Trading Update

    Bodycote International, plc

TRADING UPDATE

                                                                  PRESS RELEASE

                  EMBARGOED UNTIL 0700 HRS: 10 DECEMBER 2003                   

                                TRADING UPDATE                                 

At the time of the interim results we reported that first half sales were
marginally ahead of the same period last year, with changes in mix and erosion
of selling prices impacting upon margins. Despite our success in achieving
annualised cost savings of approximately £12m compared to 2002, we had
experienced significant offsetting cost increases, most notably in people
costs, energy and depreciation.

As anticipated we We have not seen any abatement of these cost pressures but
further annual savings of £1.5m p.a. have been achieved since the half-year,
principally in France, through reduced headcount.

Historically the second half has produced similar sales to the first half
despite the impact of summer and Christmas holidays, in part due to the benefit
of acquisitions. Since the interim announcement we have experienced a further
reduction in automotive demand in France and North America. Power outages in
North America and Italy negatively affected sales. The progressive weakening of
the dollar will also have an adverse impact on our reported profitability. As a
consequence Group sales are expected to be approximately 4% below H1 rates. A
breakeven run rate was anticipated for our coatings business based on a modest
increase in telecoms volume and operational efficiencies ; improvements in both
these areas have been slow in coming through. Cash generation continues to be
ahead of last year as a result of tight control of capital expenditure and the
ongoing focus on working capital management.

Heat Treatment sales are running about 6% below the levels seen in H1 as many
manufacturers in the Nordic region, France and North America took extended
shutdowns this summer affecting demand right through September. UK sales are
flat but margins continue to be affected by lower aerospace and industrial gas
turbine (IGT) demand. The Central European Group has performed well in the face
of declining manufacturing demand.

Materials Testing remains the best performing SBU with both sales and operating
profit ahead of 2002 levels. The Middle East laboratories acquired in July are
performing in line with our expectations. Overall demand for testing services
has remained reasonably robust.

Hot Isostatic Pressing is stable at depressed levels with the primary end
markets, commercial aviation and IGT, still weak.

Wet Coatings remains problematic and whilst these businesses, with a turnover
of c.£38m, are not likely to be a part of our long term strategy, we remain
focused on increasing sales and improving operational performance. The Dry
Coatings (PVD, Slurry , Flame Spray and Shera rdising) businesses ha ve
performed well and continue to exhibit good prospects for development and
growth.

The Board is currently reviewing the findings of a strategic review of the
Metallurgical Coatings business.

For further information, please contact:

Bodycote International plc Tel No: 01625 505300

John D. Hubbard, Chief Executive

David Landless, Group Financ e Director

Financial Dynamics Tel No: 020 7831 3113

Jon Simmons/Meg Baker




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