PERFORMING
WITH
PRECISION
Annual Report 2025
COMPANY OVERVIEW
Introduction 01
Bodycote at a glance 06
Highlights 07
Purpose and values 08
Investment proposition 09
Our markets 10
STRATEGIC REPORT
Chair’s statement 13
Chief Executive’s review 15
Chief Executive Q&A 17
Strategy in action: Optimise 19
Strategy in action: Perform 20
Strategy in action: Grow 21
Our key performance indicators 22
Our business model 24
Business reviews 26
Chief Financial Officer's review 28
Principal risks and uncertainties 31
Viability statement 38
Section 172 statement 39
Our stakeholders 42
Sustainability report 47
FINANCIAL STATEMENTS
Independent auditors’ report 132
Consolidated income statement 141
Consolidated statement of
comprehensive income
141
Consolidated balance sheet 142
Consolidated cash flow statement 143
Consolidated statement of changes
in equity
144
Group accounting policies 145
Notes to the consolidated
financialstatements
154
Company balance sheet 182
Company statement of changes in equity 183
Company accounting policies 184
Notes to the Company financial statements 186
ADDITIONAL INFORMATION
Five-year summary (unaudited) 191
Alternative performance measures
(APMs) (unaudited)
192
Subsidiary undertakings 196
Shareholder enquiries 198
Company information 199
GOVERNANCE
Compliance with UK Corporate
Governance Code
82
Chair’s introduction 83
Board of Directors 84
Executive Committee 86
Corporate governance statement 87
WELCOME
TO OUR
2025 ANNUAL
REPORT
Deliveringonstrategy – optimised
operations, elevated performance,
andsustainable expansion.
See our report online: visit bodycote.com/
investors for more information. Scan the QR code
to view or download the full annual report and
financial statements.
Report of the Nomination Committee 98
Report of the Audit Committee 102
Directors’ report on remuneration 110
Directors’ report 127
Directors’ responsibility statement 130
Bodycote plc Annual Report 2025 IFC
DELIVERING
PERFORMANCE
WITH PRECISION
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 01
DEEP EXPERTISE
£671.6m
Core revenue was broadly
stable for the year
Delivering precise solutions.
Bodycote is powered by a global team of metallurgists, engineers
and technicians with deep expertise in heat treatment and
thermal processing. This specialist knowledge enables us to
deliver precise, high-performance solutions for our customers’
most demanding applications.
By combining specialist materials knowledge with practical
operational insight, we help customers solve technical challenges,
reduce time-to-market and achieve measurable improvements in
performance, reliability and resource efficiency.
We pride ourselves on delivering precision metallurgy that ensures
components excel even in the most demanding conditions and
environments. Our skilled and experienced teams collaborate
with customers to solve complex materials challenges, combining
materials performance requirements with innovative solutions
that deliver superior performance.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 02
GLOBAL
SCALE
Global reach. Local precision.
With 136 facilities across 22 countries, the world’s most extensive
thermal processing network is always within reach. Our global
footprint enables us to support customers wherever they operate,
while delivering consistent quality and reliability.
Bodycote’s Greenville, USA, facility combines advanced heat-
treatment technologies with hot isostatic pressing (HIP) and
precision vacuum brazing to support the most demanding
aerospace and industrial applications.
Whether launching new programmes, managing complex supply
chains, or expanding capacity, our customers benefit from the
flexibility to scale without compromising quality, responsiveness
or turnaround times. This is local partnership, strengthened by
the reach and capability of our global network.
136
operational sites
in 22 countries
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 03
16.8%
Core operating margin
for the full year
ENHANCED
PERFORMANCE
Precisely tailored for superior durability.
Precision heat-treated aerospace turbine blades deliver enhanced
strength and fatigue resistance for mission-critical applications.
Across aerospace and industrial markets, our processes are
engineered to meet exact material specifications and performance
requirements, supporting long-term durability and reliability.
By applying specialist materials expertise and disciplined process
control, we improve fatigue life, reduce distortion and ensure
consistent outcomes. The result is stronger components,
greater efficiency and high-performance solutions delivered
with enhanced quality and sustainability.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 04
SUSTAINABLE
BY DESIGN
Precise processes for better outcomes.
Our optimised furnace technologies can reduce carbon
emissions by over 90% compared with conventional
processes. By combining precise process controls,
optimised furnace loading and low-carbon inputs,
we cut energy use and emissions at source while
enhancing component life, reliability and efficiency.
We have set ambitious sustainability targets across our
own operations, shaped by a disciplined, data-driven
approach that underpins our position as a sustainability
leader in the thermal processing industry. This capability
enables us to work in long-term partnership with our
customers, supporting them in meeting their
sustainability targets and delivering lower-carbon
manufacturing solutions across the markets we serve.
38%
Reduction in ourScope
1and2 emissions since2019
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 05
Bodycote at a glance
Bodycote is the world’s largest
provider of heat treatment and
specialist thermal processing.
Using innovative combinations
of heat, pressure and surface
technologies, Bodycote enhances the
performance of metals and alloys,
making critical components stronger,
more durable and more reliable.
Serving customers across aerospace, automotive,
energy and a wide range of industrial markets, we deliver
consistent, high-quality outcomes through our extensive
global network of facilities. This international footprint
enables us to apply specialist expertise, deep technical
knowledge and operational excellence wherever our
customers operate and whenever it is needed.
Revenue by geography and process
SPECIALIST
TECHNOLOGIES
PRECISION HEAT
TREATMENT
>50
processes
136
operational
sites
4,127
average employees
during FY 2025
22
countries
Precision Heat Treatment is the process of
controlled heating and cooling of metals to
optimise mechanical, chemical and metallurgical
properties, enabling the manufacture of complex,
high-performance components.
Using advanced industrial furnaces operating above
1,000°C, we transform metal microstructures to deliver
targeted hardening or softening. Our capabilities
include atmospheric and vacuum heat treatment,
Nitriding and Corr-I-Dur
®
, and low-pressure
carburising (LPC), which support the design of
thinner, lighter and stronger components.
Precision Heat Treatment also delivers environmental
benefits by extending product life, improving
efficiency and reducing components’ overall carbon
footprint, with lower CO
2
emissions per part than
in-house solutions.
Geography
1
Western Europe 50%
2 North America 38%
3
Emerging Markets 12%
Our Specialist Technologies comprise advanced,
highly differentiated processes that enhance product
strength, performance and durability. These
technologies deliver high margins, attractive market
opportunities and strong growth potential, while
offering cleaner processes with lower carbon
emissions. Hot Isostatic Pressing (HIP) applies extreme
pressure and heat to improve component integrity,
density and mechanical strength, while HIP Product
Fabrication including Powdermet
®
combines the
additive manufacturing of complex components
together with HIP to deliver high-performance
solutions. Our proprietary Specialty Stainless Steel
Processes (S³P) enhances strength, hardness and wear
resistance while maintaining corrosion resistance, and
Surface Technology applies advanced ceramic and
metal coatings to extend component life and improve
performance in demanding environments.
Revenue by division
4
Specialist Technologies 29%
5
Precision Heat Treatment 63%
6
Non-Core 8%
1
2
3
4
5
£727.1m
1
2
3
6
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 06
Highlights
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)
Group summary
Adjusted
1
Statutory
Full year
2025
Full year
2024 Change
Full year
2025
Full year
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 bps 11.5% 5.0% +650 bps
Operating cash flow £88.6m £115.5m -23.3% £143.5m £152.6m -6.0%
Basic earnings per share
2
44.4p 48.6p -8.6% 31.0p 10.8p +187%
Full year ordinary
dividend per share
23.0p 23.0p –
Core summary
1
Adjusted
1
Full year
2025
Full year
2024
Organic
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
scope announced in July 2025.
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.
– 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 profit
– New £80m share buyback announced, enabled by
strong balance sheet; expected to be completed
by the end of 2027
Outlook
We expect to deliver Core organic 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 to deliver an improvement in operating
margins in 2026, reflecting volume growth alongside
further Optimise benefits. This improvement will be
partly offset by a normalisation of variable
remuneration, which has been lower than usual in
2024 and 2025. We continue to execute at pace on
our strategy to create a high-performing, resilient and
faster growing Bodycote and we remain confident in
the delivery of our medium-term financial targets.
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 07
Purpose and values
Our values govern how we operate and underpin our purpose.
OUR PURPOSE
AND CULTURE
STRATEGIC LEVERS
Our performance is driven
by our strategic levers.
46% reduction
in Scope 1 and 2 greenhouse
gas emissions by 2030 vs 2019
125,000 tonnes
of CO
2
e avoided by our atmospheric
processing customers by 2030
20% green revenue
increase in the proportion of revenue
that supports sustainable end-use
markets and applications to 20% by 2035
SUSTAINABILITY
Our five-year vision is to be widely
recognised as a sustainability leader.
Safety First
For us, safety is not only a priority,
it is a way of life. Our belief in the value
of recognising and reducing unnecessary
risks, far exceeds the demands of
regulation or compliance.
Putting safety first ensures our people,
property, partners and customers always
feel protected, able to flourish and
operate with confidence.
Performance
Products destined for extreme operating
environments not only require precision
engineering and insights, but
performance thinking and action.
For us, there can be no shortcuts or
compromises. The result is unequalled
service quality and performance value
because our customers’ reputations
depend on us, and we depend on them.
Customer experience
As ingenious solvers of engineering
challenges, we focus on building
strong customer relationships and
close collaborations that unleash
remarkable outcomes.
These actions reinforce our market
relevance and strengthen our financial
resilience but, more importantly,
they create exceptional customer
experiences and the basis for lifelong
trust. Our customers see and feel our
openness, transparency and our sense
of shared ambition.
Sustainability
Visionary engineering is changing the
world, and we have a leading role to
play in shaping its future. This comes
with considerable responsibility that,
in meeting our business needs, we do
not compromise the ability of future
generations to meet theirs.
To do this, we will pursue technologies
and methodologies that reduce our
environmental impact and help us
to deliver positive, measurable,
environmental, societal and economic
effects, in the global geographies we
operate in.
OUR VALUES
Optimise
Perform
Grow
Defining who we are, why we do what
we do and the difference we bring.
We deliver performance
metallurgy that powers
sustainable global
progress.
We aim to foster an open and honest
culture, supportive of a positive,
effective and collaborative
environment, where colleagues are
empowered to contribute to our
success. We prioritise the wellbeing
and safety of our people and are
committed to developing talent and
capability across the Group. Our values
underpin the implementation of our
business strategy and guide our ways
of working, enabling us to deliver a
consistent customer experience and
sustainable long-term value.
Read more about how we are
developing our high-performance
culture on page 20.
See more on pages 19 to 21.
See more on pages 47 to 63.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 08
Investment proposition
Investment proposition has three essential components
Highly differentiated processes
Leading technology positions
Growing addressable market
Quality and performanceMaximise growth
A strong market
position with two
leading platforms
with defined
strategies and
targets
Three clear
strategic levers
Our strategy
supports delivery
of a compelling
set of five key
financial targets
and one key
sustainability target
Clear market leader
Global scale and network
Deep customer partnerships
Strong
growth
Mid-single-digit
total annual
revenue
growth through
the cycle
Improved
mix
35–40%
of revenue
from Specialist
Technologies
by 2028
Converting
to cash
80–90%
operating
cash conversion
through
the cycle
Higher
margins
>20%
operating
margins
by 2028
Attractive
returns
15–20%
return on capital
employed
through
the cycle
46%
reduction in CO
2
emissions by 2030
1
Underpinned and accelerated by sustainability
01
02
03
Specialist Technologies Precision Heat Treatment
1 SBTi-aligned target versus 2019 baseline.
Optimise Perform Grow
Mix of total capital deployed (2021–2025)
1
Total capital expenditure 42%
2 Acquisitions 16%
3
Ordinary dividend 27%
4
Additional shareholder returns 15%
1
2
3
4
We deliver performance
metallurgy that powers
sustainable global progress
through two leading
divisional platforms:
Specialist Technologies and
Precision Heat Treatment.
We service a wide range of end markets,
enabling improved, longer lasting and
more efficient products. We are focused
on creating sustainable value for all
our stakeholders, whether investors,
customers, employees, or the communities
where we operate.
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 09
Our markets
ENERGY
Bodycote offers materials
solutions across virtually
every market sector,
providing expertise across
heat treatment and
specialist thermal processes.
Across all markets,
Bodycote supports
customers with technically
critical processing
solutions that enhance
performance, reliability,
and lifecycle value.
AEROSPACE
& DEFENCE
We specialise in thermal processing
solutions for engine components operating
under extreme conditions, as well as
landing gear, structural and other safety-
critical aerospace and defence systems.
Our services support commercial,
business, and military aviation.
Bodycote’s global network of accredited
facilities serve aerospace and defence
Original Equipment Manufacturers (OEMs),
aftermarket providers, and their supply
chains worldwide.
The automotive industry is evolving with
hybrid/electrification and the demand for
lighter, high-performance components.
Bodycote supports this transition by
delivering thermal processing solutions
that strengthen and enhance critical
components in passenger cars, light and
heavy trucks, and buses. Partnering with
leading automotive OEMs and their supply
chains, we offer global thermal processing
services to meet evolving performance
and efficiency requirements.
We deliver specialised treatments for
critical components in the energy sector.
In these environments, safety, reliability,
and performance are essential, with
components often operating under
extreme conditions. Our success is built
on our technical expertise and reliable,
high-quality service, helping customers
innovate and meet growing demand for
electrified and cleaner energy solutions.
INDUSTRIAL
MARKETS
Bodycote supports a wide array of
industrial markets, including components
for machining, machinery and tooling, and
equipment used in construction, mining,
and agriculture. Our customer base ranges
from leading equipment manufacturers
to material and machining suppliers.
Leveraging our global network of facilities,
we deliver high-quality, technically robust,
and value-added solutions tailored to
the diverse requirements of industrial
applications.
AUTOMOTIVE
CONSUMER,
MEDICAL & OTHER
We serve a number of niche and high-tech
markets, including medical devices,
semiconductors and electronics, and
consumer products. These markets are
driven by global trends such as expanding
healthcare needs, electrification,
and growing demand for cloud computing
and AI. Our processes enhance the
properties of critical components,
improving wear and corrosion resistance,
while meeting stringent regulatory and
product requirements. We partner with
leading medical technology and
semiconductor manufacturers to address
these industry-specific demands.
of our business is in
areas with faster
growth potential, with
above-average margins
Core revenue by end market
1
Aerospace & Defence 34%
2
Industrial Markets 22%
3
Automotive 22%
4
Energy 11%
5
Consumer, Medical & Other 11%
1
2
3
4
£671.6m
5
>65%
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 10
Our markets continued
We operate in a large and fragmented thermal processing market, with a total value of approximately £30 billion
(including in-house and outsourced processing). The size of this market, alongside a number of secular growth
trends which are impacting it, provide us with multiple avenues to drive growth over the coming years.
Our path to future growth
1
Market growth
Thermal processing services are required by a number of underlying end markets,
including Aerospace & Defence, Automotive,and a wide range of other industrial
and consumer applications. The growth in these markets, which is expected to at
least match GDP globally, will increase the overall £30bn market.
1
2
Increasing product requirements
Alongside market growth, there is rising demand for lighter, stronger and more
durable products. This is driven by both product performance requirements as
well as sustainability considerations. This trend will increase the overall demand
for thermal processing, as well as driving faster growth in Specialist Technologies
and more advanced heat treatment processes, which are typically outsourced.
1
2
New specialist technology applications
Specialist Technologies are earlier stage processes, which today have varying
levels of adoption. We are focused on developing the addressable market for
these processes by finding new applications and industries in which they can offer
material performance or economic benefits for customers.
2
Increased share of outsourcing
Approximately 20% of the overall thermal processing market is currently outsourced.
We anticipate that this share will gradually increase over time, driven by increased
supply chain migration (which is a key trigger for outsourcing due to the investment
requirements for customers) as well as sustainability considerations.
3
Market share gains
We have significant potential to gain further share in a fragmented market.
We aim to achieve this through enhancing our sales capability, better leveraging
our global network, and by enhancing our operational performance and turnaround
times. In addition, we have opportunities to gain share by increasing our geographic
presence to serve previously unaddressed regions.
~£30bn
total market (including
in-house processing)
~£6bn
outsourced
market
Bodycote
share
c.15% share of
addressable
outsourced market
1
2
3
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 11
STRATEGIC
REPORT
IN THIS SECTION
Chair’s statement 13
Chief Executive’s review 15
Chief Executive Q&A 17
Strategy in action: Optimise 19
Strategy in action: Perform 20
Strategy in action: Grow 21
Our key performance indicators 22
Our business model 24
Business reviews 26
Chief Financial Officer’s review 28
Principal risks and uncertainties 31
Viability statement 38
Section 172 statement 39
Our stakeholders 42
Sustainability report 47
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 12
Chair’s statement
Overview
2025 was a year of significant change for Bodycote as we
executed on the strategy presented in December 2024.
Good progress was delivered on the Optimise programme,
simplifying the organisational structure and starting to
deliver cost reductions. Ten automotive-focused plants
in France were sold and a number of plants closed, with
a portion of the sales successfully transitioned to
well-placed Bodycote facilities. The Perform initiatives
progressed with the establishment of a strong operational
excellence team, the successful completion of our
operational excellence pilot programme and the launch of
our first two carbon-zero plants. Growth initiatives also
gained momentum, with several important capacity
expansions including early investment in our first
Specialist Technologies plant in Asia, as well as the
reinforcement of sales and marketing resources and the
creation of a focused corporate development team.
The market environment was mixed, with highlights in
civil aerospace, defence and industrial gas turbine
segments, sharply contrasting with marked weakness
from European and US automotive and general industrial
customers. Our core business demonstrated resilience,
with improving performance in the second half on both
revenue growth and margins. The strategic progress made
during the year has improved the fundamental quality of
the business, and means that we are well-positioned to
take advantage when market conditions improve.
Building on the foundations established in 2024, the
actions taken during 2025 further position Bodycote
to deliver value for all stakeholders.
Board
Patrick Larmon stepped down from the Board on
12 September 2025 after nine years of service. On behalf
of the entire Board, I would like to thank Patrick for his
many years of service and wise counsel. Patrick stepped
down as Senior Independent Director at the 2025 AGM,
with this role assumed by long-standing Non-Executive
Director, Lili Chahbazi.
In June 2025, Emmanuelle Dubu joined the Board as an
independent Non-Executive Director. Her experience in
international engineering and in leadership roles in global
manufacturing businesses, including as a chief executive,
makes her well-qualified to contribute to the Board.
Emmanuelle also took on the role of the director
responsible for employee engagement from Patrick.
Governance
Good governance is integral to the Group’s long-term
success. Maintaining high standards of governance
remains a core priority for me as Chair and for the Board
as a whole. As regulatory requirements and governance
best practice continue to evolve, we keep our Board and
Committee structures and practices under regular review,
to ensure they remain robust, effective and aligned with
the interests of all stakeholders.
THE POWER OF
PRECISION
Bodycote has continued to make
good strategic progress, despite
a mixed backdrop, and the
Board remains confident in the
medium-term outlook.”
Daniel Dayan
Chair
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 13
Chair’s statement continued
Dividend and shareholder returns
The Board is proposing a final dividend of 16.1 pence per
share, to be paid on 11 June 2026, subject to shareholder
approval at the 2026 AGM. Combined with the interim
dividend of 6.9 pence, this takes the full-year dividend to
an unchanged 23.0 pence per share, extending our 38-year
record of maintaining or increasing the dividend.
Following completion of the third £30 million tranche of
the share buyback programme in early July 2025, the
Company entered into a further £30 million buyback in
August 2025, which completed at the end of January 2026.
This brought the total value of the programme, which
commenced in March 2024, to £120 million, representing
the purchase and cancellation of 18.7 million shares,
equivalent to 9.8% of the issued share capital.
In total during 2025, the Group returned close to £100m to
shareholders while still retaining the ability to undertake
value accretive acquisitions. The Group’s balance sheet
remains strong and the Board continues its commitment
to disciplined capital allocation to deliver sustainable value
for shareholders. Reflecting this, we have announced a
new £80m share buyback programme, which is expected
to complete no later than the end of 2027.
Our People
Bodycote is a service-led business and therefore our
people are central to our success. The behaviours,
commitment and expertise of all our colleagues underpin
our culture of safety, operational excellence and
consistently high service and quality, which deliver our
market success. Across the Group, our teams continue to
perform to demanding standards in a dynamic operating
environment while maintaining a strong focus on safe
working practices and continuous improvement.
We remain committed to developing and engaging our
people, to ensure we have the skills, capability and
leadership required to support the Group’s strategy over
the long term. During 2025 we invested in our first-ever
Group-wide employee survey and are now working to
improve appropriate training, communication and career-
development opportunities for colleagues.
On behalf of the Board, I would like to extend my sincere
thanks to everyone at Bodycote for their professionalism,
resilience and dedication throughout 2025.
Sustainability
The Board and I remain focused on maximising the
commercial opportunities afforded by our ability to act as
a trusted problem solver, supporting customers to deliver
their emission-reduction goals. During the year, the Board
received regular updates on progress against our
commercial, operational and communications strategy,
including the implementation of SBTi-aligned carbon
reduction measures, which now account for 20% of our
long-term incentive plan.
Shareholders
During the year, I again had the opportunity to engage
personally with a number of shareholders and investors
to better understand their perspectives and priorities.
The Board values ongoing dialogue with investors and
recognises the importance of shareholder feedback in
informing its decision-making. I would like to thank our
shareholders for their continued support and look forward
to further constructive engagement in 2026.
Summary
2025 has been a year of disciplined execution, as we
continue to embed our strategic initiatives and progress
delivery of our plans. Bodycote has continued to make
good strategic progress despite a very mixed market
backdrop, and the Board remains confident in the
medium-term outlook. With a clear and compelling
strategy, strong leadership and the continued commitment
of our people, Bodycote is well-positioned to deliver
sustainable value for customers, shareholders
and employees.
Daniel Dayan
Chair
10 March 2026
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 14
Chief Executive's review
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
500ft
2
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
(eg. European Defence). These efforts have yielded
encouraging early results, including a significant expansion
of our Defence order pipeline in Germany.
ADVANCING ON
STRONG FOUNDATIONS
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 S
3
P 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.
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
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 15
JIM FAIRBAIRN
Chief Executive Officer
Chief Executive's review continued
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
alongside 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.
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.
Jim Fairbairn
Chief Executive Officer
10 March 2026
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 16
Chief Executive Q&A
DELIVERING AT
PACE: REFLECTIONS
AND INSIGHTS
FROM OUR CEO
In this Q&A, CEO Jim Fairbairn
shares his perspective on his
first two years at Bodycote,
the opportunities ahead and how
the Group is positioned to deliver
long-term value for shareholders.
Q
How have your first impressions of
Bodycote evolved, and how has your
deeper understanding of the business
informed your strategic priorities?
A
When I joined in 2024 my first priority was to get out
and see our sites, meet our people and engage with
our customers. I have now visited over 60 sites,
giving me first-hand insight into how our business
operates locally and how customers experience
Bodycote. A few things struck me straight away,
but the first – and probably most important – was
the level of engineering and technical expertise in the
business, which is really high. What also stands out
is the strength of our customer relationships, and the
quality and commitment of our people in supporting
safety-critical and high-performance applications.
We have an excellent foundation of expertise that our
customers truly value.
I was surprised at the level of variability in
operational performance between plants; while
many were doing a good job operationally, others
were struggling and there was no coherent system to
drive improved operational performance across the
portfolio. However, I see this as an opportunity for us
to improve consistency of execution and share best
practice more effectively across the Group. As I’ve
spent more time in the business, my conviction on
these points has increased. Our focus on clear
prioritisation, stronger operational excellence and
lean disciplines, will enable us to deliver a more
consistent, high-quality experience for customers.
Q
Since becoming CEO, what have been your
main priorities and what progress have you
made against these?
A
After getting out to see and learn about the business,
my next action was to undertake a strategic review.
This had two main components: first, to review our
plant footprint; second, the creation of a clear growth
plan. These two items, alongside my conviction that
we needed to improve our operational execution,
ultimately led to our Optimise, Perform and Grow
strategy. Since launching this in December 2024 we
have been progressing against all three levers, albeit
with differing levels of priority. In 2025, the primary
focus was on executing the Optimise programme to
improve our footprint. We are now more than
halfway through this programme and I am very
pleased at the progress made.
We have made a number of important changes to
our senior leadership team, and we launched our
new values. Building an enduring, positive culture
is very important to me and my team, and I know
we’ve made significant progress in this area.
We also upgraded the capability in both our sales
organisation and our M&A function, as well as
evaluating and allocating capital to a number of key
future growth initiatives.
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 17
Chief Executive Q&A continued
Q
What are your priorities for the next
12 months, and where do you see the
greatest opportunities?
A
As we move through 2026 and the Optimise
programme moves towards completion, our focus
is naturally shifting towards Perform and Grow.
We successfully completed the Perform pilot
programme in 2025, which validated the benefits
of deploying lean productivity tools to our sites.
We are now focused on the full roll-out across our
site network, which will happen in two phases:
first, we will roll-out some foundational tools which
are universally applicable across our sites, supported
by new General Manager training programmes.
In the second phase, we will deploy more advanced
tools based on the specific needs of each site.
I am confident that as we progress with the
programme we will see material benefits in terms
of both customer experience as well as efficiency
and profitability.
For Grow, we will be capitalising on the changes
made in 2025 to enhance sales capabilities and
enable greater collaboration between plants and
divisions. We are also continuing our investment in
a number of important organic growth projects that
will be commissioned in late 2026 or early 2027,
including taking S
3
P to Asia, two major aerospace
site upgrades in North America, and a new greenfield
site in Mexico serving automotive, general industrial
and medical customers. These will begin to deliver
meaningful revenue from 2027. Finally, we have been
building our M&A capability and pipeline, and will
be looking to deliver further bolt-on acquisitions
following the announcement of Spectrum Thermal
Processing in January 2026.
Q
How are the purpose statement and new
values helping to shape the culture,
and what changes are you already seeing
across the organisation?
A
Our purpose statement and new values build on the
strong foundations already in place, better reflecting
Bodycote as it operates today and as we look to the
future. Together they provide a practical framework to
guide behaviours, leadership, and decision-making,
while shaping our culture, supporting a safer, more
sustainable way of operating, and strengthening the
experience customers have when they work with
Bodycote. We are already seeing positive signs of
change, including stronger collaboration across sites,
supported by the sharing of ideas and best practice
with increased ownership and a more proactive
approach to continuous improvement. Safety First is
also being embedded more consistently through
day-to-day behaviours, including the introduction of
daily management routines. We completed our first
all-employee engagement survey, which has provided
a valuable baseline and insight to help guide our
ongoing focus as we continue to build a strong,
high-performance culture.
Q
How have you strengthened governance
standards and risk management practices
across the Group, and what benefits are
you seeing as a result?
A
We updated our governance framework to better
support performance, reinforcing our risk
management and internal controls processes
following structured reviews. This enabled us to
refine our processes, align activities to key risks
and identify opportunities to improve resilience.
These improvements have improved accountability
and risk visibility, strengthened the control
environment, and supported safer operations,
improved compliance, and more resilient financial
and operational performance across the business.
Q
What is being done to ensure employees
have the tools, training, and clarity
they need to deliver for the business
and customers?
A
Our people perform best when they have clarity of
purpose, the right capabilities and strong leadership
support. Our focus is therefore on equipping teams
with practical tools, consistent training and clear
expectations, tailored locally and reinforced at Group
level. In 2025, we strengthened leadership alignment
through our first General Manager conferences,
delivering focused training in safety, operational
excellence and sustainability, alongside the launch
of a new development pathway. We also designed
a comprehensive sales capability programme,
with rollout beginning in 2026, to support customers
and deliver our strategy. The launch of our
Apprenticeship Programme across three UK pilot
sites marked an important milestone in our People
strategy, with further expansion planned for 2026.
Q
What progress has been made in relation
to sustainability?
A
We made strong progress in the first year of
delivery under our integrated sustainability strategy,
strengthening our customer value proposition.
As an energy-intensive service business, improving
efficiency and productivity is a priority. We launched
our first zero-emissions pathfinder sites, enabling
customers to access low-carbon thermal processing
and support their carbon reduction goals. Customer
engagement was enhanced through the launch of
B Carbon Smart and Bureau Veritas validation of our
carbon footprint tools, providing trusted data for
informed decisions. Our leadership was reinforced
through our first global sustainability conference
and recognition via an A- CDP rating as well as an
IR Society award for best communication
of sustainability.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 18
Strategy in action: Optimise
OPTIMISE
1
Improve portfolio quality
Objective: Our aim is to create a high-quality
portfolio focused on differentiated processes,
complex customer applications and attractive end
markets where we can add the most value and
optimise our returns.
Our improved portfolio is structured around two
leading, technology-focused divisions: Specialist
Technologies and Precision Heat Treatment.
For a temporary period we are also reporting a
small Non-Core division as we progress with the
Group’s Optimise programme.
Key metrics: Facilities exited; Net Cash Costs;
Recurring Operating Profit benefits;
Transferred Sales.
2
Maintain an efficient operating model
Objective: Maintain a low-cost corporate centre
and ensure that our support functions are
appropriately sized to provide the necessary
capability at the lowest reasonable cost.
Key metrics: Overhead FTEs; Net Cash Costs;
Recurring Operating Profit benefits.
Work undertaken during 2025
– We made significant progress on Optimise during 2025,
and are now more than halfway through the execution
of the expanded programme.
– At our half-year results we announced an expansion to
the scope of the Optimise programme. This was enabled
by strong execution at lower cost than initially
anticipated, as well as the agreement to dispose of
ten Automotive and Industrial focused sites in France.
This disposal generated c.£19m proceeds and avoided
several planned high-cost closures.
– The expanded programme covers 31 sites and c.£75m
Non-Core revenue (FY 2024, prior to the commencement
of the programme), and is expected to deliver run-rate
benefits of at least £15m by mid-2027 for a net cash cost
of £10–15m.
– As at year-end 2025, we have completed the sale of
the ten French sites and closed operations at eight
of the remaining 20 Non-Core plants.
– We have also closed five specific departments within
Core sites. One such department was the closure of
surplus Oil & Gas coating capacity within a UK Surface
Technology facility. Activity was consolidated and the
site repositioned towards Aerospace component repair.
By year-end, the facility had achieved NADCAP
accreditation and repair certification from a leading
landing gear OEM.
– In parallel to the footprint reduction, the Group
restructured and right-sized its overhead functions.
These actions have improved organisational clarity and
enabled greater collaboration across the Group.
– Protecting customer relationships throughout the
consolidation programme has remained a key priority.
Each site closure has been supported by a dedicated
commercial lead working closely with key accounts to
manage transitions and transfer volumes.
– The Optimise programme remains a strategic priority
for 2026, with close oversight by the Executive
Committee and the Board. Costs and savings are
progressing in line with our expectations.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 19
Strategy in action: Perform
PERFORM
1
High performance culture
Objective: We aim to have a winning team of
highly capable and engaged people, all working
towards the same clear strategic goals and
collaborating effectively across divisions.
Key metrics: employee engagement scores;
employee retention rate; training and
development participation.
2
Enhance customer excellence
Objective: We are a service business, and are
focused on delivering the highest levels of
customer service, including quality, cost,
and turnaround times.
Key metrics: turnaround time; utilisation;
equipment downtime; net promoter score (NPS).
3
Agile cost base
Objective: Preserve and enhance the flexibility of
our cost base, to ensure we are able to respond to
changes in market conditions.
Key metrics: operational gearing performance;
cost benchmarking; % of flexible labour.
4
Transition to a sustainable future
Objective: Continue to reduce our energy
consumption and thereby reduce our costs,
improve our customer offering, and reduce
our impact on the planet.
Key metrics: energy intensity (sales/kWh);
absolute CO
2
reduction; % renewable energy use.
Work undertaken during 2025
– High performance culture: we have invested in the
specialist capabilities and leadership that we need to
grow. This has included bringing in commercial and
operational talent, delivering leadership development
and commercial excellence initiatives and making
changes to our leadership team; 50% of our Executive
team and 54% of our VP-level have joined the
organisation over the last two years. We have also
worked on our culture to create a more collaborative
organisation to improve our customer experience.
This has involved significant restructuring to remove
internal barriers and embedding new values and ways
of working.
– Enhanced customer excellence: we completed our
pilot programme in 2025, which rolled out a set of
foundational operational excellence tools to a number
of plants. This programme validated the future benefits
we expect, and included some remarkable benefits at
individual sites (eg. >45% reduction in turnaround time
at a pilot site in Southern France). We have now begun
the full roll-out of the programme, which will embed
lean ways of working and a kaizen culture into
our plants.
– Agile cost base: always a strength of Bodycote,
we continue to prioritise maintaining agility in our cost
base. This includes closely monitoring our operational
gearing and the flexibility of our labour resources.
In 2025 we also built a new centralised procurement
team, which will look to better leverage our global
network to deliver procurement savings.
– Transitioning to a sustainable future: we continued to
strengthen our energy efficiency in 2025, delivering an
8.5% reduction in Scope 1 and 2 CO
2
emissions. As part
of this effort, we undertook a comprehensive audit of
nearly 3,000 energy-intensive assets across our global
operations and progressed efficiency initiatives,
with 200 major energy efficiency measures now
implemented across the Group.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 20
Strategy in action: Grow
Work undertaken during 2025
Our primary aim is to increase organic growth in our
targeted high-growth, high-margin areas. We made
progress on this objective in 2025 through three
main levers:
– Enhancing our sales capability: following a detailed
capability assessment, we made new hires to address
gaps in strategic marketing and business development.
We also improved the sales organisation structure to
better facilitate collaboration between divisions.
Finally, we revamped our sales incentives and created
a clear link to our strategic objectives.
– Fully leveraging our global scale: we created new
cross-divisional working groups focused on key target
markets including Aerospace, Industrial Gas Turbines,
and European defence. We have seen early benefits
from these efforts, for example the European defence
group has built a pipeline which is >10x our current
annual European defence sales, and in the second half
of the year we secured approved vendor status with
Rheinmetall.
– Major organic investment projects: we evaluated and
approved a number of important investments in our
target areas. These include a greenfield site to take our
S
3
P process into Asia, two major upgrades of US
Aerospace facilities, new HIP capacity investments,
as well as an automotive greenfield site in Mexico.
Work is commencing on these projects – along with
a number of others – which will deliver meaningful
revenue from 2027.
In addition, we made progress on our aim to accelerate
growth via both sustainability and aligned M&A.
In sustainability, we launched our first two zero emission
plants (both in the UK), as well as developing a green
premium service offering in Gothenburg, Sweden.
In M&A we have improved our central capability and
built a pipeline of over 100 targets aligned to our
strategic priorities. In January 2026 we acquired
Spectrum Thermal Processing, an Aerospace-focused
site in Rhode Island, USA.
GROW
1
Target high-growth, high-margin areas
Objective: Focus our sales efforts and disciplined
investments on structural growth end markets
(eg. Aerospace, Medical), advanced processes
(including Specialist Technologies), and emerging
market geographies, improving our mix.
Key metrics: % of revenue in Specialist
Technologies; attractive end markets; and
emerging market geographies.
2
Accelerate via sustainability
Objective: Drive growth and accelerate
outsourcing through our ability to process parts
with significantly lower carbon emissions than
in-house treatment.
Key metrics: tonnes of CO
2
e avoided for
customers; % of revenue supporting sustainable
end-use markets.
3
Add aligned M&A
Objective: Boost growth through disciplined
M&A, aligned to our target high-growth,
high-margin areas and with compelling
financial returns.
Key metrics: new additions to M&A pipeline;
number of potential targets reviewed; delivery
of value-accretive bolt-on acquisitions.
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 21
KPI How we define it Why it is important
Link to
remuneration
Link to
strategy
Core revenue growth (%) The percentage year-on-year
change in revenue of our
corebusiness. Revenue growth is
measured at constant currency by
comparing two years of revenue at
the rates of exchange that existed
in the earlier year.
Our core business reflects the part of our
business that will remain after the Optimise
programme is complete. Core revenue
growth is a measure of how well we are
growing that business. Our goal is to achieve
mid single-digit growth in core revenue through
the economic cycle.
Percentage of revenue from Specialist Technologies (%) Total Specialist Technologies
revenue for the year stated as a
percentage of total Group revenue.
Our Specialist Technologies business is a key
strategic growth platform for the Group.
The percentage of our revenue derived from this
business is a measure of our progress towards
our goal of 35%-40% of our business coming
from Specialist Technologies by 2028.
Adjusted Group Operating margin (%) Group adjusted operating
margin stated as a percentage
of Group revenue.
Adjusted operating margin is a key measure
of how efficiently our business converts our
revenue into profit. Our target is to achieve
adjusted operating margin in excess of
20% by 2028.
Basic Adjusted EPS Adjusted earnings per ordinary
share is defined and reconciled
in note 6.
Earnings per share is an important profitability
metric and a key measure of how our business
operations have driven shareholder value.
20 bps
50 bps
130 bps
4.2p
Optimise
Grow Perform Part of the Executive Directors’ Remuneration
23.2
2021
24.4
26.2
29.4
29.2
2025202420232022
6.9
2021
19.3
8.9
(0.8) (0.3)
2025202420232022
15.4
2021
15.1
15.9
1 7. 0
15.7
2025202420232022
35.8
2021
42.7
48.4
48.6
44.4
2025202420232022
Our key performance indicators
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 22
Our key performance indicators continued
KPI How we define it Why it is important
Link to
remuneration
Link to
strategy
Adjusted operating cash flow conversion (%) Adjusted operating cashflow
dividedby adjusted operatingprofit.
Adjusted operating cash flow conversion
is a key measure of how efficiently our business
operations turn profit into cash. Our target is
a conversion in the range of 80%-90% over
the cycle.
Return on Capital Employed (ROCE) (%) Adjusted operating profit divided
by capital employed, defined as the
average of opening and closing net
assets adjusted for net (debt)/cash.
ROCE shows how efficiently we have deployed
our capital to generate returns. We target a ROCE
in the range of 15%-20% over the cycle.
Total Recordable Incident rate (TRIR) The number of lost time incidents,
restricted work cases and medical
treatments cases x 200,000, divided
by the total number of employee
hours worked.
Safety First is one of our four values and TRIR
is a key health and safety performance metric.
As well as being a measure of how well we are
performing against our goal of having no lost
time incidents, we believe that a plant that
operates safely is likely to be a plant that also
operates efficiently.
Carbon footprint (ktCO
2
e) Total Scope 1 and 2 emissions
in the year (location-based).
Our Scope 1 and 2 emissions are a key measure
of our progress towards our science-based
greenhouse gas emissions reduction target.
It is also a key measure of our performance in
respect of Sustainability, one of our four values.
12 ppts
150 bps
0.1
8.5%
Optimise
Grow Perform Part of the Executive Directors’ Remuneration
103.7
2021
78.3
87.9
89.5
77.5
2025202420232022
12.0
2021
13.3
14.8
15.7
14.2
2025202420232022
2.9
2021
2.5
2.8
1.8
1.9
2025202420232022
284.9
2021
270.9
265.5
254.9
233.3
2025202420232022
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 23
Our business model
Our business model positions Bodycote as the supplier of choice for performance metallurgy solutions.
Utilising our strategic differentiators Creating value for stakeholders Supported by strong execution
Global and local
With over 130 facilities
across 22 countries, we are
an established global
partner to multinationals,
while maintaining deep
local relationships with our
customers. This network
provides customers, large
and small, with unique
access to the Group’s
extensive capabilities,
expertise and backup
processing.
Expert knowledge
With decades of
experience in all major
markets and deep
knowledge of all areas of
metallurgy, Bodycote’s
engineers and
metallurgists are able to
utilise the global network
of expertise, skills and
experience to provide
solutions for customers,
whatever their market or
wherever in the world
they operate.
Technology leader
The broadest range of
metallurgical processing
capabilities and an
unrivalled equipment
network enable customers
to access materials
performance solutions that
fulfil multiple requirements
from a single quality-
assured provider, while
helping reduce their
carbon footprint.
Fully accredited
Quality has always been at
the forefront of Bodycote’s
services, delivering the
very best in precision-
controlled treatments
and quality inspection.
Our facilities hold multiple
certifications for critical
industries and approved
supplier status with
key OEMs.
– Value-adding services
– Global supplier capable of meeting multiple
processing needs
– Supporting carbon reduction versus in-house
operations, lowering overall emissions
– Cost advantages versus in-house operations
– Access to the entire Bodycote knowledge
base and expertise
– Attracting,
developing and
retaining a
diverse workforce
– Ongoing and
open engagement
– Operating as a
responsible business
– Appealing growth drivers
– Strong margins, cash
flows and balance sheet
– High return on investment
– Proactive approach to
sustainability and
climate action
Customers
Investors
Employees
Customer service
A focus on enhancing customer experience underpins
our business. We build strong customer relationships
through local service expertise, delivering quality
processing and turnaround times that add value to our
customers’ workflows and their critical components.
Carbon reduction
Bodycote has achieved previous targets and set new
ambitious targets for sustainability. We actively work
towards transitioning to lower-carbon technologies
that have a lower environmental impact. Bodycote’s
proprietary suite of customer carbon calculators is
available globally to enable our teams to support our
customers in meeting their carbon reduction targets.
Operational excellence
Improving safety and optimising productivity and
efficiency are our foundations for operational
excellence. Targeted investment in the latest processes
and the most efficient and environmentally friendly
equipment, combined with key geographies, enables
us to access high-growth markets and better support
an expanding customer base.
Our Specialist Technologies and Precision Heat Treatment divisions provide performance metallurgy solutions that are
critical to the safe and effective working life of thousands of components. Our services enable customers’ parts to achieve
optimal performance while reducing their environmental impact, supporting a more sustainable future. Across our global
network, engineers and metallurgists collaborate closely with customers to solve complex materials challenges, enhance
operational efficiency and help reduce carbon emissions.
WE PROVIDE ESSENTIAL
MATERIALS SCIENCE
SOLUTIONS.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 24
Our business model continued
Our value chain
Our value chain is
designed to enhance
performance, extend
component life and
reduce environmental
impact across the
manufacturing lifecycle.
Design collaboration
with customers
Customers
manufacture
components
Finishing and
assembly
Bodycote thermal
processing
End application
Aftercare/maintenance
We work closely with customers
early in the design and qualification
phase, applying metallurgical
expertise to help define thermal
processing routes aligned to
performance, durability, sustainability,
and lifecycle requirements.
Customers manufacture
metal components within
their own production
environments before
transferring them to
Bodycote for specialist
thermal processing.
Bodycote applies specialist
thermal processing technologies
to enhance material properties
such as strength, fatigue
resistance, and wear performance,
achieving the required
specification while optimising
energy and resource inputs,
minimising finishing work and
extending component life.
Processed components
are returned to customers
for finishing and assembly,
enabling seamless integration
into final products and
production schedules.
The optimised components are deployed
in demanding aerospace, industrial and
energy applications, delivering improved
performance and reliability while reducing
manufacturing and lifecycle impacts
through extended service life.
Through ongoing technical support,
re-processing, and maintenance
services, we help customers extend
component longevity, improve asset
utilisation, and reduce the need
for replacement.
4
What enables value creation?
Facilities and technology: A global network of specialist
thermal processing facilities, increasingly supported by
low-emission furnaces and energy-efficient technologies.
Expertise: Experienced metallurgists, engineers and
technicians applying disciplined process control and
materials knowledge.
Energy and resources: Energy-intensive processes
managed through efficiency, optimisation and the increasing
use of lower-carbon inputs.
Supplier relationships: Long-standing partnerships supporting
equipment, maintenance, and responsible sourcing.
Emissions and waste: Managed through process optimisation,
reduced rework and technologies designed to cut emissions
at source.
6
5
1
2
3
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 25
Business review
Specialist Technologies
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.
1
2
3
4
5
1
3
2
Revenue by market sector (£m)
1
Aerospace & Defence (A&D) 92.0
2 Industrial Markets 32.5
3
Automotive 1 7. 6
4
Energy 41.4
5 Consumer, Medical & Other 28.8
Total 212.3
Revenue by geography (£m)
1 Western Europe 105.1
2 North America 100.0
3 Emerging Markets 7. 2
Total 212.3
Company overview Strategic report Governance Financial statements Additional information
Bodycote plc Annual Report 2025
26
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 26
Precision Heat Treatment revenue
grew +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.
Revenue by market sector (£m)
1
Aerospace & Defence 134.9
2 Industrial Markets 116.1
3
Automotive 130.1
4
Energy 29.8
5 Consumer, Medical & Other 48.4
Total 459.3
Revenue by geography (£m)
1 Western Europe 215.4
2 North America 162.0
3 Emerging Markets 81.9
Total 459.3
1
2
3
4
5
1
3
2
Business review
Precision Heat Treatment
Company overview Strategic report Governance Financial statements Additional information
Bodycote plc Annual Report 2025
27
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 27
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 and gas work
offset by starting to see the benefit of
our Optimise savings.”
Ben Fidler
Chief Financial Officer
Financial overview
2025
£m
2024
£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.
GOOD STRATEGIC PROGRESS
IN MIXED END MARKETS
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.
Chief Financial Officer's review
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 28
Net finance charge
The net finance charge reduced to £9.1m (2024: £9.5m),
as summarised in the table below:
2025
£m
2024
£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 charge (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
£m
2024
£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.
Chief Financial Officer's review continued
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
£m
2024
£m
Profit for the year 55.4 20.7
Attributed to non-controlling
interests
0.5 0.7
Earnings attributable to equity
holders of the parent 54.9 20.0
Weighted average number
of ordinary shares in issue
176,816,708 186,012,493
Basic adjusted EPS 44.4p 48.6p
Basic EPS 31.0p 10.8p
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.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 29
Chief Financial Officer's review continued
Management cash flow
2025
£m
2024
£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 EBITDA
1
184.7 198.7
Net capital expenditure (77.0) (60.5)
Principal element 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 financing 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 1 7. 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)
1 Refer to page 194 for a reconciliation of Adjusted EBITDA to
EBITDA and note 22 on page 173 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
£m
Facility
utilisation
£m
Facility
headroom
£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 on pages 192 to 195.
Going concern
As described on page 146 of the consolidated financial
statements, 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.
Ben Fidler
Chief Financial Officer
10 March 2026
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 30
Principal risks and uncertainties
The Board is committed to protecting
and enhancing the Group’s interests
through the effective management
of risk. As a global business operating
in 22 countries we understand that
effectively managing risk underpins
the successful performance of
the Group.
Risk Management Process
The Board has ultimate responsibility for the Group’s
systems of risk management and internal control and
for ensuring that they are robust, monitored and evolving
to address changing business conditions and threats.
The Board provides direction and sets the tone on
the importance of risk management, promoting a strong
ethical culture within the business. The tone is supported
by the Group’s purpose and values, Code of Conduct
and ways of working all of which were updated and
re-launched during 2025.
The review of financial risk exposure (and twice yearly
review of the system of internal control and risk
management) has been delegated to the Group’s
Audit Committee.
The Directors, Executive Committee and senior divisional
and functional leaders take ownership of specific business
risks and actions to ensure each risk is managed
appropriately within their areas of responsibility. Each risk
is evaluated based on its likelihood of occurrence and
severity of impact on the Group‘s strategy. The Group’s
principal risks are then assessed at both inherent and net
levels, ie. before and after the effect of mitigation.
The Executive Committee assists in the identification and
evaluation of principal risks as part of the Group’s risk
assessment and risk management processes.
This approach allows the consistent identification and
evaluation of principal risks, as well as a consideration
of the effect of current lines of defence in mitigation.
A detailed review of the Group’s current and emerging
risks was presented to, and discussed with, the Board
in May 2025 and December 2025. The Board is satisfied
that an ongoing process of identifying, evaluating and
managing the Group’s principal risks has been in place
throughout 2025.
Responsibilities for risk management
The Group’s risk framework defines clear roles,
responsibilities and accountabilities for risk management
based on the 3-Lines of Defence model and continues to
develop in line with the Group’s strategy and organisation.
First line of defence
Operational management is responsible for effective
risk identification, risk mitigation and the development
of internal control systems within the business.
Our risk framework
The Board
Formulates the Group’s strategy and has overall responsibility for risk management and internal control,
including the definition of the Group’s risk appetite and culture. Regularly monitors the nature,
extent and management of the Group’s principal risk and uncertainties, including emerging risks.
Executive Committee
Comprises Executive Directors, Divisional Presidents and
Functional Executives overseeing Group-wide risks.
Divisional Management
(First line of defence)
Implementation of
the necessary systems
of risk management
and internal control.
Regular review of business
operations and implementation
of risk mitigation plans.
Day-to-day operational
management of risk.
Group Audit Committee
Reviews and monitors the integrity of financial reporting,
systems of internal control, performance of internal and
external audit and monitoring financial risk.
Corporate Functions
(Second line of defence)
Responsible for the Group-level
design and maintenance of the risk
and control framework
and providing specialist direction
and support across the Group.
Group
Internal
Audit
(Third line
of defence)
Independent
and objective
assurance
function.
Independent
Assurance
(Where
commissioned
as necessary
from specialist
parties).
Lines of Defence
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 31
Principal risks and uncertainties continued
Risk management is integrated into day-to-day operations.
Each division has an established organisational structure
that is reviewed on a regular basis, a senior management
team and policies and procedures to support the
achievement of business objectives. Operational policies
ensure compliance with laws and regulations in the
geographies in which divisions operate. Key risks are
escalated as and when they are identified.
The first line of defence includes plant management and
administration, operations, engineering, sales, marketing,
continuous improvement, divisional finance, human
resources, health and safety, and all roles up to and
including Divisional Presidents and Vice Presidents of
Finance. Divisional Presidents are ultimately responsible
for the effective management of risk in each Division.
Second line of defence
The second line is responsible for establishing Group-wide
control frameworks, policies and procedures, including
the Code of Conduct, Delegation of Authority Matrix,
Group Finance Manual, tax and treasury procedures and
health and safety policies. Risk management practices are
embedded into many aspects of the Group’s leadership
and performance model. Areas of risk are considered in
the usual course of business or in routine decision-making.
Consistent with the Group’s approach to Provision 29 of
the revised UK Corporate Governance Code, extensive
work has been undertaken to document material risks and
controls across a range of key processes which underpin
both the Group’s principal risks and its approach to
risk management.
The second line of defence includes the General Counsel,
Company Secretariat, Group Finance, Group Health and
Safety, Group Sustainability, Group HR, Group Treasury
and Tax and Group IT. A number of appointments have
been made in key positions during the year to further
strengthen expertise within the second line of defence.
Third line of defence
The third line comprises Group Internal Audit which
provides objective and independent assurance on the
effectiveness of the Group’s risk management processes
and controls. A new experienced Group Head of Internal
Audit and Risk was appointed in late 2024. The Group
Head of Internal Audit and Risk is supported by an Internal
Audit co-sourcing relationship with a professional services
firm who support the Internal Audit function globally.
The Group Head of Internal Audit and Risk reports directly
to the Chair of the Audit Committee and functionally to the
Group CFO, reinforcing the importance of ensuring the
independence and objectivity of the function. The Group
also commissions independent advice and assurance,
as required.
In 2026, the Group will continue to evolve its risk and
control framework, replacing the Risk and Sustainability
Committee with two separate management committees:
a Group Risk Committee and a Sustainability Committee.
Group Risk Appetite
The Board determines the Group’s risk appetite and
ensures that the Group’s exposures to risk are appropriate
and align to the Group’s strategic initiatives and priorities.
The Board reviewed the Group’s risk appetite in May and
December 2025.
The Board is committed to enhancing the management
of risk and control to support the Group’s resilience and
performance. Throughout the year the Group has
continued to review and enhance aspects of the Group’s
risk and internal controls framework and will continue to
do so during 2026 in line with the requirements the
updated UK Corporate Governance Code.
On a day-to-day basis, the Group monitors risk through
routine oversight and reporting processes, including
regular operational review meetings with each Division
covering key areas of performance and risk. Additional
processes and reporting exist for major projects and
capital expenditures. Similar to other businesses, the
Group faces a number of risks and uncertainties that are
not necessarily within its control, for example those arising
from macro-economic developments.
Emerging Risks
The Group considers emerging risks to be those that may
materialise in the future but for which the nature or impact
is not clear. They are discussed by the Board throughout
the year alongside the Group’s principal risks.
The Group’s risks have been considered in the broader
context of the geopolitical and macro-economic
environments globally and in the countries in which the
Group operates. The dynamic and volatile nature of such
risks is such that the changing nature and potential
impacts of these risks are closely monitored throughout
the year. Emerging risk is mitigated by the fact that
Bodycote has a global network of sites which allow it to
service customers from multiple locations, such that the
residual risk exposure is not considered significant.
Other risks include rapidly changing technological risks
such as information security threats and the exponential
increase in agentic AI. Changes in the supply chain
(such as supply chain migration to lower cost/developing
economic environments) are monitored on an ongoing
basis. Details of the Group’s financial risks, which are
managed by the Group’s Treasury function, are provided
in note 16 to the consolidated financial statements.
The mitigating activities described in this report will
reduce the impact or likelihood of these risks occurring,
although the Board recognises that it will not be possible
to eliminate these risks entirely.
The Group’s principal risks are those that are material and
which have the potential to have a significant impact on
the Group’s operations. The Directors confirm that they
have undertaken a thorough review of the Group’s
principal and emerging risks including those that would
threaten the Group’s business model, future performance,
solvency and liquidity. The Group’s principal risks are
outlined on pages 33 to 37.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 32
Principal risks and uncertainties continued
Group Principal Risks
The following tables set out a description of the Group’s principal risks and related mitigation measures, as agreed by the Board, and describe how these principal risks may affect
Bodycote’s ability to deliver its strategy. The risk rating sets out the direction of change from 2024. Please refer to pages 19 to 21 for further information on our strategic levers.
Risk description Risk rating Mitigation and control
Link to
strategic
priority
Markets
The Group operates in 22 countries. There is a risk that
macro-economic trends and changes in the economic
and geopolitical environment will impact the end
markets that the Group serves and, consequently, the
number of parts that need to be treated. These events
may result in supply chain disruptions, rising energy
prices and labour shortages which can escalate
inflationary pressure on earnings if not passed on
to customers.
– The high proportion of short-term fixed costs
in the business means that a movement in sales
can have a significant impact on the
Group’s profitability.
– High levels of cost inflation exert pressure on
the Group’s profitability if it is not successfully
passed on to customers.
– Globally increased levels of
geopolitical instability.
– The Group’s presence in 22 countries, servicing customers across a
wide variety of end markets, acts as a natural hedge to neutralise
localised economic volatility and component lifecycles.
– The Group has demonstrated the ability to actively manage its cost
structure in response to changes in demand, supply chain issues and
significant cost inflation, protecting profitability and returns.
– Restructuring activities have successfully adapted the Group’s facilities
footprint to respond to trends in end markets in order to mitigate
pressure on earnings.
– Regular reviews of the cost base and activity levels take place
periodically with corrective actions taken.
Competitor activity
The threat of new and existing competitors in any of
the Group’s markets results in customer loss or loss
of market share adversely impacting the Group’s
financial performance.
The entrance of new competitors could result in
the erosion of market share with a loss of revenue
and profitability.
– Robust process to monitor competitor activity in the market’s in
which the Group operates.
– Proactive management of service offering – price, lead time, quality.
– Expansion in the Group’s offerings to maintain its position as supplier
of choice.
– The close control of proprietary knowledge.
– A focus on customer service to ensure that satisfied customers have
no cause to seek alternative suppliers.
– There are high financial barriers to entry.
Optimise
Grow
Increasing Stable
Perform
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 33
Principal risks and uncertainties continued
Risk description Risk rating Mitigation and control
Link to
strategic
priority
Health and safety
The inherent nature of Bodycote’s activities and the
equipment operated presents health and safety risks.
The Group’s operations, if not properly managed,
could have a significant impact on our employees and
the wider community. Furthermore, poor health and
safety practices could lead to disruption of business,
prosecution, financial penalties and an adverse impact
on the Group’s reputation.
Bodycote is committed to providing a safe
environment for its employees and the
wider community.
– Global health and safety culture programme and values in place.
– Visible health and safety leadership and communication process with
established reporting processes in place up to Board level.
– Established Group-wide health and safety policies ensure continuous
improvement of safety standards, monitoring and investigation of
all events.
– Programmes in place to focus on the reduction of incidents which
could have a high impact.
– EHS Training process in place.
– The Group appointed a new Senior Vice President, Health & Safety
in February 2025, driving the renewed focus on rigorous health and
safety practices across the Group.
Climate change
As a thermal processing company, the Group’s
carbon reduction strategy is of particular importance
to stakeholders, both as a potential risk and a
commercial opportunity.
Climate change poses a range of potential risks,
arising from current and emerging regulation,
technology, legal, market, reputational, and physical
climate risk drivers, which could lead to business
disruption, health risks, loss of reputation and
financial costs.
Climate change risk continues to rise in prominence
in light of stakeholders’ expectations, changing
regulations and reporting requirements, and
potential physical weather-related impacts.
– Centre of expertise established to drive climate-related activity.
– Sustainability Committee supports the execution of strategy.
– SBTi-validated target to reduce Scope 1 and 2 emissions by 46% by
2030 vs 2019.
– A climate scenario process established to support the identification and
mitigation of potential risks (see the TCFD report on pages 71 to 79).
– Climate-related stakeholder communications, in alignment with
internationally recognised standards.
– Adherence to the ISO 14001 standard for environmental impact
management (97% of the Group’s operational facilities are accredited).
