Melrose Industries Plc · LSE:MRO
Melrose Industries — FY2025 Earnings Presentation
36 slides from Melrose Industries's earnings presentation, Feb 27, 2026
Slide 1: Full Year Results
Melrose Industries PLC Full Year Results Year ended 31 December 2025 27 February 2026
Slide 2: Disclaimer
Disclaimer 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 rela
Slide 3: Executing our Plan
Executing our Plan • Operating profit up significantly, driven by Engines and Defence • Cash target delivered with positive FCF of £125 million Strong 2025 performance • Good commercial and operational progress in complex environment • Multi-year transformation programme completed • Record demand in
Slide 4: Strong 2025 Performance
Strong 2025 Performance Financial Commercial Operational 8% 1 Multi-year contracts for fan blade repairs with Pratt & 32% increase in revenue to £3.6bn Whitney and Rolls-Royce Reduction in total incident rate2 23% Successful repricing of defence portfolio 19% increase in operating profit to £647m Im
Slide 5: Positive Growth Momentum
Positive Growth Momentum Unique Tier 1 portfolio embedded on all the world’s leading aircraft Record civil order backlogs Unprecedented defence scale-up Structural aftermarket demand Proprietary differentiated technology 2023 2025 2029 Multi-year transformation completed Strong foundations for conti
Slide 6: 2025 Results and 2026 Guidance
2025 Results and 2026 Guidance Full Year Results
Slide 7: Results Overview
Results Overview Strong 2025 performance, in line with our expectations Adjusted1 results Growth £m 2025 vs 2024 Revenue growth of 8%2, with strong growth in Engines Revenue 3,589 8%2 23% increase in operating profit to £647 million Group operating profit 647 23% Margins up 240bps to 18.0%, with mar
Slide 8: Divisional Overview
Divisional Overview Growth vs 2024 Adjusted1 results 2025 Operating Operating Operating Operating £m Revenue profit margin Revenue profit margin Engines 1,632 520 31.9% 15% 27% 300bps Airframes 1,957 156 8.0% 3%2 10% 80bps Corporate - (29) n/a n/a (12%) n/a Group 3,589 647 18.0% 8%2 23% 240bps Sales
Slide 9: Engines: Results
Engines: Results REVENUE (£m) Revenue growth of 15% driven by both OE and 2025 REVENUE SPLIT aftermarket (‘AM’) 1,632 1,459 15% OE revenue growth of 16% Growth driven by GEnx and GTF volumes, as well as other commercial contracts, including military ducts Strong OE growth in second half OE: 48% AM r
Slide 10: Airframes: Results
Airframes: Results REVENUE (£m) Revenue growth of 3%1 Continuing Exited businesses 2025 REVENUE SPLIT 2,009 Defence up 15%1 from increased build rates and 3%1 1,957 improved commercial terms >90% of portfolio now sustainably priced Defence: 35% New contract wins with C-130J and Typhoon transparencie
Slide 11: Results Overview: 2025 Statutory Results
Results Overview: 2025 Statutory Results Adjusting operating items were principally amortisation of 2024 2025 intangibles acquired in business combinations, restructuring costs and exchange movements not hedge accounted2 Adjusted1 Statutory Adjusted1 Statutory £m results results results results Stat
Slide 12: Free Cash Flow: Target Delivered
Free Cash Flow: Target Delivered £m 2024 2025 Change Adjusted operating profit1 540 647 Strong trade working capital performance in H2 in line with Depreciation and amortisation 142 138 seasonality of the Group augmented by certain customer Lease obligation payments (32) (31) settlements Non-cash im
Slide 13: 2026 P&L Guidance
2026 P&L Guidance 2025 2026 Group: Revenue of £3,750-£3,950 million, LFL2 growth of c.10% at mid-point 2025 Results Guidance £m Results @ $1.37 @ $1.37 Operating profit of £700-£750 million, LFL growth of c.16% at mid-point Revenue: Margins of c.19% at mid-point Engines 1,632 1,571 1,700-1,800 Engin
Slide 14: 2026 Guidance: Free Cash Flow
2026 Guidance: Free Cash Flow1 Free cash flow1 (after interest and tax) Trade working capital % of sales – minimal growth expected to be more than offset by customer settlements £150-£200 million GTF PMI payments of c.£50 million Capex – £120-140 million representing 1.2x owned asset depreciation an
Slide 15: Disciplined Capital Allocation
Disciplined Capital Allocation • Investment in Engines’ unique additive fabrication technology Invest in Business • Growth in Airframes: highly selective approach; customer funded wherever possible • Capital expenditure to depreciation ratio in the range of 1-1.2x Maintain Strong • Leverage1 of 1.5-
Slide 16: Growth Outlook
2025 Results and 2026 Guidance Growth Outlook
Slide 17: Unique Tier Portfolio
Unique Tier 1 Portfolio Civil Defence Unmatched portfolio of 19 RRSPs with all OEMs Partner to all global defence engine OEMs Engines Aftermarket entitlement on ~70% global flying Long-term supplier on P&W F135 engine £1.6bn hours 78% 22% revenue RM12 and RM16 system level responsibili
Slide 18: Structural Demand Growth
Structural Demand Growth Civil Defence Backlogs extend into next decade $3.0 NATO spending ramp driven by conflict, EU scale and US ambition Airbus 10,000 Boeing 8,700 $2.5 9,000 6,700 6y 7,000 $2.1 8,000 7y 7y $2.0 6,000 Number of aircraft Number of aircraft 7,000 7y $1.6 +31% $ Trillion 6,000 5,00
Slide 19: Exceptional Engines Business Serving All OEMs
