Melrose Industries Plc · LSE:MRO
Melrose Industries — H1 2026 Earnings Presentation
30 slides from Melrose Industries's earnings presentation, Jul 31, 2026
Slide 1: Half Year Results 2026
Melrose Industries PLC Half Year Results 2026 31st July 2026
Slide 2: Disclaimer
Disclaimer 1 This presentation has been prepared by or on behalf of Melrose Industries PLC (“Melrose”). The information set out in this presentation is not intended to form the basis of any contract. By attending (whether in person, by telephone or webcast) the presentation to which this document re
Slide 3: Overview
Overview Good first half performance with continued profit and cash flow momentum Attractive civil and defence markets with embedded positions on leading platforms Working closely with stakeholders to restore full Garden Grove production Commercialising breakthrough technologies and investing for fu
Slide 4: H1 Highlights
H1 Highlights FINANCIAL OPERATIONAL COMMERCIAL 10% 25% Fan blade repair Increase in revenue to £1.9bn Reduction in Total Incident Rate1 expansion at San Diego 16% 7 days Major contributor to BAE Systems Increase in operating profit to £347m Reduction in Days Inventory Outstanding2 Brontanax £67 mill
Slide 5: Garden Grove Incident
Garden Grove Incident SITE OVERVIEW INCIDENT PATH FORWARD • World-leader in supply of aerospace • MMA chemical tank overheated in May • Manufacturing plant resumed operations transparencies (windows / canopies) in July using existing inventory • Production halted alongside local • Site produces sign
Slide 6: H1 2026 Results and 2026 Outlook
H1 2026 Results and 2026 Outlook Ross McCluskey Size of corner image Legally privileged and confidential 5
Slide 7: Results Overview
Results Overview 6 Good H1 performance with double-digit revenue growth H1 2026 Growth and margin expansion Adjusted1 results Excluding GG Excluding GG £m H1 2026 Impact2 H1 2025 Growth Impact2 Revenue 1,873 1,889 1,720 10% 11% Revenue growth driven by strong growth in Engines, partially offset by i
Slide 8: Engines Results
Engines Results 7 KEY POINTS Adjusted1 results H1 2026 Growth £m H1 2026 Excluding VC2 H1 2025 Growth Excluding VC2 • Revenue growth of 19% driven by strong OE performance (+23%) and good growth in aftermarket Revenue 896 690 781 19% 19% (+15%) Operating profit 303 97 261 21% 29% • RRSP growth of 18
Slide 9: Airframes Results
Airframes Results 8 H1 2026 Growth KEY POINTS Adjusted1 results Excluding GG Excluding GG £m H1 2026 Impact2 H1 2025 Growth Impact2 • Airframes H1 results constrained by the Garden Grove incident: revenue and operating profit reduced by £16 Revenue 977 993 939 4% 6% million and £9 million respective
Slide 10: Free Cash Flow
9 Free Cash Flow £m H1 2026 H1 2025 Change Free cash inflow of £13 million, an improvement of £67 million Adjusted operating profit1 347 310 Depreciation and amortisation 70 67 Factoring utilisation down from £396 million to £387 million; equivalent Variable consideration (206) (182) to a H1 2026 ca
Slide 11: Net Debt and Shareholder Returns
Net Debt1 and Shareholder Returns 1 0 £m H1 2026 Net debt1 at 31 December 2025 (1,407) Free cash inflow 13 Dividends paid (60) Share buyback (70) Capital return from investments 13 FX and other non-cash movements (19) Net debt1 at 30 June 2026 (1,530) BALANCE SHEET SHAREHOLDER RETURNS • Leverage1 ma
Slide 12: Garden Grove Financial Impact in 2026
Garden Grove: Financial Impact in 2026 1 1 H1 2026 H2 2026 £m Actuals Estimated Operational impact • Expect the site to run at c.50% of normal capacity Revenue (16) c.(6)/month until full production resumed Operating profit (9) c.(6)/month • H2 cash impact will depend on timing of full restart and w
Slide 13: 2026 Guidance
2026 Guidance @ $1.37 (Excluding Garden Grove Impact) 1 2 2026 Guidance (Excluding Garden Group: Revenue of £3,750-£3,950 million, growth of c.10% at mid-point £m Grove Impact) Operating profit of £700-£750 million, growth of c.16% at mid-point Revenue: Margins of c.19% at mid-point Engines 1,700-1,
Slide 14: Strategic Progress & Growth Outlook
Strategic Progress & Growth Outlook Peter Dilnot Size of corner image Legally privileged and confidential 13
Slide 15: Structural Market Growth
Structural Market Growth CIVIL ORIGINAL EQUIPMENT CIVIL AFTERMARKET DEFENCE RISING AIRCRAFT BACKLOGS GROWING ENGINE FLIGHT HOURS INCREASING NATO DEFENCE SPEND 237m $2.7tn MARKET OUTLOOK 15,474 16,036 174m $2.1tn 4% 36% 28% Dec-25 Jun-26 2025 2030 2025 2030 Narrowbody Widebody Embedded positions on a
Slide 16: Melrose Growth Strategy
Melrose Growth Strategy DELIVER GROWTH FROM EXISTING PLATFORMS EXPAND IN TARGETED PARTICIPATE IN NEXT NEW OPPORTUNITIES GENERATION AIRCRAFT • Production ramp-up • Engines additive fabrication • Next generation engines • Increasing returns from RRSPs • Advanced air mobility • Future single aisle • En
