year. We continue to expect
the pace of Core revenue growth to moderate through the year, principally
reflecting the shape of prior year comparators, particularly in Aerospace &
Defence. We are mindful of ongoing geopolitical uncertainty and will continue
to closely manage input costs and to focus on preserving agility in our cost
base.

 

 

 


Appendix

Bodycote Directors' Confirmation

As part of this announcement, the following statement regarding the outlook
for the full financial year to 31 December 2026 was published:

"                               Our full year outlook is unchanged. Trading
year-to-date and continued strategic progress underpin our expectation to
deliver Core organic revenue growth and improved operating margins for the
full year.                               "                     (the "         
           Outlook Statement                    ")

 

The Outlook Statement was originally published as part of the 2025 Full Year
Results, before the announcement of a possible offer for Bodycote by Apollo
Management X, L.P. (together with Apollo Global Management, Inc. and its
subsidiaries) on Friday 22 May 2026. The requirements of Rule 28.1(c) of the
City Code on Takeovers and Mergers apply in relation to the Outlook Statement.

Basis of preparation

The Outlook Statement has been compiled on the basis of the assumptions set
out below and the basis of the accounting policies used in the Outlook
Statement is consistent with the existing accounting policies of Bodycote plc.

Directors' confirmations

The Bodycote Directors have considered the Outlook Statement and confirm that,
as at the date of this announcement, the Outlook Statement remains valid, has
been properly compiled on the basis of the assumptions set out below and the
basis of accounting used is consistent with Bodycote's existing accounting
policies.

Assumptions

The Outlook Statement was prepared on the basis of the following assumptions,
any of which could turn out to be incorrect and therefore affect the validity
of the Outlook Statement.

Factors within the influence and control of the Bodycote Directors include:
*            There is no material change to the present management of
Bodycote;          
*            There is no material change in the operational structure and
strategy of Bodycote;           
*            There is no significant change to Bodycote's existing or
prospective material customer contracts or agreements;          
*            There is no material change in the scale, scope and delivery of
the Optimise programme benefits; and          
*            Bodycote's accounting policies will be consistently applied over
the forecast period.
 

Factors outside the influence or control of the Bodycote Directors include:

 
*            There will be no further material deterioration in business
conditions as a result of geopolitical events including the current conflict
in the Middle East;          
*            There will be no material changes in market conditions impacting
either customer demand or competitive environment;          
*            There will be no material change to the foreign exchange and
input cost inflation in the markets and regions in which Bodycote operates;   
      
*            There will be no material adverse events or disruption that could
have a significant impact on Bodycote's financial performance, including
litigation, cyber events or natural catastrophes that affect key products,
supply chain or markets;          
*            There will be no material impact from tariffs or uncertainty
related to potential tariffs           ;          
*            There will be no material adverse outcome from any ongoing or
future disputes with any customer, competitor, regulator or tax authority; and
         
*            There will be no material change in employee attrition rates and
no material change in Bodycote's labour costs, including medical and pension
and other post-retirement benefits driven by external parties or regulations.
 

Other important factors and information are contained in Bodycote's most
recent annual report and accounts for the 12 months ended 31 December 2025
(including risks summaries in the section entitled "Principal risks and
uncertainties") and Bodycote's other periodic filings and statements are
available at www.bodycote.com.

 

 



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