Exceptional Engines Business Serving All OEMs Sales Sales 60% 10% 10% 20% Governmental Civil RRSP partnerships Repairs Commercial contracts partnerships • OEM level capability • 90-year strategic relationship with • Global repair capacity and certification • Unique capabilities with key structural S
Slide 20: Design-led Airframes Business with Global Reach
Design-led Airframes Business with Global Reach 35% 15% Sales 10% 40% Composite structures EWIS Transparencies Metallic structures • Leader in advanced composite design • Top 3 global player in EWIS • World leader in transparency systems • Decades long experience in design and manufacture of metalli
Slide 21: Melrose Growth Strategy
Melrose Growth Strategy Deliver growth from Expand in targeted Participate in next existing platforms 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 22: Production Ramp-Up
Production Ramp-Up Civil Aircraft Deliveries1 Civil Engine Deliveries1 Defence In Service 1,400 1,800 7,000 1,200 1,600 6,000 +48% 1,400 +35% 1,000 +53% 5,000 1,200 Number of aircraft Number of engines Number of aircraft 800 1,000 4,000 600 800 3,000 600 400 2,000 400 200 1,000 200 0 0 0 2025 2030 2
Slide 23: Increasing Engines Aftermarket Returns
Increasing Engines Aftermarket Returns Greater RRSP shares on latest narrow and widebody Global engine repair capability Engines in service PW1100 PW1500/1900 • Pedigree of repairing GKN manufactured components PW1100G 3,900 Current NB c.4% +150% • Major expansion over last 5 years in breadth of rep
Slide 24: Operational Excellence Approach
Operational Excellence Approach 1 2 3 DAILY DELIVER PROBLEM MANAGEMENT BREAKTHROUGHS SOLVING SYSTEMS Safety Quality Delivery Inventory Productivity 32% Increased inventory 300bps Delivery 19% Increased arrears 2025 levels to protect Improvement due to supply chain Increase in productive Improvement
Slide 25: Targeted New Opportunities
Targeted New Opportunities Additive Fabrication Military Uncrewed • Proprietary technology to augment forgings and castings • Strong, growing market for military uncrewed vehicles with accelerated development • 100% serial production on Fan Case Mount Ring – largest FAA certified additive component
Slide 26: Growing Sustainably
Growing Sustainably Environmental Social Governance • All 2025 environmental • Significantly surpassed • Board transition to reflect targets delivered or safety target A&D focus surpassed • Increased female board • New Chair and three new • On-track to meet SBTi membership to 44% NEDs with deep A&D
Slide 27: Clear Path to 2029 Targets
Clear Path to 2029 Targets Free Cash Flow generation (£ million) 600 2029 targets Growth in EBITDA from the 1 £5 billion production ramp-up revenue Increasing aftermarket returns from 2 RRSPs 3 GTF turns cash positive in 2028 £1.2+ billion operating profit 150 to 200 125 £600 million FCF (74) 2024 2
Slide 28: Executing our Plan
Executing our Plan Strong 2025 performance Positive growth momentum Clear path to delivering ongoing shareholder returns and 2029 targets 27 27
Slide 29: Appendices
Appendices Melrose
Slide 30: Margin Progression
Margin Progression Engines Operating Margin Airframes Operating Margin 31.9% 1% 9% 1% 2% 1% 28% 8.0% 4% 22% 3% 3% 2023 RRSP Growth Business 2025 2025 2023 Civil Defence Business 2025 2025 2025 contribution initiatives improvement Results ramp-up portfolio improvement Actual Results & pricing 2023 CM
Slide 31: Reconciliation Between Statutory and Adjusted Results
Reconciliation Between Statutory and Adjusted1 Results Cash spent £m Total in 2025 Statutory operating profit 600 Amortisation of intangible assets acquired in business combinations 252 - Exchange movements not hedge accounted (232) - 1 Restructuring costs 34 (31) Acquisition and disposal related ga
Slide 32: Reconciliation of Net Debt
Reconciliation of Net Debt1 Reconciliation of net debt1 (£m) 2025 Net debt1 at 1 January 2025 (1,321) Free cash flow1 125 Dividends paid (82) Share buybacks (173) Net acquisition and disposal related cash flows (16) FX and other non-cash movements 68 Other (8) Net debt1 at 31 December 2025 (1,407) A
Slide 33: Some Helpful Data
Some Helpful Data 2026 Guidance 2026 Guidance Income Statement 2025 (USD: $1.37) Cash Flow 2025 (USD: $1.37) Revenue: Depreciation and amortisation: Owned assets £107 million c.£110 million Engines £1,632 million £1,700 - £1,800 million Leased assets £31 million c.£40 million Airframes £1,957 millio
Slide 34: Some Helpful Data: 2029 at $1.25
Some Helpful Data: 2029 at $1.25 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.£500 mi
Slide 35: Historical Variable Consideration Table
Historical Variable Consideration Table £m 2018 2019 2020 2021 2022 2023 2024 2025 Income Statement: RRSP Sales 415 679 354 402 547 680 859 996 Balance Sheet: Unbilled work done – brought forward 171 206 242 247 305 450 595 922 Reclassification of PMI1 143 Add: variable consideration 28 60 26 44 105
Slide 36: Foreign Exchange Environment: Transactional Hedging Position
Foreign Exchange Environment: Transactional Hedging Position1 EUR:USD 2026 2027 2028 2029 2030 2031 Transaction FX exposures and approach (figures in USD) Exposure in $m 565 494 382 335 22 17 • Main currency pairs are EUR:USD and GBP:USD • Additional SEK and NOK hedged vs USD Hedged 95% 88% 75% 66%