Melrose Industries Plc · LSE:MRO
Melrose Industries — FY2014 Earnings Presentation
26 slides from Melrose Industries's earnings presentation, March 2015
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 2014 March 2015
Slide 2: Contents
Contents Sections 1 Highlights 2 Summary financial results 3 Summary of operating divisions 4 Brush 5 Elster 6 Questions 7 Appendix Buy Improve Sell 2
Slide 3: Highlights
Buy Improve Sell Highlights 3
Slide 4: Highlights in 2014
1 Highlights in 2014 Headline2 profit before tax of £213 million, up 21% (11% at actual currency) and headline 2 proforma earnings per share3 of 15.3p Elster profits up by two thirds (circa £80 million) in the two full years of ownership Elster now delivering revenue and order intake growth, u
Slide 5: Summary financial results: Income performance
Buy Improve Sell Summary financial results Income performance 5
Slide 6: Income Statement
Income Statement FY 2014 headline¹ growth2 Group £m FY 2014 Growth Elster Growth Brush Growth FY 2014 statutory format Revenue 1,377.5 flat 1,050.2 +1% 327.3 -3% Continuing operations Headline¹ operating profit 246.0 +11% 205.5 +14% 65.4 -7% £m Headline¹ Other Total Revenue 1,377.5 - 1,377.5 Headlin
Slide 7: Revenue growth
Revenue growth FY 2014 headline¹ growth2 Group £m FY 2014 Growth Elster Growth Brush Growth Revenue growth2 – by division compared to 12 months ago Revenue Revenue 1,377.5 1,377.5 flat flat 1,050.2 1,050.2 +1% +1% 327.3 327.3 -3% -3% Headline¹ operating profit 246.0 +11% 205.5 +14% 65.4 -7% Headline
Slide 8: Order intake
Order intake FY 2014 headline¹ growth2 Group £m FY 2014 Growth Elster Growth Brush Growth Order intake growth2 Revenue 1,377.5 flat 1,050.2 +1% 327.3 -3% compared to 12 months ago Headline¹ operating profit 246.0 +11% 205.5 +14% 65.4 -7% Headline¹ operating margin % 17.9% +1.7ppts 19.6% +2.3ppts 20.
Slide 9: Revenue and order intake – half year trends
Revenue and order intake – half year trends FY 2014 headline¹ growth2 Group £m FY 2014 Growth Elster Growth Brush Growth Revenue growth2 – half year trends compared to 12 months ago Revenue Revenue 1,377.5 1,377.5 flat flat 1,050.2 1,050.2 +1% +1% 327.3 327.3 -3% -3% Headline¹ operating profit 246.0
Slide 10: Headline operating margin
Headline operating margin 1 FY 2014 headline¹ growth2 Group £m FY 2014 Growth Elster Growth Brush Growth Headline1 operating margin Revenue 1,377.5 flat 1,050.2 +1% 327.3 -3% Headline¹ operating profit 246.0 +11% 205.5 +14% 65.4 -7% Headline¹ operating Headline¹ operatingmargin margin% % 17.9% 17.9%
Slide 11: Foreign exchange impact on 2014 results
Foreign exchange impact on 2014 results FY 2014 headline¹ growth2 Group £m FY 2014 Growth Elster Growth Brush Growth Currency impact on the Group results year on year Revenue 1,377.5 flat 1,050.2 +1% 327.3 -3% Headline¹ operating Headline¹ operating profit profit 246.0 +11% 205.5 205.5 +14% 65.4 65.
Slide 12: Foreign exchange sensitivities ongoing into 2015
Foreign exchange sensitivities ongoing into 2015 FY 2014 headline¹ growth2 Group £m FY 2014 Growth Elster Growth Brush Growth Translation impact on the full year profit of a 10 cent strengthening of US$ or Euro Revenue 1,377.5 flat 1,050.2 +1% 327.3 -3% Headline¹ operating Headline¹ operating profit
Slide 13: Diluted earnings per share (EPS)
Diluted earnings per share (EPS) FY 2014 headline¹ growth2 Group £m FY 2014 Growth Elster Growth Brush Growth Headline1 diluted EPS calculations - 2014 Revenue 1,377.5 flat 1,050.2 +1% 327.3 -3% Headline¹ operating profit 246.0 +11% 205.5 +14% 65.4 -7% Headline¹ operating margin % 17.9% +1.7ppts 19.
