Bodycote PLC Trading Update (1825T)
November 23 2021 - 1:00AM
UK Regulatory
TIDMBOY
RNS Number : 1825T
Bodycote PLC
23 November 2021
23 November 2021
Bodycote plc
Trading Update
Bodycote, the world's leading provider of heat treatment and
specialist thermal processing services, is issuing the following
trading update, covering the four-month period from 1 July to 31
October 2021 ("the period").
Group revenue for the period was GBP200.1m, 3% higher than last
year (8% higher at constant currency). ADE revenues were GBP81.3m
(up 4% at actual rates, up 9% at constant currency); AGI revenues
were GBP118.8m (up 3% at actual rates, 8% at constant currency).
Group revenue for the 10 months to 31 October 2021 was GBP513.0m,
3% up on last year (7% up at constant currency).
All percentage movements in the following review of the Group's
markets compare to the same period from 1 July to 31 October 2020,
at constant currency, unless otherwise stated.
Automotive revenues declined 6%, with the 10% decline in car and
light trucks more than offsetting good growth in heavy truck and
bus. This decline is a direct result of supply chain bottlenecks in
the automotive industry. Whilst the decline is greater than we had
anticipated, it has been concentrated almost entirely in our North
American and Mexican businesses, driven by automotive OEM supply
chain shortages. Our European car and light truck revenues were
flat in the period. As set out at the Half Year results, we
expected Q3 revenues in this market sector to decline, but had
expected Q4 revenues to rebound, resulting in H2 revenues across
the Group for automotive being broadly flat against H1. We no
longer believe that our Q4 revenues can offset the Q3 decline.
Consequently, we now expect that our full year Group revenue will
be up to GBP10m (1.6%) lower than our previous expectations as a
result of lower automotive revenues.
Underlying consumer automotive demand remains strong and
therefore we believe that this issue is transitory in nature. As a
result, we would expect our revenues to recover and return to the
previous growth trajectory in due course.
In contrast, civil aerospace revenues were up 25% on the
comparable period. While there is still some inventory in the
supply chain, activity is picking up as the OEMs ramp up production
and flying hours continue to build. This acceleration is in line
with our expectations of good growth in aerospace in 2022 and
beyond.
General industrial revenues were 17% higher, with most
categories registering good growth. Indeed, general industrial
revenues were only 1% lower versus the same period in 2019,
representing an excellent recovery. Most general industrial supply
chains remain short on inventory.
Emerging Markets achieved revenue growth of only 4%. This
underperformance was driven predominantly by a fall in revenues in
Mexico (which largely supplies the automotive market in the US),
which were down almost 50% on last year. General industrial
revenues in the Emerging markets grew 27%. And overall, despite the
current weakness in automotive, Emerging Markets' revenues in the
period were 7% up on the comparable period in 2019.
Specialist Technologies' revenues grew 10%, continuing to
outperform the background market.
Cash Flow, Margins and Financial position
Underlying cash flows in the period remained strong. Higher
energy costs and labour inflation are being passed onto customers
and margins remain healthy as we benefit from cost savings
associated with the restructuring programme that we initiated in
2020. Net debt (excluding lease liabilities) at 31 October 2021 was
GBP62m.
Outlook
Beyond the short term, the outlook for the business is positive
as we anticipate a stronger automotive market in due course,
continued good performance in our general industrial business, and
accelerating growth in civil aerospace revenues.
Trading Update Conference Call
Stephen Harris and Dominique Yates will be hosting a conference
call for analysts and investors at 8.00am today (Tuesday, 23
November 2021).
Participant's dial in number: +44 (0) 333 300 9266 (Direct)
Participants will be asked for names only, no PIN 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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