The Group has 187 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, while 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 2017 £m	AGI 2017 £m	Central costs and eliminations 2017 £m	Consolidated 2017 £m
Revenue
Total revenue	273.1	417.1	–	690.2
Result
Headline operating profit prior to share-based payments and unallocated central costs	65.6	77.3	–	142.9
Share-based payments (including social charges)	(1.4)	(3.1)	(4.6)	(9.1)
Unallocated central costs	–	–	(9.9)	(9.9)
Headline operating profit/(loss)	64.2	74.2	(14.5)	123.9
Amortisation of acquired intangible fixed assets	(1.5)	(3.0)	–	(4.5)
Operating profit/(loss) prior to exceptional items	62.7	71.2	(14.5)	119.4
Segment result	62.7	71.2	(14.5)	119.4
Investment revenue				0.1
Finance costs				(2.5)
Profit before taxation				117.0
Taxation				(19.7)
Profit for the year				97.3

Inter-segment sales are not material in either year.

The Group does not rely on any individual major customers.

Aerospace, Defence & Energy	Western Europe 2017 £m	North America 2017 £m	Emerging markets 2017 £m	Total ADE 2017 £m
Revenue
Total revenue	126.0	145.7	1.4	273.1
Result
Headline operating profit prior to share-based payments	30.7	34.7	0.2	65.6
Share-based payments (including social charges)	(0.5)	(0.9)	–	(1.4)
Headline operating profit	30.2	33.8	0.2	64.2
Amortisation of acquired intangible fixed assets	(0.3)	(1.2)	–	(1.5)
Operating profit prior to exceptional items	29.9	32.6	0.2	62.7
Segment result	29.9	32.6	0.2	62.7

Automotive & General Industrial	Western Europe 2017 £m	North America 2017 £m	Emerging markets 2017 £m	Total AGI 2017 £m
Revenue
Total revenue	258.9	105.5	52.7	417.1
Result
Headline operating profit prior to share-based payments	51.2	11.6	14.5	77.3
Share-based payments (including social charges)	(2.4)	(0.4)	(0.3)	(3.1)
Headline operating profit	48.8	11.2	14.2	74.2
Amortisation of acquired intangible fixed assets	(0.4)	(2.6)	–	(3.0)
Operating profit prior to exceptional items	48.4	8.6	14.2	71.2
Segment result	48.4	8.6	14.2	71.2

Group	ADE 2016 £m	AGI 2016 £m	Central costs and eliminations 2016 £m	Consolidated 2016 £m
Revenue
Total revenue	250.9	349.7	–	600.6
Result
Headline operating profit prior to share-based payments and unallocated central costs	56.3	57.9	–	114.2
Share-based payments (including social charges)	(0.7)	0.6	(0.6)	(0.7)
Unallocated central costs	–	–	(13.9)	(13.9)
Headline operating profit/(loss)	55.6	58.5	(14.5)	99.6
Amortisation of acquired intangible fixed assets	(1.5)	(3.0)	–	(4.5)
Operating profit/(loss) prior to exceptional items	54.1	55.5	(14.5)	95.1
Acquisition costs	–	(0.6)	–	(0.6)
Segment result	54.1	54.9	(14.5)	94.5
Finance costs				(2.6)
Profit before taxation				91.9
Taxation				(24.9)
Profit for the year				67.0

Aerospace, Defence & Energy	Western Europe 2016 £m	North America 2016 £m	Emerging markets 2016 £m	Total ADE 2016 £m
Revenue
Total revenue	115.1	134.7	1.1	250.9
Result
Headline operating profit prior to share-based payments	24.0	32.7	(0.4)	56.3
Share-based payments (including social charges)	(0.2)	(0.5)	–	(0.7)
Headline operating profit/(loss)	23.8	32.2	(0.4)	55.6
Amortisation of acquired intangible fixed assets	(0.3)	(1.2)	–	(1.5)
Operating profit prior to exceptional items	23.5	31.0	(0.4)	54.1
Segment result	23.5	31.0	(0.4)	54.1