– Remediation of contaminated sites continues.
Optimise
Grow
Increasing Stable
Perform
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 34
Principal risks and uncertainties continued
Risk description Risk rating Mitigation and control
Link to
strategic
priority
Customer service
The Bodycote brand is reliant on the repeatable delivery
of parts to agreed specification within an agreed
time period.
There is a risk that Bodycote fails to meet the needs of
customers in terms of quality, delivery, innovation and
problem-solving.
The risk of poor quality, poor service levels or
non-compliance with agreed specifications can
cause serious long-term damage to Bodycote’s
reputation with financial consequences such as
customer loss or the cost of damages or litigation.
– Bodycote has stringent quality systems in place managed by
qualified staff.
– Quality systems and processes are operated within our plants with
strong oversight by our divisional quality teams.
– Where necessary, our plants maintain industry relevant accreditations,
such as ISO 9001, Nadcap and IATF 16949.
– Each facility undergoes regular audits by quality staff, accreditation
bodies and customers.
Quality and accreditations
There is risk that parts are not treated according
to contractually agreed specification or additional
customers’ amendments.
The Group is required to maintain specific accreditations
in order to provide heat treatment and thermal
processing services on parts for certain customers.
Failing to maintain such accreditations would prevent
Bodycote from delivering services to customers in
these markets.
Non-compliance with agreed specifications
or failure to update the process at a plant to
comply with specification changes requested
by the customer may potentially lead to parts
being rejected or failing, which could result in
material claims against Bodycote with significant
reputational damage.
Should a number of facilities fail to maintain their
accreditations, customers could potentially move
work to a competitor resulting in a loss of revenue
to Bodycote.
– Each facility has a robust quality management system with regular
audits by quality staff, accreditation bodies and customers.
Remediation plans are implemented in the event of non-conformities
being identified.
– Bodycote carefully negotiates terms and conditions associated
with the supply of services to its customers, carefully managing
potential liabilities.
– Certain potential damages resulting from this risk are fully or
partially covered through the Group’s various insurance policies.
– Bodycote has a global network of 136 facilities enabling work to be
transferred to another accredited facility.
Business interruption
Bodycote’s facilities are subject to man-made and
natural hazards that could lead to their potential closure.
Some business processes are inherently risky and there
is a possibility that a major incident, such as a fire or
utility outage, could occur. In addition, some facilities
are exposed to natural hazards, such as earthquakes,
flooding and storms.
Any significant incident at a site could result in the
service to Bodycote’s customers from the affected
site being disrupted.
– Business continuity plans are in place for all plants.
– Independent insurer physical inspections of facilities to assess hazard
and business interruption risks have been conducted during the year.
– Insurance cover, including business interruption cover,
is in place.
– Scheduled equipment maintenance and inspections are carried out
on a regular basis.
– Bodycote’s global network of 136 facilities creates
a framework to provide backup capability if required.
Optimise
Grow
Increasing Stable
Perform
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 35
Principal risks and uncertainties continued
Risk description Risk rating Mitigation and control
Link to
strategic
priority
Critical equipment
Bodycote relies upon its operational equipment, across
its network of plants, being available to meet the
requirements of its customers. Accordingly, unexpected
equipment downtime would potentially affect
Bodycote’s ability to service its customers. Moreover,
without an effective preventative maintenance
programme there is a risk that equipment redundancy
plans would need to be built into facility management in
order to cope with equipment breakdowns.
Significant periods of equipment downtime would
impact customer service and revenue.
– Preventative maintenance programmes mitigate the risk of downtime
occurrence associated with major breakdowns ensuring business
continuity and customer satisfaction.
– Spare parts replenishment programme ensures efficient maintenance
activities occur according to plan.
– Bodycote’s global network of facilities with robust business continuity
plans help to minimise the impact of equipment downtime on customer
service. If required, customer work can be transferred to another facility
within the network.
Investment and capital deployment
It is important that where systems investments and
programmes are implemented across Bodycote, they
are delivered on target, with the expected benefits and
within the timescales. Accordingly, it is critical to the
strategic objectives of Bodycote, that the rollout of key
systems investments and programmes is successful.
A failure of key systems, projects and/or
acquisitions would adversely impact critical
business operations or financial performance.
– For acquisitions, specified due diligence processes and procedures
are established (including integrations).
– Periodic assessments of progress on all key investments.
– Project governance processes in place for all key business and IT
projects (including contracts with third parties) to ensure deliverables.
Information systems and security (Cyber)
The Group relies upon its IT systems, including a range
of ERP solutions, to manage its operations. IT system
interruptions could lead to business process disruption
and interruption to key business services.
There is an increasing global risk of sophisticated
cyber-attacks, including ransomware and phishing
with the complexity of these attacks rising.
A significant failure of IT systems as a result of
external factors, such as a cyber-attack, could
disrupt service to our customers, and result in
reputational and financial loss.
– The Group has robust governance processes to ensure that
IT projects are adequately reviewed and approved to ensure that they
are consistent with the Group’s IT strategy.
– The Group continues to focus on information security management
processes, business recovery planning and data backup procedures.
Optimise
Grow
Increasing Stable
Perform
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 36
Principal risks and uncertainties continued
Risk description Risk rating Mitigation and control
Link to
strategic
priority
Legal, regulatory and compliance
The global nature of Bodycote’s operations means that
the Group must comply with a wide range of local and
international regulatory and legislative requirements,
including modern slavery, anti-bribery and anti-
competition legislation, employment law and import
and export controls.
The Group must also comply with taxation legislation
and the advantages associated with the UK’s controlled
foreign companies that the Group has employed in its
financing structures.
Failure to comply with current and new legislation
could lead to substantial financial penalties,
disruption to business, diversion of management
time, personal and corporate liability and loss
of reputation.
– Group-wide policies are in place and reviewed on a regular basis.
A number of new or updated policies have been launched within the
year including the Group Code of Conduct, purpose and values and
ways of working. In addition a suite of other policies exist in key areas.
– Training programmes in place for key elements of the policy framework.
– The ‘Open Door Line’ whistleblowing facility operated by a third-party
and overseen by the Group Company Secretary with updates reported
to the Board.
– Engagement of specialists (lawyers, accountants, tax specialists, trade
compliance consultants and freight forwarders) to support Bodycote
at local, divisional and Group levels.
– Regular audits of the effectiveness of implemented procedures.
– Regular assessment to ensure continuing compliance with the UK
Corporate Governance Code, including any proposed changes.
People and capability
The Group’s ability to attract, retain and develop key
skills and capabilities are critical to ensuring the key
business objectives are met in particular in serving
our customers.
Failure to secure and retain key skills and
capabilities (including technical know-how)
limits the Group’s ability to successfully service
customer requirements.
– Strengthened core business skills and capabilities through several
senior level appointments.
– Investment in management and commercial skills training.
– Launch of new talent, succession and development process.
– New careers website, candidate management and recruitment process
in place to strengthen employer brand.
– New Apprenticeship Programme established.
– Employee Engagement Survey and action planning completed in 2025.
Optimise
Grow
Increasing Stable
Perform
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 37
Viability statement
In preparing this statement of viability, the Directors have
considered the prospects of the Group over the five-year
period immediately following the 2025 financial year.
This longer-term assessment supports the Board’s
statements on both viability, as set out below, and going
concern (on page 30). The Directors have determined that
a five-year period is an appropriate period over which the
business could be restructured in the event that any
material changes to demand for the Group’s services
transpired. This period is also consistent with that used
for the Group’s planning process. As a result, the Board
determined that a period of longer than five years would
not be meaningful for the purpose of concluding
on longer term viability.
The base case forecasts which underpin this assessment
are based on the Board approved 2026 budget and the
Board approved five-year strategic plan. These projections
reflect ongoing growth in the Group’s end markets over
the forecast period. The performance of the Group over
the period of the assessment has then been assessed
against the covenants that exist in the Group’s Revolving
Credit Facility (RCF), as explained on page 30, and the
Group’s liquidity.
In conducting the review of the Group’s prospects, the
Directors assessed the five-year plan alongside the
Group’s current position, the Group’s strategy and the
principal and emerging risks facing the Group (all of which
are detailed in the Strategic Report on pages 13 to 80).
This assessment included consideration of the principal
risks to the business model and on future performance,
liquidity and solvency and was mindful of the limited
forward visibility that the Group has as it carries limited
order backlog. The Directors’ viability assessment
included a review of the sensitivity analysis performed on
the five-year financial forecasts. The assessment included
two scenarios designed to stress-test the Group’s base
case forecasts as follows:
– A plausible downside scenario which assumes a
slow-down in the global economy, resulting in a fall in
FY26 revenues of 14% versus FY25 followed by gradual
growth thereafter. This results in a material reduction in
revenues over the five year period versus the Group’s
plan, and a 0% CAGR across the five-year period to 2030.
As a result of the revenue decline, operating margins are
materially lower over the five-year period than those
achieved by the Group in recent years.
– A break-case scenario designed to establish the decline
in revenues required to result in the Group’s liquidity
being exhausted or loan covenants breached.
This scenario shows that FY26 revenues would need
to fall by more than 30% below FY25 levels, and
demonstrate zero growth thereafter, before the Group’s
leverage ratio covenant is breached at the end of the
five-year review period. Whilst this scenario is not
considered remotely plausible, it was designed to
stress-test the financial resilience of the Group.
Both scenarios applied a 50% profit gearing to the fall
in revenue.
In the plausible downside scenario, capital expenditure
was reduced versus the base case and dividends were
maintained at the same level as FY25 through the five-year
period. In the break-case scenario, capital expenditure
was further reduced, reflecting the reduced maintenance
capital expenditure required in that scenario due to
sustained lower equipment utilisation, and the lower
levels of growth capital expenditure that would be
required. In addition, dividends were reduced significantly.
No mitigating actions such as undertaking further
restructuring were included.
In the base case and plausible downside scenario,
there were no breaches to the Group’s covenants,
and substantial headroom was maintained.
In making this viability statement the Directors considered
the other mitigating actions (including, but not limited to,
cost reduction initiatives, further discretionary capital
expenditure reduction and the reduction of dividends)
that may be taken by the Group in the event that the
principal risks of the Company become realised, but note
that none of these actions were modelled in performing
the assessment since the Group maintained substantial
headroom in both scenarios. The Directors also took into
consideration the Group’s financial position at
31 December 2025, with available liquidity of £156.2m
(December 2024: £194.4m) and a history of strong and
resilient cash flow generation. Uncommitted facilities were
not taken into account in performing the assessment. It is
noted that the Group’s RCF matures in September 2030,
before the end of the assessment period, however the
Directors have a reasonable belief that, based on previous
experience and ongoing supportive discussions with our
lenders, should any debt facility be required, the RCF will
be able to be refinanced or extended.
The Directors have assessed the viability of the Group and,
based on the procedures outlined above in addition to
activities undertaken by the Board in its normal course of
business, confirm that they have a reasonable expectation
that the Group will be able to continue in operation and
meet its liabilities as they fall due over the period to
31 December 2030.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 38
Section 172 statement
The Directors recognise their duties
under Section 172 (s172) of the
Companies Act 2006 and their
responsibility to act, in good faith,
to promote the long-term success
of the Company for the benefit of
shareholders as a whole. In doing so,
the Directors have regard to the
interests of key stakeholders, the
impact of the Group’s operations on
the environment and wider society,
the importance of maintaining high
standards of business conduct, being
a responsible employer, and the need
to act fairly between shareholders.
As a global provider of specialist heat treatment and
thermal processing services operating a decentralised
operating model across diverse end markets, Bodycote’s
long-term value creation depends on safe and reliable
operations, strong customer relationships, skilled and
engaged employees, disciplined capital allocation and
responsible environmental management. Consideration
of stakeholder interests is therefore integral to the
Board’s oversight of strategy, performance and risk.
The Board considers effective stakeholder engagement
to be fundamental to the delivery of the Group’s strategy
and its long-term sustainable success. Stakeholder
engagement and long-term decision-making are therefore
embedded within the Board’s governance framework.
The Board recognises that different stakeholder interests
may not always align and that certain decisions may
require careful judgement and prioritisation, particularly
in relation to operational safety, investment prioritisation,
cost management, employee engagement and footprint
optimisation. In such cases, the Board seeks to balance
competing considerations and reach proportionate
outcomes that support the Group’s resilience and
sustainable success.
Led by the Chair, the Board’s decision-making processes
ensure that the long-term implications of strategic and
operational decisions, and their impact on stakeholders,
are appropriately considered. While favourable outcomes
for all stakeholders cannot always be achieved, the Board
is committed to maintaining open and constructive
dialogue to inform decisions made in good faith.
The principles of s172 are embedded throughout the
Group’s culture and governance framework, including
our Group-wide policies, ways of working, delegated
authorities and Code of Conduct. The Board sets the tone
from the top, reinforcing responsible business practices,
ethical behaviour aligned with our values, operational
discipline and accountability across all levels of
the organisation.
Further information on stakeholder engagement and how
these considerations influenced principal decisions taken
during the year is provided throughout this Annual Report.
The Group’s key stakeholder groups and how we engage
with them can be found on pages 42 to 45
Section 172 duties Key examples Page
Consequences
of decisions
in the long-term
Chief Executive and Chief
Financial Officer’s reviews
15, 28
Our business model 24
Our markets 10
Going concern and
viability statements
30, 38
Principal risks and uncertainties 31
Interests of
employees
Chair’s statement and
Chief Executive’s review
13, 15
Our stakeholders 42
Sustainability report
(including TCFD report)
47
Board activities in the year 87
Fostering
business
relationships
with suppliers,
customers
and others
Our stakeholders 42
Our markets 10
Sustainability report 47
Strategy and objectives 15
Board activities in the year 87
Impact of
operations on
the community
and the
environment
Sustainability report
(including TCFD report)
47
Principal risks and uncertainties 31
Maintaining
high standards
of business
conduct
Sustainability report
(including TCFD report)
47
Principal risks and uncertainties 31
Corporate governance
statement
82
Acting fairly
between
members
Shareholder engagement 42, 89
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 39
Section 172 statement continued
Compliance with Directors’ duties
Strategy
In setting the Group’s strategic direction and overseeing the sustainability of its
business model, the Board has regard to the interests of the Group’s key stakeholders
and ensures that appropriate governance, risk management and management
structures are in place to support effective strategy execution. The Board recognises
that long-term value creation is underpinned by safe and reliable operations, strong
customer relationships, engaged employees, disciplined capital allocation and
responsible environmental management. Progress against the Group’s strategic
priorities, together with the performance and development of the business portfolio
is reviewed at each scheduled Board meeting. This includes regular consideration of
operational performance, health and safety, talent and capability, capital investment
and organic growth initiatives, as well as external market and regulatory
developments.
The Board’s approval and ongoing oversight of the Group strategy are directed
towards delivering sustainable long-term value. Strategic and capital allocation
decisions are taken in the context of the Company’s long-term financial success
and with due consideration of their impact on stakeholders, including employees,
customers, suppliers, communities and shareholders. The Group’s underlying
financial position provides the flexibility to pursue growth opportunities, including
targeted capital investment and value-accretive acquisitions, within a disciplined
financial framework. This approach supports the resilience of the business through the
cycle and enables the Group to invest in its operations, people and capabilities, while
maintaining an appropriate balance between growth, returns and financial strength.
Performance
The Group drives performance through the clear communication of objectives,
values driven leadership, ongoing capability development, and a culture of continuous
improvement. Consistent with Bodycote’s safety-critical operating environment,
the Board maintains regular oversight of the Group’s operational, safety and
environmental, and technology performance, recognising that safe, reliable and
resilient operations are fundamental to sustainable value creation.
The Board reviews health, safety and environmental performance at each meeting,
supported by detailed reporting and trend analysis, as the safety, health and wellbeing
of our employees remain the Group’s highest priority, underpinned by our ‘Safety
First’ value. In 2025, the Group’s total recordable injury rate was 1.89, reflecting our
sustained focus on safety leadership, behavioural programmes and operational
discipline across the Group. During the year, the Group introduced a comprehensive
Group-wide safety programme, designed to strengthen risk identification, promote
consistent standards and embed learning across its decentralised operations.
In addition to safety and environmental matters, the Board oversees the Group’s
approach to operational excellence and resilience, information technology and cyber
security. As reliance on digital systems continues to increase, the Board recognises
the importance of robust IT infrastructures, cyber-risk management and data
protection in supporting operational continuity, protecting customer and employee
data and maintaining trust. Progress in these areas is monitored through regular
management reporting, assessed employee training, and risk reviews.
Through its ongoing oversight, the Board ensures this strong focus on non-financial
performance is complemented by financial discipline. This integrated approach
supports resilient operational performance, earnings, cash generation and underpins
the delivery of sustainable returns for shareholders over the long term.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 40
People
As a service-led business, it is our employees who are central to the Group’s success.
Their skills, capabilities and behaviours underpin the Group’s reputation for high
standards of business conduct and are fundamental to our customers’ success.
The Board recognises that an engaged, skilled and safety-focused workforce is
essential to the delivery of the Group’s strategy and long-term value creation.
The Group is committed to providing safe, inclusive and high-performance
working environments that enable employees to perform to their full potential.
This commitment reflects the safety-critical nature of the Group’s operations and
the importance of attracting, developing and retaining skilled colleagues across
the Group.
As an integral part of our comprehensive employee engagement programmes,
Bodycote operates Employee Engagement Groups that are chaired by a Non-
Executive Director, in line with the UK Corporate Governance Code. Following her
appointment in June 2025, the new Chair of the Employee Engagement Groups has
met with employee representatives from different regions and at several levels of
seniority, providing an opportunity for workforce perspectives to be heard directly.
Feedback from these engagements was reported to the Board, with Executive
Directors tasked with addressing specific themes and issues raised.
Feedback from the Group’s first employee engagement survey was also reviewed
by the Board and management, with the results used to identify priority areas and
Group-wide improvement plans. Progress will be tracked through defined measures
and ongoing engagement with colleagues. This structured approach to workforce
engagement supports constructive dialogue, informs Board decision-making and
reinforces the Group’s culture of accountability, ethical conduct and continuous
improvement.
Governance
The Board believes that strong governance is essential to the Group’s long-term
success and effective stewardship. It recognises that the sustainable success of
the Group depends on a continued commitment to maintaining high standards
of governance, ethical conduct and accountability.
The Board sets the tone from the top and is responsible for establishing and
maintaining a robust governance framework that promotes high standards of
business conduct and supports delivery of the Group’s purpose, values, strategy
and culture. This framework underpins good governance practices, enables effective
stewardship of the Group’s operations, and supports the Board in fulfilling its
stewardship responsibilities.
The Board takes an active interest in the Group’s culture and seeks to gain insight
through constructive dialogue with our key stakeholders. Feedback from these
engagements is considered as part of the Board’s decision-making processes,
helping to ensure that the tone from the top is aligned with the business direction
with respect to the Group’s values and ways of working.
The Board recognises the importance of regular performance evaluation in
maintaining its effectiveness. During the year, the Board undertook an internal
evaluation, focused on reviewing progress against the actions arising from the
externally facilitated Board evaluation conducted in 2024. Details of the evaluation
process and outcomes are set out on pages 96 and 97.
Section 172 statement continued
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 41
Our stakeholders
By understanding what matters to our key stakeholders and building constructive, long-term relationships, the Group is better positioned to deliver sustainable success.
In discharging its duties under s172, the Board recognises that long-term success depends on understanding and balancing the interests of our key stakeholders. This section outlines
how the Group has engaged with its key stakeholders during the year and how the insights gained from this engagement have informed the Board’s discussions and decision-making.
Stakeholder Reasons for engagement Their interests Key engagement channels Outcome of engagement
Shareholders and investors
Delivering attractive and
sustainable returns for
shareholders is a core priority for
the Board. The Group’s
investment proposition is
founded on its market-leading
positions, cash-generative
business model and disciplined
approach to capital allocation,
creating long-term value for
shareholders through a
combination of share price
growth and dividends.
The Board and management
maintain regular and
constructive engagement with
shareholders and the wider
investment community,
including institutional investors,
analysts, lenders and proxy
advisory agencies. The Group
communicates progress against
its financial and non-financial
objectives through results
announcements, investor
presentations, meetings and
ongoing dialogue, supporting
transparency, informed decision-
making and continued investor
confidence.
Our investors rely on the
Board to steward their
capital in a responsible
and sustainable way.
Through transparent
communication and regular
engagement, the Board
aims to build trust, support
informed investment
decisions and generate
long-term value for
shareholders.
Continued access to capital is
important to the long-term
performance and resilience
of the Group. The Board
therefore seeks to ensure
that shareholders and
investors have a clear and
balanced understanding of
the Group’s strategic
objectives, performance
capital allocation priorities,
and the principal risks and
uncertainties being
managed.
– Effective capital allocation
including shareholder
returns
– Financial performance
– Commitment to advancing
sustainability and
climate goals
– Health and safety
performance
– Good governance
and transparency
– Strong leadership
– Active management of
the portfolio, including
acquisitions and disposals
– Results presentations and
regular engagement with
major shareholders
– Annual General Meeting
– Annual Report
and Accounts
– Investor communications,
including the Group’s
corporate website
– Regular meetings
throughout the year with
existing and prospective
shareholders and
banking partners
– Press releases and
regulatory announcements
– Prompt and responsive
handling of shareholder
and investor enquiries
– Further balanced capital allocation,
including an extension of the share
buyback programme, resulting in
completion of a £120 million buyback
in January 2026
– Continued engagement undertaken
throughout the year, with meetings
held with key shareholders,
investors and analysts
– Regular market updates issued
to keep the market informed on
business performance
– Series of ESG-focused investor
meetings, with shareholder input
into the sustainability materiality
assessments
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 42
Our stakeholders continued
Stakeholder Reasons for engagement Their interests Key engagement channels Outcome of engagement
Employees
The knowledge, capabilities
and expertise of the Group’s
employees represent a
significant component of
Bodycote’s intangible value.
The Group is focused on
attracting, developing and
retaining talented individuals
with the skills and experience
required to support the delivery
of its strategy and meet future
business needs.
Employees play a critical role in
delivering the Group’s strategic
objectives, maintaining safe
and reliable operations and
creating long-term value for
stakeholders. The Board
recognises the importance of
aligning remuneration and
reward structures with the
Group’s strategy, purpose,
values and culture. The Group’s
remuneration policies are
designed to support long-term
sustainable performance,
promote responsible behaviours
and align the interests of
employees and shareholders.
Employee engagement is
essential to the Group’s
long-term success.
The Group seeks to create
a diverse and inclusive
working environment in
which employees can reach
their full potential and
contribute to the delivery
of the Group’s strategy.
Engagement with our
employees and
comprehensive two-way
leadership communication
enables the Group to
understand workforce
priorities and expectations,
informs the Board in its
business decisions, and
supports the attraction,
development and retention
of skilled and motivated
colleagues.
– Health, safety
and wellbeing
– Competitive and equitable
total reward
– Career development
opportunities
– Training opportunities
– Reputation of
the organisation
– Sustainability and
climate action
– Diversity, equality and
inclusion driving a strong
sense of belonging
– Two-way engagement
– Employee Engagement
Groups
– Regular town hall meetings
and briefing videos to
update employees on
performance and
strategic initiatives
– Group-wide intranet
based communications
– Annual performance and
development reviews
– Updates provided to the
Board by the CEO on
matters affecting or
impacting the workforce
– Grievance and
whistleblowing
mechanisms
– Leadership and
management conferences
– Regular interaction
between the Board and
management during and
after Board meetings
– Board site visits
– Environment, health
and safety briefings
and trainings
– Annual Report and
Accounts
– Social media
communications
– Completion of the first all-employee
engagement survey, achieving a
participation rate of 69% and a strong
overall engagement score of 79%, with
results used to identify priority areas
for action and improvement plans
– Leadership and General Manager
conferences held to share knowledge,
align priorities and promote the
consistent application of best practices
across the Group
– Regular in-person and virtual town hall
meetings held throughout the year to
provide updates on strategy, business
performance and key developments.
– Launch of a new global apprenticeship
programme with targeted pilot sites in
the UK to deliver hands-on experience
and structured learning and
development
– During the year, the Board visited two
plants, in Newport, South Wales, UK
and Eden Prairie, Minneapolis, USA.
These visits provided Directors with
direct engagement with a range of
employees and further enhanced the
Board’s understanding of operational
matters at plant level
– Employee Engagement Group
meetings were held, chaired by the
Non-Executive Director responsible for
workforce engagement, providing a
formal mechanism for employee
feedback to be shared with the Board
– Ways of working focus groups
deployed across the Group
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 43
Our stakeholders continued
Stakeholder Reasons for engagement Their interests Key engagement channels Outcome of engagement
Society and communities
The Group is committed to
building and maintaining
positive relationships with the
communities in which it
operates. Through its global
network of plants and
operations, the Group engages
locally to better understand,
manage and, where possible,
mitigate the social and
environmental impacts of
its activities.
Local engagement provides
valuable insight into community
priorities and helps ensure that
the Group’s operations are
conducted responsibly, supports
employment, and minimises
adverse impacts on the
local environment.
Bodycote operates in a large
number of local communities
across the world and is
committed to being a
responsible partner in each
location. Engagement with
local communities helps the
Group to understand
community expectations,
manage social and
environmental impacts, and
support the Group’s
reputation, licence to operate
and long-term success.
– Positive social impact.
– High-quality employment
opportunities
– Future talent pipeline
– Minimised environmental
impact in the locations in
which we operate and on
the global community
– Safety, health
and environmental
performance
– Individual employee
volunteering
– Local site community
activities
– Labour and human
rights matters
– Employee engagement
activities involving families
– Employee volunteering
initiatives within
local communities
– Local site community
activities
– The Group’s
corporate website
– Participation in work
experience and career
fair initiatives
– Continued development of the Group’s
supply chain strategy and engagement
processes to help mitigate potential
human rights risks and support the
fair, dignified and respectful treatment
of everyone working for, and with,
the Group
– During the year, the Group’s Code of
Conduct and Supplier Code of Conduct
were updated, together with a number
of Group-wide policies, reinforcing
expectations around ethical behaviour,
responsible business practices and
compliance across the Group and its
supply chain
– Launch of a new Group-wide
compliance training platform
– Improved understanding of the
Group’s impact on society and local
communities through our materiality
assessment processes
– Ongoing support at plant level for local
charitable and community initiatives,
reflecting the Group’s commitment to
being a responsible contributor within
the communities in which it operates
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 44
Stakeholder Reasons for engagement Their interests Key engagement channels Outcome of engagement
Customers
The Group provides specialist
services to customers operating
across the aerospace and
defence, automotive and general
industrial markets. By working
closely with customers and
actively seeking their feedback,
the Group is better able to
understand their evolving
requirements and expectations.
This ongoing engagement
supports continual improvement
and enables the Group to adapt
its services, develop tailored
solutions and enhance the
overall customer experience,
contributing to long-term
customer relationships and
sustainable value creation.
Collaboration with our
customers enables the
Group to support
improvements in customers’
product characteristics and
to develop a sustainable
pipeline of projects.
Engagement with customers
also helps the Group to
better understand their
evolving needs and
requirements, identify
opportunities and
challenges, and adapt
its services to support
long-term customer
relationships.
– Value-enhancing services
and satisfaction of
their needs
– Service performance,
efficiency and quality
– Commitment to
sustainability and
emissions reduction
– Supply chain transparency
– Implementation of
strategic agenda
– Ongoing customer
relationship management
and account engagement
– Participation in industry
forums and trade events,
including the Paris and
Farnborough airshows to
enable improved dialogue
on technical developments
– Customer satisfaction
surveys, providing
feedback on service
quality, reliability and
overall performance
– Customer marketing and
communication
programmes, including
use of the Group’s
corporate website to share
information on the Group’s
capabilities, accreditations
and quality standards
– Continued development and
strengthening of long-term customer
relationships, supporting business and
sustained demand across the Group’s
end markets
– Collaboration with customers to
support their climate and wider
environmental objectives, including
through operational efficiency,
process optimisation and responsible
environmental management
– Ongoing review of opportunities
to harness innovation and digital
technologies to enhance service
quality, operational reliability and
customer value
– Restructuring and upskilling of our
Group-wide commercial teams
Our stakeholders continued
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 45
Our stakeholders continued
During the year, the Board considered a number of stakeholder views and the likely consequences of its decisions over the long term.
Set out below are examples of how differing stakeholder interests influenced Board decision-making:
Stakeholders
considered Feedback received Section 172(1) considerations Actions taken
Internal reorganisation
Customers,
employees,
shareholders
Customer feedback during the year indicated
that, in some areas, we were not consistently
‘easy to do business with’, citing complexity in
engagement interfaces resulting in a variability
in customer experience. The Board discussed
this feedback alongside management’s analysis
of customer experience and service delivery
reports and concluded that organisational
changes were required to improve
accountability and simplify how customers
interact with Bodycote.
In considering the reorganisation, the Board evaluated the
long-term benefits of improving customer experiences,
including how changes could support consistent service
standards and more effective engagement with key
accounts. Customer retention was also discussed, along
with potential operational and delivery risks during
transition. The impact on employees, including that of
changing roles, line reporting, effectiveness of systems,
investment in capabilities, and the potential effect on
performance and value creation for shareholders,
was also considered.
The Board approved the reorganisation
of customer-facing roles and functions, including
sales, marketing and customer experience
management, to better align responsibilities with
customer needs and to remove friction points in our
service delivery. Management was tasked with
implementing the structured changes and did so
effectively during the year. The impact and outcomes
of the reorganisation will be reviewed during 2026,
with any key learnings feeding into our ongoing
continuous improvement.
Development of a new corporate website
Investors,
shareholders,
customers,
wider
community
The Board considered feedback received
which indicated that the existing website
could be improved to strengthen investor
communications, build our global employer
brand, better support customer enquiries
and present information about the Group
more clearly.
Recognising that the Company’s digital presence is an
important channel for engaging customers and providing
accessible, high-quality information to both customers,
future employees, and the investment community, the
Board assessed the value of improving accessibility and
clarity of our offering for customers; the importance of
having timely, transparent and readily available
information for investors; cyber-security, data protection
and operational resilience; and the need to maintain brand
consistency to support our efficient internal processes.
The Board supported the investment in updating the
corporate website, which has been designed to
improve navigation, increase accessibility of key
content and enable more effective interactions with
customers and investors. The Board expects the
improved platform to support stronger relationships
with customers and the investment community over
the long term.
Issuance of the first Groupwide employee engagement survey
Employees Employee Engagement Groups, hosted by our
Non-Executive Director responsible for
workplace engagement, provided feedback that
the Group could benefit from a consistent,
structured mechanism to capture employee
views and identify opportunities to improve
culture, performance, communications,
development and talent retention.
Recognising that engaged employees are critical to
delivering a high-quality customer experience,
maintaining a strong culture and supporting sustainable
performance, the Board considered how best to obtain
representative insight from across the Group.
Consideration was also given to how the outcome of an
employee survey would result in practical actions.
The Board endorsed the launch of the Group’s
first Group-wide employee engagement survey,
with management tasked with ensuring appropriate
ownership of action plans at both divisional and
Group level. The Board will monitor the themes
emerging from the survey, with progress against
agreed actions and trends to be reported on a
regular basis.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 46
Sustainability report
Our approach
As the world’s leading provider
of thermal processing services,
Bodycote operates at the centre
of many critical industries.
The components we process support modern life
across healthcare, automotive, energy and aerospace.
Our sustainability performance therefore matters not
only for our own productivity and resilience, but also for
our customers’ ability to meet increasingly demanding
market, regulatory, investor and climate expectations.
This extensive sphere of influence brings with it a clear
responsibility to act, and a significant opportunity to turn
sustainability into a source of competitive advantage.
A strategy grounded in value creation
Sustainability is a core pillar of our Optimise, Perform and
Grow strategy, both underpinning and accelerating its
execution. It is also embedded in our refreshed corporate
values of Safety First, Performance, Customer Experience
and Sustainability. These values ensure that our actions
and the way we operate are guided by our beliefs and
focused on long-term value creation for all stakeholders.
Our sustainability strategy is firmly grounded in our
business model and designed to create mutual value.
As we improve efficiency and reduce the carbon intensity
of our operations, we strengthen our service offering to
customers. By delivering greater value, we increase our
influence over customer sourcing decisions. As more
customers select lower-carbon options, we are able to
accelerate our own transition. This reinforcing dynamic
POWERING
SUSTAINABLE PROGRESS
At Bodycote, sustainability is integral
to how we create value. Through deep
engineering expertise, a world-class
range of performance metallurgy
solutions and cutting-edge specialist
technologies, we enable customers to
produce components that are stronger,
safer and more sustainable.
In so doing, we recognise both the scale
of our responsibility and the breadth of
our opportunity to influence emissions
and environmental performance across
global supply chains.”
Lily Heinemann
Chief Sustainability Officer
– linking operational efficiency, customer value and
accelerated decarbonisation – sits at the centre of
our approach.
The strategy is structured around two complementary
pillars. Sustainable Impact focuses on what we deliver
externally for customers. Responsible Business underpins
how we operate internally. Together, they reflect customer
priorities of service, quality, expertise and sustainability,
alongside business priorities of leadership, technology,
culture and responsibility.
Under Sustainable Impact, we focus on four customer
drivers. These are low-carbon processes, solutions for
improved product safety, greater resource efficiency, and
support for sustainable industries. Under Responsible
Business, our priorities are a zero-harm culture,
environmental leadership, maximising employee
engagement, and building a diverse and dynamic
Left to right: Jim Fairbairn, Kuda Kafamba (Derby General
Manager), Baggy Shanker MP, Lily Heinemann
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 47
Sustainability report
Our approach continued
workplace. These focus areas were identified through
detailed materiality assessments to ensure that our efforts
are directed where they create the greatest impact.
2025: from strategy to execution
2025 marked the first year of full implementation of our
sustainability strategy following its launch in December
2024. It has been a year of exceptional momentum.
We made significant progress across all eight strategic
focus areas, delivered multiple industry firsts, and
established the technical and organisational foundations
for accelerated delivery in the years ahead.
A defining milestone was the launch of two zero-
emissions plants in Derby and Rotherham, UK. These sites
demonstrate that meaningful, scalable decarbonisation is
achievable in highly energy-intensive industries such as
heat treatment. They now serve as centres of excellence
for low-carbon manufacturing and provide customers with
a tangible pathway to low-carbon heat treatment.
Alongside this, we achieved independent validation of our
product carbon footprint calculators by Bureau Veritas,
a world-leading assurance provider. Validating these tools
reflects Bodycote’s commitment to scientific integrity
and to supporting customers in decarbonising their
manufacturing processes and supply chains. By providing
robust and credible carbon data at the product level,
we help manufacturers accelerate their journey towards
net zero while advancing our own strategic priorities to
optimise operations, perform efficiently and grow
revenues in lower-carbon service lines. This initiative
represents a major step forward for a sector that has
historically struggled to quantify process-level emissions
due to technical complexity.
Thermal processing as a decarbonisation lever
Thermal processing is critical to component performance,
safety and longevity. Without advanced heat treatment,
Hot Isostatic Pressing and specialised coatings,
components would fail earlier, consume more raw
materials and generate higher emissions and waste.
As the global leader in this field, Bodycote supports
Operationally, we strengthened our science-based
emissions target, increasing ambition from a 28%
reduction to a validated 46% reduction by 2030.
We built a comprehensive inventory of nearly 3,000
energy-intensive assets across the Group, providing
a robust baseline for our net-zero roadmap, which is
currently under evaluation. The roadmap will focus on
improving energy efficiency, asset-level decision-making,
renewable energy adoption and process gas reduction,
with flagship zero-emissions sites acting as catalysts for
wider transformation.
Culturally and reputationally, we took a more proactive
approach. We expanded year-round communication and
engagement with internal and external stakeholders,
providing regular progress updates. We hosted our
inaugural two-day sustainability conference for the global
leadership team and rolled out strengthened policies,
including a new Code of Conduct, Environmental Policy
and Supplier Code of Conduct. We aligned 20% of our
LTIP to delivery of our science-based emissions target.
We also enhanced sustainability reporting in line with
best practice. Our work was recognised with an IR Society
award for excellence in sustainability communication.
Looking ahead
2025 has been about moving sustainability decisively
into execution mode. With the technical foundations
now in place, our focus will shift toward scaling delivery
– expanding our portfolio of low-carbon and net-zero
services, deepening customer partnerships, and
strengthening Bodycote’s reputation as a trusted,
credible partner in sustainable manufacturing.
For Bodycote, leadership in sustainability is not only
the right thing to do; it underpins how we optimise
performance, manage risk, and create long-term value
for our customers, shareholders, our people and the
communities we serve.
Lily Heinemann
Chief Sustainability Officer
customers to improve the sustainability of their
manufacturing processes and supply chains, turning
thermal processing into a decarbonisation opportunity.
In 2025, we launched B Carbon Smart, the industry’s
first end-to-end sustainability pathway for customers.
It combines Bodycote’s technical expertise, practical tools
and validated carbon calculators to support customer
decarbonisation – from carbon measurement and
transparency, through process optimisation, to low-carbon
and zero-emission services. It positions Bodycote at the
cutting edge as sustainability becomes an increasingly
decisive factor in procurement and investment decisions.
Many of our customers operate internationally and
face pressure from investors, regulators, employees
and consumers to deliver credible sustainability
improvements. They are seeking partners who can
provide practical decarbonisation solutions alongside the
data, assurance and expertise needed to support informed
decision-making. Bodycote’s sustainability pathway,
underpinned by product-level carbon measurement,
sets us apart in the thermal processing industry.
Commercial, operational and industry leadership
To support execution of the strategy, our efforts in 2025
focused on three priorities. These were advancing our
commercial agenda, accelerating operational
decarbonisation, and elevating our external profile
as a credible and trusted partner in this space.
Commercially, we set two sustainability-linked objectives:
supporting customers to avoid 125,000 tonnes of CO
2
e
by 2030 and increasing revenue from green markets to
at least 20% of Group revenue by 2035. We developed
a customer sustainability segmentation framework to
prioritise opportunities where sustainability is
commercially material and where Bodycote can
deliver scalable, measurable impact. This commercial
sustainability strategy supports value creation
through sustainability-led new business, higher win rates
where sustainability is a differentiator, and customer
retention supported by performance and transparency.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 48
GROW
OPTIMISE & PERFORM
GREATER REPRESENTATION OF WOMEN.
Alongside appointments of women in senior leadership
and operations roles, our Board is now 50% female.
SUSTAINABLE
IMPACT.
RESPONSIBLE
BUSINESS.
BUSINESS
STRATEGY
ACCELERATE
GREEN GROWTH.
SUPPORT PEOPLE
AND PLANET.
LOW TO NO
EMISSIONS
SAFE &
COMPLIANT
RESOURCE
EFFICIENT
SUSTAINABLE
END-MARKETS
ZERO
HARM
ENVIRONMENTAL
LEADERSHIP
ENGAGED
TEAM
DIVERSE
WORKPLACE
Sustainability report
Advancing our strategy
VALIDATED CARBON FOOTPRINT TOOLS.
Bureau Veritas validation of product carbon footprint
calculator tools for 80% of thermal processing services.
HVOF COATINGS EXPANDED TO MRO MARKET.
Safer coatings expanded to new customers in the
aerospace maintenance, repair and overhaul market.
GROWTH IN SUSTAINABLE END-MARKETS.
Sales of processing services for components used in
sustainable end-markets and applications up to ~9%.
COMPONENT SERVICE LIFE EXTENDED.
Kolsterising
®
delivered significantly extended
component life for customers in the food industry.
STRONGER SAFETY ENGAGEMENT.
‘Safety Card’ improvement suggestions up by 540%,
achieving the target of one per employee per month.
ZERO-EMISSION OPERATIONS MILESTONE.
Five Bodycote sites now operate with zero emissions,
providing a blueprint for other sites across the Group.
ADVANCED OUR TOP EMPLOYER AMBITION.
First global engagement survey delivered, establishing
a baseline for our 85% engagement target by 2030.
OUR FOCUS OUR PRIORITIES OUR 2030 AMBITIONS 2025 HIGHLIGHTS
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 49
Sustainability report
Materiality, governance and measurement
Managing and reporting what matters
Transparent disclosure is central to Bodycote’s
sustainability strategy. We continue to strengthen our
reporting using recognised frameworks such as GRI,
SASB, ESG ratings methodologies and, increasingly,
the European Sustainability Reporting Standards (ESRS).
We conducted a double materiality assessment in 2024 in
preparation for the EU Corporate Sustainability Reporting
Directive (CSRD). Following the European Commission’s
Omnibus simplification package and the publication of
Directive (EU) 2026/470, we are reassessing our position.
If applicable, reporting would now be expected from 2029,
three years later than originally envisaged. Regardless of
our ultimate reporting obligations, we continue to view
the ESRS as a useful framework for communicating
sustainability information, alongside other
established standards.
Our materiality assessment and stakeholder engagement
processes identify and prioritise key sustainability topics
for Bodycote and its stakeholders. We assess impacts on
people and the environment, as well as sustainability-
related risks and opportunities. The process includes value
chain analysis, stakeholder engagement, and structured
scoring and validation, supported by an independent
adviser and overseen by senior management. The results
inform our sustainability strategy, targets and disclosures.
We will conduct a full double materiality assessment every
two years, with internal reviews in interim years to confirm
the continued relevance of our disclosures.
The adjacent matrix shows the relative importance of
key sustainability topics for Bodycote and its stakeholders
and their alignment to the ESRS standards. Topics are
assessed and presented on an unmitigated basis,
reflecting their inherent severity and scope before
applying existing controls or mitigation measures.
Additional information on the material impacts, risks,
and opportunities identified through our double
materiality assessment – including supporting context
and relevant data – can be found in our ESG Supplement.
Delivering our agenda
The Group has a clear governance structure for
sustainability. The CEO oversees the sustainability
strategy, while the Chief Sustainability Officer (CSO),
a member of the Executive Committee, is responsible
for its development, implementation and communication
across all divisions and markets. The CEO and CSO
provide regular updates to the Board, including one to
two deep-dive sessions per year. Implementation of the
sustainability strategy was previously supported by a
combined Risk and Sustainability Committee. To enable
greater focus on both risk and sustainability matters,
separate committees have now been established,
as outlined on page 93.
Bodycote recognises the importance of incentivising its
leadership population to support the delivery of its
sustainability objectives. In 2025, the Group’s long-term
incentive plan was redesigned, with 20% of the
opportunity aligned to the successful achievement of the
Group’s externally validated, 1.5°C-aligned science-based
target to reduce emissions by 46% by 2030 compared with
a 2019 baseline. For details see pages 113, 119 and 126.
Measuring our progress
Bodycote works with external agencies to track progress
and in 2025 engaged key ESG ratings agencies to ensure
its improved sustainability performance was accurately
reflected. We were pleased to maintain our A- CDP rating,
a leadership score that places Bodycote among a small
cohort of climate leaders globally. We also improved our
Sustainalytics score, reducing it from 29.7 to 27.9, and now
rank in the 24
th
percentile within our industry globally.
Our ISS ESG score improved from 47 to 49 points,
strengthening our performance within the ‘C’ rating band.
In addition, we retained our industry ‘Leading’ rating from
Bloomberg ESG in 2025.
IMPACT MATERIALITY
FINANCIAL MATERIALITY
Topic impact:
+
Positive impact
–
Negative impact
O
Opportunity
R
Risk
Relevant Critical
Relevant Critical
Climate change
adaptation
1
Energy
2
Business conduct
3
Biodiversity
& ecosystems
2
Workers in
value chain
2
Equal treatment
and opportunities
in workforce
2
Pollution
1
Other work-related
rights in workforce
2
Climate change
mitigation
1
Working conditions
in workforce
2
Materiality matrix
Link to Sustainability
Framework:
1 Sustainable Impact
2 Responsible Business
3 Governance
–RO
–RO
–O
O
O
–R
–
–RO
–R –R
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 50
Sustainability report
Sustainable impact
Heat treatment is fundamental to
the performance and durability of
a wide range of components. While
traditionally energy- and carbon-
intensive, advances in technology and
process optimisation are reducing its
carbon impact and enabling a lower-
carbon manufacturing value chain.
Bodycote’s energy-efficient and sustainable thermal
processing solutions enable customers to reduce
emissions and environmental impacts across the
manufacture of their products and components.
By improving process efficiency and optimising energy
use, Bodycote lowers the carbon intensity of heat
treatment while maintaining the highest standards of
quality and performance. This supports customers in
meeting their decarbonisation targets and strengthening
the sustainability of their manufacturing value chains.
Across our global operations, customers are increasingly
requesting emissions data for our heat treatment services,
as well as solutions that support emissions reduction
or elimination, to help meet ambitious decarbonisation
targets across their own production facilities and wider
supply chains.
Outsourcing heat treatment to Bodycote is recognised
as a key lever in achieving these targets. By transferring
processing from customers’ own facilities to Bodycote,
emissions are removed from customers’ sites, and their
on-site energy consumption and associated operating
costs are reduced. At the same time, processing is carried
out within Bodycote’s more energy-efficient operations,
reducing overall emissions and energy intensity.
Bodycote’s SBTi-aligned target further supports sustained
emissions reductions from these outsourced processes
over the long-term.
Our low-carbon processes help customers
accelerate progress towards their
environmental ambitions with greater
efficiency and impact.
OUR 2030 GOAL
We will help our customers avoid at least
125,000 tonnes of CO
2
e by 2030 to meet
their climate and net zero targets.
OUR PRIORITIES
– Lower carbon processing
– Customer saved emissions
(Scope 1 and Scope 2)
– Avoided emissions (Scope 4)
– Carbon calculation
We are focused on developing and executing our strategy
to capture and create sustainability-related growth
opportunities. As part of this strategy, we continue to
expand our suite of carbon calculation tools, providing
customers with robust and transparent proof points.
These footprinting tools enable us to demonstrate the
energy, carbon emissions, material use and waste
management benefits that can be achieved by
transitioning heat treatment and surface technology
processes to Bodycote.
In 2025, we launched our B Carbon Smart campaign
to further integrate sustainability into our commercial
strategy and customer engagement model. The campaign
is underpinned by a structured customer profiling
framework, designed to deepen our understanding
of customers’ sustainability priorities, operational
requirements and decarbonisation roadmaps.
This approach enables us to align our technical capabilities
and low-carbon solutions with clearly defined customer
needs, strengthening the relevance and impact of our
value proposition.
Through B Carbon Smart, we are proactively engaging
with customers to identify opportunities to support their
sustainability agendas and performance objectives.
Leveraging our proprietary avoided-emissions
methodology and independently validated carbon
calculation tools, we quantify the carbon and efficiency
benefits associated with different thermal processing
routes, including under an outsourced model compared
with in-house processing. This data-led, commercially
focused engagement supports informed decision-making,
enhances the credibility of customers’ emissions
reporting, and reinforces Bodycote’s role as a strategic
partner in advancing lower-carbon manufacturing.
LOW TO
NO EMISSIONS
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 51
Sustainability report
Sustainable impact continued
Enabling customer carbon footprinting
Our expanding suite of proprietary carbon calculator tools
now includes product carbon footprint (PCF) calculators
for nine core processes, representing approximately 80%
of Group revenues (up from 70% in 2024). Developed in
alignment with ISO 14064-3:2019, these tools enable us
to provide customers with PCF data across a range of
services, including batch atmospheric processing,
low pressure carburising, vacuum heat treatment, Hot
Isostatic Pressing and induction hardening. Importantly,
the PCF calculators allow comparison of the relative
carbon impacts of different thermal processing routes.
In 2025, the methodology underpinning our proprietary
PCF tools was independently validated by Bureau Veritas
in accordance with ISO 14064, the internationally
recognised standard for greenhouse gas accounting,
validation and verification.
Customers can now request detailed carbon footprint
data for the heat treatment of their components, with
confidence that the methodology used to generate these
calculations aligns with international standards. Crucially,
this supports customer reporting and enables evaluation
of lower-carbon Bodycote heat treatment solutions as
alternatives to in-house processes.
Scaling customer emissions reductions
Recognising the opportunity to support lower-emission
heat treatment across its markets, Bodycote announced
its first avoided emissions target in December 2024.
The target is to enable batch atmospheric processing
customers to avoid 125,000 tonnes of CO
2
on a cumulative
basis by 2030
1
.
Heat treatment is typically an energy-intensive step in
component manufacturing. By operating more efficient
and lower-emission processes than those typically
available in-house, we enable a significant reduction in
carbon emissions when customers outsource heat
treatment to Bodycote. Thermal processing emissions
can be reduced by up to 60% per part through outsourcing
alone. When a lower-carbon process such as low pressure
carburising is used – particularly in combination with
renewable electricity – emissions reductions can exceed
90%, in some cases approaching 100%. As part of our
sustainable impact ambition, we continue to challenge
ourselves to increase the scale of avoided emissions by
further improving efficiency and working with customers
to increase uptake of our services.
Using our proprietary avoided emissions calculator,
we are able to compare a customer’s existing thermal
processing emissions with those of Bodycote, illustrating
the emissions reductions that can be achieved through
outsourcing. Avoided emissions are calculated using a
range of inputs – including furnace type, processing time,
parts per cycle and processing gas – alongside operational
data from Bodycote facilities where the customer’s parts
would be processed.
In 2025, following the first full year of measurement,
we estimate that batch atmospheric processing
customers have avoided 48,700 tonnes of CO
2
by
outsourcing heat treatment to Bodycote since our 2023
base year. This reflects avoided emissions for atmospheric
processing customers only, and the overall emissions
avoidance enabled by our services is therefore expected
to be greater. Our avoided emissions methodology
aligns with the World Business Council for Sustainable
Development (WBCSD) Guidance on Avoided Emissions
and is available on our website at www.bodycote.com.
Over time, we will extend this methodology to
additional processes.
CARBON FOOTPRINTING
IN BUSINESS DEVELOPMENT
Our proprietary PCF tools are supporting new
business development across the Group. In 2025,
we proposed an alternative outsourced heat
treatment solution to a global automotive
component supplier recognised as a sustainability
leader in its sector.
Drawing on our understanding of the customer’s
existing batch atmospheric furnaces, we developed
an outsourced solution combining Bodycote’s low
pressure carburising and batch atmospheric
processing services.
PCF calculations included in the proposal showed
that Bodycote’s outsourced solution could deliver
a 73% reduction in the carbon emissions of the
customer’s components, equivalent to
approximately 2,250 tonnes of CO
2
per year.
1 Bodycote’s atmospheric processing service lowers
emissions intensity per batch vs customers’ comparative
in-house treatment due to our operational efficiency and
decarbonisation measures. This, our first avoided emissions
target covers a single, widely used thermal processing
technology. We intend to expand the scope to include other
processes in future.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 52
SUSTAINABLE
END-MARKETS
Sustainability report
Sustainable impact continued
We are actively positioning the
business to capture growth from
the global transition to a low-carbon
economy by expanding our presence
in new sustainable products and
end-use sectors.
Growth opportunities linked to the low-carbon transition
are increasingly integral to our long-term strategy and
reflect rising demand from customers operating in
decarbonising and sustainability-led markets.
We have established a Green Revenue framework to track
and accelerate progress, measuring the proportion of our
revenue derived from sustainable end-use applications
and markets. The framework enables us to evaluate how
effectively we are responding to emerging lower-carbon
opportunities and supports a disciplined, strategic
approach to green growth.
Using our internal framework – guided by leading
external taxonomies, including the EU Taxonomy and
the FTSE Russell Green Revenues Classification System
– our assessment of 2025 revenues shows that
approximately 9% of revenues (2024: 7%) support aligned
end-use markets, including:
1. End-use markets and applications that manufacture
zero- or low-carbon vehicles.
2. End-use markets and applications that develop
renewable and low-carbon energy solutions.
3. End-use markets and applications that enable resource
and energy efficiency.
This growth in the proportion of revenues derived from
sustainable products and end-use markets reflects the
structural transition underway across several of our core
sectors, including aerospace, energy and automotive.
Our precision heat treatment supports major aero engine
manufacturers in the development and deployment of the
latest generation of high-efficiency large engines. In the
automotive sector, an increasing share of components we
process are destined for fully electric cars and commercial
vehicles, as markets continue the transition towards
dedicated battery electric platforms. Across low-carbon
power generation, our heat treatment and Hot Isostatic
Pressing capabilities support expansion in electricity
markets such as wind and nuclear energy. We continue to
take care to apply conservative assumptions where our
visibility of the end-use of products is unclear.
Our performance metallurgy services
support growing low-carbon industries,
including clean tech, electric vehicles and
low-carbon energy generation.
OUR 2035 GOAL
We will increase the proportion of revenue
supporting sustainable end-use markets
and applications to at least 20% by 2035.
OUR PRIORITIES
– Supporting low-carbon industries
– Enabling the growth of renewable energy
and electrified low-carbon technologies
– Accelerating the adoption of
low-carbon solutions
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 53
Sustainability report
Sustainable impact continued
MATERIALS SOLUTIONS FOR NUCLEAR ENERGY
As the energy transition accelerates, nuclear power remains central to delivering
reliable, low-carbon electricity. From supporting today’s fission reactors to enabling
future fusion technologies, Bodycote provides advanced material solutions for some
of the sector’s most technically challenging and safety-critical applications.
ITER, the world’s largest fusion energy demonstrator under construction in France,
is designed to prove fusion as a large-scale carbon-free energy source. Its tokamak
must confine plasma at temperatures of up to 150 million °C, requiring materials
and joints capable of maintaining structural integrity under extreme thermal loads.
Bodycote supports the manufacture of the reactor’s protective blanket through
diffusion bonding of copper chromium zirconium and stainless steel modules,
one of the most technically demanding components within ITER – and critical to
safety. This involves multiple, high specification Hot Isostatic Pressing processes
to ensure integrity under extreme conditions.
We also support the safe and reliable operation of nuclear fission power plants,
a significant source of low-carbon electricity. Through our long-standing
partnership with Framatome, we apply our proprietary Nivox
®
process to plasma
assisted nitriding of austenitic stainless steel reactor fuel tubes, enhancing surface
hardness while maintaining corrosion and wear resistance for demanding
reactor environments.
As investment increases in large-scale reactors and emerging Small Modular
Reactor technologies, Bodycote is engaged with a growing range of providers.
Our portfolio, spanning HIP, additive manufacturing support, precision heat
treatment, surface technologies and brazing, positions us to support innovation
and performance across the evolving nuclear sector.
ENABLING THE EXPANSION OF RENEWABLE ENERGY SYSTEMS
In 2025, Bodycote began collaborating with a US manufacturer of iron-air battery
technology to support the production of tooling for its advanced energy storage
systems. The company is developing multi-day battery systems designed to store
excess renewable energy and stabilise the grid during peak demand. Global energy
storage markets are expected to grow rapidly this decade, with grid-scale battery
capacity forecast to increase several-fold as renewable penetration rises.
For this battery technology, Bodycote applies its Corr-I-Dur
®
(CiD) process to treat
forming dies – precision tools used in extrusion to shape material into defined
profiles. CiD enhances die wear life and improves durability as the customer brings
tooling production in-house. Our furnaces are well suited to treat these parts,
supporting current demand and future volume growth.
Corr-I-Dur
®
is a thermochemical heat treatment process designed to improve
surface hardness and wear resistance while operating at lower temperatures than
many conventional alternatives. This results in reduced energy consumption,
minimal distortion, and lower associated emissions.
This collaboration positions Bodycote at an early stage of a rapidly developing
energy storage market – supporting a sustainable end application with a
lower-energy, lower-emissions heat treatment process and establishing us
as a trusted partner in a high-growth sector.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 54
SAFE &
COMPLIANT
Sustainability report
Sustainable impact continued
Displacing hazardous hard chrome in aviation
Bodycote’s Surface Technology business is a recognised
leader in surface solutions that provide a safer alternative
to traditional and hazardous hard chrome plating.
We have been working with a world-leading aircraft
landing gear manufacturer over a number of years to
grow the deployment of this safer coating to the landing
gear systems on a growing range of the world’s civil
aircraft fleets.
Our expanding facilities supporting this industry use a
High Velocity Oxygen Fuel (HVOF) coating and finishing
process to create a coating of tungsten carbide in a cobalt
chrome matrix. The result is a dense and tightly bonded
coating with excellent adhesion and superior
mechanical properties.
These HVOF coatings offer exceptional hardness,
wear resistance, and corrosion protection, making them
a highly effective replacement for traditional hard chrome
in these demanding applications. Importantly, Bodycote
has demonstrated that HVOF coatings provide a proven
alternative to processes that have traditionally relied
on hexavalent chrome, without compromising the
performance or functionality of coated parts
and components.
Hexavalent chrome, also known as chromium (VI),
has been widely used in industry to enhance the corrosion
resistance and durability of components. However, due
to its toxicity and the associated risks to human health
and the environment, its use is subject to strict controls
under the EU’s Registration, Evaluation, Authorisation
and Restriction of Chemicals (REACH) regulation.
Following our wide deployment of this safer coating on
landing gears across a number of new fleets (including
Airbus A380, A350, A400M and Boeing 787), we are now
developing new capacity to support the reconditioning
and renewal of these coatings as the fleets cycle through
their planned maintenance, repair and overhaul (MRO)
cycles in the coming years.
The successful transition to this treatment approach
delivers tangible benefits, including improved workplace
safety, reduced environmental risk, and extended
component service life. We continue to work closely
with leading aerospace OEMs to expand the use of these
coatings across a wide range of critical components,
from the large landing gear structures through to smaller
engine parts and fuel pumps. As a result, several civil
aircraft programmes have successfully eliminated the use
of hard chrome by adopting these modern alternatives.
