Bodycote Plc – Final Results

Bodycote plc – 2025 Full Year Results

Good strategic progress in mixed markets

Group summary Adjusted1 Statutory
Full year Full year Full Full year
year
2025 2024 Change 2025 2024 Change
Revenue £727.1m £757.1m -4.0% £727.1m £757.1m -4.0%
Operating profit £114.3m £129.0m -11.4% £83.6m £37.9m +121%
Operating margin 15.7% 17.0% -130 11.5% 5.0% +650 bps
bps
Operating cash £88.6m £115.5m -23.3% £143.5m £152.6m -6.0%
flow
Basic earnings per 44.4p 48.6p -8.6% 31.0p 10.8p +187%
share2
Full year ordinary 23.0p 23.0p –
dividend per share

Core summary1 Full year Full year Organic
2025 2024 Change
Revenue £671.6m £682.1m -0.3%
Adjusted operating profit £113.0m £125.5m -8.5%
Adjusted operating margin 16.8% 18.4%

Excludes Non-Core sites included in the Optimise programme; 2024 Core perimeter
re-stated for enlarged programme announced in July 2025

Highlights

· Executing at pace on Optimise, Perform & Grow strategy to create a high
-performing, resilient and faster growing Bodycote
· Significant steps taken to improve the quality of the Group’s portfolio,
including the disposal of ten Non-Core sites in France in 2025 and an Aerospace
& Defence (A&D) acquisition in January 2026
· Mixed market environment in FY25, with accelerating growth in A&D and
Industrial Gas Turbines (IGT) while Oil & Gas demand slowed and Automotive and
Industrial Markets remained challenging
· Group revenue £727.1m (FY24: £757.1m) with Core revenue broadly stable
organically (-0.3%); improved momentum in H2 (Core +3.2% year-on-year)
· Adjusted operating profit of £114.3m (FY24: £129.0m), ~£4m Optimise savings
partly offsetting fall in high-margin Oil & Gas revenue and challenging
Automotive & Industrial environment
· Statutory operating profit of £83.6m (FY24: £37.9m), driven by lower level
of exceptional charges
· Adjusted basic EPS of 44.4p (FY24: 48.6p), with lower profit partly offset
by reduced share count; statutory EPS increased to 31.0p (FY24: 10.8p) due to
higher statutory profit
· New £80m share buyback announced, enabled by strong balance sheet; expected
to be completed by the end of 2027
· Outlook: expect to deliver Core organic revenue growth, improved operating
margins and further strategic progress in FY26; remain confident in delivering
our medium-term financial targets

Commenting, Jim Fairbairn, Chief Executive Officer, said:

«2025 was a year of significant progress in executing our strategy, improving
the quality of the Group’s portfolio and positioning us for growth. The Optimise
programme is well underway and is delivering benefits in line with our
expectations. We are continuing to invest in a number of organic growth projects
in Specialist Technologies and in our faster-growing target end markets. I am
pleased with the development of our M&A pipeline, and in early 2026 we completed
the acquisition of Spectrum Thermal Processing, enhancing our A&D footprint in
North America. All of these actions are improving the quality of our portfolio
and creating a more resilient and faster growing Bodycote.

«Market conditions were mixed in 2025, with continued challenges in Automotive
and Industrial Markets partly offset by accelerating growth in Aerospace &
Defence and Industrial Gas Turbines. Core organic revenue was broadly stable for
the year but grew in the second half. Margins were impacted by mix headwinds and
the low volume environment, partly offset by growing Optimise benefits.

«In 2026 we expect to deliver Core organic revenue growth, supported by
continued strong demand in Aerospace & Defence and Industrial Gas Turbines.
Reflecting the subdued economic backdrop, conditions in Automotive and
Industrial Markets are expected to remain challenging in the near term, though
we are well positioned to capitalise when demand recovers. We expect operating
margins to improve in 2026, reflecting volume growth and further Optimise
benefits. We are mindful of the current elevated geopolitical uncertainty and
continue to monitor the situation closely. Our focus remains on delivering our
strategy at pace and we are confident in the delivery of our medium term
financial targets.»

1       Adjusted performance measures and Core measures represent the statutory
results excluding certain items; Organic measures are stated at constant
currency excluding any acquisitions and disposals in the current and prior
periods. These are all considered alternative performance measures (APMs) and a
reconciliation to the nearest IFRS equivalent to these measures is provided at
the end of these 2025 Results (hereafter `Report’).

2       An earnings per share reconciliation is provided in note 6 to the
consolidated financial statements.

END

Full Year Results Presentation

Bodycote will host an in-person presentation for investors and analysts at 9.30
am GMT on 11 March 2026.The presentation will also be webcast live. Please find
connection instructions below:

Webcast: https://www.bodycote.com/webcast2025

Conference call details:

United Kingdom local: +44 20 3936 2999

United Kingdom (Toll-free): +44 808 189 0158

Global Dial-In Numbers (https://www.netroadshow.com/conferencing/global
-numbers?confId=94290)

Participant Code:899080

Questions can be asked online via the webcast service. A recording will also be
available after the event.

For further information, please contact:

Bodycote plc FTI Consulting

Jim Fairbairn, Group Chief Executive Richard Mountain

Ben Fidler, Chief Financial Officer Edward Knight

Peter Lapthorn, Investor Relations & FP&A Tel: +44 203 727 1340

Tel: +44 1625 505 300

About Bodycote plc

Bodycote is the world’s largest provider of thermal processing services with a
global footprint. Through Specialist Technologies and Precision Heat Treatment,
Bodycote improves the properties of metals and alloys, extending the life of
vital components for a wide range of industries, including Aerospace, Defence,
Automotive, Power Generation, Oil & Gas, Construction, Medical and
Transportation. Customers have entrusted their products to Bodycote’s care for
more than 50 years. For more information, visit www.bodycote.com.

Full Year Commentary

Core overview

Core revenue was broadly stable for the year organically, down 0.3% to £671.6m
(FY24: £682.1m), with a much improved year-on-year trend in the second half
(+3.2%) compared with the first half (-3.5%). The end market environment was
mixed, as growth accelerated through the year in A&D and IGT, while Oil & Gas
demand softened and Industrial and Automotive conditions remained challenging.
By division, growth in Precision Heat Treatment (+1.3% organic) was offset by a
decline in Specialist Technologies (-3.7% organic), driven predominantly by
lower Oil & Gas revenues including the previously announced impact of the end of
a sizable contract in the UK. Excluding the Oil & Gas headwind, organic growth
in Specialist Technologies was c.2%.

Core adjusted operating profit was £113.0m (FY24: £125.5m) with adjusted
operating margins of 16.8% (FY24: 18.4%). The lower margins reflected a mix
headwind from the decline in high-margin Specialist Technologies Oil & Gas
activity, as well as challenging market conditions in Automotive and Industrial.
These headwinds were partly offset by ~£4m benefits from the Optimise programme,
which increased through the year in line with our expectations and supported the
improved margins in the second half.

Group overview

Including Non-Core businesses, total Group revenue was 4.0% lower at £727.1m
(FY24: £757.1m). The year-on-year reduction reflected disposals and the closure
and consolidation activity under the Optimise programme. Group adjusted
operating profit was £114.3m (FY24: £129.0m), with adjusted operating margins of
15.7% (FY24: 17.0%), reflecting the reduced Core margins partly offset by the
exit of low margin Non-Core sites.

Group statutory operating profit was £83.6m for the year (FY24: £37.9m), a
significant year-on-year increase as the lower adjusted operating profit was
more than offset by a reduced exceptional charge of £20.9m (FY24: £78.3m). The
2025 charge related solely to the Optimise programme, while 2024 was impacted by
impairments of £46.4m and an Optimise charge of £31.9m.

Basic adjusted earnings per share were 44.4p (FY24: 48.6p). The movement
reflected lower adjusted operating profit, partly offset by a c.5% reduction in
the weighted average share count for the year as a result of the Group’s share
buyback programme. The higher statutory operating profit resulted in an improved
statutory earnings per share of 31.0p (FY24: 10.8p).

Adjusted operating cash flow was £88.6m (FY24: £115.5m), with cash conversion of
78% (FY24: 90%). This reflected a higher level of net capital expenditure, with
increased investment to drive key organic growth initiatives. Free cash flow was
£47.5m (FY24: £70.6m), driven primarily by the lower level of operating cash
flow together with increased cash spend on the Optimise programme.

Closing net debt excluding lease liabilities increased to £104.8m (FY24:
£68.3m), with leverage remaining low at approximately 0.6x net debt/EBITDA. The
£36.5m increase in net debt reflected free cash flow of £47.5m, more than offset
by close to £100m in shareholder returns comprising ordinary dividend payments
of £40.9m and share buyback programme spend of £57.6m.

Divisional Performance

Specialist Technologies FY 2025 FY 2024 Organic Change

(restated) Change
Revenue 212.3 222.3 -3.7% -4.5%
Adjusted operating profit 57.6 65.5 -12.1%
Adjusted operating margin 27.1% 29.5% -240bps

Precision Heat Treatment FY 2025 FY 2024 Organic Change

(restated) Change
Revenue 459.3 459.8 +1.3% -0.1%
Adjusted operating profit 73.7 80.4 -8.3%
Adjusted operating margin 16.0% 17.5% -150bps

Non-Core FY 2025 FY 2024 Organic Change

(restated) Change
Revenue 55.5 75.0 -28.0% -26.0%
Adjusted operating profit 1.3 3.5 -62.9%
Adjusted operating margin 2.3% 4.7% -240bps

Specialist Technologies revenue declined by 3.7% organically to £212.3m (FY24:
£222.3m). The decline in revenue included a c.40% reduction in Oil & Gas
revenue, reflecting both the previously disclosed end of a significant customer
project and soft overall market demand, particularly in the Middle East, which
resulted in delays to the ramp-up of new project wins. Excluding this decline in
Oil & Gas, organic revenue rose c.2% in the year. This reflected strong growth
in A&D and IGT, partly offset by softer demand in Automotive and Industrial
Markets. Adjusted operating profit was £57.6m (FY24: £65.5m), with operating
margins reducing to 27.1% (FY24: 29.5%), largely as a result of the drop in high
-margin Oil & Gas activity. Performance in Specialist Technologies improved
considerably in the second half, with organic growth of +0.7% (H1: -7.7%) and
operating margins of 28.2% (H1: 26.0%), reflecting the acceleration in
underlying growth in A&D and IGT.

