Slide 1: 2024 Interim results presentation
© Morgan Advanced Materials 05/08/2024 1 2024 Interim results presentation 6 August 2024
Slide 2: Agenda
© Morgan Advanced Materials 2 Agenda • Introduction and summary – Pete Raby • 2024 Interim results – Richard Armitage • Operational and strategic update – Pete Raby
Slide 3: Summary
© Morgan Advanced Materials 3 Summary • Organic constant-currency revenue growth of 8.2%, with 14.9% from our faster growing markets • Group adjusted operating profit margin of 12.5%, in line with our financial framework. Pricing measures continue to more than offset inflation • Adjusted EPS at 14.7
Slide 4: 2024 Interim results Richard Armitage
© Morgan Advanced Materials 4 2024 Interim results Richard Armitage
Slide 5: Group Performance
© Morgan Advanced Materials 5 Group Performance % change from 1H 2023 £m 1H 2024 1H 2023 At organic constant- As reported currency Revenue 572.6 553.9 3.4% 8.2% Group adjusted operating profit1 71.3 50.0 42.6% 59.5% Group adjusted operating profit margin % 12.5% 9.0% Return on invested capital % 19.
Slide 6: Group adjusted operating profit bridge
© Morgan Advanced Materials 6 Group adjusted operating profit bridge 2.9 (6.0) 6.7 (5.4) 23.0 71.3 • 1H 2023 results reduced due to cyber incident, now recovered in 1H 2024 • Volume growth through 1H despite industrial slowdown impacting core markets in 2H 2023 • Savings from restructuring and simpl
Slide 7: Cash flow summary
© Morgan Advanced Materials 7 Cash flow summary £m 1H 2024 1H 2023 Working capital outflow of £(22.0)m EBITDA 92.6 69.5 2023 1H : £(45.2)m Change in working capital (22.0) (45.2) Net capital expenditure (44.6) (24.0) Capital investment of Net interest (7.3) (4.5) £44.6m Tax paid (16.0) (15.8) 2023 1
Slide 8: Simplification and restructuring on track
© Morgan Advanced Materials 8 Simplification and restructuring on track £m FY 2023 FY 2024 FY 2025 Total Adjusted operating profit¹ benefits (incremental) 1 7 10 - Costs charged to specific adjusting items (7) (11) (2) (20) • Simplification into three segments supports our growth ambition by allowin
Slide 9: FY2024 technical guidance
© Morgan Advanced Materials 9 FY2024 technical guidance Capital expenditure c. £120m Net finance charge: Interest charges (c. £15-16m) IAS 19 pensions net interest charge (c. £0.5m) c. £17-19m IFRS 16 lease interest (c. £2m) © Morgan Advanced Materials Effective tax rate 25-27% Non-UK defined benefi
Slide 10: Operational and strategic update Pete Raby
© Morgan Advanced Materials 10 Operational and strategic update Pete Raby
Slide 11: Growth across major market segments
© Morgan Advanced Materials 11 Growth across major market segments Half-on-half organic % change at constant-currency Semiconductors 14.3% • Consumables for SiC power electronics and ion implant Healthcare 1 9.1% • Feedthroughs for implantable devices Clean Energy & Clean Transportation 26.5% • Sola
Slide 12: Segmental performance
© Morgan Advanced Materials 12 Segmental performance Revenue Organic constant- Adjusted operating profit1 Margin £m currency growth £m % 1H 2024 1H 2023 % 1H 2024 1H 2023 1H 2024 1H 2023 Thermal Products 221.5 231.4 2.4% 24.2 15.8 10.9% 6.8% Performance Carbon 178.9 157.4 18.1% 31.3 19.6 17.5% 12.5%
Slide 13: CO2e emissions now 50% below 2015 baseline
© Morgan Advanced Materials 13 CO2e emissions now 50% below 2015 baseline Absolute CO2e (Scope 1 and 2)1 11.6% reduction in absolute CO2e emissions compared with 1H 2023 driven by: • Green energy procurement: transition to 343 338 328 339 renewable and other carbon free energy sources 319 277 • Effi