Automotive & General Industrial	Western Europe 2016 £m	North America 2016 £m	Emerging markets 2016 £m	Total AGI 2016 £m
Revenue
Total revenue	214.9	94.3	40.5	349.7
Result
Headline operating profit prior to share-based payments	36.8	10.7	10.4	57.9
Share-based payments (including social charges)	0.4	0.1	0.1	0.6
Headline operating profit	37.2	10.8	10.5	58.5
Amortisation of acquired intangible fixed assets	(0.4)	(2.6)	–	(3.0)
Operating profit prior to exceptional items	36.8	8.2	10.5	55.5
Acquisition costs	(0.4)	(0.2)	–	(0.6)
Segment result	36.4	8.0	10.5	54.9

Other information Group	ADE 2017 £m	AGI 2017 £m	Central costs and eliminations 2017 £m	Consolidated 2017 £m
Gross capital additions	33.6	39.7	5.2	78.5
Depreciation and amortisation	23.5	39.3	1.5	64.3
Balance sheet
Assets:
Segment assets	352.6	530.2	76.9	959.7
Liabilities:
Segment liabilities	(60.2)	(133.2)	(68.8)	(262.2)
	292.4	397.0	8.1	697.5
Allocation of head office net liabilities	3.4	4.7	(8.1)	–
Adjusted segment net assets	295.8	401.7	–	697.5

Aerospace, Defence & Energy	Western Europe 2017 £m	North America 2017 £m	Emerging markets 2017 £m	Total ADE 2017 £m
Gross capital additions	23.4	9.3	0.9	33.6
Depreciation and amortisation	10.0	13.4	0.1	23.5
Balance sheet
Assets:
Segment assets	168.0	179.9	4.7	352.6
Liabilities:
Segment liabilities	(30.8)	(28.4)	(1.0)	(60.2)
Segment net assets	137.2	151.5	3.7	292.4

Automotive & General Industrial	Western Europe 2017 £m	North America 2017 £m	Emerging markets 2017 £m	Total AGI 2017 £m
Gross capital additions	20.1	12.6	7.0	39.7
Depreciation and amortisation	23.6	10.5	5.2	39.3
Balance sheet
Assets:
Segment assets	292.3	153.2	84.7	530.2
Liabilities:
Segment liabilities	(96.7)	(20.6)	(15.9)	(133.2)
Segment net assets	195.6	132.6	68.8	397.0

Group	ADE 2016 £m	AGI 2016 £m	Central costs and eliminations 2016 £m	Consolidated 2016 £m
Gross capital additions	25.8	39.0	5.9	70.7
Depreciation and amortisation	22.2	36.5	1.0	59.7
Balance sheet
Assets:
Segment assets	343.1	514.8	66.5	924.4
Liabilities:
Segment liabilities	(67.8)	(122.4)	(105.9)	(296.1)
	275.3	392.4	(39.4)	628.3
Allocation of head office net liabilities	(16.2)	(23.2)	39.4	–
Adjusted segment net assets	259.1	369.2	–	628.3

Aerospace, Defence & Energy	Western Europe 2016 £m	North America 2016 £m	Emerging markets 2016 £m	Total ADE 2016 £m
Gross capital additions	10.5	13.0	2.3	25.8
Depreciation and amortisation	9.3	12.7	0.2	22.2
Balance sheet
Assets:
Segment assets	142.7	196.9	3.5	343.1
Liabilities:
Segment liabilities	(29.7)	(36.3)	(1.8)	(67.8)
Segment net assets	113.0	160.6	1.7	275.3

Automotive & General Industrial	Western Europe 2016 £m	North America 2016 £m	Emerging markets 2016 £m	Total ADE 2016 £m
Gross capital additions	20.2	10.6	8.2	39.0
Depreciation and amortisation	21.7	10.5	4.3	36.5
Balance sheet
Assets:
Segment assets	279.8	163.3	71.7	514.8
Liabilities:
Segment liabilities	(91.8)	(21.0)	(9.6)	(122.4)
Segment net assets	188.0	142.3	62.1	392.4

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
	2017 £m	2016 £m	2017 £m	2016 £m
USA	236.8	219.0	272.1	298.9
France	111.9	97.6	78.1	73.8
Germany	91.4	69.9	86.5	85.4
UK	51.9	48.5	91.0	76.4
Sweden	38.9	36.1	36.8	37.5
Netherlands	29.4	25.3	22.7	22.6
Others	129.9	104.2	134.3	121.1
	690.2	600.6	721.5	715.7