Precision Heat Treatment revenue grew by 1.3% organically to £459.3m (FY24:
£459.8m). There was strong growth in IGT, while A&D growth accelerated in the
second half (after a stable first half) as supply chain conditions improved
materially. The Automotive and Industrial market environment remained
challenging in both Europe and North America, albeit prior year comparators
eased in the second half. As a result of low volumes and the challenging market
backdrop, operating margins were 150bps lower at 16.0% (FY24: 17.5%). Benefits
from the Optimise programme increased through the year, including the gradual
transfer of the retained portion of revenue from Non-Core sites, as well as
overhead reductions. These actions leave the division well positioned to benefit
when Industrial and Automotive market conditions improve.

Strategic progress: Optimise, Perform, Grow

We continued to execute at pace on our strategy in 2025, with important
milestones achieved across all three pillars. We remain confident in delivering
on our medium-term targets and in creating a high-performing, more resilient and
faster growing Bodycote.

Optimise: we are now well progressed with the execution of the Optimise
programme, with increasing run-rate benefits being delivered. In November 2025
we completed the sale of ten Non-Core, Automotive and Industrial focused sites
in France for net proceeds of £19m. Following the disposal, our remaining
footprint in France is focused predominantly on A&D and higher-grade Industrial
Markets. We have now closed or consolidated eight of the other 20 Non-Core
sites, with cash costs to achieve this running in line with expectations. By the
end of 2026, around 85% of site closures are expected to be complete, resulting
in minimal run-rate Non-Core revenues. Overhead cost reductions have also
progressed well and are expected to be complete in the first half of 2026. We
delivered a £4m profit benefit in 2025, with a similar c.£4m incremental benefit
expected in 2026. We remain confident of reaching our target of at least £15m
run-rate benefits by mid-2027.

Perform: in 2025 we completed our Perform pilot programme, which validated the
benefits from rolling out operational excellence tools to our plant network.
Substantial benefits were seen across the pilot sites, which comprised around
10% of the Group’s portfolio. At one Aerospace & IGT focused site in Cincinnati,
Ohio, poor throughput was limiting the capacity available for growth. Through
the pilot, the factory layout was re-organised and a more efficient process flow
was designed, which achieved a ~5 mile reduction in the distance that parts
travelled each week and saved more than 500ft2 of production floorspace.
Following the success of the pilot programme, the full roll-out of operational
excellence tools across all Core sites was launched. This comprises two phases:
first, `foundational’ tools including 5S (a workplace organisation methodology)
and daily management; secondly, more advanced tools and the embedding of a
continuous improvement (`kaizen’) mindset. The first phase has progressed well
with foundational tools being embedded across our portfolio. The second phase is
now also underway and will take place across 2026-2028. By 2028, we continue to
expect the programme to deliver a benefit of c.100bps to Group operating margins
through improved productivity.

Grow: we have taken a number of steps towards accelerating growth in our target
high-growth, high-margin areas. First, following a detailed review of our
commercial capability, we reorganised our sales structure from divisional silos
into global, end market-focused teams. We also strengthened our business
development capability and updated our sales incentives to ensure they aligned
with our strategy. Secondly, to better leverage our global footprint we have
increased the emphasis on cross-selling and collaboration, including selective
use of key account management and the establishment of a small number of cross
-divisional working groups, focused on target markets (e.g. European Defence).
These efforts have yielded encouraging early results, including a significant
expansion of our Defence order pipeline in Germany. Moving into 2026, we
continue to invest in a number of key organic expansion projects which will be
commissioned in late 2026 or early 2027, including the first S3P facility in
Asia, increased HIP capacity to serve Aerospace & Defence, and a new Automotive
site in Mexico. Revenue from these projects will begin to ramp-up towards the
end of 2026, with a modest headwind expected during the year from associated
setup costs. Finally, we are continuing to accelerate our organic growth efforts
via both sustainability, where we increased our zero-carbon customer offering in
2025, as well as bolt-on M&A for which we have increased our capability and
continue to build an attractive pipeline. In January 2026 we completed the
acquisition of Spectrum Thermal Processing, an Aerospace-focused Precision Heat
Treatment business in Rhode Island, USA.

Capital allocation

Our strong balance sheet enables us to take a balanced and disciplined approach
to capital allocation, focused on improving the quality of the Group’s
portfolio, driving profitable growth and delivering sustainable shareholder
returns. This was evidenced in 2025 by the successful recycling of capital from
Non-Core areas (including £19m disposal proceeds) towards targeted growth
investment including £77m in capital expenditure. We continue to build our M&A
pipeline, which has begun to yield results with the purchase of Spectrum Thermal
Processing in January 2026. In addition we returned close to £100m to
shareholders in 2025 via dividends (£40.9m) and share buybacks (£57.6m). We
completed the fourth £30m tranche of the Group’s share buyback programme in
January 2026, taking the total amount repurchased since the programme began in
2024 to £120m. Today we are announcing a further £80m share buyback which is
expected to be completed by the end of 2027. This reflects both the Group’s
strong balance sheet and the planned increase in growth investment in the near
term to deliver the Group’s strategy.

Sustainability

We continue to focus on sustainability as an enabler of our strategy, both
through reducing our internal energy usage and as an accelerator of our revenue
growth. In terms of our own operations, since 2019 we have delivered a 27%
improvement in our energy intensity (kWh of energy consumed per £ of revenue
generated). We also made further progress towards our SBTi emissions target of a
46% reduction in Scope 1 and 2 emissions by 2030, having now delivered a 38%
reduction versus our 2019 base year. We continue to develop our lower-carbon
service offerings: in 2025, we announced new zero-emissions sites at Derby and
Rotherham in the UK and we are also now able to offer green premium services in
Gothenburg, Sweden. Our customer carbon calculator tool, which demonstrates the
emissions savings achievable through using our services, now covers processes
representing around 80% of Group revenues and has been independently validated
by Bureau Veritas. We are in active conversations with a number of our larger
customers around these offerings.

Outlook

We expect to deliver Core organic revenue growth in 2026, led by continued
strong demand in A&D and IGT. Reflecting the subdued economic backdrop,
conditions in Automotive and Industrial Markets are likely to remain challenging
in the near term, though we are well positioned to capitalise when demand
recovers. We expect operating margins to improve in 2026, reflecting volume
growth and further Optimise benefits, partly offset by a normalisation of
variable remuneration which has been lower than usual in 2024 and 2025. We are
mindful of the current elevated geopolitical uncertainty and continue to monitor
the situation closely. Our focus remains on executing our strategy at pace and
we are confident in the delivery of our medium term targets.

Chief Financial Officer’s Review

«Despite mixed end-market conditions, our core revenue remained stable and we
made significant progress on our efforts to improve the quality of the Group’s
portfolio.  Margins were impacted by reduced Oil & Gas work offset by starting
to see the benefit of our Optimise savings.»

Ben Fidler

Chief Financial Officer

Financial overview

2025 2024
£m £m
Revenue 727.1 757.1
Adjusted operating profit 114.3 129.0
Exceptional items (20.9) (78.3)
Amortisation of acquired intangible assets (9.7) (10.4)
Acquisition costs (0.1) (2.4)
Operating profit 83.6 37.9
Net finance charge (9.1) (9.5)
Profit before taxation 74.5 28.4
Taxation charge (19.1) (7.7)
Profit for the year 55.4 20.7

Group revenue decreased by 4.0% to £727.1m (2024: £757.1m) at actual exchange
rates and 2.8% at constant currency. The fall in revenue reflected a £19.5m
reduction in our non-core segment as we continued to execute our Optimise
strategy at pace and exit non-core sites. Reflecting mixed end market
conditions, at constant FX rates our core business revenue of £671.6m (2024:
£682.1m) was broadly stable, down 0.3%.

Adjusted operating profit decreased by 11.4% to £114.3m (2024: £129.0m), down
10.0% at constant currency, reflecting the fall in high-margin Oil & Gas revenue
in the year and a challenging Automotive & Industrial environment, partly offset
by the benefit of £4m of savings delivered through our Optimise programme.

These trends resulted in a reduction in Adjusted Operating Profit margin of
130bps to 15.7% (2024: 17.0%).

Statutory operating profit increased to £83.6m (2024: £37.9m) after a reduced
charge of £20.9m (2024: £78.3m) for exceptional items (see below).

Exceptional items

In 2024 the Group announced the Optimise programme which is designed to enhance
the quality of the Group’s portfolio. The programme is focused on closing and
consolidating a set of `Non-Core’ sites as well as delivering overhead savings.
The Non-Core sites operate in challenging end markets and regions, as well as
typically utilising older and more commoditised technologies with higher carbon
footprints. The programme was extended in 2025 to a total of 31 sites. Of this
total, eight sites have now been fully closed and in November 2025 the Group
sold a further ten Non-Core sites in France that primarily served automotive and
industrial markets, for a cash consideration of £19.3m.

Exceptional items for the year were £20.9m (2024: £78.3m) and solely reflected
the Group’s Optimise programme (2024: £31.9m related to the Optimise programme,
£18.0m related to goodwill impairment and £28.4m ERP impairment).

Further detail can be found in note 3 to the financial statements.

Net finance charge

The net finance charge reduced to £9.1m (2024: £9.5m), as summarised in the
table below:

2025 2024
£m £m
Interest on loans and bank overdrafts (3.7) (3.9)
Lease and other interest charges (2.6) (3.0)
Finance and bank charges (3.2) (3.4)
Total finance charges (9.5) (10.3)
Interest received 0.4 0.8
Net finance charge (9.1) (9.5)

The decrease in net finance charges during the year was driven primarily by
lower lease interest as leases were exited as part of actions resulting from the
Optimise programme.

Profit before taxation

2025 2024
£m £m
Adjusted profit before taxation 105.2 119.5
Exceptional items (20.9) (78.3)
Amortisation of acquired intangible assets (9.7) (10.4)
Acquisition costs (0.1) (2.4)
Profit before taxation 74.5 28.4

Adjusted profit before tax was £105.2m (2024: £119.5m) at actual exchange rates,
driven by the reduction in adjusted operating profit described above. Statutory
profit before taxation increased to £74.5m (2024: £28.4m) reflecting the reduced
impact of exceptional charges of £20.9m (2024: £78.3m), as well as a fall in
acquisition costs due to reduced acquisition activity in the year.