Slide 14: Summary financial results: Cash performance
Buy Improve Sell Summary financial results Cash performance 14
Slide 15: Profit conversion to cash and capital investment
Profit conversion to cash and capital investment Cash generated from trading (after all costs including tax) Group £m FY 2014 Elster Brush FY 2014 headline¹ EBITDA2 conversion to cash (pre-capex) Headline¹ operating profit 246.0 205.5 65.4 Depreciation2 31.8 24.6 6.3 Working capital movement (28.5)
Slide 16: Summary financial results: Balance Sheet
Buy Improve Sell Summary financial results Balance Sheet 16
Slide 17: Balance Sheet – leverage, pensions, working capital
Balance Sheet – leverage , pensions, working capital 3 Balance Sheet 31 Dec 31 Dec £m 2014 2013 Leverage3 Fixed assets, intangible assets and goodwill 2,604.9 2,853.2 1.8x 2.5x Net Net working capital working capital 106.4 106.4 126.9 126.9 Net debt to Proforma4 Pensions and Pensions andretirement r
Slide 18: Balance Sheet – pensions and retirement benefits
Balance Sheet – pensions and retirement benefits Balance Sheet 31 Dec 31 Dec £m 2014 2013 Fixed assets, intangible assets and goodwill 2,604.9 2,853.2 Net working capital 106.4 126.9 Pensions andretirement Pensions and retirementbenefits benefits (218.5) (218.5) (219.3) (219.3) Provisions (177.0) (1
Slide 19: Summary of operating divisions
Buy Improve Sell Summary of operating divisions Brush Revenue by end market Elster 5 4 3 2 1 Energy 84% 2 Oil & Gas 3% 3 Industrials 1% 4 Water 11% 5 Other 1% 1 19
Slide 20: Brush
24% of Melrose1 Brush 24% of Melrose1 “World number one independent supplier of turbogenerators” www.brush.eu 20 1. Based on FY 2014 revenue for all continuing businesses
Slide 21: Brush – headline results
Brush Brush – headline¹ results Brush £m FY 2014 Growth3 Revenue 327.3 -3% Headline¹ EBITDA² 71.7 -5% Headline¹ EBITDA² margin % 21.9% -0.5ppts Headline¹ operating profit 65.4 -7% Headline¹ operating margin % 20.0% -0.8ppts Order intake 276.3 -8% Book to bill % 84% Highlights Revenue by end market R
Slide 22: Elster
76% of Melrose1 Elster 65% of Elster1 “Best-in-class products and solutions for 50% of Melrose1 Gas measurement, regulation and the safe control and application of gases” www.elster.com/en/gas 21% of Elster1 “Meeting the expanding needs of utilities Electricity by providing advanced metering product
Slide 23: Elster – headline results
Gas Electricity Water Elster Elster – headline¹ results Elster4 Gas Electricity Water £m FY 2014 Growth3 FY 2014 Growth3 FY 2014 Growth3 FY 2014 Growth3 Revenue 1,050.2 +1% 687.0 +6% 215.7 -4% 147.5 -12% Headline¹ EBITDA² 230.1 +12% 176.8 +13% 28.6 +16% 26.7 +5% Headline¹ EBITDA² margin % 21.9% +2.2
Slide 24: Questions
Buy Improve Sell Questions 24
Slide 25: Appendix
Appendix Buy Imp 7 rove elrose Sell 25
Slide 26: Appendix – Foreign exchange forward looking
Appendix – Foreign exchange forward looking Movements Currency movement impact 2014 average rate IMS announcement rate to current spot rate to current spot rate US$ 10 cent = £4.3m 11 cent = £4.7m 2 cent = £0.9m Euro 10 cent = £8.6m 14 cent = (£12.0m) 12 cent = (£10.3m) CZK 10% = £1.9m 11.0% = (£2