The Group has in excess of 190 locations across the world serving a range of market sectors with various thermal processing services. The range and type of services offered is common to all market sectors.
In accordance with IFRS 8 'Operating Segments', the segmentation of Group activity reflects the way the Group is managed by the chief operating decision maker, being the Group Chief Executive, who on a monthly basis reviews the operating performance of six operating segments, split between the Aerospace, Defence & Energy (ADE) and Automotive & General Industrial (AGI) business areas, as follows:
- ADE – Western Europe;
- ADE – North America;
- ADE – Emerging markets;
- AGI – Western Europe;
- AGI – North America; and
- AGI – Emerging markets.
The split of operating segments by geography reflects the divisional reporting structure of the Group.
In accordance with the aggregation criteria of IFRS 8, the operating segments are aggregated into the Group's two key business areas, ADE and AGI, the split being driven by customer behaviour and requirements. Customers in the ADE segment tend to operate and purchase more globally and have long supply chains, whilst customers in the AGI segment tend to purchase more locally and have shorter supply chains.
Bodycote plants do not exclusively supply services to customers of a given market sector. Allocations of plants between ADE and AGI is therefore derived by reference to the preponderance of markets served.
| Half year to 30 June 2014 |
|---|
| Group | ADE
£m | AGI
£m | Central costs and eliminations
£m | Consolidated
£m |
|---|
| Revenue | | | | |
| Total revenue | 133.5 | 178.8 | – | 312.3 |
| Result | | | | |
| Headline operating profit prior to share-based payments and unallocated central costs | 36.5 | 26.3 | – | 62.8 |
| Share-based payments | (0.5) | (1.0) | (0.7) | (2.2) |
| Unallocated central costs | – | – | (4.5) | (4.5) |
| Headline operating profit / (loss) | 36.0 | 25.3 | (5.2) | 56.1 |
| Amortisation of acquired intangible fixed assets | (0.6) | (1.3) | – | (1.9) |
| Segment result | 35.4 | 24.0 | (5.2) | 54.2 |
| Investment revenue | | | | 0.1 |
| Finance costs | | | | (1.7) |
| Profit before taxation | | | | 52.6 |
| Taxation | | | | (12.4) |
| Profit for the period | | | | 40.2 |
Inter-segment sales are not material.
The Group does not rely on any individual major customers.
| Half year to 30 June 2014 |
|---|
| Aerospace, Defence & Energy | Western Europe
£m | North America
£m | Emerging markets
£m | Total ADE
£m |
|---|
| Revenue | | | | |
| Total revenue | 67.4 | 64.9 | 1.2 | 133.5 |
| Result | | | | |
| Headline operating profit prior to share-based payments | 16.7 | 19.5 | 0.3 | 36.5 |
| Share-based payments | (0.1) | (0.4) | – | (0.5) |
| Headline operating profit | 16.6 | 19.1 | 0.3 | 36.0 |
| Amortisation of acquired intangible fixed assets | (0.1) | (0.5) | – | (0.6) |
| Segment result | 16.5 | 18.6 | 0.3 | 35.4 |
| Half year to 30 June 2014 |
|---|
| Automotive & General Industrial | Western Europe
£m | North America
£m | Emerging markets
£m | Total AGI
£m |
|---|
| Revenue | | | | |
| Total revenue | 116.1 | 41.8 | 20.9 | 178.8 |
| Result | | | | |
| Headline operating profit prior to share-based payments | 18.3 | 7.0 | 1.0 | 26.3 |
| Share-based payments | (0.7) | (0.2) | (0.1) | (1.0) |
| Headline operating profit | 17.6 | 6.8 | 0.9 | 25.3 |
| Amortisation of acquired intangible fixed assets | (0.1) | (1.1) | (0.1) | (1.3) |
| Segment result | 17.5 | 5.7 | 0.8 | 24.0 |
| Half year to 30 June 2013 (Restated*) |
|---|
| Group | ADE
£m | AGI
£m | Central
costs and eliminations
£m | Consolidated
£m |
|---|
| Revenue | | | | |
| Total revenue | 132.6 | 183.9 | – | 316.5 |
| Result | | | | |
| Headline operating profit prior to share-based payments and unallocated central costs | 35.2 | 26.8 | – | 62.0 |
| Share-based payments | (1.0) | (1.4) | (1.2) | (3.6) |
| Unallocated central costs | – | – | (6.0) | (6.0) |
| Headline operating profit / (loss) | 34.2 | 25.4 | (7.2) | 52.4 |
| Amortisation of acquired intangible fixed assets | (0.7) | (1.4) | – | (2.1) |
| Segment result | 33.5 | 24.0 | (7.2) | 50.3 |
| Investment revenue | | | | 0.1 |
| Finance costs | | | | (1.9) |
| Profit before taxation | | | | 48.5 |
| Taxation | | | | (12.5) |
| Profit for the period | | | | 36.0 |
* Restated for the reclassification of one facility from ADE to AGI following a reassessment of its customers.