Taxation

The tax charge for the year was £19.1m (2024: £7.7m). Before accounting for
amortisation of acquired intangibles, acquisition costs and exceptional items,
the adjusted tax rate for the Group was 24.9%  (2024: 23.8%). The Group’s
overall tax rate reflects the blended average of the tax rates in the
jurisdictions around the world in which the Group trades and generates profit
and so is impacted by changes to the mix of profit generation. Looking ahead,
the adjusted tax rate is expected to moderately increase over the mid-term,
reflecting the expected growth in different geographies.

The effective statutory tax rate was 25.6%  (2024: 27.1%) with the decrease
primarily due to the exceptional goodwill impairment in 2024 not being
deductible for tax. Provisions of £23.8m (2024: £24.9m) are carried in respect
of potential future tax assessments related to `open’ historical tax years. Note
5 of the consolidated financial statements provides more information.

The OECD Pillar II Rules for a global minimum tax rate have been applicable to
the Group from 1 January 2024. The changes have not had a material impact on the
Group’s tax charge in 2025.

Pension scheme

In December 2025 the Group completed a buy-in for its UK pension scheme. This
had no net cash cost, secures the benefits for the scheme’s 680 members and
removes the Group’s exposure to future risk around asset performance.

Return on capital employed

Return on capital employed decreased by 150bps in the year to 14.2% from 15.7%
in 2024. The decrease was driven by the 130bps reduction in adjusted operating
profit margins, with capital employed being broadly stable.

Earnings per share

Basic adjusted earnings per share decreased 8.6% to 44.4p (2024: 48.6p),
reflecting the lower operating profit, partly offset by the impact of the share
buyback programme. Basic statutory earnings per share for the year increased to
31.0p (2024: 10.8p), reflecting the lower level of exceptional charges recorded
in the year. See note 6 of the consolidated financial statements for further
details of these calculations.

2025 2024
£m £m
Profit for the year 55.4 20.7
Attributed to non-controlling interests 0.5 0.7
Earnings attributable to equity 54.9 20.0
holders of the parent
Weighted average number of 176,816,708 186,012,493
ordinary shares in issue
Basic adjusted EPS 44.4 48.6
Basic EPS 31.0 10.8

Capital expenditure

Total capital expenditure in the year was £77.0m (2024: £60.5m). The increase
year-on-year was driven by increased investment in key growth and modernisation
projects, alongside a lower level of PP&E disposals. The Group remains committed
to maintaining its assets to the highest standards of quality and safety whilst
maintaining good discipline around its capital expenditure.

Management cash flow

2025 2024
£m £m £m
Adjusted operating profit 114.3 129.0
Depreciation and amortisation 70.8 75.3
Other, including impairment and profit on disposal of PPE (0.4) (5.6)
Adjusted EBITDA1 184.7 198.7
Net capital expenditure (77.0) (60.5)
Principal elements of lease payments (13.8) (13.5)
Provisions movement 0.4 (7.3)
Net working capital movement (5.7) (1.9)
Adjusted operating cash flow 88.6 115.5
Restructuring (14.3) (3.9)
Net finance costs (8.2) (8.9)
Net tax payments (18.6) (32.1)
Free cash flow 47.5 70.6
Net lease liability additions and disposals 2.7 (0.7)
Ordinary dividend (40.9) (42.9)
Net disposal/(acquisition) cash flow 17.5 (55.6)
Ordinary shares purchased for share buyback programme (57.6) (57.7)
Own shares purchased less share-based payments 3.4 0.6
Increase in net debt (27.4) (85.7)
Opening net debt (131.8) (51.7)
Foreign exchange movements (6.4) 5.6
Closing net debt (165.6) (131.8)
Lease Liabilities 60.8 63.5
Net debt excluding lease liabilities (104.8) (68.3)

1Refer to page 194 and note 22 of the 2025 Annual Report for a reconciliation of
Adjusted EBITDA to EBITDA and note 22 of the 2025 Annual Report for a
reconciliation of operating profit to EBITDA.

Adjusted operating cash flow decreased to £88.6m (2024: £115.5m) as a result of
decreased operating profit and higher capital spend as the Group has begun
investment in key growth initiatives. Operating cash conversion fell to 78%
(2024: 90%), principally due to the increased capex investment.

Free cash flow fell to £47.5m (2024: £70.6m) for the year principally due to the
reduced adjusted operating cash flow as well as increased cash outflows in
respect of the Optimise programme, partly offset by reduced tax outflows. The
statutory measure, net cash from operating activities, fell to £143.5m (2024:
£152.6m) as the lower profit was partly offset by decreased cash tax outflows.

Closing net debt was £165.6m (2024: £131.8m) and £104.8m (2024: £68.3m)
excluding lease liabilities, representing a net debt/adjusted EBITDA ratio of
0.6x.

Dividend and dividend policy

The Group has a 38-year track record of growing or maintaining the dividend and
aims to pay ordinary dividends so that cover will be at or above 2.0x earnings
on a `normalised’ multi-year basis.

In line with this policy, the Board has recommended a final dividend of 16.1p
(2024: 16.1p), bringing the full year dividend to 23.0p (2024: 23.0p). The
interim dividend of 6.9p was paid on 6 November 2025 to shareholders on the
register at the close of business on 3 October 2025. Subject to shareholder
approval at the 2026 AGM, the final dividend will be paid on 11 June 2025 to
shareholders on the register at the close of business on 1 May 2026.

Borrowing facilities

During the year the Group exercised an option to extend the maturity date of its
Revolving Credit Facility (`RCF’) to 19 September 2030.  An option to extend by
a further one year is executable up to 19 September 2026. The Group is financed
by a mix of cash flows from operations, short-term borrowings and leases. The
Group’s funding policy aims to ensure continuity of financing at a reasonable
cost, based on committed and uncommitted facilities and loans to be procured
from several banking partners. The Group continues to have access to committed
facilities at competitive rates and deems this to be an effective means of long
-term funding. At 31 December 2025, the facility was drawn as follows:

Facility Facility utilisation Facility headroom
£m £m £m
Revolving Credit Facility 251.0 129.2 121.8

In addition to the Revolving Credit Facility, the Group also has access to
additional committed facilities of £9.2m and cash of £25.2m, taking total
committed facility headroom to £156.2m at 31 December 2025 (2024: £194.5m).

Alternative performance measures

To provide additional information and analysis and to enable a full
understanding of the Group’s results, management makes use of a number of APMs
in its internal management of the business and as part of its internal and
external reporting. Definitions of these alternative performance measures, the
reasons why they are used, along with reconciliations to equivalent IFRS
measures can be found in the 2025 Annual Report.

Going concern

The Directors have formed a judgement, at the time of approving the financial
statements, that there are no material uncertainties that cast doubt on the
Group’s going concern status and that they have a reasonable expectation that
the Group has adequate resources to continue in operational existence for at
least the next 12 months. In making this judgement, they have considered the
impacts of potential severe but plausible consequences arising from the Group’s
activities. For this reason, the Directors continue to adopt the going concern
basis in preparing the consolidated financial statements.

Directors’ responsibilities statement

This responsibilities statement has been prepared in connection with the Group
consolidated financial statements,

extracts of which are included within this announcement. The Directors confirm
that to the best of their knowledge:

· The condensed consolidated financial statements included in this document
are derived from the audited consolidated financial statements of the Group,
prepared in accordance with UK-adopted international accounting standards (they
do not contain sufficient information to comply with UK-adopted international
accounting standards);
· The Group’s consolidated financial statements, prepared in accordance with
UK-adopted international accounting standards, give a true and fair view of the
assets, liabilities, financial position, cash flows and profit of the Group;
· There have been no significant individual related party transactions during
the year;
· There have been no significant changes in the Group’s related party
relationships from that reported in the half-yearly results for the six months
ended 30 June 2025; and
· The Strategic Report includes a fair review of the development and
performance of the business and the position of the Group, together with a
description of the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the Directors’ Report is
approved:

· So far as the Director is aware, there is no relevant audit information of
which the Group’s auditors are unaware; and
· They have taken all steps that they ought to have taken as a Director in
order to make themselves aware of any relevant audit information and to
establish that the Group’s or Company’s auditor are aware of that information.

The Group’s consolidated financial statements, and related notes, including this
responsibilities statement, were

approved by the Board and authorised for issue on 11 March 2026 and were signed
on their behalf by:

By order of the Board,

DirectorDirector

J. Fairbairn B. Fidler

Audited financial information

The condensed consolidated financial statements and notes 1 to 12 for the year
ended 31 December 2025 included

below are derived from the Group’s consolidated financial statements which have
been audited by

PricewaterhouseCoopers LLP. The unmodified audit report is available for
inspection at the Group’s registered office.

Consolidated income statement

For the year ended 31 December 2025

2025 2024
Note £m £m
Revenue 1 727.1 757.1
Cost of sales and overheads1 2 (627.0) (647.8)
Other operating income1 2 6.5 9.7
Other operating expenses1 2 (0.7) (0.4)
Net impairment losses on financial assets1 (1.4) (2.4)
Operating profit before exceptional items 1,2 104.5 116.2
Exceptional items 3 (20.9) (78.3)
Operating profit 2 83.6 37.9
Finance income 0.4 0.8
Finance charges (9.5) (10.3)
Profit before taxation 74.5 28.4
Taxation charge 4 (19.1) (7.7)
Profit for the Year 55.4 20.7
Attributable to:
Equity holders of the Parent 54.9 20.0
Non-controlling interests 0.5 0.7
55.4 20.7

Earnings per share 5 Pence Pence
Basic 31.0 10.8
Diluted 31.0 10.7

1Excludes exceptional items. Total cost of sales and overheads including
exceptional items are £627.8m (2024: £648.5m), other operating income including
exceptional items are £8.6m (2024: £9.7m), other operating expenses including
exceptional items are £23.0m (2024: £77.7m), and net impairment losses on
financial assets are £1.3m (2024: £2.7m).