As these programmes progress through their planned
maintenance cycles, they are now demonstrating the
long-term effectiveness and reliability of this coating
and finishing solution.
In 2025, we experienced a significant increase of business
in MRO landing gear programmes compared with 2024.
In addition, we are seeing a notable increase in the number
of landing gear components being submitted for overhaul
qualification using HVOF.
Our solutions improve product safety
and assist with adherence to important
compliance requirements.
OUR 2030 GOAL
We will work as the industry standard-
setter for material science that prioritises
safety, health, and the preservation of
the planet.
OUR PRIORITIES
– Certified solutions (eg. REACH compliant)
– Improving sustainability performance
(eg. via surface technology)
– Safer coatings (eg. HVOF coating)
CIRCULAR PLASTIC MANAGEMENT
Our Swedish plants have focused on reducing
plastic waste generated by the movement of
customers’ products and inbound materials.
We assessed how waste could be better segregated,
collected, recycled and reused. We partnered with
a local recycler to process these waste streams.
Soft plastic foils and bags are collected, washed,
converted into polythene flakes, then dried, heated
and reused in new plastic bags. A similar solution
was developed for waste polypropylene strapping
used in inbound packaging. When correctly
segregated, it can be melted, re-granulated and
reused in new strapping. Initially implemented in
two Swedish plants, these initiatives now redirect
approximately four tonnes of plastic waste per year
to recycling. Following this success, a regional
rollout is now being developed.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 55
RESOURCE
EFFICIENT
Durability driving resource efficiency
Durability and resilience are crucial attributes for stainless
steel components – including pumps, filling plants, and
cutting and packing equipment – operating in the harsh
environments of the food industry.
Kolsterising
®
enhances the durability of these stainless-
steel components by increasing surface hardness and
significantly improving material performance. This
leads to longer component life and reliability, reduced
maintenance and food-processing downtime, and greater
resource efficiency by minimising the use of component
materials and associated manufacturing impacts.
Our proprietary low-temperature diffusion process
increases surface hardness by up to eight times
(achieving 900–1300 HV0.05 on the Vickers hardness
scale), depending on the material and surface, while
fully maintaining the stainless steel’s critical corrosion
resistance. This delivers a reduction in wear depth of up to
25x compared with untreated stainless steel, along with a
20-fold improvement in resistance to galling and fretting.
While components can function without this treatment,
their operational lifespan would be significantly reduced,
leading to increased material consumption, more frequent
maintenance, and higher lifecycle resource use. As a
proprietary, registered Bodycote technology, Kolsterising
®
is delivered exclusively through Bodycote’s global
Specialist Stainless Steel Processes (S³P) network.
In addition to performance benefits, Kolsterising
®
supports
customer sustainability and compliance requirements,
particularly in hygiene-critical food industry applications
such as pumps, filling plants, and packaging machinery.
As a surface-hardening process rather than a coating,
it preserves component geometry, eliminates toxicity
risks, and improves cleanability by reducing surface
wear and scratching. The process complies with key
food-contact regulations, including EU, NSF, and FDA
requirements, supporting long-term product purity.
Importantly, all plants delivering Kolsterising
®
services
are certified to ISO 14001 for environmental
management, reinforcing the environmental integrity
of the process itself.
Delivering Kolsterising
®
to new markets
As part of our focus on driving future growth and
supporting wider adoption of the Kolsterising
®
process
across industries using stainless steel – including food
processing and automotive – we identified a new
greenfield S³P site in Asia in 2025. This will open up new
markets for our low-temperature diffusion process,
delivering greater resource efficiency for stainless steel
component manufacturers.
NEXT STEPS
– Deepen our strategic partnerships with
customers to build long-term growth
opportunities and capture new revenue by
supporting the achievement of their carbon
avoidance, energy reduction and broader
environmental goals, positioning sustainability
as a value-add to strengthen our opportunity
pipeline and underpin customer retention.
– Advance and commercialise our green premium
offering, delivering a fully decarbonised heat
treatment service across Scopes 1, 2 and 3,
using renewable electricity, biofuels and
alternative low-carbon process gases.
Sustainability report
Sustainable impact continued
We enable customers to achieve more
with less by increasing durability,
resilience, and sustainability performance.
OUR 2030 GOAL
We will provide specialist technologies
and support research and development
that empowers customers to realise their
growth and sustainability ambitions.
OUR PRIORITIES
– Specialist technologies that support
customer sustainability
– Solutions that enable materials, energy,
waste and water savings for customers
(eg. powder metallurgy)
– Involvement in customer R&D to
advance more sustainable solutions
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 56
ZERO
HARM
Sustainability report
Responsible business
Building on the House of Safety
transformation programme launched
in 2024, 2025 marked a year of
strong progress in safety leadership
and employee engagement across
Bodycote. Through strengthened
leadership commitment, enhanced
risk management, and the
establishment of consistent global
standards and values, we continued
to embed a Safety First culture and
drive meaningful cultural and
operational improvement across
our facilities.
Strategic Area 1: Leadership
A strong safety culture starts with leadership and is
reinforced at all levels of the organisation. The following
initiatives form the core of our leadership-led approach
to safety.
– Daily Management: This has now been implemented
across all Bodycote facilities and has driven
improvements in working conditions, hazard
recognition, and follow-up actions.
– Principles and policies: We also introduced a new
Group Health & Safety Policy aligned to our Safety-First
value, endorsed by the CEO and Executive Leadership
Team through our Safety Charter, alongside a refreshed
Code of Conduct setting clear behavioural expectations
for all employees.
Strategic Area 2: Risk Awareness
andAssessment
Our second strategic area focuses on empowering our
workforce with the tools and knowledge to manage risk
effectively. The following practices support a vigilant and
proactive approach to workplace risk management.
– Job Safety Analysis (JSA): Global sites achieved an
average JSA completion rate of nearly 80%, supported
by dedicated training for more than 500 employees.
JSA remains a key priority as we continue to strengthen
risk identification and operational controls.
– Risk oversight and engagement: Managers and
supervisors completed 3,900 safety-focused Gemba
walks during the year, driving targeted improvements
and meaningful safety dialogue. We also established
a High Risk Operations Team to strengthen
management of low-frequency, high-consequence
risks, promote consistent standards, and enhance
technical governance.
Strategic Area 3: Standardised Approach
The third area of our strategy focuses on aligning our
systems and processes to address our most critical safety
challenges. Our key initiatives include:
– Safety Critical Rules: Deployed and embedded across all
Bodycote sites, our Bodycote Safety Critical Rules define
minimum expectations for managing key risks and form
a core component of Group standards.
– Standards and values: We continued developing our
Group EHS Management System to establish consistent
minimum health and safety requirements across all
sites, aligned with international standards. We launched
our refreshed company values, positioning Safety First
at the forefront to reinforce that safety is a prerequisite
in every aspect of our operations.
– Safety First Value: We continue to prioritise knowledge
sharing by communicating EHS incidents and best
practices across the Group, supporting learning and
continuous improvement.
Safety First is our core value, underpinning
a positive safety culture so all our people
return home safely every day.
OUR GOAL
We will deliver sustained year-on-year
improvement in safety performance,
with the clear ambition of preventing all
work-related injuries.
OUR PRIORITIES
– Safety Critical Rules and high-risk
operations management
– Group-wide EHS management system
– Governance, training and accountability
– Global hazard and opportunity reporting
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 57
Sustainability report
Responsible business continued
Health and safety management
During the year, we established a dedicated Executive-level
health and safety role reporting to the CEO, enabling
greater focus and closer management of health and safety
across the Group. The health and safety organisation was
reorganised to align with this enhanced governance model,
strengthening regional and subject matter expertise and
providing improved business-partner support to the
divisions, supporting the delivery of global standards, tools,
and processes aligned to the House of Safety programme.
Measuring performance
In 2025, we enhanced access to timely health and safety
information through a new health and safety metrics
dashboard, providing greater visibility of a defined set
of priority KPIs across all levels of the organisation and
supporting informed decision-making. Performance
continues to be formally monitored and reviewed monthly
by the Executive Committee and at each Board meeting,
using a balanced mix of leading and lagging metrics.
In 2025, 19% of our facilities maintained ISO 45001
certification, with each site undergoing an internal audit
at least once every three years.
Lagging indicators
We monitor health and safety performance using two
lagging indicators: total recordable incident rate (TRIR)
and lost time injury rate (LTIR)
1
. Increased transparency
and reporting rigour, driven by our transformation
programme, led to higher reported rates in 2025:
– TRIR: 1.89 (2024: 1.82)
2
– LTIR: 1.15 (2024: 1.06)
3
There were no work-related fatalities among employees
or contractors, consistent with the past five years.
Ergonomics and manual handling accounted for over
43% of recordable incidents (2024: 50%), followed by
slips and trips at nearly 12% (2024: 12%). These remain
key priorities for 2026, supported by continued focus
on 5S, training, and automation.
Leading indicators
We made strong progress across our leading safety
indicators, focused on risk prevention, employee
engagement, and proactive improvement. In 2025,
188 near misses were reported (2024: 274), while Safety
Cards, including Opportunities for Improvement (OFIs),
increased by 540% to 26,886, achieving our target of
one per employee per month ahead of schedule.
Daily Management was implemented at 100% of sites
globally, and the average Job Safety Analysis (JSA)
completion rate reached 79%, demonstrating strong
progress towards our target of 100%.
We have set 2026 targets to reduce TRIR, LTIR, and total
recordable work-related incidents by 5%, reflecting our
commitment to continuous safety improvement.
While 2024 was an outlying year and increased awareness
and reporting from a stronger safety culture may affect
near-term results, we expect incident rates to reduce over
time as performance stabilises, with a continued focus on
sustained, long-term improvement.
Chemical management
In 2025, we continued to strengthen our Group EHS
Management System by implementing a new chemical
management software across all European and Asian
plants, enabling consistent and improved chemical
management practices. The system categorises chemicals
into three risk levels and provides a comprehensive
overview of usage and associated risk profiles across
these regions. A total of 4,214 chemicals are currently
tracked, of which 1,795 are classified as green risk,
1,261 as amber risk, and 494 as red risk, helping teams
manage hazardous materials more proactively and
reduce potential impacts on people and the environment.
Accountability for the system sits with our Chief
Sustainability Officer.
In 2026, we will expand the system to North America
and, once fully rolled out, develop a global chemical
management strategy, set performance improvement
goals, identify safer alternatives for red-category
chemicals, and begin public reporting.
Supporting employee health
We are committed to protecting occupational health
and wellbeing across all sites. Through the JSA process,
we identify and control risks such as noise, dust,
temperature, and ergonomic hazards. We also promote
broader health and wellbeing initiatives that support
employees both at work and in their daily lives. Our risk
assessments are a key preventative measure, identifying
potential health impacts and reducing risk exposure in
support of our safety-first culture.
NEXT STEPS
– Work towards our target to reduce TRIR, LTIR,
and total recordable work-related incidents
by 5% in 2026.
– Complete global rollout of our chemical
management system and develop a chemical
management strategy.
1 All workers are included in reporting – employees
and contractors.
2 TRIR represents the number of recordable cases
per 200,000 hours worked.
3 LTIR represents the number of lost time incidents
per 200,000 hours worked.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 58
Sustainability report
Responsible business continued
Climate and environmental
leadership sits at the core of our
value proposition and operational
performance. We accelerated progress
across the Group in 2025 with five
zero-emission sites now in operation.
Energy use is our largest source of emissions, driven
primarily by our furnaces, which account for around 70%
of a typical facility’s energy consumption. We established
a comprehensive inventory and analysis of nearly 3,000
energy-intensive assets, creating a robust baseline for
our net-zero roadmap evaluation. We are using this
inventory to develop bespoke decarbonisation strategies
focused on energy efficiency, targeted retrofit and
replacement, and the adoption of net-zero-ready
technologies, including renewable energy, low-carbon
process gases and hydrogen. Implementation of these
decarbonisation programmes will be underpinned by
rigorous technical, commercial and cost analysis and
accelerated through flagship zero-emissions sites.
In 2025, we achieved a major decarbonisation milestone
by delivering zero operational carbon emissions at two
UK heat treatment facilities, Derby and Rotherham.
We believe this to be a sector first, demonstrating
leadership in low-carbon services. Both sites transitioned
fully to electric operations powered by 100% renewable
energy, eliminating fossil fuel use and without relying on
carbon offsetting. This was achieved while maintaining
capacity, lead times and cost competitiveness,
demonstrating that decarbonisation in energy-intensive
manufacturing is both technically and commercially viable.
Derby and Rotherham now serve as blueprint sites for
the global rollout of zero-emissions facilities. During the
year, the number of zero-emissions sites increased to five,
with a further three sites in Sweden – Katrineholm,
Västra Frölunda and Vellinge – now also operating at
zero emissions.
In parallel, we are decarbonising our more energy- and
carbon-intensive processes. Atmospheric processing
typically uses gas-fired heating and fossil-based gases
to create the controlled atmospheres required to treat
customers’ components. At our Gothenburg plant,
operating exclusively with electrically heated atmospheric
furnaces powered by renewable electricity, we have
completed feasibility testing for on-site nitrogen
generation and replacing fossil-based gases with
low-carbon and bio-sourced alternatives. As we expand
our portfolio of zero-emission, renewable-powered
facilities and introduce alternative process gases to cut
broader emissions, we will begin offering green,
premium heat treatment services from this site in 2026.
Energy and GHG emissions performance
In 2025, having met our previous target six years early,
we achieved validation of a new and more ambitious
SBTi-aligned target to reduce Scope 1 and 2 greenhouse
gas emissions by 46% by 2030, against a 2019 baseline
calculated on a market-based basis and aligned with a
1.5°C trajectory.
In 2025, the proportion of electricity from renewable
sources increased to 35% (2024: 27%), supported by our
Group-wide renewable energy policy and regulatory
incentives in Germany. We also reduced natural gas
consumption by 3.9% compared with 2024. As a result,
market-based Scope 1 and 2 emissions decreased by 16.7%.
Compared with our 2019 baseline year, we have reduced
emissions by 38.0%, demonstrating strong progress
towards our SBTi target of a 46% reduction by 2030.
Scope 1 and 2 emissions reduced by 8.5% in 2025
(location-based). This was driven by lower natural gas
consumption and accelerated decarbonisation of grid
electricity across most of our markets. Combined Scope 1
and 2 emissions intensity fell to 320.9 tonnes CO
2
e per £m
of revenue, from 336.7 tonnes CO
2
e per £m in 2024,
representing a 4.7% reduction. Total energy consumption
decreased by 4.2%, while energy intensity remained the
same year-on-year.
ENVIRONMENTAL
LEADERSHIP
We are taking direct action to manage our
use of natural resources and to improve
the energy efficiency of our processes.
OUR 2030 GOAL
We will reduce our Scope 1 and Scope 2
emissions by 46%. In 2026, we will reduce
our energy consumption by 2%.
OUR PRIORITIES
– Scope 1 and 2 emissions reduction
– Energy use and decarbonisation
initiatives (including renewables)
– Supply chain emissions reduction
– Net-zero roadmap development
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 59
Sustainability report
Responsible business continued
We divested ten sites in November 2025 (see page 160).
This has influenced the reported year-on-year emissions
reduction, as these sites contributed only ten months of
emissions in 2025. In line with our reporting policy,
they remain within the current-year reporting boundary
as the divestment occurred after our March cut-off date.
The divestment will be fully reflected in next year’s
disclosures, with the ten sites removed from both the
reporting and base years.
Total CO
2
emissions (ktCO
2
e)
1
2025 2024
% change
in 2025 2019
Scope 1 CO
2
e emissions 123.6 129.6 -4.6% 170.2
Scope 2 CO
2
e emissions
(location-based)
109.7 125.3 -12.4% 186.4
Scope 2 CO
2
e emissions
(market-based)
105.1 145.1 -27.6% 198.7
Total Scope 1 + Scope 2
(location-based)
233.3 254.9 -8.5% 356.6
Total Scope 1 + Scope 2
(market-based)
228.7 274.7 -16.7% 368.9
Emissions reduction programme
Energy efficiency plays a critical role in reducing emissions,
managing costs and strengthening competitiveness. We are
advancing a multi-year programme of targeted efficiency
measures and climate-focused investments, including:
– increasing furnace load density by up to 50% using
proprietary equipment (without increasing
energy consumption);
– optimising heat treatment cycles to extract
the most value from energy;
– improving furnace insulation to reduce
heat loss and waste;
– implementing adiabatic cooling systems,
which use significantly less energy, water and
water-treatment chemicals;
– identifying and fixing air and process gas leaks
to minimise energy waste;
– upgrading or substituting process gas generators
to increase efficiency and limit waste;
– upgrading or substituting vacuum furnace pumps
with newer, more efficient models; and
– investing in buildings’ energy efficiency.
We also embed climate considerations into core business
processes, including sustainability reviews within capital
investment decisions, to ensure alignment with our
SBTi commitment.
Emissions intensity (tCO
2
e/£m)
2
2025 2024
£m sales
at actual
exchange
rate
normalised
to constant
currency
rate
£m sales
at actual
exchange
rate
normalised
to constant
currency
rate
Scope 1 170.0 170.8 171.2 173.5
Scope 2
(location-
based)
150.9 151.6 165.5 167.8
Scope 1 + 2
total
320.9 322.4 336.7 341.3
Energy consumption (kWh)
1,2
2025 2024
%
change
in 2025
Scope 1 Natural gas 564,687,297 587, 857,464 -3.9%
Other (LPG,
fuel oils,
diesel, petrol)
25,291,781 28,190,545 -10.3%
Scope 2 Electricity 445,375,689 465,041,776 -4.2%
Total energy
consumption (kWh) 1,035,354,767 1,081,089,785 -4.2%
1 Prior year energy consumption and associated greenhouse gas
emissions have been restated to reflect actual consumption
following the availability of updated information.
2 Comparative intensity figures have been restated to ensure
year-on-year comparability.
SMARTER ENERGY MANAGEMENT
At our Vlkanová site in Slovakia, we improved
the energy performance of the quench oil system
without capital investment by better aligning
operation with production demand. Smarter
process control reduces electricity use for oil
heating and cooling by up to 50%, delivering
savings of around 10 MWh per month, while also
reducing equipment wear and maintenance.
We also introduced a hybrid cooling system using
harvested rainwater and groundwater to support
equipment cooling at the site, reducing reliance
on electric chillers and municipal water. Together,
these initiatives have improved energy intensity
per tonne of production and demonstrate our
focus on efficient, circular and nature-based
resource management.
EFFICIENT USE OF RESOURCES
At our Haag-Winden site in Germany, we delivered
a series of energy and water efficiency projects.
Traditional cooling towers were replaced with a
closed-loop adiabatic cooling system, reducing
electricity consumption for cooling by 40% and
cutting water use by more than 80%. The system
also lowered peak electrical demand and improved
energy and water intensity per tonne of production.
In parallel, we launched a pilot to automate control
of the cooling units, with early results indicating
a potential reduction in operating time to around
60–70% of previous levels. Additional energy
savings were delivered through the conversion
to LED lighting.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 60
Sustainability report
Responsible business continued
2
Portfolio rationalisation
Furnace utilisation
Energy efficiency
2019 baseline 2025 actual 2030 target
400 ktCO
2
e
200 ktCO
2
e
Scope 2 (market-based)
emissions
Scope 1 emissions
2
1
-38%
actual
2
-46%
target
2
Actual Scope 1
and 2 emissions
Energy use optimisation (~45%)
Renewable electricity (~55%)
Retrofit or replace fossil-fuel-heated furnaces to
use renewable electricity (~45%)
Switch existing electricity consumption to
renewable sources (~50%)
Use alternative low-carbon options for remaining
process and transport-related gases/fuels (~5%)
Towards decarbonised
operations
Progress highlights
5
zero-emission plants
4
plants with onsite solar installations
6
plants with onsite self-generation of nitrogen or hydrogen
200
major energy efficiency measures implemented
50%
process gas reductions demonstrated using dynamic controls
STEPS TOWARDS DECARBONISED OPERATIONS
1 1 1
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 61
Sustainability report
Responsible business continued
Scope 3 emissions
Unusually, Scope 3 represents a smaller share of the
Group’s emissions than Scopes 1 and 2 and remains
below the Science Based Targets initiative (SBTi)
materiality threshold of 40% of total emissions.
Nevertheless, Scope 3 emissions are an important part of
our decarbonisation journey. In 2024, we introduced full
Scope 3 reporting and set SBTi-aligned reduction targets.
Our 2024 Scope 3 emissions are externally assured.
Assurance of 2025 emissions is currently underway (see
www.bodycote.com/sustainability).
In 2025, emissions from fuel- and energy-related activities
(category 3) reduced by 40.6% compared with our 2019
base year, reflecting good progress towards our 2030
target of a 45% reduction. An update on progress towards
our Scope 3 supplier engagement target is provided on
page 63.
Scope 3 emissions by category
1
2025
tCO
2
e
2024
tCO
2
e
Category 1:
Purchased goods and services
54,760 50,422
Category 2: Capital goods 1,408 1,300
Category 3:
Fuel and energy related activities
50,180 59,317
Category 4:
Upstream transport and distribution
2,030 2,113
Category 5: Waste generated
inoperations
1,974 2,008
Category 6: Business travel 2,390 2,380
Category 7: Employee commuting 8,369 8,774
Category 8: Leased assets 633 1,008
Category 9: Downstream transport
and distribution
2,030 2,114
Category 10:
Processing of sold products
43 86
Categor y 11:
Use of sold products
n/a n/a
Category 12:
End of life treatment of sold products
359 369
Category 13:
Downstream leased assets
n/a n/a
Category 14: Franchises n/a n/a
Category 15: Investments n/a n/a
Total 124,176 129,891
Bodycote’s UK footprint
In line with Streamlined Energy and Carbon Reporting
(SECR) requirements, emissions and energy consumption
for the Group’s UK operations are disclosed separately in
the table below. In 2025, UK Scope 1 and 2 location-based
emissions decreased by 2.6% despite a 4.3% increase in
energy consumption, reflecting the impact of grid
electricity decarbonisation.
Bodycote’s UK sites (facilities and offices)
2
2025 2024
Emissions
(tonnes
CO
2
e)
Energy
consumption
(kWh)
Emissions
(tonnes
CO
2
e)
Energy
consumption
(kWh)
Scope 1 4,334 20,789,303 4,212 20,021,309
Scope 2 6,418 36,278,225 6,836 34,741,963
Scope 3 10.8 44,720 9.0 37,462
Total 10,763 57,112,248 11,057 54,80 0,734
Long-term emissions strategy
Bodycote supports the objectives of the Paris Agreement
and recognises the importance of aligning with global
net-zero ambitions. We have prioritised areas of greatest
impact, delivering near-term emissions reductions through
SBTi-aligned targets and, in 2025, accelerating progress
through our new Scope 3 reduction programme. We plan
to update on our climate transition approach in 2026.
SHAPING A SUSTAINABLE FUTURE
In 2025, we held our first Sustainability Conference,
led by our CEO and Chief Sustainability Officer,
reinforcing environmental leadership as a strategic
priority. Entitled ‘Low carbon heat, high value
future’, it brought together our global leaders to
advance our low-carbon ambitions.
The programme featured senior executives and
thought leaders from industry, strategy consulting,
and marketing, alongside internal experts. This mix
provided independent challenge and real-world
insight, deepening our leaders’ understanding of
environmental risks and opportunities and
establishing a strong foundation for continued
environmental leadership in our industry.
1 During the reporting year, emission factors used in the
calculation of Scope 3 were updated to reflect the latest
Eurostat Greenhouse Gas Emission Footprints (CO
2
equivalent)
dataset based on the FIGARO application. This methodological
update had a significant impact on total Scope 3 emissions.
Comparative figures have been restated to ensure year-on-
year comparability.
2 Electricity and fuel consumption information is collected from
each facility on a monthly basis. Scope 3 includes business
road travel in vehicles not owned by the Company and is
calculated from mileage and vehicle type. DEFRA conversion
factors are then applied to calculate the total tonnage of
CO
2
e produced.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 62
Sustainability report
Responsible business continued
Environmental management
Our environmental management system aligns with
ISO 14001. At the end of 2025, 97% of Group operating
facilities were ISO 14001 certified, covering 92% of all
employees. We comply with all applicable environmental
legislation and permitting requirements.
Our energy management approach aligns with ISO 50001.
Certification covers 19% of operating facilities, supporting
energy management and compliance with the Energy
Efficiency Directive (2012/27/EU). UK requirements are
met through the Energy Savings Opportunity Scheme.
In 2025, we strengthened our environmental policy
framework through an updated Environmental Policy
and the introduction of a Renewable Energy Policy.
Responsible water management
While our operations are not water-intensive, we recognise
water as a finite resource and manage it responsibly,
reusing and recycling water where possible. We actively
reuse and recycle water across our operations wherever
possible. In 2025, the Group withdrew approximately
819,740m³ of water, representing a decrease of 2.7%
compared with 2024. Water intensity (water withdrawal
per £m of sales) was 1,127m
3
/£m (1,112m
3
/£m in 2024).
While most withdrawn water is returned after use, some
is lost through evaporation. To reduce evaporative losses,
we are replacing traditional cooling towers with closed-
loop adiabatic cooling systems for furnaces.
All water used in our operations is sourced from municipal
suppliers. Discharges are managed through interception
tanks that monitor and control water quality before
release. Independent audits confirm compliance with legal
requirements and alignment with ISO 14001:2015.
2025 2024
% change
in 2025
Total water withdrawn (m
3
) 819,740 842,516 -2.7%
Intensity (thousand m
3
/£m)
1
1.13 1. 11 1.4%
1 Comparative intensity figures have been restated to ensure
year-on-year comparability.
Waste management
This year, we aligned elements of our reporting with
European sustainability reporting standards as a best-
practice measure. We enhanced our waste reporting
by collecting more detailed plant-level data, including
waste reused, recycled, recovered, incinerated, landfilled,
or otherwise disposed of, alongside total waste generated.
Total waste in 2025 was 12,401 tonnes, with waste
intensity of 17.1 tonnes/£m sales. Improved visibility of
our waste streams supports more effective monitoring
of environmental impacts and helps identify opportunities
to improve resource efficiency.
Hazardous Non-hazardous
Waste disposed (kg) 3,757,361 8,643,393
Recycled (kg) 780,598 1,075,428
Other recovery (kg) 334,844 256,482
Incinerated (kg) 368,145 184,164
Landfill (kg) 406,035 406,252
Other disposal
operations (kg)
1,867,739 6,721,067
Supplier management
We have initiated an enhanced supplier due diligence
programme to improve insights into our supply chain
emissions. In 2025, our first year of reporting, suppliers
of purchased goods and services representing 13% of
our total Scope 3 emissions reported SBTi-validated or
SBTi-aligned carbon reduction targets. This represents
meaningful early progress towards our target of ensuring
that 30% of suppliers (by emissions) have science-based
or other carbon reduction targets by 2030.
We also became a member of amfori during the year to
strengthen our supplier engagement and data-gathering
capabilities. This will support clearer communication of
our climate-related expectations and dialogue on the
adoption of credible emissions-reduction targets. In 2026,
we will engage suppliers with the greatest impact on
Scope 3 emissions from purchased goods and services,
setting out our climate-related expectations.
NATURE-RELATED RISK ASSESSMENT
In 2025, guided by the TNFD framework, we
assessed how our operations may interact with
nearby protected and ecologically sensitive areas.
We began by using the WWF Biodiversity Risk Filter
to screen all Bodycote sites and identify those sites
in locations potentially exposed to risk associated
with protected or internationally recognised
conservation areas.
The screening considered three WWF categories:
Protected and Conserved Areas 6.1, Key
Biodiversity Areas 6.2 and Sites of International
Interest 8.3. GIS mapping was then used to assess
each site’s proximity to designated areas within
one- and five-kilometre radii, cross-referenced
with the World Database of Protected Areas to
identify relevant conservation designations
and sensitivities.
Geographies with a higher density of sites close
to protected areas were selected for deeper
review, representing 9.6% of our global portfolio.
This further assessment considered external
environmental pressures, potential operational
impacts and appropriate mitigation measures.
The review also identified potential responses,
including enhanced habitat protection,
strengthened water and air quality management,
support for local species, improved ecological
connectivity, refined lighting and landscape
management, and collaboration with local
conservation groups. The findings will inform
the development of a biodiversity action plan
and the integration of nature-related risks and
dependencies into operational planning and
environmental management.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 63
ENGAGED
TEAM
Sustainability report
Responsible business continued
At Bodycote, we recognise that
our people are central to our position
as a world leader.
We delivered a step-change in our people strategy,
internal communications and key people processes
during the year to support delivery of our Optimise,
Perform and Grow strategy. The programme focused on
aligning colleagues behind our priorities, and building
capability and operational effectiveness across the Group.
Driving a high-performance culture
We launched our new values in 2025, establishing the
foundation for how we work together as one Bodycote
team and guiding our behaviour internally and in our
interactions with customers, partners and communities.
Our values were embedded through a structured,
leadership-led communications programme, supported
by guidance materials and workshops across several
leadership forums. We further strengthened alignment
with our values through a review and relaunch of the
Group’s compliance policies, including a new Code of
Conduct with updated language, focus and intent.
We also established a global set of ‘ways of working’
describing the behaviours we expect to reinforce our
high-performance culture. We developed these ways
of working in collaboration with our people, drawing
on focused employee engagement to identify the
behaviours that matter most and translate our values
into everyday actions.
To further enable our high-performance culture, we set
out an organisational redesign, effective from 2026,
to better align the business to our markets and create a
more efficient, centre-light operating model. The redesign
simplifies the divisional structure and strengthens
alignment between central functions and divisions,
enabling more responsive support and better deployment
of specialist expertise to support customer delivery.
Employee engagement
We made significant progress during the year in
strengthening the Group’s internal communications
programme, recognising it as a vital tool underpinning
our culture and strategy. Our global virtual town hall series
continued and, for the first time, was led by members of
the Executive Committee alongside our Chief Executive
Officer. These sessions included the launch of our values
and purpose, updates on strategic priorities and Group
performance, and the sharing of best practice and case
studies to support continuous improvement across
sustainability, health and safety, operational excellence
and financial performance.
We deliver communications through a broad mix of
channels, including weekly intranet updates and timely
Group-wide emails. In parallel, we are strengthening
our digital infrastructure to improve connectivity,
access to information and the overall effectiveness
of Group communications.
During the year, we commissioned an independent,
externally benchmarked global employee engagement
survey, achieving a participation rate of 69% and an overall
engagement score of 79%. Results showed high levels of
alignment with our strategy, strong understanding of
our values, and a culture where colleagues feel informed,
empowered and supported to make decisions.
These insights will inform the next phase of our culture
and employee experience work.
In 2026, we will build on this foundation by further
strengthening internal communications and enhancing
our approach to recognition and appreciation, ensuring
colleagues continue to feel connected to our strategy
and valued for their contribution.
We have set a target to increase our employee
engagement score to 85% by 2030, reflecting the
importance of high engagement in supporting talent,
performance and the delivery of our strategic objectives.
We empower our expert teams by creating
a high performance work environment
that gives them the culture, opportunities,
resources and recognition to succeed.
OUR 2030 GOAL
We aim to be one of the best companies
to work for in our sector, supported by
an employee engagement score of 85%
by 2030.
OUR PRIORITIES
– Values, culture, and purpose
– Engagement and communication
– Career opportunities and development
– Talent attraction, recognition
and retention
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 64
Sustainability report
Responsible business continued
Developing our people
We invest in the skills and capabilities our colleagues need
to work safely, perform at their best and deliver for our
customers. Learning and development is delivered at both
local and Group levels through a combination of digital
learning, facilitated workshops and practical training,
supported by collaborative cross-functional and cross-
divisional knowledge-sharing.
In 2025, we completed the rollout of our global learning
management platform, Bodycote Academy, expanding
access to training and development across all 16 of
Bodycote’s global languages. Employees complete
around four hours of induction e-learning covering
12 core mandatory compliance topics, with additional
learning to be added throughout 2026 as we continue
to expand the learning library. Further details are
available in the Ethics section on page 69 and in
our ESG supplement.
Strengthening leadership capability and connectivity
was a core priority in 2025. We launched our first General
Manager Conference series, bringing together around
125 General Managers from across our global operations
for the first time to strengthen alignment, accelerate
collaboration and share best practices, The conferences
delivered practical training in safety, operational
excellence and sustainability, and marked the launch
of our General Manager development programme.
We also strengthened our approach to talent development
and succession planning. Around 500 employees,
representing approximately 12% of the workforce and
40% of professional employees, including the full senior
management team, were included in high-potential
identification and development planning reviews,
supported by Executive Committee oversight.
The process enhanced insight into capability and
succession planning and will be expanded in 2026.
Alongside this, we continued to strengthen our broader
talent development initiatives. We completed the design
of our sales training programme in 2025, with rollout
planned for early 2026. We also launched a new
Apprenticeship Programme to attract and develop the
next generation of talent. The programme welcomed its
first apprentices during the year, supported by academic
mentors. A significantly larger intake is planned for 2026
to further strengthen our talent pipeline.
Employment practices
We believe in rewarding colleagues fairly for their
contribution to our success. We regularly review pay
levels and employment practices against local market
standards and have a structured, calibrated annual pay
review process in place. We are fully committed to
complying with all applicable local and national minimum
wage requirements, and our pensions are aligned with
relevant local laws and practices.
As part of Bodycote’s broader transformation and growth
agenda, we took a significant step forward in responsible
pay practices by becoming an accredited Living Wage
employer in the UK. This accreditation underscores our
commitment that all Bodycote UK employees are paid at
least the Real Living Wage, an independently calculated
rate based on the cost of living. This milestone reflects our
commitment to valuing our colleagues and recognising
their contribution to the Group’s long-term success.
Most colleagues are employed on permanent or
fixed-term contracts. We limit the use of non-regular
employment and, where it is used, aim to align rewards
with those of permanent employees. Temporary workers
are typically engaged to support peak demand, cover
vacancies or deliver specific projects. In 2025, part-time
employees represented 4% of the workforce.
We provide a range of benefits to our employees
which meet, and in some cases exceed, the minimum
requirements in all countries in which we operate,
including paid holiday and life insurance. Tuition
reimbursement schemes are available to colleagues
undertaking relevant professional development courses.
In 2025, we completed an externally benchmarked
organisation levelling and job evaluation exercise to
prepare for forthcoming pay transparency requirements.
Through this work, we established a simplified and
standardised organisational framework, informed by
objective and gender-neutral criteria and aligned to
external market benchmarks. This framework supports
a fair and consistent approach to pay and helps our
people better understand how they can grow and
progress in their careers, keeping rewards aligned
with our long-term goals.
Freedom of association
Bodycote upholds employees’ freedom of association
and recognises their right to collective bargaining,
including within those countries where legal or factual
limitations apply. Approximately 35% of the Group’s
employees are represented by unions and works
councils and we are committed to ensuring open and
constructive engagement with our employees and their
representatives. Collective agreements are in place in
nine of the countries in which we operate, covering 38%
of employees, covering topics such as compensation,
holiday entitlement, working hours, paid and unpaid
absence, grievances, and local workplace changes.
Where traditional representation is prevented by legal
restrictions, alternative mechanisms for employee
participation are encouraged through measures such
as meetings with management and election of
employee representatives.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 65
Sustainability report
Responsible business continued
Community engagement
Although we operate internationally, our business is
locally rooted, with plants located close to our customers.
We encourage and support site-led community initiatives,
reflecting our commitment to making a positive
contribution to the communities in which we operate.
Activities supported by our people in 2025 delivered
measurable benefits to local communities across multiple
regions. Examples from the year include colleagues in the
Czech Republic participating in a city-wide charity run in
Prague that helped raise over CZK 1.8 million in support
of individuals with severe visual impairments, alongside
a bake sale and a Volunteer Day at a local community
garden. In the US, employees supported local families
and children through food, clothing, school supply,
and toy donations. In China, our team participated in
an event for elderly residents living alone, carrying out
household electrical inspections and repairs.
NEXT STEPS
– We will strengthen our future talent pipeline
by significantly expanding our apprenticeship
programme in 2026 to support a highly skilled
workforce for the long-term.
– We will roll out our global sales excellence
training programme and deliver phase 2 of our
General Manager development programme.
ONE BODYCOTE, MANY ENGINES
Over the past three months, Bodycote brought together 125 of its General Managers for the first time through
a Leadership Conference Series held in Düsseldorf, Prague and Dallas. Hosted by the Executive Team and
Divisional Presidents, this important milestone created an opportunity to strengthen connections across the
global business and align around the Optimise, Perform and Grow strategy.
Across the two-day sessions, General Managers engaged in practical workshops covering safety, sustainability,
operational excellence and customer experience, alongside discussions on purpose, values and ways of working.
The theme, ‘One Bodycote, Many Engines’, reflected the balance between a shared strategic direction and the
strong local leadership within each plant.
The conferences focused on sharing best practice, building a high-performance culture and clarifying
expectations and priorities for 2026. They also marked the launch of the General Manager Development
Programme. The series reinforced the depth of experience across the Group and strengthened collaboration
as we position Bodycote for continued improvement and growth.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 66
DIVERSE
WORKPLACE
Sustainability report
Responsible business continued
We are building a welcoming,
progressive culture that fosters a
strong sense of belonging. This means
creating a workplace where everyone
– wherever they are and whoever
they are – can thrive, do their best
work and build a rewarding career.
Equality, diversity and inclusion are important for all
our people and for society. We recognise that legislative
frameworks and cultural landscapes vary significantly
across the 22 countries in which we operate worldwide.
In each country, we aim to continuously improve our
equality, diversity and inclusion working practices,
while ensuring that we are not in conflict with applicable
legislative frameworks.
We are committed to creating an inclusive and
collaborative workplace culture where all colleagues
can succeed. We value the different experiences and
perspectives our colleagues bring and recognise that
they may require different levels of support. We design
our recruitment and working practices accordingly,
ensuring all colleagues have the opportunity to perform
at their best.
We actively promote equal access to employment
and career development and embed non-discriminatory
practices throughout our recruitment and people
processes. Our hiring approach is intentionally designed
to attract, support and retain a diverse workforce,
maintaining equal opportunity irrespective of age,
race, gender, ethnic origin, nationality, religion, health
or disability, marital status, sexual orientation, socio-
economic background, political or philosophical opinions,
trade union membership, as well as military and veteran
status in North America.
Our focus is on improving gender balance at all levels
of the organisation, particularly in middle management,
technical and operational roles. In 2025, we implemented
a series of targeted actions to advance our diversity
agenda. These included refreshing our employer branding
and careers website, strengthening recruitment oversight
through new leadership and a digital platform with good
analytics, and increasing the representation of women in
senior leadership pipelines, with early progress reflected
in our gender pay gap reporting. We also continued global
prevention of sexual harassment training and expanded
our gender pay gap reporting beyond the UK statutory
requirements to strengthen transparency and inform
future action.
Our refreshed careers website strengthened accessibility
and inclusion, with imagery, content and navigation
designed to reflect and engage diverse communities.
We also implemented a centralised recruitment platform
to strengthen transparency of applicant demographics,
in line with applicable data protection requirements.
This platform enables us to actively monitor and
review recruitment practices and to drive continuous
improvement in support of our people strategy and
our commitment to eliminating discrimination. We use
gender-neutral and inclusive language in all job
advertisements to ensure roles are accessible and
appealing to the broadest pool of candidates.
Inclusive culture and working practices
We promote an inclusive and respectful workplace,
supporting flexible, agile and part-time working
arrangements where appropriate, and maintaining
a zero-tolerance approach to harassment.
Online anti-sexual harassment training is issued to all
employees with computer access (67% of the workforce),
of whom 74% completed the training issued in 2025.
We are committed to creating a diverse
and equitable workplace, built on
inclusion and a strong sense of belonging,
where everybody can thrive.
OUR 2030 GOAL
We will strengthen inclusion and
collaboration across our organisation,
improving gender balance at all levels,
particularly in middle management,
technical and operational roles.
OUR PRIORITIES
– Inclusive and equitable
workplace practices
– Fair recruitment and career progression
– Gender and ethnicity representation
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 67
Sustainability report
Responsible business continued
We recognise work–life balance as an important element
of our working practices. Flexible working options,
including adjusted start and finish times within defined
core hours, as well as remote or hybrid working, are
available primarily to employees in non-production roles,
subject to operational requirements and role suitability.
For eligible office-based employees, our global Remote
Working Policy enables hybrid working, with three days
per week in the office and the remainder from home.
Flexible and part-time arrangements support workforce
participation and career progression, particularly for
those with caring responsibilities or other individual
needs. The Group also provides additional support
through special leave policies to help manage unforeseen
or challenging personal circumstances.
Gender diversity
In 2025, we took a proactive approach to strengthening
representation of women in senior leadership, with a
particular focus on Board and Vice President roles.
At 31 December 2025, women represented 50.0% of the
Board, up from 37.5% in 2024. We achieved both our
internal goal and the FTSE Women Leaders Review target
of at least 40% female Board representation in June 2025,
ahead of the end-2025 deadline.
The Group has not yet met the second FTSE Women
Leaders Review target of 40% representation of women
across senior leadership and this remains an area of active
focus. In 2025, women represented 36% of executive
management (2024: 33%). Among senior managers
(including the Executive Committee), 26% were women,
and across the total workforce the proportion was 23%.
We have voluntarily reported UK gender pay gap data for
several years, despite none of our UK entities individually
meeting the statutory threshold. In 2025, we expanded
our disclosure to include the United States, significantly
increasing the proportion of our global workforce covered.
This broader coverage (approximately 40% of global
employees) provides greater insight into pay outcomes
and will support targeted actions to improve
gender balance.
In the UK, the median gender pay gap remained stable at
6.5% in favour of women, while the mean gap increased to
17.0% in favour of women (2024: 6.9%), primarily reflecting
the intentional hiring of women into leadership roles.
The mean bonus pay gap narrowed from 12% in favour of
men to 1%, while the median bonus gap widened from
4% to 47% in favour of women. Given the limited number
of employees participating in bonus schemes, bonus pay
gap outcomes can be volatile and should be considered
alongside broader gender pay indicators, which provide
a more stable view of pay equity trends.
In the US, the median gender pay gap was 1.0% and the
mean gap 6.1%, both in favour of men, reflecting
workforce and role mix rather than differences in pay for
comparable roles. Across the Group, the estimated global
mean gender pay gap at December 2025 was 8.5% in
favour of men. While increased representation of women
in senior roles continues to influence outcomes in parts of
the business, our focus remains on improving gender
balance at all levels to support sustainable progress over
time. Our full Gender Pay Gap report is on our website.
December 2025
Men Women Not reported
Group Board 4 (50%) 4 (50%) –
Executive
Committee
9 (64%) 5 (36%) –
Senior managers
1
(including
Executive
Committee)
64 (74%) 23 (26%) –
All employees 3,073 (77%) 916 (23%) 12 (0.3%)
1 Senior managers are defined as Executive Committee
members and their direct reports.
Ethnic diversity
Bodycote meets the Parker Review target for FTSE
250 boards to have at least one director from an ethnic
minority background. The Board includes two members
who meet the ONS classifications of Asian/British
Asian and mixed/multiple ethnic groups. The Executive
Committee also reflects broad international
representation, with four nationalities represented,
including one member from an ethnically diverse
background. Further information in accordance with
LR 6.6.6(9) and (10) is provided on page 101.
Governance and oversight
The Board has oversight of the Group’s diversity
and inclusion approach, with operational responsibility
led by the Chief Human Resources Officer. The Board
receives updates on diversity metrics and related
initiatives to support its oversight.
As outlined in our Board Diversity & Inclusion Policy,
the Board recognises that a diverse range of views,
perspectives and backgrounds strengthens decision-
making and supports long-term value creation for
stakeholders. The Policy also sets out the Board’s
commitment to supporting management in increasing
the proportion of senior leadership roles held by women,
those from non-white minority ethnic backgrounds and
other under-represented groups, setting the tone from
the top. A copy of the policy is available on our website.
NEXT STEPS
– Our immediate focus is to continue to improve
the gender balance at all levels of the
organisation, but in particular in middle
management, technical and operations roles.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 68
Sustainability report
Ethics & governance
We operate to high standards of
ethics and compliance and expect
the same of our partners.
We are committed to conducting our activities in a
responsible and ethical manner and have established
a robust governance framework, supported by a
comprehensive set of policies that set clear standards and
expectations. The Board oversees ethical conduct through
regular review of compliance metrics, including training
completion rates and reports received via the Open Door
Line whistleblowing service. This oversight reinforces a
strong culture of integrity, accountability, and compliance
across the Group.
During 2025, we strengthened our governance framework
through a comprehensive review and relaunch of our
compliance policies, including a new Code of Conduct and
Supplier Code of Conduct, updated Human Rights Policy
and Anti-Slavery and Human Trafficking Policy, and a
revised Environmental Policy. These updates reflect the
Group’s evolving culture and values and respond to
changes in the legislative and regulatory environment.
Relevant management-level employees are required
to confirm bi-annually their understanding of, and
compliance with, the Code of Conduct and Group policies,
reinforcing ethical behaviour and accountability.
The Group’s Code of Conduct sets out our approach to
legal compliance and ethical practices, supported by
subject-specific policies published on our website at
www.bodycote.com/investors/governance/our-policies/.
Employees complete mandatory training on key ethical
and compliance topics, including modern slavery,
anti-bribery and corruption, fraud, tax evasion, data
protection, competition law and the prevention of sexual
harassment. This training is delivered through the
Bodycote Academy, refreshed annually, and reinforces
expected standards of behaviour.
In July 2025, we launched B the Difference, a global
compliance communication providing updates on key
legal and regulatory topics, policy reminders and guidance
on raising concerns. Topics covered in 2025 included
modern slavery, fraud and the prevention of sexual
harassment. We also introduced B Alert!, a short-form
video training programme to raise awareness, which in
2025 focused on communication standards and the
Open Door Line whistleblowing service.
Bodycote prohibits forced, compulsory and underage
labour and is committed to providing a workplace free
from discrimination and harassment. Discrimination based
on age, race, gender, ethnic origin, nationality, religion,
health, disability, marital status, sexual orientation, gender
reassignment, pregnancy, and maternity or paternity,
political or philosophical opinions or trade union
membership is not tolerated. Appropriate policies and
reporting mechanisms are in place to support compliance
and minimise the risk of breaches.
Respect for human rights
We are committed to upholding and respecting
internationally recognised human rights. The Group’s
Human Rights Policy is aligned with the Ten Principles
of the UN Global Compact and incorporates the United
Nations Universal Declaration of Human Rights and
the International Labour Organization Fundamental
Conventions. Our policy reaffirms the Group’s
commitment to freedom of association, the abolition
of forced or compulsory labour; the elimination of
child labour; the prevention of discrimination; and the
provision of a safe and healthy working environment.
The Group’s Anti-Slavery and Human Trafficking
Statement is published on the Group’s website and
is reviewed annually by the Board.
We require colleagues in senior management, human
resources and purchasing roles to complete Modern
Slavery Act training, with refresher training at least every
three years. In 2025, the training was reissued to relevant
employees, with a completion rate of 90%.
In May 2025, we completed an externally facilitated
review of our Modern Slavery controls. We established a
dedicated working group to address the recommendations
and strengthen our control framework on an ongoing
basis. Further information will be provided in our annual
Modern Slavery Act Statement, to be published on our
website by mid-2026.
Anti-bribery and corruption
We provide mandatory online bribery prevention
training for employees based on their role or seniority,
with a completion rate of 92% for training issued in 2025.
Clear standards of behaviour are set out in our Code of
Conduct and related policies, including Anti-Bribery
and Anti-Corruption and Gifts and Hospitality, supported
by training and defined limits. Bribery in any form is
strictly prohibited, and the Group does not make
political donations.
We conduct periodic corruption risk assessments across
our operations and business relationships. The most
recent externally facilitated assessment, completed in
September 2025, also covered fraud and the prevention
of the facilitation of tax evasion. A working group was
established to address the recommendations and
strengthen controls. During 2025, we also launched a
Gifts and Hospitality reporting app to support policy
compliance through management approval.
Further information
Further information on our training activity related to
ethics and compliance is provided in our ESG Supplement.
See www.bodycote.com.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 69
Sustainability report
Ethics & governance continued
NEXT STEPS
– Complete control enhancements identified
through externally facilitated risk assessments
in 2025 covering modern slavery, bribery and
corruption, fraud and tax evasion.
– Screen higher-risk suppliers using the amfori
BSCI framework to establish a baseline of
potential impacts and support proportionate,
targeted supplier engagement and
improvement actions.
Responsible supplier management
As a world-leading provider of heat treatment and thermal
processing services, we recognise our responsibility to
support high standards of environmental stewardship
and sustainable business practices across our global
supply chain.
During the year, we refreshed our Group-wide Supplier
Code of Conduct to reflect current best practice and the
Group’s updated Code of Conduct and values. The revised
Code consolidates all expectations relating to social,
environmental and ethical issues, including human rights,
into a single document and integrates our sustainable
procurement principles, previously set out in a separate
document. To ensure alignment with the refreshed
Supplier Code of Conduct, environmental responsibilities
for employees involved in procurement and supply chain
activities are detailed in our Environmental Policy.
See our website www.bodycote.com for our policies.
The Supplier Code of Conduct applies to all suppliers
and defines the minimum standards they are expected to
meet, including embedding these principles within their
own operations and cascading Bodycote’s values and
expectations to their workforce and business partners.
In addition to being incorporated into our standard
purchasing terms, we strengthened supplier engagement
in 2025 by introducing a formal confirmation process
requiring selected suppliers – those operating in higher-
risk sectors and regions – to acknowledge acceptance of
the Supplier Code of Conduct.
Prior to engagement, suppliers are screened against
internationally recognised sanctions, watchlists and
restricted-party databases to support compliance
with applicable trade controls. We are committed to
responsible sourcing, including supporting international
efforts to eliminate the use of conflict minerals, and seek
to avoid contributing to conflict or human-rights abuses.
Suppliers are engaged in line with our values of fairness,
transparency and integrity, with contracts agreed on fair
and reasonable terms and invoices paid in accordance
with agreed conditions.
To further strengthen supply chain due diligence,
Bodycote joined amfori in 2025, gaining access to a
structured framework that will enhance transparency
and support the assessment of potential labour and
human rights impacts across our supply base. In 2026,
we will use the amfori BSCI framework to screen a
selection of suppliers identified as higher risk by
geography or procurement category. This will establish
a baseline understanding of potential impacts and
inform targeted engagement and improvement actions,
aligned with internationally recognised standards.
Encouraging colleagues to speak up
We promote a culture of openness, where individuals are
encouraged to speak up. We want everyone working for
or with Bodycote to feel confident raising concerns
without fear of retaliation. We make a range of secure
and confidential reporting channels available, including
anonymous reporting and our independent, third-party
operated whistleblowing helpline, the Open Door Line,
which can be used to raise concerns relating to Bodycote’s
operations or supply chain.
The Open Door Line is widely promoted through multiple
channels, including posters in plants and offices, our
intranet and the Bodycote plc website, our Code of
Conduct and Supplier Code of Conduct, Group policies
and B the Difference and B Alert! employee
communications. Colleagues can also raise concerns
through our HR-managed grievance mechanism.
The Board reviews compliance training completion rates
and receives reports on the Open Door Line, including
the number, nature and outcomes of reports. During 2025,
all reports submitted through the Open Door Line were
investigated and appropriately resolved, with feedback
provided where requested. No reports received related
to modern slavery concerns.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 70
Sustainability report
Task Force on Climate-related Financial Disclosures (TCFD) report
Bodycote reports in full against the
TCFD recommendations, ensuring
that climate-related impacts are
understood and incorporated into
our business strategy.
We refresh our qualitative and quantitative scenario
analysis annually and assess the potential financial
impacts of climate-related risks and opportunities under
a range of scenarios to inform the ongoing development
of our climate strategy.
This process is supported by our double materiality
assessment, which provides an in-depth evaluation of
environmental, social and ethical impacts, risks and
opportunities. See page 50 for details.
Our climate-related disclosures continue to follow the
TCFD recommendations and the UK Climate-related
Financial Disclosure Regulations. We note the UK
Government’s publication of the UK Sustainability
Reporting Standards – the UK-endorsed versions of IFRS
S1 and S2 issued by the ISSB. We expect to align our
reporting with the UK SRS and transition from our current
TCFD-aligned reporting for the financial year beginning
1 January 2027, subject to the FCA’s final rules following
its CP26/5 consultation.
TCFD statement of compliance
This report sets out Bodycote’s climate-related financial
disclosures in accordance with the Companies (Strategic
Report) (Climate-related Financial Disclosure) Regulations
2022 and FCA Listing Rule LR9.8.6R(8), which requires
listed companies to state whether disclosures are
consistent with the TCFD framework on a comply-or-
explain basis. The principal disclosures are set out in this
section, with additional disclosures on pages 51 to 56
and 59 to 63. Bodycote has reported in full against all
11 TCFD recommendations.
Governance
Climate-related responsibilities of the Board
Climate-related matters are integral to Bodycote’s
business model and strategy. The Board oversees
the management of climate-related issues and their
integration into corporate strategy, with the Chief
Executive Officer providing periodic updates on the
Group’s climate strategy and performance.
In 2025, the Board agenda focused on the commercial
sustainability strategy, including customer pipeline
development, alongside the operational strategy.
Discussions were held on progress against the
net-zero roadmap evaluation, decarbonisation testing
and projects, and the achievement and announcement
of zero-emissions sites.
The Board monitors performance against six financial
and two non-financial KPIs, including absolute Scope 1
and Scope 2 GHG emissions (see page 23), and
considers climate-related factors in budgeting and other
decisions, including capital expenditure approval for
carbon-reduction projects.
The Audit Committee supports the Board in overseeing
climate and environmental risk management,
including compliance with climate-related reporting
requirements and controls over emissions measurement
and disclosures.
Governance framework for climate and sustainability topics
PLC Board
Oversight of the Group’s climate agenda
within its business strategy.
Chief Executive Officer: accountable for
delivery of the Group’s climate strategy.
Finance Committee
Considers climate-related
issues in financial and
investment matters.
Audit Committee
Oversees risk management
and controls related
to climate and
environmental risks.
Remuneration Committee
Integrates climate-related
targets into remuneration,
as appropriate.
Nomination Committee
Considers climate-
related expertise in
Board appointments.
Board
Committees
Executive Committee
Manages climate risks and opportunities, sets targets,
and oversees delivery, with members holding
function-specific responsibilities.
Sustainability Committee
Supports implementation of the operational
and commercial sustainability and climate
strategies, driving progress towards targets.
Group Risk Committee
Supports enterprise-wide oversight
of climate-related risks, integration across
categories, and consideration of assessments.
Management
Committees
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 71
Sustainability report
Task Force on Climate-related Financial Disclosures (TCFD) report continued
Board members’ sustainability experience
Board members have diverse experience in climate-
related issues. Examples include:
– The Chief Executive Officer has practical experience
in developing and implementing energy and carbon
reduction projects, including renewable energy systems
and grid integrity in his previous role at Megger.
– Non-Executive Chair, Daniel Dayan, has substantial
climate and sustainability experience from leading
major plastics processing and recycling businesses.
– Non-Executive Director, Beatriz García-Cos Muntañola
brings climate-related experience from the renewable
energy and mining industries and her role as CFO at
Ferroglobe plc.
– Non-Executive Director Cynthia Gordon oversees
climate-related metrics in incentive schemes and has
experience in sustainability and climate-related
reporting.
Climate-related responsibilities of management
The Chief Executive Officer is accountable for the Group’s
climate strategy, supported by the Chief Sustainability
Officer and the Executive Committee.
Climate-related topics are a standing agenda item at
Executive Committee meetings. Examples of topics
discussed in 2025 include:
– progress in the HEAT ‘Transition to a sustainable future’
pillar, our performance excellence programme;
– development of our commercial approach to support
customers’ sustainability goals;
– Bureau Veritas validation of product footprint calculators
covering ~80% of revenue;
– progress in evaluating the Group’s net-zero roadmap;
– development of our first zero-emission plants,
announced September 2025; and
– CO
2
and energy efficiency performance, and
improvement targets for 2026.
Processes for oversight of climate-related issues
The Executive Committee oversees climate risk and
opportunity management, with climate considerations
embedded in strategy, business planning, capital
investment, risk management and budgeting.
This includes the development of climate-related service
offerings, sustainability reviews of capital investments
aligned to the Group’s SBTi commitment, consideration of
environmental impacts in asset and property decisions,
integration of climate risks into formal risk management
processes, and consideration of climate risks and
opportunities within annual budgets, scenario planning
and longer-term financial modelling.
The Sustainability and Group Risk Committees supports
the Executive Committee in implementing climate-related
initiatives, risk management and reporting.
Responsibilities of individuals and teams
– Chief Executive Officer: overall responsibility for the
Group’s climate strategy.
– Chief Financial Officer and the Group Finance team:
supporting the assessment of financial impacts,
investments and climate scenario modelling.
– Chief Sustainability Officer and the Sustainability team:
development of climate strategy and targets,
and monitoring and communication of progress.
– Divisional Presidents: management of climate-related
operational matters, delivery of carbon reduction
projects, and capture of climate-related opportunities.
– Group Internal Audit and Risk: capture of climate-
related risks and their interconnectivity with other
enterprise risks through the Group’s risk
management processes.
– Technical Services Operation (TSO): support for
implementation of carbon reduction projects and
low-carbon technologies.
– Sales and customer key account teams:
customer engagement on sustainability goals and
emissions reduction.