| Half year to 30 June 2013 (Restated*) |
|---|
| Aerospace, Defence & Energy | Western Europe
£m | North
America
£m | Emerging markets
£m | Total ADE
£m |
|---|
| Revenue | | | | |
| Total revenue | 60.5 | 70.5 | 1.6 | 132.6 |
| Result | | | | |
| Headline operating profit prior to share-based payments | 15.4 | 19.5 | 0.3 | 35.2 |
| Share-based payments | (0.3) | (0.7) | – | (1.0) |
| Headline operating profit | 15.1 | 18.8 | 0.3 | 34.2 |
| Amortisation of acquired intangible fixed assets | (0.2) | (0.5) | – | (0.7) |
| Segment result | 14.9 | 18.3 | 0.3 | 33.5 |
| Half year to 30 June 2013 (Restated*) |
|---|
| Automotive & General Industrial | Western Europe
£m | North
America
£m | Emerging markets
£m | Total AGI
£m |
|---|
| Revenue | | | | |
| Total revenue | 116.1 | 44.8 | 23.0 | 183.9 |
| Result | | | | |
| Headline operating profit prior to share-based payments | 16.9 | 8.4 | 1.5 | 26.8 |
| Share-based payments | (0.9) | (0.4) | (0.1) | (1.4) |
| Headline operating profit | 16.0 | 8.0 | 1.4 | 25.4 |
| Amortisation of acquired intangible fixed assets | (0.1) | (1.2) | (0.1) | (1.4) |
| Segment result | 15.9 | 6.8 | 1.3 | 24.0 |
| Year ended 31 December 2013 |
|---|
| Group | ADE
£m | AGI
£m | Central
costs and eliminations
£m | Consolidated
£m |
|---|
| Revenue | | | | |
| Total revenue | 261.8 | 357.8 | – | 619.6 |
| Result | | | | |
| Headline operating profit prior to share-based payments and unallocated central costs | 71.9 | 54.2 | – | 126.1 |
| Share-based payments | (1.2) | (1.5) | (1.7) | (4.4) |
| Unallocated central costs | – | – | (14.3) | (14.3) |
| Headline operating profit / (loss) | 70.7 | 52.7 | (16.0) | 107.4 |
| Amortisation of acquired intangible fixed assets | (1.3) | (3.2) | – | (4.5) |
| Operating profit / (loss) prior to exceptional items | 69.4 | 49.5 | (16.0) | 102.9 |
| Reorganisation costs | – | – | (0.8) | (0.8) |
| Segment result | 69.4 | 49.5 | (16.8) | 102.1 |
| Investment revenue | | | | 0.1 |
| Finance costs | | | | (3.8) |
| Profit before taxation | | | | 98.4 |
| Taxation | | | | (25.3) |
| Profit for the year | | | | 73.1 |
| Year ended 31 December 2013 |
|---|
| Aerospace, Defence & Energy | Western Europe
£m | North
America
£m | Emerging markets
£m | Total ADE
£m |
|---|
| Revenue | | | | |
| Total revenue | 121.0 | 137.9 | 2.9 | 261.8 |
| Result | | | | |
| Headline operating profit prior to share-based payments | 32.1 | 39.6 | 0.2 | 71.9 |
| Share-based payments | (0.3) | (0.9) | – | (1.2) |
| Headline operating profit | 31.8 | 38.7 | 0.2 | 70.7 |
| Amortisation of acquired intangible fixed assets | (0.3) | (1.0) | – | (1.3) |
| Segment result | 31.5 | 37.7 | 0.2 | 69.4 |
| Year ended 31 December 2013 |
|---|
| Automotive & General Industrial | Western Europe
£m | North
America
£m | Emerging markets
£m | Total AGI
£m |
|---|
| Revenue | | | | |
| Total revenue | 226.9 | 85.9 | 45.0 | 357.8 |
| Result | | | | |
| Headline operating profit prior to share-based payments | 36.1 | 15.6 | 2.5 | 54.2 |
| Share-based payments | (1.0) | (0.5) | – | (1.5) |
| Headline operating profit | 35.1 | 15.1 | 2.5 | 52.7 |
| Amortisation of acquired intangible fixed assets | (0.2) | (2.8) | (0.2) | (3.2) |
| Segment result | 34.9 | 12.3 | 2.3 | 49.5 |