Melrose Industries Plc · LSE:MRO
Melrose Industries — H1 2017 Earnings Presentation
19 slides from Melrose Industries's earnings presentation, Aug 31, 2017
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 2017 31 August 2017
Slide 2: Contents
Contents Sections 1 Highlights 2 Summary financial results 3 Brush & Nortek 4 Questions Buy Improve Sell 2
Slide 3: Highlights
Buy Improve Sell Highlights 3
Slide 4: Highlights in 2017
Highlights in 2017 Underlying1 Statutory £m results results Revenue 1,085.6 1,085.6 Profit before tax 131.1 47.8 Diluted earnings per share 4.9p 2.0p Record Nortek first half performance: ‒ Fastest improvement in profit compared to any previous Melrose deal ‒ Highest ever first half cash generatio
Slide 5: Summary financial results
Buy Improve Sell Summary financial results 5
Slide 6: Income Statement
Income Statement Six months to 30 June 2017 Statutory numbers £m Revenue 1,085.6 Operating profit 57.9 Profit before tax 47.8 Tax (9.6) Profit after tax 38.2 Underlying1 operating profit 141.2 Underlying1 profit before tax 131.1 Underlying1 profit after tax 95.3 Underlying1 diluted earnings per shar
Slide 7: Reconciliation of statutory results to underlying performance
Reconciliation of statutory results to underlying performance A reconciliation of the statutory results to the underlying performance £m H1 2017 statutory profit before tax 47.8 Restructuring costs 25.1 Acquisition and disposal costs 1.7 Amortisation of intangible assets 41.5 Melrose equity-settle
Slide 8: H1 2017 underlying operating results by division
H1 2017 underlying1 operating results by division Security & Air Smart Nortek Melrose Total £m Management Technology Ergonomics Central Energy Central Group Revenue 616.6 237.5 133.3 - 98.2 - 1,085.6 Underlying1 operating profit 75.9 37.0 33.9 (1.3) 7.2 (11.5) 141.2 Underlying1 operating margin 12.3
Slide 9: Foreign exchange forward looking
Foreign exchange forward looking 2017 2016 USD CNY USD CNY 6 month average rates 1.26 8.66 1.43 9.37 Closing rates (June) 1.30 8.80 1.33 8.83 Closing rates (December) - - 1.23 8.57 Ongoing sensitivity of profit to translation risk and the portion of transaction risk that is not hedged Increase/(de
Slide 10: Summary financial results: Cash performance
Buy Improve Sell Summary financial results Cash performance 10
Slide 11: Record first half cash generation for Nortek, strong Brush cash performance
Record first half cash generation for Nortek, strong Brush cash performance Group Operating cash flow £m H1 2017 Nortek Brush (pre capex) Underlying1 operating profit 141.2 145.5 7.2 Air Depreciation 17.7 13.1 4.6 Management £47.9m Working capital movement (48.0) (55.2) 7.8 Operating cash flow (pre
Slide 12: Balance Sheet, leverage, capital expenditure & tax
Balance Sheet, leverage3, capital expenditure & tax 30 June Capital expenditure - Nortek £m 2017 Fixed assets, intangible assets and goodwill 2,705.3 1.5x Net working capital 274.2 dep’n Pensions and retirement benefits (22.2) Provisions (239.7) Significant capital investment into Nortek Deferred ta
Slide 13: Summary of operating divisions
Buy Improve Sell Summary of operating divisions Brush Nortek 13
Slide 14: Brush
Brush 9% of Melrose1 Brush Turbogenerators is the world's largest independent manufacturer of electricity generating equipment for the power generation, industrial, oil & gas and offshore sectors 14 1. Based on H1 2017 revenue
Slide 15: Brush – underlying results
Brush Brush – underlying1 results Brush £m H1 2017 Growth3 Revenue 98.2 -11% Underlying1 EBITDA2 11.8 -32% Underlying1 EBITDA2 margin % 12.0% -3.8ppts Underlying1 operating profit 7.2 -43% Underlying1 operating margin % 7.3% -4.3ppts Order intake 128.9 10% Book to bill % 131% Revenue and margins i
Slide 16: Nortek
Nortek 91% of Melrose1 Nortek is a global, diversified group which manufactures innovative air management, security, home automation and ergonomic and productivity solutions 16 1. Based on H1 2017 revenue
Slide 17: Nortek – underlying results
Nortek Nortek – underlying1 results Security & Smart Nortek Group5 Air Management Ergonomics Technology £m H1 2017 Growth3,4 H1 2017 Growth3,4 H1 2017 Growth3,4 H1 2017 Growth3,4 Revenue 987.4 -1% 616.6 2% 237.5 -4% 133.3 -5% Underlying1 EBITDA2 158.6 39% 85.4 27% 38.5 33% 35.3 -10% Underlying1 EBIT
Slide 18: Nortek – actions achieved and underway
Nortek – actions achieved and underway Air Management Security & Smart Technology Ergonomics Management changes Management changes Investment for Further consolidation of the two HVAC businesses into one management Consolidation of Security & Smart growth team Technology under one management Investm
Slide 19: Questions
Buy Improve Sell Questions 19