– General managers of sites: day-to-day management of
facilities and equipment to optimise energy efficiency.
Climate-related incentives
Bodycote recognises the importance of incentivising
progress towards ESG targets. Following a comprehensive
review of the Group’s incentive arrangements, the long-
term incentive plan was amended in 2025 to incorporate a
metric aligned to the Group’s carbon emissions reduction
target, accounting for 20% of the award. Further details
are set out in the Directors’ Remuneration report on
page 110.
Strategy
Climate change remains one of Bodycote’s top strategic
priorities (see page 9 for the Group’s strategy and
objectives). Climate change-related initiatives are integral
to our operational strategy, under the ‘Optimise’ and
‘Perform’ pillars, as well as our commercial growth
strategy, under our ‘Grow’ pillar and support value
creation through alignment with the low-carbon market
transition. Structural growth in sustainable end-markets is
driving an increasing contribution from these sectors to
Group revenues. We continue to focus on sustainability
and energy efficiency throughout our operations,
recognising the commercial imperative in optimising the
use of energy, industrial gases and other materials across
our cutting-edge material science solutions.
Growing customer focus on climate change and
decarbonisation continues to be a catalyst for
differentiated growth. We provide industrial customers
with solutions that reduce energy use, carbon emissions,
and total value chain impacts, positioning Bodycote as the
partner of choice in lower-carbon manufacturing. With our
demonstrated efficiency and public commitment to
ambitious carbon reduction targets, we offer customers
a compelling route to meet their own decarbonisation
objectives by transitioning in-house heat treatment to
an outsourced partner, delivering immediate efficiency
benefits and a clear pathway to further emissions
reductions. Our flagship sustainability programme,
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 72
Sustainability report
Task Force on Climate-related Financial Disclosures (TCFD) report continued
deployment of product carbon footprint tools and
development of premium heat treatment offerings –
including the use of decarbonised energy and green
process gases – strengthen our value proposition and
support customers in addressing their Scope 3 emissions.
Climate scenario analysis
Bodycote regularly re-assesses climate-related risks and
opportunities to inform strategy, financial planning and
investment decisions. The assessment is supported by
structured workshops involving senior professionals and
internal and external experts, with outputs used to update
risks, opportunities and associated mitigation and
realisation actions.
Bodycote applies the same short-, medium- and long-term
time horizons used for its Principal Risks. While climate
risks typically emerge over longer timeframes, these
horizons are used to integrate climate risk assessment into
the Group’s overall strategy and risk evaluation. Climate-
related impacts are assessed using a range of scenarios,
including a 2°C or lower scenario as required under TCFD,
modelled on the latest IPCC assessment.
The Group conducts an annual review of all identified
climate-related risks and opportunities under each
scenario. For selected risks, potential impacts are
calculated where suitable data and models are available,
estimating effects on capital expenditure, operating costs
and revenues in at-risk locations. Risks and opportunities
are prioritised based on potential impact and considered
material where they could significantly affect our strategy.
Physical risks, including heatwaves and flooding, were
assessed using external data sources selected for
relevance to the Group’s locations. Heatwave risk was
assessed using data from the IPCC’s Sixth Assessment
Report via the World Bank Climate Knowledge Portal;
in 2025, the heatwave indicator was updated to reflect
compounded risk by combining projected climate
conditions with population exposure, and site-level
validation confirmed that this resulted in lower risk
classifications for most locations.
Flooding risk (coastal and riverine) was assessed using
the same IPCC data alongside the WRI Aqueduct Water
Risk Atlas 4.0, while wildfire risk was assessed using a
combination of IPCC and NASA MODIS data.
Other indicators were also drawn from the IPCC’s Sixth
Assessment Report. The results of our assessment
completed at December 2025 (see pages 74 to 77) indicate
that the majority of climate-related risks and opportunities
remain broadly consistent with our 2022–2024
assessments. The December 2025 assessment
incorporated the update of external indicators and the
assessment was validated via enhanced physical risk
modelling using geocoordinate-level data, providing
greater precision in our exposure analysis. As a result,
the potential financial impact of physical risks has been
reassessed from ‘low’ to ‘negligible’ risk. This refinement
reflects improved data granularity rather than a material
change in underlying risk drivers. We have also further
refined the description of key risks, opportunities and
associated mitigation measures to enhance clarity and
transparency of disclosure.
Scenarios used to assess
climate-related impacts
1
Scenario 1 (<1.5ºC)
1
Net zero emissions reached
by 2050 globally
Global temperatures are limited to
a 1.5°C increase by 2050 compared
to pre-industrial levels.
Physical risks are limited, and there has
been a substantial shift in behaviour and
public policy (eg. higher carbon taxes).
2
Scenario 2 (<2ºC)
2
Emissions peak and start falling
around 2050
Policy action is late and disruptive and while
some steps have been taken, it is largely
business-as-usual. There are limited public
policies before 2025, temperatures continue
to rise, and physical impacts intensify.
3
Scenario 3 (<3ºC)
3
Emissions keep rising (doubling by 2100)
Limited global action results in accelerated
global warming andsignificant physical risks.
Governments fail to introduce further policies
to address climate change.
1 RCP1.9/SSP1-1.9.
2 RCP3.4/SSP2-4.5.
3 RCP6.0/SSP3-7.0.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 73
Sustainability report
Task Force on Climate-related Financial Disclosures (TCFD) report continued
Type of risk Potential impact and mitigation measures
Physical risks
Extreme
weather events
Risk Driver:
Acute physical
– Wildfires
– Flooding
Description
Risk of disruption to the Group’s operations and value chain from wildfires
andcoastal or river flooding, affecting employees, property, equipment
and surrounding infrastructure.
Impact assessment
Across all three scenarios, fewer than 10% of sites are assessed as high risk
forwildfires or flooding. The potential operational disruption and any relocation
costs are considered negligible (see table on page 77).
Mitigation measures
– Implementation of additional mitigation measures at higher-risk sites,
including safety, maintenance, business continuity planning and
contractual protections.
– Increased use of automation and remote technologies to maintain
operations during disruption.
– Ongoing review of climate science to monitor risk exposure.
– Application of flood and wildfire risk assessments to all potential new
sites during selection.
Scenario 1
M
Scenario 2
M
Scenario 3
M
Extreme
temperatures
Risk Driver:
Chronic physical
– Heatwaves
and heat stress
– Cold
wave/frost
Description
Risk of more frequent and severe heatwaves affecting employees, facilities
andequipment, increasing maintenance costs and reducing productivity.
Impact assessment
Higher-risk sites have been identified, with fewer than 10% of sites assessed
as high risk under Scenario 3. The potential financial impact from operational
disruption and investment in cooling measures is considered low
(see page 77). Cold wave and frost risk is not currently considered relevant
1
.
Mitigation measures
– Increased investment in insulation and cooling solutions to improve
temperature control in at-risk sites.
– Greater use of automation to enhance operational resilience.
Scenario 1 L
Scenario 2 L
Scenario 3 M
1 Extreme cold weather risk assessed using CMIP6 data from the World Bank Climate
Knowledge Portal. It was determined that this is not likely to be an increasing risk in the future,
so it is not currently assessed.
Climate risk and opportunity assessment
Type of risk Potential impact and mitigation measures
Transition risks
Impacts to
electricity supply
Risk Driver:
Market
– Uncertainty in
market signals
Technology
– Transitioning
to low-
emission
technology
Description
Less stable energy systems, driven by higher renewable penetration and
rising demand, may increase intermittency and price volatility.
Under Scenario 2, elevated electricity demand could affect energy security;
under Scenario 3, additional cooling requirements may further increase
electricity demand and costs.
Impact assessment
The potential financial impact of this risk has not yet been quantified.
Pricing approaches would be reviewed to manage, and where appropriate
passthrough, energy cost inflation.
Mitigation measures
– Implementation of energy-saving initiatives to reduce consumption.
– Starting furnaces during off-peak periods to reduce energy costs.
– Use of on-site solar generation to displace grid consumption.
– Deployment of battery storage to add power resilience and continuity.
Scenario 1
N
Scenario 2
L
Scenario 3
L
Increased
pricing of
carbon emissions
Risk Driver:
Emerging
regulation
– Carbon pricing
mechanisms
of sector
Technology
– Transitioning
to low-
emission
technology
Description
Operating costs may rise due to failure to reduce energy consumption and
exposure to new or expanded carbon pricing and regulatory mechanisms.
New regulation or decarbonisation pressures may also accelerate technology
retrofit or replacement, requiring additional capital investment.
Impact assessment
The potential financial impact of this risk has been assessed using an
estimated2030 carbon price; see the table on page 77.
Mitigation measures
– Reduction in energy consumption and continued progress towards
our enhanced 1.5ºC aligned SBTi target.
– Further development of a decarbonisation roadmap and investment
in lower-carbon technology and energy.
– Review of pricing approaches to manage, and where appropriate
pass through, energy cost inflation.
– Assessment of technology investments against future-proofing criteria;
andintegration of regulatory risks into capital investment decisions.
Scenario 1
L
Scenario 2
L
Scenario 3
N
S
Short-term (0–2 years)
M
Medium-term (2–5 years)
L
Long-term (5+years)
N
Not applicable
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 74
Sustainability report
Task Force on Climate-related Financial Disclosures (TCFD) report continued
Type of risk Potential impact and mitigation measures
Transition risks continued
Reputational risk
Risk Driver:
Reputation
– Stigmatisation
of sector
– Increased
stakeholder
concern
Description
Risk of reduced ability to attract and retain customers, employees and
investors who prioritise climate action and risk management. This may
affect talent acquisition, new business opportunities, investor confidence,
and access to, or cost of, capital.
Impact assessment
The Group’s carbon reduction strategy supports customer, employee and
investor advocacy. As the only major global heat treatment company with
anSBTi-validated target, Bodycote benefits from a clear competitive
advantage in attracting new business and talent.
Mitigation measures
– Clear, proactive, and high-profile stakeholder communications positioning
the Group’s decarbonisation approach as a core strategic priority.
– Ongoing monitoring of stakeholder expectations through engagement,
benchmarking and research to inform continuous improvement in climate
strategy and disclosures.
– Regular customer engagement on Bodycote’s climate roadmap, alignment
with international standards and carbon reduction solutions.
Scenario 1
S
Scenario 2
M
Scenario 3
N
Increased
regulation of
GHG emissions
Risk Driver:
Emerging
regulation
– Mandates
on, and
regulation of,
existing
services
Description
Increased regulation of greenhouse gas emissions may disrupt the Group and
its customers, resulting in higher operating costs, carbon taxes, compliance
obligations, and potential penalties or litigation for non-compliance. It may
alsoaccelerate the need for investment in lower-emissions technologies.
Impact assessment
The potential financial impact from increased deployment of
low-emissions technologies is assessed as low (see page 77).
Mitigation measures
– Decarbonisation defined as a core strategic priority, aligned with
our 1.5ºC SBTi target.
– Implementation of a structured decarbonisation roadmap across
technologies and sites.
– Ongoing monitoring of the regulatory landscape to support timely
compliance and action.
Scenario 1 L
Scenario 2 L
Scenario 3 N
Type of risk Potential impact and mitigation measures
Opportunities
Increased
outsourcing by
customers to
reach GHG
targets
Opportunity
Driver:
Resource
efficiency
– Use of more
efficient
production
processes
Description
Potential revenue growth from increased customer outsourcing to Bodycote
to reduce their Scope 1 and 2 emissions, limit exposure to carbon taxes, and
enable emissions avoidance. Emissions per part processed by Bodycote can
beup to 60% lower through operational efficiency, furnace utilisation and
energyefficiency measures (see page 51).
Impact assessment
Supporting customers in meeting their emissions targets presents revenue
opportunities across sectors and markets. Improved efficiencies and higher
furnace utilisation may also reduce the Group’s operating costs.
Realisation measures
– Leveraging existing operations to deliver emissions reduction
and avoidance benefits.
– Positioning Bodycote as a partner of choice through the
B Carbon Smart sustainability programme.
– Deployment of product carbon footprint tools to help customers
assess Scope 3 emissions from outsourced processes and advance their
decarbonisation goals.
Scenario 1
S
Scenario 2
M
Scenario 3
N
S
Short-term (0–2 years)
M
Medium-term (2–5 years)
L
Long-term (5+years)
N
Not applicable
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 75
Sustainability report
Task Force on Climate-related Financial Disclosures (TCFD) report continued
Type of risk Potential impact and mitigation measures
Opportunities continued
Low-carbon
technologies
offering
for customers
Opportunity
Driver:
Services
– Development
and/or
expansion
of low-
emission
services
Description
Providing lower-carbon processing services to meet evolving customer and
regulatory requirements, enhancing competitive differentiation and supporting
premium positioning.
Impact assessment
Low-carbon services offer potential for revenue growth, margin enhancement
and access to new markets for the Group’s metallurgy solutions.
Realisation measures
– Ongoing monitoring of customer climate strategies and
supplier expectations.
– Alignment of capital investment with anticipated demand for
lower-carbon capacity.
– Positioning Bodycote as a partner of choice through its flagship
sustainability programme.
– Deployment of product carbon footprint tools to help customers
assess Scope 3 emissions and support decarbonisation.
– Development of premium heat treatment solutions, including
decarbonisedenergy and green process gases.
Scenario 1
S
Scenario 2
M
Scenario 3
N
New volumes
for Bodycote
related to low-
carbon transition
Opportunity
Driver:
Products
and services
– Ability to
diversify
business
activities
Markets
– Access to
new markets
Description
Alignment of business development priorities with the low-carbon transition,
including growth in EVs, nuclear energy and the circular economy, supporting
revenue growth. Increased demand from these sectors is expected to expand
their contribution to Group revenues, in line with our target for at least 20%
ofrevenue to support sustainable end-use markets by 2035.
Impact assessment
This opportunity can largely be delivered through existing facilities, as the
Group’s global capacity enables rapid response to evolving customer demand.
Realisation measures
– Leveraging operational flexibility to serve both existing and
emerging industries.
– Expansion of maintenance, repair and overhaul service offerings
to support evolving market demand.
Scenario 1
M
Scenario 2
M
Scenario 3
N
Type of risk Potential impact and mitigation measures
Opportunities continued
Government and
other incentives
Opportunity
Driver:
Resource
efficiency
– Use of more
efficient
production
processes
Services
– Development
of low-
carbon
service
offering
Description
Potential benefits from government and regulatory incentives that support
customer adoption of outsourced, lower-carbon processing services.
Such incentives may strengthen the economic case for transitioning to
lower-carbon thermal processing, supporting demand growth.
Impact assessment
The financial impact of this opportunity has not yet been quantified. The Group
will continue to monitor developments and assess the opportunity as further
information becomes available.
Realisation measures
– Continued deployment of lower-carbon technologies across
Bodycote’s operations to reduce the emissions intensity of
outsourced processing services.
– Installation of comprehensive metering and expansion of energy
KPIs within Bodycote sites to improve efficiency, benchmarking and
anomaly detection, reducing energy use and operating costs.
– Active engagement with customers to demonstrate how outsourced,
lower-carbon processing can support their emissions reduction objectives
and improve the economics of transition in light of available incentives.
Scenario 1
M
Scenario 2
L
Scenario 3
N
S
Short-term (0–2 years)
M
Medium-term (2–5 years)
L
Long-term (5+years)
N
Not applicable
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 76
Sustainability report
Task Force on Climate-related Financial Disclosures (TCFD) report continued
Risk Value drivers assessed
Potential annual impact
before mitigation
1
Time horizon Mitigation measures
Chronic
physical risk:
Heatwaves
Potential cost of mitigation of extreme heat in sites at risk of
frequent and severe heat waves (installation and operation of
cooling systems) and probability of potential
production losses
2
.
1
NG
Long-term – Investment in additional insulation and cooling
measures for temperature control in at-risk sites
– Investment in increased automation in our operations
2
NG
Long-term
3
NG
Medium-term
Acute physical
risk: Flooding,
wildfire
Potential cost of mitigating flooding and wildfire risk through
relocation, and potential disruption to production in at-
risk sites
3
.
1
NG
Medium-term – Implementation of additional measures in at-risk sites
– (eg. safety, business continuity, landscaping)
– Investment in increased automation in our operations
– Monitoring risk using climate science and models
2
NG
Medium-term
3
NG
Medium-term
Transition
risk: Increased
pricing of
carbon
emissions
Future costs of carbon applied to Group-wide Scope 1 and
Scope 2 emissions using IPCC estimates for prices per tonne of
carbon under different scenarios. (Tonnes CO
2
e x projected
cost per tonne)
4
.
1
SV
Long-term – Carbon cost inflation recovery through pricing
– Alignment to SBTi emission reduction pathways
– Continuous reduction in absolute energy consumption,
decreasing carbon emissions
– Investment in increased automation in our operations
2
MD
Long-term
3
–
Not applicable
Transition risk:
Increased
regulation of
GHG emissions
Accelerated decarbonisation of operational processes through
investment in LPC furnaces (electrically powered, low
consumption) and retrofitting gas heated furnaces to be
powered by electricity. (Price premium of replacing to lower-
carbon technology/assumed transition time)
5
.
1
LO
Long-term – Continued deployment of lower emissions Specialist
Technologies and low-carbon heat treatment services
– Energy reduction and decarbonisation measures
– Monitoring of regulatory landscape to ensure timely
action and compliance
2
–
Not applicable
3
–
Not applicable
Climate risks quantitative impact assessment
1
Scenario 1
NG
Negligible (<£1m)
2
Scenario 2
LO
Low (£1m–£5m)
3
Scenario 3
MD
Moderate (£5m–£10m)
SG
Significant (£10m–£20m)
SV
Severe (>£20m)
1 Costs before current and planned mitigation measures.
2 Site risk assessed using CMIP6 data from the World Bank
Climate Knowledge Portal, a combination of two indicators:
Hot Day Heat Risk Categorisation and Cooling Degree Days.
The indicator Hot Day Categorization (used in the past) has
been updated this time to a Hot Day Heat Risk Categorization
indicator. This updated indicator presents the compounded risk
categorisation (0-4) of temperature-based heat + population or
temperature and humidity-based heat + population, enabling
users to understand where and when risks may occur.
The main change to the indicator is that now ‘risk
categorization’ calculations account for high population
densities (eg. high exposure to harsh climate conditions) and
climate conditions (eg. temperature-based). In addition, the
update allows for risk identification at geocoordinate level.
For the 2025 assessment, state/province level data was used
in consistency with the methodology, but where changes
occurred it was validated at geocoordinate level and it was
found that most sites had an even lower risk.
Disruption probability was assessed under the assumption
that heatwaves are 1.2 times worse under scenario 2 and
1.5 times worse under scenario 3 (IPCC data).
3 Probability of risk estimated using WRI Aqueduct, UNEP and
NASA data. The disruption probability for each site is assumed
based on past events related to flood and wildfire risks, and the
average cost for site relocation has been provided by TSO.
The potential cost for a given year is the number of sites with
High Risk x cost of moving and the probability of the event
occurring. The risk of production loss due to an extreme
weather event (flooding and wildfires) follows the same
methodology as for heatwaves.
4 Cost of carbon based on Intergovernmental Panel on Climate
Change (IPCC) projections for 2030 – £100 per tonne of CO
2
e in
Scenario 1; £25 per tonne of CO
2
e in Scenario 2. This assumes
emissions will continue into the future, and will not be reduced
by energy/carbon savings opportunities.
5 Assumed transition time: number of pending years to 2050,
assuming that replacement to lower-carbon technology is
gradual across the years.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 77
Sustainability report
Task Force on Climate-related Financial Disclosures (TCFD) report continued
Organisational resilience to climate change
Our climate scenario analysis assesses the Group’s
resilience to climate-related risks and opportunities and
identifies appropriate mitigation actions. As set out in the
risks and opportunities table, we have defined actions to
manage each key risk and opportunity. The diversity of
applications for our services, together with the Group’s
global presence, enhances resilience and supports
opportunities for growth in emerging low-carbon
transition areas.
All risks and opportunities set out in the tables on pages
74 to 76 are integrated into our commercial and
operational planning. Commercial opportunities are
embedded within the ‘Grow’ lever of our business
strategy, while operational risks and opportunities are
incorporated into the ‘Optimise’ and ‘Perform’ levers.
Further details on how we are executing our strategy
across these areas can be found on pages 19 to 21.
The Group has determined that scenarios in which global
warming is limited to 1.5ºC or below 2ºC would be the
most beneficial. Under these scenarios, the business is
better positioned to thrive despite the potential impact of
higher carbon costs, due to the climate-related commercial
and operational opportunities they present and the lower
level of disruption from physical climate impacts.
Potential increases in carbon pricing would be managed
through pricing mechanisms, while the Group’s ongoing,
targeted energy efficiency initiatives would help
mitigate exposure to higher carbon costs. In addition,
continued investment in low-carbon processing
technologies enhances resilience by reducing energy
intensity, supporting long-term growth objectives,
and strengthening alignment with the transition to a
low-carbon economy. Pages 51 to 56 outline how
the Group supports customers in achieving their
environmental sustainability goals.
Risk management
Climate risk and opportunity identification and
assessment
Climate change is a Group principal risk, encompassing
potential physical impacts on operations and supply
chains, as well as transition risks and opportunities from
the move to a low-carbon economy. The Group’s risk
appetite is set annually by the Board.
Bodycote identifies its most relevant climate-related risks
and opportunities through benchmarking, research,
internal consultation, customer engagement, and
consideration of regulatory developments, supported
by external climate data. Climate scenario analysis was
refreshed in 2025, with insights incorporated into the
Group’s Principal Risks register (see page 34).
Climate risks and opportunities are assessed qualitatively
and quantitatively by the Sustainability and Finance
functions, with input and oversight from the
Sustainability Committee.
Climate risk management
Climate risk and opportunity management is led by the
Group Chief Executive, with the Chief Sustainability Officer
responsible for coordinating climate risk and opportunity
assessment, maintaining the climate risk register, and
advising on controls for regulatory, technological, market,
legal, reputational and physical risks.
Climate risks and opportunities are prioritised based on
potential impact, likelihood and magnitude. The Executive
Committee oversees management of priority risks and
opportunities and deployment of additional resources
where required.
The Group’s climate risk and opportunity management
plans are updated at least annually. Climate scenario
analysis informs transition planning and integration of
climate-related opportunities into commercial offerings
and operations. Key mitigation and realisation strategies
are set out on pages 74 to 77.
Integration of climate risk into overall risk management
Climate risk is assessed alongside other business
risks within the Group’s risk management framework.
Ownership is assigned to key executives and senior
leaders, with climate risk assigned to the Chief
Sustainability Officer. Executive Committee members
review the Group’s principal risks and mitigations
throughout the year to ensure integration into strategic
and financial planning.
The Group’s principal risk assessment, including climate
risk, is maintained by the Group Head of Internal Audit and
Risk. Operational risk management is supported by Group
policies, controls and training, and overseen by Executive
Directors, functional leaders and divisional management.
The Group Head of Internal Audit and Risk reports on
Group risks to the Board and separately reports on
assurance matters to the Group Audit Committee.
Climate risks are monitored throughout the year, with
identification, assessment and management supported
by the Sustainability Committee. Risks, scores and
mitigations are reviewed at least twice a year by
the Executive Committee members and twice a year
by the Board.
Metrics and targets
Climate-related metrics
The Group monitors a range of metrics to assess climate-
related risks and opportunities and track performance
against targets. The following metrics are tracked:
– Scope 1 and Scope 2 emissions (CO
2
e);
– CO
2
e emissions intensity (CO
2
e/£m revenue);
– energy consumption (MWh);
– energy intensity (MWh/£m revenue); and
– % renewable electricity use.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 78
Sustainability report
Task Force on Climate-related Financial Disclosures (TCFD) report continued
These metrics are monitored by the Executive Committee,
and the Board receives regular reports on energy usage
and emissions. ESG measures are incorporated into
executive remuneration. Climate-related data is tracked
through our Group-wide EHS management platform.
Other climate-related metrics
Energy consumption remains the Group’s most material
environmental topic, reflecting the nature of our
operations. Although our processes are not inherently
water-intensive, water is used in certain activities and
wastewater arises from processes such as degreasing;
water use, wastewater and related chemical consumption
are therefore monitored. Water use data is reported on
page 63. In 2025, we continued to enhance climate-related
metrics to support performance management and risk
oversight, and completed our second year of Group-level
waste data reporting, alongside ongoing improvements to
asset-level data for benchmarking, operational efficiency
and net-zero evaluation.
Climate-related opportunity metrics
The Group’s climate strategy presents both commercial
and operational opportunities:
Commercial opportunities
Bodycote has a significant opportunity to support
customers in reducing emissions and energy
consumption. We track customer sustainability
requirements and related business opportunities,
particularly those linked to carbon reduction goals.
We proactively engage with customers to demonstrate
how we can support delivery of their objectives.
Operational opportunities
Reductions in the Group’s carbon emissions help lower
customers’ Scope 1, 2 and 3 emissions when services are
outsourced to Bodycote. The Group also benefits from
reduced energy use, lower operating costs and decreased
financial risk. Further details on operational carbon
reduction projects are provided on page 60.
The Group’s Scope 1 and 2 emissions decreased by 8.5%
in 2025, and CO
2
e per £m revenue fell by 4.7%. Location-
based emissions are shown in the below table, and
five-year data is included in the Environmental Leadership
section. Market-based emissions are reported on page 60,
UK emissions and energy data on page 62, and a
breakdown of energy use by type on page 60.
Bodycote applies an operational control approach to
emissions reporting. Scope 1 and 2 emissions and energy
data for 2025 have been independently assured by
Carbon Calculated, with Scope 3 assurance underway.
Assurance statements are published on our website.
GHG emissions and related risks
GHG emissions Associated risks
2025
tCO
2
e
Scope 1 – Price volatility of fossil fuels
– Future carbon taxes
123.6
Scope 2 – Fluctuation in electricity costs
(including impacts of fossil-
fuel sourced generation and
future carbon taxes)
109.7
Total Scope
1 and 2
– Customer appetite for lower
emission solutions
– Faster than expected growth
resulting in an increase in
emissions beyond
planned mitigation
233.3
Scope 3 – Price fluctuation in energy
intensive supplies such as
industrial gases
124.2
Scope 3 emissions
Although the Group’s Scope 3 emissions remain below
SBTi’s 40% materiality threshold, Bodycote has set
reduction targets aligned with SBTi best-practice
methodology. These targets cover almost 70% of the
Group’s Scope 3 footprint and include the following:
– reduce absolute Scope 3 GHG emissions from fuel-
and energy-related activities by at least 45% by 2030
from a 2019 base year; and
– ensure that 30% of suppliers (by emissions) of
purchased goods and services have science-based
or other carbon reduction targets by 2030.
We are in our second year of reporting the Group’s full
Scope 3 footprint and are making progress against our
reduction targets, as set out on page 62.
Climate-related targets
Bodycote achieved its first SBTi-validated target six years
early in 2024. In 2025, the Group validated a new
1.5°C-aligned target to reduce absolute Scope 1 and 2
emissions by 46% by 2030 from a 2019 base year.
This target is significant because the majority of the
Group’s total emissions arise from Scopes 1 and 2.
Energy efficiency initiatives support customers by
optimising thermal processing, lowering energy use and
reducing emissions, contributing to their own
decarbonisation objectives. To further support customers,
the Group has developed proprietary carbon calculator
tools, validated by Bureau Veritas, to quantify the
emissions and environmental impact of its heat and
surface treatments. These tools enable customers to
assess service impacts and potential avoided emissions
by outsourcing (see page 52).
Our position on carbon offsets
In line with a science-based approach, Bodycote prioritises
absolute emissions reductions. Carbon offsets may be
used in future only to address residual emissions or as a
supplementary measure.
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 79
Sustainability report
Non-financial and sustainability information statement
In accordance with the Non-Financial Reporting Directive,
the table opposite sets out key policies and standards
that govern our approach and due diligence in relation
to environmental, employee, social, human rights,
anti-corruption and anti-bribery matters, along with
references to additional information included elsewhere
in this report.
The required information about the business model
can be found on page 24.
Information about non-financial Key Performance
Indicators that are aligned to our business strategy
can be found on pages 22 to 23.
Our climate-related financial disclosures can be found
on pages 71 to 79.
Our principal risks are summarised on pages 31 to 37.
Our Group policies can be found on our website:
www.bodycote.com/investors/governance/our-policies/.
Compliance with our policies is monitored by our Board,
Executive Committee, through our Internal Audit function
and, locally, by our General Managers.
In line with the Companies (Strategic Report) (Climate-
related Financial Disclosure) Regulations 2022, we have
disclosed fully under these requirements (pages 71 to 79).
Reporting
requirement
Group policies that
guide our approach
Information about actions, metrics and targets
and risk management with page references
Environmental
matters
– Environmental Policy
– Environmental Re-baseline, Restatement
and Reporting Policy
– Supplier Code of Conduct
– Renewable Electricity Policy
Company purpose and values, page 8
Sustainability report, pages 47 to 79
Principal risks and uncertainties, pages 31 to 37
TCFD disclosures, pages 71 to 79
Our business model, page 24
Section 172 statement, pages 39 to 41
Employees
– Occupational Health & Safety Policy
– Equality, Diversity and Inclusion Policy
– Our Values
– Code of Conduct
– Human Rights Policy
– Open Door Policy
– Sexual Harassment Policy
Company purpose and values, page 8
Sustainability report, pages 47 to 79
Employee engagement, pages 43 and 64
Principal risks and uncertainties, pages 31 to 37
Our business model, page 24
Section 172 statement, pages 39 to 41
Social
matters
– Code of Conduct
– Human Rights Policy
– Supplier Code of Conduct
– Board Diversity and Inclusion Policy
– Data Protection Policy
Company purpose and values, page 8
Sustainability report, pages 47 to 79
Our business model, page 24
Section 172 statement, pages 39 to 41
Respect for
human rights
– Human Rights Policy
– Anti-Slavery and Human Trafficking Policy
– Supplier Code of Conduct
– Conflict Minerals Procedure
Company purpose and values, page 8
Sustainability report, pages 47 to 79
Section 172 statement, pages 39 to 41
Principal risks and uncertainties, pages 31 to 37
Anti-corruption
and anti-
bribery matters
– Supplier Code of Conduct
– Anti-Facilitation of Tax Evasion Policy
– Anti-Bribery and Corruption Policy
– Competition and Anti-Trust Policy
– Data Protection Policy
– Anti-Money Laundering Policy
– Open Door Policy
Sustainability report, pages 47 to 79
Principal risks and uncertainties, pages 31 to 37
Report of the Audit Committee, page 102
Bodycote recognises the role we can play in advancing
the United Nation Sustainable Development Goals
(SDGs) by integrating sustainable practices into our
operations and influencing positive change in society.
In line with our strategy, we have identified five
key SDGs where we contribute to these crucial
global goals:
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 80
GOVERNANCE
IN THIS SECTION
Compliance with the UK Corporate
Governance Code
82
Chair’s introduction 83
Board of Directors 84
Executive Committee 86
Corporate governance statement 87
Report of the Nomination Committee 98
Report of the Audit Committee 102
Directors’ report on remuneration 110
Directors’ report 127
Directors’ responsibility statement 130
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 81
Compliance with the UK Corporate Governance Code
Bodycote, as a publicly-listed company in the UK,
is required to prepare a corporate governance statement
with reference to the UK Corporate Governance Code.
For 2025, the Company is reporting against the 2024 UK
Corporate Governance Code (the 2024 UK Code), as issued
by the Financial Reporting Council (FRC) and applicable
to financial years beginning on or after 1 January 2025.
The 2024 UK Code sets out the principles and provisions
of good governance for listed companies, with
responsibility for compliance resting with the Board.
Copies are available at www.frc.org.uk.
The Company undertook an internal review of its
governance framework to assess the process
improvements and refinements required to meet the
updated expectations of the 2024 UK Code and to ensure
that the Company would be able to report on a comply
or explain basis against the revised requirements.
The table below sets out where shareholders can find
further information on how the Company has applied the
principles of the 2024 UK Code within this Annual Report.
Disclosures required under DTR 7.2 are also provided
within this Report and, where appropriate, are cross-
referenced to the Strategic Report, Audit Committee
Report and Directors’ Report. For the year ended
31 December 2025, Bodycote also complied with the
relevant requirements of the UK Listing Rules, the DTR,
and other narrative reporting requirements.
Code principles – Board areas of focus
Board leadership and company purpose
– Regularly review the Group’s long-term strategy and
monitoring progress against strategic objectives, including
potential acquisitions
– Establish and regularly reaffirm the Company’s purpose,
values and strategic priorities and monitoring alignment
between expectations, behaviours and culture
– Ensure transparent reporting on key Board decisions and
their strategic outcomes
– Engage regularly with key stakeholders, including
major shareholders, to understand their views
on governance, performance and strategy
– Oversee initiatives that support employee
development, inclusion and engagement
See more
on pages
15 to 18
and
42 to 46
Division of responsibilities
– Ensure the Chair leads the Board effectively, fostering open
debate and facilitating constructive relationships
– Ensure Directors commit sufficient time to their roles and
receive accurate, timely and clear information
– Review Board roles and responsibilities
– Review schedule of matters reserved for the Board and
terms of reference of all Committees
– Convene the AGM and approving all
shareholder materials
– Review of 2024 UK Code requirements
and guidelines
– Review of environmental and health and
safety updates and ensure implementation
of sustainability strategy
See more
on pages
42 to 43,
47 to 49
and
87 to 97
Composition, succession and evaluation
– Review the size, composition and diversity of the Board and
its Committees
– Consider proposals on succession planning for the Board
and senior management
– Completion of the annual Board performance
evaluation reviews
– Tailored induction, when required
– Consider talent management programmes
and the need to develop managers and
executives for the future
– Approve further terms for the
Non-Executive Directors
See more
on pages
95 and
98 to 101
Audit, risk and internal control
– Annual review of principal and emerging risks, risk
management and control systems
– Establish formal policies and procedures for internal and
external audit
– Approve the 2024 year end and 2025 half-year results
– Recommend the final dividend and approving
interim dividends
– Review future scenarios and other factors in relation
to audit, risk and internal control
– Review of viability statement
– Consideration as to whether the Annual Report and
Accounts are fair, balanced and understandable
See more
on pages
102 to 109
Remuneration
– Design remuneration policies to promote long-term
sustainable success, aligned with purpose and values
– Ensure application of the remuneration policy in respect of
Executive Directors’ and Senior Management remuneration
– Review of Chair and Non-Executive Directors’ fees
– Exercise of independent judgement and discretion
in relation to remuneration outcomes
See more
on pages
110 to 126
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 82
Chair’s introduction
2025 marked the first year of the
implementation of Bodycote’s strategic
initiatives designed to enhance
growth and performance. Guided by
a governance culture grounded in
transparency, accountability and trust,
we remain committed to delivering
value for all stakeholders.”
Daniel Dayan
Chair
10 March 2026
Dear Shareholders
On behalf of the Board, I am pleased to present Bodycote’s
Corporate Governance Statement for 2025. Like many
industrial businesses, Bodycote faced macro-economic
headwinds during the year, with mixed and unpredictable
conditions seen across our end markets. Despite this
backdrop, the business remains resilient and continues
to make good operational progress, underpinned by the
disciplined execution of our Optimise, Perform and
Grow initiatives, which have been designed to create a
higher-quality, more resilient and faster-growing Group.
We maintained a strong focus on cost control in our plants
around the world and continued to optimise our central
functions. Throughout the year, the Board, together with
management, has assessed and responded to the risks
and opportunities in our markets to ensure the Group
remains well-positioned.
Board changes
In June 2025, Emmanuelle Dubu was appointed to the
Board as a Non-Executive Director. With considerable
experience in international engineering and a track record
across various leadership roles in global manufacturing
businesses, the Board believes she will be a valuable asset
to the Company. Emmanuelle has also taken up the
position of the director responsible for employee
engagement. Having served for nine years, Patrick Larmon
stepped down from the Board in September 2025 with
our sincere thanks for his considerable contributions.
He was succeeded as Senior Independent Director by
Lili Chahbazi with effect from the 2025 AGM.
Stakeholder engagement
Regular, open and constructive dialogue with shareholders
continued throughout 2025. I again met with several major
shareholders to discuss their views on governance and
related matters. Shareholder and other stakeholder
perspectives continue to inform the Board’s strategy
and planning discussions, ensuring decisions are made
with a focus on long-term value creation.
During the year, the Board visited two operational sites,
one in the UK and one in the US, providing valuable
opportunities to meet colleagues and gain deeper insight
into the business challenges, organisational culture and
employee priorities. The Board also reviewed the results
of the Group’s first annual employee engagement
survey, noting a participation rate of 69% and an overall
engagement score of 79%, both of which compare
favourably to peer scores. The Board acknowledges
areas where elements fell below our high expectations
and management is working to ensure appropriate action
plans are implemented. Further details are set out on
pages 64 and 90.
Sustainability
Significant progress has been made on sustainability
topics during 2025. Climate-related projects were
progressed, both to reduce our own carbon emissions
and enhance customer offerings. The Board has seen
continued momentum across the Group to deliver against
our own climate targets and was pleased to see our first
two sites, both in the UK, achieve zero-emissions. We were
also pleased to see this progress recognised through the
IR Society award for Best Communication of Sustainability
(Mid-Cap). Our Sustainability report sets out the activities
undertaken throughout 2025.
AGM
All Directors plan to attend this year’s AGM, which will
provide an opportunity for shareholders to ask questions
of the Board. I look forward to meeting any shareholders
who can join us.
I would like to extend my thanks to all our stakeholders
for their continued support throughout the year.
Daniel Dayan
Chair
10 March 2026
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 83
Non-Executive Chair
Appointed to Board
January 2022
External roles
Non-executive Chair of Watson
Fuels, Aquaspersions group and
Trend Networks group. NED of
JSM group, Margin Drive Green
Ltd and Dayson Enterprises Ltd.
All non-listed.
Past roles
Chair of CellMark AB from 2021
to 2025, Portals International
from 2020 to 2022 and of Low &
Bonar plc from 2018 to 2020,
Non-Executive Director of
Chemring Group plc from 2016
to 2018 and Chair of Nonwovens
Innovation & Research Institute
from 2014 to 2015. CEO of Linpac
Group and Klöckner Pentaplast
Group from 2015 to 2019 and
CEO of Fiberweb plc from 2006
to 2013. Spent his early career at
Novar plc, ICI and Arthur D Little.
Qualifications
Masters degree in Engineering
from the University of Cambridge.
Member of the Institute of
Mechanical Engineers.
Chief Executive Officer
Appointed to Board
March 2024
External roles
None.
Past roles
Began his career as a design
engineer with John Wood Group
plc. Joined Clyde Bergemann in
2000 as Managing Director, and
subsequently became CEO of
Clyde Process Solutions. Held
several executive management
roles with Howden Group, latterly
as Divisional CEO of the Power,
Environmental and Process
Division. Group CEO of Megger
Group from 2017 to 2024.
Qualifications
Degree in Mechanical
Engineering from University
of Strathclyde and MBA from
Loughborough University.
Chartered Engineer and Fellow
of the Royal Academy of
Engineering. Honorary Doctor
of Science from City University.
Officer of the Order of the British
Empire (OBE).
Chief Financial Officer
Appointed to Board
February 2023
External roles
None.
Past roles
Began his career in strategy
consulting working for the
LEK Partnership. He moved to
investment banking in 1997, as an
equity research analyst covering
the Aerospace & Defence sector
at Kleinwort Benson and then
Deutsche Bank. Joined Rolls-
Royce Holdings plc in 2017 where
he held a number of senior
management positions including
Director of Group FP&A, Vice
President Business Performance
and Deputy Group CFO. Was a
Non-Executive director of ITP
Aero engines in Spain and
Rolls-Royce SMR.
Qualifications
Masters degree in Biochemistry
from the University of Oxford.
Non-Executive Director
Appointed to Board
September 2020
External roles
Non-Executive Chair of Genuit
Group plc. Senior Independent
Director and Audit Committee
Chair of Galliford Try Holdings plc.
Past roles
Held the positions of Chief
Financial Officer at Oxford
Instruments plc, Radstone
Technology plc and at Spirax-
Sarco Engineering plc (stepped
down in September 2020). He was
Non-Executive Director of EMIS
Group plc from 2014, Chair of the
Audit Committee from 2019 and
Senior Independent Director from
2022 until October 2023.
Qualifications
Chartered Accountant, Chartered
Engineer. Fellow of the Institute
of Chartered Accountants and
the Institute of Engineering and
Technology. BEng, Electronic and
Information Engineering from
Queen’s University Belfast.
Board of Directors
DANIEL
DAYAN
JIM
FAIRBAIRN
BEN
FIDLER
KEVIN
BOYD
Senior Independent Director
Appointed to Board
January 2018
External roles
Senior partner at Bain &
Company focused on Industrials
and Energy & Natural Resources
sectors; member of Bain’s Global
Compensation and Promotions
Committee.
Past roles
Began her career as an actuary
before joining Bain & Company.
Qualifications
Graduated with a BSc in
Mathematics from Concordia
University, Montreal followed
by an MBA from INSEAD,
Fontainebleau.
LILI
CHAHBAZI
A
N
R
A
N
R
EEN
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 84
Board of Directors continued
A
Audit
E
Executive
N
Nomination
R
Remuneration
Committee Chair
Board diversity
1 Male 4
2
Female 4
3
White 6
4
BAME 2
1
2
3
4
Board composition
1
Executive Directors 2
2
Independent
Non-Executive Directors
5
3
Independent Chairman 1
2
3
1
Non-Executive Director
Appointed to Board
June 2022
External roles
Chair and Non-Executive Director
of Global Fashion Group and
Chair of its Remuneration
Committee. Non-executive
Director and Chair of the
Remuneration Committees of
Severfield plc and Airtel Africa
plc. Senior adviser for Tillman
Global Holdings.
Past roles
Began her career at Unilever
before moving to Lloyds Bank.
Held the positions of VP Business
Marketing and VP Partnerships
& Emerging Markets at Orange
– France Telecom. Group Chief
Commercial Officer at Ooredoo
Group and former CEO of
Millicom Cellular, Africa. Non-
executive director of Kinnevik
AB, BIMA Mobile and Tele 2 AB.
Freeman of the City of London.
Qualifications
Graduated with a BA from the
University of Brighton in
Business Studies.
Non-Executive Director
Appointed to Board
June 2025
External roles
Non-executive director of
Volution Group plc.
Past roles
Over 30 years across various
leadership roles in global
manufacturing businesses.
Retired from her executive career
in 2024, following several years
as Executive Vice President
and CEO of Sercel, a subsidiary
of Viridien, a Euronext-listed
technology company based in
France. Prior to Sercel, she was
the President of US and Canada at
Dura-Line, a subsidiary of Orbia.
Held a variety of senior business
leadership positions at Tyco Flow
Control, based in Spain, the US
and France, and at Saint-Gobain,
based in France and Italy.
Qualifications
Metallurgist Engineer from Escola
Politécnica da Universidade de
São Paulo.
Non-Executive Director
Appointed to Board
September 2023
External roles
Chief Financial Officer of
Ferroglobe PLC and director of a
number of its subsidiaries.
Past roles
Began her career at Audigest,
Spain, before moving to PPG
Industries. She spent several
years at Vestas Wind Systems
in Spain and then at Trafigura
in Switzerland. She was Chief
Financial Officer at Bekaert in
Belgium, before being appointed
as Chief Financial Officer of
Ferroglobe plc in 2019, based in
the UK. She was also a Non-
Executive Director of Bridon-
Bekaert Ropes Group in the UK
from 2016 to 2018.
Qualifications
Graduated with a Masters
degree in Economics and
Business Administration from the
University of Barcelona.
Group Company Secretary
Appointed
January 2024
External roles
None.
Past roles
Began her company secretarial
career with Enterprise Oil plc,
before joining Shell Exploration
& Production Limited, part of
the Royal Dutch Shell group,
following a takeover in 2002. She
spent eight years with Wolseley
plc (now Ferguson plc) as Deputy
Company Secretary, before
joining Petrofac Limited in 2011,
where she was latterly the Head
of Company Secretariat and
Secretary to the Board.
Qualifications
A fellow of the Chartered
Governance Institute.
CYNTHIA
GORDON
EMMANUELLE
DUBU
BEATRIZ GARCÍA-COS
MUNTAÑOLA
ALISON
BROUGHTON
A
N
R
EA
N
R
A
N
R
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 85
Executive Committee
Bodycote’s strength is its people and technology
and it is our employees who set us apart.
VICKI POTTER
Chief Human
Resources Officer
We are determined that Bodycote should be a place where people feel proud to work,
as well as a place where they feel safe. We are therefore looking to the refreshed
executive team to develop their respective parts of the business to ensure we maintain
consistent standards and implement our values throughout the Group.
METIN BEGECARSLAN
Chief Excellence
Officer
ALISON BROUGHTON
Group Company
Secretary
PAUL CALLAWAY
Chief Information
Officer
MICHAEL HARKCOM
Group General
Counsel
LILY HEINEMANN
Chief Sustainability
Officer
JIM FAIRBAIRN
Chief Executive
Officer
BEN FIDLER
Chief Financial
Officer
HEIDI McNARY
President,
Global ADE
RICK LLOPE
President,
Global AGI
BARIS˛ TELSEREN
Executive
Vice President
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 86
Corporate governance statement
Board leadership and Company purpose
Purpose and values
Bodycote’s purpose is to deliver performance metallurgy
that powers sustainable global progress. The Board
recognises that a clearly defined purpose, supported
by a shared set of values embedded throughout the
organisation, helps to cultivate a culture that drives high
performance and supports long-term success.
Throughout the year, work has continued to strengthen
and embed this culture through leadership behaviours,
performance management, workforce engagement and
the reinforcement of ethical standards. A revised and
updated set of Company values was launched during 2025,
together with a set of ways of working. The Board is
satisfied that the practices and behaviours demonstrated
across the organisation remain aligned with the
Company’s purpose, values and strategy.
Strategy
During the year, the Board provided oversight and support
directed towards delivering our strategic objectives, with a
continued focus on the Optimise, Perform, Grow strategic
levers launched at the Capital Markets Event in December
2024. As part of this work, the Board reviewed evolving
market dynamics, technological developments, changing
customer requirements and ESG-related challenges, with
the aim of ensuring long-term resilience and promoting
sustainable value creation across the business.
Business ethics and culture
A robust culture is one in which the Group’s purpose,
values and strategy are understood and respected by
stakeholders, and in which the operating environment is
inclusive, diverse and engaging, enabling employees to
make a positive contribution. The Board is responsible for
assessing, monitoring and promoting the Group’s culture
and recognises the importance of setting the tone from
the top.
Corporate culture is shaped by the principles against
which the Board monitors how the culture is embedded
and experienced by employees, including our values,
attitudes and behaviours. Implementation of key cultural
messages and expectations is driven through initiatives
led by the Executive Committee and divisional leadership
teams. These initiatives included mandatory training,
targeted communications, leadership engagement
activities, and our first all-employee engagement survey,
with outcomes and progress regularly reported to
the Board.
The Board’s responsibility for purpose, strategy, long-term
objectives and stakeholder engagement plays a central
role in supporting a healthy culture across the Group.
The Board’s Committees also contribute to this oversight,
and the Board acknowledges that cultural development
and monitoring must continue to evolve in line with
stakeholder expectations.
The Board are encouraged to undertake annual site visits
which helps them gain deeper insight into our culture and
operations. These site visits provide opportunities to meet
local management teams and colleagues, observe
operational processes first-hand, and better understand
the technologies and customer requirements specific to
each site. The visits also provide the Board with the
opportunity to see directly the commitment of our people
and how the systems and processes in place support the
consistent delivery of operational performance.
Board members are also invited to attend leadership
events held during the year, where they hear directly the
key messages shared with our management teams on
strategy, performance and future priorities. These events
bring our leaders together to strengthen networks,
encourage greater collaboration, and support the
development of practical solutions to the challenges
facing the Group.
Matters reserved for the Board
The Board is responsible for promoting the long-term
success of the Group for the benefit of all stakeholders and
maintains a formal schedule of matters reserved for its
decision and approval. These include oversight of the
Group’s overall management and performance; approval
of strategy and long-term objectives; and consideration
of the financial statements, budgets, material contracts,
capital commitments and investments, as well as
acquisitions and disposals. The schedule also covers
matters relating to internal controls, risk management
and the Group’s risk appetite, approval of the viability
statement, environmental, social and governance matters,
employee incentive arrangements and Group
related policies.
The matters reserved for the Board are reviewed regularly
to ensure they remain appropriate and reflect evolving
governance expectations. The latest review was
undertaken in October 2025 and updates were made
where required. The latest version of the Matters Reserved
for the Board is available on the Company’s website.
Board activities and key focus areas
The Board’s key priorities include providing leadership and
oversight of the Group’s strategic direction and priorities,
while monitoring financial performance and ensuring that
effective governance and risk management frameworks
are firmly embedded. The Board also takes account of
the views and differing perspectives of the Group’s
stakeholders in its discussions.
During the year the Board and its Committees considered
a broad range of matters, including the development and
refinement of the Group’s strategic plan, progress against
the strategic initiatives, business performance, budgets
and financial forecasts and planning. The Board also
reviewed stakeholder feedback, health & safety
performance, talent development, organisational design,
sustainability matters, regulatory and wider governance
matters, ensuring that these each informed discussions
and supported effective long-term decision-making.
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 87
Board and Board Committees meeting attendance
Each year, the Board follows a comprehensive programme of scheduled meetings, which are supplemented by ad hoc
meetings as required. During 2025, the Board had eight scheduled meetings and Director attendance for those meetings
is set out below. At every meeting, the Chief Executive Officer and Chief Financial Officer provide updates on safety
performance as well as the business and operating performance of the Group.
All Directors are encouraged to participate actively and effectively in Board discussions, with robust scrutiny and
constructive debate forming an essential part of the decision-making process. Non-executive Directors are supported
in seeking clarification from management on any matter requiring further explanation.
Senior Management from across the Group, along with external advisers as appropriate, are also regularly invited to
attend and present at Board meetings to provide updates, context and specialist insight. This engagement allows
specific issues to be highlighted for the Board’s attention and helps Directors appreciate nuances that may not be
immediately evident from written reports. Exposure to a broad range of Senior Management also deepens the Board’s
understanding of the business, strategy implementation and the evolving dynamics of the markets in which the Group
operates. Additionally, it provides an opportunity for Directors to meet and assess key individuals identified through
the succession planning process.
Where relevant, the Chair and Executive Directors are also invited as guests to attend certain parts of the Audit,
Nomination and Remuneration Committees’ meetings during the year.
Board
meetings
Audit
Committee
Nomination
Committee
Remuneration
Committee
Meetings held during the year 8 5 3 6
Directors
Daniel Dayan 8 – 3 –
Jim Fairbairn 8 – – –
Ben Fidler 8 – – –
Lili Chahbazi 8 5 3 6
Kevin Boyd 8 5 3 6
Emmanuelle Dubu
1
5 2 3 3
Cynthia Gordon 8 5 3 6
Beatriz García-Cos Muntañola
2
7 4 2 6
Former Director
Patrick Larmon
3
5 4 2 4
1 Emmanuelle Dubu was formally appointed to the Board with effect from 23 June 2025.
2 Beatriz García-Cos Muntañola was unable to attend the Board and Committee meetings held on one occasion due to a pre-existing
overseas commitment.
3 Patrick Larmon stepped down from the Board on 12 September 2025.
Corporate governance statement continued
The Board’s areas of focus during 2026 are expected
to include:
– Continued execution of strategic priorities, with an
increased emphasis on our ‘perform’ and ‘grow’
initiatives;
– Further strengthening of the Group’s values, culture
and ways of working and issuance of first employee
engagement survey;
– Ongoing monitoring of financial and operational
performance;
– Sustained focus on improving and developing health
and safety performance;
– Consideration of the risks, opportunities and wider
implications of climate change and other sustainability
matters; and
– Regular review of the principal and emerging risks
facing the Group and their potential impact.
2
3
1
4
5
1
Strategic matters 27%
2 Financial matters, including year-end matters 26%
3
Operational updates, including leadership and
sustainability matters
18%
4
Safety, risk management and IT matters 15%
5
Governance, reporting and training 14%
The key activities of the Board undertaken during 2025
are set out in the following chart:
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 88
Stakeholder engagement
The Board recognises that long-term success depends on
effective engagement with all stakeholders, ensuring their
interests are understood and considered in strategic
decisions. It places significant importance on building and
maintaining strong relationships with each stakeholder
group, as this engagement provides valuable insight into
what matters to them and helps the Board assess the
potential impact of its decisions. Understanding these
differing perspectives is integral to Board discussions.
Effective engagement also keeps our Directors informed
of material changes in the operating environment as well
as the wider market, including emerging risks and trends,
which can then be reflected in strategic discussions and
planning. The Company’s Section 172 statement on pages
39 to 41 summarises how we have considered such
interests in our decisions during the year.
Constructive engagement with major shareholders and
other investors throughout the year is regarded as a
critical activity. The Investor Relations team acts as the
primary point of contact, coordinating a comprehensive
programme of meetings and presentations for both
existing and prospective shareholders and other investors.
The Chief Executive Officer and Chief Financial Officer
regularly meet institutional investors, both individually
and collectively, enabling institutional investors to enhance
their understanding of the Group’s strategy and operating
performance. Additional engagement sessions are also
held with stakeholders following the publication of our
full-year and half-year financial results, with attendance at
various conferences also arranged throughout the year.
During 2025 , we have communicated with existing and
prospective shareholders, using a variety of methods,
including:
January 2025 – US investor roadshow
– Investor meetings in the UK and US
following the Capital Markets Event
in December 2024
March 2025 – Full-year results announcement
and results presentations
– UK investor roadshow
– Annual Report and Accounts and
Notice of AGM posted to
shareholders and placed on the
Company’s website
May 2025 – Trading Update
– Annual General Meeting
June 2025 – Scandinavian investor roadshow
– Investor meetings at Paris Air Show
August 2025 – Half-year results announcement and
results presentation
– UK investor roadshow
September 2025 – US investor roadshow
October 2025 – European investor roadshows in
Madrid, Paris and Frankfurt
– Investor meetings on governance
with the Chair
November 2025 – Trading Update
– Investor site visits
In addition to the events listed above, a number of investor
conferences, including those organised by UBS and
Berenberg, were attended throughout the year by our
Chief Executive Officer, Chief financial Officer and Group
Head of Investor Relations primarily in London.
Corporate governance statement continued
BOARD SITE VISIT
During 2025, the Directors held two full Board
meetings at Bodycote sites. The first took place in
Newport, South Wales, UK and the second was to
Eden Prairie, Minneapolis, USA, coinciding with a
visit by the Executive team. Both visits included
presentations from the plant managers, giving
the Board the opportunity to engage with local
management, review business performance, discuss
current opportunities and challenges, and receive
updates on customer activities. Each visit also
enabled Directors to experience the operational
environment within each plant first-hand, allowing
them to better understand our operations.
During these visits Directors were also encouraged
to meet and speak directly with employees.
This gave them valuable insights and provided them
with the opportunity to hear their views and observe
examples of best practice that could be shared
across the business, while answering questions
about Bodycote.
Overall, these visits allow Directors to see and
appreciate the differences across plant locations and
to recognise the scale, diversity and capability of our
operations and workforce. This deeper operational
understanding provides important context that
supports more informed Board decision-making on
future operational matters.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 89
Bodycote’s financial advisers, corporate brokers and
financial public relations consultants provide the Directors
with periodic opinion surveys from analysts and investing
institutions following major company announcements
and meetings with the Chief Executive Officer and Chief
Financial Officer, helping to enhance understanding of
investor sentiment. Analyst research notes are also
routinely circulated to all Directors, with brokers’ reports
included in Board packs.
Up-to-date information on the Group and its share price,
including recent announcements and results
presentations, is available to all stakeholders at
www.bodycote.com. The Chair and Senior Independent
Director (SID) also remain available to discuss any matters
that cannot be resolved through engagement with the
Chief Executive Officer and Chief Financial Officer.
During the year, our Chair, Daniel Dayan, again undertook
a programme of engagement with the Company’s top
twenty shareholders on general governance matters.
Each of these major investors were offered the
opportunity for direct dialogue with the Chair, with
meetings held with a number of shareholders, providing
a valuable forum for discussion of governance topics,
including board effectiveness and other matters of
interest. Feedback from this engagement was shared
with the Board.
Employee engagement
During the year, we continued to strengthen our approach
to employee engagement across the Group. While the
Board and the Executive Committee take every
opportunity to meet with local employees when visiting
different business locations, in line with the Board’s
commitment to fostering open dialogue with employees
at all levels, Emmanuelle Dubu, the new Chair of our
Employee Engagement Groups met with a selection of
employees at one of our US sites, holding a dedicated
meeting to hear first-hand their perspectives and
experiences and to share recommended improvements.
We further expanded the opportunities for communication
this year by holding a Leadership Conference, which
brought together more than 50 leaders from across the
business. This event, attended by the Chair, provided a
platform for sharing strategic priorities, discussing local
and global challenges, and encouraging collaborative
problem-solving solutions.
This year also saw the introduction of General Manager
Conferences for our plant managers. This was the first
time this group of employees had met collectively for
many years, and the aim of the events was to share best
practices, embed the new values, develop leadership
capabilities, and reinforce a consistent approach to culture,
health and safety and operational excellence across
all regions.
