Melrose Industries Plc · LSE:MRO
Melrose Industries — FY2015 Earnings Presentation
17 slides from Melrose Industries's earnings presentation, Mar 3, 2016
Slide 1: Melrose Industries PLC Full Year Results
Buy Improve Sell Strictly private and confidential Melrose Industries PLC Full Year Results Twelve months to 31 December 2015 3 March 2016
Slide 2: Contents
Contents Sections 1 Highlights 2 Summary financial results 3 Melrose the deals 4 Summary of operating results Brush 5 Questions 6 Appendix Buy Improve Sell 2
Slide 3: Highlights
Buy Improve Sell Highlights 3
Slide 4: Highlights in 2015
Highlights in 2015 Sale of Elster to Honeywell completed on 29 December 2015 for £3.3 billion, a multiple of 3.1x 2014 revenue and 14.3x 2014 headline1 EBITDA2 with a subsequent capital return of £2.4 billion made to shareholders On 16 March 2015, following the sale of Bridon, £200.4 million was
Slide 5: Summary financial results
Buy Improve Sell Summary financial results 5
Slide 6: Income Statement
Income Statement Full year to 31 December 2015 Continuing operations £m Statutory format Proforma¹ 2015 Revenue 261.1 261.1 Brush 38.5 Operating profit 4.8 20.8 Central (12.7) LTIPs (5.0) Operating margin % 1.8% 8.0% Net finance costs (35.5) (1.8) (Loss)/profit before tax (30.7) 19.0 Tax credit/(cha
Slide 7: Final 2015 dividend
Final 2015 dividend Continuing operations £m Proforma¹ 2015 Revenue 261.1 Headline2 operating profit 20.8 Headline2 operating margin % 8.0% Net finance costs (1.8) Profit before tax 19.0 Tax (5.7) Profit after tax 13.3 Proforma1 profit for the period 13.3 Basic number of shares (following share cons
Slide 8: Proforma Balance Sheet
Proforma1 Balance Sheet As at 31 December 2015 Continuing operations Brush £m Group2 Corporate Total Fixed assets, intangible assets and goodwill 384.7 1.2 385.9 Net working capital/accruals 62.8 (9.4) 53.4 Net cash1 - 54.1 54.1 Pensions and retirement benefits3 (8.4) - (8.4) Provisions (25.7) (4.3)
Slide 9: Pensions
Pensions Gross Gross IAS 19 £m liabilities assets deficit Pensions balances by region December 2015 At 31 December 2014 (1,343.7) 1,125.2 (218.5) At 29 December 2015 (1,209.4) 1,080.3 (129.1) Sold with Elster (848.7) 736.8 (111.9) Surplus Deficit Percentage of IAS 19 deficit sold 87% £10.2m (£18.6m)
Slide 10: Melrose – the deals
Buy Improve Sell Melrose the deals 10
Slide 11: Melrose – the deals
Melrose the deals Elster FKI McKechnie / Dynacast Acquired for £1.8bn £1.0bn £0.4bn Bolt on acquisitions £0.1bn - - Total price £1.9bn £1.0bn £0.4bn Net cash generated (after all costs) £0.1bn £0.4bn £0.1bn Sold for £3.3bn £1.8bn3 £0.8bn Total cash generated1 £1.5bn £1.2bn £0.5bn Equity multiple 2
Slide 12: Melrose – operational improvement
Melrose operational improvement The McKechnie / Melrose total The Elster deal The FKI deal Dynacast deal +9ppts +5ppts +6ppts Increase in margin achieved representing a 70% uplift representing a 50% uplift representing a 40% uplift in the margin in the margin in the margin Uplift in value generate
Slide 13: Brush
Brush “the largest independent manufacturer of electrical equipment including 2 and 4-pole Turbogenerators, Power Management Systems, Transformers, Hawker Siddeley Switchgear and Harrington Diesel Generators.” www.brush.eu 13
Slide 14: Brush – headline results
Brush Brush – headline¹ results Revenue by product £m 2015 FY 2015 Growth3 Revenue 261.1 -17% 5 1 New build 4 generators 31% Headline¹ EBITDA² 1 46.0 -33% 2 Aftermarket 33% 3 Switchgear 17% Headline¹ EBITDA² margin % 3 17.6% -4.1ppts 4 Transformers 15% 5 Other 4% Headline¹ operating profit 38.5 -38%
Slide 15: Questions
Buy Improve Sell Questions 15
Slide 16: Appendix
Appendix Buy Imp 7 rove elrose Sell 16
Slide 17: Elster – operational improvement
Elster operational improvement Elster Group2 Gas Electricity Water £m 2015 Growth3 2015 Growth3 2015 Growth3 2015 Growth3 Revenue (CAGR%) 1,107.4 +2% 753.5 +6% 228.6 flat 125.3 -9% Headline1 operating profit 248.1 +88% 204.1 +54% 26.6 +60% 18.8 +153% Headline1 operating margin % 22.4% +9ppts 27.1%