Steering
success
Ball studs
Used in virtually every automobile made, ball studs are located within the ball joints in a vehicle's steering system, between the wheels and suspension, allowing rotating movement - similar to the way a human hip joint works. Because of their function and position within the vehicle, they must be extremely strong, corrosion resistant and able to cope with weight and stress. Their effective operation is critical to the safety of the vehicle and, therefore, the driver. Bodycote's proprietary Corr-I-Dur® process ensures the parts achieve the necessary material properties.
For further information about our services go to www.bodycote.com/services
The AGI Divisions
AGI revenue by market sector and geography
£m
Market sector
- Aerospace and Defence10.1
- Energy9.2
- Automotive195.4
- General Industrial202.4
- Total417.1
Geography
- Western Europe258.9
- North America105.5
- Emerging Markets52.7
- Total417.1
Bodycote has more than 180 facilities around the world which are organised into customer focused divisions; the ADE divisions and the AGI divisions. Our AGI customers include many multinational businesses which tend to operate on a regionally-focused basis, as well as numerous medium sized and smaller businesses, and all of which are important to Bodycote. Much of the business is locally oriented and the business is, therefore, organised on a regional basis.
Our extensive network of more than 120 AGI facilities enables the business to offer the widest range of technical capability and security of supply, while continuing to increase the proportion of technically differentiated services that it offers. Bodycote has a long and successful history of servicing this division's wide-ranging customer base.
The following review reflects constant currency growth rates unless stated otherwise.
Revenue was £417.1m, 13.1% ahead of the prior year (19.3% at actual rates), including a contribution of 2.1 percentage points to the growth from investments in new facilities and 5.0 percentage points from the plants acquired in 2016.
Growth in Western European revenues underpinned the divisions' growth, with double-digit growth in its automotive revenues and solid growth in the General Industrial business.
Emerging Markets' revenues also grew very strongly and now represent 13% of Bodycote's AGI business. Mexico and China both achieved revenue growth above 40%.
Headline operating profit1 was £74.2m (2016: £58.5m), 20% ahead of the prior period (27% at actual rates). Return on sales expansion has been a focus for our AGI business over many years now, and at 17.8% we delivered return on sales improvement once again (2016: 16.7%). Statutory operating profit grew to £71.2m (2016: £54.9m).
Net capital expenditure was £37.8m (2016: £37.4m), representing 1.0 times depreciation. We are continuing to invest in the rapid growth Emerging Markets, with investments in Mexico, China, Turkey and Poland contributing the majority of the growth from new facilities. We also made further investment in S3P as the strong growth in demand for the technology requires us to continue to add more capacity.
Return on capital employed increased to 17.8% (2016: 15.2%), reflecting the strong improvement in profitability and is the highest return that we have seen since these divisions were created.
- Headline operating profit is reconciled to operating profit in note 2 to the financial statements. Bodycote plants do not exclusively supply services to customers of a given market sector (see note 2 to the financial statements).