Aerospace, Defence & Energy markets
Civil aerospace revenues increased in 2014 by 4% at constant exchange rates (1% decline at actual exchange rates), reflecting a combination of new contract gains and market demand, despite significant OEM destocking in the UK. Original equipment sales improved during the year in both the USA and France. Available seat kilometres grew by 6% indicating a continued increase in aircraft flying hours, which in turn resulted in increased demand for aftermarket parts.
Sales into the defence sector, which accounted for just under 5% of Group revenues, were weak as the effect of the widespread reduction in military budgets continued. Revenues were 6% lower than in 2013 at constant exchange rates (11% decline at actual exchange rates).
Demand for the Group's services in the power generation sector softened as the year progressed, with revenues below 2013 by 4% at constant exchange rates (7% at actual exchange rates).
The performance in oil & gas was strong, helped by significantly increased requirements for the Group's HIP Product Fabrication offering for major subsea projects, along with an end to destocking by onshore oil field service providers. Overall Group revenues were up 13% (at constant exchange rates) compared to 2013 and by 7% at actual exchange rates. Sales into the oil & gas sectors accounted for 10% of Group revenue.
Automotive & General Industrial markets
Revenues in car and light truck markets increased year-on-year by 5% at constant exchange rates (1% decline at actual exchange rates). Particularly pleasing was an increase in revenues above 4% in Western Europe, at constant exchange rates (1% decline at actual exchange rates), notwithstanding continued weak consumer demand.
Revenues from the heavy truck sector in North America grew strongly in 2014 and were ahead of the prior year by 6% at constant exchange rates (flat at actual exchange rates). In contrast, demand in Western Europe was very weak and revenues declined by 8% at constant exchange rates (15% decline at actual exchange rates).
Bodycote provides thermal processing services for a wide range of machinery and heavy equipment customers. Most sectors served by Bodycote grew well in 2014. This was particularly noteworthy in Western Europe against a background of generally soft macro-economic conditions. Of the more important sectors for the Group, demand was robust in tooling, construction equipment and general machinery, whilst consumer goods was soft. Overall revenues grew 4% at constant exchange rates (2% decline at actual exchange rates).