Consolidated statement of comprehensive income

For the year ended 31 December 2025

2025 2024
£m £m
Profit for the Year 55.4 20.7
Items that will not be
reclassified to profit or loss:
Actuarial gains/(losses) on 1.4 (0.3)
defined benefit pension schemes
Tax on retirement benefit – (0.1)
obligations that will not be
reclassified
Total items that will not be 1.4 (0.4)
reclassified to profit or loss
Items that may be reclassified
subsequently to profit or loss:
Exchange losses on translation of (10.5) (13.8)
overseas operations
Movements on hedges of net (6.9) 4.1
investments
Movements on cash flow hedges 0.1 (0.1)
Total items that may be (17.3) (9.8)
reclassified subsequently to
profit or loss
Total other comprehensive expense (15.9) (10.2)
for the year
Total comprehensive income for 39.5 10.5
the year
Attributable to:
Equity holders of the parent 39.5 10.1
Non-controlling interests – 0.4
39.5 10.5

Consolidated balance sheet

For the year ended 31 December 2025

2025 2024
Note £m £m
Non-current assets
Goodwill 6 200.5 207.0
Other intangible assets 99.2 114.4
Property, plant and equipment 477.7 481.2
Right-of-use assets 54.3 56.4
Deferred tax assets 3.4 7.0
Trade and other receivables 2.6 2.8
837.7 868.8
Current assets
Inventories 28.7 28.1
Current tax assets 13.0 10.1
Trade and other receivables 145.2 141.3
Cash and bank balances 25.2 19.1
212.1 198.6
Assets held for sale 3.8 –
Total assets 1,053.6 1,067.4
Current liabilities
Trade and other payables 122.2 146.7
Current tax liabilities 4 34.3 32.2
Borrowings (restated)1 0.8 3.1
Lease liabilities 13.6 13.1
Provisions 13.1 11.9
184.0 207.0
Net current assets/(liabilities)1 28.1 (8.4)
Non-current liabilities
Borrowings (restated)1 129.2 84.3
Lease liabilities 47.2 50.4
Retirement benefit obligations 10.3 11.3
Deferred tax liabilities 38.6 41.2
Provisions 7 2.2 2.5
Other payables 0.2 0.8
227.7 190.5
Total liabilities 411.7 397.5
Net assets 641.9 669.9
Equity
Share capital 8 30.0 31.6
Share premium account 177.1 177.1
Own shares (6.5) (11.1)
Translation reserves 28.8 38.8
Other reserves 135.5 141.3
Retained earnings 275.3 290.4
Equity attributable to equity holders of the parent 640.2 668.1
Non-controlling interests 1.7 1.8
Total equity 641.9 669.9

1In 2025 the Group reclassified its Revolving Credit Facility liability to
present it as a non-current liability. See note 15 of the 2025 Annual Report for
details.

Consolidated cash flow statement

For the year ended 31 December 2025

2025 2024
Note £m £m
Net cash from operating activities 10 143.5 152.6
Investing activities
Purchases of property, plant and equipment (76.4) (70.1)
Proceeds on disposal of property, plant and equipment 4.7 13.4
Purchases of other intangible assets (2.1) (4.1)
Acquisition of businesses, net of cash acquired – (52.2)
Net proceeds on disposal of business 3 17.6 0.4
Repayments of loans issued/(loans issued) 0.2 (1.0)
Interest received 0.4 0.8
Net cash used in investing activities (55.6) (112.8)
Financing activities
Interest paid (8.6) (9.7)
Dividends paid 9 (40.9) (42.9)
Principal elements of lease payments (13.8) (13.5)
Drawdown of bank loans 53.6 75.2
Repayments of bank loans (12.3) (19.0)
Ordinary shares purchased for share buyback 8 (57.6) (57.7)
Net cash used in financing activities (79.6) (67.6)
Net increase/(decrease) in cash and cash equivalents 8.3 (27.8)
Cash and cash equivalents at beginning of year 16.0 44.7
Effect of foreign exchange rate changes 0.1 (0.9)
Cash and cash equivalents at end of year 10 24.4 16.0

Consolidated statement of changes in equity

For the year ended 31 December 2025

Share Share Own Translation Other Retained Equity
Non Total
capital premium shares reserves reserves earnings
attributable -controlling equity
account to
equity
holders
of
the
interests
parent
£m £m £m £m £m £m £m
£m £m
1 January 33.1 177.1 (15.6) 52.3 139.9 404.0 790.8
1.5 792.3
2024
Profit for – – – – – 20.0 20.0
0.7 20.7
the
year
Exchange – – – (13.5) – – (13.5)
(0.3) (13.8)
differences
on
translation
of overseas
operations
Movements on – – – – 4.1 – 4.1
– 4.1
hedges of net
investments
Movements on – – – – (0.1) – (0.1)
– (0.1)
cash
flow hedges
Actuarial – – – – – (0.4) (0.4)
– (0.4)
losses
on defined
benefit
pension
schemes
net of
deferred
tax
Total – – – (13.5) 4.0 19.6 10.1
0.4 10.5
comprehensive
income for
the
year
Ordinary (1.5) – – – 1.5 (90.6) (90.6)
– (90.6)
shares
acquired
Settlement of – – 4.5 – (4.7) 0.2 –
– –
share awards
Share-based – – – – 0.6 – 0.6
– 0.6
payments
Dividends – – – – – (42.8) (42.8)
(0.1) (42.9)
31 December 31.6 177.1 (11.1) 38.8 141.3 290.4 668.1
1.8 669.9
2024
Profit for – – – – – 54.9 54.9
0.5 55.4
the
year
Exchange – – – (10.0) – – (10.0)
(0.5) (10.5)
differences
on
translation
of overseas
operations
Movements on – – – – (6.9) – (6.9)
– (6.9)
hedges of net
investments
Movements on – – – – 0.1 – 0.1
– 0.1
cash
flow hedges
Actuarial – – – – – 1.4 1.4
– 1.4
gains
on defined
benefit
pension
schemes
net of
deferred
tax
Total – – – (10.0) (6.8) 56.3 39.5
– 39.5
comprehensive
income for
the
year
Ordinary (1.6) – – – 1.6 (30.0) (30.0)
– (30.0)
shares
acquired
Settlement of – – 4.6 – (4.0) (0.6) –
– –
share awards
Share-based – – – – 3.4 – 3.4
– 3.4
payments
Dividends – – – – – (40.8) (40.8)
(0.1) (40.9)
31 December 30.0 177.1 (6.5) 28.8 135.5 275.3 640.2
1.7 641.9
2025

The own shares reserve represents the cost of Bodycote plc shares held by the
Bodycote International Employee Benefit Trust to satisfy share-based payment
awards granted under the Group’s incentive schemes. As at 31 December 2025,
944,252 (31 December 2024: 1,627,781) ordinary shares of 173/11p each that had
been acquired in the market were held by the Bodycote International Employee
Benefit Trust. Included within other reserves is a capital redemption reserve of
£132.9m (2024: £131.3m) which consists of £129.8m (2024: £129.8m) transferred
from retained earnings on the conversion of B shares into deferred shares in
2008 and 2009, and a total of £3.1m arising from the share buyback programme
which commenced in 2024 and was extended in July 2025. Of the £3.1m, £1.6m was
incurred in 2025. See note 8 for details.

Notes to the consolidated financial statements

Year ended 31 December 2025

General information

Bodycote plc is a company incorporated in the United Kingdom under the Companies
Act 2006. The nature of the Group’s operations and its principal activities, and
information on the Group’s objectives, are included within the Group’s Company
overview and Strategic report in the 2025 Annual report.

Items included in the financial statements of each entity in the Group are
measured using the currency of the primary economic environment in which the
entity operates. These condensed consolidated financial statements are presented
in pounds sterling, which is the functional and presentation currency of the
Parent Company. Foreign operations are included in accordance with the policies
set out in the Foreign Currencies accounting policy in the 2025 Annual report.

Basis of preparation and non-statutory financial statements

The financial statements of the Group, from which these condensed consolidated
financial statements are derived, have been prepared in accordance with UK
-adopted international accounting standards as applied in accordance with the
provisions of the Companies Act 2006.

The financial information set out above does not constitute the Company’s
statutory accounts for the years ended 31 December 2025 or 2024 but is derived
from those accounts. Statutory accounts for 2024 have been delivered to the
Registrar of Companies and those for 2025 will be delivered following the
Company’s Annual General Meeting. The auditor has reported on those accounts;
their reports were unqualified, did not draw attention to any matters by way of
emphasis and did not contain statements under s.498 (2) or (3) of the Companies
Act 2006.

1.Segmental analysis

The Group has 136 operational locations across the world providing a range of
market sectors with thermal processing services.  It organises its plants into
three divisions:

Specialist Technologies: This division includes the Group’s Hot Isostatic
Pressing (`HIP’) business; its Speciality Stainless Steel Processes (`S3P’)
business and its Surface Technology business.

Precision Heat Treatment: This division includes the Group’s business centred on
the controlled heating and cooling of metals to obtain the desired mechanical,
chemical and metallurgical properties for the end process. It also includes the
Group’s Low Pressure Carburising and Corr-I-Dur processes.

Non-core: The Group has identified a number of plants that form part of its
Optimisation programme and are considered non-core. These plants typically
provide heat treatment services using older, less efficient and more carbon
-intensive technologies. The Group is managing these sites with a view to
merging them with other plants in the portfolio, closing plants, or selling them
over the coming 24 months. In July 2025 this programme was expanded to include
an additional 13 plants.

The Group’s Chief Executive Officer is considered to be the Chief Operating
Decision Maker (`CODM’) of the Group and reviews the results of each of the
divisions on a monthly basis focusing on adjusted operating profit which is
defined as operating profit before acquisition costs, amortisation of acquired
intangibles and exceptional items. Accordingly, the three divisions outlined
above are considered to be the Group’s Operating and Reportable segments as
defined in IFRS 8 Operating Segments.

In determining the segments’ adjusted operating profit, the Group makes certain
allocations of costs that are incurred centrally to benefit each of the
segments. To the extent that these costs are of a nature that will continue to
be incurred after the Group’s Optimisation programme has been completed, they
are not allocated to the non-core segment.

As described above, during 2025 the Group expanded its Optimisation programme
(«Optimise») to include a further 13 plants. At the same time, actions at one
site that had been part of the Optimisation programme resulted in its removal
from the programme. Consequently the prior year segmental analysis has been
restated to reflect the updated Optimisation programme and the way that the
Group is now viewed by the CODM.

