Morgan Advanced Materials Plc · LSE:MGAM

Morgan Advanced Materials — Shareholder Meeting (May 2011)

18 slides from Morgan Advanced Materials's shareholder meeting presentation, May 10, 2011

1. Slide 1: Annual General Meeting 10th May 2011

   ANNUAL GENERAL MEETING 10th May 2011

2. Slide 2: Good performance momentum in 2010 - underlying operating profit increased by 31.9%

   Good performance momentum in 2010 ‐ underlying operating profit increased by 31.9% FY10 FY09 % Change from FY09 As reported Revenue £1,017.1m £942.6m +7.9% EBITA before restructuring and one‐off items £109.5m £89.0m +23.0% EBITA margin % before restructuring and one‐off items 10.8% 9.4% Underlying o

3. Slide 3: Profit before tax and amortisation up by c.59%

   Profit before tax and amortisation up by c.59% FY10 FY09 £m £m R Revenue 1 017 1 1,017.1 942 6 942.6 EBITA before restructuring and one‐off items * 109.5 89.0 Restructuring and one‐off items* (7.9) (12.0) EBITA after restructuring and one‐off items * 101.6 77.0 Amortisation of intangible assets (8.0

4. Slide 4: Strong cash generation

   Strong cash generation FY10 FY09 £m £m  Third party working capital to Cash from trading * 141.9 120.5 sales ratio below 20% Ch Change iin working ki capital i l 10 5 10.5 25 8 25.8 Change in provisions (4.3) (11.8) CASH FLOW FROM OPERATIONS 148.1 134.5  Free cash flow before Net capital expenditu

5. Slide 5: Improving margins in 2010 with good momentum entering 2011

   Improving margins in 2010 with good momentum entering 2011 Show 2009 and 2010 as full years rather than H1 and H2 5

6. Slide 6: Year-on-year revenue growth taking 2010 sales through the billion pound threshold

   Year‐on‐year revenue growth taking 2010 sales comfortably through the billion pound threshold  Overall reported revenue up 7.9% year‐ on‐year  NP Aerospace delivered £120 million of revenue in 2010 after the exceptional level of business in 2009  At constant currency and excluding NP Aerospace re

7. Slide 7: Constant currency revenue recovering but not yet back to 2008 levels

   Constant currency revenue recovering but not yet back to 2008 levels  Western world revenue (Europe and North America) picked up in 2010 but with further recovery potential still to go  Strong growth in emerging markets with constant currency revenue up over 33% in 2010 vs 2009 All at 2010 actual

8. Slide 8: Group revenue to emerging markets have trebled in the past 7 years

   Group revenue to emerging markets have trebled in the past 7 years All at 2010 actual rates 8

9. Slide 9: Pricing once more a positive contributor to Group revenue

   Pricing once more a positive contributor to Group revenue 9

10. Slide 10: Engineered Materials: profits up year-on-year with non-NP Aerospace revenue increasing c.22%

    Engineered Materials: profits up year‐on‐year with non‐NP Aerospace revenue increasing c.22% EBITA pre‐restructuring £m Revenue Profit Margins % and one‐off one off items FY10 FY09 FY10 FY09 FY10 FY09 AM&T (formerly Carbon) 246.8 205.2 22.1 11.6 8.9% 5.7% NP A Aerospace 120 9 120.9 186 2 186.2 17 1

11. Slide 11: Engineered Materials: key value drivers for 2011 and beyond

    Engineered Materials: key value drivers for 2011 and beyond 2010 Position Future prospects Extracting GDP or better growth from our base industrial businesses Ongoing recovery from the 2009 downturn ++ Good progress made in Growth in the clean energy sector Wind and Solar. Lithi Lithium I acquisitio

12. Slide 12: Clean energy business targeted to treble to c.£60 million in 2013

    Clean energy business targeted to treble from c.£20 million of revenue in 2010 to c.£60 million in 2013 K Markets Key M k t  Solar power generation  Wind power generation  Electric vehicles  Energy storage  Future development Graphene and andother other advanced d materials dt materials i lt i

13. Slide 13: Ceramics: strong progress in revenue, profit and margins

    Ceramics: strong progress in revenue, profit and margins EBITA pre‐restructuring £m Revenue Profit Margins % and one‐off items FY10 FY09 FY10 FY09 FY10 FY09 Technical Ceramics 250.1 206.0 34.0 25.1 13.6% 12.2% Thermal Ceramics 359.0 315.1 34.8 26.7 9.7% 8.5% Ceramics 609.1 521.1 68.8 51.8 11.3% 9.9%

14. Slide 14: Ceramics: key value drivers in 2011 and beyond

    Ceramics: key value drivers in 2011 and beyond 2010 Position Future prospects Organic growth from targeting markets Successful market with > GDP growth drivers positioning in Technical allowed strong growth ++ Strong Thermal base in Emerging markets growth strategy Asia , and LatAm offers l leverage

15. Slide 15: Positioned for a huge market with tiny piezo components in data storage

    Positioned for a huge market with tiny piezo components in data storage Ceramics is working with computer disk drive manufacturers to incorporate piezoelectric components on the next generation of drives These components allow for improved control of the read‐write head, which enables data density t

16. Slide 16: Summary

    Summary  Good year‐on‐year progress in 2010 with H2 stronger than H1 in revenue, profit and margin  Encouraging momentum in early 2011 – book to bill > 1 times on growing revenue  Opportunity O i for f further f h performance f improvement i this hi year andd beyond b d  Operational gearing as W

17. Slide 17: Financial ambitions by 2013

    Financial ambitions by 2013  Double Group underlying PBT* from £75.7 million to c.£150 million  Mid‐teen underlying y g operating p g profit p margins g  Improve Operating ROCE from c.25% in 2010 to c.35% by 2013 Capital markets presentation on March 31st to provide more details on the roadmap an

18. Slide 18: Our ambition is to double underlying PBT by 2013

    Our ambition is to double underlying PBT by 2013 c.£150 million Selective use of value accretive M&A Growth in new markets/products eg. clean energy, HDD Organic ggrowth o t in traditional £75.7 million businesses Cost benefits of low cost manufacturing and divisional Rapid growth streamlining poten

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