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• Organic Revenue Growth (Core Business): 1% excluding surcharges.

• Total Revenue: GBP 757 million, down 4% organically, flat after surcharge adjustments.

• Operating Profit: GBP 129 million, up 1.7% organically.

• Core Operating Profit: GBP 127.6 million, 3% organic profit growth.

• Adjusted EPS: Up 0.4% to 48.6p.

• Full Year Dividend: Up 1.3% to 23p.

• Operating Margin (Core Business): Increased by 120 basis points to 17.9%.

• Group Operating Margin: Increased by 110 basis points to 17%.

• Return on Capital Employed (ROCE): 15.7%, up 90 basis points.

• Operating Cash Conversion: 90%.

• Specialist Technologies Revenue Growth: 5% organically.

• Specialist Technologies Margin: Up 300 basis points to 29%.

• Precision Heat Treatment Revenue: Fell by 0.8% organically.

• Precision Heat Treatment Margin: Down 60 basis points to 17%.

• Carbon Emissions Reduction: 6% reduction achieved.

• Shareholder Returns: Over GBP 100 million returned through dividends and share buybacks.

• Net Debt: GBP 68.3 million, leverage at 0.3 times net debt to EBITDA.

• Warning! GuruFocus has detected 4 Warning Signs with BYPLF.

Release Date: March 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bodycote PLC (BYPLF) achieved a margin improvement from 15.9% to 17%, driven by a better business mix, operational leverage, and productivity improvements.

• The company reported a resilient performance in 2024, with core business organic growth of 1% and a total growth of 2.4% including acquisitions.

• Specialist Technologies division saw a 5% organic revenue growth, demonstrating the underlying quality of the business despite tough market conditions.

• Bodycote PLC (BYPLF) achieved a 6% reduction in carbon emissions, surpassing its previous sustainability targets ahead of schedule.

• The company returned over GBP100 million to shareholders through dividends and share buybacks, reflecting a disciplined approach to capital allocation.

Negative Points

• The non-core segment, which includes cyclical, high-carbon, low-margin processes, was either loss-making or just over breakeven, impacting overall growth.

• The automotive and industrial markets faced challenges, with a 0.8% revenue decline in precision heat treatment due to weak end market conditions.

• FX was a GBP4.9 million headwind to profit year over year, affecting overall financial performance.

• The company incurred significant exceptional costs of GBP78.3 million related to restructuring and goodwill impairment in North American automotive and industrial businesses.

• Free cash flow is expected to be lower in 2025 due to increased capital expenditure and restructuring cash spend, impacting short-term financial flexibility.