2025
Specialist Precision Central costs Total Non Total
Technologies Heat and core -core Group
Treatment eliminations
£m £m £m £m £m £m
Revenue 212.3 459.3 – 671.6 55.5 727.1
Result
Adjusted 57.6 73.7 (18.3) 113.0 1.3 114.3
operating
profit/(loss)

Amortisation (8.6) (1.1) – (9.7) – (9.7)
of acquired
intangible
assets
Acquisition – – (0.1) (0.1) – (0.1)
costs
Operating 49.0 72.6 (18.4) 103.2 1.3 104.5
profit/(loss)

before
exceptional
items
Exceptional (0.9) (3.7) (0.3) (4.9) (16.0) (20.9)
items
Operating 48.1 68.9 (18.7) 98.3 (14.7) 83.6
profit/(loss)

Finance 0.4
income
Finance (9.5)
charges
Profit 74.5
before
taxation
Taxation (19.1)
Profit for 55.4
the Year

2024
restated
Specialist Precision Central costs Total Non Total
Technologies Heat and core -core Group
Treatment eliminations
£m £m £m £m £m £m
Revenue 222.3 459.8 – 682.1 75.0 757.1
Result
Adjusted 65.5 80.4 (20.4) 125.5 3.5 129.0
operating
profit/(loss)

Amortisation (8.7) (1.7) – (10.4) – (10.4)
of acquired
intangible
assets
Acquisition (2.4) – – (2.4) – (2.4)
costs
Operating 54.4 78.7 (20.4) 112.7 3.5 116.2
profit/(loss)

prior to
exceptional
items
Exceptional (1.4) (24.4) (30.7) (56.5) (21.8) (78.3)
items
Operating 53.0 54.3 (51.1) 56.2 (18.3) 37.9
profit/(loss)

Finance 0.8
income
Finance (10.3)
charges
Profit 28.4
before
taxation
Taxation (7.7)
Profit for 20.7
the Year

The segmental analysis has been restated to reflect the expansion of the
Optimise programme in July 2025. Adjusted operating profit of the Specialist
Technologies segment has been increased by £0.5m, to £65.5m, and Precision Heat
Treatment decreased by £2.6m, to £80.4m. The net effect is to decrease core
adjusted operating profit and increase non-core adjusted operating profit by
£2.1m with no effect on the Group’s adjusted operating profit.

Inter-segment revenues are not material in either year.

The Group does not have any one customer that contributes more than 10% of
revenue in either year.

2025
Specialist Precision Total core Non-core Total Group
Technologies Heat
Treatment
Revenue £m £m £m £m £m
Western 105.1 215.4 320.5 40.2 360.7
Europe
North 100.0 162.0 262.0 14.2 276.2
America
Emerging 7.2 81.9 89.1 1.1 90.2
Markets
Group 212.3 459.3 671.6 55.5 727.1

2024
restated
Specialist Precision Total core Non-core Total Group
Technologies Heat
Treatment
Revenue £m £m £m £m £m
Western 119.1 211.2 330.3 50.9 381.2
Europe
North 95.7 165.7 261.4 23.0 284.4
America
Emerging 7.5 82.9 90.4 1.1 91.5
Markets
Group 222.3 459.8 682.1 75.0 757.1

Other information

2025
Specialist Precision Central costs Total Non Total
Technologies Heat and core -core Group
Treatment eliminations
£m £m £m £m £m £m
Gross capital 23.2 59.3 4.4 86.9 4.4 91.3
additions
Depreciation 23.3 48.6 3.0 74.9 5.6 80.5
and
amortisation
Impairments – (0.3) 0.3 – 3.7 3.7

2024
restated
Specialist Precision Central costs Total Non Total
Technologies Heat and core -core Group
Treatment eliminations
£m £m £m £m £m £m
Gross capital 18.7 57.9 5.2 81.8 8.2 90.0
additions
Depreciation 23.5 48.7 3.8 76.0 9.7 85.7
and
amortisation
Impairments 0.8 23.1 28.4 52.3 13.0 65.3

Geographical information

The Group’s revenue from external customers analysed by country in which the
service is delivered is detailed below:

2025 2024
Revenue £m £m
USA 260.8 271.2
France 95.9 104.2
Germany 69.9 72.3
UK 65.2 68.5
Sweden 45.1 50.3
Netherlands 31.3 29.5
Mexico 25.0 24.7
China 20.5 20.4
Canada 15.4 13.2
Poland 13.3 12.8
Czech Republic 13.2 12.9
Italy 12.5 15.7
Finland 11.1 10.2
Turkey 10.6 11.1
Other countries less than £10m revenue 37.3 40.1
Group 727.1 757.1

2.Operating profit

2025 2024
£m £m
Revenue 727.1 757.1
Cost of sales (446.3) (460.4)
Gross profit 280.8 296.7
Selling costs (22.0) (22.3)
Administration expenses (158.7) (165.1)
Other operating income 6.5 9.7
Other operating expenses (0.7) (0.4)
Net impairment losses on financial assets (1.4) (2.4)
Operating profit before exceptional items 104.5 116.2
Exceptional items (note 3) (20.9) (78.3)
Operating profit 83.6 37.9

Operating profit for the year has been arrived at after charging/(crediting):

2025 2024
£m £m
Within operating profit before
exceptional items:
Employee costs 268.0 280.6
Temporary agency contractors 15.6 16.7
Pension scheme administration 0.4 0.6
expenses
Utility costs 70.3 68.8
Consumables and gases 53.6 52.6
Transport and carriage costs 11.5 12.4
Inventories expensed 69.8 70.5
Repairs and maintenance 24.5 25.5
Depreciation of property, plant 56.5 59.7
and equipment
Depreciation of right-of-use 13.1 13.6
assets
Amortisation of other intangible 10.9 12.4
assets
Impairment loss on trade 1.4 2.4
receivables
Impairment of property, plant and – 0.1
equipment
Gain on disposal of property, (0.4) (5.5)
plant and equipment
Gain on disposal of right-of-use – (0.2)
assets
Government assistance support (1.4) (1.0)
received1
Acquisition costs 0.1 2.4
Net foreign exchange loss/(gain) 0.5 (0.4)

Within exceptional items:
Site closure and associated costs 11.8 5.2
(see note 3)
Impairment of property, plant and 3.1 16.9
equipment (see note 3)
Impairment of other intangible 0.3 29.2
assets (see note 3)
Impairment of right-of-use assets 0.3 1.1
(see note 3)
Impairment of goodwill (see notes – 18.0
3 & 6)
(Gain)/loss on disposal of (1.8) 0.1
property, plant and equipment (see
note 3)

1Government assistance consists of support towards R&D of £1.1m (2024: £0.4m);
local economic support of £0.3m (2024: £0.4m); energy support programmes £nil
(2024: £0.1m); and £nil (2024: £0.1m) in respect of other support programmes.

3.Exceptional items

2025 2024
£m £m
Impairment of ERP intangible asset: – 28.4
Impairment of goodwill – 18.0
Optimisation programme: 20.9 31.9
Impairment of assets 3.7 18.8
Severance and redundancy cost 5.6 4.1
Site closure and associated costs 11.8 5.2
(Gains)/losses on sale of property, plant and equipment (1.8) 0.1
Loss on sale of business 0.9 2.7
Other programme costs 0.7 1.0
Total exceptional items 20.9 78.3

Optimise programme

In 2024 the Group announced the Optimise programme to drive improvements across
the business, primarily centred on restructuring and/or closing sites that were
utilising older, less efficient and more carbon-intensive technologies. This
program was extended in July 2025 to include a further 13 sites.

During 2025, the Group has continued to progress the site closures and asset
sales forming part of Optimise, recognising an exceptional charge of £20.9m
(2024: £31.9m), net of gains on the sale of the associated assets.

Impairments of £3.7m (2024: £18.8m) have been charged to exceptional items
relating to sites, operational lines, equipment and intangible assets that will
no longer generate benefits. These impairments comprise of £3.1m (2024: £16.9m)
for property, plant and equipment, £0.3m (2024: £1.1m) for right-of-use assets
and £0.3m impairment of software and acquired intangibles (2024: £0.8m). Gains
of £1.8m (2024: losses of £0.1m) were realised on the sale of property, plant
and equipment assets that were no longer required as a result of Optimise.

Site closure costs of £11.8m (2024: £5.2m) were incurred in respect of closures
announced before 31 December 2025 including amounts charged to provisions of
£6.8m (2024: £5.2m) net of provision releases of £0.6m (2024: £nil). Related
severance and redundancy costs of £5.6m (2024: £4.1m) were incurred in relation
to staff at sites and in central roles who were informed that they were affected
by the Optimisation programme before 31 December 2025. This comprised of £6.8m
(2024: £3.3m) charged to provisions net of provision releases £1.3m (2024: £nil)
and £nil (2024: £0.8m) charged directly to the profit and loss account.

In November 2025 the Group sold 10 non-core sites in France. These sites were
focused on serving automotive and industrial markets and were not well aligned
with Bodycote’s strategic focus areas. Cash consideration of £19.3m was received
for the assets sold with a loss on disposal of £0.9m recognised within
exceptional costs. Up to the date of disposal, the plants divested achieved 2025
full year revenues of £22.4m, and operating profit before exceptional items of
£0.4m. The loss on sale of business in 2024 of £2.7m, relates to the sale of the
Metz Tessy business in France, consisting of a single site. See the 2024 Annual
Report for further details.

See also the strategic review of the 2025 Annual Report for further details of
the Optimisation  programme.

4.Taxation charge

2025 2024
£m £m
Current taxation – charge for the year 17.5 20.7
Current taxation – adjustments in respect of previous years – 1.5
Deferred tax – charge for the year 0.4 (13.2)
Deferred tax  – adjustments in respect of previous years 1.2 (1.3)
Total taxation charge 19.1 7.7

The Group operates in several jurisdictions, some of which have tax rates in
excess of the UK rate, and as such it uses a weighted average country tax rate,
rather than the UK tax rate, for the reconciliation of the charge for the year
to the profit before taxation per the consolidated income statement as this
provides the most meaningful information to the users of the financial
statements. The weighted average corporation tax rate was 25.1% in 2025 (2024:
25.1%). The OECD Pillar II GloBE Rules do not have a material impact on the
Group’s current tax charge and the Group has applied the exception in IAS 12 and
has not recognised, or disclosed, information about deferred tax assets and
liabilities related to these rules.

The charge for the year can be reconciled to the profit before taxation per the
consolidated income statement as follows:

2025 2024
£m £m
Profit before taxation 74.5 28.4
Tax at the weighted average country tax rate 18.7 7.2
of 25.1 % (2024: 25.1%)
Tax effect of expenses in various 2.0 1.6
jurisdictions not deductible in determining
taxable profit
Impact of recognition or derecognition of (0.6) 0.8
deferred tax balances
Tax effect of other adjustments in respect of
previous years:
Current tax1 – 1.5
Deferred tax1 1.2 (1.3)
Effect of financing activities between (1.9) (2.5)
jurisdictions2
Impact of trade and minimum corporate taxes 0.2 0.2
Effect of changes in statutory tax rates on (0.8) (0.2)
deferred tax assets and liabilities
Other tax risk provision movements3 0.3 0.4
Tax expense for the year 19.1 7.7

12025 and 2024 adjustments in current and deferred tax in respect of previous
years relate mainly to changes in assumptions and outcomes in UK and overseas
tax positions.

