In This Article:
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Revenue: GBP399 million in the first half, up 1.5% organically pre surcharges.
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Operating Profit: Organic headline operating profit up 7% to GBP66.8 million.
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Operating Margin: Improved by 170 basis points to 16.7%.
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Earnings Per Share (EPS): Headline EPS up 5% to 25p.
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Interim Dividend: Raised by 3% to 6.9p.
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Operating Cash Flow: Broadly stable at GBP49.2 million.
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Free Cash Flow: Lower due to higher cash tax payments.
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Aerospace and Defense Revenue: Up 15% organically, accounting for almost 30% of revenues.
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Automotive Revenue: Fell by 1% organically, excluding surcharges.
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General Industrial Revenue: Down 4% excluding surcharges.
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Specialist Technologies Revenue: Organic revenues up 8%.
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Net Debt: GBP68 million, 0.7 times net debt to EBITDA.
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Capital Expenditure: GBP35 million in the first half, flat versus the first half of 2023.
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Share Buyback: GBP25.8 million deployed in the first half.
Release Date: July 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Bodycote PLC (BYPLF) delivered a strong performance in the first half, with headline operating margins increasing by 170 basis points to 16.7%.
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The Aerospace and Defense division saw a 15% organic revenue increase, now accounting for almost 30% of total revenues.
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Specialist technologies continue to show strong growth, with organic revenues up 8%, outperforming the Classical Heat Treatment business.
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The company has successfully renegotiated contracts with key customers, particularly in North America, leading to improved margins.
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Bodycote PLC (BYPLF) has reduced its carbon emissions by 7.5% in the first half, enhancing its sustainability credentials and offering a compelling carbon reduction story to customers.
Negative Points
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The Automotive and Industrial markets have been challenging, with automotive revenues falling by 1% organically.
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General Industrial revenues decreased by 4% excluding surcharges, with particular weakness in Europe.
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The company faced a GBP28.3 million non-cash write-off related to the SAP ERP solution rollout, impacting financials.
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Free cash flow decreased by GBP17 million due to higher cash tax payments, affecting overall cash flow performance.
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Currency headwinds negatively impacted revenue by over GBP12 million, reflecting the strengthening of sterling against the dollar and euro.
Q & A Highlights
Q: Can you elaborate on the timeline and strategy for addressing underperforming sites within your footprint? A: Jim Fairbairn, CEO: It's too early to provide concrete plans, but work is underway. This is more about fine-tuning rather than major surgery, affecting a small proportion of our sites. The plan will likely take 12 to 24 months to execute, focusing on consolidation and repurposing assets rather than just closures.