2. Business and geographical segments

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
GroupADE
£m
AGI
£m
Central costs and eliminations
£m
Consolidated
£m
Revenue
Total revenue133.5178.8312.3
Result
Headline operating profit prior to share-based payments and unallocated central costs36.526.362.8
Share-based payments(0.5)(1.0)(0.7)(2.2)
Unallocated central costs(4.5)(4.5)
Headline operating profit / (loss)36.025.3(5.2)56.1
Amortisation of acquired intangible fixed assets(0.6)(1.3)(1.9)
Segment result35.424.0(5.2)54.2
Investment revenue0.1
Finance costs(1.7)
Profit before taxation52.6
Taxation(12.4)
Profit for the period40.2

Inter-segment sales are not material.

The Group does not rely on any individual major customers.

Half year to 30 June 2014
Aerospace, Defence & EnergyWestern Europe
£m
North America
£m
Emerging markets
£m
Total ADE
£m
Revenue
Total revenue67.464.91.2133.5
Result
Headline operating profit prior to share-based payments16.719.50.336.5
Share-based payments(0.1)(0.4)(0.5)
Headline operating profit16.619.10.336.0
Amortisation of acquired intangible fixed assets(0.1)(0.5)(0.6)
Segment result16.518.60.335.4
Half year to 30 June 2014
Automotive & General IndustrialWestern Europe
£m
North America
£m
Emerging markets
£m
Total AGI
£m
Revenue
Total revenue116.141.820.9178.8
Result
Headline operating profit prior to share-based payments18.37.01.026.3
Share-based payments(0.7)(0.2)(0.1)(1.0)
Headline operating profit17.66.80.925.3
Amortisation of acquired intangible fixed assets(0.1)(1.1)(0.1)(1.3)
Segment result17.55.70.824.0
Half year to 30 June 2013 (Restated*)
GroupADE
£m
AGI
£m
Central
costs and eliminations
£m
Consolidated
£m
Revenue
Total revenue132.6183.9316.5
Result
Headline operating profit prior to share-based payments and unallocated central costs35.226.862.0
Share-based payments(1.0)(1.4)(1.2)(3.6)
Unallocated central costs(6.0)(6.0)
Headline operating profit / (loss)34.225.4(7.2)52.4
Amortisation of acquired intangible fixed assets(0.7)(1.4)(2.1)
Segment result33.524.0(7.2)50.3
Investment revenue0.1
Finance costs(1.9)
Profit before taxation48.5
Taxation(12.5)
Profit for the period36.0

* 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 & EnergyWestern Europe
£m
North
America
£m
Emerging markets
£m
Total ADE
£m
Revenue
Total revenue60.570.51.6132.6
Result
Headline operating profit prior to share-based payments15.419.50.335.2
Share-based payments(0.3)(0.7)(1.0)
Headline operating profit15.118.80.334.2
Amortisation of acquired intangible fixed assets(0.2)(0.5)(0.7)
Segment result14.918.30.333.5
Half year to 30 June 2013 (Restated*)
Automotive & General IndustrialWestern Europe
£m
North
America
£m
Emerging markets
£m
Total AGI
£m
Revenue
Total revenue116.144.823.0183.9
Result
Headline operating profit prior to share-based payments16.98.41.526.8
Share-based payments(0.9)(0.4)(0.1)(1.4)
Headline operating profit16.08.01.425.4
Amortisation of acquired intangible fixed assets(0.1)(1.2)(0.1)(1.4)
Segment result15.96.81.324.0
Year ended 31 December 2013
GroupADE
£m
AGI
£m
Central
costs and eliminations
£m
Consolidated
£m
Revenue
Total revenue261.8357.8619.6
Result
Headline operating profit prior to share-based payments and unallocated central costs71.954.2126.1
Share-based payments(1.2)(1.5)(1.7)(4.4)
Unallocated central costs(14.3)(14.3)
Headline operating profit / (loss)70.752.7(16.0)107.4
Amortisation of acquired intangible fixed assets(1.3)(3.2)(4.5)
Operating profit / (loss) prior to exceptional items69.449.5(16.0)102.9
Reorganisation costs(0.8)(0.8)
Segment result69.449.5(16.8)102.1
Investment revenue0.1
Finance costs(3.8)
Profit before taxation98.4
Taxation(25.3)
Profit for the year73.1
Year ended 31 December 2013
Aerospace, Defence & EnergyWestern Europe
£m
North
America
£m
Emerging markets
£m
Total ADE
£m
Revenue
Total revenue121.0137.92.9261.8
Result
Headline operating profit prior to share-based payments32.139.60.271.9
Share-based payments(0.3)(0.9)(1.2)
Headline operating profit31.838.70.270.7
Amortisation of acquired intangible fixed assets(0.3)(1.0)(1.3)
Segment result31.537.70.269.4
Year ended 31 December 2013
Automotive & General IndustrialWestern Europe
£m
North
America
£m
Emerging markets
£m
Total AGI
£m
Revenue
Total revenue226.985.945.0357.8
Result
Headline operating profit prior to share-based payments36.115.62.554.2
Share-based payments(1.0)(0.5)(1.5)
Headline operating profit35.115.12.552.7
Amortisation of acquired intangible fixed assets(0.2)(2.8)(0.2)(3.2)
Segment result34.912.32.349.5