Slide 17: Existing Platforms – Engines
Existing Platforms – Engines LEAN OPERATING MODEL EXAMPLES GEnx KAIZEN WEEK TALLASSEE (US) Reduction in inspection time • OE growth of 23% driven by strong demand for GTF and GEnx programmes 90% for GEnx fan cases • Good progress on GTF AOG and GTF Advantage ramp-up H1 2026 • Secured multi-year repa
Slide 18: Existing Platforms – Airframes
Existing Platforms – Airframes LEAN OPERATING MODEL EXAMPLES SUPPLIER QUALITY HOOGEVEEN (NL) Reduction in customer issues • Further increases in civil backlog, particularly with narrowbody aircraft 80% linked to supplier parts • Continued investment in capabilities to support rate readiness and prod
Slide 19: Targeted New Opportunities – DUAVs
Targeted New Opportunities – DUAVs AIRFRAMES COMBINED SYSTEMS ENGINES Increasing size / weight Increasing thrust Tier 3 Tier 2 Tier 1 1-10 kN 7-10+ kN 25-35 kN CCA OEMs OWE OEMs DIRECT TO END USER OWE OEMs CCA OEMs BAE Brontanax Partnerships Partnerships Swedish FMV Ongoing development Anduril Thund
Slide 20: Targeted New Opportunities – Engines Additive Fabrication
Targeted New Opportunities – Engines Additive Fabrication TARGET MARKET: STRUCTURAL COMPONENTS FOR GAS TURBINE ENGINES UNIQUE PROPRIETARY OFFERING Fan case mount rings Fabricated Current AF Mid Castings production compressor application LPC structures Fabricated Compressor cases HPC Forgings Mid tur
Slide 21: Next Generation Platforms
Next Generation Platforms CIVIL DEFENCE Design partner on next-generation single-aisle programmes Design partner on next-generation defence air platforms ▪ Systems integrated Fixed Trailing Edge ▪ Sixth-generation fighters (GCAP) ▪ Wing spars, moveable structures and folding wing technologies ▪ Coll
Slide 22: Drivers of Free Cash Flow
Drivers of Free Cash Flow Growing operating profit • Production ramp-up • Growing aftermarket, including repairs To 2029 2030 – 2035 Notes • Operational improvements • Expansion into new areas NEW • Increasing contribution • Contribution from 4 new • Higher share on new from GEnx and XWB engines con
Slide 23: Summary
Summary Good first half performance with continued profit and cash flow momentum Attractive civil and defence markets with embedded positions on leading platforms Working closely with stakeholders to restore full Garden Grove production Commercialising breakthrough technologies and investing for fut
Slide 24: Appendices
Appendices Size of corner image Legally privileged and confidential 23
Slide 25: Reconciliation Between Statutory and Adjusted Results
Reconciliation Between Statutory and Adjusted1 Results 2 4 H1 2026 H1 2025 Adjusted1 Statutory Adjusted1 Statutory £m results results results results Operating profit 347 154 310 441 Net finance costs (65) (65) (62) (62) Net tax charge (60) (14) (54) (94) Profit after tax 222 75 194 285 Diluted earn
Slide 26: Factoring
Factoring 2 5 £m USD:GBP Factoring utilisation at 31 December 2024 338 $1.25 FX movements (29) Net cash inflow 31 Factoring utilisation at 30 June 2025 340 $1.37 FX movements 6 Net cash inflow 50 Factoring utilisation at 31 December 2025 396 $1.35 FX movements 6 Factoring utilisation reduced by £9 m
Slide 27: Some Helpful Data: Excluding Garden Grove Impact
Some Helpful Data: Excluding Garden Grove Impact 2 6 2026 Guidance 2026 Guidance Income Statement H1 2026 (USD: $1.37) Cash Flow H1 2026 (USD: $1.37) Revenue: Depreciation and amortisation: Owned assets £53 million c.£110 million Engines £896 million £1,700 - £1,800 million Leased assets £17 million
Slide 28: Some Helpful Data: 2029 at $1.25
Some Helpful Data: 2029 at $1.25 2 7 Income Statement 2029 Targets1 Cash Flow 2029 Targets1 Revenue: Depreciation: Engines HSD2 CAGR3 Owned assets c.£135 million Leased assets c.£35 million Airframes MSD2 CAGR3 Total depreciation c.£170 million Melrose Group c.£5 billion Variable consideration c.£50
Slide 29: Historical Variable Consideration Table
Historical Variable Consideration Table 2 8 £m 2018 2019 2020 2021 2022 2023 2024 H1 2025 2025 H1 2026 Income Statement: RRSP Sales 415 679 354 402 547 680 859 485 996 555 Balance Sheet: Unbilled work done – brought forward 171 206 242 247 305 450 595 922 922 1,308 Reclassification of PMI1 143 Add:
Slide 30: Foreign Exchange Environment: Transactional Hedging Position
Foreign Exchange Environment: Transactional Hedging Position1 2 9 EUR:USD 2026 2027 2028 2029 2030 2031 2032 Transaction FX exposures and approach (figures in USD) Exposure in $m 599 547 439 383 303 282 141 • Main currency pairs are EUR:USD and GBP:USD • Additional SEK and NOK hedged vs USD Hedged 9