Melrose Industries Plc · LSE:MRO

Melrose Industries — H1 2015 Earnings Presentation

19 slides from Melrose Industries's earnings presentation, Jul 28, 2015

1. Slide 1: Melrose Industries PLC Half Year Results

   Buy Improve Sell Strictly private and confidential Melrose Industries PLC Half Year Results Six months to 30 June 2015 28 July 2015

2. Slide 2: Contents

   Contents Sections 1 Highlights 2 Melrose  the first 11 years 3 The Elster deal 4 Summary financial results 5 Questions Buy Improve Sell 2

3. Slide 3: Highlights

   Buy Improve Sell Highlights 3

4. Slide 4: Highlights in 2015

   Highlights in 2015  Management action produced strong Elster profit improvement  Brush is performing broadly in line with earlier indications in a tough market  Melrose net debt at the half year was £742 million, representing a leverage of 2.7x  The Board has declared an interim dividend of 2.8p

5. Slide 5: Melrose – the first 11 years

   Buy Improve Sell Melrose  the first 11 years 5

6. Slide 6: Melrose – the first 11 years

   Melrose  the first 11 years1 From the first acquisition (May 2005) to now…  Shareholder gain £2.5 bn  Average annual return for a shareholder since the first acquisition 22%  Average return on equity across all three acquisitions 2.9x The future…  Over the 11 years Melrose has raised £2.0 billi

7. Slide 7: Shareholder value created

   Melrose  the first 11 years How has value been created?  22% IRR on equity  Achieved through changing management focus and investing in the businesses  The investment by Melrose in the businesses in capital expenditure and restructuring projects has been as large as one third of the equity price

8. Slide 8: The Elster deal

   Buy Improve Sell The Elster deal 8

9. Slide 9: The Elster deal

   The Elster deal  Melrose has entered into an agreement with Honeywell for the sale of Elster for £3.3 billion in cash on completion  Following completion Melrose intends to make a capital return to shareholders of over £2 billion  Subject to customary anti trust clearances and Melrose shareholder

10. Slide 10: The Elster deal – pension schemes

    The Elster deal  pension schemes  £0.9 billion, c.70% of the total Melrose pension liabilities transferring with Elster  £0.13 billion, c.80% of the total Melrose pension deficit transferring with Elster Gross pension liabilities Accounting deficit £0.9bn £0.13bn June 2015 June 2015 £1.3bn £0.17b

11. Slide 11: Summary financial results

    Buy Improve Sell Summary financial results 11

12. Slide 12: Income Statement

    Income Statement H1 2015 statutory format Continuing operations H1 2015 other non-headline¹ items £m Headline¹ Other Total Revenue 117.7 - 117.7 Continuing operations £m Operating Tax Total Operating profit/(loss) 6.1 (9.3) (3.2) Intangible asset amortisation (4.1) 0.8 (3.3) Operating margin % 5.2%

13. Slide 13: Summary financial results: Cash performance

    Buy Improve Sell Summary financial results Cash performance 13

14. Slide 14: Profit conversion to cash and investment

    Profit conversion to cash and investment Cash generated from trading (after all costs including tax) Group4 £m H1 2015 Headline¹ operating profit 112 Depreciation2 16 Working capital movement (19) Headline¹ operating cash flow (pre capex) 109 Headline¹ EBITDA33 conversion Headline¹ EBITDA conversion

15. Slide 15: Brush

    Brush “World number one independent supplier of turbogenerators” www.brush.eu 15

16. Slide 16: Brush – headline results

    Brush Brush – headline¹ results Brush £m H1 2015 Growth3 Revenue 117.7 -26% Headline¹ EBITDA² 18.1 -44% Headline¹ EBITDA² margin % 15.4% -5.1ppts Headline¹ operating profit 14.5 -55% Headline¹ operating margin % 12.3% -8.2ppts Order intake 131.1 flat Book to bill % 111% Highlights Revenue by geograp

17. Slide 17: Elster

    Elster 69% of Elster1 “Best-in-class products and solutions for Gas measurement, regulation and the safe control and application of gases” www.elster.com/en/gas 18% of Elster1 “Meeting the expanding needs of utilities Electricity by providing advanced metering products and services worldwide” www.el

18. Slide 18: Elster – headline results

    Gas Electricity Water Elster Elster – headline¹ results Elster4 Gas Electricity Water £m H1 2015 Growth3 H1 2015 Growth3 H1 2015 Growth3 H1 2015 Growth3 Revenue 541.3 +14%5 370.6 +18%5 98.9 +18% 71.8 -5% Headline¹ EBITDA² 120.9 +20% 100.8 +24% 7.3 +11% 13.7 -4% Headline¹ EBITDA² margin % 22.3% +1.0p

19. Slide 19: Questions

    Buy Improve Sell Questions 19

Melrose Industries — H1 2015 Earnings Presentation on 6ix