Importantly, we conducted our first all-employee
engagement survey, marking a significant milestone in
helping to understand employee sentiment. The insights
generated are currently informing action plans, with
follow-up feedback sessions scheduled with management
teams. In addition, Emmanuelle Dubu will meet with
Employee Engagement Groups during 2026 to discuss
the survey outcomes and planned improvements,
ensuring Board visibility of key themes and supporting
accountability for progress.
Corporate governance statement continued
2
3
1
4
Shareholders by region
1
United Kingdom 51%
2 United States 23%
3 Rest of Europe 18%
4 Rest of World 8%
2
3
1
4
Meetings held with shareholders by region
1
United States 29%
2 United Kingdom 38%
3
Rest of World 14%
4
Rest of Europe 19%
Shareholders’ distribution
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 90
Division of responsibilities
Board roles and responsibilities
The Board is responsible to shareholders for the long-term
sustainable success of the Group. It sets the Group’s
purpose, values and strategic objectives, and ensures
that the necessary resources, capabilities and controls
are in place to support their delivery. The roles and
responsibilities of our Directors are outlined on page 92.
The Board operates in an environment that encourages
openness, constructive challenge and informed decision-
making. All Directors are expected to contribute their
independent judgement, with Non-Executive Directors
encouraged to bring external perspectives and to provide
rigorous scrutiny and support to the Executive team.
Regular meetings throughout the year between the
Chair and Chief Executive Officer ensure ongoing dialogue
on key matters and alignment on strategic priorities.
The Chair and Senior Independent Director also maintain
frequent contact between scheduled Board meetings,
with time also set aside at Board meetings for the Chair to
meet with Non-Executive Directors without management
present. In combination, these meetings support strong
working relationships between the Chair, Executive
Directors and Non-Executive Directors, and ensures the
Chair has a full understanding of the range of views across
the Board. This insight informs agenda planning and helps
ensure that all Directors can participate effectively by
drawing on their individual and collective experiences.
Board information
Directors receive comprehensive and timely information
ahead of each Board meeting to support effective
decision-making. This includes updates on operational
and trading performance, the Group’s financial position,
and performance against prior year budgets and forecasts.
The Board is also provided with regular reports on
environmental and health and safety matters, risk
management issues, and key performance indicators,
including incident severity and frequency rates across
the Group.
The Chief Executive Officer and Chief Financial Officer
provide detailed operational and financial reports,
which are supplemented by briefings from functional
management on matters relevant to their areas.
Cybersecurity is addressed through periodic updates
and briefings from the Chief Information Officer.
In addition, the Board has a programme of briefings from
the Group’s external advisers on relevant regulatory,
market and governance developments. These help ensure
that the Board’s discussions and decisions are informed
by a clear understanding of the Group’s performance
within the context of the wider environment.
Board support
Directors have full access to Executive Management and
to any additional information required to discharge their
duties effectively. The Group also has procedures in place
enabling Directors to obtain independent professional
advice at the Company’s expense, where they consider it
necessary for the proper discharge of their responsibilities.
All Directors have unrestricted access to the Group
Company Secretary, who provides support on governance
and Board matters, and may also raise specific issues with
the Senior Independent Director where appropriate.
A statement of the Directors’ responsibilities is set out
on page 130.
Corporate governance statement continued
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 91
Board governance
The Board seeks to ensure there is an
effective governance framework across the
Group and recognises that the Group’s
long-term success depends on a
commitment to good standards, with
governance an element to be ingrained
in our behaviours, in the way we make
decisions and run our business, rather than
simply a compliance metric.
Our governance framework is therefore
designed to reflect the size, complexity
and global footprint of the Group,
ensuring robust oversight, accountability,
and effective decision-making. The Board
delegates certain responsibilities to
dedicated Committees, with clearly
defined terms of reference. We believe
this governance framework underpins
good governance practices and enables
the Board and senior management to
provide effective strategic leadership
and stewardship of the Group.
As part of the ongoing evolution of its
approach to the management of risk,
during 2026 the Sustainability and Risk
committee will be replaced with two
separate management committees, a
Group Risk Committee and a Sustainability
Committee to further enhance the focus
on these areas across the business.
The Board
Provides leadership and
direction to support the
long-term success of
the Company by setting
a sustainable strategy
and overall governance,
delegating specific
responsibilities to its
principal committees
where appropriate.
It provides rigorous
challenge and oversight
to ensure that robust
processes are in place
for monitoring and
managing risk and for
maintaining effective
internal controls.
Chair
Leads the Board and is
responsible for its overall
effectiveness and the promotion
of high standards of corporate
governance. Oversees the
Board evaluation process and
promotes a culture of openness,
constructive challenge and
informed decision-making.
Ensures efficient information
flows within the Board and
between the Board and
Executive management so
that Directors receive accurate,
timely and clear information.
Leads engagement with
shareholders and wider
stakeholders, ensuring that
their views are understood by
the Board and appropriately
considered in its discussions
and decisions.
Chief Executive Officer
Has overall responsibility for
the Group’s management,
performance and sustainable
success. Leads the development
and execution of strategy, setting
priorities and ensuring the delivery
of objectives. Presents proposals
on matters reserved for Board
decision, ensuring the Board is
kept fully informed of significant
issues, performance and risks.
Supported by the leadership team,
drives operational excellence
and continuous improvement
across the Group. Maintains a
constructive relationship with the
Chair, and leads engagement with
investors and wider stakeholders.
Holds executive responsibility for
the Group’s sustainability agenda,
ensuring it is embedded within
strategy and operations.
Senior Independent Director
Acts as a trusted sounding
board to the Chair and provides
support in ensuring the
effective operation of the Board.
Serves as an intermediary
for other NEDs, offering
an additional channel for
objective advice and challenge.
Leads the appraisal of the
Chair’s performance, meeting
with Directors individually and
collectively as appropriate.
Is available to stakeholders
should they have concerns that
cannot be resolved through the
usual channels or where such
contact is deemed appropriate.
Chief Financial Officer
Responsible for all aspects of the
Group’s financial management,
including financial planning,
budgeting and reporting.
Implements effective financial
controls and provides commercial
and financial leadership to support
informed decision-making.
Oversees the integrity of the Group’s
accounting, finance operations
and risk management. Maintains a
constructive relationship with the
Audit Committee Chair. Builds and
maintains strong relationships with
key external stakeholders, including
investors, lenders and banks.
Non-Executive Directors
Provide independent oversight,
constructive challenge and support
to management, contributing
rigour and objectivity to the
Board’s deliberations. Play a key
role in shaping and monitoring
Company strategy, drawing on
their broad experience and external
perspectives. Review the integrity
and effectiveness of the risk
management and internal control
framework, including financial
reporting systems and controls.
Hold management to account
for the delivery of objectives
and performance outcomes.
Contribute to composition and
succession planning, ensuring the
Board and its Committees have
the appropriate balance of skills,
experience, independence and
diversity to operate effectively.
Group Company Secretary
Advises the Board on governance
and regulatory requirements,
and on developments in
corporate governance best
practice. Ensures effective
Board processes, compliance
with agreed procedures and
efficient information flows.
Facilitates Board and Committee
evaluations, induction
programmes and ongoing
development. Provides support
and guidance to individual
Directors on Board procedures and
general governance matters.
Corporate governance statement continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 92
Management
Committees
Committees
responsible for day-to-
day operational
management and the
implementation of
strategic decisions.
Authorised by the
Board to make
decisions within
defined limits and to
ensure timely execution
of required actions.
Board Committees
The Board delegates
detailed oversight to
specific matters to its
Committees, which
are composed
predominantly of
independent Non-
Executive Directors.
Audit Committee
Reviews and monitors the integrity of the
Group’s financial reporting, the effectiveness
of the internal and external audit processes,
and the adequacy of internal controls.
Assesses and oversees the management of
financial and related risks.
Read more in the Committee report
on page 102.
Executive Committee
Focuses on developing and executing the
Group’s strategy, overseeing the financial
structure, organisational development and
key policies, and monitoring financial and
operational performance.
Sustainability Committee
1
Provides oversight of the Group’s sustainability agenda. Monitors
progress against sustainability objectives and ensures that climate-
related risks and opportunities are appropriately considered within the
Group’s strategy and operations.
1 As noted on page 92, the Sustainability and Risk Committee previously
operated as a combined committee.
Nomination Committee
Ensures the Board has an appropriate
balance of skills, experience, knowledge and
diversity. Oversees Board and senior
leadership succession planning and the
appointment process to support effective
Board composition.
Read more in the Committee report
on page 98.
Finance Committee
Oversees the implementation of treasury and
tax policies and, within Board-approved
limits, authorises capital expenditure and
other significant financial activities.
Group Risk Committee
1
Oversees the Group’s risk management framework, ensuring principal
and emerging risks are identified, assessed and effectively managed.
Reviews the adequacy of internal controls and provides insight and
challenge to support a robust risk culture across the organisation.
Remuneration Committee
Sets remuneration policy and determines the
remuneration of the Executive Directors, the
Chair, and members of senior management.
Oversees the Group’s wider remuneration
framework to ensure it supports the
Company’s strategy and promotes long-term
sustainable performance.
Read more in the Committee report
on page 110.
Disclosure Committee
Oversees the identification and approval
processes for inside information, reviewing
the Group’s disclosure controls and
procedures. Ensures the Group meets its
obligations regarding the timely and accurate
disclosure of information, in accordance with
relevant legal and regulatory requirements.
Corporate governance statement continued
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 93
Composition/succession and evaluation
Board composition
At the date of this report, the Board comprised eight
members, comprising the Chair, five independent
Non-Executive Directors and two Executive Directors.
All Board appointments are subject to formal and rigorous
procedures led by the Nomination Committee and details
of the work undertaken by this Committee during 2025
are set out on pages 98 to 101. Non-Executive Directors,
including the Chair, are appointed for fixed terms of up to
three years from the date of first election by shareholders
(for a maximum of two three-year terms), after which
their appointment may be extended annually by
mutual agreement.
In accordance with the 2024 UK Code, all Directors are
requested by the Board to retire annually and, unless they
have decided to stand down, will offer themselves for
re-appointment at each AGM. In addition, under the
Articles of Association, any Director appointed during the
year must also stand for election at the first AGM following
their appointment to the Board.
Following the internal Board effectiveness review
undertaken in 2025, the Board remains satisfied that it
continues to operate effectively. The Chair also confirms
that each Director has demonstrated the commitment
and capability necessary for their role and that their
performance remains effective. The Board therefore
recommends that shareholders re-elect all Directors at the
2026 AGM, noting that Emmanuelle Dubu will stand for
election at the 2026 AGM having been appointed to the
Board in June 2025. The biographical details of all
Directors are set out on pages 84 and 85.
Service contracts and letters of appointment
Executive Directors are employed under service contracts of employment, the principal terms of these service contracts
are set out below:
Name Position
Effective date
of contract
Notice period from
Company/from
Director Termination
Jim Fairbairn Chief Executive Officer 17 October 2023 12 months/
12 months
Company has right to
terminate on payment of
a termination payment
Ben Fidler Chief Financial Officer 28 October 2022 12 months/
12 months
Company has right to
terminate on payment of
a termination payment
The Chair and Non-Executive Directors have letters of appointment that set out their duties and responsibilities.
They do not have service contracts. The key terms of the appointments are set out below:
Name Position
Date of original
appointment
Date of last
re-appointment
at AGM Notice period
Daniel Dayan Chair 1 January 2022 2025 6 months
Kevin Boyd Non-Executive Director 1 September 2020 2025 6 months
Lili Chahbazi Senior Independent
Director
1 January 2018 2025 6 months
Emmanuelle Dubu Non-Executive Director 23 June 2025 – 6 months
Cynthia Gordon Non-Executive Director 1 June 2022 2025 6 months
Beatriz García-Cos
Muntañola
Non-Executive Director 1 September 2023 2025 6 months
Service contracts and letters of appointment are available for inspection at the Company’s registered office during
normal business hours. In line with the 2024 UK Code, all Directors will seek re-appointment by shareholders at the 2026
AGM, with service contracts and letters of appointment, also available for inspection in the 30 minutes prior to the start
of the AGM.
Corporate governance statement continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 94
Skills and experience
An effective Board requires an appropriate balance of
skills, experience and perspectives. As set out in the
Directors’ biographies on pages 84 and 85, each Board
member brings a distinct and varied career background
and relevant expertise. Considerable attention is given to
ensuring that the Board maintains the right mix of
capabilities, knowledge and industry expertise to support
the long-term success of the Group and its commitment to
deliver sustainable growth.
The skills matrix below highlights the key competencies
the Board considers essential for effective oversight and
strategic execution, and shows which Directors bring
those particular skills to the boardroom. The matrix is
reviewed annually to ensure it continues to reflect the
evolving needs of the business.
Development and Training
The Board recognises the importance of ensuring that
Directors continually refresh and develop their skills and
knowledge. In addition to training available to all
employees across the Group, Directors are also
encouraged to participate in external seminars,
conferences and training programmes to remain informed
on relevant regulatory, governance and industry
developments. Board meetings routinely include
presentations from internal experts to provide the
Directors with insight into key operational, technical and
functional areas. Directors also receive briefings from
external advisers and subject matter experts to deepen
their understanding of emerging trends and issues.
To maintain a strong understanding of the Group’s
operations, every year the Board undertakes site visits,
which provides it with opportunities to meet local
management teams and gain first-hand exposure to the
technologies, operational processes, health and safety
standards, logistics, and customer requirements relevant
to each plant. During 2025, the entire Board made visits to
the Group’s plants in Newport, South Wales, UK and
Eden Prairie in Minnesota, USA. Further details are set out
on page 89.
Board performance reviews
The Board recognises the value of a formal annual
performance evaluation process in supporting its
continuous improvement. Regular assessments provide
an opportunity to reflect on individual and collective
performance, identify strengths, highlight areas for
development and ensure the Board continues to operate
effectively in promoting the long-term sustainable success
of the Group.
In line with the 2024 UK Code, the Board undertakes an
annual evaluation of its own performance and that of its
Committees, with externally facilitated reviews conducted
at least every three years. The evaluation process
considers how effectively the Board operates, the quality
of discussions and decision-making, and the contribution
of each Director.
Daniel
Dayan
Jim
Fairbairn
Ben
Fidler
Lili
Chahbazi
Kevin
Boyd
Emmanuelle
Dubu
Cynthia
Gordon
Beatriz.
García-Cos
Muntañola
Strategy
M&A
International
Recent and relevant financial experience
Corporate finance/treasury
Accounting
Customer
Sales and marketing
Service industry
Environmental, including climate change
Governance
Engineering
Leadership
Emerging markets
Manufacturing
Capital-intensive industries
Corporate governance statement continued
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 95
As part of the three-year evaluation cycle and in line with
the FRC’s Guidance on Board Effectiveness, the 2024
review was externally facilitated by Dr Sabine
Dembkowski of Better Boards. This external process
involved a review of Board and Committee materials,
an online questionnaire and individual interviews with
each Director. Dr Dembkowski also observed the Board
and Committee meetings held in July 2024, subsequently
presenting her findings and recommendations to the
Board in September 2024. The Board discussed this
review in detail, with the outcomes informing the Board’s
priorities and activities during 2025.
Progress following 2024 external performance review
Recommendation Action taken
Better focus and alignment around
Company purpose
Opportunities were identified to further strengthen the alignment and consistent
messaging with the Company’s purpose across the organisation, reinforcing the
link between purpose, culture and performance.
Allow more time to discuss the
development of strategic initiatives
The format of Board meetings were reviewed to ensure there was sufficient time
set aside for key discussions, creating sufficient space for reflection and feedback.
Understanding and confidence in the new strategy was strengthened, with several
deep-dive presentations provided throughout the year, to ensure the business was
able to fully deliver on the strategy. Meeting agendas have also been adjusted to
allow additional time for more strategic value-add discussions, with Board
members actively encouraged to provide input and feedback during meetings.
Review the structure of Board and
Committee papers to ensure
high-quality information is submitted
to inform decision-making
New templates for papers have been developed to better articulate key
information and actions. This paper simplification has facilitated improved
discussions and constructive engagement during meetings.
Strengthen Board dynamics A review of the skills and experience required on the Board was undertaken
as part of the NED recruitment process during 2025. Relationships between
management and the Non-Executive Directors have been further strengthening
during the year, ensuring constructive relationships have been maintained,
and greater use of their skills and experience undertaken.
Increased focus to be given to
succession planning and talent
management
Succession planning and a talent review of the Executive Committee and their
direct reports was undertaken by the Nomination Committee in November 2025.
Focus was given to ensuring robust succession plans are in place across the
Group. The Board are satisfied that investment in leadership development and
broader capability development initiatives are appropriate.
During 2025, the Chair and Group Company Secretary led an internally-facilitated evaluation of the effectiveness of the
Board and its Committees. This review consisted of confidential questionnaires completed by all Directors and regular
meeting attendees, with the findings presented to the Board and each Committee in November 2025. The Board and
Committees reviewed and discussed the outcomes of the performance review, together with proposed actions to further
enhance their effectiveness. Progress against these areas will be discussed and reviewed throughout the year.
The Senior Independent Director also led the Non-Executive Directors in a review of the Chair’s performance, with
feedback provided to him directly. Following completion of the performance evaluation process, the Board remains
satisfied that it continues to operate effectively and believes the Directors are performing well and as would be expected
within their relevant roles.
Year 2
Internal
evaluation
Year 1
External
evaluation
Year 3
Internal
evaluation
Board
performance
evaluation
cycle
Corporate governance statement continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 96
A number of opportunities for improvement emerged from the 2025 internal evaluation review process.
The Board and its Committees intend to work through these proposed suggestions over the coming year:
Action plan following 2025 Board performance review
Areas for improvement Action Plan
Board – Deepen strategic discussions and broaden oversight of risk, particularly
non-financial risk
– Obtain enhanced insight into market trends and stakeholder perspectives
– Continue to review meeting agendas to ensure appropriate focus and
prioritisation and simplify papers to give greater focus to strategy over
operational content
Audit Committee – Continue optimisation of the internal control framework
– Continue progressing the Internal Control review to ensure the Provision 29
reporting requirements can be delivered
– Strengthen governance and compliance oversight
Nomination Committee – Broaden succession planning processes below Board level
– Increase visibility of, and engagement with, the leadership pipeline
Remuneration Committee – Explore greater creativity in remuneration design
– Enhance benchmarking to ensure alignment with shareholder expectations,
market competitiveness and long-term strategy
– Refine performance measures and undertake review of advisory support
Audit, risk and internal control
Internal control and risk management
The Board is responsible for setting the Group’s risk
appetite and ensuring that robust internal control and
risk management systems are in place and operating
effectively. The Group maintains processes across all
business areas to identify, assess and manage significant
risks, with regular oversight to ensure that these systems
remain both appropriate and proportionate to the scale
and complexity of the business. Further information on
the Group’s risk management framework is provided
on pages 31 and 32.
The Audit Committee supports the Board in discharging
these responsibilities. It provides independent and
rigorous oversight of the integrity of the Group‘s financial
reporting, the effectiveness of the internal control and risk
management systems, and the performance of both the
internal and external audit functions. Details of the Group’s
policies, procedures and assurance activities relating to
financial reporting and internal control can be found in the
Audit Committee Report on pages 102 to 109.
Remuneration
Remuneration Report
The Directors’ Remuneration Report is set out on pages
110 to 126. This report describes the work of the
Remuneration Committee in determining Director
remuneration, overseeing senior management
remuneration and reviewing workforce remuneration and
related policies. Each of our Non-Executive Directors are
members of the Remuneration Committee, which enables
them to ensure the Group’s remuneration policy and
remuneration arrangements remain fully aligned with the
Group’s strategic objectives.
Annual General Meeting
The 2026 AGM will be held on 27 May 2026 in accordance
with the Notice being sent to shareholders under separate
cover. All resolutions to be considered during the AGM will
be conducted on a poll, with the results announced to the
market as soon as practicable after the meeting.
By order of the Board:
Alison Broughton
Group Company Secretary
10 March 2026
Corporate governance statement continued
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 97
Report of the Nomination Committee
The Committee ensures the
Board comprises individuals with
an appropriate balance of skills,
perspectives and experience,
willing and ready to engage with the
opportunities, challenges and risks
facing Bodycote. The Committee
focuses on maintaining a highly
effective Board, ensuring it is
supported by individuals whose diverse
backgrounds meet the Company’s
current and future needs.”
Daniel Dayan
Chair
10 March 2026
Committee membership Attendance
Chair Daniel Dayan 3/3
Members Kevin Boyd
Lili Chahbazi
Emmanuelle Dubu
1
Beatriz García-Cos Muntañola
Cynthia Gordon
3/3
3/3
1/1
3/3
3/3
Former Member Patrick Larmon
2
2/2
1 Emmanuelle Dubu joined the Committee following her
appointment to the Board with effect from 23 June 2025.
2 Patrick Larmon stepped down from the Committee when he
retired from the Board on 12 September 2025.
Role and responsibilities
– Lead the process for identifying, evaluating and
recommending candidates for appointment to the
Board and senior leadership positions, using objective
and transparent selection criteria.
– Regularly review the structure, size and composition of
the Board and its Committees, ensuring it retains the
right balance of skills, experience, independence and
diversity to support the Company’s strategic direction.
Make recommendations to the Board regarding
any changes.
– Review and consider succession planning for the
Executive Directors and other senior executives.
– Review and monitor Board performance and
effectiveness, including committee structure
and membership, to ensure strong governance and
alignment with evolving corporate requirements
and best practice.
Terms of reference
– The terms of reference for the Committee were reviewed
during 2025 and can be found at www.bodycote.com.
Chair’s introduction
I am pleased to introduce the Report of the Nomination
Committee for 2025. This report provides an overview of
the work of the Committee and details its activities during
the year.
During 2025, the Committee’s primary focus was on the
Board’s composition, reviewing the Board’s skills and
capabilities against the current and future needs of the
Company to ensure an optimal mix of experience and
expertise, as one member of the Board reached nine
years’ service and would, therefore, step down.
The Committee also considered director performance and
oversaw senior management succession plans to support
effective leadership and successful strategy execution.
2
3
1
4
5
1
Board composition 28%
2 Governance and reporting 22%
3
Succession planning 22%
4
Director performance 17%
5
Diversity and inclusion 11%
How the Committee spent its time during the year
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 98
Report of the Nomination Committee continued
Board composition and changes
During the year, the Committee reviewed the Board’s size
and composition, with focus given to planning for the
transition of our long-standing Non-Executive Directors
and reviewing the changes required to one of our key
Board roles.
Recognising that Patrick Larmon’s tenure on the Board
would reach nine years in September 2025, a search
process was undertaken in early 2025 to identify a new
Director to join the Board, coupled with identifying and
appointing a successor to the role of Senior Independent
Director. Following a thorough recruitment process led by
the Chair of the Board, we welcomed Emmanuelle Dubu to
the Board as an independent Non-Executive Director with
effect from 23 June 2025. Emmanuelle is an experienced
international engineering executive, with a track record of
over 30 years across various leadership roles, including
CEO, in global manufacturing businesses. It is envisaged
that her metallurgy background, coupled with her
international industry and commercial experience will be a
valuable contribution to the Board. Emmanuelle will stand
for election by shareholders at the 2026 AGM.
On behalf of the Board, I would like to extend our thanks to
Patrick Larmon for the valuable contribution he has made
over his nine years on the Board, in particular, his wise
counsel as Senior Independent Director. Lili Chahbazi was
appointed as Senior Independent Director with effect from
the 2025 AGM, succeeding Mr Larmon. Emmanuelle Dubu
assumed the role of Chair of the Employee Engagement
Group from 13 September 2025 when Patrick formally
stepped down from the Board.
As part of the recruitment process, the Committee
engaged external search consultancy Korn Ferry to
identify suitable candidates for this non-executive
vacancy. Recognising that the Committee remains
committed to ensuring that the best available candidate
fills any Board appointment irrespective of any other
consideration, Korn Ferry were briefed on our equality,
diversity and inclusion policy and were required to reflect
this in the long list submitted to the Committee.
Following the changes made during the year, the
Committee is satisfied that the Board’s composition
remains well-balanced, with the appropriate skills,
experience, capabilities and background, and that the
Committee has met all relevant UK Corporate Governance
Code (UK Code) and UK Listing Authority requirements.
Induction
On appointment to the Board, all Directors receive a
tailored and comprehensive induction programme,
designed to address each individual’s differing needs and
concentrating on key focus areas. This ensures they are
fully prepared for their new roles, taking their background
and experience into consideration. Each programme also
considers existing expertise and any prospective Board
or Committee positions. It includes meetings with
senior management and external advisers to provide
an introduction to the Group’s businesses and culture,
the competitive environment and the UK regulatory
and governance landscapes. Details of Emmanuelle
Dubu’s induction as a Non-Executive Director are set
out on page 100.
Board evaluation
In line with our three-year cycle, this year’s Board
evaluation was internally facilitated, following the external
evaluation completed in 2024. Further details on the
review and the resulting actions can be found on pages
96 and 97.
Training
The Board recognises that continuous training and
development is essential to maintaining effective
governance. The Company is committed to providing
tailored training to ensure each of the Directors refresh,
update and enhance their skills, knowledge, and
capabilities. Given the evolving regulatory landscape in
which the Group operates, it is vital that the Board
remains informed of recent and relevant legal and
regulatory developments in addition to market practice.
To this end, the Group Company Secretary provides
regular updates on any governance, legislative and
regulatory developments that may impact the Group and,
where relevant, these are supplemented by briefings
from external advisers on significant and strategic and
significant topics as part of the annual Board programme.
As part of our mandatory training programme, all
Directors are required to complete online courses relevant
to Bodycote’s operations, covering both statutory
obligations and ethical responsibilities. Topics include
directors’ legal duties, competition law, anti-bribery and
corruption, anti-facilitation of tax evasion, share dealing,
data protection, IT and cyber-security, sexual harassment,
and modern slavery regulations.
Succession planning
A key responsibility of the Committee is to ensure a
stable and effective leadership framework is in place
and to proactively manage changes that may affect the
Company’s future leadership needs, across both Executive
and Non-Executive roles. Ensuring the correct leaders are
in place is essential for the organisation to compete
effectively and to meet its obligations to stakeholders.
Succession planning therefore remains an area of focus
for the Committee, with significant attention given to the
development of the Group’s future leaders to promote a
strong, resilient and diverse talent pipeline.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 99
Report of the Nomination Committee continued
During 2025, the Committee reviewed senior management
succession plans, supported by work undertaken by
management to ensure the organisational structure
remains appropriate for the strategy changes underway.
The Committee remains satisfied that the succession
process is sufficiently robust to create options to fill key
vacancies that arise to be filled, while maintaining a broad
approach to diversity. It also recognises that, in a business
the size of Bodycote, internal successors may not always
be available for every role and therefore endorsed the
recruitment of external candidates where necessary to
strengthen the skills and capabilities needed within the
senior leadership team.
The Committee will continue to work closely with
management to ensure a strong pipeline of talented
individuals is available to support the Group in delivering
its business objectives and achieving its strategic goals.
Committee governance
In line with the UK Code, the Committee is chaired by
the Chair of the Board and comprises all Non-Executive
Directors. Only Committee members have the right to
attend meetings, although other individuals and external
advisers may be invited to attend all or part of any
meeting, when appropriate.
During the year, the Committee reviewed potential
conflicts of interest arising from Directors’ external
fiduciary responsibilities and concluded that no
inappropriate conflicts existed. The Committee also
retains the authority to request any information it deems
necessary from any officer or employee of the Company
or its subsidiaries. In performing its duties, the Committee
is authorised by the Board to seek independent advice,
including legal or other professional support at the
Group’s expense, and to commission external
investigations considered necessary.
Diversity and inclusion
Diversity and inclusion continue to be key priorities for
the Committee, which recognises that diversity extends
beyond gender balance or geographic location.
It encompasses building a workforce that reflects a broad
range of backgrounds, experiences and social identities,
and fostering an inclusive culture where all employees and
stakeholders feel valued and respected. The Committee
and the Board believe that an inclusive and diverse
workforce strengthens performance, enhances
productivity, and supports the Group’s ability to operate
successfully across its varied markets and geographies.
As a global business with operations in more than
20 countries, inclusion is integral to our culture and how
we operate. While progress has been made in improving
gender diversity at Board and Senior Management level,
as referenced in the 2025 FTSE Women Leaders Review,
the Committee acknowledges that further progress is
needed, particularly given the historically male-dominated
nature of the engineering profession, and remains
committed to continued improvement in this area.
In 2024, and in line with the requirements of the
UK Listing Rules and the 2024 UK Code, the Committee
recommended the adoption of a Board Diversity and
Inclusion Policy. This policy, approved by the Board,
sets out the Board’s commitment to achieving the targets
of having at least 40% female representation, ensuring at
least one senior Board position is held by a woman, and
maintaining at least one director from an ethnic minority
background. It also recognises that short-term periods of
non-compliance with these targets may occur during
Board transitions and changes. The Committee is pleased
to confirm that all three diversity targets were met
during 2025.
Non-Executive Director: Emmanuelle Dubu
Strengths
– Over 30 years’ experience across
various leadership roles in global
manufacturing businesses
– Broad commercial expertise from previous
executive roles, including as a CEO
– An experienced international engineering
executive with a metallurgy background
Induction programme
Emmanuelle Dubu’s induction programme started
on her appointment in June 2025 with a focus on
increasing her knowledge of Bodycote plc and her
understanding of the role and duties of being a
director of a UK-listed company. An overview of
this programme is set out below:
– Meetings with the Chair and each of the Directors
– Individual meetings with Executive Committee
members, as well as Group functional heads
– Meetings with key advisors, including
corporate lawyers, auditors, brokers, and
remuneration consultants
– Site visits to Newport in the UK and Eden Prairie
Minneapolis, USA with the Board, and to
Magny-Cours and Chanteloup-les-Vignes
in France
– Meetings with various employee groups as part
of her Employee Engagement role
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 100
Report of the Nomination Committee continued
In accordance with LR 6.6.6(10), the following tables provide the diversity profile of the Board and Executive
management. This information was collected directly from the individuals concerned, using 31 October 2025 as the
reference date in line with the FTSE Women Leaders Review submission:
Gender representation: Board and executive management as at 31 December 2025
ONS gender category
No. of
Board
members
% of
Board
No. of senior
positions on the
Board (CEO, CFO,
SID or Chair)
No. in
executive
management
% of executive
management
Men (including those self-identifying as men) 4 50% 3 9 64%
Women (including those self-identifying as women) 4 50% 1 5 36%
Non-binary 0 n/a 0 0 0
Not specified/prefer not to say 0 n/a 0 0 0
Ethnic representation: Board and executive management as at 31 December 2025
ONS ethnicity category
No. of
Board
members
% of
Board
No. of senior
positions on the
Board (CEO, CFO,
SID or Chair)
No. in
executive
management
% of executive
management
White British or White Other 6 75.0% 3 13 93%
Mixed/Multiple ethnic groups 1 12.5% 1 1 7%
Asian/Asian British 1 12.5% 0 0 0
Black/African/Caribbean/Black British 0 0 0 0 0
Other ethnic group 0 0 0 0 0
Not specified/prefer not to say 0 0 0 0 0
Further details of female representation at senior management level and across the workforce as a whole are provided
in the Sustainability Report on pages 67 and 68, where we also disclose further details about the Group’s approach to
diversity, equality and inclusion. Our Equality, Diversity and Inclusion Policy and the Board Diversity and Inclusion Policy
are both available on our website.
Annual General Meeting
Having reviewed its independence and contribution to
Board matters, the Committee confirms that all Directors
standing for election and re-election at the 2026 Annual
General Meeting (AGM) continue to perform effectively
and demonstrate the necessary commitment to their roles,
including independence of judgement and sufficient time
commitment for meetings. Accordingly, the Committee
has recommended to the Board that all Directors be
proposed for election and re-election at the forthcoming
AGM. Biographical details of the Directors in office on
31 December 2025 can be found on pages 84 and 85.
As Chair of the Committee, I will be available at the 2026
AGM to answer any questions relating to the work of the
Committee. Questions can also be submitted in advance
of the meeting, either to our registered office address or
to agm@bodycote.com.
On behalf of the Nomination Committee:
Daniel Dayan
Chair
10 March 2026
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 101
Report of the Audit Committee
The Audit Committee continues to
uphold Bodycote’s commitment to a
robust governance framework in light
of the Group’s ambition for growth
and evolving regulatory requirements.
During 2025, the Committee has
particularly focused on: the clarity of
the Group’s financial reporting, financial
risk management, internal controls and
the quality of the external and internal
audit processes.”
Kevin Boyd
Chair of the Audit Committee
10 March 2026
Committee membership Attendance
Chair Kevin Boyd 5/5
Members Lili Chahbazi
Cynthia Gordon
Emmanuelle Dubu
1
Beatriz García-Cos Muntañola
2
5/5
5/5
2/5
4/5
Former Member Patrick Larmon
3
4/5
1 Emmanuelle Dubu joined the Committee following her
appointment to the Board with effect from 23 June 2025.
2 Beatriz García-Cos Muntañola was unable to attend one
Committee meeting due to a pre-existing
overseas commitment.
3 Patrick Larmon stepped down from the Committee when he
retired from the Board on 12 September 2025.
Role and responsibilities
– Encourage and safeguard the highest standards of
integrity, financial reporting, and internal controls.
– Monitor the integrity of the financial statements
including annual and half-yearly reports, trading
updates and any other formal announcements relating
to financial performance.
– Review significant financial reporting issues and
judgements and report its findings to the Board.
– Review the Annual Report and advise the Board
whether, taken as a whole, it is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Group’s position,
performance, business model and strategy.
– Monitor and review the adequacy and effectiveness of
the Group’s internal financial controls and risk
management framework.
– Monitor and review the effectiveness of the Group’s
Internal Audit function including its key findings, any
trends arising, and the implementation of improvements
identified through its work.
– Oversee the relationship with the Group’s external
auditors: including approving their remuneration, audit
scoping and terms of engagement, reviewing audit
outcomes, ensuring compliance with the policy for the
provision of non-audit services, conducting tender
processes and making recommendations to the Board,
subject to shareholder approval, on the appointment,
re-appointment or removal of the external auditors.
– Monitor the Group’s policy on the engagement of the
external auditors to supply non-audit services ensuring
that any such services provided by the auditors are
approved in advance after considering their impact on
auditor independence and taking into account the
relevant regulations and ethical guidance. Report to
the Board on any improvement or action required.
– Review and monitor the external auditors’
independence, effectiveness and objectivity.
Terms of reference
– The terms of reference for the Committee were reviewed
during 2025 and can be found at www.bodycote.com.
How the Committee spent its time during the year
2
3
1
4
5
1
Financial reporting 32%
2
Internal audit 25%
3
Internal controls 15%
4
External audit 17%
5
Governance matters 11%
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 102
Report of the Audit Committee continued
Chair’s introduction
I am pleased to present the Report of the Audit Committee
for the year ended 31 December 2025. This report provides
an overview of the Committee’s key activities and focus
areas during the year, as well as the framework within
which it operates.
The Committee fulfils an important oversight role
providing effective governance over the Group’s reporting,
including the adequacy of related disclosures, the
management and oversight of the Group’s systems of
internal control, the management of financial risks,
the performance of Internal Audit and the evaluation
of the external auditors including their appointment and
re-appointment.
During the year, the Committee continued to focus on the
integrity of Bodycote’s financial reporting, financial risk
management and internal controls as well as the quality of
the external and internal audit processes. The Committee
will continue to keep its activities under review as the
regulatory environment develops.
Kevin Boyd
Chair of the Audit Committee
10 March 2026
Committee membership and meetings
The Committee is comprised entirely of independent
Non-Executive Directors. Their biographical details are
shown on pages 84 and 85, and their remuneration on
page 119. The Group Company Secretary is the secretary
to the Audit Committee.
Kevin Boyd is Chair of the Committee. Mr Boyd is a
Chartered Accountant and a Chartered Engineer with
substantial experience in senior finance roles. The Board
considers that Mr Boyd has the necessary extensive recent
and relevant financial, accounting and sector experience
required to chair the Committee.
All Committee members have significant and widespread
experience in executive and non-executive capacities from
either multinational or industrial companies and are
considered to have competencies relevant to their duties.
The expertise the Committee utilises, together with their
independence, provides good challenge to management
as well as to the internal and external auditors.
The Committee met five times during 2025 and in March
2026. The Committee Chair also invited the Board Chair,
Chief Executive Officer, Chief Financial Officer, Group
Financial Controller and Group Head of Internal Audit and
Risk to attend all of the Committee’s meetings.
Other Senior Management from the Group were invited,
as appropriate, to attend meetings to provide a deeper
level of insight into key issues. The external auditors,
PricewaterhouseCoopers LLP (PwC), attended every
meeting. As part of the process of working with the
Board to carry out its responsibilities and to maximise
effectiveness, regular meetings of the Committee
generally take place shortly before Board meetings.
Mr Boyd also held preparatory meetings separately with
the external auditors, the Chief Financial Officer, the Group
Financial Controller and the Group Head of Internal Audit
and Risk before regular Committee meetings to review
their reports and discuss issues in detail. PwC and the
Group Head of Internal Audit and Risk also met with the
Committee without executive management present.
Main activities of the Committee during the year
The Committee supports the Board in fulfilling its
responsibilities in relation to financial reporting and
assessing the effectiveness of the Group‘s financial
risk management and internal control systems.
The Committee is also responsible for reviewing the
Interim results for the half-year and the Annual Report and
financial statements before recommending them to the
Board for approval. At its meetings, the Committee
focused on the following main areas:
Financial reporting
The primary recurring role of the Committee in relation to
financial reporting is to review, with management and the
external auditors, the appropriateness and integrity of the
Annual Report and financial statements for the year and
the interim results for the half-year concentrating on,
amongst other matters:
– the quality and acceptability of the Group’s accounting
policies and practices;
– the way that management has interpreted and applied
relevant accounting and reporting standards;
– the effect of significant judgements, accounting
estimates and matters where there was a significant
discussion with the external auditors including the
appropriateness of management’s judgements
and estimates;
– compliance with regulatory and governance
requirements;
– the key points of disclosure and presentation in the
Annual Report and financial statements with a focus on
whether they are adequate, clear, complete and in line
with accounting standards;
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 103
Report of the Audit Committee continued
– the appropriateness of the alternative performance
measures used in the Annual Report and
their disclosure;
– the classification of certain income and costs as
exceptional in the financial statements;
– whether the Annual Report, taken as a whole, is fair,
balanced and understandable and provides the
information necessary for shareholders to assess the
Group’s position, performance, business model
and strategy;
– the appropriateness of the external audit scoping and
whether the external auditors applied the necessary
level of professional scepticism in performing
their work;
– reviewing various materials to support the statements
on risk management and internal control and related
disclosures made in the Annual Report and financial
statements; and
– the Group’s readiness for the revised UK Corporate
Governance Code requirements for an expanded
annual declaration on the effectiveness of material
internal controls from its 2026 year-end.
During 2025, the Committee approved a refreshed Group
Accounting Policy Manual providing greater clarity around
the Group’s policies and practices as well as a revised
Minimum Financial Control framework for the Group.
Reports from management were reviewed on significant
matters, accounting judgements and issues, including
outstanding litigation and claims, the Group’s UK defined
benefit pension scheme, business combinations, and
treasury and tax matters. The Committee also reviewed
reports from the external auditors on the outcome of their
work. A summary of the areas of focus considered by the
Committee in respect of the 2025 consolidated financial
statements is set out in the table on pages 105 and 106.
Going concern, viability statement and financial resilience
The Committee receives regular updates from
management on the underlying performance of the
business, the Group’s liquidity and its operational and
financial resilience. The Committee reviewed the 2025
going concern and viability statements and challenged the
assumptions, risk assessments, profit and cash flow
forecasts, liquidity, available borrowing facilities and tests
of banking covenants that were modelled in the Group’s
base, severe but plausible downside and stress
test scenarios.
The Committee challenged the assumptions related to the
effect of current and future inflation and the effects of the
strategic optimisation initiatives on cash flows.
The Committee considered how the cash flows reflected
the cost of actions to be undertaken consistent with the
carbon reduction initiatives agreed with the Science Based
Targets initiative. Sensitivity analyses were undertaken by
management to understand the impact of changes to key
variables and included severe but plausible downside
scenarios and stress testing. The Committee was satisfied
that these represented reasonable assessments of the
Group’s financial position at the date of the consolidated
financial statements. Further detail on the going concern
and viability assessments are set out on pages 30 and 38,
respectively.
Fair, balanced and understandable
The Committee reviewed a paper prepared by
management summarising the form and content of the
Annual Report including a summary of the Group’s
successes and setbacks in the year with an indication of
how and where they were disclosed. The review included
consideration of: the oversight provided during the year
through the Committee’s regular review of financial results
and reports from both management and external auditors,
the regulatory and governance requirements for reporting,
and the process for preparing the Annual Report.
In reviewing that process, the Committee considered the
collaborative approach between all parties required to
contribute to the report to ensure it contains complete,
accurate and balanced information, and the reviews
performed (both internally and externally) to ensure that
feedback was appropriately reflected. In reviewing the
disclosure in the annual report, the Committee considered
whether a balanced view was provided which gave a
similar level of prominence to both good and bad news.
Based on the activities described above and on robust
discussion with both management and the external
auditors, the Committee was satisfied with the work
performed and advised the Board that the Annual Report,
taken as a whole, presents a fair, balanced and
understandable view of the business and its performance
for the year and that it provides the information necessary
for shareholders to assess the Group’s strategy, business
model, position and performance.
In addition to these matters, the Committee
considered the following significant topics impacting
the financial statements:
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 104
Report of the Audit Committee continued
Area of focus Actions
Valuation of goodwill
As set out in the accounting policies, the Group performs
an impairment test over the carrying amounts of goodwill
at least annually. Further details are set out in note 7 of the
consolidated financial statements.
Whilst no impairment was recorded in 2025 (2024: £18.0m)
the assessments in respect of the Global Surface
Technology and Global AGI groups of CGUs were sensitive
to some downside scenarios. Further details are included in
note 7.
The Committee considered reports from management describing the outcome of impairment tests performed at the
year-end. Details of the key assumptions used in those tests and the sensitivity analysis applied as well
as the conclusions reached are set out in note 7 to the consolidated financial statements.
The Committee reviewed management’s reports and challenged the assumptions used including the future forecasts
and business improvement initiatives underlying the calculations of recoverable amounts, the discount rates used, the
effect of future inflationary impacts and the growth factors used in the discounted cash flow calculations for each group
of cash generating units.
Based on those reviews, the Committee was satisfied with the carrying value of goodwill in the annual report and that
no impairment charge was required in the year ended 31 December 2025.
The Committee considered the adequacy of the disclosures included in the Annual Report and was satisfied that the
disclosure provided was appropriate.
Strategic Optimisation Programme
In the prior year, the Group announced a number of
portfolio and footprint optimisation actions which
continued into 2025. During 2025, the Group expanded the
scope of the actions to include additional plants. The actions
resulted in an exceptional charge of £20.9m (2024: £31.9m)
being recorded in the year, largely comprising £17.4m
(2024: £9.3m) of restructuring and site closure costs and
£3.7m (2024: £18.8m) of asset write-downs.
Assumptions and judgement are exercised in the
development of restructuring, reorganisation, legal and
environmental provisions and in the measurement of
recoverable amounts when assessing whether asset
values at affected sites have become impaired.
Further details of the exceptional charge are included
in note 3 to the consolidated financial statements.
Movements in the Group’s provisions in the year are set
out in note 19 and movements in property, plant and
equipment are set out in note 9.
In the prior year, the Committee received a paper from management summarising the accounting for the strategic
actions as well as the basis for treating the associated costs as exceptional. The Committee challenged the principles
applied in determining the timing, measurement and presentation of the related costs.
During 2025, the Committee received periodic updates on the status of the programme and a report summarising the
status of the actions at the year-end.
In respect of restructuring provisions, the Committee considered the status of announcements at the year-end and
challenged management’s judgements as to whether a constructive or legal obligation had been created in respect
of them. The Committee was satisfied that appropriate restructuring provisions had been recorded.
The Committee received a paper summarising the asset write-downs recorded as a result of the strategic restructure.
It challenged the basis on which write-downs had been calculated and was satisfied with the level of
impairment recorded.
The Committee was satisfied with the accounting treatment applied. The Committee considered the adequacy of the
disclosures provided in respect of the Group’s strategic actions including the classification of costs as exceptional and
the associated accounting effects. The Committee was satisfied that the disclosure provided was appropriate.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 105
Report of the Audit Committee continued
Area of focus Actions
Taxation
The Group operates in a number of tax jurisdictions and is
subject to audits and reviews by different tax authorities in
the ordinary course of business.
A number of judgements are involved in calculating tax
provisions and the level of deferred tax assets/liabilities
to be recognised.
Provisions are made based on the tax laws in the relevant
country and the expected outcomes of any negotiations
or settlements.
Recognition of deferred tax assets relating to future
utilisation of accumulated tax losses and other tax assets
is dependent on future profitability and performance of
the underlying business.
Further details are included in notes 5 and 17 of the
consolidated financial statements.
The Committee received regular reports from management about the Group’s most significant tax exposures,
including ongoing tax audits and related tax provisions recognised by management, new legislative developments
that may impact the Group’s tax positions, and the results of both internal and external reviews.
The Committee focused on reviewing, understanding and challenging the Group’s critical tax risks and management’s
assessment of, and accounting for, these risks. In particular, the Committee challenged management’s views on the
future profitability of the businesses related to the Group’s internal cross-border funding arrangements.
The Committee received and challenged reports about the impact of the introduction of the global minimum tax rate
on the Group and management’s process for assessing the impact on the current and future years.
The Committee was satisfied that the Group’s approach to taxation and the associated accounting judgements
was appropriate.
The Committee has supported transparency over the Group’s tax risks and strategy in external reporting. The Committee
reviewed the disclosures about the Group’s tax exposures provided in note 17 to the consolidated financial statements
and was satisfied with the disclosure provided.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 106
Report of the Audit Committee continued
External audit
The Committee is responsible for managing the
relationship with the Group’s external auditors on behalf
of the Board.
The Group last undertook a tender for external audit
services during 2018 which led to the appointment of
PwC at the May 2019 Annual General Meeting. The Listing
Rules require the lead partner to change every five years in
order to protect independence and objectivity and provide
a fresh challenge to the Group. Mr Tim McAllister rotated
onto the audit as Lead Audit Partner for the 2024 audit.
The Committee continues to review the performance of
the external audit and make recommendations with regard
to the re-appointment of the external auditors each year.
In making these recommendations, the Committee
considers auditor effectiveness and independence,
partner rotation and any other factors which may impact
the external auditors’ re-appointment.
At the July Committee meeting, PwC presented its audit
plan for the year end audit with an update presented to
the December meeting The Committee considered,
challenged and agreed the scope and materiality to
be applied to the Group audit and its components.
The Committee gave particular focus to the scope applied
in respect of smaller, more remote, and emerging market
locations and noted that the majority of the Group’s local
audits are performed by PwC. Audit fees for the year were
agreed at £2.4m.
The significant matters that PwC drew to the Committee’s
attention, key audit areas and the audit approach to these
areas are discussed in the Independent Auditors’ Report
on pages 132 to 140.
In order to comply with UK legal requirements regarding
the auditor’s tenure and audit tendering, the external audit
must be put out to tender before the 2029 financial year.
The Committee is cognisant of the geographical spread of
the Group and that a sufficiently long transition period
would be required to allow a new auditor to build up the
necessary knowledge and business familiarity to ensure
the delivery of an effective audit, Any plans to tender the
external audit therefore need to allow time for an
orderly transition.
For that reason, the Committee does not believe that
tendering the audit would be in the best interests of
shareholders at this time. During 2026 the Committee will
start to develop a timeline to ensure that the audit tender
can be completed in time to allow any change to be
effected before the 2029 year-end. The Committee reviews
the performance of PwC as the external auditors on an
annual basis and may choose to commence a tender
earlier if it deems this to be in the best interests of the
Company’s shareholders.
During 2025, the Group complied with The Statutory Audit
Services for Large Companies Market Investigation
(Mandatory Use of Competitive Tender Processes and
Audit Committee Responsibilities) Order 2014.
Assessment of effectiveness
The Committee has adopted a formal framework for the
review of the effectiveness of the external audit process
and audit quality which includes an assessment of the:
– quality, technical skills and experience of the
engagement partners and the audit team;
– audit approach and scope, including the identification
of risk areas;
– quality of reporting to the Committee, the level of
challenge and professional scepticism and the
understanding demonstrated by PwC of the business
of the Group;
– execution of the audit;
– interaction with management;
– communication with, and support to, the Committee;
– insights, management letter points, added value and
reports; and
– independence and objectivity.
An assessment questionnaire was completed by each
member of the Committee, the Chief Financial Officer,
the Group Financial Controller and other senior personnel
involved in the audit at both the corporate and divisional
levels. Senior management received answers and
comments from all questionnaires and consolidated them
into a report. The Committee used this report to assist in
its assessment of the level of external audit effectiveness.
Feedback from the process was discussed and considered
by the Committee and provided to the external auditors
and management. The key outputs of this
assessment were:
– no issues were raised concerning the quality of
either the Group audit partner or the team in the
feedback received;
– the audit had been well planned and delivered, with
work completed and management comfortable that any
key findings had been raised appropriately;
– there was active engagement on misstatements and
appropriate judgements on materiality;
– PwC’s reporting to the Committee was clear and
included explanations supporting its conclusions;
– there was an appropriate level of challenge of
management’s judgements and assertions, including
critical accounting judgements and key sources of
estimation uncertainty, during the audit; and
– PwC demonstrated a good understanding of the Group
and identified and focused on areas of greatest financial
reporting risk.
The Committee assessed the effectiveness of
management in the external audit process by considering
the timely identification and resolution of areas of
accounting judgement, the quality and timeliness of
papers analysing those judgements and other documents
provided for review by the external auditors and
the Committee.
The Committee considered the UK Financial Reporting
Council’s (FRC) Annual Review of Audit Quality 2025 which
included a review of audits carried out by PwC as well as
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 107
Report of the Audit Committee continued
the associated Audit Quality Inspection and Supervision
report in respect of PwC. If the Bodycote audit is selected
for quality review, the Committee understands that any
resulting reports will be sent to the Committee by the FRC.
No such review occurred in 2025.
After considering all of the relevant matters,
the Committee concluded that the external audit
had been effective and objective.
Safe-guarding independence and objectivity
The Committee recognises that the independence of
the external auditors is an essential part of the audit
framework. The independence of the external auditors
was formally confirmed by PwC at the March 2025
Audit Committee and was confirmed again in
March 2026. The Committee considered PwC’s
presentation and confirmed that it considered the
auditors to be independent.
Non-audit services
The external auditors may be invited to provide services to
the extent that their position as auditors renders them best
placed to undertake the work. In order to safeguard the
auditors’ independence and objectivity, the Group does
not engage PwC for any non-audit services unless the
proposed services are permissible in the context of the
FRC’s Ethical Standard, and it is work that the statutory
auditors must, or are clearly best suited to, perform.
Non-audit services, regardless of scope, cannot be
awarded to the external auditors without prior approval
from the Committee Chair on behalf of the Committee.
In addition to the Group’s policy, the auditors run their own
independence and compliance checks, prior to accepting
any engagement, to ensure that all non-audit work is
compliant with the FRC’s Ethical Standard and that there is
no conflict of interest. The only non-audit fees paid to the
auditors in 2025 were for the half-year interim review and a
subscription to a generic accounting and reporting website
which, in total, represented 5% (2024: 5%) of the audit fee
(see note 27 to the consolidated financial statements).
Group Internal Audit
The Group internal audit plan for 2025 was presented to
the Committee for approval in January 2025 having been
reviewed by the newly appointed Group Head of Internal
Audit and Risk. The development of the internal audit plan
took into account the Group’s strategic objectives, key
areas of risk, areas of change, the degree of coverage of
key functions and plants over time and other factors
deemed appropriate by the Committee. The Committee
reviewed and approved the plan.
The Group’s approach to Internal Audit has been
enhanced, with the appointment of an experienced Group
Head of Internal Audit and Risk in late 2024 who provides
independent and objective assurance over key areas of risk
and control. Further enhancements to the Internal Audit
process have also taken place to ensure the focus and
execution of Internal Audit assurance activities is
strategically aligned to the Group’s objectives and risks.
The internal audit approach for 2025 remained focused on
providing assurance over the Group’s principal risks as
appropriate as well as ensuring key financial, IT and
operational controls are considered and included in the
Internal Audit plan over time. A number of internal audits
have been completed during 2025 including reviews in
both the Prague and Dallas shared service centres.
The reviews focused on a range of controls including
accounts payable, expense processes and accounts
receivable, and credit control. Additional reviews have
been completed of Payroll in Prague, the Netherlands and
Poland and newly designed plant audits have taken place
in three key plants in Mexico and two in the UK. In addition
to the delivery of the internal audit plan the Group Head of
Internal Audit and Risk provided advisory support to
management in a number of key areas including Group
Legal, Company Secretariat, Group Finance, IT and HR.
At each Committee meeting throughout the year, the
Group Head of Internal Audit and Risk presented a report
to the Committee on the status of the internal audit plan,
points arising from audits completed, follow-up action
plans to address areas for improvement and any other
observations on key areas of risk and control. The status of
these actions is monitored by the Committee until they
are completed.
The effectiveness of Internal Audit is reviewed and
discussed annually with the Group Head of Internal Audit
and Risk, the Executive Directors and members of the
Committee. This review confirmed that the Group Head of
Internal Audit and Risk was independent, objective and
remained an effective element of the Group’s corporate
governance framework throughout the year.
The Committee continues to support the Group Head of
Internal Audit and Risk in developing the Internal Audit
function. The co-source agreement for the provision of
internal audit services to support the Group Head of
Internal Audit was reviewed within the year and continues
to provide specialised resources to deliver the Internal
Audit reviews throughout the Group globally.
Risk management
The Group Head of Internal Audit and Risk has
responsibility for developing and monitoring the Group’s
risk management framework, and reporting to the
Executive Committee and Board who are responsible for
ensuring risk is effectively managed within the Group.
The Committee reviewed the Group’s financial risk
management and internal control systems’ effectiveness
through regular updates from the Chief Financial Officer,
Group Financial Controller and other members of senior
management, supported by regular reports from the
Group Head of Internal Audit and Risk.
The Committee reviewed changes to the principal financial
risks and mitigating actions identified by management and
also monitored the emerging risk identification process.
It provided its support to the Board in concluding that a
robust assessment of the principal and emerging risks has
been undertaken in 2025.
Further details are set out in the Principal risks and
uncertainties report on pages 31 to 37.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 108
Report of the Audit Committee continued
Internal control including the revised Provision 29 of the
UK Corporate Governance Code
The Board has overall responsibility for the effectiveness
of the Group’s internal control framework.
At each of its regular meetings, the Committee considered
and challenged reports from the Head of Internal Audit
and Risk on the effectiveness of internal controls.
The Committee also performed an annual review of the
Group’s internal control processes and remains satisfied
that management places a strong focus on closing out
internal audit actions on a timely basis. Additional financial
control assurance was obtained through the completion of
control self-assessments by the Group’s plants and letters
representing compliance with key areas of policy and
control by the Group’s divisional finance teams, financial
shared services, tax and treasury and Group finance
teams. Those self-assessments and representation letters
confirmed that internal controls had been in place through
the year, or noted any areas of non-compliance.
The Committee received reports on actual and suspected
frauds and thefts by third parties and employees during
the year; none of which had a material financial
impact on the Group. Employees’ compliance with the
legal requirements concerning fraud and theft, including
those provided by the Economic Crime and Corporate
Transparency Act 2023 is mandatory. Relevant employees
are required to complete online Fraud training based on
their role or seniority. The completion rate amongst those
employees for training issued during 2025 was 88%.
The Committee also received reports on the outcome of
an externally facilitated risk assessment for Anti-Bribery
and Corruption completed in 2025.
The Committee has concluded that the internal control
system is effective in accordance with the Guidance on
Risk Management, Internal Control and Related Financial
and Business Reporting as issued by the FRC (September
2014). Further information is set out on page 31. The Board
is therefore satisfied that the Group maintains an effective
system of internal controls in relation to the financial
reporting process.
The Group is well progressed with its roll-out of the
financial and purchasing modules of SAP S4/Hana. In line
with its focus on strong governance and controls and its
strategic objectives to perform and grow, the Group has
also commenced multi-year initiatives to review and
enhance its payroll and HR systems. The Committee
considers that both of these initiatives will serve to
further enhance the internal controls in those areas in
coming years.
At each of its meetings during the year, the Committee has
been presented with reports, prepared by management,
on the Group’s readiness for the adoption of the revised
provision 29 of the UK Corporate Governance Code from
31 December 2026. These have included an assessment
of the Group’s material controls, and a review of
Risk and Control matrices in respect of those controls.
The Committee will continue to monitor progress in this
important area in 2026.
Tax & Transparency
Bodycote strives to comply with both the spirit and the
letter of all relevant tax laws and regulations in the
countries in which it operates and is committed to
maintaining a transparent and open approach to tax
reporting . The Group’s policy is to file all tax returns
accurately and on time, and to pay taxes as they fall due.
The Group does not engage in any aggressive or
unreasonable tax planning arrangements for the purpose
of tax avoidance and aims to broadly align tax payments
with revenue generation.
During the year the Committee has received various
reports on the Group’s tax compliance and associated
risks, including the status of open tax audits
and assessments.
The Committee continues to support the Group’s
approach to developing and maintaining open,
constructive and straightforward relationships with the
tax authorities in the jurisdictions in which it operates,
supporting compliance and transparency across its Global
operations and its policy of not knowingly assisting others
in avoiding their tax obligations or pursuing tax
advantages through the use of tax havens.
