Bodycote

Manufacturing

21 Feb

Bodycote is the world’s largest provider of heat treatment and thermal processing services, with 165+ facilities around the world.

Employees: 4,750

Revenue: £618.8m for FY2021

HQ Location: Macclesfield, UK

What they do:

Bodycote is the world’s largest and most respected provider of thermal processing services that form a vital link in the manufacturing supply chain and offer value-adding and proprietary specialist technologies which offer unique solutions for a variety of applications.
Thermal processing - improving material properties such as strength, durability and corrosion resistance.
Heat treatment and metal joining - Heat treatment to increase surface hardness, temperature resistance, ductility and strength. Metal joining includes electron beam welding, vacuum and honeycomb brazing.
Hot isotonic pressing (HIP) - high temperature remove gaps or porosity in materials to make them dense or turn powders into solid material.
Surface technology - used to extend the life of components and protect them from environmental factors such as corrosion and abrasion
These services are provided to markets including aerospace, defence, power generation, oil and gas, automotive, construction, machine building, medical and transportation sectors.
93% of their revenue comes from outside the UK (where the HQ sits)
The company splits its reporting by customer segment
ADE Divisions - Aerospace, Defence and Energy
AGI Divisions - Automotive and General Industrial

Their vision and priorities:

The objective is to create superior shareholder returns
Strategic Priorities
- Safety and the environment
- Driving operational improvement
- Capitalising on and investing in our Specialist Technologies
- Investing in Emerging Markets (focus on Eastern Europe, Mexico and China)
- Investing in structural growth opportunities
- Acquisitions (to improve the plant network in Classical Heat Treatment and to grow Specialist Technologies

Things to know right now

2020 restructuring programme complete
Delivered permanent cost savings of £20m from 2021 with incremental £10m of permanent cost savings in 2022.
Science Based Targets
The company has submitted emission reduction targets to the Science Based Targets initiative committing to a 28% reduction in absolute emissions by 2030.
They have been working on energy efficiency and carbon reduction for many years, and they have multiple projects underway across the organisation in order to meet these targets.
Energy Security
To reduce the impact of energy inflation, the company continues to move away from gas-fired processes. Today three quarters of their profits are generated from electricity powered processes.

Competitors

Oerlikon
Muehlhan
Quaker Houghton
Croda

What does each business unit do?

Classical Heat Treatment

Classical Heat Treatment is the process of controlled heating and cooling of metals in order to obtain the desired mechanical, chemical, and metallurgical properties during the manufacturing of a product.

Specialist Technologies (30% of revenues)

The Specialist Technologies business is a selection of highly differentiated, early-stage processes with high margins, significant market opportunities, and solid growth prospects.

The Specialist Technologies are generally lower carbon-emitting and therefore better for the environment. Bodycote is either the clear market leader or one of the top players among a small number of competitors.

Their financial calendar
H1: January-June - Earnings July

H2: July-December - Earnings March

Next Earnings Report:

July 2023

Positives from the last earnings report H1 Interim report FY22