Bodycote (BOY) H1 2025 earnings summary

Executive summary

• Revenue improved sequentially from H2 2024 despite challenging market conditions, with Aerospace growth offsetting weakness in Automotive and Industrial markets.

• Strategic initiatives, including the expanded Optimise programme, progressed and are expected to deliver at least £15 million annual profit benefit at a lower net cost.

• Announced a new £30 million share buyback, supported by a strong balance sheet and low leverage.

• Full-year outlook remains unchanged, with H2 profit improvement expected from Optimise benefits, Aerospace recovery, and new Specialist Technologies contracts.

• Statutory operating profit increased 33.8% to £41.2 million due to lower exceptional charges, despite lower revenues.

Financial highlights

• Group revenue was £369.0 million, down 7.5% year-over-year and 4.5% organically; core revenue declined 3.6% year-over-year but grew 4% sequentially from H2 2024.

• Adjusted operating profit was £55.1 million (down from £66.8 million), with a margin of 14.9% (down 180bps year-over-year).

• Adjusted EPS fell to 21.3p; interim dividend held at 6.9p.

• Cash conversion at 68%; free cash flow £18.0 million; net debt (excluding leases) rose to £112.5 million, leverage at 0.6x.

• Total shareholder returns of £60 million, including £30 million share buyback.

Outlook and guidance

• Full-year profit improvement expected, driven by Optimise benefits, Aerospace growth, and Specialist Technologies order wins.

• Specialist Technologies expected to return to growth in H2, with full-year performance flattish.

• Optimise programme expected to deliver £4–5 million core benefit in FY25, with further improvement in H2.

• FY25 operating profit consensus range: £115.7–123.0 million.

• Macro environment remains uncertain, with continued challenges in Industrial and Automotive markets.