Committee evaluation
The Committee’s activities formed part of the Board
effectiveness evaluation which was undertaken during the
year (see pages 96 and 97). The Committee considered it
had operated effectively during the year. Based on this,
and as a result of the work undertaken throughout 2025,
the Committee has concluded that it has acted in
accordance with its terms of reference and carried out its
responsibilities effectively.
On behalf of the Audit Committee:
Kevin Boyd
Chair of the Audit Committee
10 March 2026
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 109
Directors’ report on remuneration
The Committee has ensured that
remuneration outturns for 2025
reflect the performance delivered
to shareholders and has set the
remuneration packages for 2026 to
focus on growth and delivering
value to shareholders.”
Cynthia Gordon
Chair of the Remuneration Committee
10 March 2026
Committee membership Attendance
Chair Cynthia Gordon 6/6
Members Kevin Boyd
Lili Chahbazi
Emmanuelle Dubu
1
Beatriz García-Cos Muntañola
6/6
6/6
4/4
6/6
Former Member Patrick Larmon
2
3/3
1 Emmanuelle Dubu joined the Committee following her
appointment to the Board with effect from 23 June 2025.
2 Patrick Larmon stepped down from the Committee when
he retired from the Board on 12 September 2025.
Role and responsibilities
– Responsibility for setting and reviewing the
remuneration policy for Executive Directors,
the Company’s Chair and Senior Management
– Ensuring the operation of the remuneration policy
for the Executive Directors and Chair, and on the
recommendation of the Chief Executive Officer for
Senior Management
– Oversight of workforce remuneration and related
policies and the alignment of incentives and rewards
with culture, taking these into account when setting
the policy for Executive Directors’ remuneration
– Approve the design of, and determine targets and
performance against targets for, Executive Directors’
and other senior executives’ incentive arrangements
Terms of reference
– The terms of reference for the Committee were reviewed
during 2025 and can be found at www.bodycote.com
Chair’s letter
As Chair of the Remuneration Committee (‘the Committee’)
and on behalf of the Board of Directors, I am pleased to
present our Directors’ report on remuneration for 2025.
The report has the following sections:
– This letter, which provides an overview of the key
decisions made on Directors’ remuneration during
the year (pages 110 to 112)
– An ‘at a glance’ section, which summarises the
remuneration outcomes for 2025 and the operation
of policy for 2026 (page 113)
– A short summary of the Directors’ Remuneration Policy,
which was approved at the 2025 Annual General (AGM)
Meeting (page 114)
– The Annual Report on Remuneration, which describes
the remuneration outcomes for 2025 and explains how
our Remuneration Policy is being applied for 2026
(pages 116 to 126)
2
3
1
4
5
1
Director remuneration arrangements,
including performance conditions
32%
2 Remuneration consultant tender review 20%
3
Governance and reporting 19%
4
Wider workforce remuneration considerations 18%
5
Review of external environment 11%
How the Committee spent its time during the year
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 110
Directors’ report on remuneration continued
Directors’ Remuneration Policy
As explained in my letter to shareholders last year, the
Committee carried out a comprehensive review of the
Directors’ Remuneration Policy during 2024 with a new
Policy being brought to shareholders for approval at our
2025 AGM. I would like to thank shareholders for their
support, with our Policy receiving the approval of 96.3%
of votes cast.
Business performance during 2025
During 2025 we made good progress across our Optimise,
Perform and Grow initiatives, with key Perform and Grow
programmes underway and the enhancement of our
Optimise programme mid-year. Whilst we are already
seeing the benefits of this strategic progress, market
conditions remained challenging during the year, and end
markets remained mixed. This resulted in a marginal
decline in Group revenue and adjusted operating profit
performance year-on-year. As we look to 2026, the focus
continues to be on controlling costs, delivery of increased
benefits from improved operational execution and driving
enhanced future growth.
It is within this context that the Committee has considered
the incentive outturns for 2025 and the operation of Policy
for 2026.
Operation of Policy during 2025
The Committee considers that the incentive-based
payouts made this year are aligned with the overall
performance of the Company. As such, the Committee
determined that no discretionary adjustments (either
upward or downward) would be required from the
formulaic outcomes of the annual bonus or BIP.
Annual bonus
Our CEO Jim Fairbairn and CFO Ben Fidler’s annual bonus
maximum opportunity for 2025 was 175% and 150% of
salary respectively and the bonus earned is 35.6% and
36.4% of maximum respectively, reflecting robust
performance during the year. The award was determined
by adjusted operating profit (40%), return on sales (20%),
adjusted cash flow conversion (20%) and individual
metrics (20%). Adjusted operating profit and margin were
lower compared to the prior year as we repositioned the
business portfolio for future growth and were below the
stretching target ranges set by the Committee for each
measure. Cashflow conversion was, however, strong with
performance at 98% of maximum under this measure.
The individual objectives of the Executive Directors reflect
how they have delivered on our strategic goals.
Their performance across all areas was exceptionally
strong, in particular with excellent execution of several
planned transactions as the Board refocuses the portfolio
on growth areas. Accordingly, the Committee determined
that the payout should be 80% of maximum for the CEO
and 84% of maximum for the CFO. Further details are set
out on pages 117 and 118.
Bodycote Incentive Plan (BIP) awards
The 2023 BIP awards were based on performance against
return on capital employed (ROCE) (50%) and adjusted
earnings per share (EPS) (50%) targets over a three-year
period ended 31 December 2025. Performance fell short of
the threshold target for EPS and accordingly, these awards
have therefore lapsed.
Last year’s Directors’ Remuneration Report set out the
detail of our 2025 BIP awards. In summary awards levels
were 175% of salary for both our CEO and CFO with
performance based on ROCE 40%, adjusted EPS 40%
and CO
2
emission targets (20%). Further detail including
targets set can be found on page 119.
Operation of Policy for 2026
Our CEO has been in role now since May 2024 and
in determining operation of the Policy for 2026,
the Committee has considered his remuneration.
Jim has performed strongly in his role since appointment,
driving key strategic change in the Group to deliver growth
and investor return.
The Committee agreed that the CEO’s salary should be
increased by 5% to £672k and annual bonus opportunity
from 175% to 200% of salary effective for 2026. The salary
increase falls within the range of increases for our
workforce which are performance based. The increase in
annual bonus opportunity recognises the CEO’s strong
performance, while supporting the Committee’s policy
of ensuring a significant proportion of remuneration is
performance based to support the delivery of our stretch
growth objectives in 2026, as well as over the three-year
performance period for the BIP. The Committee has
considered the increased package against both an
industrial and pan sector set of peers and is comfortable
that the resulting package remains at a broadly mid
market level.
Our CFO’s salary is increased by 3% which also falls within
the merit increase range for our workforce.
There are no changes to performance metrics and
weightings for either the annual bonus or BIP awards
from 2025 (aside from any adjustments required in relation
to M&A transactions), with the Committee comfortable
that the balance of performance metrics reflects
Bodycote’s strategic priorities and focus on delivering
value to shareholders, together with our commitments
to sustainability.
Targets for the 2026 annual bonus are considered
commercially sensitive and will be fully disclosed
with performance against them in the 2026 Directors’
Remuneration Report.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 111
Directors’ report on remuneration continued
The Committee has considered carefully the targets for
the 2026 BIP awards. The adjusted EPS target range of
2.5% CAGR to 12% CAGR recognises the importance of
ensuring the BIP is incentivising with realistic threshold
targets while providing significant stretch for maximum
payment. The wider range for the 2026 award compared
to the 2025 award also recognises the significant
headwinds of cost increases, ongoing market uncertainty
and challenges of delivering value in a cyclical market.
Our ROCE target range of 15% to 18.6% provides a similar
level of stretch to the EPS range and we continue to
focus on reduction in CO
2
emissions in relation to the
ESG element.
New long-term incentive plan (LTIP) rules
Our current BIP rules expire in May 2026 and the Board
will therefore bring new LTIP rules to shareholders for
approval at the 2026 AGM. These LTIP rules will follow
current market practice and provide the Committee with
the flexibility to provide different LTIP structures, over the
term of these rules, as necessary and appropriate for an
international business.
Executive Directors’ remuneration must be set within the
shareholder approved Policy and the terms of the new
LTIP do not change this. Our AGM notice will provide
detail of the different terms of the LTIP rules. In particular,
we are removing the 5% in ten years dilution limit for
discretionary executive share awards but retaining the
10% in ten years for all share awards and will plan
carefully to operate within this limit. This follows market
practice and the Investment Association’s Principles of
Remuneration, noting that we operate our share plans
widely over many jurisdictions, including the USA,
and not just to our most senior executives.
Conclusion
The Committee is comfortable that the Policy operated
as intended during 2025 and that the remuneration
received by Executive Directors was fair and appropriate,
recognising business and individual performance as
well as shareholder and wider stakeholder experience.
The operation of Policy for 2026 ensures continued focus
on delivery of business strategy with the increases to the
CEO’s remuneration appropriate considering experience,
performance in role and the stretch targets that have
been set.
I look forward to receiving shareholders support for the
advisory resolution to approve this Annual Statement and
our Annual Report on Remuneration and the binding vote
to adopt our new LTIP rules. If in the meantime you have
any queries regarding this report or our approach to
remuneration more generally please do reach out to me
through our Company Secretary.
Cynthia Gordon
Chair of the Remuneration Committee
10 March 2026
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 112
Directors’ report on remuneration continued
Remuneration at a glance
Performance outcomes for the 2025 financial year
The table below sets out the performance outcomes for the annual bonus and BIP awards in respect
of the financial year ended 31 December 2025.
CEO
Jim Fairbairn
CFO
Ben Fidler
Base salary £640,460 £537,130
Benefits Car allowance, medical
and life assurance
Car allowance, medical
and life assurance
Pension opportunity 10% of salary 10% of salary
Annual Bonus
maximum opportunity
175% of salary 150% of salary
Bodycote Incentive Plan
(BIP) 2025 award
175% of salary 175% of salary
Shareholding requirements 200% of salary (to be held for two years post-employment)
2025 Annual Bonus 2023 BIP
Measure Adjusted Operating Profit
Return on Sales
Adjusted Cash flow Conversion
Personal Objectives
(40%)
(20%)
(20%)
(20%)
ROCE
Adjusted EPS
(50%)
(50%)
Performance % of max Adjusted Operating Profit
Return on Sales
Adjusted Cash flow Conversion
Personal Objectives: CEO
CFO
0%
0%
98%
80%
84%
ROCE
Adjusted EPS
(0%)
(0%)
CEO Jim Fairbairn 35.6% of maximum N/A (joined in 2024)
CFO Ben Fidler 36.4% of maximum 0% of maximum
Implementation of Policy in 2025
Annual Bonus
performance measures
1
Bodycote Incentive Plan
(BIP) measures
1
CEO
Jim Fairbairn
CFO
Ben Fidler
Base salary £672,483
5% increase
£553,244
3% increase
Benefits Car allowance, medical
and life assurance
Pension opportunity 10% of salary
Annual Bonus
maximum opportunity
200%
of salary
150%
of salary
BIP 2026 award 175% of salary
Shareholding
requirements
200% of salary
(to be held for two years
post-employment)
Implementation of Policy in 2026
1
Adjusted
operating profit
40%
2
Return on sales 20%
3
Adjusted cash
flow conversion
20%
4
Personal
objectives
20%
1
ROCE 40%
2
Adjusted EPS 40%
3
Absolute Group
CO
2
e
20%
1 These relate to both
the 2025 and 2026
performance measures.
1
2
3
4
1
2
3
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 113
Directors’ report on remuneration continued
Directors’ Remuneration Policy
This part of the Directors’ Remuneration report sets out a summary of the Remuneration Policy approved by shareholders at our 2025 AGM on 21 May 2025. The policy is intended
to apply for a period of up to three years from this date. The full Remuneration Policy is available in the 2024 Annual Report, which can be accessed at www.bodycote.com.
Element Purpose Maximum Operation
Base Salary – To be market competitive and attract and
retain the talent required to execute and
deliver the strategy.
– There is no prescribed maximum annual
base salary increase.
– Typically reviewed annually
– Any increase to Executive Director salaries will be
determined considering wider workforce increases.
Higher or lower increases may be made
Benefits – Provides market competitive benefits at
an appropriate cost. Supports attraction
and retention of appropriate talent.
– At cost. – Includes a company car or car allowance, health insurance,
sick pay and life assurance
– Other benefits may be provided
Pension – Provides an appropriate level of provision
for post-retirement income and assists with
retirement planning.
– Aligned to the rate applying to the
workforce in the country where the
Executive Director lives, UK at 10%
of salary.
– Contribution to Group pension scheme or cash allowance
in lieu of pension
Annual Bonus – To incentivise delivery of the business plan
on an annual basis and to reward
performance against key performance
indicators that are critical to the delivery
of strategy.
– Maximum opportunity is 200% for the CEO
and 150% for the CFO.
– At least 70% based on Group financial measures
– No more than 30% bonus payout at threshold
– No more than 65% of bonus paid in cash with the
remaining amount deferred into shares which vest in
3 years subject to continued employment
– Committee discretion to adjust formulaic outcome
– Malus and clawback provisions also apply
Bodycote Incentive
Plan (BIP)
– Rewards the delivery of targets linked to the
delivery of long-term strategic goals, and
incentives performance. Assists the
creation of shareholder value over the
longer-term.
– Maximum opportunity is 200% of salary.
– Dividend equivalents are payable in respect
of vested shares.
– Based on a range of measures reflecting the Group’s
strategic levers and key performance indicators
– No more than 25% vests for threshold performance
– Three-year performance period with two-year
holding period
– Committee discretion to adjust formulaic outcome
– Malus and clawback provisions also apply
Shareholding
requirement
– To provide alignment of interest between
Executive Directors and shareholders.
– 200% of salary during employment.
– Lower of actual shares held and 200% of
salary post-employment for two years.
– Executive Directors are required to build up and retain
shares from incentive awards to meet the requirement
within five years of appointment
Fees for Non-
Executive Directors
(NEDs)
– To attract NEDs who have a broad range of
experience and skills to oversee the
implementation of our strategy.
– No prescribed maximum annual
fee increase.
– NEDs are paid a base fee and additional fees for chairing
a Board committee and other responsibilities
– Any reasonable expenses will be reimbursed including
any tax incurred in relation to these
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 114
Directors’ report on remuneration continued
Illustration of application of remuneration policy for 2026
The remuneration arrangements for the Executive
Directors are designed to provide an appropriate balance
between fixed and variable performance-related
components and to ensure that a significant proportion of
pay is dependent on the delivery of stretching short- and
long-term performance targets, which are aligned with the
creation of sustainable shareholder value. The Committee
is satisfied that the composition and structure of the
remuneration package remains appropriate, clearly
supports the Group’s strategic ambitions and does not
incentivise inappropriate risk-taking.
The following charts provide illustrative values of each
Executive Director’s remuneration package in 2026, under
four assumed performance scenarios:
Assumed performance Assumption
Minimum
performance
– Fixed remuneration
1
only
On-target
performance
– Fixed remuneration
1
– 60% of maximum annual bonus
is earned
– 50% of maximum BIP vests
Maximum
performance
– Fixed remuneration
1
– 100% of maximum annual bonus
is earned
– 100% of maximum BIP vests
Maximum
performance +50%
share price growth
– As per the maximum performance
illustration, but also assumes for
the purposes of the BIP that share
price increases by 50% over the
vesting period
1 Fixed remuneration comprises base salary as at 1 January
2026, benefits received in 2025 and the pension opportunity
applying from 1 January 2026.
The percentages for 2026 are shown below:
A
Fixed Remuneration
B
Bonus
C
BIP
CEO 2026
£764,404
£2,159,807
£3,286,216
£3,874,638
Minimum
On-target
Maximum
Maximum plus 50% share price growth
38%
27%
41%
35%
100%
35%
23%
19%
A
B
CA
A
A
B
B
36%
C
46%
C
CFO 2026
31%
30%
34%
29%
£633,505
£1,615,514
£2,431,548
£2,915,637
Minimum
On-target
Maximum
Maximum plus 50% share price growth
100%
39%
26%
21%
A
B
CA
A
A
B
B
40%
C
50%
C
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 115
Directors’ report on remuneration continued
Annual Report on Remuneration
Auditable section
The information presented within this section provides details of remuneration outcomes for Directors who served
during the financial year ended 31 December 2025.
Single total figure of remuneration
The following table sets out the total remuneration for Executive Directors for the year ended 31 December 2025,
with prior year figures also shown.
Fixed remuneration Variable remuneration
Salary
(£000)
Pension
(£000)
Taxable
benefits
2
(£000)
Total
fixed pay
(£000)
Annual
bonus
3
(£000)
BIP
(£000)
4
Buy-out
award
5
(£000)
Total
variable pay
(£000)
Total
remuneration
(£000)
2025 Jim Fairbairn 640 64 19 723 399 – – 399 1,122
2024 Jim Fairbairn
1
502 50 45 597 469 – 930 1,399 1,996
2025 Ben Fidler 537 54 16 607 293 – – 293 900
2024 Ben Fidler 523 52 16 591 415 – – 415 1,006
1 Jim Fairbairn was appointed to the Board on 11 March 2024. The 2024 figures reflect the period from 11 March to 31 December 2024.
2 Taxable benefits consist of company car (or allowance), family level private medical insurance and life insurance cover. Jim Fairbairn
also received a one-off relocation allowance of £30,000 in 2024 following his appointment.
3 See pages 117 and 121 for the application of bonus deferral.
4 The BIP award granted to Ben Fidler on 23 March 2023 with a performance period ending on 31 December 2025 did not meet the
performance threshold and will lapse in March 2026.
5 As disclosed on page 110 of the 2024 Directors’ Remuneration Report, the Committee agreed to buy-out the in-flight long-term
incentive awards which were forfeited by Jim Fairbairn on leaving his previous employer. The face value of his buy-out award was
£930,000 which was granted as nil cost options that would vest between March 2025 and March 2027, subject to his
continued employment.
Pension
Aligned with the Company pension contributions for the UK workforce, Jim Fairbairn received a pension contribution of
£10,000, with the balance of his 10% base salary entitlement paid in cash. Ben Fidler received a cash contribution in lieu
of pension of 10% of base salary.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 116
Directors’ report on remuneration continued
2025 Personal Scorecards
Jim Fairbairn
Overview
The Chief Executive Officer’s objectives for 2025 focused
on improving safety performance through enhanced
behaviours and reporting. He was tasked with delivering
the 2025 programme for the Optimise element of the
strategic plan, and progressing the HEAT programme to
drive improvements towards a >20% operating margin.
Key initiatives included the rollout of successful pilot sites,
the review of automation opportunities and definition of
general manager profiles to strengthen training and
development opportunities. He was also charged with
advancing the growth element of the strategy, including
the review of investment opportunities in new
geographies and the development of a proactive
acquisition strategy, while improving the market
perception of Bodycote as a cyclical company.
Key achievements in the year
A new safety operating model, focused on risk and injury
prevention was introduced, with risk management
initiatives embedded within the management structure.
Progress was made on strategic activities, including the
timely closure of sites with minimum disruption, in line
with the Board-approved plan. Employee engagement
initiatives were advanced, alongside trails and feasibility
studies for automation opportunities. A clear and effective
cross-divisional sales and pricing strategy was
implemented, supporting growth through the
development of new technologies and expansion into
new geographies.
Rating
After reviewing Jim Fairbairn’s scorecard performance
taking into consideration the accomplishments achieved
during the year, the Chair and the Remuneration
Committee agreed with an overall rating for the personal
element of his bonus, which equated to a bonus outcome
of 80% of maximum.
Annual bonus outcomes for 2025
Annual bonus
The maximum annual bonus opportunity for Jim Fairbairn and Ben Fidler was 175% of salary and 150% of salary
respectively. Measures, targets, performance and payment outcome are detailed in the table below.
35% of the annual bonus amount earned is deferred into shares, which will vest in three years subject to
continued employment.
Jim Fairbairn Ben Fidler
% of
award Threshold
1
Target
1
Maximum
1
Actual
performance
achieved
2
% of
max
% of
salary
% of
max
% of
salary
Adjusted
Operating Profit
40% £129m £136m £145m £114.3m 0% 0% 0% 0%
Adjusted Cash
Flow Conversion
20% 60% 69% 78% 77.6% 98% 34.3% 98% 29.4%
Return on Sales 20% 17.0% 17.3% 17.9% 15.7% 0% 0% 0% 0%
Personal
scorecard
20% Remuneration Committee determination
(see pages 117 and 118)
80% 28.0% 84% 25.2%
Total 35.6% 62.3% 36.4% 54.6%
1 Payout is linear between threshold and target, and between target and maximum as follows: Adjusted operating profit: threshold
(25%), target (60%) and maximum (100%); Adjusted cash flow conversion threshold (0%), target (60%) and maximum (100%) and
Return on Sales (margin): threshold (25%), target (60)% and maximum (100%).
2 Figures quoted for adjusted operating profit are at constant exchange rates.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 117
Directors’ report on remuneration continued
Ben Fidler
Overview
The Chief Financial Officer’s objectives included
establishing a structured approach to delivering the
Optimise element of the strategic plan, supported by a
regular monthly reporting framework. Objectives also
included strengthening the controls environment to meet
regulatory requirements, enhancing risk processes and
planning, and improving the rigour, value and partnership
of the Group Internal Audit function. In addition,
implementation of a structured and centrally-managed
process for energy hedging risk was required and
developing a clear plan for Group borrowing and funding,
expanding investor engagement, including building on the
Company’s existing US focus, with roadshows in new
European markets and increasing the Company’s presence
and profile at investor conferences.
Key achievements in the year
Regular reporting was established to support the
execution and delivery of the Optimise programme,
enabling the Board to exercise effective governance over
key decisions. Provision 29 team workstreams were
established, with new processes and controls designed for
adoption during 2026. A strengthened risk management
approach was implemented and rolled out across the
Group. A sizeable US Private Placement shelf facility was
put in place by year-end, and investor engagement was
expanded through roadshows in new regions, alongside
a consistent programme of US roadshows, with the
Company significantly increasing its presence at investor
conferences throughout 2025.
Rating
Ben Fidler’s detailed scorecard was reviewed by the
Chief Executive Officer and the Remuneration Committee,
assessing the achievement of each objective and
accomplishments during the year. Following this review,
the Remuneration Committee agreed with the overall
rating proposed for the personal element of his bonus,
which equated to a bonus outcome of 84% of maximum.
Bodycote Incentive Plan (BIP)
Awards with performance periods ending in the financial year
BIP awards granted on 23 March 2023 had a three-year performance period ended 31 December 2025.
Targets, performance achieved and the vesting outcome are set out in the table below:
Performance measure
Threshold
performance
(0% of element)
Target performance
(57.1% of element)
Maximum
performance
(100% of element)
Actual
performance
achieved
(out-turn)
Vesting %
(of element
maximum)
2,3
ROCE (50%)
1,4
14.0% 18.9% 20.0% 14.2% 0%
Adjusted EPS
4
(50%) 56.0p 64.0p 70.0p 44.4p 0%
1 For the purposes of the BIP, pre-tax ROCE is calculated using actual exchange rates. Capital employed includes the acquired goodwill
existing as at the start of the performance period (1 January 2023) only.
2 Figures have been rounded to one decimal place.
3 There is an adjusted EPS underpin of 47.5p, which must be achieved for the ROCE element to vest. The final adjusted EPS of 44.4p fell
below this threshold.
4 Adjusted EPS and ROCE performance is based on the final year of the performance period.
The table below sets out the 2023 BIP outcome for our CFO Ben Fidler and former Group Chief Executive Stephen Harris
and former Chief Financial Officer Dominique Yates:
Number of
shares
granted
End of
performance
period
% award
vesting
Number
of shares
vesting
Number
of shares
lapsed
Dividend
equivalents
Total
estimated
value of
awards
on vesting
Vesting
date
End of
holding
period
Ben Fidler 140,179 31 Dec 2025 0 0 140,179 0 0 n/a n/a
Stephen
Harris 177,625
1
31 Dec 2025 0 0 177,625 0 0 n/a n/a
Dominique
Yates 119,235
2
31 Dec 2025 0 0 119,235 0 0 n/a n/a
1 Stephen Harris was granted a BIP award of 177,625 shares equivalent to 175% of his salary in 2023. He stepped down as Group Chief
Executive on 30 May 2024 and the award was subsequently pro-rated for time served during the vesting period. The number of
shares available to vest after the application of the time pro-rating was 83,878, with a total of 93,747 shares lapsing due to this time
pro-rating in May 2024.
2 Dominique Yates was granted a BIP award of 119,235 shares equivalent to 175% of his salary in 2023. He stepped down as Group
Chief Financial Officer on 1 May 2023 and the award was subsequently pro-rated for time served during the vesting period.
The number of shares available to vest after the application of the time pro-rating was 13,248, with a total of 105,987 shares lapsing
due to this time pro-rating in May 2023.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 118
Awards granted during the financial year
Awards of nil cost options were granted to Jim Fairbairn
and Ben Fidler on 21 March 2025 equivalent in value to
175% of their base salaries. The performance period
comprises three financial years to 31 December 2027.
These awards are subject to continued employment and
the achievement of ROCE, Adjusted EPS and greenhouse
gas emission performance targets, as summarised in the
table below:
Performance
measure
Threshold
performance
(25% of
element)
Target
performance
(57.1% of
element)
Maximum
performance
(100% of
element)
ROCE (40%)
1,3
15.0% 17.2% 20.0%
Adjusted EPS
3,4
(CAGR) (40%)
2% 5% 10%
Absolute
Group CO
2
e
emissions
(20%)²
243.1ktCO
2
e
(a reduction
over three
years of at
least 7.3%)
228.2ktCO
2
e
(a reduction
over three
years of at
least 13.0%)
1 For the purposes of the BIP, pre-tax ROCE is calculated using
actual exchange rates. Capital Employed includes the goodwill
existing as at the start of the performance period (1 January
2025) only.
2 Full vesting of the CO
2
e emissions metric is based on meeting
the Group’s new SBTi target reduction, requiring absolute
reductions by December 2027 to align to the Group’s 2030
target (a 46% reduction compared with 2019 levels).
This equates to an average annual reduction of 4.5%.
The threshold target is based on meeting an annual absolute
reduction, that aligns with a ‘well-below 2 degree’ pathway,
which requires an average annual reduction of 2.5%.
The absolute emissions targets in this performance measure
will be recalculated following any re-baselining or restatements
of historical emissions, maintaining the target’s aim of meeting
the Group’s reduction targets, as defined.
3 Adjusted EPS and ROCE performance is based on the final year
of the performance period.
4 If Adjusted EPS at the end of the performance period is below
47.0p, then no awards will vest.
Grant date
Number
of shares
granted
Market
price at
grant date
1
Face
value at
grant date
Jim
Fairbairn
21 March
2025
184,523 £5.88 £1,084,995
Ben
Fidler
21 March
2025
155,505 £5.88 £914,369
1 The three-day volume weighted average share price following
the announcement of results for financial year 2024 (14, 17 and
18 March 2025).
Single total figure of remuneration for the Chair and
Non-Executive Directors
The following table sets out the total remuneration for the
Chair and Non-Executive Directors for the year ended
31 December 2025, with the prior year figures also shown:
Fees 2025
(£000)
Fees 2024
(£000)
Non-Executive Directors
Daniel Dayan
310
302
Kevin Boyd
85
83
Lili Chahbazi
1
78
68
Emmanuelle Dubu
2
40
–
Cynthia Gordon
85
83
Beatriz García-Cos Muntañola
70
68
Patrick Larmon
3
61
91
1 Lili Chahbazi was appointed as Senior Independent Director
with effect from 21 May 2025.
2 Emmanuelle Dubu was appointed to the Board on 23 June
2025. She became the Chair of the Employee Engagement
Group from 13 September 2025.
3 Patrick Larmon stepped down from the Board on
12 September 2025.
Chair and Non-Executive Directors’ fees
At 31 December 2025, the aggregate annual fees for all
Non-Executive Directors, including the Chair, was
£730,663, which is below the maximum aggregate fee
allowed by the Company’s Articles of Association of
£1,000,000 pa. The fees payable to the Chair and other
Non-Executive Directors are set out as follows:
Fee for
2025
Fee for
2024
%
increase
Base fee for
Non-Executive Chair
£310,913 £301,744 2.8%
Base fee for Non-
Executive Directors
£70,339 £68,423 2.8%
Remuneration
Committee Chair/
Audit Committee Chair
£14,664 £14,264 2.8%
Senior Independent
Director
£11,607 £11,291 2.8%
Chair of Employee
Engagement Groups
£11,607 £11,291 2.8%
Directors’ report on remuneration continued
Bodycote plc Annual Report 2025
Company overview Strategic report Governance Financial statements Additional information 119
Share interests – share plan awards
The interests of the Executive Directors in the Company’s share plans as at 31 December 2025 are as follows:
Director Plan
Interests
as at
1 January 2025
Granted
in year
Vested
in year
Lapsed
in year
Interests as at
31 December
2025
Jim Fairbairn BIP 156,445 184,523 – – 340,968
Buy-out awards 141,209 – 94,139
1
– 47,070
Deferred bonus
shares
– 27,932
4
– – 27,932
Ben Fidler BIP 273,765
3
155,505 – – 429,270
Buy-out awards 63,906 – 63,906
2
– –
Deferred bonus
shares
33,658 24,693
4
– – 58,351
1 Jim Fairbairn was appointed as Group Chief Executive designate and as a member of the Board on 11 March 2024 and became
Chief Executive Officer on 31 May 2024. The first element of his buy-out award vested in March 2025 and was exercised on
28 April 2025. The remaining shares will vest on 22 March 2026 and 22 March 2027.
2 Ben Fidler was appointed as Chief Financial Officer designate and as a member of the Board on 24 February 2023 and became
Chief Financial Officer on 1 May 2023. The final element of his buy-out award was exercised on 28 April 2025.
3 The BIP awards granted on 23 March 2023 will lapse in March 2026 as the performance targets have not been met.
4 The grant date face value of the deferred bonus shares granted on 21 March 2025 is £164,240 for Jim Fairbairn and £145,195
for Ben Fidler. This is based on a share price of £5.88, being the three-day volume weighted average share price following the
announcement of the 2024 year-end results (14, 17 and 18 March 2025).
Payments to past Directors
Stephen Harris stepped down as Group Chief Executive
and retired from the Board and the Company on 30 May
2024. The treatment of his remuneration arrangements
were fully disclosed in the 2024 Directors’ Remuneration
Report. Dominique Yates stepped down from the Board on
30 April 2023 and the treatment of his remuneration
arrangements were fully disclosed in the 2023 Directors’
Remuneration Report. Details of the vesting outcome of
the 2023 BIP awards are disclosed on page 118. There were
no payments to past Directors made in the year and no
other disclosures under this section.
Payments for loss of office
There were no payments for loss of office during the year.
Application of malus and clawback
The annual bonus, deferred bonus and BIP each contain
robust malus and clawback provisions, which provide the
Committee with the authority, in certain circumstances to
request the repayment of amounts received, or to reduce
or cancel awards or require repayment of amounts already
paid. There have been no instances of these provisions
having been used. The provisions apply as follows:
Malus Clawback
Annual bonus To such time as
payment is made
Up to three years
following payment
Deferred bonus To such time as
the award vests
No clawback
provisions apply
(as malus provisions
apply for three years
from the date of
award)
BIP To such time as
the award vests.
Up to two years
following vesting
Directors’ report on remuneration continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 120
Directors’ report on remuneration continued
Directors’ shareholdings and scheme interests
Executive Directors are expected, within five years of appointment, to build up a shareholding in the Company of 200% of
salary. For the purposes of this requirement, only beneficially owned shares and the net of tax value of unvested share
awards, which are not subject to performance conditions, will be counted.
The interests in ordinary shares of Directors and their connected persons as of 31 December 2025 (or the date of stepping
down from the Board if earlier), including any interests awarded under the annual bonus or BIP or buy-out awards, along
with whether Executive Directors have met the shareholding guidelines, are presented below.
Counted towards the
shareholding requirement
Not counted
towards the
shareholding
requirement
Executive Directors
Beneficially
owned at
31 December 2025
(or at the date of
leaving)
Deferred
shares granted
under the
annual bonus
1
Unvested
buy-out awards
Shares subject
to performance
conditions (BIP)
4
Percentage of
shareholding
target achieved/
requirement met
Jim Fairbairn (200% of salary
min. holding requirement)
50,190
2
27,932 47,070
2
340,968 68%
No
Ben Fidler (200% of salary min.
holding requirement)
87,637 58,351 – 429,270 95%
No
Non-Executive Directors
Daniel Dayan 97,500 – – – n/a
Lili Chahbazi – – – – n/a
Kevin Boyd 11,800 – – – n/a
Emmanuelle Dubu – – – – –
Cynthia Gordon 1,708 – – – n/a
Beatriz García-Cos Muntañola – – – – n/a
Former Director
Patrick Larmon
3
15,000 – – – n/a
1 Figures relate to deferred shares granted in 2024 and 2025.
2 Jim Fairbairn was granted 141,209 shares under a buy-out award on appointment to the Board in March 2024. The first element of
this award, 94,139 shares, was exercised on 28 April 2025. A total of 43,949 shares were sold to satisfy the tax liability, with the
remaining 50,190 shares retained. The remaining shares held under this award will vest on 22 March 2026 and 22 March 2027.
3 Patrick Larmon stepped down from the Board on 12 September 2025.
4 Figures relate to unvested awards granted under the BIP in 2023, 2024 and 2025. The BIP awards granted on 23 March 2023 will lapse
in March 2026 as the performance targets were not met.
As at 10 March 2026, the Company has not been advised
of any changes to the interests of Directors and their
connected persons as set out in the above table.
This represents the end of the audited section of
the report.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 121
Directors’ report on remuneration continued
Historical TSR performance
Growth in the value of a hypothetical £100 holding over 10 years
Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21 Dec 22 Dec 23 Dec 24
Bodycote TSR FTSE All Share Industrial Index
Dec 25
Bodycote TSR
FTSE All Share
Industrial Index
£0
£50
£350
£300
£250
£200
£150
£100
Comparison of overall performance and pay
The following chart shows the value over the last ten
financial years of £100 invested in Bodycote plc compared
with that of £100 invested in the FTSE All Share Industrial
index. The Committee has chosen this index as it is a
broad market index of which Bodycote plc is a constituent
and reflects the wider sector in which the Group operates.
The points plotted represent the values at each financial
year-end.
The table below shows how total remuneration for the Chief Executive Officer has developed over the last 10 years.
2016 2017 2018 2019 2020 2021 2022 2023 2024
SCH
1
2024
JF
1
2025
JF
Single figure of remuneration (£000) 875 2,280 2,728 1,862 783 1,969 1,608 2,399 937 1,996 1,122
Annual bonus payout (% of maximum) 19% 98% 68% 50% 0% 96% 61% 98% 46% 53% 36%
Long-term incentive vesting outturn (% of maximum) 0% 48% 89% 84% 0% 0% 1% 27% 36% – –
1 The role of Group Chief Executive was held by Stephen Harris until 30 May 2024 when he stepped down from the Board. He was succeeded by Jim Fairbairn who joined the Company and Board on
11 March 2024. The total pay set out in the table above is reflective of the remuneration received by each during 2024.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 122
Directors’ report on remuneration continued
Percentage change in remuneration
The table below sets out the annual percentage change in remuneration for each of the Directors compared to that for an average employee.
% change in salary/fees
4
% change in benefits
5
% change in annual bonus
2020/21 2021/22 2022/23 2023/24 2024/25 2020/21 2021/22 2022/23 2023/24 2024/25 2020/21 2021/22 2022/23 2023/24 2024/25
Executive Directors
Jim Fairbairn
1
– – – – 3.3% – – – – – – – – – (14.9)%
Ben Fidler
2
– – – 4.5% 2.8% – – – 3.3% – – – – (34.1)% (29.4)%
Non-Executive Directors
Daniel Dayan – – 5.0% 4.5% 2.8% – – – – – – – – – –
Patrick Larmon 2.0% 3.0% 14.0% 4.5% 2.8% 1,935% (100%) – – – – – – –
Lili Chahbazi 2.0% 3.0% 5.0% 4.5% 2.8% 19% (100%) – – – – – – –
Kevin Boyd 2.0% 17.3% 11.0% 4.5% 2.8% (8.3%) (100%) – – – – – – –
Emmanuelle Dubu – – – – – – – – – – – – – – –
Cynthia Gordon – – 5.0% 4.5% 2.8% – – – – – – – – – –
Beatriz García-Cos
Muntañola
– – – 4.5% 2.8% – – – – – – – – – –
Average employee
3
2.9% 5.7% 6.9% 5.2% 3.7% 10% 9.8% 10.8% 9.7% – 100% (9.2%) 6.9% (5.6)% (36.0)%
1 Jim Fairbairn was appointed as Group Chief Executive designate and as a member of the Board on 11 March 2024. He became Chief Executive Officer on 31 May 2024. The payout figure shown in respect
of the 2024 bonus was pro-rated for time served during the year for 2024.
2 Ben Fidler was appointed as Chief Financial Officer designate and as a member of the Board on 24 February 2023. He became Chief Financial Officer on 1 May 2023. The payout figure shown in respect of
the 2023 bonus was pro-rated for time served during the year for 2023.
3 The annual percentage change of the average remuneration of the listed parent entity employees (excluding Directors), is calculated on a full-time equivalent basis.
4 Refer to the Remuneration Report for prior years for notes in respect of disclosures for those years.
5 Percentage change in Benefits is calculated on unrounded figures.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 123
Directors’ report on remuneration continued
Pay ratio of Chief Executive Officer
to UK employees
The table below sets out the Chief Executive Officer’s
remuneration as a ratio against the full-time equivalent
remuneration of the 25th, 50th (median) and 75th
percentile UK employees.
Year Method
25th
percentile
pay ratio
Median
pay ratio
75th
percentile
pay ratio
2025 Option A 31:1 24x:1 18:1
2024 Option A 66:1 53:1 36:1
2023 Option A 71:1 56:1 39:1
2022 Option A 52:1 41:1 28:1
2021 Option A 69:1 52:1 36:1
2020 Option A 28:1 21:1 15:1
2019 Option A 70:1 55:1 40:1
A substantial proportion of the Chief Executive Officer’s
total remuneration is performance-related and delivered
in shares. The ratios will therefore depend significantly
on the Chief Executive Officer’s annual bonus and
BIP outcomes, which may fluctuate year-to-year.
The calculations for the representative employees were
performed as at the final day of the relevant financial year.
Option A methodology, which is calculated using the pay
and benefits of all UK employees for the relevant financial
year, was selected on the basis that it is considered to be
a robust approach and is aligned with best practice and
investor expectations.
2025 pay ratios have decreased significantly from 2024,
reflecting the absence of any share awards attributable
to the CEO in the 2025 figure.
Our broad remuneration policy reflects the diversity of
cultures, legislative environments and employment
markets of our geographical spread. However, in line with
the UK reporting regulations we have reported solely on
the UK employee population. The Board believes that the
median pay ratio is consistent with the pay, reward and
progression policies for the UK employee population.
Total pay and benefits used to calculate the ratios
The table below sets out the UK employee percentile pay and benefits used to determine the above pay ratios and the
salary component for each figure.
Financial year ended Element of pay
Chief Executive
Officer
remuneration (£)
25th
percentile
1,2
(£)
Median
1,2
(£)
75th
percentile
1,2
(£)
31 December 2025 Total pay and
benefits
1,122,530 36,685 46,620 63,529
Salary component 640,460 28,110 33,003 51,844
1 The UK employee percentile total pay and benefits has been calculated based on the amount paid or receivable for the relevant
financial year. The calculations are on the same basis as required for the Chief Executive Officer’s remuneration for single figure
purposes. For pension-related benefits, employer pension costs have been estimated using the employer contribution rates
applicable to the member’s pension scheme. No other estimates or adjustments have been used in the calculations and no
remuneration components have been omitted.
2 For employees employed on a part-time basis, their remuneration has been annualised to reflect the full-time equivalent.
Relative importance of pay spend
The table below sets out the total expenditure in relation to staff and employee costs and distributions to shareholders
in 2024 and 2025.
Year 2025 (£m) 2024 (£m) % change
Staff and employee costs 268.0 280.6 (4.5)%
Distribution to shareholders 40.8 42.8 (4.6)%
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 124
Directors’ report on remuneration continued
Committee activities
During 2025 the Committee met six times to consider, amongst other matters:
Theme Agenda items
Executive Directors’ and
senior executives’ remuneration
– Approved the remuneration arrangements for the Executive Directors and
senior executives, including base salary increases
– Reviewed, and where required approved, the remuneration arrangements
for new senior hires below the main Board
– Reviewed and approved the annual bonus and BIP awards for Executive
Directors and senior executives, including setting of stretching and
incentivising targets and ensuring performance measures continue to align
with strategy
– Assessment of annual bonus and BIP outcomes, including the monitoring
of performance for inflight BIP awards
– Reviewed shareholdings against share ownership requirements
Wider workforce remuneration
considerations
– Reviewed remuneration and related policies relating to the wider workforce
– Reviewed the annual bonus and Bodycote Senior Management Incentive Plan
awards for the wider workforce, with oversight of targets and ensuring
performance measures align with strategy
Best practice – Consideration of feedback from shareholders and proxy agencies following
the 2025 AGM
– Reviewed market practice and corporate governance updates, including
proxy advisory agency reports
Governance and reporting – Considered and approved the Directors’ Remuneration Report
– Reviewed and updated the Committee’s terms of reference
– Oversaw and completed the tender process for remuneration consulting
services, including the evaluation of shortlisted firms and the selection of
the preferred provider
Advisers to the Committee
During the year, the Committee carried out a formal
process for the selection of new advisers and appointed
Korn Ferry to replace Deloitte LLP effective from 1 October
2025. Korn Ferry and Deloitte are each members of the
Remuneration Consultants Group and, as such, both
voluntarily operate under its Code of Conduct in relation
to executive remuneration in the UK.
The Committee is satisfied that the advice it has received
during the year has been objective and independent, and
that no conflict of interest arises as a result of the other
services provided as noted below. The fees paid to
Deloitte for its services to the Committee during the year,
based on time and expenses, amounted to £19,850 and to
Korn Ferry £35,000 excluding VAT. Deloitte also provided
employee share plan advisory services, business tax
services and financial advisory services to the Company
during the year, while Korn Ferry also provided
recruitment services in relation to the appointment of a
new Non-Executive Director and employee share plan
advisory services.
The Company Secretary acts as Secretary to the
Committee. During the year, the Chief Executive Officer,
Chief Financial Officer and Chief Human Resources Officer
attended meetings as required at the invitation of the
Committee, to provide information and support as
requested. However, no individual was present when
their own remuneration was being discussed.
The Committee consulted with the Chief Executive
Officer and received recommendations from him in
respect of his direct reports.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 125
Directors’ report on remuneration continued
Operation of Policy for 2026
The operation of policy for 2026 is set out in the
‘At a Glance’ section on page 113.
Annual bonus targets are commercially sensitive and will
be disclosed with performance against them in our 2026
Remuneration Report. The targets for the 2026 BIP awards
are set out below.
Performance measure
Threshold
performance
(25% of element
vesting)
Maximum
performance
(100% of element
vesting)
ROCE (40%)
1,3
15.0% 18.6%
Adjusted EPS (CAGR)
(40%)
3
2.5% 12.0%
Absolute Group CO
2
e
emissions (20%)²
2.5% p.a 3.6% p.a
1 For the purposes of the BIP, pre-tax ROCE is calculated
using actual exchange rates. Capital Employed includes the
goodwill existing as at the start of the performance period
(1 January 2026) only.
2 Full vesting of the CO
2
e metric will continue the trajectory
towards the Group’s 2030 SBTi target reduction. This will
equate to a consistent annual reduction of 3.6% to achieve
the 2031 goal. The threshold target is based on meeting an
annual absolute reduction that aligns with a ‘well-below 2
degree’ pathway, which requires an average annual reduction
of 2.5%.
3 Adjusted EPS and ROCE performance is based on the final
year of the performance period.
On behalf of the Board:
Cynthia Gordon
Chair of the Remuneration Committee
10 March 2026
Statement of shareholder voting and shareholder engagement
The votes received on the 2024 Remuneration Report and Directors’ Remuneration Policy are set out below:
2025 AGM held on
21 May 2025 Nature of vote
Total number of
votes cast
(excluding
abstentions) For (%) Against (%) Abstentions
Approve the
2024 Directors’
Remuneration Report
Advisory 151,328,235 98.9% 1.1% 1,192,077
2025 AGM held on
21 May 2025 Nature of vote
Total number of
votes cast
(excluding
abstentions) For (%) Against (%) Abstentions
Approve the Directors’
Remuneration Policy
Binding 148,490,332 96.3% 3.7% 1,368
The Committee engaged with investors as part of the review and shareholder approval of the Directors’ Remuneration
Policy, which was brought for approval at the 2025 AGM. No specific consultation was considered necessary since then.
Governance
The Board and the Committee consider that, throughout 2025 and to the date of this report, the Company has complied
with the provisions set out in the UK Corporate Governance Code relating to Directors’ remuneration. In addition,
relevant guidelines issued by prominent investor bodies and proxy voting agencies have been presented to and
considered by the Committee throughout the year. The Committee considers executive remuneration matters in the
context of alignment with risk management and, during the year, had oversight of any related factors to be taken into
consideration. The Committee considers that the remuneration arrangements in place do not raise any health and safety,
environmental, social or ethical issues, nor inadvertently motivate irresponsible behaviour.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 126
Directors’ report
Directors’ report
The Directors are pleased to submit their report and
the audited financial statements for the year ended
31 December 2025.
The Chair’s statement and the Chief Executive Officer’s
review on pages 13 to 16, the Chief Financial Officer’s
report and all the information contained on pages 28 to 30,
together comprise the Directors’ report for the year ended
31 December 2025. For going concern, please see the Chief
Financial Officer’s report on page 30 and page 145 of the
consolidated financial statements.
Strategic report
The Strategic report is provided on pages 13 to 80 of this
Annual Report. That report incorporates a review of the
development of the Group’s businesses, the financial
performance during the year ended 31 December 2025,
key performance indicators and a description of the
principal risks and uncertainties facing the Group.
The Strategic report has been prepared solely to assist the
shareholders in assessing the Group’s strategies and the
potential of those strategies. It should not be relied on by
any other party for any other purpose. Forward-looking
statements have been made by the Directors in good faith,
using information available up to the date of this report.
Such statements should be regarded with caution due to
the inherent uncertainties in economic trends and
business risks. Since the end of the financial year, no
significant events affecting the business of the Group
have occurred.
Dividends
The Board has recommended a final dividend of 16.1p
per share (2024: 16.1p) bringing the full-year dividend to
23.0p per share (2023: 23.0p). If approved by shareholders,
the final dividend of 16.1p per share will be paid on
11 June 2026 to all shareholders on the register at the
close of business on 1 May 2026.
Share capital
The Company’s issued ordinary share capital as at
31 December 2025 was £30m. No shares were issued
during the year. Details of the issued share capital
are shown in note 20 of the consolidated
financial statements.
The Company has one class of ordinary shares, which
carries no right to fixed income. Each share carries the
right to one vote at general meetings of the Company.
There are no specific restrictions on the size of a holding
nor on the transfer of shares, both of which are governed
by the general provisions of the Articles of Association and
prevailing legislation. The Directors are not aware of any
agreements between holders of the Company’s shares
that may result in restrictions on the transfer of securities
or on voting rights. Details of employee share schemes are
set out in note 25 and shares held by the Bodycote
Employee Benefit Trust abstain from voting and waive
dividend rights. No person has any special rights of
control over the Company’s share capital and all issued
shares are fully paid.
Authority to purchase own shares
Under the Articles of Association, the Company has
authority to issue ordinary shares with a nominal value
of £9,946,937, representing one third of the issued
ordinary share capital.
At the Annual General Meeting held on 21 May 2025,
the shareholders authorised the Company to make
market purchases of up to 18,035,208 of its own shares,
representing 10% of the Company’s issued ordinary
share capital as at the latest practicable date prior to
the publication of the Notice of AGM.
On 15 March 2024, the Group announced the
commencement of a £30 million share buyback
programme (the Programme). This Programme was
extended by a further £30 million on 30 July 2024 and
completed on 14 January 2025. A third £30 million
extension to the Programme commenced on 15 January
2025 and was completed on 9 July 2025. On 30 July 2025,
the Company announced a further £30 million extension
to the Programme, which commenced on 1 August 2025.
This was completed on 30 January 2026. The total
maximum aggregate consideration allocated to the
Programme and its extensions was £120m and the
average cost of shares purchased under Programme and
its extensions was 641.84 pence per share. The sole
purpose of the Programme was to reduce the Company’s
share capital, with all ordinary shares purchased
being cancelled.
Between 2 January 2025 and the end of the financial year
on 31 December 2025, the Company purchased 9,401,421
ordinary shares of 17 3/11th pence each, representing a
nominal value of £1,623,882 and 5.4% of the Company’s
issued share capital. All of these ordinary shares had been
cancelled by 31 December 2025. The total cost of shares
purchased during 2025 was £57.3 million, excluding
transaction costs.
A further 733,485 ordinary shares, representing a nominal
value of £126,693 and 0.42% of the Company’s issued
share capital, were purchased between 2 January and
30 January 2026 at a cost of £5.48 million, excluding
transaction costs. The authority to allow the Company to
purchase its own shares will expire at the conclusion of
the Annual General Meeting to be held on 27 May 2026,
at which time a further authority will be sought
from shareholders.
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 127
Change of control provisions
There are a number of agreements that take effect, alter,
crystallise, or terminate upon a change of control of the
Company following a takeover bid, such as commercial
contracts, bank loan agreements, property lease
agreements, employment contracts and employee share
plans. None of these are considered to be significant in
terms of their likely impact on the business of the Group
as a whole, and the Directors are not aware of any
agreements between the Company and themselves or
employees that provide for compensation for loss of office
or employment that occurs because of a takeover bid
except where specifically mentioned in this report.
Directors
The appointment and replacement of Directors is
governed by the Company’s Articles of Association,
the UK Corporate Governance Code, the Companies Act
2006, and related legislation. The Articles of Association
may be amended by a special resolution of shareholders.
The powers of the Directors are described in the
Corporate Governance Statement on pages 87 to 97.
The Directors in office as at 31 December 2025 and their
biographies are listed on pages 84 and 85. All served
throughout the year, other than Emmanuelle Dubu,
who was appointed to the Board on 23 June 2025.
Patrick Larmon stepped down from the Board on
12 September 2025 having served for nine years.
In line with the UK Corporate Governance Code, all
Directors in office at 31 December 2024 retired at the
Annual General Meeting (AGM) held in 2025 and stood
for re-election by the shareholders. All Directors in office
at 31 December 2025 will retire at the AGM to be held in
2026 and will offer themselves for re-election by the
shareholders. Emmanuelle Dubu will stand for election,
having been appointed to the Board since the last AGM.
Directors’ interests in contracts and shares
Details of the Executive Directors’ service contracts are
shown on page 94 and details of the Directors’ interests
in the Company’s shares and share incentive plans are
shown on pages 120 and 121. No Director has had any
dealings in any shares or options in the Company since
31 December 2025. None of the Directors had a material
interest in any contract of significance in relation to the
Company and its subsidiaries at any time during the
financial year.
Qualifying third-party indemnity provisions (as defined by
section 234 of the Companies Act 2006) have remained in
force for the Directors for the year ended 31 December
2025 and, as at the date of this report, remain in force for
the benefit of the current Directors in relation to certain
losses and liabilities which they may incur (or have
incurred) to third parties in the course of their duties.
Apart from these exceptions, none of the Directors had a
material interest in any contract of significance in relation
to the Company and its subsidiaries at any time during the
financial year.
Potential conflicts of interest
Directors are required to declare actual conflicts of interest
in transactions as they arise, and have a duty to avoid such
conflicts whether real or potential. Potential conflicts of
interest could arise where a single Director owes a
fiduciary duty to more than one organisation (a ‘Situational
Conflict’) which typically will be the case where a Director
holds directorships in more than one company. To ensure
all Directors have complied with these duties, each
Director provided the Company with a formal declaration
disclosing what, if any, Situational Conflicts affected him
or her. The Board reviewed these declarations and
approved the existence of each declared Situational
Conflict and permitted each affected Director to attend
and vote at Bodycote Directors’ meetings up to the end of
2025, on the basis that each Director continues to ensure
Bodycote’s information remains confidential, and provided
overall that such authorisation remained appropriate and
in the interests of shareholders. Where such authorisation
becomes inappropriate or is no longer in the interests
of Bodycote’s shareholders, either the Chair or the
Nomination Committee can revoke an authorisation.
No such revocations have been made.
Employment
The Group recognises the important contribution of its
employees to future profitability and long-term success.
Employee commitment and engagement are central to
the Group’s performance and continued success.
Through regular strategy, production, safety and health
meetings at site level, employees are kept informed of
Group performance and progress , their site’s contribution,
and relevant health and safety matters. Employees are
also able to raise concerns through the Group’s
anonymous and confidential Open Door whistleblowing
helpline, a service that is accessible in local languages.
More than 3,000 Bodycote employees are connected
to the Group intranet, which supports communication,
knowledge-sharing, and the exchange of technology and
best practice across the business.
The Group operates an Equality, Diversity and Inclusion
policy and is committed to providing full and fair
consideration to applications from disabled persons,
having regard to their individual aptitudes and abilities.
The Group supports the training and career development
of all employees and, where an employee becomes
disabled, will endeavour to continue the employment
through appropriate retraining and reasonable workplace
adjustments where practical.
Employee and stakeholder engagement
Information relating to engagement with employees and
other stakeholders, including customers and suppliers,
can be found in the Strategic report on pages 42 to 46 and
in the Corporate Governance Statement on page 89.
Directors’ report continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 128
Directors’ report continued
Greenhouse gas emissions
Details of greenhouse gas emissions and Streamlined
Energy and Carbon Reporting are included within the
Sustainability section of this Annual Report on pages
47 to 70.
Donations
The Company made no political contributions and
incurred no expenditure on lobbying activities during
2024 or 2025. Bodycote does not engage in direct or
indirect political advocacy.
Shareholders
An analysis of the Company’s shareholders and the shares
in issue as at 27 February 2026 together with details of the
interests of major shareholders in voting shares notified to
the Company pursuant to Chapter 5 of the Disclosure and
Transparency Rules are given on page 199.
External auditors
In accordance with the provisions of section 489 of the
Companies Act 2006, a resolution for the re-appointment
of PricewaterhouseCoopers LLP as external auditors is to
be proposed at the forthcoming Annual General Meeting.
Annual General Meeting
The 2026 Annual General Meeting will be held on
27 May 2026 in accordance with the Notice being sent
to shareholders under separate cover.
By order of the Board:
Alison Broughton
Group Company Secretary
10 March 2026
Springwood Court
Springwood Close
Tytherington Business Park
Macclesfield
Cheshire
SK10 2XF
Bodycote plc Annual Report 2025Company overview Strategic report Governance Financial statements Additional information 129
Directors’ responsibility statement
Statement of Directors’ responsibilities in
respect of the financial statements
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have prepared the Group financial statements
in accordance with UK-adopted international accounting
standards and the Company financial statements in
accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 101 ‘Reduced Disclosure
Framework’, and applicable law).
Under company law, Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group
and Company and of the profit or loss of the Group for that
period. In preparing the financial statements, the Directors
are required to:
– select suitable accounting policies and then apply
them consistently;
– state whether applicable UK-adopted international
accounting standards have been followed for the Group
financial statements and United Kingdom Accounting
Standards, comprising FRS 101, have been followed for
the Company financial statements, subject to any
material departures disclosed and explained in the
financial statements;
– make judgements and accounting estimates that are
reasonable and prudent; and
– prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and Company will continue in business.
The Directors are responsible for safeguarding the
assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Group and Company and enable them to ensure that
the financial statements and the Directors’ Remuneration
Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and
integrity of the Company’s website. Legislation in the
United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and
Accounts, taken as a whole, are fair, balanced and
understandable and provide the information necessary
for shareholders to assess the Group’s and Company’s
position and performance, business model and strategy.
Each of the Directors, whose names and functions are
listed in the Governance Report, confirm that, to the best
of their knowledge:
– the Group financial statements, which have been
prepared in accordance with UK-adopted international
accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit of
the Group;
– the Company financial statements, which have
been prepared in accordance with United Kingdom
Accounting Standards, comprising FRS 101, give a
true and fair view of the assets, liabilities and financial
position of the Company; and
– the Strategic report includes a fair review of the
development and performance of the business and
the position of the Group and Company, 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 and Company’s
auditors are unaware; and
– they have taken all the 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 and Company’s auditors are aware of
that information.
This responsibility statement was approved by the
Board of Directors on 10 March 2026.
