Bodycote Plc · LSE:BOY

Bodycote — Investor Day (April 2019)

12 slides from Bodycote's investor day presentation, Apr 30, 2019

  1. Slide 1: The Bodycote Margin Model: Improving the mix

    The Bodycote Margin Model Improving the mix

  2. Slide 2: The big unknown: Which customers are profitable?

    The big unknown Which customers are profitable? Share of revenue vs. number of customers Example plant: 100%  In this plant, top customers represent >85% of total turnover – the distribution varies by plant 90% 80%  High potentials are customers with higher margin potential 3 Small customers 70% 

  3. Slide 3: Digging deeper into the product mix

    Digging deeper into the product mix… …we discover even more margin differences A typical Classical Heat Treatment 120,000  Over 12,000 customers division of products  On average 10 products per customer Bodycote:  Identical parts can be treated at different cost Efficiency  Factors such as effic

  4. Slide 4: Understanding the profitability

    Understanding the profitability Plant 1 ? Margin: -5% Plant 2 Product: Gearbox component Margin: +25% Market: Automotive Treatment: Hardening and Tempering Pricing: Identical in both plants 4

  5. Slide 5: Understanding the profitability: key questions

    Understanding the profitability Key questions A systematic approach for mix and margin Where do we earn our profits? improvement is needed Where do we have potential for growth? How do we do our pricing? Bodycote Margin Model 5

  6. Slide 6: Improving the profitability: driving the Bodycote margin process

    Improving the profitability Driving the Bodycote margin process Define Calculate Review Action  Alignment of cost data  Process data  Analyse share of  Challenge the results with production customer’s wallet  Identify and adjust for  Action plan: ‘Improving processes inefficiencies in the  Re

  7. Slide 7: Bodycote margin model: margin analysis

    Improving the profitability Bodycote margin model Margin analysis Case 1: 40% Case 2: Case 3: HIGH PENETRATION Case 4: SECURE NEW PENETRATION Increase penetration Secure position CUSTOMER Increase without loss of profitability Not part of 30% penetration analysis Increase profitability 20% Margin 10

  8. Slide 8: The result: Up or Out…

    Improving the profitability The result: Up or Out… Example Analysis Up or Margin Out Size of circle = Revenue volume Share of customer’s wallet 8

  9. Slide 9: Mapping the different ways to improve profit

    Improving the profitability Mapping the different ways to improve profit Optimised pricing, terms & conditions Higher efficiency Fully optimised Improve efficiencies 4 views As is situation Increase volume Bodycote Margin Model Improve utilisation 9

  10. Slide 10: There is more than one margin dimension when comparing processes between plants

    There is more than one margin dimension when comparing processes between plants ? Plant 1 Plant 2  Utilisation and load density are low  Utilisation and load density are optimized  Standard heat treatment process  Customised heat treatment process  Bad furnace management  Energy management in

  11. Slide 11: The Bodycote margin model: why is it so successful?

    The Bodycote margin model Why is it so successful? Robust and long term portfolio profitability Improving Understanding A defined the processes Action where the and repetitive & benchmarking plan profits are process across plants 11

  12. Slide 12: Capital Markets Day 2019

    CAPITAL MARKETS DAY 2019 -

Bodycote — Investor Day (April 2019) on 6ix