2The Group is externally financed by a mix of cash flows from operations and
short-term borrowings. Internally, operating subsidiaries are predominantly
financed by intercompany loans. The effect of these arrangements is stated net
of provisions, including a credit relating to a provision release of £1.9m
(2024: £2.5m) based on management’s estimation of the tax risk relating to the
potential disallowance of interest.

3Includes provisions for local tax risks and cross-border transactions. 2025
includes a credit of £0.3m (2024: £2.2m) for the release of provisions for tax
risks which are no longer within an audit period.

Tax on retirement benefit obligations taken directly to equity was £nil
(2024:charge of £0.1m).

The Group recognises a number of tax provisions in respect of ongoing tax
enquiries and in recognition of the multinational tax environment in which
Bodycote operates where the nature of the tax positions that are taken is often
complex and subject to change. Included within current tax liabilities of £34.3m
(2024: £32.2m) are tax provisions totalling £23.8m (2024: £24.9m), of which
£2.0m become ineligible for tax audit during 2026 (2024: £4.2m become ineligible
in 2025). The provisions are based on an assessment of a range of possible
outcomes to determine reasonable estimates of the consequences of tax authority
audits in the various tax jurisdictions in which the Group operates. The
material provisions relate to the financing of the Group’s operations where
management’s judgement is exercised to determine the quantum of the tax risk
provisions based on an understanding of the appropriate local tax legislation,
taking into consideration the differences of interpretation that can arise on a
wide variety of issues including the nature of ongoing tax audits and the
experience from earlier enquiries, and determining whether any possible
liability is probable. The Group’s individual provisions by country vary in
quantum from £1.9m to £8.8m (2024: £1.9m to £8.8m).

5.Earnings per share

2025 2024
£m £m
Earnings
Earnings for the purpose of basic earnings per share being net 54.9 20.0
profit attributable to equity holders of the parent

Number Number
Number of shares
Weighted average number of ordinary shares 176,816,708 186,012,493
for the purpose of basic earnings per share
Effect of dilutive potential ordinary
shares:
Shares subject to performance conditions 53,826 418,728
Shares subject to vesting conditions 355,857 448,614
Weighted average number of ordinary shares 177,226,391 186,879,835
for the purpose of diluted earnings per
share

Pence Pence
Earnings per share:
Basic 31.0 10.8
Diluted 31.0 10.7

2025 2024
£m £m
Adjusted earnings
Net profit attributable to equity holders of the parent 54.9 20.0
Add back:
Amortisation of acquired intangible assets 9.7 10.4
Acquisition costs 0.1 2.4
Exceptional items 20.9 78.3
Tax on adjusted earnings (7.1) (20.7)
Adjusted earnings 78.5 90.4

Pence Pence
Adjusted earnings per share:
Basic 44.4 48.6
Diluted 44.3 48.4

As at 31 December 2025, the performance conditions have only been met for some
of the Group’s open share plans. Those plans result in nil dilution of earnings
per share and 0.1p dilution in adjusted earnings per share (2024: 0.1p and 0.2p
dilution respectively).

6.Goodwill

2025 2024
£m £m
Cost
At 1 January 285.9 282.3
Exchange differences (5.9) (0.2)
Transfer to assets held for sale (2.0) –
Recognised on acquisition of businesses – 3.8
Total cost 278.0 285.9
Accumulated impairment
At 1 January 78.9 60.8
Impairment – 18.0
Exchange differences (1.4) 0.1
Total accumulated impairment 77.5 78.9
Carrying amount 200.5 207.0

Goodwill acquired through a business combination is allocated to the groups of
CGUs that are expected to benefit from the synergies of the combination.
Goodwill is tested for impairment at least annually or more frequently if there
are indications that its carrying value may not be recoverable. To test the
goodwill for impairment, the carrying value of the groups of CGUs containing
goodwill are compared to their recoverable amounts, calculated as the higher of
their fair value less costs to dispose and value in use.

The Group has determined its CGUs based on geography, customer groupings, and
processes to reflect the lowest level at which the Group’s operations generate
cash inflows that are largely separate to each other. In previous years they
have also formed the lowest level to which the Group has allocated goodwill and
the level at which goodwill has been monitored internally. A number of changes
in the Group’s management and operational structures took place in early 2025,
as a result of the strategic review undertaken in 2024, and the Group’s internal
reporting was updated as a result of those changes. Accordingly, in the year
ended 31 December 2025 the Group has reassessed the level at which goodwill is
monitored internally and, following this reassessment, it has concluded that the
lowest level at which management reviews goodwill is now the following six
groups of CGUs:

· HIP

· S3P

· Surface Technology (`ST’)

· Global Automotive and General Industrial (`AGI’), excluding Emerging markets

· Global Aerospace, Defence and Energy (`ADE’)

· Emerging markets

A summary showing how the CGUs at 31 December 2024 were combined into the above
groups of CGUs is set out below:

Goodwill
2024
Group of CGUs CGUs £m
HIP North America HIP 3.9
Europe HIP 2.2
Total HIP 6.1
ST Europe ST 12.6
North America ST 28.5
Total ST 41.1
S3P Total S3P nil
Total Specialist Technologies 47.2
AGI Europe AGI1 24.9
North America AGI 39.4
Total AGI 64.3
ADE UK ADE 11.0
North America ADE 69.7
France and Belgium ADE 1.2
Total ADE 81.9
Emerging markets Eastern Europe AGI 11.6
Asia AGI nil
Total Emerging markets 11.6
Total Precision Heat treatment 157.8
Non-core1 2.0
Total Goodwill 207.0

1 £2m of goodwill that was reported within the Europe AGI CGU at 31 December
2024 was re-allocated to Non-core following the expansion of the Group’s
Optimise Programme in 2025.

The Group has therefore aggregated the goodwill previously held by CGUs to
determine the goodwill held by those six groups of CGUs, and they formed the
basis of its impairment test at 31 December 2025. Prior to aggregating the
goodwill, the Group undertook an impairment indicator assessment based on the
CGUs that formed the basis of the impairment test at 31 December 2024. No
indicators of impairment in respect of those CGUs were identified

In assessing value in use, estimated pre-tax future cash flows for each group of
CGUs are discounted to their present value using a pre-tax discount rate which
reflects current market assessments of the time value of money and the risks
specific to the group of CGUs, including country risk premia.

Fair value less costs to dispose is determined in a similar manner but takes
into account the benefits of actions that a rational buyer would take during the
forecast period. Those actions include any that form part of the Group’s
strategic optimisation programme that the business had not announced to the
affected plants as at 31 December 2025 as well as other capital expenditure and
growth initiatives planned. Such actions are not permitted to be reflected in
the value in use calculations as at 31 December 2025. Because the majority of
the inputs into the fair value calculations are not observable, they are
categorised as level 3 in the fair value hierarchy.

In 2025, the recoverable amounts of all of the groups of CGUs were determined
using value in use with the exception of AGI and ST, for which the recoverable
amount has been determined using fair value less costs to dispose. The fair
value less costs to dispose of AGI and ST are in excess of their value in use
since a number of the benefits referred to above had not been formally committed
to prior the year end (for example, via a public announcement) and therefore
could not be reflected in their value in use.

The cash flows of each group of CGUs are based on the 2026 budget and the five
-year financial plan up to and including 2030, both of which have been approved
by the Board. A long-term growth rate has been applied into perpetuity from 2030
onwards.

The key assumptions applied in determining the recoverable amount of each group
of CGUs were as follows:

Revenue: Revenue for 2026-2030 was projected based on management’s growth
expectations, which take account of the expected trends in the underlying market
sectors served by each group of CGUs. These were benchmarked against external
projections for each market. Pricing expectations were based on recent
experience in the market and forecast inflation expectations.

Operational margin growth: Operational margin growth represents the changes
expected to the group of CGUs’ operating profit as a percentage of revenue. The
margin levels assumed reflect management’s expectations of future business
performance and are informed by past performance adjusted for changes made to
the plant footprint.

Capital expenditure: The future cash flows include estimates of capital
expenditure required to maintain the existing asset base of each group of CGUs
and are based on historical experience. In determining the estimates of capital
expenditure, management has assumed that capital expenditure will at least equal
depreciation in the long term. In the case of AGI and ST, which were measured on
a fair value less costs to dispose basis, planned expansionary capex projects
were also included.

Long-term growth rate: Long-term growth rates have been applied into perpetuity
based on the long-term average GDP growth projections of the geographies
relevant to each group of CGUs. Growth rates are in the range of 1.5% to 2.4%
(2024: 2.0% to 2.2%).

Discount rate: The discount rates have been derived from a weighted average cost
of capital, adjusted for the geographies in which each group of CGUs operates.
The post-tax discount rates range from 9.0% to 9.3% (2024: 9.4% to 10.1%). The
pre-tax discount rates are the rates which, when applied to the pre-tax cash
flows, result in the same NPV as calculated by the post-tax discount rate
applied to the post-tax cash flows. The pre-tax discount rates range from 11.7%
to 11.9% (2024: 11.6% to 12.7%).

Goodwill is allocated to the Group’s reportable segments as set out below:

2025 20241
£m £m
Specialist Technologies 45.3 47.2
Precision Heat Treatment 155.2 157.8
Non-core – 2.0
200.5 207.0

1Restated to reflect the changes to the Group’s operating segments following the
expansion to the Optimise Programme announced in July 2025. As a result, 2024
goodwill in the non-core segment has increased by £2m and Precision Heat
Treatment has decreased by £2m. See note 1 for further details.

With the exception of goodwill related to the French sites disposed in 2025, no
goodwill was allocated to the Group’s non-core segment on the basis that the
value of that segment was minimal compared to the Group’s core segments.
Goodwill of £2.0m, related to the 10 French sites disposed in 2025, was
allocated to the non-core segment based on the relative fair value of the
business sold and the group of CGUs to which it previously belonged.

