Heat Treating Giant Bodycote Has Strong Third Quarter Financial Results

Bodycote the world’s largest commercial heat treater (to see how the company compares to competitors we would suggest The Monty Heat Treat News – 50 Largest North American Commercial Heat Treats 2022 | The Monty) announced on November 18th, 2022 a trading update for the four month period from July1 to October 31 2022. The results, (which should please Bodycote share holders) are summarized below with entire report available at The leading provider of heat treatment and specialist thermal processing services worldwide – Bodycote plc

“Trading update – 18 November 2022/ 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”).

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.”

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