It is signed on its behalf by order of the Board:
Jim Fairbairn
Chief Executive Officer
Ben Fidler
Chief Financial Officer
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 130
FINANCIAL
STATEMENTS
IN THIS SECTION
Independent auditors’ report 132
Consolidated income statement 141
Consolidated statement of
comprehensive income
141
Consolidated balance sheet 142
Consolidated cash flow statement 143
Consolidated statement of changes in equity 144
Group accounting policies 145
Notes to the consolidated financialstatements 154
Company balance sheet 182
Company statement of changes in equity 183
Company accounting policies 184
Notes to the company financial statements 186
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 131
Opinion
In our opinion:
– Bodycote plc’s Group financial statements and Company financial statements (the
“financial statements”) give a true and fair view of the state of the Group’s and of the
Company’s affairs as at 31 December 2025 and of the Group’s profit and the Group’s
cash flows for the year then ended;
– the Group financial statements have been properly prepared in accordance with
UK-adopted international accounting standards as applied in accordance with the
provisions of the Companies Act 2006;
– the Company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law);
and
– the financial statements have been prepared in accordance with the requirements
of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report 2025
(the “Annual Report”), which comprise: the Consolidated and the Company balance sheets
as at 31 December 2025; the Consolidated income statement and the Consolidated
statement of comprehensive income, the Consolidated cash flow statement, and the
Consolidated and the Company statements of changes in equity for the year then ended;
the Group and the Company accounting policies; and the notes to the financial statements.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK)
(“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further
described in the Auditors’ responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, which includes the FRC’s
Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited
by the FRC’s Ethical Standard were not provided.
Other than those disclosed in Note 27 of the consolidated financial statements, we have
provided no non-audit services to the Company or its controlled undertakings in the
period under audit.
Our audit approach
Overview
Audit scope
– Our audit included full scope audits of twenty-one components (two of which are
financially significant due to their relative size); audit procedures over certain financial
statement line items were also performed at five further components as well as other
Group level audit procedures. This gave us coverage of 76% of the Group’s revenue and
73% of the Group’s absolute adjusted profit before taxation.
Key audit matters
– Accounting for the Optimisation programme (Group and Company)
– Valuation of goodwill (Group)
– Valuation of uncertain tax positions (Group)
Materiality
– Overall Group materiality: £5,300,000 (2024: £6,000,000) based on approximately
5% of adjusted profit before taxation.
– Overall Company materiality: £6,200,000 (2024: £7,000,000) based on approximately
1% of total assets but capped at £3,500,000 (2024: £3,500,000) for the purposes of the
Group audit.
– Performance materiality: £3,975,000 (2024: £4,500,000) (Group) and £4,650,000
(2024: £5,250,000) but capped at £2,625,000 (2024: £2,625,000) for the purposes of the
Group audit (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements.
Independent auditors’ report to the members of Bodycote plc
Report on the audit of the financial statements
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 132
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of
most significance in the audit of the financial statements of the current period and include
the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters, and any comments we make on the results of our
procedures thereon, were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Independent auditors’ report to the members of Bodycote plc continued
This is not a complete list of all risks identified by our audit.
The valuation of other intangible assets – Lake City Heat Treating acquisition (Group),
the valuation of the ERP intangible asset (Group and Company) and the valuation of the
defined benefit obligations of the UK scheme (Group and Company), which were key audit
matters last year, are no longer included because they related to one-off events in the
prior year (Lake City acquisition and ERP intangible asset impairment), and because the
Company completed a buy-in policy agreement in the year which has derisked the
defined benefit obligations of the UK scheme. Otherwise, the key audit matters below
are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Accounting for the Optimisation programme (Group and Company)
Refer to Note 3 (Exceptional items), Note 9 (Property, plant and equipment) and Note 19
(Provisions) of the consolidated financial statements and the areas of focus in the
Report of the Audit Committee.
In 2025, the Group continued to progress the Optimisation programme
(“the Programme”) which was announced in December 2024, and expanded in July
2025. The Programme has resulted in the closure, or planned closure, of a number of
sites across the Group, a revised strategy and operational focus and the removal of
certain non-core operational lines which will no longer be used. The Programme has
resulted in costs associated with severance and redundancy and site closures,
including the impairment of property, plant and equipment no longer planned for
use in the business, of £20.9m (2024: £31.9m).
Management has presented the associated costs as exceptional items. There is
judgement as to whether the costs are exceptional, and the point at which the
associated costs of the Programme should be recognised. The provisions for
redundancies and site closures, and the recognition of impairments, include estimation
where the final costs are not yet known, or judgement as to whether assets have further
use to the business in the short term.
Certain costs recognised were recorded in the Company financial statements and
therefore the key audit matter is relevant for both the Group and the Company.
We identified a significant risk over the valuation of the provisions recognised and
assets impaired, given the estimation and judgement involved in the associated
accounting treatment, and the presentation of such items as exceptional. Given the
level of audit effort and judgements involved, this was a key audit matter.
With respect to the accounting for the Optimisation programme, we performed the
following audit procedures:
We reviewed management’s accounting policies and presentation of the items recorded
as exceptional.
We challenged the judgements and estimates made by management; our audit work in this
area was supported by our component teams.
For the amounts recognised in respect of severance, redundancy and site closures, our
audit work included verifying the internal announcements made to impacted plants and/or
employees, and testing the accuracy of the amounts recorded.
For the impairment of assets, we ensured that the charges recognised represented a full
impairment of the carrying value of the assets that are no longer to be used or sold.
Where assets had not been fully impaired, we verified that the assets will continue to be
used in the short term, and that the residual value retained after recognition of an
impairment charge is supported by the remaining expected useful economic lives.
Where plant closures or equipment scrappage was significant, we also inspected the
relevant approval for the closure/scrappage from executive management.
We considered whether the presentation of these items as exceptional was in accordance
with the Group’s accounting policy.
We considered the appropriateness of the disclosures in the consolidated financial
statements. Based on the audit procedures performed, we noted no material issues.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 133
Independent auditors’ report to the members of Bodycote plc continued
Key audit matter How our audit addressed the key audit matter
Valuation of goodwill (Group)
Refer to Note 7 (Goodwill) of the consolidated financial statements, as well as the areas
of focus in the Report of the Audit Committee.
The Group has recognised £200.5m (2024: £207.0m) of goodwill in the Consolidated
balance sheet as at 31 December 2025. As required by IAS 36, management has
performed an annual impairment assessment and there was no impairment charge
recognised (2024: £18.0m impairment charge).
In response to the strategic review and Optimisation programme, during 2025 the
Group reassessed the level at which goodwill is monitored internally resulting in a
reduction in the number of cash generating units (“CGUs”) from twelve to six groups
of CGUs. Subsequently, goodwill was reallocated between the six groups of CGUs,
with no impairment indicators identified as a result of this reallocation.
For the CGUs with goodwill (which require an annual impairment test), the
determination of the recoverable amount, being the higher of value in use and fair value
less costs of disposal (“FVLCD”), requires judgement and estimation by management.
This is because the determination of a recoverable amount includes management’s
consideration of key internal inputs and external market conditions (such as future
market volumes and pricing trends in those industries in which its customers operate),
which impacts future cash flows, and the determination of the most appropriate
discount rate. Where a FVLCD approach is applied, this assessment also considered
the forecast cash flows from the Optimisation programme.
We identified the Global Automotive & General Industrial (“Global AGI”) and Global
Surface Technologies (“Global ST”) goodwill balances as significant audit risks.
This was due to the lower level of headroom relative to the carrying value of these
CGUs and the material goodwill balances held in each of these CGUs. The nature of the
risk and the related audit effort resulted in this being a key audit matter.
We have assessed the rationale and methodology adopted for the Group’s reallocation
of goodwill to the six groups of CGUs, including management’s assessment that no
impairment indicators existed following this reallocation, and consider this to
be appropriate.
With respect to the valuation of goodwill, we performed audit procedures as set out below.
Our audit procedures were focused on the significant risk CGUs – Global AGI and Global ST:
– We tested the integrity of management’s impairment calculation and its mathematical
accuracy, and corroborated the forecasts used to the Board-approved budget and
High-Level Plan.
– We performed lookback reviews to understand how accurate management has been in
its forecasting historically and to verify historic growth rates achieved.
– We challenged management’s key assumptions for revenue, profit and cash flow
forecasts by comparing them with third party industry market data, where available,
and considered the allocation of central costs and central assets to the CGUs.
In particular, we challenged management on the growth projections (revenue
and margins).
– We utilised internal valuation experts to support our assessment of the long-term growth
assumptions, by comparing these to economic forecasts, and discount rates, by
independently calculating a range for the discount rate.
– In light of the FVLCD approach adopted, we evaluated the reasonableness of benefits
expected to be realised from the Group’s Optimisation programme. We also assessed the
FVLCD against comparable market multiples for similar businesses.
– We agreed the underlying carrying values of the CGUs to audited financial information.
– We reviewed management’s sensitivity analyses to assess whether they were
appropriate and also tested the mathematical accuracy. We supplemented this with
our own sensitivity analyses to determine if any further impairment risks existed.
We considered additional specific factors, including management’s self-identified
impacts of climate change, and were satisfied that the level of management’s sensitivity
took these factors into account.
We considered the appropriateness of the disclosures in the consolidated financial
statements, which included an assessment of the sensitivities disclosed by management.
Based on the audit procedures performed, we noted no material issues.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 134
Independent auditors’ report to the members of Bodycote plc continued
Key audit matter How our audit addressed the key audit matter
Valuation of uncertain tax positions (Group)
Refer to Note 5 (Taxation charge) and Note 17 (Deferred tax) of the consolidated
financial statements and the areas of focus in the Report of the Audit Committee.
The Group has operations in a number of geographical locations and as such is subject
to multiple tax jurisdictions, giving rise to complexity in the accounting for the Group’s
taxation balances.
In particular, the interpretation of complex tax regulations and the unknown future
outcome of pending rulings by the tax authorities results in the need to provide against
a number of uncertain tax positions. The Group undertakes financing activities
between jurisdictions and non-financing cross border transactions, which require
judgement to determine the appropriate tax charge and any associated provisions.
These transactions result in the recognition of material provisions for tax of £23.8m
(2024: £24.9m). The nature of the risk and the related audit effort resulted in this being
considered a key audit matter.
Our audit work, which involved tax audit specialists, included the assessment of the
Group’s uncertain tax positions. Our audit procedures included:
– Considering the current status of new and historical tax assessments and investigations
to monitor developments in ongoing disputes, in addition to reviewing correspondence
with tax authorities.
– Reviewing external tax advice received by the Group, where relevant, to satisfy ourselves
that the tax provisions had been appropriately recorded or adjusted to reflect the latest
tax legislative developments.
– Understanding management’s rationale based on internal analysis and other
supporting information.
– Assessing significant transactions to identify uncertain tax positions that may arise from
those transactions.
– Determining whether the tax provisions were recognised and measured in accordance
with the relevant accounting standards.
In addition, we considered the appropriateness of the disclosures in the consolidated
financial statements. Based on the audit procedures performed, we noted no
material issues.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 135
Independent auditors’ report to the members of Bodycote plc continued
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to
give an opinion on the financial statements as a whole, taking into account the structure
of the Group and the Company, the accounting processes and controls, and the industry
in which they operate.
The financial statements are a consolidation of components, comprising the Group’s
operating businesses and centralised functions. In establishing the overall approach to
the Group audit, we determined the type of work that needed to be performed at
components by us, as the Group engagement team, or component auditors of other PwC
network firms operating under our instruction. Our audit included full scope audits of
twenty-one components (two of which are financially significant due to their relative size).
The significant components were based in the USA, audited by the Group audit team, and
France. Audit procedures over certain financial statement line items were also performed
at five further components and central testing was performed on selected items, such as
goodwill, uncertain tax positions and the Group consolidation, primarily to ensure
appropriate audit coverage. This gave us coverage of 76% of the Group’s revenue and
73% of the Group’s absolute adjusted profit before taxation.
Where the work was performed by component auditors, we determined the level of
involvement we needed to have in the audit work at those components to be able to
conclude whether sufficient appropriate audit evidence had been obtained as a basis for
our opinion on the financial statements as a whole. We issued formal written instructions
to all component auditors setting out the audit work to be performed by each of them.
These instructions covered the significant areas that should be addressed by the
component auditors (which included the relevant risks of material misstatement) and set
out the information required to be reported back to the Group audit team. We spent time
with our French component team during the interim and execution phases of the audit,
and we attended their local audit closing meeting. We also visited our Czech Republic
team at the Group’s Prague Shared Services Centre, given the extent of testing they
perform which supports the financial accounting for the majority of the Group’s European
businesses. In addition, we maintained our oversight over all component audit teams
through regular meetings and other forms of communication as considered necessary.
We received reporting from all our component teams, and supplemented this with remote
and in-person working paper reviews for certain component teams to satisfy ourselves as
to the appropriateness of the audit work performed. This, together with the additional
procedures performed centrally at the Group level, gave us the evidence we needed for
our opinion on the financial statements as a whole.
The impact of climate risk on our audit
In planning our work, including identifying areas of audit risk and determining an
appropriate response, we were mindful of the continued focus on the impact of climate
change risk on companies and their financial reporting, and also that the Group has
identified climate change as a principal risk. Climate change risk is expected to have an
impact on the Group’s business as the operations and strategy of the Group evolve to
address the potential physical and transitional risks that could arise and the opportunities
associated with climate change, including from its customer base. Climate change-related
initiatives and commitments impact the Group in a variety of ways, as described within
the Annual Report. We challenged the completeness of management’s climate risk
assessment by considering the appropriateness of extending the cash flows as modelled
in the Group’s impairment assessment into perpetuity and assessing how management
had considered the impact of the Group’s sustainability initiatives on the cash flows
included in this assessment.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 136
Materiality
The scope of our audit was influenced by our application of materiality. We set certain
quantitative thresholds for materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature, timing and extent of our
audit procedures on the individual financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and in aggregate on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the financial
statements as a whole as follows:
Financial statements – Group Financial statements – Company
Overall materiality £5,300,000
(2024: £6,000,000).
£6,200,000 (2024: £7,000,000)
but capped at £3,500,000
(2024: £3,500,000) for the
purposes of the Group audit.
How we determined it Approximately 5% of
adjusted profit before tax.
Approximately 1% of
total assets.
Rationale for
benchmark applied
Adjusted profit before tax is
the primary benchmark used
by management and other
stakeholders in monitoring
the performance of
the Group.
The Company holds the
Group’s investments in
subsidiary companies.
The strength of the balance
sheet is the key measure of
financial health that is
important to shareholders as
this determines the
Company’s ability to pay
dividends. For the purpose of
the Group audit, the allocated
component overall materiality
was capped at £3,500,000.
For each component in the scope of our Group audit, we allocated a materiality that is
less than our overall Group materiality. The range of materiality allocated across
components was between £450,000 and £4,000,000 (2024: £500,000 and £4,500,000).
Certain components were audited to a local statutory audit materiality that was also less
than our overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements exceeds overall
materiality. Specifically, we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances, classes of transactions
and disclosures, for example in determining sample sizes. Our performance materiality
was 75% (2024: 75%) of overall materiality, amounting to £3,975,000 (2024: £4,500,000)
for the Group financial statements and £2,625,000 (2024: £2,625,000) for the Company
financial statements.
In determining the performance materiality, we considered a number of factors –
the history of misstatements, risk assessment and aggregation risk and the effectiveness
of controls – and concluded that an amount in the middle of our normal range
was appropriate.
We agreed with the Audit Committee that we would report to them misstatements
identified during our audit above £265,000 (Group audit) (2024: £300,000) and £265,000
(Company audit) (2024: £300,000) as well as misstatements below those amounts that,
in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s and the Company’s ability
to continue to adopt the going concern basis of accounting included:
– Obtaining the Directors’ assessment and understanding the assumptions used in the
base case scenario and the severe but plausible downside scenario, including testing
the accuracy of the modelling performed and compliance with the Group’s covenants
on its borrowing facilities throughout the going concern period;
– Agreeing the forecasts used in the base case scenario to the Board-approved forecasts
and evaluating the appropriateness of the key assumptions used in determining these
forecasts, including considering these in the context of wider market data and the
Group’s historical performance and future plans; and
– Challenging the appropriateness of the severe but plausible downside scenario adopted
by management.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt
on the Group’s and the Company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
Independent auditors’ report to the members of Bodycote plc continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 137
In auditing the financial statements, we have concluded that the Directors’ use of the
going concern basis of accounting in the preparation of the financial statements
is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is
not a guarantee as to the Group’s and the Company’s ability to continue as a
going concern.
In relation to the Directors’ reporting on how they have applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in relation to the
Directors’ statement in the financial statements about whether the Directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern
are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than
the financial statements and our auditors’ report thereon. The Directors are responsible
for the other information. Our opinion on the financial statements does not cover the
other information and, accordingly, we do not express an audit opinion or, except to the
extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to
conclude whether there is a material misstatement of the financial statements or a
material misstatement of the other information. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether
the disclosures required by the UK Companies Act 2006 have been included.
Independent auditors’ report to the members of Bodycote plc continued
Based on our work undertaken in the course of the audit, the Companies Act 2006
requires us also to report certain opinions and matters as described below.
Strategic report and the Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information
given in the Strategic report and Directors’ report for the year ended 31 December 2025
is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their
environment obtained in the course of the audit, we did not identify any material
misstatements in the Strategic report and Directors’ report.
Directors’ report on Remuneration
In our opinion, the part of the Directors’ report on remuneration to be audited has been
properly prepared in accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the Directors’ statements in relation to going
concern, longer-term viability and that part of the corporate governance statement
relating to the Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review. Our additional responsibilities with respect to
the corporate governance statement as other information are described in the Reporting
on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the
following elements of the corporate governance statement is materially consistent with
the financial statements and our knowledge obtained during the audit, and we have
nothing material to add or draw attention to in relation to:
– The Directors’ confirmation that they have carried out a robust assessment of the
emerging and principal risks;
– The disclosures in the Annual Report that describe those principal risks, what
procedures are in place to identify emerging risks and an explanation of how these
are being managed or mitigated;
– The Directors’ statement in the financial statements about whether they considered it
appropriate to adopt the going concern basis of accounting in preparing them, and their
identification of any material uncertainties to the Group’s and Company’s ability to
continue to do so over a period of at least twelve months from the date of approval of
the financial statements;
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 138
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the
financial statements, the Directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they
give a true and fair view. The Directors are also responsible for such internal control as
they determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the
Group’s and the Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Company
or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditors’ report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis
of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal
risks of non-compliance with laws and regulations related to employment law, and health
and safety legislation, and we considered the extent to which non-compliance might have
a material effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements such as the Companies
Act 2006 and tax legislation. We evaluated management’s incentives and opportunities
for fraudulent manipulation of the financial statements (including the risk of override of
controls), and determined that the principal risks were related to posting inappropriate
– The Directors’ explanation as to their assessment of the Group’s and Company’s
prospects, the period this assessment covers and why the period is appropriate; and
– The Directors’ statement as to whether they have a reasonable expectation that the
Company will be able to continue in operation and meet its liabilities as they fall due
over the period of its assessment, including any related disclosures drawing attention
to any necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term viability of the Group
and Company was substantially less in scope than an audit and only consisted of making
inquiries and considering the Directors’ process supporting their statement; checking
that the statement is in alignment with the relevant provisions of the UK Corporate
Governance Code; and considering whether the statement is consistent with the financial
statements and our knowledge and understanding of the Group and Company and their
environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that
each of the following elements of the corporate governance statement is materially
consistent with the financial statements and our knowledge obtained during the audit:
– The Directors’ statement that they consider the Annual Report, taken as a whole, is fair,
balanced and understandable, and provides the information necessary for the members
to assess the Group’s and Company’s position, performance, business model
and strategy;
– The section of the Annual Report that describes the review of effectiveness of risk
management and internal control systems; and
– The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the Directors’
statement relating to the Company’s compliance with the Code does not properly disclose
a departure from a relevant provision of the Code specified under the Listing Rules for
review by the auditors.
Independent auditors’ report to the members of Bodycote plc continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 139
journal entries meeting our defined risk criteria and management bias in accounting
estimates and judgements. The Group engagement team shared this risk assessment
with the component auditors so that they could include appropriate audit procedures in
response to such risks in their work. Audit procedures performed by the Group
engagement team and/or component auditors included:
– Discussions with management, Internal Audit, the Audit Committee and the Group’s
internal legal counsel, including consideration of potential instances of non-compliance
with laws and regulation or fraud;
– Reviewing minutes of meetings of those charged with governance including the Board,
Audit Committee and Remuneration Committee;
– Incorporating unpredictability into the audit procedures we performed;
– Substantive testing of journal entries which met defined risk criteria; and
– Challenging assumptions and judgements made by management in their critical
accounting estimates and judgements, including the key audit matters described above.
There are inherent limitations in the audit procedures described above. We are less likely
to become aware of instances of non-compliance with laws and regulations that are not
closely related to events and transactions reflected in the financial statements. Also, the
risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and
balances, possibly using data auditing techniques. However, it typically involves selecting
a limited number of items for testing, rather than testing complete populations. We will
often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the
population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is
located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s
members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006
and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly agreed by our prior consent
in writing.
Independent auditors’ report to the members of Bodycote plc continued
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
– we have not obtained all the information and explanations we require for our audit; or
– adequate accounting records have not been kept by the Company, or returns adequate
for our audit have not been received from branches not visited by us; or
– certain disclosures of Directors’ remuneration specified by law are not made; or
– the Company financial statements and the part of the Directors’ report on remuneration
to be audited are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were first appointed by the Company for the financial year ended 31 December 2019.
Our uninterrupted engagement covers seven financial years.
Other matter
The company is required by the Financial Conduct Authority Disclosure Guidance and
Transparency Rules to include these financial statements in an annual financial report
prepared under the structured digital format required by DTR 4.1.15R–4.1.18R and filed on
the National Storage Mechanism of the Financial Conduct Authority. This auditors’ report
provides no assurance over whether the structured digital format annual financial report
has been prepared in accordance with those requirements.
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
10 March 2026
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 140
Consolidated income statement
For the year ended 31 December 2025
| 2025 | 2024 | ||
| Note | £m | £m | |
Revenue | 1 | ||
Cost of sales and overheads 1 | 2 | ( | ( |
Other operating income 1 | 2 | ||
Other operating expenses 1 | 2 | ( | ( |
Net impairment losses on financial assets 1 | 12,16 | ( | ( |
Operating profit before exceptional items | 1,2 | ||
Exceptional items | 3 | ( | ( |
Operating profit | 2 | ||
Finance income | 4 | ||
Finance charges | 4 | ( | ( |
Profit before taxation | |||
Taxation charge | 5 | ( | ( |
Profit for the Year | |||
| Attributable to: | |||
Equity holders of the Parent | |||
Non-controlling interests | |||
Earnings per share | 6 | ||
Pence | Pence | ||
Basic | |||
Diluted |
1 Excludes exceptional items. Total cost of sales and overheads including exceptional items are
£627.8 m (2024: £6 4 8 .5 m), other operating income including exceptional items are £8 .6 m
(2024: £9.7 m), other operating expenses including exceptional items are £23 .0 m (2024: £77.7 m),
and net impairment losses on financial assets are £1.3 m (2024: £2 .7 m).
Consolidated statement of comprehensive income
For the year ended 31 December 2025
| 2025 | 2024 | ||
| Note | £m | £m | |
Profit for the Year | |||
| Items that will not be reclassified to profit or loss: | |||
| Actuarial gains/(losses) on defined benefit | 25 | ( | |
| pension schemes | |||
Tax on retirement benefit obligations that will not be reclassified | 17 | ( | |
Total items that will not be reclassified to profit or loss | ( | ||
| Items that may be reclassified subsequently to profit | |||
| or loss: | |||
Exchange losses on translation of overseas operations | ( | ( | |
Movements on hedges of net investments | 16 | ( | |
Movements on cash flow hedges | ( | ||
| Total items that may be reclassified subsequently | ( | ( | |
| to profit or loss | |||
Total other comprehensive expense for the year | ( | ( | |
Total comprehensive income for the year | |||
| Attributable to: | |||
Equity holders of the parent | |||
Non-controlling interests | |||
The notes to the consolidated financial statements on pages 145 to 181 form an integral
part of the consolidated financial statements.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 141
Consolidated balance sheet
At 31 December 2025
| 2025 | 2024 | ||
| Note | £m | £m | |
| Non-current assets | |||
Goodwill | 7 | ||
Other intangible assets | 8 | ||
Property, plant and equipment | 9 | ||
Right-of-use assets | 10 | ||
Deferred tax assets | 17 | ||
Trade and other receivables | 12 | ||
| Current assets | |||
Inventories | 11 | ||
Current tax assets | |||
Trade and other receivables | 12 | ||
Cash and bank balances | 13 | ||
Assets held for sale | 14 | ||
Total assets | |||
| Current liabilities | |||
Trade and other payables | 18 | ||
Current tax liabilities | 5 | ||
Borrowings (restated) 1 | 15 | ||
Lease liabilities | 10 | ||
Provisions | 19 | ||
Net current assets/(liabilities) 1 | ( |
| 2025 | 2024 | ||
| Note | £m | £m | |
| Non-current liabilities | |||
Borrowings (restated) 1 | 15 | ||
Lease liabilities | 10 | ||
Retirement benefit obligations | 25 | ||
Deferred tax liabilities | 17 | ||
Provisions | 19 | ||
Other payables | 18 | ||
Total liabilities | |||
Net assets | |||
| Equity | |||
Share capital | 20 | ||
Share premium account | |||
Own shares | ( | ( | |
Translation reserves | |||
Other reserves | |||
Retained earnings | |||
Equity attributable to equity holders of the parent | |||
Non-controlling interests | |||
Total equity |
1 In 2025 the Group reclassified its Revolving Credit Facility liability to present it as a non-current
liability. See note 15 for details.
The notes to the consolidated financial statements on pages 145 to 181 form an integral
part of the consolidated financial statements.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 142
Consolidated cash flow statement
For the year ended 31 December 2025
| 2025 | 2024 | ||
| Note | £m | £m | |
Net cash from operating activities | 22 | ||
| Investing activities | |||
Purchases of property, plant and equipment | 9,18 | ( | ( |
Proceeds on disposal of property, plant and equipment | |||
Purchases of other intangible assets | 8 | ( | ( |
Acquisition of businesses, net of cash acquired | ( | ||
Net proceeds on disposal of business | 3 | ||
Repayments of loans issued/(loans issued) | ( | ||
Interest received | |||
Net cash used in investing activities | ( | ( | |
| Financing activities | |||
Interest paid | ( | ( | |
Dividends paid | 21 | ( | ( |
Principal elements of lease payments | ( | ( | |
Drawdown of bank loans | |||
Repayments of bank loans | ( | ( | |
Ordinary shares purchased for share buyback | 20 | ( | ( |
Net cash used in financing activities | ( | ( | |
Net increase/(decrease) in cash and cash equivalents | ( | ||
Cash and cash equivalents at beginning of year | |||
Effect of foreign exchange rate changes | ( | ||
Cash and cash equivalents at end of year | 22 |
The notes to the consolidated financial statements on pages 145 to 181 form an integral part of the consolidated financial statements.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 143
Consolidated statement of changes in equity
For the year ended 31 December 2025
| Equity | |||||||||
| Share | attributable to | Non- | |||||||
| Share | premium | Own | Translation | Other | Retained | equity holders | controlling | Total | |
| capital | account | shares | reserves | reserves | earnings | of the parent | interests | equity | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | |
1 January 2024 | ( | ||||||||
Profit for the year | |||||||||
Exchange differences on translation of overseas operations | ( | ( | ( | ( | |||||
Movements on hedges of net investments | |||||||||
Movements on cash flow hedges | ( | ( | ( | ||||||
| Actuarial losses on defined benefit pension schemes | ( | ( | ( | ||||||
| net of deferred tax | |||||||||
Total comprehensive income for the year | ( | ||||||||
Ordinary shares acquired | ( | ( | ( | ( | |||||
Settlement of share awards | ( | ||||||||
Share-based payments | |||||||||
Dividends | ( | ( | ( | ( | |||||
31 December 2024 | ( | ||||||||
Profit for the year | |||||||||
Exchange differences on translation of overseas operations | ( | ( | ( | ( | |||||
Movements on hedges of net investments | ( | ( | ( | ||||||
Movements on cash flow hedges | |||||||||
| Actuarial gains on defined benefit pension schemes | |||||||||
| net of deferred tax | |||||||||
Total comprehensive income for the year | ( | ( | |||||||
Ordinary shares acquired | ( | ( | ( | ( | |||||
Settlement of share awards | ( | ( | |||||||
Share-based payments | |||||||||
Dividends | ( | ( | ( | ( | |||||
31 December 2025 | ( |
The notes to the consolidated financial statements on pages 145 to 181 form an integral
part of the consolidated financial statements.
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 17
3
/
11
p 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 £132.9 m (2024: £1 31 .3 m) which consists of £129.8 m
(2024: £129.8 m) transferred from retained earnings on the conversion of B shares into
deferred shares in 2008 and 2009, and a total of £3. 1 m arising from the share buyback
programme which commenced in 2024 and was extended in July 2025. Of the £3.1 m,
£1.6 m was incurred in 2025. See note 20 for details.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 144
Group accounting policies
Year ended 31 December 2025
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 145
Group accounting policies continued
Year ended 31 December 2025
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 146
Group accounting policies continued
Year ended 31 December 2025
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 147
Group accounting policies continued
Year ended 31 December 2025
Software | 7% to 33% |
Non-compete agreements | 20% to 33% |
Customer relationships | 7% to 10% |
Freehold buildings | 2% |
Leasehold improvements | Over the projected life of the lease |
Fixtures and fittings | 10% to 20% |
Plant and machinery | 5% to 20% |
Motor vehicles | 20% to 33% |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 148
Group accounting policies continued
Year ended 31 December 2025
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 149
Group accounting policies continued
Year ended 31 December 2025
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 150
Group accounting policies continued
Year ended 31 December 2025
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 151
Group accounting policies continued
Year ended 31 December 2025
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 152
Group accounting policies continued
Year ended 31 December 2025
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 153
Notes to the consolidated financial statements
Year ended 31 December 2025
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 | ||||||
| Precision | Central | |||||
| Specialist | Heat | costs and | Total | |||
| Technologies | Treatment | eliminations | Total core | Non-core | Group | |
| £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 costs | – | – | (0.1) | (0.1) | – | (0.1) |
| Operating profit/ | 49.0 | 72.6 | (18.4) | 103.2 | 1.3 | 104.5 |
(loss) before exceptional items | ||||||
Exceptional items | (0.9) | (3.7) | (0.3) | (4.9) | (16.0) | (20.9) |
| Operating profit/ | 48.1 | 68.9 | (18.7) | 98.3 | (14.7) | 83.6 |
| (loss) | ||||||
Finance income | 0.4 | |||||
Finance charges | (9.5) | |||||
Profit before taxation | 74.5 | |||||
Taxation | (19.1) | |||||
Profit for the Year | 55.4 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 154
Notes to the consolidated financial statements continued
Year ended 31 December 2025
1. Segmental analysis continued
| 2024 restated | ||||||
| Precision | Central | |||||
| Specialist | Heat | costs and | Total | |||
| Technologies | Treatment | eliminations | Total core | Non-core | Group | |
| £m | £m | £m | £m | £m | £m | |
Revenue | 222.3 | 459.8 | – | 682.1 | 75.0 | 757.1 |
| Result | ||||||
| Adjusted operating | 65.5 | 80.4 | (20.4) | 125.5 | 3.5 | 129.0 |
| profit/(loss) | ||||||
Amortisation of acquired intangible assets | (8.7) | (1.7) | – | (10.4) | – | (10.4) |
Acquisition costs | (2.4) | – | – | (2.4) | – | (2.4) |
| Operating profit/ | 54.4 | 78.7 | (20.4) | 112.7 | 3.5 | 116.2 |
(loss) prior to exceptional items | ||||||
Exceptional items | (1.4) | (24.4) | (30.7) | (56.5) | (21.8) | (78.3) |
| Operating profit/ | 53.0 | 54.3 | (51.1) | 56.2 | (18.3) | 37.9 |
| (loss) | ||||||
Finance income | 0.8 | |||||
Finance charges | (10.3) | |||||
Profit before taxation | 28.4 | |||||
Taxation | (7.7) | |||||
Profit for the Year | 20.7 | |||||
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 | |||||
| Precision | |||||
| Specialist | Heat | Total | |||
| Technologies | Treatment | Total core | Non-core | Group | |
| Revenue | £m | £m | £m | £m | £m |
Western Europe | 105.1 | 215.4 | 320.5 | 40.2 | 360.7 |
North America | 100.0 | 162.0 | 262.0 | 14.2 | 276.2 |
Emerging Markets | 7. 2 | 81.9 | 89.1 | 1.1 | 90.2 |
Group | 212.3 | 459.3 | 671.6 | 55.5 | 727.1 |
| 2024 restated | |||||
| Precision | |||||
| Specialist | Heat | Total | |||
| Technologies | Treatment | Total core | Non-core | Group | |
| Revenue | £m | £m | £m | £m | £m |
Western Europe | 119.1 | 211.2 | 330.3 | 50.9 | 381.2 |
North America | 95.7 | 165.7 | 261.4 | 23.0 | 284.4 |
Emerging Markets | 7. 5 | 82.9 | 90.4 | 1.1 | 91.5 |
Group | 222.3 | 459.8 | 682.1 | 75.0 | 757.1 |
Other information
| 2025 | ||||||
| Precision | Central | |||||
| Specialist | Heat | costs and | Total | |||
| Technologies | Treatment | eliminations | Total core | Non-core | Group | |
| £m | £m | £m | £m | £m | £m | |
| Gross capital | 23.2 | 59.3 | 4.4 | 86.9 | 4.4 | 91.3 |
| additions | ||||||
Depreciation and amortisation | 23.3 | 48.6 | 3.0 | 74.9 | 5.6 | 80.5 |
Impairments | – | (0.3) | 0.3 | – | 3.7 | 3.7 |
| 2024 restated | ||||||
| Precision | Central | |||||
| Specialist | Heat | costs and | Total | |||
| Technologies | Treatment | eliminations | Total core | Non-core | Group | |
| £m | £m | £m | £m | £m | £m | |
| Gross capital | 18.7 | 57.9 | 5.2 | 81.8 | 8.2 | 90.0 |
| additions | ||||||
Depreciation and amortisation | 23.5 | 48.7 | 3.8 | 76.0 | 9.7 | 85.7 |
Impairments | 0.8 | 23.1 | 28.4 | 52.3 | 13.0 | 65.3 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 155
Notes to the consolidated financial statements continued
Year ended 31 December 2025
1. Segmental analysis continued
| 2025 | 2024 | |
| £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 |
| 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 |
| 2025 | 2024 | ||
| £m | £m | ||
| Within operating profit before exceptional items: | |||
Employee costs (see note 23) | 268.0 | 280.6 | |
Temporary agency contractors | 15.6 | 16.7 | |
Pension scheme administration expenses (see note 25) | 0.4 | 0.6 | |
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 and equipment (see note 9) | 56.5 | 59.7 | |
Depreciation of right-of-use assets (see note 10) | 13.1 | 13.6 | |
Amortisation of other intangible assets (see note 8) | 10.9 | 12.4 | |
Impairment loss on trade receivables (see note 12) | 1.4 | 2.4 | |
Impairment of property, plant and equipment (see note 9) | – | 0.1 | |
Gain on disposal of property, plant and equipment | (see note 9) | (0.4) | (5.5) |
Gain on disposal of right-of-use assets (see note 10) | – | (0.2) | |
Government assistance support received 1 | (1.4) | (1.0) | |
Acquisition costs | 0.1 | 2.4 | |
Net foreign exchange loss/(gain) | 0.5 | (0.4) | |
| Within exceptional items: | |||
Site closure and associated costs (see note 3) | 11.8 | 5.2 | |
Impairment of property, plant and equipment (see notes 3 and 9) | 3.1 | 16.9 | |
Impairment of other intangible assets (see notes 3 and 8) | 0.3 | 29.2 | |
Impairment of right-of-use assets (see notes 3 and 10) | 0.3 | 1. 1 | |
Impairment of goodwill (see notes 3 and 7) | – | 18.0 | |
| (Gain)/loss on disposal of property, plant and equipment | (1.8) | 0.1 | |
| (see notes 3 and 9) |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 156
Notes to the consolidated financial statements continued
Year ended 31 December 2025
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 on page 19 for further details of the Optimisation
programme.
| 2025 | 2024 | |
| £m | £m | |
Interest on bank loans and overdrafts | 3.7 | 3.9 |
Interest on lease liabilities | 2.6 | 2.6 |
Total interest expense | 6.3 | 6.5 |
Net interest on the defined benefit pension liability | 0.4 | 0.4 |
Other finance charges | 2.8 | 3.4 |
Total finance charge | 9.5 | 10.3 |
| Less: | ||
Interest received on bank deposits | (0.3) | (0.7) |
Other interest receivable | (0.1) | (0.1) |
Total finance income | (0.4) | (0.8) |
Net finance charge | 9.1 | 9.5 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 157
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2024 | |
| £m | £m | |
Current taxation – charge for the year | 1 7. 5 | 20.7 |
Current taxation – adjustments in respect of previous years | – | 1.5 |
Deferred tax – charge for the year (see note 17) | 0.4 | (13.2) |
| Deferred tax – adjustments in respect of previous years | 1.2 | (1.3) |
| (see note 17) | ||
Total taxation charge | 19.1 | 7. 7 |
| 2025 | 2024 | |
| £m | £m | |
Profit before taxation | 74.5 | 28.4 |
| Tax at the weighted average country tax rate of 25.1% | 18.7 | 7. 2 |
| (2024: 25.1%) | ||
Tax effect of expenses in various jurisdictions not deductible in determining taxable profit | 2.0 | 1.6 |
Impact of recognition or derecognition of deferred tax balances | (0.6) | 0.8 |
| Tax effect of other adjustments in respect of previous years: | ||
Current tax 1 | – | 1. 5 |
Deferred tax 1 | 1.2 | (1.3) |
Effect of financing activities between jurisdictions 2 | (1.9) | (2.5) |
Impact of trade and minimum corporate taxes | 0.2 | 0.2 |
| Effect of changes in statutory tax rates on deferred tax assets | (0.8) | (0.2) |
| and liabilities | ||
Other tax risk provision movements 3 | 0.3 | 0.4 |
Tax expense for the year | 19.1 | 7. 7 |
1 2025 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.
2 The 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.
3 Includes 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).
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 158
Notes to the consolidated financial statements continued
Year ended 31 December 2025
6. Earnings per share
| 2025 | 2024 | |
| £m | £m | |
| Earnings | ||
Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the parent | 54.9 | 20.0 |
Number | Number | |
| Number of shares | ||
| Weighted average number of ordinary shares for the purpose | 176,816,708 | 186,012,493 |
| 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 for the purpose | 177,226,391 | 186,879,835 |
| 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).
| 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 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 159
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| Goodwill | ||
| 2024 | ||
Group of CGUs | CGUs | £m |
North America HIP | 3.9 | |
HIP | Europe HIP | 2.2 |
Total HIP | 6.1 | |
Europe ST | 12.6 | |
ST | North America ST | 28.5 |
Total ST | 41.1 | |
S 3 P | Total S 3 P | nil |
Total Specialist Technologies | 47.2 | |
Europe AGI 1 | 24.9 | |
AGI | North America AGI | 39.4 |
Total AGI | 64.3 | |
UK ADE | 11. 0 | |
| ADE | North America ADE | 69.7 |
France and Belgium ADE | 1.2 | |
Total ADE | 81.9 | |
Eastern Europe AGI | 11. 6 | |
Emerging markets | Asia AGI | nil |
Total Emerging markets | 11.6 | |
Total Precision Heat treatment | 157.8 | |
Non-core 1 | 2.0 | |
Total Goodwill | 207.0 |
7. Goodwill continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 160
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2024 1 | |
| £m | £m | |
Specialist Technologies | 45.3 | 47.2 |
Precision Heat Treatment | 155.2 | 157.8 |
Non-core | – | 2.0 |
200.5 | 207.0 |
| Goodwill | Long-term | Post-tax | Pre-tax | |
| carrying | growth | discount | discount | |
| value | rate | 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 |
S 3 P | 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 markets | 12.4 | 2.4 | 9.3 | 11.7 |
7. Goodwill continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 161
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| deemed sufficiently severe to cover a range of potential risks, some of which could relate | |
| to these potential climate change risks. |
| Non- | ||||
| Customer | compete | |||
| Software | relationships | agreements | Total | |
| £m | £m | £m | £m | |
| Cost | ||||
At 1 January 2024 | 60.9 | 146.9 | 3.8 | 211.6 |
Exchange differences | (0.3) | 1.3 | – | 1.0 |
Additions | 4.1 | – | – | 4.1 |
Acquired on acquisition of businesses | – | 39.6 | 0.3 | 39.9 |
Impairments | (28.4) | – | – | (28.4) |
Eliminated on disposals | (0.6) | – | – | (0.6) |
At | 35.7 | 187.8 | 4.1 | 227.6 |
Exchange differences | 0.1 | (10.7) | – | (10.6) |
Additions | 2.1 | – | – | 2.1 |
Eliminated on disposals | (0.2) | – | – | (0.2) |
At 31 December 2025 | 37.7 | 177.1 | 4.1 | 218.9 |
| Amortisation | ||||
At 1 January 2024 | 25.1 | 71.8 | 3.5 | 100.4 |
Exchange differences | (0.1) | 0.3 | – | 0.2 |
Charge for the year | 2.0 | 10.2 | 0.2 | 12.4 |
Impairments | – | 0.8 | – | 0.8 |
Eliminated on disposals | (0.6) | – | – | (0.6) |
At 1 January 2025 | 26.4 | 83.1 | 3.7 | 113.2 |
Exchange differences | 0.1 | (4.6) | – | (4.5) |
Charge for the year | 1.3 | 9.4 | 0.2 | 10.9 |
Impairments | 0.3 | – | – | 0.3 |
Eliminated on disposals | (0.2) | – | – | (0.2) |
At 31 December 2025 | 27.9 | 87.9 | 3.9 | 119.7 |
| Carrying amount | ||||
At 31 December 2025 | 9.8 | 89.2 | 0.2 | 99.2 |
At 31 December 2024 | 9.3 | 104.7 | 0.4 | 114.4 |
7. Goodwill continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 162
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| Land and buildings | ||||||
| Leasehold | Plant | Fixtures | Assets under | |||
| Freehold | improvements | and machinery | and fittings | construction | Total | |
| £m | £m | £m | £m | £m | £m | |
| Cost or valuation | ||||||
At 1 January 2024 | 251.8 | 37.8 | 1,082.1 | 21.2 | 70.5 | 1,463.4 |
Additions 1 | 0.1 | 0.4 | 6.3 | 1.2 | 60.0 | 68.0 |
Acquired in business combination | 1. 3 | – | 6.4 | – | – | 7. 7 |
Exchange differences | (7.1) | (1.3) | (30.0) | (0.5) | (1.2) | (40.1) |
Recategorisation | 5.2 | 0.6 | 38.7 | 1.4 | (45.9) | – |
Eliminated on sale of business | (2.9) | – | (5.2) | (0.2) | – | (8.3) |
Disposals | (4.7) | – | (20.8) | (1.1) | (0.2) | (26.8) |
At 1 January 2025 | 243.7 | 37.5 | 1,077.5 | 22.0 | 83.2 | 1,463.9 |
Additions 1 | 0.1 | 0.3 | 5.0 | 1.1 | 70.5 | 77.0 |
Exchange differences | 3.8 | (0.1) | 7. 2 | 0.1 | (1.4) | 9.6 |
Transfer to assets held for sale | (31.3) | (1.1) | (56.0) | (0.7) | (1.2) | (90.3) |
Recategorisation | 5.7 | 1.5 | 56.0 | 2.7 | (65.9) | – |
Disposals | (1.8) | (1.7) | (32.6) | (1.8) | (0.5) | (38.4) |
At 31 December 2025 | 220.2 | 36.4 | 1,057.1 | 23.4 | 84.7 | 1,421.8 |
| Accumulated depreciation and impairment | ||||||
At 1 January 2024 | 126.1 | 23.9 | 791.5 | 1 7. 0 | – | 958.5 |
Charge for the year | 7. 2 | 2.2 | 48.3 | 2.0 | – | 59.7 |
Impairments | 1.8 | 0.5 | 14.6 | 0.1 | – | 1 7. 0 |
Exchange differences | (3.9) | (0.9) | (21.3) | (0.4) | – | (26.5) |
Recategorisation | – | – | (0.1) | 0.1 | – | – |
Eliminated on sale of business | (2.4) | – | (4.2) | (0.1) | – | (6.7) |
Disposals | (2.0) | – | (16.2) | (1.1) | – | (19.3) |
At 1 January 2025 | 126.8 | 25.7 | 812.6 | 1 7. 6 | – | 982.7 |
Charge for the year | 7. 3 | 1.8 | 45.4 | 2.0 | – | 56.5 |
Impairments (see notes 2 and 3) | – | (0.2) | 3.1 | 0.2 | – | 3.1 |
Exchange differences | 2.6 | 0.2 | 6.2 | 0.1 | – | 9.1 |
Transfer to assets held for sale | (19.2) | (1.1) | (49.0) | (0.6) | – | (69.9) |
Disposals | (1.7) | (1.3) | (32.6) | (1.8) | – | (37.4) |
At 31 December 2025 | 115.8 | 25.1 | 785.7 | 1 7. 5 | – | 944.1 |
| Carrying amount | ||||||
At 31 December 2025 | 104.4 | 11.3 | 271.4 | 5.9 | 84.7 | 477.7 |
At 31 December 2024 | 116.9 | 11. 8 | 264.9 | 4.4 | 83.2 | 481.2 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 163
Notes to the consolidated financial statements continued
Year ended 31 December 2025
9. Property, plant and equipment continued
| 2025 | 2024 | |
| £m | £m | |
| Recorded within operating profit before exceptional items: | ||
Proceeds on sale of property | 0.6 | 12.4 |
Less NBV of property sold | – | (7.7) |
Net gain on sale of property | 0.6 | (4.7) |
Net (loss)/gain on sale of plant and equipment | (0.2) | 0.8 |
| Net gain on sale of property, plant and equipment | 0.4 | 5.5 |
| (see note 2) | ||
| Recorded within exceptional items: | ||
Proceeds on sale of property | 3.6 | – |
Less NBV of property sold | (1.5) | – |
Net gain on sale of property | 2.1 | – |
Net loss on sale of plant and equipment | (0.3) | (0.1) |
Net gain on sale of property, plant and equipment (see note 3) | 1.8 | (0.1) |
Total net gain of sale of property, plant and equipment | 2.2 | 5.4 |
| 2025 | 2024 2 | |
| £m | £m | |
Specialist Technologies | – | 0.9 |
Precision Heat Treatment 1 | (0.3) | 4.1 |
Non-core | 3.4 | 12.0 |
Group | 3.1 | 1 7. 0 |
| Land, | ||||
| buildings, | ||||
| fixtures and | Plant and | |||
| fittings | machinery | Vehicles | Total | |
| £m | £m | £m | £m | |
| Cost or valuation | ||||
At 1 January 2024 | 137.9 | 21.1 | 18.3 | 177.3 |
Additions | 12.7 | 2.3 | 2.9 | 1 7. 9 |
Eliminated on sale of business | (0.8) | (0.1) | – | (0.9) |
Disposals | (12.1) | (1.5) | (3.7) | (17.3) |
Exchange differences | (4.9) | (0.7) | (0.5) | (6.1) |
At 1 January 2025 | 132.8 | 21.1 | 1 7. 0 | 170.9 |
Additions | 8.4 | 1.6 | 2.2 | 12.2 |
Disposals | (3.9) | (2.8) | (1.9) | (8.6) |
Exchange differences | 0.5 | 0.4 | 0.2 | 1.1 |
At 31 December 2025 | 137.8 | 20.3 | 1 7. 5 | 175.6 |
| Accumulated depreciation | ||||
| and impairment | ||||
At 1 January 2024 | 87.2 | 1 7. 4 | 14.2 | 118.8 |
Charge for the year | 9.5 | 1.7 | 2.4 | 13.6 |
Impairments (see notes 2 and 3) | 1. 1 | – | – | 1.1 |
Eliminated on sale of business | (0.8) | (0.1) | – | (0.9) |
Disposals | (8.8) | (1.5) | (3.5) | (13.8) |
Exchange differences | (3.6) | (0.5) | (0.2) | (4.3) |
At 1 January 2025 | 84.6 | 1 7. 0 | 12.9 | 114.5 |
Charge for the year | 9.0 | 1.7 | 2.4 | 13.1 |
Impairments (see notes 2 and 3) | 0.3 | – | – | 0.3 |
Disposals | (3.4) | (2.4) | (1.8) | (7.6) |
Exchange differences | 0.8 | 0.3 | (0.1) | 1.0 |
At 31 December 2025 | 91.3 | 16.6 | 13.4 | 121.3 |
| Carrying amount | ||||
At 31 December 2025 | 46.5 | 3.7 | 4.1 | 54.3 |
At 31 December 2024 | 48.2 | 4.1 | 4.1 | 56.4 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 164
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2024 | |
| £m | £m | |
Raw materials | 24.5 | 25.6 |
Work-in-progress | 5.0 | 2.9 |
Finished goods and goods for resale | 0.6 | 0.9 |
Less: obsolescence provision | (1.4) | (1.3) |
28.7 | 28.1 |
| 2025 | 2024 | |
| £m | £m | |
| Current: | ||
Amounts receivable for the supply of services | 128.2 | 125.2 |
Allowance for expected credit loss | (3.5) | (3.3) |
Net trade receivables | 124.7 | 121.9 |
Other receivables | 9.3 | 8.1 |
Prepayments | 11.2 | 11. 3 |
145.2 | 141.3 | |
| Non-current: | ||
Trade and other receivables | 2.8 | 3.1 |
Allowance for expected credit loss | (0.2) | (0.3) |
Net trade receivables | 2.6 | 2.8 |
10. Right-of-use assets continued
| 2025 | 2024 | |
| £m | £m | |
At 1 January | 63.5 | 64.3 |
Additions | 12.2 | 1 7. 8 |
Disposals | (0.9) | (3.7) |
Principal and interest repayments | (13.8) | (13.5) |
Exchange differences | (0.2) | (1.4) |
At 31 December | 60.8 | 63.5 |
Current | 13.6 | 13.1 |
Non-current | 47.2 | 50.4 |
| 2025 | 2024 | |
| Amounts recognised in the consolidated income statement | £m | £m |
Depreciation charge | 13.1 | 13.6 |
Interest on lease liabilities | 2.6 | 2.6 |
Expenses relating to short-term leases | 0.9 | 0.9 |
Expenses relating to leases of low value assets | 0.8 | 0.8 |
Gain on disposal of right-of-use assets | – | (0.2) |
Right-of-use asset impairment charge | 0.3 | 1.1 |
| 2025 | 2024 | |
| Maturity analysis – contractual undiscounted cash flows | £m | £m |
Less than one year | 15.5 | 15.5 |
One to five years | 38.2 | 38.0 |
More than five years | 1 7. 1 | 21.6 |
Total undiscounted cash flows | 70.8 | 75.1 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 165
Notes to the consolidated financial statements continued
Year ended 31 December 2025
12. Trade and other receivables continued
| 31 - 60 | 61 - 90 | 91 - 120 | >120 | |||
| Current | days | days | days | days | £m | |
| 31 December 2025: | ||||||
| Expected credit | 0.3% | 1.0% | 1.3% | 4.0% | 64.8% | |
| loss rate % | ||||||
Gross carrying amount - trade | 93.0 | 15.6 | 11.3 | 4.0 | 4.3 | 128.2 |
| recevables £m | ||||||
Loss allowance £m | (0.3) | (0.2) | (0.1) | (0.2) | (2.8) | (3.5) |
| 31 December 2024: | ||||||
| Expected credit | 0.2% | 0.6% | 1.3% | 5.2% | 118.2% | |
| loss rate | ||||||
Gross carrying amount – trade | 93.4 | 15.2 | 11. 9 | 2.4 | 2.3 | 125.2 |
| recevables | ||||||
Loss allowance | (0.2) | (0.1) | (0.2) | (0.1) | (2.7) | (3.3) |
| 2025 | 2024 | |
| £m | £m | |
At 1 January | 3.6 | 2.8 |
Impairment losses recognised | 2.1 | 3.0 |
Allowance eliminated on disposal | – | (0.1) |
Amounts written off as uncollectable | (1.2) | (1.6) |
Impairment losses reversed | (0.7) | (0.6) |
| Allowance for expected credit loss on loans issued/repayments | (0.1) | 0.3 |
| on loans issued | ||
Exchange differences | – | (0.2) |
At 31 December | 3.7 | 3.6 |
13. Cash and bank balances
Cash and bank balances comprise cash held by the Group. A breakdown of significant
cash and bank balances by currency is as follows:
| 2025 | 2024 | |
| £m | £m | |
Euro | 5.5 | 1.6 |
US dollar | 1.4 | – |
Sterling | 0.9 | 3.5 |
Chinese yuan | 13.2 | 11. 5 |
South Korean wan | 1.6 | – |
Others | 2.6 | 2.5 |
Total cash and bank balances 1 | 25.2 | 19.1 |
1 An analysis of overdrafts by currency is included in note 15.
| Assets | ||
| 2025 | 2024 | |
| £m | £m | |
Precision Heat Treatment | 0.2 | – |
Non-core | 3.6 | – |
Total assets held for sale | 3.8 | – |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 166
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2024 | |
| £m | £m | |
Revolving Credit Facility | 129.2 | 84.3 |
Bank overdrafts | 0.8 | 3.1 |
Total borrowings | 130.0 | 87.4 |
Weighted average interest rate paid | 2.9% | 3.9% |
| Analysis of Revolving Credit Facility drawdowns by currency: | ||
Euro | 129.2 | 84.3 |
129.2 | 84.3 | |
| Analysis of bank overdrafts by currency: | ||
US dollar | 0.7 | 1. 5 |
Euro | – | 1. 3 |
Canadian dollar | – | 0.2 |
Other | 0.1 | 0.1 |
0.8 | 3.1 |
| Less than | |||||
| 1 year | 1–2 years | 2–5 years | 5+ years | Total | |
| 2025 | 2025 | 2025 | 2025 | 2025 | |
| £m | £m | £m | £m | £m | |
| Non-interest bearing | 78.1 | – | – | – | 78.1 |
financial liabilities 1 | |||||
Bank loans and overdrafts | 0.8 | – | 150.4 | – | 151.2 |
Lease liabilities | 15.5 | 12.7 | 25.5 | 1 7. 1 | 70.8 |
94.4 | 12.7 | 175.9 | 1 7. 1 | 300.1 |
| Less than | |||||
| 1 year | 1-2 years | 2-5 years | 5+ years | Total | |
| 2024 | 2024 | 2024 | 2024 | 2024 | |
| £m | £m | £m | £m | £m | |
| Non–interest bearing | 97.1 | – | – | – | 97.1 |
financial liabilities 1 | |||||
Bank loans and overdrafts 2 | 3.1 | – | 98.1 | – | 101.2 |
Lease liabilities | 15.5 | 12.8 | 25.2 | 21.6 | 75.1 |
115.7 | 12.8 | 123.3 | 21.6 | 273.4 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 167
Notes to the consolidated financial statements continued
Year ended 31 December 2025
16. Financial instruments
| 2025 | 2024 | |
| Financial assets at amortised cost | £m | £m |
Trade and other receivables | 131.5 | 126.5 |
Loan receivable | 0.6 | 0.8 |
Cash and bank balances | 25.2 | 19.1 |
157.3 | 146.4 |
| 2025 | 2024 | |
| Financial liabilities at amortised cost | £m | £m |
Borrowings – loans and overdrafts | 130.0 | 87.4 |
Lease liabilities | 60.8 | 63.5 |
Trade and other payables 1 | 68.7 | 61.2 |
259.5 | 212.1 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 168
Notes to the consolidated financial statements continued
Year ended 31 December 2025
16. Financial instruments continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 169
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2025 | 2024 | 2024 | |
| EUR Net investment hedge | £m | €m | £m | €m |
| Carrying amount of the hedging | 126.4 | 144.7 | 90.1 | 109.0 |
| instruments | ||||
| Carrying amount of the hedged items (net | 126.4 | 144.7 | 90.1 | 109.0 |
| assets of subsidiaries) and denominations | ||||
Hedge Ratio | 1:1 | – | 1:1 | – |
| Change in hedging instruments carrying | (6.7) | – | 4.1 | – |
| amount as a result of foreign currency | ||||
| movements from 1 January 2025 | ||||
Change in value of hedged item used to determine hedge effectiveness | 6.7 | – | (4.1) | – |
| 2025 | 2025 | 2024 | 2024 | |
| SEK Net investment hedge | £m | SEKm | £m | SEKm |
| Carrying amount of the hedging | 2.9 | 36.5 | – | – |
| instruments | ||||
| Carrying amount of the hedged items (net | 2.9 | 36.5 | – | – |
| assets of subsidiaries) and denominations | ||||
Hedge Ratio | 1:1 | – | – | – |
| Change in hedging instruments carrying | (0.2) | – | – | – |
| amount as a result of foreign currency | ||||
| movements from 1 January 2025 | ||||
Change in value of hedged item used to determine hedge effectiveness | 0.2 | – | – | – |
| Accelerated | Retirement | ||||
| tax | benefit | ||||
| depreciation | Tax losses | obligations | Other | Total | |
| £m | £m | £m | £m | £m | |
At 1 January 2024 | 61.4 | (3.3) | (2.8) | (6.1) | 49.2 |
| Credit to the consolidated | (11.1) | (2.0) | (0.2) | (1.0) | (14.3) |
| income statement | |||||
Debit to equity | – | – | 0.1 | – | 0.1 |
Transfers | 0.3 | – | – | (0.3) | – |
Disposal of business | – | – | – | 0.1 | 0.1 |
Exchange differences | (0.7) | – | 0.1 | (0.1) | (0.7) |
Effect of change in tax rate in the income statement | – | – | – | (0.2) | (0.2) |
At 1 January 2025 | 49.9 | (5.3) | (2.8) | (7.6) | 34.2 |
| Charge to the consolidated | (0.1) | 0.6 | 0.6 | 1.3 | 2.4 |
| income statement | |||||
Exchange differences | (1.1) | (0.1) | 0.1 | 0.5 | (0.6) |
Effect of change in tax rate in the income statement | (0.8) | – | (0.2) | 0.2 | (0.8) |
At 31 December 2025 | 47.9 | (4.8) | (2.3) | (5.6) | 35.2 |
| 2025 | 2024 | |
| £m | £m | |
Deferred tax liabilities | 38.6 | 41.2 |
Deferred tax assets | (3.4) | (7.0) |
35.2 | 34.2 |
16. Financial instruments continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 170
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2024 | |
| £m | £m | |
| Current - working capital: | ||
Trade payables | 31.3 | 19.4 |
Other taxes and social security | 14.2 | 1 7. 1 |
Other payables | 3.3 | 8.0 |
Trade accruals 1 | 50.1 | 57.1 |
98.9 | 101.6 | |
| Current - other: | ||
Share buyback liabilities | 5.3 | 32.9 |
Interest payable | 4.7 | 3.7 |
Deferred income | 6.2 | 2.0 |
Capital payables | 4.1 | 2.3 |
Capital accruals | 3.0 | 4.2 |
23.3 | 45.1 | |
Total current: | 122.2 | 146.7 |
| Non-current: | ||
Other payables | 0.2 | 0.8 |
17. Deferred tax continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 171
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| Restructuring | Environmental | Legal | Total | |
| 2025 | 2025 | 2025 | 2025 | |
| £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 |
Ordinary Shares | Share Capital 1 | |||
| 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 |
| 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 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 172
20. Share capital continued
2025 | 2024 | |
Shares purchased with a nominal value of 17 3 / 11 p | 9,401,421 | 8,558,676 |
Consideration excluding costs | £57.3m | £57.3m |
Costs | £0.3m | £0.4m |
Total consideration | £57.6m | £57.7m |
21. Dividends
| 2025 | 2024 | 2025 | 2024 | |
| Per share | Per share | £m | £m | |
| Interim dividend for the year ended | 6.9 | 6.9 | 12.0 | 12.7 |
| 31 December | ||||
Proposed final/final dividend for the year ended 31 December | 16.1 | 16.1 | 27.8 | 28.7 |
Total dividend | 23.0 | 23.0 | 39.8 | 41.4 |
The 2024 final dividend of 16. 1 p per share was paid on 5 June 2025. The 2025 interim
dividend of 6 . 9 p per share was paid on 6 November 2025. The proposed final dividend for
2025 of 16. 1 p, 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.