A summary of the goodwill allocated to each of the groups of CGUs containing
goodwill, along with the long-term growth rates and discount rates used to
determine their recoverable amount, is set out below:

Goodwill Long-term Post-tax Pre-tax discount rate
carrying growth discount
value rate rate
2025 2025 2025 2025
£m % % %
Specialist
technologies:
HIP 5.9 1.6 9.2 11.7
ST 39.4 1.6 9.3 11.9
S3P nil n/a n/a n/a
Precision
Heat
Treatment:
AGI 63.6 1.5 8.8 11.6
ADE 79.2 1.6 9.2 11.7
Emerging 12.4 2.4 9.3 11.7
markets

The recoverable amount was higher than the book value for all groups of CGUs
and, accordingly, the Directors have concluded that no impairment charge is
required as at 31 December 2025 (2024: £18.0m impairment recorded in respect of
the NA AGI CGU, which is now part of the AGI CGU).

Expected future cash flows are inherently uncertain and could change materially
over time. They are affected by several factors, including market and production
estimates, together with economic factors such as prices, discount rates,
currency exchange rates, operational costs, and future capital expenditure.

The Group has conducted sensitivity analysis by considering reasonably possible
changes to the key assumptions applied in the recoverable amount calculations
for each group of CGUs. The sensitivity analysis considered downside scenarios
including an increase in discount rates, a reduction in sales growth throughout
the forecast period and reduced operating margin growth. With the exception of
AGI and ST, no reasonably possible downside reductions to any of the assumptions
resulted in an impairment for any of the groups of CGUs.

The sensitivities modelled are intended to reflect an unlikely but reasonably
possible downturn in key assumptions that persists in the long-term. None of the
downside scenarios incorporate mitigating actions reflect mitigating actions
that management would take in the event that such a situation developed.

In determining the sensitivities to apply, consideration was given to the impact
that climate change risks and opportunities may have on the Group’s businesses.
Specific scenarios relating to the potential risks of climate change, as set out
in the TCFD section of the Annual Report, were considered to determine if these
should be included in the modelling performed and it was determined that none of
these scenarios would have a material impact on the outcome. Furthermore, the
impact of the sensitivities was deemed sufficiently severe to cover a range of
potential risks, some of which could relate to these potential climate change
risks.

The recoverable amount of AGI and ST were determined using a fair value less
costs to dispose. For AGI, this reflected operating margins which, in 2030, were
modestly (30bps) below the level achieved in 2023 prior to the recent downturn
in industrial and automotive markets, alongside benefits from Optimise and other
initiatives giving rise to an annual cash benefit of £5.6m by 2030. If none of
these benefits were achieved, the group of CGUs would retain a more modest level
of headroom. In addition, in the unlikely event that no benefits were achieved
and margins were limited to 150bps below the 2023 level, the headroom of £82m
would be fully eroded. A further 50bps reduction in margin would result in an
impairment of c.£12.0m.

For ST, this reflected operating margins which improve by 330bps versus the 2024
level, prior to the recent downturn in Oil & Gas markets, alongside benefits
from Optimise and other initiatives giving rise to an annual cash benefit of
£4.9m. If none of these benefits were achieved and margins were limited to 90bps
below the 2024 level, headroom of £56.5m would be fully eroded. A further 50bps
reduction in the margin would result in a c.£4.5m impairment.

7.Provisions

2025
Restructuring Environmental Legal Total
£m £m £m £m
At 1 January 2025 8.4 3.9 2.1 14.4
Additions 13.6 0.9 1.8 16.3
Released (1.9) (0.3) (0.4) (2.6)
Utilisation (10.9) (1.1) (0.6) (12.6)
Exchange difference (0.1) (0.2) 0.1 (0.2)
At 31 December 2025 9.1 3.2 3.0 15.3
Included in current liabilities 13.1
Included in non-current liabilities 2.2
15.3

In December 2024, the Group announced that it had commenced the Optimise
programme. This programme includes undertaking a number of actions to continue
to drive step changes and improvements across the Group, primarily centred on
sites utilising older, more commoditised technologies with higher carbon
footprints. As described below, a number of provisions have been made as a
result of that programme. Refer to the strategic report in the 2025 Annual
report for further information of this programme.

Restructuring

Included in restructuring provision additions in the year are £13.6m (2024:
£8.5m) which have been charged to exceptional items in the consolidated income
statement in respect of the Optimisation programme. These charges related to the
redundancy and severance of employees who have been notified before the year
end, along with site closure costs where the announcement has been made. The
majority of cash outflows in respect of these provisions are expected to occur
within 12 months of the balance sheet date. See note 3 for further details.

Environmental Provisions

The Group provides for the costs of environmental remediation if there is a
probable outflow of economic resources that has been identified at the time of
plant closure, as part of acquisition due diligence or in other circumstances
where remediation by the Group is required. This provision is reviewed annually
to determine the best estimate of expenditure required to settle the identified
obligations. Where applicable, external confirmations of the future liabilities
are obtained.

The Group could be subjected to regulatory or legislative requirements to
remediate sites in the future. However, it is not possible at this time to
determine whether, and to what extent, any liabilities exist, other than for
those recognised above. Therefore no provision is recognised in relation to
these items.

Legal provisions

Legal provisions include, but are not limited to, alleged breach of contract and
alleged breach of environmental legislation. While the Group cannot predict the
outcome of individual legal actions, a provision is recognised if the exposure
can be reliably measured and an outflow of economic benefits is considered
probable. The amount provided is based on legal advice. There were no
individually material provisions as at 31 December 2025.

8.Share capital

Ordinary Shares Share Capital1
2025 2024 2025 2024
Number Number £m £m
At 1 January 182,897,496 191,456,172 31.6 33.1
Share buyback programme (9,401,421) (8,558,676) (1.6) (1.5)
At 31 December 173,496,075 182,897,496 30.0 31.6

1Nominal value of shares held is 173/11 p each.

In 2024 a share buyback programme was announced that was then extended in July
2025. The first tranche of the programme was for £60m and completed in 2025. A
total of 8,979,759 shares were repurchased, including 421,083 purchased in 2025,
for a total price including transactional costs of £60.4m, of which £2.7m was
paid in cash in 2025. The first extension of the programme of £30m, announced in
December 2024, completed in July 2025 with a total of 5,166,009 shares
repurchased for a total price including transactional costs of £30.2m. In July
2025 the Group announced a further extension of £30m to the share buyback
programme. A total of 3,814,329 shares have been repurchased in relation to this
extension for a total price including transactional costs of £24.7m. As at 31
December 2025 a liability of £5.3m remained for shares contracted to be
repurchased but for which the repurchases were still outstanding (2024: £32.9m).

The nominal value of the shares purchased in 2025 is £1.6m (2024: £1.5m) which
has been transferred to the capital redemption reserve with the difference
between the nominal value and the purchase price recorded within retained
earnings.

2025 2024
Shares purchased with a nominal value of 173/11p 9,401,421 8,558,676
Consideration excluding costs £57.3m £57.3m
Costs £0.3m £0.4m
Total consideration £57.6m £57.7m

9.Dividends

2025 2024 2025 2024
Per share Per share £m £m
Interim dividend for the year 6.9 6.9 12.0 12.7
ended 31 December
Proposed final/final dividend 16.1 16.1 27.8 28.7
for the year ended 31 December
Total dividend 23.0 23.0 39.8 41.4

The 2024 final dividend of 16.1p per share was paid on 5 June 2025. The 2025
interim dividend of 6.9p per share was paid on 6 November 2025. The proposed
final dividend for 2025 of 16.1p, to be paid on 11 June 2026 to shareholders on
the register at close of business on 1 May 2026, is subject to approval at the
AGM on 27 May 2026 and therefore is not included as a liability in these
consolidated financial statements.

10.Notes to the cash flow statement

2025 2024
£m £m
Profit for the year 55.4 20.7
Adjustments for:
Finance income (0.4) (0.8)
Finance charges 9.5 10.3
Taxation charge 19.1 7.7
Operating profit 83.6 37.9
Non-cash items reflected in
operating profit before exceptional
items:
Depreciation of property, plant and 56.5 59.7
equipment
Depreciation of right-of-use assets 13.1 13.6
Amortisation of other intangible 10.9 12.4
assets
Profit on disposal of property, (0.4) (5.5)
plant and equipment
Profit on disposal of right-of-use – (0.2)
assets
Impairment of property, plant and – 0.1
equipment and other assets
Non-cash items reflected in
exceptional items:
(Profit)/loss on disposal of (1.8) 0.1
property, plant and equipment
Disposal of business 0.9 2.6
Impairment of goodwill – 18.0
Impairment of acquired intangibles – 0.8
Impairment of fixed assets 3.7 46.4
EBITDA 166.5 185.9
Share-based payments 3.4 0.6
(Increase)/decrease in inventories (1.7) 1.3
(Increase)/decrease in receivables (3.9) 7.2
Increase/(decrease) in payables 0.3 (7.6)
Increase/(decrease) in provisions 0.9 (0.6)
Cash generated by operations 165.5 186.8
Net income taxes paid (18.6) (32.1)
Net exchange differences (3.4) (2.1)
Net cash from operating activities 143.5 152.6

2025 2024
£m £m
Cash and cash equivalents comprise:
Cash and bank balances 25.2 19.1
Bank overdrafts (included in borrowings) (0.8) (3.1)
24.4 16.0

Cash and bank balances include £0.7m (2024: £1.1m) held in the USA relating to
the refund of a pension surplus which the Group intends to use to fund future
pension contributions for its USA employees to avoid the full amount becoming
subject to regulatory restrictions in the USA.

11.Post balance sheet events

Acquisition of Spectrum Thermal Processing LLC

On 14 January 2026 the Group acquired 100% of the ordinary share capital of
Spectrum Thermal Processing LLC (`Spectrum’) in North America for a total gross
consideration of £5.9m ($8.0m) on a cash and debt free basis which was settled
through the Group’s existing cash and borrowing facilities. Spectrum is a
Precision Heat Treatment business supplying the Aerospace and Defence markets
and brings well established Nadcap-accredited capabilities in the Northeast US,
spanning a range of high-quality Precision Heat Treatment processes
complementing the Aerospace and Defence strategy in North America.

The Group’s assessment of the fair value of the assets and liabilities acquired
is ongoing but the net assets acquired are expected to relate primarily to PPE
and customer intangibles with the remainder allocated to goodwill.

Share repurchase programme

On 10 March 2026 the Group announced its intention to launch a share repurchase
programme of up to £80.0m expected to be completed by the end of 2027,
commencing on 11 March 2026. No amounts are included in these financial
statements in respect of
that buyback.