Slide 14: Water, Safety and Diversity
© Morgan Advanced Materials 14 Water, Safety and Diversity Water withdrawal Water withdrawal in stressed areas 2500 500 450 2000 400 350 '000 m3 '000 m3 1500 300 250 1000 200 150 500 100 50 0 0 2015 2019 2020 2021 2022 2023 H1.2023 H1.2024 2030 2015 2019 2020 2021 2022 2023 H1.2023 H1.2024 2030 Base
Slide 15: Leading differentiated positions
© Morgan Advanced Materials 15 Leading differentiated positions Share of revenue (%) Market (1H 2024) Market Position Differentiation Faster growing L H Semiconductors 9.9% Emerging/Top 3 Healthcare 7.3% Leader Clean energy + clean transportation 5.2% Emerging 22.4% Core L H Industrial 27.3% Leader/
Slide 16: A disciplined approach to delivering improving growth and returns
© Morgan Advanced Materials 16 A disciplined approach to delivering improving growth and returns Delivering enhanced EPS growth Clear through cycle financial framework 1H 2024 delivery Organic revenue growth 4-7% organic revenue growth 8.2% + 12.5% to 15% adjusted operating Continuing profit growth
Slide 17: Outlook
© Morgan Advanced Materials 17 Outlook • Industrial and metals markets, particularly in Europe and China, remain weak, but we continue to see good momentum in our faster growing segments and in aerospace and defence • Outlook for full-year constant currency revenue growth towards top end of our 4-7%
Slide 18: Summary
© Morgan Advanced Materials 18 Summary • Organic constant currency revenue growth +8.2%, with +14.9% growth from our faster growing markets • Margin performance within the range of our financial framework at 12.5% • Our investment to increase capacity for the semiconductor market, lifting the Group’
Slide 19: Appendix
© Morgan Advanced Materials Appendix
Slide 20: End-market mix (as a % of revenue)
7% 7% Healthcare 7% 7% © Morgan Advanced Materials 17% 17% 17% Healthcare Energy Energy 20 17% Energy 7% 7% 7% End-market mix (as a % of revenue) Energy Security and Security and defence defence Security and defence 7% Main markets by segment1 44% 44% Security and defence 44% 14% 14% Semiconductor S
Slide 21: Reported statutory figures
© Morgan Advanced Materials 21 Reported statutory figures Period ended 30 June 2024 Period ended 30 June 2023 Results before £m Results before specific Specific adjusting Specific adjusting Total specific adjusting Total adjusting items items items items Revenue 572.6 - 572.6 553.9 - 553.9 Operating
Slide 22: Strong balance sheet and available liquidity
© Morgan Advanced Materials 22 Strong balance sheet and available liquidity Headroom on banking covenants • Net debt to EBITDA excluding the impact of IFRS 16 leases: 1.3x (1H 2023: 1.3x). Significant liquidity • £159m available RCF plus available net cash and cash equivalents of £115m Average cost
Slide 23: Foreign currency impacts
© Morgan Advanced Materials 23 Foreign currency impacts The principal exchange rates used in the translation of the results of overseas subsidiaries were as follows: 1H 2024 1H 2023 Closing Average Closing Average GBP to: rate rate rate rate USD 1.26 1.27 1.27 1.23 Euro 1.18 1.17 1.16 1.14 For illus
Slide 24: Adjusted earnings per share
© Morgan Advanced Materials 24 Adjusted earnings per share £m 1H 2024 1H 2023 Profit for the period attributable to shareholders of the Company 37.4 14.8 Profit from discontinued operations - - Profit from continuing operations 37.4 14.8 Specific adjusting items 3.4 13.4 Amortisation of intangible a
Slide 25: Contact
© Morgan Advanced Materials 25 Contact investorrelations@morganplc.com +44 (0)1753 837 000 morganadvancedmaterials.com