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.
| Group | ADE
2013
£m | AGI
2013
£m | Head Office
and eliminations
2013
£m | Consolidated
2013
£m |
|---|
| Revenue | | | | |
| Total revenue | 261.8 | 357.8 | – | 619.6 |
| Result | | | | |
| Headline operating profit prior to share-based payments and unallocated corporate expenses | 71.9 | 54.2 | – | 126.1 |
| Share-based payments | (1.2) | (1.5) | (1.7) | (4.4) |
| Unallocated corporate expenses | – | – | (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 |
Inter-segment sales are not material in either year.
The Group does not rely on any individual major customers.
| Aerospace, Defence & Energy | Western Europe
2013
£m | North
America
2013
£m | Emerging markets
2013
£m | Total
ADE
2013
£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 |
| Automotive & General Industrial | Western Europe
2013
£m | North
America
2013
£m | Emerging markets
2013
£m | Total
AGI
2013
£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 |
| Restated* |
|---|
| Group | ADE
2012
£m | AGI
2012
£m | Head Office
and eliminations
2012
£m | Consolidated
2012
£m |
|---|
| Revenue | | | | |
| Total revenue | 258.0 | 329.8 | – | 587.8 |
| Result | | | | |
| Headline operating profit prior to share-based payments and unallocated corporate expenses | 70.9 | 45.6 | – | 116.5 |
| Share-based payments | (1.8) | (1.5) | (2.1) | (5.4) |
| Unallocated corporate expenses | – | – | (13.6) | (13.6) |
| Headline operating profit / (loss) | 69.1 | 44.1 | (15.7) | 97.5 |
| Amortisation of acquired intangible fixed assets | (1.1) | (0.9) | – | (2.0) |
| Operating profit / (loss) prior to exceptional items | 68.0 | 43.2 | (15.7) | 95.5 |
| Profit on disposal of investments | – | – | 2.4 | 2.4 |
| Acquisition costs | (0.8) | (1.7) | – | (2.5) |
| Reorganisation costs | – | – | (2.4) | (2.4) |
| Segment result | 67.2 | 41.5 | (15.7) | 93.0 |
| Investment revenue | | | | 0.2 |
| Finance costs | | | | (3.2) |
| Profit before taxation | | | | 90.0 |
| Taxation | | | | (22.8) |
| Profit for the year | | | | 67.2 |
| Restated* |
|---|
| Aerospace, Defence & Energy | Western
Europe
2012
£m | North
America
2012
£m | Emerging markets
2012
£m | Total
ADE
2012
£m |
|---|
| Revenue | | | | |
| Total revenue | 115.9 | 140.4 | 1.7 | 258.0 |
| Result | | | | |
| Headline operating profit / (loss) prior to share-based payments | 27.4 | 43.7 | (0.2) | 70.9 |
| Share-based payments | (0.5) | (1.3) | – | (1.8) |
| Headline operating profit / (loss) | 26.9 | 42.4 | (0.2) | 69.1 |
| Amortisation of acquired intangible fixed assets | (0.3) | (0.8) | – | (1.1) |
| Operating profit / (loss) prior to exceptional items | 26.6 | 41.6 | (0.2) | 68.0 |
| Acquisition costs | – | (0.8) | – | (0.8) |
| Segment result | 26.6 | 40.8 | (0.2) | 67.2 |
| Restated* |
|---|
| Automotive & General Industrial | Western
Europe
2012
£m | North
America
2012
£m | Emerging markets
2012
£m | Total
AGI
2012
£m |
|---|
| Revenue | | | | |
| Total revenue | 221.6 | 61.8 | 46.4 | 329.8 |
| Result | | | | |
| Headline operating profit prior to share-based payments | 30.8 | 13.1 | 1.7 | 45.6 |
| Share-based payments | (1.0) | (0.5) | – | (1.5) |
| Headline operating profit | 29.8 | 12.6 | 1.7 | 44.1 |
| Amortisation of acquired intangible fixed assets | (0.2) | (0.5) | (0.2) | (0.9) |
| Operating profit prior to exceptional items | 29.6 | 12.1 | 1.5 | 43.2 |
| Acquisition costs | – | (1.7) | – | (1.7) |
| Segment result | 29.6 | 10.4 | 1.5 | 41.5 |
Other information
| Group | ADE
2013
£m | AGI
2013
£m | Head Office
and eliminations
2013
£m | Consolidated
2013
£m |
|---|
| | | | |
| Capital additions | 21.1 | 35.4 | 2.7 | 59.2 |
| Depreciation and amortisation | 20.6 | 36.1 | 0.7 | 57.4 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 312.5 | 440.2 | 54.2 | 806.9 |