Alternative performance measures (APMs) (unaudited)

The Group’s Financial Statements are prepared using the basis of preparation and
accounting policies described in the 2025 Annual Report. To provide additional
information and analysis and to enable a full understanding of the Group’s
results, management also makes use of a number of APMs in its internal
management of the business and as part of its internal and external reporting.
These APMs are prepared and presented as described below:

Adjusted results (including adjusted operating profit; adjusted profit before
tax; adjusted EBITDA; and adjusted tax charge) are defined as being the
respective GAAP measure excluding the effect of exceptional items, acquisition
costs and amortisation of acquired intangibles. These measures form the basis of
the Group’s internal reporting and are presented to give greater insight into
the ongoing trading performance of the Group excluding the effects of
acquisitions and one-off items.

Constant currency results (including constant currency revenue and constant
currency adjusted operating profit) present the 2025 results translated into GBP
using the same exchange rates as were used in 2024.  Constant currency results
are intended to provide further insight into the trading performance of the
business excluding the effects of foreign exchange movements that are beyond its
control.

Organic results (including organic revenue and organic adjusted operating
profit) present the results of the business stated at constant currency
excluding the results of any businesses acquired or disposed of in either the
current or prior year. Organic results are provided to give greater insight into
the trading performance of the Group excluding the effects of changes to
its composition. The Group sold 10 sites in France in 2025 (see note 3 for more
information) and these have been excluded from the organic results in 2025 and
2024. Metz Tessy, which was sold in December 2024, has been excluded from the
organic results for 2024.

EBITDA (Earnings before interest, taxation, depreciation and amortisation) is
used by management to provide further information about the ability of its
businesses to generate cash before working capital and other movements. EBITDA
is stated before profits and losses on disposal of assets and impairment
charges. A similar measure is used for the Group’s covenant calculation. A
reconciliation of EBITDA to operating profit and cash generated by activities is
included in note 10 to the financial statements.

Core measures reflect the results of the Group’s two segments based on its
technology based platforms. Those segments include the parts of the business
that are expected to continue to exist once the Group’s Optimisation programme
is complete and so give an indication of performance of the ongoing part of the
Group.

Net Debt is defined as the Group’s borrowings (including finance lease
liabilities) net of the Group’s cash and overdrafts balance. It is used to
provide an overall picture of the net indebtedness of the Group.

Free cash flow is defined as the movement in the Group’s net debt excluding
payments made to the Group’s shareholders in respect of dividends and share
purchases, cash flows arising on the acquisitions or disposal of businesses,
movements in net debt due to lease liability additions and disposals and non
-cash share based payment charges which are deducted as a proxy for the cost of
providing the associated benefits to employees. It is presented to give an
indication of the businesses’ ability to generate cash to support acquisitive
growth and return to shareholders.

Adjusted operating cashflow is defined as free cash flow adjusted to exclude the
effects of payments in respect of exceptional items (typically restructuring
payments), finance costs and net tax. Adjusted operating cashflow forms part of
the basis of the Group’s internal reporting and is presented to give greater
insight into the ongoing cash generation of the Group before financing costs and
excluding the effects of acquisitions and one-off items. The definition of
adjusted operating cashflow is consistent with the definition of the equivalent
adjusted profit measures.

Return on capital employed is defined as adjusted operating profit divided by
capital employed, which is defined as the average of opening and closing net
assets adjusted for net (debt)/cash. Return on capital employed provides a
measure of how well the business has deployed capital to generate profit.

A reconciliation of each of the APMs to its nearest GAAP measure is set out
below. Whilst broadly consistent with the treatment adopted by both the Group’s
business sector peers and by other businesses outside of the Group’s business
sector, these APMs are not necessarily directly comparable with those used by
other companies.

2024 Segmental APMs have been restated to reflect the changes to the Group’s
segments as a result of the expansion of the Optimisation programme announced in
July 2025 (see note 1 for details).

Adjusted operating profit

Adjusted operating profit is reconciled to Operating Profit in note 1 to the
financial statements.

Adjusted operating margin

2025
Specialist Precision Central cost Total Non Consolidated
Technologies Heat and core -core
Treatment eliminations
£m £m £m £m £m £m
Revenue 212.3 459.3 – 671.6 55.5 727.1
Adjusted 57.6 73.7 (18.3) 113.0 1.3 114.3
Operating
Profit
Adjusted 27.1% 16.0% n/a 16.8% 2.3% 15.7%
operating
margin (%)

2024
Restated
Specialist Precision Central cost Total Non Consolidated
Technologies Heat and core -core
Treatment eliminations
£m £m £m £m £m £m
Revenue 222.3 459.8 – 682.1 75.0 757.1
Adjusted 65.5 80.4 (20.4) 125.5 3.5 129.0
Operating
Profit
Adjusted 29.5% 17.5% n/a 18.4% 4.7% 17.0%
operating
margin (%)

Adjusted profit before taxation

2025 2024
£m £m
Profit before taxation 74.5 28.4
Add back:
Amortisation of acquired intangibles 9.7 10.4
Acquisition costs 0.1 2.4
Exceptional items 20.9 78.3
Adjusted profit before taxation 105.2 119.5

Organic revenue and adjusted operating profit at constant currency.

Reconciled to revenue and adjusted operating profit in the table below:

2025
Specialist Precision Central cost Total Non Consolidated
Technologies Heat and core -core
Treatment eliminations
£m £m £m £m £m £m
Revenue 212.3 459.3 – 671.6 55.5 727.1
Constant 1.8 6.5 – 8.3 0.2 8.5
exchange
rates
adjustment
Revenue at 214.1 465.8 – 679.9 55.7 735.6
constant
currency
Less – – – – (22.3) (22.3)
adjustments
for
revenue
from
disposals
completed
in the
current or
prior year
Organic 214.1 465.8 – 679.9 33.4 713.3
revenue
Adjusted 57.6 73.7 (18.3) 113.0 1.3 114.3
operating
profit
Constant 0.5 1.3 – 1.8 – 1.8
exchange
rates
adjustment
Adjusted 58.1 75.0 (18.3) 114.8 1.3 116.1
operating
profit at
constant
currency
Less – – – – (2.1) (2.1)
adjustments
for
operating
profit from
disposals
completed
in the
current or
prior
year
Organic 58.1 75.0 (18.3) 114.8 (0.8) 114.0
adjusted
operating
profit

2024
Restated
Specialist Precision Central cost Total Non Consolidated
Technologies Heat and core -core
Treatment eliminations
£m £m £m £m £m £m
Revenue at 222.3 459.8 – 682.1 75.0 757.1
constant
currency
Less – – – – (28.6) (28.6)
adjustments
from
disposals
completed in
the
prior year
Organic 222.3 459.8 – 682.1 46.4 728.5
revenue
Adjusted 65.5 80.4 (20.4) 125.5 3.5 129.0
operating
profit at
constant
currency
Less – – – – (3.4) (3.4)
adjustments
from
disposals
completed in
the
prior year
Organic 65.5 80.4 (20.4) 125.5 0.1 125.6
adjusted
operating
profit

Adjusted EBITDA (earnings before interest, taxation, depreciation and
amortisation)

2025 2024
£m £m
EBITDA 166.5 185.9
Acquisition 0.1 2.4
costs
Exceptional 18.1 10.4
items,
excluding
(gains)/losse
s on sale of
property,
plant and
equipment,
impairments,
and losses
on disposal
of business
Adjusted 184.7 198.7
EBITDA
Adjusted 25.4% 26.2%
EBITDA
Margin

Adjusted operating cash flow

2025 2024
£m £m
Adjusted EBITDA 184.7 198.7
Less:
Net capital expenditure (77.0) (60.5)
Principal elements of lease payments (13.8) (13.5)
Provisions movement 0.4 (7.3)
Working capital movement (5.7) (1.9)
Adjusted operating cash flow 88.6 115.5

Free cash flow

2025 2024
£m £m
Adjusted operating cash flow 88.6 115.5
Less:
Restructuring cash flows (14.3) (3.9)
Net income taxes paid (18.6) (32.1)
Net interest paid (8.2) (8.9)
Free cash flow 47.5 70.6

Adjusted operating cash conversion

2025 2024
£m £m
Adjusted operating cash flow 88.6 115.5
Adjusted operating profit 114.3 129.0
Adjusted operating cash conversion 77.5% 89.5%

Free cash flow conversion

2025 2024
£m £m
Free cash flow 47.5 70.6
Adjusted operating profit 114.3 129.0
Free cash flow conversion 41.6% 54.7%

Adjusted tax charge

2025 2024
£m £m
Tax charge 19.1 7.7
Tax on amortisation of acquired intangibles 3.6 2.1
Tax on acquisition costs – 0.6
Tax on exceptional items 3.6 18.0
Adjusted tax charge 26.2 28.4

Adjusted tax rate

2025 2024
£m £m
Adjusted tax charge 26.2 28.4
Adjusted profit before taxation 105.2 119.5
Adjusted tax rate 24.9% 23.8%

Adjusted earnings and adjusted earnings per share

A detailed reconciliation is provided in note 5 of the consolidated financial
statements.

Net debt excluding lease liabilities

2025 2024
£m £m
Cash and bank balances 25.2 19.1
Bank overdrafts (included in borrowings) (0.8) (3.1)
Bank loans (included in borrowings) (129.2) (84.3)
Net debt excluding lease liabilities (104.8) (68.3)
Lease liabilities (60.8) (63.5)
Net debt (165.6) (131.8)

A reconciliation of movements in net debt excluding lease liabilities to Free
Cash Flow is included in the CFO report in the 2025 Annual report.

Return on capital employed (%)

2025
Specialist Precision Central cost Total Non Consolidated
Technologies Heat and core -core
Treatment eliminations
£m £m £m £m £m £m

Adjusted 57.6 73.7 (18.3) 113.0 1.3 114.3
operating
profit
Average 313.6 531.7 (62.9) 782.4 22.2 804.6
capital
employed
Return on 18.4% 13.9% n/a 14.4% 5.8% 14.2%
capital
employed
(%)

2024
Restated
Specialist Precision Central cost Total Non Consolidated
Technologies Heat and core -core
Treatment eliminations
£m £m £m £m £m £m

Adjusted 65.5 80.4 (20.4) 125.5 3.5 129.0
operating
profit
Average 308.0 530.4 (57.0) 781.4 41.5 822.9
capital
employed
Return on 21.3% 15.2% n/a 16.1% 8.4% 15.7%
capital
employed
(%)

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