Bodycote sees more difficult demand conditions in 2015

17th Nov 2014 07:31

Industrial materials engineer Bodycote saw group revenues drop by 3.9% in the four months to 31 October on the back of adverse currency movements, alongside weakness at its aerospace and defence arm and in its automotive business in Western Europe.At actual exchange rates group revenues dropped by 3.9%. However, at constant exchange rates the group´s performance was significantly better, with sales up 2.9% over the same period of 2013, and in-line with management´s expectations.Oil&gas on an improving trendSales at its Aerospace, Defence and Energy arm rose by 2.5% at constant currencies despite, despite a 3.3% decrease in revenues from aerospace and defence as a result of inventory adjustments at civil aviation engine original equipment manufacturers and ongoing reductions in defence budgets.Oil & Gas revenues on the other hand were up 13.6% with demand from the North American onshore sector remaining on an improving trend, according to the company. Steady growth, particularly for its hot isostatic pressing (HIP) product fabrication offering, was registered, the firm added.Weakness in Western European automotive segmentBodycote´s Automotive & General Industrial business saw revenues increase 3.2% at constant exchange rates (4.5% lower at actual exchange rates).There was a glaring disparity between the performance of the company´s US and European operations within this space. In Western Europe revenues advanced 0.9% whereas in North America they did so by 8.5%. To take note of, sales at its car and light trucks segment were hit by extended summer shutdowns at many Western European customers.General industrial revenues on the other hand continued to see a broad-based recovery, albeit at a slower rate than in the first half.Emerging market revenues were flat at constant exchange rates. Even so, the outfit´s expension strategy in emerging markets continued apace, with the opening of two heat treatment facilities, one close to Shanghai and another in Gebze, Turkey.Full-year expectations unchanged. However ...Despite the slowdown in growth seen in Europe management´s full-year expectations were unchanged. Nevertheless, the background for demand in 2015 "will be more difficult" in light of the weak economic conditions in the Eurozone. However, the Board expected that to be offset by the strength of the group´s specialist technologies.