22. 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 equipment | 56.5 | 59.7 |
Depreciation of right-of-use assets | 13.1 | 13.6 |
Amortisation of other intangible assets | 10.9 | 12.4 |
Profit on disposal of property, plant and equipment | (0.4) | (5.5) |
Profit on disposal of right-of-use assets | – | (0.2) |
Impairment of property, plant and equipment and other assets | – | 0.1 |
| Non-cash items reflected in exceptional items: | ||
(Profit)/loss on disposal of property, plant and equipment | (1.8) | 0.1 |
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 |
Notes to the consolidated financial statements continued
Year ended 31 December 2025
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 173
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 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.
23. Employees
The average number of employees (including Executive Directors) and their aggregate
remuneration is shown in the table below:
| 2025 | 2024 | |
| Number | Number | |
Total average employees | 4,439 |
| 2025 | 2024 | |
| £m | £m | |
| Their aggregate remuneration comprised: | ||
Wages and salaries (including bonuses) | 221.9 | 235.0 |
Share based payments (see note 24) | 3.4 | 0.6 |
Social security costs | 34.6 | 36.0 |
Pension costs | 8.1 | 9.0 |
268.0 | 280.6 |
Included in pension costs are £7.8m (2024: £8.7m) relating to defined contribution
schemes and a £0.3m (2024: £0.3m) charge relating to defined benefit schemes. Pension
costs not included of £0.8m (2024: £1.0m) relate to administrative costs of £0.4m
(2024: £0.6m) and net interest costs of £0.4m (2024: £0.4m). Refer also to notes 2 and 25.
Disclosure of individual Directors’ remuneration, share interests, share awards, long-term
incentive schemes, pension contributions and pension entitlements are shown in the
tables in the Directors’ remuneration report on pages 110 to 126.
See note 24 for information on share-based payments and note 25 for information on
retirement benefit schemes.
24. Share-based payments
The Company operates the Bodycote Incentive Plan (BIP) under which Executive Directors
and Senior Executives receive a conditional award of Bodycote shares up to a maximum
of 175% of base salary. Vesting of awards are based upon two performance measures,
over a three-year period. The Group also operates a Bodycote Senior Manager Incentive
Plan (BSMIP) under which certain senior managers receive a conditional award of
Bodycote shares.
| Other | Other | |||
| BIP/BSMIP | BIP/BSMIP | Plans | Plans | |
| 2025 | 2024 | 2025 | 2024 | |
At 1 January | 6,240,628 | 6,001,991 | 646,944 | 624,905 |
Granted during the year | 2,978,392 | 2,923,641 | 162,101 | 373,275 |
Exercised during the year | (310,458) | (390,579) | (373,071) | (273,882) |
Expired during the year | (2,898,466) | (2,294,425) | – | (77,354) |
At 31 December | 6,010,096 | 6,240,628 | 435,974 | 646,944 |
| Average fair value of share awards | 505.7 | 544.7 | 532.3 | 608.2 |
granted during the year at date of grant (pence) | ||||
Fair value of awards granted during the year (£) | 15,062,622 | 15,925,445 | 862,795 | 2,270,119 |
For BIP awards granted prior to 2025, 50% are subject to a return on capital employed
(ROCE) performance condition, and 50% are subject to adjusted operating profit or
adjusted earnings per share (EPS) performance conditions assigned to the individual.
Forty percent of awards granted during 2025 are subject to a return on capital employed
(ROCE) performance condition, 40% are subject to adjusted earnings per share (EPS
CAGR) performance conditions, and 20% are subject to greenhouse gas emissions
performance conditions assigned to the individual. In the event that an adjusted EPS
underpin is not achieved, no awards will vest for any of the BIP schemes. BSMIP awards
are based on performance conditions relevant to the individuals concerned.
Other plans include buy-out awards, a targeted employee retention share programme and
a deferred bonus plan whereby 35% of any bonus earned is deferred into shares. Buy-out
award shares issued vest between 12 and 36 months from the grant date, with the
remaining vesting after three years from the grant date. All plans are conditional on
continued employment.
22. Notes to the cash flow statement continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 174
Notes to the consolidated financial statements continued
Year ended 31 December 2025
More information on the BIP and the buy-out awards for Executive Directors can be found
in the Directors report on remuneration on pages 110 to 126. The exercise price of shares
exercised was £nil. As at 31 December 2025 of 132,605 exercisable shares outstanding,
67,962 were related to BIP, and 64,643 related to other plans. The inputs to the
Black-Scholes simulation model, used to determine the charge to the income statement
for BIP, are as follows:
| Other | Other | |||
| BIP | BIP | Plans | Plans | |
| 2025 | 2024 | 2025 | 2024 | |
Weighted average share price (pence) | 566.0 | 604.1 | 565.4 | 646.4 |
Weighted average exercise price (pence) | nil | nil | nil | nil |
Expected life (years) | 3.0 | 3.0 | 1.0-3.0 | 1.0-3.0 |
Expected dividend yields (%) | 3.7 | 3.4 | 3.7 | 3.4 |
| Weighted average remaining contractual | 1.1 | 1.1 | 1.0 | 0.9 |
| life of shares outstanding (years) | ||||
| Average fair value of share awards granted | 505.7 | 544.7 | 532.3 | 608.2 |
| during the year at date of grant (pence) | ||||
Fair value of awards granted during the year (£) | 15,062,622 | 15,925,445 | 862,795 | 2,270,119 |
The Group recognised a total charge to the consolidated income statement of £3.4m
(2024: £0.6m) related to equity-settled share-based payment transactions, excluding
social charges.
25. Retirement benefit schemes
| 2025 | 2024 | |
| £m | £m | |
UK Scheme | – | – |
Non-UK Schemes | 10.3 | 11. 3 |
10.3 | 11. 3 |
24. Share-based payments continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 175
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2024 | |
| £m | £m | |
UK Scheme 1 | 0.4 | 0.6 |
Non-UK Schemes | 0.1 | 0.7 |
0.5 | 1.3 |
| 2025 | 2024 | |
| £m | £m | |
Present value of defined benefit obligation | 53.4 | 54.8 |
Fair value of plan assets | (54.0) | (60.6) |
Scheme surplus | (0.6) | (5.8) |
| Adjustment relating to asset ceilings and minimum | 0.6 | 5.8 |
| funding requirements | ||
Net defined benefit asset before deferred tax | – | – |
| 2025 | 2024 | |
| £m | £m | |
Restriction due to asset ceiling at beginning of period | 5.8 | 4.9 |
Interest on asset restriction | 0.3 | 0.2 |
Other changes in asset restriction | (5.5) | 0.7 |
Restriction due to asset ceiling at end of period | 0.6 | 5.8 |
25. Retirement benefit schemes continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 176
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2024 | |
| % per | % per | |
| annum | annum | |
RPI inflation | 3.00 | 3.35 |
CPI inflation | 2.75 | 3.05 |
Salary increases | n/a | n/a |
Rate of discount | 5.40 | 5.35 |
| Allowance for pension in payment increases of RPI | 2.18 | 2.30 |
| or 3% p.a. if less | ||
Allowance for revaluation of deferred pensions | 2.75 | 3.05 |
| 2025 | 2024 | |
S 3 PxA YoB | S 3 Px A YoB | |
| CMI 2024 | CMI 2023 | |
| 1.0% | 1.0% | |
| long-term | long-term | |
| Actuarial tables used | trend | trend |
Life expectancy for male members currently aged 65 | 20.2 | 19.8 |
Life expectancy for female members currently aged 65 | 22.6 | 22.4 |
| 2024 | 2023 | |
S 3 PxA YoB | S 3 Px A YoB | |
| CMI 2024 | CMI 2023 | |
| 1.0% | 1.0% | |
| long-term | long-term | |
| Actuarial tables used | trend | trend |
Life expectancy at age 65 for male members currently aged 45 | 21.1 | 20.7 |
Life expectancy at age 65 for female members currently aged 45 | 23.7 | 23.5 |
2025 | 2024 | |||
| Increase | Decrease | Increase | Decrease | |
| £m | £m | £m | £m | |
0.5% change in discount rate | (3.0) | 3.3 | (3.0) | 3.3 |
| 0.5% change in price inflation | 1.1 | (1.1) | 1.1 | 1.1 |
| (and associated assumptions) | ||||
| One year change in life expectancy | 2.0 | (2.0) | 2.1 | (2.1) |
| at age 65 |
25. Retirement benefit schemes continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 177
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2024 | |
| £m | £m | |
Defined benefit obligation at start of year | 54.8 | 62.7 |
Interest expense | 2.8 | 2.8 |
Actuarial losses/(gains) arising from changes in demographic assumptions | 0.5 | (1.2) |
Actuarial gains arising from changes in financial assumptions | (1.0) | (5.5) |
Experience losses/(gains) | 0.2 | (0.3) |
Benefits paid, death in service insurance premiums and expenses | (3.9) | (3.7) |
Defined benefit obligation at end of year | 53.4 | 54.8 |
| 2025 | 2024 | |
| £m | £m | |
Fair value of assets at start of year | 60.6 | 67.6 |
Interest income | 3.1 | 3.0 |
Return on scheme assets excluding interest income | (5.8) | (6.1) |
Scheme administration expenses | (0.4) | (0.6) |
Contributions by employer | 0.4 | 0.4 |
Benefits paid, death in service insurance premiums and expenses | (3.9) | (3.7) |
Fair value of assets at end of year | 54.0 | 60.6 |
| 2025 | 2024 | |
| £m | £m | |
Return on scheme assets excluding interest income | (5.8) | (6.1) |
Actuarial gains arising from changes in financial assumptions | 1.0 | 5.5 |
Actuarial (losses)/gains arising from changes in demographic assumptions | (0.5) | 1.2 |
Experience (losses)/ gains on liabilities | (0.2) | 0.3 |
Gain/(loss) due to change in asset restriction | 5.5 | (0.7) |
Total gain recognised in other comprehensive income | – | 0.2 |
| 2025 | 2025 | 2024 | 2024 | |
Quoted 1 | Unquoted | Quoted 1 | Unquoted | |
| £m | £m | £m | £m | |
Bulk annuity insurance policy | – | 53.0 | – | – |
Bonds | – | 2.3 | 12.8 | 2.2 |
Liability Driven Investment | – | – | 16.2 | – |
Diversified credit funds | – | – | 16.6 | 3.8 |
Cash and Cash equivalents | 1.0 | – | 9.0 | – |
Deferred Premium 2 | – | (2.3) | – | – |
Total | 1.0 | 53.0 | 54.6 | 6.0 |
25. Retirement benefit schemes continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 178
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2024 | |
| £m | £m | |
Current service cost | 0.3 | 0.3 |
Net interest on the defined benefit liability | 0.4 | 0.4 |
Curtailments | (0.6) | – |
Total expense | 0.1 | 0.7 |
| 2025 | 2024 | |
| £m | £m | |
Return on scheme assets excluding interest income | 0.3 | 0.1 |
Actuarial gains/(losses) arising from changes in financial assumptions | 0.6 | (0.7) |
Experience gains on liabilities | 0.5 | 0.1 |
Total gain/(losses) recognised in other comprehensive income | 1.4 | (0.5) |
25. Retirement benefit schemes continued
| 2025 | 2024 | |
| £m | £m | |
Defined benefit obligation at start of year | 1 7. 0 | 1 7. 3 |
Current service cost | 0.3 | 0.3 |
Interest expense | 0.4 | 0.5 |
Actuarial (gains)/losses arising from changes in financial assumptions | (0.6) | 0.7 |
Experience gains on liabilities | (0.5) | (0.1) |
Benefits paid, death in service insurance premiums and expenses | (1.0) | (1.1) |
Employee contributions | 0.1 | 0.2 |
Settlements | (0.3) | – |
Curtailments | (0.6) | – |
Exchange rate loss/(gain) | 1.0 | (0.8) |
Defined benefit obligation at end of year | 15.8 | 1 7. 0 |
| 2025 | 2024 | |
| £m | £m | |
Fair value of assets at start of year | 5.7 | 6.2 |
Interest income | – | 0.1 |
Return on scheme assets excluding interest income | 0.3 | 0.1 |
Contributions by employer | 0.1 | 0.1 |
Contributions by employees | 0.1 | 0.2 |
Benefits paid, death in service insurance premiums and expenses | (0.7) | (0.6) |
Settlements | (0.3) | – |
Exchange rate gain/(loss) | 0.3 | (0.4) |
Fair value of assets at end of year | 5.5 | 5.7 |
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 179
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| Salary | Rate of | Pension | ||
| increases | discount | Inflation | increases | |
| % per | % per | % per | % per | |
| annum | annum | annum | annum | |
France | 3.0 | 3.8 | 2.0 | 1.0 |
Germany | 2.5 | 4.1 | n/a | 2.0 |
Italy | 3.0 | 3.8 | 1.7-2.0 | n/a |
Turkey | 25.0 | 29.0 | 28.0 | n/a |
Liechtenstein | 2.5 | 1.3 | n/a | n/a |
Switzerland | n/a | 2.3 | n/a | n/a |
| 2025 | 2024 | |
| £m | £m | |
Present value of defined benefit obligation | 15.8 | 1 7. 0 |
Fair value of plan assets | (5.5) | (5.7) |
Net defined benefit liability, before deferred tax | 10.3 | 11. 3 |
2025 | 2024 | |||
| Increase | Decrease | Increase | Decrease | |
| £m | £m | £m | £m | |
0.25% change in discount rate | (0.4) | 0.4 | (0.5) | 0.5 |
| 0.25% change in price inflation | 0.2 | (0.2) | 0.3 | (0.3) |
| (andassociated assumptions) |
25. Retirement benefit schemes continued
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 180
Notes to the consolidated financial statements continued
Year ended 31 December 2025
| 2025 | 2024 | |
| £m | £m | |
Fees payable to the auditors for the audit of the annual accounts | 1.3 | 1.3 |
| Fees payable to the auditors and its associates for other services: | ||
The audit of the Group's subsidiaries | 1.0 | 1.1 |
Total audit fees | 2.3 | 2.4 |
Audit related assurance services 1 | 0.1 | 0.1 |
Total fees payable to the auditors | 2.4 | 2.5 |
0.1 | 0.2 | |
3.6 | 4.8 |
28. 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.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 181
Company balance sheet
At 31 December 2025
Note
2025
£m
2024
£m
Non-current assets
Intangible assets 3 8.4 8.5
Property, plant and equipment 0.2 0.2
Right-of-use assets 0.9 1.1
Investments in subsidiaries 4 388.9 388.9
Deferred tax assets 7 2.5 3.9
Trade and other receivables 5 211.7 295.8
612.6 698.4
Current assets
Trade and other receivables 5 13.6 10.4
Total assets 626.2 708.8
Current liabilities
Trade and other payables 6 13.1 41.6
Lease liabilities 0.2 0.2
13.3 41.8
Net current assets/(liabilities) 0.3 (31.4)
Non-current liabilities
Lease liabilities 0.8 1. 0
Total liabilities 14.1 42.8
Net assets 612.1 666.0
Equity
Share capital 8 30.0 31.6
Share premium account 177.1 177.1
Own shares (6.5) (11.1)
Other reserves 138.3 137.5
Retained earnings 273.2 330.9
Total equity 612.1 666.0
The Company has elected to take the exemption under section 408 of the Companies Act
2006 from presenting a profit and loss account. The Company reported a profit for the
financial year ended 31 December 2025 of £1 1.4 m (2024: £383.6m).
The notes to the Company financial statements on pages 184 to 189 form an integral part
of the Company financial statements.
The financial statements of Bodycote plc, registered number 519057, were approved by
the Board of Directors and authorised for issue on 10 March 2026.
They were signed on its behalf by:
Jim Fairbairn Ben Fidler
Director Director
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 182
Company statement of changes in equity
Year ended 31 December 2025
Share
capital
£m
Share
premium
account
£m
Own
shares
£m
Other
reserves
£m
Retained
earnings
£m
Total
£m
1 January 2024 33.1 177.1 (15.7) 139.8 80.8 415.1
Profit for the year – – – – 383.6 383.6
Exchange differences on translation of overseas branch – – – 0.3 – 0.3
Total comprehensive income for the year – – – 0.3 383.6 383.9
Shares acquired (1.5) – – 1.5 (90.6) (90.6)
Share-based payments – – – 0.6 – 0.6
Settlement of share awards – – 4.6 (4.7) (0.1) (0.2)
Dividends paid – – – – (42.8) (42.8)
31 December 2024 31.6 177.1 (11.1) 137.5 330.9 666.0
Profit for the year – – – – 11.4 11.4
Exchange differences on translation of overseas branch – – – (0.2) – (0.1)
Total comprehensive income for the year – – – (0.2) 11.4 11.2
Ordinary shares acquired (1.6) – – 1.6 (30.0) (30.0)
Share-based payments – – – 3.4 – 3.4
Settlement of share awards – – 4.6 (4.0) 1.7 2.3
Dividends paid – – – – (40.8) (40.8)
31 December 2025 30.0 177.1 (6.5) 138.3 273.2 612.1
The notes to the Company financial statements on pages 184 to 189 form an integral part
of the Company financial statements.
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 17
3
/
11
p each that had been acquired in the market were
held by the Bodycote International Employee Benefit Trust. The market value of these
shares was £6.6m (2024: £10.3m).
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. See note 20 of the Group consolidated financial statements for details.
Details of share-based payment transactions are set out in note 24 of the Group
consolidated financial statements.
Details of dividends paid are set out in note 21 of the Group consolidated financial
statements.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 183
Company accounting policies
Basis of accounting
The financial statements have been prepared in accordance with Financial Reporting
Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with the
Companies Act 2006 as applicable to companies using FRS 101. The financial statements
have been prepared under the historical cost convention and in accordance with
applicable law. The principal accounting policies are summarised below. In accordance
with Section 408 of the Companies Act 2006, a separate profit and loss account dealing
with the results of the Company has not been presented.
The Company has taken advantage of the disclosure exemptions available in FRS 101
in relation to share-based payments, financial instruments, capital management,
related party transactions, standards not yet effective, and the presentation of a
cash flow statement. Where required, equivalent disclosures are provided in the
Group consolidated financial statements, which are publicly available.
The accounting policies have been applied consistently throughout the current and
preceding year.
Dividends
Interim dividend distributions (ordinary and special) to Bodycote plc’s ordinary
shareholders are recognised when paid. Final dividends are accrued when approved
by the ordinary shareholders at the Group’s Annual General Meeting. Further detail is
included in note 21 of the Group consolidated financial statements.
Going concern
The Directors have formed a judgement that there are no material uncertainties that may
cast doubt on the Company’s ability to continue as a going concern for the foreseeable
future, and that they have a reasonable expectation that the Company has adequate
resources to continue in operational existence for at least 12 months from the approval
date of the financial statements. From a going concern perspective, the Company is
inextricably linked to the Group. As explained in the accounting policies of the
consolidated financial statements, the Directors have concluded that it is appropriate to
prepare the consolidated financial statements on a going concern basis. This conclusion
also applies to the preparation of the Company’s financial statements for the reasons set
out in that note. For this reason, the Directors continue to adopt the going concern basis in
preparing the consolidated financial statements.
Investments
Investments are held at cost less provision for impairment. An impairment review is
carried out when an indication of impairment is identified in respect of any of the
investments and impairment recognised to the extent that the carrying value of the
investment is not supported by the net assets of the investment or discounted future
cash flows that it is expected to generate in the form of dividend income.
Foreign currencies
Transactions in currencies other than pounds sterling are recorded at the rates of
exchange prevailing on the dates of the transactions. At each balance sheet date,
monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date. Non-monetary items
are not retranslated.
The assets and liabilities of the Company’s overseas branch are translated at exchange
rates prevailing on the balance sheet date. Income and expense items are translated at
the average exchange rates for the period unless exchange rates fluctuate significantly.
Where exchange differences arise on this translation, they are recorded within the
Company’s translation reserve within equity.
Retirement benefit schemes
The Company is the sponsoring entity of the Bodycote UK Pension Scheme
(‘the Scheme’) which is a funded defined benefit arrangement for certain former UK
employees, that pays out pensions at retirement based on service, final pensionable pay
and price inflation. The Scheme is funded by the Group. The UK Scheme is closed to
new members and all accruals of benefits and costs represent past service credits and
administrative costs.
The Company also participates in a number of defined contribution schemes. The amount
charged to the profit and loss account in respect of these schemes reflects the
contributions payable in the year.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any
provision for impairment. Depreciation is provided on a straight-line basis, to reduce the
carrying value to the estimated residual value, at the annual rates for fixtures and fittings
of 10% to 20%.
Intangible assets
Intangible assets are stated at cost less accumulated amortisation and any provision for
impairment. Amortisation is provided to reduce their carrying value to nil on a straight-
line basis over their estimated useful lives, at the annual rates for software of 7% to 33%.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 184
Company accounting policies continued
Impairment of tangible and intangible assets
At each balance sheet date, the Company reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets may
be impaired. If any such indication exists or the asset is not in use and therefore requires
an annual test, the recoverable amount of the asset is estimated as the higher of fair value
less costs to dispose and value in use.
If the recoverable amount of an asset is less than its carrying amount, then its carrying
amount is reduced to its recoverable amount.
Impairment losses are reversed to the extent that a subsequent event results in the
recoverable amount of the asset becoming more than its carrying value provided that
the carrying value of the asset does not exceed the value as it would have been if no
impairment loss had been previously.
Impairment losses and gains on reversal of impairments are recognised in the
income statement.
Receivables
Receivables are initially recognised at fair value. Trade receivables, loans, and other
receivables that have fixed or determinable payments that are not quoted in an active
market are classified as measured at amortised cost.
An Expected Credit Loss (‘ECL’) model is used to assess trade receivables for impairment
whereby the ECL is calculated to be the present value of all expected cash shortfalls over
the life of a trade receivable. ECL in respect of amounts owed by subsidiary undertakings
are assessed. Given there is no significantly increase in credit risk in the 12 months an
appropriate approach is applied to the 12-month ECL. No allowance has been recognised
on the basis that the loans do not exceed the borrower’s liquid assets and there is no
history of default or forward-looking indication of future default.
Payables
Trade and other payables are recognised at fair value which is the amount expected
to be paid to the counterparty. They are subsequently held at amortised cost.
Taxation
Current UK corporation tax and foreign tax is provided at amounts expected to be paid
(or recovered) using the tax rates and laws that have been enacted or substantively
enacted by the balance sheet date. Deferred tax is recognised in respect of all temporary
differences that have originated but not reversed at the balance sheet date.
Temporary differences are differences between the Company’s taxable profits and its
results as stated in the financial statements that arise from the inclusion of gains and
losses in tax assessments in periods different from those in which they are recognised in
the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised only when,
on the basis of all available evidence, it can be regarded as more likely than not that there
will be suitable taxable profits from which the future reversal of the underlying temporary
differences can be deducted.
Deferred tax is measured at the average tax rates that are expected to apply in the periods
in which the temporary differences are expected to reverse based on tax rates and laws
that have been enacted or substantively enacted by the balance sheet date.
Share-based payments
The Company periodically issues equity-settled share-based payments to employees.
Equity-settled share-based payments are measured at their fair value at the date of grant.
The grant date fair value is expensed on a straight-line basis over the vesting period with
a corresponding adjustment recorded in the share-based payments reserve. At each
balance sheet date, the Company revises its estimate of the number of equity instruments
expected to vest as a result of the effect of non-market based vesting conditions.
The impact of the revision of the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimates.
The Company recognises the share-based payment reserve for all eligible Group
employees. The cost of share-based payments of non-Company employees are passed
on to other Group companies at the weighted average cost to purchase shares exercised.
The difference between the grant date fair value of shares exercised by non-Company
employees and the weighted average cost to purchase shares exercised is recognised
within retained earnings.
Financial guarantee contracts
The Company enters into financial guarantee contracts to guarantee the indebtedness of
other companies within the Group. The Company records these contracts at fair value
which it considers to be immaterial given the strong financial position of the
counterparties.
Critical judgements in applying the Company’s accounting policies and
key sources of estimation uncertainty
There were no critical judgements or key sources of estimation uncertainty in applying
the Company’s accounting policies.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 185
Notes to the company financial statements
Year ended 31 December 2025
1. Auditors’ remuneration
The auditors’ remuneration for audit and other services is disclosed in note 27 of the
Group consolidated financial statements.
2. Employees
2025
Number
2024
Number
Total average employees 57 47
£m £m
Their aggregate remuneration comprised:
Wages and salaries (including bonuses) 7. 5 7. 8
Share based payments 1.1 2.4
Social security costs 1.7 1.6
Pension costs 0.4 0.4
10.7 12.2
All Bodycote Plc Directors are remunerated through the Company. Disclosure of
individual Directors’ remuneration, share interests, share awards, long-term incentive
schemes, pension contributions and pension entitlements required by the Companies
Act 2006 are disclosed in the tables in the Directors’ report on remuneration on pages
110 to 126.
3. Intangible assets
Software
£m
Cost
At 1 January 2025 29.7
Additions 1.3
At 31 December 2025 31.0
Amortisation
At 1 January 2025 21.2
Charge for the year 1.1
Impairment losses 0.3
At 31 December 2025 22.6
Net book value
At 31 December 2025 8.4
At 31 December 2024 8.5
Included in software assets are ongoing development costs related to the Group’s ERP
solution. Additions in the year all relate to the ongoing ERP development and include
£0.5m (2024: £3.1m) charged to the Company by other Group companies.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 186
Notes to the company financial statements continued
Year ended 31 December 2025
4. Investments in subsidiaries
£m
Cost
At 1 January 2025 and 31 December 2025 395.5
Provision for impairment
At 1 January 2025 and 31 December 2025 6.6
Net book value
At 1 January 2025 and 31 December 2025 388.9
At 31 December 2024 388.9
The following subsidiaries in the UK have taken advantage of an exemption from audit
under section 479A of the Companies Act 2006, as the ultimate parent company
companies. These subsidiaries have been included in the consolidated financial
statements of Bodycote plc as at 31 December 2025.
Bodycote America Capital Limited Bodycote HIP Germany Limited
Bodycote America Finance Limited Bodycote International Limited
Bodycote America Treasury Limited Bodycote Investments
Bodycote Finance Limited Bodycote Nominees No. 1 Limited
Bodycote Finance UK Limited Bodycote Pension Trustees Limited
Bodycote Heat Treatments Limited Bodycote Surface Technology Limited
Bodycote H.I.P. Limited Bodycote Thermal Processing Mexico Limited
A full list of directly and indirectly owned subsidiary undertakings can be found on pages
196 and 197.
5. Trade and other receivables
2025
£m
2024
£m
Current:
Amounts owed by subsidiary undertakings 9.1 6.0
Corporation tax 2.6 2.4
Other receivables and prepayments 1.9 2.0
13.6 10.4
Non-current:
Amounts owed by subsidiary undertakings 210.8 294.8
Other receivables 0.9 1.0
211.7 295.8
225.3 306.2
Amounts owed by subsidiary undertakings have a defined maturity date which is broadly
in line with the Group’s Revolving Credit Facility although subsidiaries have the ability to
repay earlier. Amounts due from subsidiary undertakings have been classified as falling
due within one year to the extent that the Company expects collections in that period.
All other amounts are classified as falling due after more than one year based on
intra-Group loan agreements ending on 19 September 2030. The interest rate for such
loans was SONIA plus 1.45% in 2025 (2024: SONIA plus 1.95%).
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 187
Notes to the company financial statements continued
Year ended 31 December 2025
6. Trade and other payables
2025
£m
2024
£m
Current:
Trade payables 1.2 0.7
Amounts owed to subsidiary undertakings
1
0.4 0.3
Other taxes and social security 1.8 1.2
Other payables
2
6.4 36.1
Accruals 3.3 3.3
13.1 41.6
1 Amounts owed to subsidiaries undertakings have a defined maturity date which is predominantly
in line with the Group’s Revolving Credit Facility although the Company is able to repay them
earlier. The interest rate on those loans was SONIA plus 0.7% margin in 2025 (2024: SONIA plus
1.2%). Amounts owed to subsidiary undertakings’ that the Company could be required to settle
within 12 months of the balance sheet date are classified as current.
2 2025 Other payables include £5.3m related to the Company’s share repurchase programme.
7. Deferred tax
The following are the deferred tax assets and liabilities recognised by the Company and
movements thereon during the current and prior year.
Accelerated
tax
depreciation
£m
Retirement
benefit
obligations
£m
Other
timing
differences
£m
Total
£m
At 1 January 2024 (2.5) – 0.2 (2.3)
Credit/(Charge) to profit or loss 5.7 0.1 0.5 6.3
Charge to other comprehensive income – (0.1) – (0.1)
At 1 January 2025 3.2 – 0.7 3.9
Credit/(Charge) to profit or loss (0.8) – (0.6) (1.4)
At 31 December 2025 2.4 – (0.1) 2.5
Deferred tax assets and liabilities are offset where they relate to taxes levied by the same
authority and the Company has a legally enforceable right to offset current tax assets and
liabilities.
8. Share capital
Ordinary Shares Share Capital
1
2025
Number
2024
Number
2025
£m
2024
£m
At 1 January 2025 182,897,496 191,456,172 31.6 33.1
Share buyback programmes (9,401,421) (8,558,676) (1.6) (1.5)
At 31 December 2025 173,496,075 182,897,496 30.0 31.6
1 Nominal value of shares held is 17
3
/
11
p each.
Details of share awards in issue on the Company’s share capital and share-based
payments are set out in note 20 of the Group consolidated financial statements.
In 2024 a share buyback programme was announced which was extended to a total
of £120m in July 2025. The first £60m tranche of the programme 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 £30m extension of the programme, 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. 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).
9. Financial guarantee contracts
The Company has guaranteed bank overdrafts, loans and letters of credit of certain
subsidiary undertakings amounting to £134.0m (2024: £91.1m). It is considered unlikely
that these guarantees will be called upon and no liability has been recorded in respect
of them (2024: £nil).
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 188
10. Pension commitments
The Company is the sponsoring entity the Bodycote UK Pension Scheme (‘the Scheme’)
which is a funded defined benefit arrangement for certain former UK employees that pays
out pensions at retirement based on service, final pensionable pay and price inflation.
The Scheme is funded by the Group. The UK Scheme is closed to new members and all
accruals of benefits and costs represent past service credits and administrative costs.
Details are provided in note 25 of the consolidated financial statements.
On 5 December 2025, the Scheme entered into an agreement with Pension Insurance
Corporation plc (“PIC”) to purchase a bulk annuity insurance policy which provides the
Scheme with a future income stream matching the majority of the Scheme’s obligations
to make future payments to members and eligible dependants. The insurance policy was
purchased using existing assets held within the Scheme. The income from the policy
matches the amount and timing of benefits payable to those members covered by the
policy. As a result, the policy has been recorded as an asset with a carrying value equal
to the carrying value of the liabilities that the policy covers.
The Company also participates in a number of defined contribution schemes.
The contributions made by the Company over the financial year to the defined
contribution scheme amounted to £0.4m (2024: £0.4m). As at 31 December 2025,
contributions of £nil (2024: £nil) were due in respect of the current year had not
been paid over to the scheme.
11. Related party transactions
Information on the retirement benefit schemes operated by the Company are set out in
note 25 of the Group consolidated financial statements. The remuneration of the Directors
is set out in note 27 of the Group consolidated financial statements and in the Directors’
report on remuneration on pages 110 to 126. The Company has taken the exemption
available under FRS 101 not to disclose transactions with wholly-owned subsidiary
companies.
12. Post Balance sheet events
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.
Notes to the company financial statements continued
Year ended 31 December 2025
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 189
ADDITIONAL
INFORMATION
IN THIS SECTION
Five-year summary (unaudited) 191
Alternative performance measures
(APMs) (unaudited)
192
Subsidiary undertakings 196
Shareholder enquiries 198
Company information 199
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 190
Five-year summary (unaudited)
2025
£m
2024
£m
2023
£m
2022
£m
2021
£m
Revenue 727.1 757.1 802.5 743.6 615.8
Profit:
Adjusted operating profit 114.3 129.0 127.6 112.2 94.8
Amortisation of acquired intangible assets (9.7) (10.4) (8.1) (9.3) (10.3)
Acquisition costs (0.1) (2.4) (0.3) (0.9) (0.7)
Operating profit before exceptional items 104.5 116.2 119.2 102.0 83.8
Exceptional items (20.9) (78.3) – – –
Operating profit 83.6 37.9 119.2 102.0 83.8
Net finance charge (9.1) (9.5) (7.5) (6.7) (6.3)
Profit/(loss) before taxation 74.5 28.4 111. 7 95.3 77.5
Taxation (19.1) (7.7) (24.9) (21.0) (17.5)
Profit after taxation 55.4 20.7 86.8 74.3 60.0
Non-controlling interests (0.5) (0.7) (1.2) (0.6) (0.5)
Profit attributable to the equity holders of the parent 54.9 20.0 85.6 73.7 59.5
Adjusted earnings per share (pence) 44.4 48.6 48.4 42.7 35.8
Full year dividend per share (pence) 23.0 23.0 22.7 21.3 20.0
Assets employed
Intangible assets 299.7 321.4 332.7 344.7 322.0
Property, plant and equipment 477.7 481.2 504.9 516.3 489.3
Other assets/(liabilities) 30.1 (0.9) 6.4 20.4 (9.5)
807.5 801.7 844.0 881.4 801.8
Financed by
Share capital 30.0 31.6 33.1 33.1 33.1
Reserves 610.2 636.5 757.7 747.8 651.6
Shareholders' funds 640.2 668.1 790.8 780.9 684.7
Non-controlling interests 1.7 1. 8 1. 5 1. 1 0.7
Net debt 165.6 131.8 51.7 99.4 116.4
Capital employed 807.5 801.7 844.0 881.4 801.8
Net assets per share (pence) 369.0 365.3 413.0 407.9 357.6
Average capital employed
1
804.6 822.9 862.8 841.6 789.9
Return on capital employed
1
(%): 14.2 15.7 14.8 13.3 12.0
1 As defined in the Alternative performance measures on page 192.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 191
Alternative performance measures (APMs) (unaudited)
The Group’s Financial Statements are prepared using the basis of preparation and
accounting policies described on pages 145 to 153 of this 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 22 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 costs 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).
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 192
Alternative performance measures (APMs) (unaudited) continued
Adjusted operating profit
Adjusted operating profit is reconciled to Operating Profit in note 1 to the
financial statements.
Adjusted operating margin
2025
Specialist
Technologies
£m
Precision
Heat
Treatment
£m
Central cost
and
eliminations
£m
Total
core
£m
Non-core
£m
Consolidated
£m
Revenue 212.3 459.3 – 671.6 55.5 727.1
Adjusted
OperatingProfit
57.6 73.7 (18.3) 113.0 1.3 114.3
Adjusted
operatingmargin
(%)
27.1% 16.0% n/a 16.8% 2.3% 15.7%
2024 Restated
Specialist
Technologies
£m
Precision
Heat
Treatment
£m
Central cost
and
eliminations
£m
Total
core
£m
Non-core
£m
Consolidated
£m
Revenue 222.3 459.8 – 682.1 75.0 757.1
Adjusted
Operating Profit
65.5 80.4 (20.4) 125.5 3.5 129.0
Adjusted operating
margin (%)
29.5% 17.5% n/a 18.4% 4.7% 17.0%
Adjusted profit before taxation
2025
£m
2024
£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 organic adjusted operating profit
Reconciled to revenue and adjusted operating profit in the table below:
2025
Specialist
Technologies
£m
Precision
Heat
Treatment
£m
Central cost
and
eliminations
£m
Total
core
£m
Non-core
£m
Consolidated
£m
Revenue 212.3 459.3 – 671.6 55.5 727.1
Constant exchange
rates adjustment
1.8 6.5 – 8.3 0.2 8.5
Revenue at constant
currency
214.1 465.8 – 679.9 55.7 735.6
Less adjustments
forrevenue from
disposals completed
in the current or
prioryear
– – – – (22.3) (22.3)
Organic revenue 214.1 465.8 – 679.9 33.4 713.3
Adjusted
operatingprofit
57.6 73.7 (18.3) 113.0 1.3 114.3
Constant exchange
rates adjustment
0.5 1.3 – 1.8 – 1.8
Adjusted operating
profit at
constantcurrency
58.1 75.0 (18.3) 114.8 1.3 116.1
Less adjustments
foroperating profit
from disposals
completed in the
current or prior year
– – – – (2.1) (2.1)
Organic adjusted
operating profit
58.1 75.0 (18.3) 114.8 (0.8) 114.0
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 193
Alternative performance measures (APMs) (unaudited) continued
2024 Restated
Specialist
Technologies
£m
Precision
Heat
Treatment
£m
Central cost
and
eliminations
£m
Total
core
£m
Non-core
£m
Consolidated
£m
Revenue at
constant currency
222.3 459.8 – 682.1 75.0 757.1
Less adjustments
from disposals
completed in the
prior year
– – – – (28.6) (28.6)
Organic revenue 222.3 459.8 – 682.1 46.4 728.5
Adjusted operating
profit at constant
currency
65.5 80.4 (20.4) 125.5 3.5 129.0
Less adjustments
from disposals
completed in the
prior year
– – – – (3.4) (3.4)
Organic adjusted
operating profit
65.5 80.4 (20.4) 125.5 0.1 125.6
Adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation)
2025
£m
2024
£m
EBITDA 166.5 185.9
Acquisition costs 0.1 2.4
Exceptional items, excluding (gains)/losses on sale of property,
plant and equipment, impairments, and losses on disposal of
business
18.1 10.4
Adjusted EBITDA 184.7 198.7
Adjusted EBITDA Margin 25.4% 26.2%
Adjusted operating cash flow
2025
£m
2024
£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
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 194
Alternative performance measures (APMs) (unaudited) continued
Free cash flow
2025
£m
2024
£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
£m
2024
£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
£m
2024
£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
£m
2024
£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 3.5 18.0
Adjusted tax charge 26.2 28.4
Adjusted tax rate
2025
£m
2024
£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 6 of the consolidated financial statements.
Net debt excluding lease liabilities
2025
£m
2024
£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 on page 30
Return on capital employed (%)
2025
Specialist
Technologies
£m
Precision
Heat
Treatment
£m
Central cost
and
eliminations
£m
Total
core
£m
Non-core
£m
Consolidated
£m
Adjusted
operatingprofit
57.6 73.7 (18.3) 113.0 1.3 114.3
Average capital
employed
313.6 531.7 (62.9) 782.4 22.2 804.6
Return on capital
employed (%)
18.4% 13.9% n/a 14.4% 5.8% 14.2%
2024 Restated
Specialist
Technologies
£m
Precision
Heat
Treatment
£m
Central cost
and
eliminations
£m
Total
core
£m
Non-core
£m
Consolidated
£m
Adjusted
operatingprofit
65.5 80.4 (20.4) 125.5 3.5 129.0
Average capital
employed
308.0 530.4 (57.0) 781.4 41.5 822.9
Return on capital
employed (%)
21.3% 15.2% n/a 16.1% 8.4% 15.7%
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 195
Subsidiary undertakings
Incorporated in the UK
Springwood Court, Springwood Close, Tytherington Business
Park, Macclesfield SK10 2XF
Bodycote America Capital Limited
6
Bodycote America Finance Limited
6
Bodycote America Treasury Limited
6
Bodycote Developments Limited
2,4
Bodycote Finance Limited
6
Bodycote Finance UK Limited
6
Bodycote Heat Treatments Limited
1
Bodycote H.I.P. Limited
1
Bodycote HIP Germany Limited
3
Bodycote International Limited
3
Bodycote Investments
6
Bodycote K-Tech Limited
2
Bodycote Nominees No. 1 Limited
3
Bodycote Nominees No. 2 Limited
2
Bodycote Pension Trustees Limited5
Bodycote Processing (Skelmersdale) Limited
2,4
Bodycote Surface Technology Limited
1
Bodycote Thermal Processing Limited
2
Bodycote Thermal Processing Mexico Limited
1
Expert Heat Treatments Limited
2,4
Taylor & Hartley Fabrics Limited
2
Incorporated in Belgium
Industrie Park Noord 7, 9100 Sint-Niklaas, Belgium
Bodycote Hot Isostatic Pressing NV
1
Incorporated in Canada
4211 Mainway, Burlington, Ontario, L7L 5N9, Canada
Bodycote Heat Treatment Canada, Inc.
1
Bodycote Thermal Processing Canada, Inc.
1
1100–1959 ST Upper Water Halifax Nova Scotia B3J 3N2, Canada
Bodycote Surface Technology Canada Ltd.
1
30 de l’Aeroport Boulevard, Bromont Québec JSL 1S6, Canada
Bodycote Surface Technology Canada Property, Inc.
4
Incorporated in China
No.2 Factory Building of LeKai Industrial Park, No. 180 Meihua
Road, Zhonglou District, Changzhou Jiangsu Province, China
Bodycote (Changzhou) Heat Treatment Co., Ltd.
1
No. 68 Ningbo East Road, Taicang Economic Development Area,
Taicang City, Jiangsu, China
Bodycote Heat Treatments Technology (Taicang) Co., Limited
2
Building 4 in International Innovation Park Phase Two,
No. 1188 Feng Hua Road, Jiaxing City, Zhejiang Province, China
Bodycote (Jiaxing) Heat Treat Co., Ltd.
1
2012 Kehang Road, High Tech District, Jinan City,
Shandong, China
Bodycote (Jinan) Heat Treatments Technology Co., Ltd.
1
No. 12 Building, No. 78, Gu Cheng Zhong Road, Yu Shan Town,
Kunshan City, Jiangsu Province, China
Bodycote (Kunshan) Heat Treatments Technology Co., Ltd.
1
No.B2-A, Wuxi National Hi-New Tech Industrial Development Z,
Wuxi City, Jiangsu Province, 214028, China
Bodycote (Wuxi) Technology Co., Ltd.
1
Incorporated in Czech Republic
Liberec 30, Tanvaldska 345, PSC, 46311, Czech Republic
Bodycote HT s.r.o.
1
Rohanske nabrezi 671/15, Karlin, 186 00, Praha 8, Czech Republic
Bodycote SSC s.r.o.
6
Incorporated in France
Parc Mail – Bâtiment A, 6 allée Irène Joliot-Curie,
69800 Saint Priest, France
Bodycote SAS
1
Bodycote Sud-Ouest SAS
1
Ilena Park – Bât. B2, Parc Technologique de Lyon,
117, allée des Parcs, 69800 Saint Priest, France
Bodycote Bourgogne SAS
1
Bodycote France Holdings SA
3
Bodycote Haute-Savoie SAS
2
– dissolved 24 October 2025
Bodycote Lyon SNC
6
Bodycote Metal SAS
1
– comprising 10 non-core sites sold
18 November 2025
HITEC SAS
2
– dissolved 22 August 2025
Nitruvid SAS
1
– dissolved 19 December 2025
Incorporated in Germany
Schießstraße 68, 40549 Düsseldorf, Germany
Bodycote Deutschland GmbH
6
Bodycote European Holdings GmbH
3
Bodycote Hirzenhain GmbH
1
Bodycote Schmerbach GmbH
1
Bodycote Specialist Technologies GmbH
1
Bodycote Specialist Technologies Deutschland GmbH
1
Bodycote Wärmebehandlung GmbH
1
Incorporated in Ireland
12 Merrion Square North, Dublin 2, Ireland
Bodycote Ireland Finance DAC
6
Incorporated in Jersey
19-21 Broad Street, St Helier JE2 3RR, Jersey
Bodycote Jersey Holdings Limited
3
Incorporated in Republic of Korea
298, Namsadang-ro, Bogae-myeon, Anseong-si, Gyeonggi-do,
Republic of Korea
Bodycote Specialist Technologies Korea, LLC
Incorporated in Mexico
Avenida Conquistadores, Exterior No.: 105 Interior No.: PA 07,
Calle Rio Lys and Calle Rios Mosa, Col. Mirasierra, San Pedro
Garza Garcia, Nuevo León 66240, México
Bodycote de SLP, S. de R.L. de C.V.
1
Carretera Monterrey-Saltillo #3279 B, Privada de Santa Catarina,
Nuevo León 66367, México
Bodycote Testing de Mexico, S. de R.L. de C.V.
2
Avenida Olmo, No. 100, Parque Industrial y de Negocios Las
Colinas, Silao, Guanajuato 36270, México
Bodycote Thermal Processing de Mexico, S. de R.L. de C.V.
1
Avenida Industriales del Poniente Km. 19, Colonia Centro,
Santa Catarina, Nuevo León 66350, México
Bodycote Thermal Processing de Mexico Servicios,
S. de R.L. de C.V.
6
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 196
Subsidiary undertakings continued
Incorporated in Sweden
Box 209, 735 23, Surahammar, Sweden
Bodycote Hot Isostatic Pressing AB
1
Box 124, 424 23, Angered, Sweden
Bodycote Sweden AB
3
Bodycote Thermotreat AB
2
Bodycote Värmebehandling AB
1
Bodycote Ytbehandling AB
1
Incorporated in Switzerland
Chemin du Pavillon 2, 1218 Le Grand-Saconnex, Switzerland
Bodycote (Suisse) SA
6
BDC Enterprises SA
3,6
c/o BV Consult SA, rue de Flore 5, 2502 Biel, Canton de Berne,
Switzerland
HTM Biel GmbH
1
Incorporated in USA
12750 Merit Drive, Suite 1400, Dallas, TX 75251, USA
Bodycote IMT, Inc.
1
Bodycote K-Tech, Inc.
1
Bodycote Syracuse Heat Treating Corporation
1
Bodycote Thermal Processing, Inc.
1
Bodycote USA, Inc.
3
8118 Corporate Way Suite 201, Mason OH 45040, USA
Bodycote Surface Technology Property LLC
4
Bodycote Surface Technology Mexico LLC
1
Bodycote Surface Technology, Inc.
1
Bodycote Surface Technology Group, Inc.
6
1237 Knoxville Hwy, Wartburg TN 37887, USA
Bodycote Surface Technology Wartburg, Inc.
2
2427 N Boeing Road, Warsaw IN 46582, USA
Lake City Heat Treating LLC
1
Incorporated in other European countries
Böhlerdurplatz 1, 8605 Kapfenberg, Austria
Bodycote Austria GmbH
1
Industribuen 16–18, 5592, Ejby, Denmark
Bodycote Varmebehandling A/S
1
Gesällvägen 7, 01730 Vantaa, Finland
Bodycote Lämpökäsittely Oy
1
ÁTI-Sziget Ipari Park, 23. Épület, 2310 Szigetszentmiklós,
Hungary
Bodycote Hungary Hökezelö KFT
1
Via Moie 28, 25050, Rodengo Saiano, Italy
Bodycote Trattamenti Termici SpA
1
Im alten Riet 123, 9494 Schaan, Liechtenstein
Bodycote Rheintal Wärmebehandlung AG
1
Groethofstraat 27, 5916PA Venlo, Netherlands
Bodycote Hardingscentrum BV
1
Bodycote Hardingscentrum No.2 BV
3
Wilgowa 65D, Czestochowa, 42-271, Poland
Bodycote Polska sp z.o.o.
1
Brasov, str. Zizinului nr. 119, cod 500407, Romania
Bodycote Tratamente Termice SRL
1
Matuškova 48, Vlkanová, Banksá Bystrica, 976 31, Slovakia
Bodycote Slovakia s.r.o.
1
Kemalpasa OSB, Izmir Kemalpasa Asfalti No. 17/1, 35730
Kemalpasa-IZMIR, Turkey
Bodycote Istas Isil Islem Sanayi ve Ticaret AS (79.3% owned)
1
Other
Incorporated in USA
13753 Otterson Court, Livonia, MI 48150, USA
Thixomat Technologies, LLC (13.9% Investment)
Classifications Key
1. Thermal processing company
2. Dormant
3. Holding company
4. Property holding company
5. Trustee
6. Provision of services to Group companies
Except where stated, these companies are wholly owned
subsidiaries and have only one class of issued shares.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 197
Shareholder enquiries
Registrar
The Company’s Registrar is Equiniti Limited.
Equiniti provide a range of services to shareholders.
Extensive information, including answers to frequently
answered questions can be found online at
www.shareview.co.uk. Equiniti’s registered address is:
Highdown House, Yeoman Way, Worthing,
West Sussex BN99 3HH.
Use the QR code to register for FREE at
www.shareview.co.uk
Telephone +44 (0)333 207 5951.
Please note that lines are open 8:30am to
5:30pm (UK time) Monday to Friday excluding
public holidays in England and Wales.
For deaf and speech impaired customers, Equiniti
welcomes calls via Relay UK. Please see
www.relayuk.bt.com for more information.
Share dealing service
For information on the share dealing service offered by
Equiniti Limited, telephone +44 (0)345 603 7037.
Please ensure the country code is used if calling from
outside the UK. Lines open 8.00am to 5.30pm (UK time),
Monday to Friday excluding public holidays in England and
Wales. Please either telephone Equiniti or check online at
www.shareview.co.uk for up-to-date commission rates.
Dividend reinvestment plan (DRIP)
Equiniti’s DRIP offers a convenient way for shareholders to
build up their shareholding by using dividend payments to
purchase additional shares. The DRIP is provided by
Equiniti Financial Services Limited, part of Equiniti Group,
which is authorised and regulated by the Financial
Conduct Authority. It is important to remember that the
value of shares and dividend payments can fall as well as
rise and you may not recover the amount of money that
you invest. Past performance should not be seen as
indicative of future performance.
For more information and an application pack, please go
to shareview.co.uk/info/drip. Alternatively, call +44 (0)333
207 5951. Lines open 8.30am to 5.30pm (UK time), Monday
to Friday excluding public holidays in England and Wales.
Overseas shareholders
Equiniti provides a service to overseas shareholders that
will convert sterling dividends into local currency at a
competitive rate. Dividend payments will then be made
directly into your local bank account. For more information
log on to www.shareview.co.uk/info/ops for answers to
any queries you may have, as well as the full terms and
conditions of the service. Alternatively, please call
+44 (0)333 207 5951. Lines open 8.30am to 5.30pm (UK
time), Monday to Friday excluding public holidays in
England and Wales.
Duplicate share register accounts
If you are receiving more than one copy of our annual
report, it may be that your shares are registered in two or
more accounts on our register of members. If that was not
your intention, you might consider merging your accounts
into one single entry. Please contact Equiniti, who will be
pleased to carry out your instructions.
Shareholder warning
Shareholders should be very wary of any unsolicited
advice, offers to buy shares at a discount or offers of free
company reports on the Company. Fraudsters use
persuasive and high-pressure tactics to lure investors into
scams and they may offer to sell shares that often turn out
to be worthless, overpriced or even non-existent.
Whilst high returns are promised, those who invest usually
end up losing their money.
Please keep in mind that firms authorised by the Financial
Conduct Authority (FCA) are unlikely to contact you out of
the blue. If you receive any unsolicited investment advice:
– Make sure you get the correct name of the person and
organisation and make a record of any other information
they give you, e.g. telephone number, address, and ask
for their ‘firm reference number’ (FRN)
– Check that they are properly authorised by the FCA
before getting involved. You can check the FCA register
at https://register.fca.org.uk or call +44 (0)800 111 6768
– Report approaches to the FCA – a list of unauthorised
firms who are targeting, or have targeted, UK investors
is maintained. Reporting such organisations means the
list can be kept up to date and appropriate action
be considered
– Inform Equiniti Limited, our Registrars. They are not able
to investigate such incidents themselves, but will record
the details and pass them on to the Company and liaise
with the FCA on your behalf
– Consider that if you deal with an unauthorised firm, you
would not be eligible to receive payment under the
Financial Services Compensation Scheme If you suspect
you have been approached by fraudsters, please contact
the FCA using the share fraud reporting form at fca.org.
uk/scams
You can also call the FCA Helpline on: 0800 111 6768 (UK
freephone) or 0300 500 8082 (UK), or +44 207 066 1000
(from outside UK).
If you have already paid money to share fraudsters, you
should contact Report Fraud on 0300 123 2040 or online at
www.reportfraud.police.uk.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 198
Shareholder enquiries continued Company information
Shareholder analysis
Analysis of share register as at 27 February 2026:
Holding range
Number of
shareholders %
Number of
shares %
1 to 1,000 573 41.86 277,852 0.13
1,001 to 10,000 488 35.65 1,555,975 0.90
10,001 to 100,000 167 12.20 5,945,444 3.44
100,001 to 500,000 82 5.99 18,819,515 10.90
500,001 and over 59 4.30 146,213,804 84.63
1,369 100.00 172,762,590 100.00
Type of shareholders
% of
shareholders
% of total
shares
Directors’ interests 0.2 0.2
Major institutional and corporate holdings 31.1 98.6
Other shareholdings 68.7 1.2
100.0 100.0
As at 27 February 2026 the following voting rights in the Company had been notified in
accordance with the Disclosure and Transparency Rules:
Name of shareholders
Number of
shares %
Fidelity Management & Research Company LLC 17,276,259 10.00
Goldman Sachs Asset Management 11,695,549 6.77
Artemis Investment Management 10,845,854 6.28
The Vanguard Group, Inc. 9,344,508 5.41
Blackrock Investment Management (UK) Ltd. 9,069,278 5.22
Baillie Gifford & Co. 7,464,109 4.32
Dimensional Fund Management 6,586,018 3.81
Newtoin Investment Management 5,884,564 3.41
ClearBridge Investments LLC 5,801,611 3.36
Schroders 5,425,440 3.14
Janus Henderson Investors 5,199,166 3.01
Advisers
Auditors
PricewaterhouseCoopers LLP
Principal bankers
HSBC UK Bank plc, National Westminster Bank plc, Handelsbanken plc,
UniCredit Bank AG, Wells Fargo Bank, N.A., KBC Bank N.V., Banco Bilboa Vizcaya
Argentaria, S.A. and BNP Paribas.
Brokers
Barclays Bank plc and Jefferies International Limited
Solicitors
Herbert Smith Freehills Kramer LLP and DLA Piper UK LLP
Financial calendar
Annual General Meeting 27 May 2026
Final dividend for 2025 11 June 2026
Half Year results for 2026 July 2026
Interim dividend for 2026 November 2026
Full Year Results for 2026 March 2027
Designed by Radley Yeldar www.ry.com
Printed by Park Communications.
The material used in this Report is from 100% recycled material. The paper mill
and printer are both registered with the Forestry Stewardship Council (FSC)
®
and
additionally have the Environmental Management System ISO 14001.
It is recyclable and bio-degradable. It has been printed using 100% offshore wind
electricity sourced from UK wind.
Company overview Strategic report Governance Financial statements Additional information Bodycote plc Annual Report 2025 199
www.bodycote.com
For the online version of this report go to
www.bodycote.com/investors
Bodycote plc
Tel: +44 (0)1625 505300
Email: info@bodycote.com
© Bodycote plc 2026