Bodycote (BOY) H1 2026 earnings summary

Executive summary

• Achieved strong H1 2026 performance with core organic revenue growth of 9.6%, led by Aerospace & Defense (+24.6% to +37%), IGT, and a return to growth in Medical, offsetting automotive weakness.

• Margin improvement delivered through volume growth and the Optimise restructuring program, with group operating profit up 11% organically and group margins up 110bps year-over-year.

• Strategy execution focused on Optimise (portfolio rationalization), Perform (margin improvement via Lean), and Grow (capability, commercial wins, and M&A), with further site closures and operational improvements.

• Spectrum acquisition integrated well, enhancing North American Aerospace & Defence capabilities.

Financial highlights

• Group revenue rose to £381.2m (up 6.5% organically); core revenue £372.0m (up 9.6%).

• Adjusted operating profit increased to £61.0m (up 10.7%); adjusted EPS up 18.3% to 25.2p.

• Interim dividend increased by 4% to 7.2p per share; £12.6m-£17.8m spent on share buybacks in H1.

• Operating cash flow £41.6m, cash conversion stable at 68%; free cash flow £14.5m.

• Net debt (excluding leases) at £135.2m; leverage at 0.7x net debt/EBITDA.

Outlook and guidance

• Full-year outlook unchanged: expect continued core organic revenue growth led by Aerospace & Defense, IGT, and Medical, with growth moderating in H2 due to tougher comparators.

• Group operating margins expected to increase further as Optimise benefits ramp up, partly offset by higher variable pay and ramp-up costs.

• CapEx for the year expected at £80-90m; cash tax c.£25m; finance cost and tax rate slightly lower than previously guided.