Bodycote PLC

Pre-Annual General Meeting Information • Mar 25, 2011

WWW.BODYCOTE.COM

25 March 2011

ELECTRONIC COMMUNICATIONS

Our shareholder records show that you have not signified that you wish to receive paper copies of Bodycote's annual and interim results and meeting notices. As a result we are writing to tell you that Bodycote's 2010 Annual Report, highlights of which are provided below, together with the notice of Annual General Meeting are now available at our website – www.bodycote.com. Shareholders should read the whole of both these items and not rely on the summarised information set out in this letter.

Bodycote's Annual General Meeting will be held at 12:00 noon on 27 April 2011 at Springwood Court, Springwood Close, Tytherington Business Park, Macclesfield, Cheshire SK10 2XF. Enclosed with this letter is your personalised proxy card, with which you can vote; you can, of course attend the meeting in person if you wish.

Should you wish to revert to receiving physical copies of documents, you can request this by contacting our registrars, Capita, by telephone on 0871 664 0391 (within the UK calls cost 10p per minute plus network extras – lines open Monday to Friday 09:00 to 17:30 hours) or +44(0)208 639 3367 (from overseas), by post to SAS, FREEPOST RLYX-GZTU-KRRG The Registry, 34 Beckenham Road, Beckenham, Kent BR3 9ZA) or online at www.capitashareportal.com.

Dear Shareholder,

2010 saw a notable and pleasing improvement in the performance of the Group. Better macro economic conditions were an important contributor to this and the underlying ability of the business to deliver consistently superior value has been strengthened considerably. Total revenue growth was well ahead of market improvement. The reorganisation of the Group into market focused divisions has enhanced revenue growth and careful targeting of capital investment has improved cash flow and return on capital.

2010 RESULTS HIGHLIGHTS

	2010	2009
Revenue - continuing operations	£499.8m	£435.4m
Headline operating profit - continuing operations	£52.1m	£8.0m
Operating profit/(loss) - continuing operations	£51.2m	£(50.2)m
Headline profit before taxation - continuing operations	£46.1m	£3.7m
Profit/(loss) before taxation - continuing operations	£45.2m	£(54.5)m
Headline operating cash flow	£77.3m	£34.7m
Operating cash flow	£68.1m	£15.5m
Net debt	£51.3m	£85.5m
Basic headline earnings per share - continuing operations	18.3p	0.4p
Basic earnings/(loss) per share	14.9p	(27.0)p
Dividend per share	8.7p	8.3p
Return on capital employed - continuing operations	10.1%	1.5%

The future trends for Bodycote's markets are very favourable. The more notable trends include:

• In the aerospace segment most industry analysts foresee a significant growth in flying hours and new build of aeroplanes associated with traffic for the emerging markets. The move to higher engine operating temperature requirements increases thermal processing needs. These are all positive factors for the demand for thermal processing.
• Rising oil and gas prices, together with the increasing sophistication associated with extracting difficult to reach reserves, are increasing the material requirements of exploration and production equipment, which in turn is driving greater demand for thermal processing services.
• Power generation, where Bodycote enjoys a strong presence in both heat treatment and HIP services, will resume its long term growth path in due course, as the expansion in the emerging markets continues.
• The automotive segment is moving to more sophisticated materials engineering as manufacturers try to reduce weight and increase strength. This in turn directly increases the amount of thermal processing required. In addition, the introduction of hybrid vehicles is leading to a larger number of components in vehicles, which in turn require more services offered by Bodycote.

Outsourcing remains a major opportunity for the Group. Agreements are typically framework in nature, with standard terms and conditions and a commitment to sole source the work from Bodycote. Pricing is normally defined as a base level with prices linked to various indices such as the cost of energy.

Going forward it is expected that the pace of outsourcing and size of outsource contracts will increase. This is due not only to the general tendency of companies to eliminate non core activities over time, but also to two other significant factors.

• The rising cost of energy. Bodycote is typically more energy efficient than manufacturers that process the work in-house and can balance the load in its process lines by aggregating work from several customers. Level loading, in itself, is a much more efficient way of operating thermal processing plants than the fluctuating load conditions faced by most manufacturers' in-house facilities. As a result, rising energy prices tend to drive increased levels of outsourcing.
• The general move of manufacturing industries to emerging markets. This not only creates opportunities in emerging markets for Bodycote to serve these customers, but also provides a source of opportunity in developed economies. This is because most customers that move their manufacturing to emerging markets tend not to close their facilities completely in the developed economies. Instead, these facilities stop being expanded and have investment constrained. The capital intensive nature of thermal processing means that such facilities often become undercapitalised or outmoded and outsourcing becomes an attractive option. The choice of companies capable of taking on such outsourced work in a reliable way is small, and Bodycote becomes the preferred partner for most of the customer base.

In 2009 the Board recommended a maintained dividend despite the challenges posed by the downturn, based upon its confidence that actions taken by the new management team would restore the Company to a satisfactory level of profitability and cash generation. The Board is satisfied with the steady improvement in results throughout 2010 and is confident in the future outlook for the business. The Board is recommending that a final dividend of 5.75p be paid to shareholders, giving an increased total of 8.7p (4.8% increase) for the full year. If approved at the Annual General Meeting the dividend will be paid on 6 May 2011 to all holders on the register on 8 April 2011.

Looking at 2011, it is anticipated that automotive and general industrial business will continue to grow at a reasonable pace. Aerospace, defence and energy demand has begun to recover, although within this the power generation segment remains soft, with the timing of improvement still unclear. In summary, the Board is confident that 2011 will be another year of growth for Bodycote, albeit at a less rapid rate than experienced in 2010. The year has started in line with these expectations. Looking further out, the Board sees encouraging opportunities for improved through-cycle returns.

As you will see from the enclosed form of proxy, in addition to the ordinary business your Board is proposing 4 items of special business as set out in resolutions 12 to 15. Briefly, these relate to: the renewal of the authority for Directors to allot shares; the dis-application of pre-emption rights to permit limited allotment of ordinary shares for cash; the renewal of authority for the Company to purchase its own shares; and authority for the Company to call General Meetings at 14 days' notice.

You will find enclosed a form of proxy which, to be effective, you should please complete in accordance with the instructions given and return so as to reach the Company's registrar as soon as possible, but in any event not later than 48 hours before the time of the meeting. The completion of the form of proxy will not prevent you from attending the meeting in person if you wish to do so.

Copies of the full notice of meeting and the 2010 annual report and accounts are available to read in full on the Company's website, together with the presentation made to City analysts.

S. C. Harris Chief Executive

Financial Calendar 2011-2012
2011 AGM	27 April 2011
Final dividend for 2010	6 May 2011
Interim results for 2011	July 2011
Interim dividend for 2011	November 2011
Results for 2011	February 2012

Bodycote plc · Springwood Court · Springwood Close · Tytherington Business Park · Macclesfield · Cheshire · SK10 2XF · UK Tel: +44 (0)1625 505300 · Fax: +44 (0)1625 505313

Registered Office: As above – Registered No. 519057 (England)