| Other investments | – | – | 1.7 | 1.7 |
| Consolidated total assets | 312.5 | 440.2 | 55.9 | 808.6 |
| Liabilities: | | | | |
| Segment liabilities | (63.6) | (130.2) | (67.4) | (261.2) |
| 248.9 | 310.0 | (11.5) | 547.4 |
| Allocation of head office net liabilities | (5.1) | (6.4) | 11.5 | – |
| Adjusted segment net assets | 243.8 | 303.6 | – | 547.4 |
| Aerospace, Defence & Energy | Western Europe
2013
£m | North America
2013
£m | Emerging markets
2013
£m | Total
ADE
2013
£m |
|---|
| Capital additions | 7.4 | 13.4 | 0.3 | 21.1 |
| Depreciation and amortisation | 10.0 | 10.3 | 0.3 | 20.6 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 148.5 | 161.2 | 2.8 | 312.5 |
| Liabilities: | | | | |
| Segment liabilities | (34.7) | (27.2) | (1.7) | (63.6) |
| Segment net assets | 113.8 | 134.0 | 1.1 | 248.9 |
| Automotive & General Industrial | Western
Europe
2013
£m | North
America
2013
£m | Emerging markets
2013
£m | Total
AGI
2013
£m |
|---|
| Capital additions | 17.3 | 9.9 | 8.2 | 35.4 |
| Depreciation and amortisation | 22.8 | 8.1 | 5.2 | 36.1 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 263.2 | 114.1 | 62.9 | 440.2 |
| Liabilities: | | | | |
| Segment liabilities | (99.1) | (18.6) | (12.5) | (130.2) |
| Segment net assets | 164.1 | 95.5 | 50.4 | 310.0 |
| Restated* |
|---|
| Group | ADE
2012
£m | AGI
2012
£m | Head Office
and eliminations
2012
£m | Consolidated
2012
£m |
|---|
| Capital additions | 22.8 | 25.9 | 3.7 | 52.4 |
| Depreciation and amortisation | 19.3 | 31.7 | 1.9 | 52.9 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 310.2 | 453.0 | 28.0 | 791.2 |
| Other investments | – | – | 1.6 | 1.6 |
| Consolidated total assets | 310.2 | 453.0 | 29.6 | 792.8 |
| Liabilities: | | | | |
| Segment liabilities | (68.4) | (127.7) | (92.6) | (288.7) |
| 241.8 | 325.3 | (63.0) | 504.1 |
| Allocation of head office net liabilities | (26.9) | (36.1) | 63.0 | – |
| Adjusted segment net assets | 214.9 | 289.2 | – | 504.1 |
| Restated* |
|---|
| Aerospace, Defence & Energy | Western
Europe
2012
£m | North
America
2012
£m | Emerging markets
2012
£m | Total
ADE
2012
£m |
|---|
| Capital additions | 6.4 | 16.4 | – | 22.8 |
| Depreciation and amortisation | 9.7 | 9.4 | 0.2 | 19.3 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 147.0 | 160.5 | 2.7 | 310.2 |
| Liabilities: | | | | |
| Segment liabilities | (35.8) | (31.4) | (1.2) | (68.4) |
| Segment net assets | 111.2 | 129.1 | 1.5 | 241.8 |
| Restated* |
|---|
| Automotive & General Industrial | Western
Europe
2012
£m | North
America
2012
£m | Emerging markets
2012
£m | Total
AGI
2012
£m |
|---|
| Capital additions | 16.9 | 4.9 | 4.1 | 25.9 |
| Depreciation and amortisation | 22.6 | 4.0 | 5.1 | 31.7 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 276.4 | 112.1 | 64.5 | 453.0 |
| Liabilities: | | | | |
| Segment liabilities | (97.5) | (17.3) | (12.9) | (127.7) |
| Segment net assets | 178.9 | 94.8 | 51.6 | 325.3 |
* Restated for the adoption of IAS 19 (revised) 'Employee Benefits' and the reclassification of one facility from ADE to AGI following a reassessment of its customers.
Geographical information
The Group's revenue from external customers and information about its segment assets (non-current assets excluding financial instruments, deferred tax assets and other financial assets) by country are detailed below:
| Revenue from
external customers | Non-current assets |
|---|
| 2013
£m | 2012
£m | 2013
£m | 2012
£m |
|---|
| USA | 216.1 | 194.2 | 237.4 | 233.3 |
| France | 93.8 | 90.1 | 68.5 | 70.1 |
| UK | 64.2 | 63.9 | 71.5 | 72.7 |
| Germany | 63.9 | 60.5 | 65.1 | 64.7 |
| Sweden | 42.0 | 42.1 | 43.8 | 44.3 |
| Netherlands | 26.7 | 24.1 | 20.2 | 20.8 |
| Others | 112.9 | 112.9 | 107.7 | 111.2 |
| 619.6 | 587.8 | 614.2 | 617.1 |