Slide 1: 2021 Interim results presentation
2021 Interim results presentation 29 July 2021 1
Slide 2: Agenda
Agenda • Introduction and summary – Pete Raby • 2021 Interim results – Peter Turner • Operational and strategic update – Pete Raby © Morgan Advanced Materials 2
Slide 3: Key highlights
Key highlights • The safety of our people is our priority and we continue to operate protection measures to keep our employees safe during the pandemic • Organic constant-currency revenue growth was 4.2%, with broad based growth across our healthcare, semiconductor, energy and industrial segments •
Slide 4: 2021 Interim results
2021 Interim results Peter Turner © Morgan Advanced Materials 4
Slide 5: Group performance
Group performance % change from 1H 2020 £m 1H 2021 1H 2020 At organic constant- As reported currency Revenue 461.2 477.8 (3.5%) 4.2% Group adjusted operating profit1 59.1 52.9 11.7% 29.0% Group adjusted operating profit margin % 1 12.8% 11.1% ROIC % 15.4% 15.6% Cash generated from continuing operati
Slide 6: Group adjusted operating profit bridge
Group adjusted operating profit bridge £m 80 • Acceleration of the restructuring programme benefits 70 • Pricing and continuous improvement efficiency actions continue to more 60 than offset cost inflation • Margin expansion from volume growth 50 driven by recovery in the economy • Reversal of prior
Slide 7: Emerging stronger: Group restructuring and efficiency programme
Emerging stronger: Group restructuring and efficiency programme The Group restructuring and efficiency programme to simplify Morgan’s structure and drive efficiency in operations is ahead of plan. We have made significant progress across the programme, with only one remaining site closure to be comp
Slide 8: Cash flow summary
Cash flow summary £m 1H 2021 1H 20201 • Working capital outflow driven by EBITDA 77.5 75.3 business growth Change in working capital (7.4) (4.4) Change in provisions and other (7.0) (11.9) • Free cash flow of £36.5m as a Cash generated from continuing operations 63.1 59.0 result of lower capex, net
Slide 9: Pensions update
Pensions update Deficit movement since 31 December 2020 £m Deficit at 31 December 2020 (176) Contributions (net of service costs) 9 Net IAS 19 interest costs (1) Actuarial gain on liabilities 55 Remeasurement loss on assets (17) Currency adjustment 2 Deficit at 30 June 2021 (128) £m 30 June 2021 31
Slide 10: FY21 financial framework
FY21 financial framework Effective tax rate 27-28% Net finance charge: Interest charge (c. £6m) IAS 19 pensions net interest charge (c. £2m) c. £10m IFRS 16 lease interest (c. £2m) Defined benefit pension scheme contributions c. £20m Foreign currency impacts see slide 29 Portfolio impacts Capital ex
Slide 11: Operational and strategic update
Operational and strategic update Pete Raby © Morgan Advanced Materials 11
Slide 12: Broad based growth across our healthcare, semiconductor, energy and industrial segments
Broad based growth across our healthcare, semiconductor, energy and industrial segments Year-on-year organic % change at constant-currency % of Group revenue Industrial 10% 45% • Broad based recovery in all global business units Transportation 2% 18% • Automotive growth partially offset by a Q1 decl
Slide 13: Thermal Ceramics performance summary
Thermal Ceramics performance summary % change from 1H 2020 £m 1H 2021 1H 2020 At organic constant- As reported currency Revenue 174.7 175.3 (0.3%) 5.5% 1 Adjusted operating profit 21.2 13.5 57.0% 73.8% Margin % 12.1% 7.7% Performance commentary • Strong growth in automotive, healthcare and industria
Slide 14: Molten Metal Systems performance summary
Molten Metal Systems performance summary % change from 1H 2020 £m 1H 2021 1H 2020 At organic constant- As reported currency Revenue 22.8 20.4 11.8% 16.3% 1 Adjusted operating profit 2.5 1.7 47.1% 47.1% Margin % 11.0% 8.3% Performance commentary • Revenue growth from strong demand in the aluminium an
Slide 15: Electrical Carbon performance summary
Electrical Carbon performance summary % change from 1H 2020 £m 1H 2021 1H 2020 At organic constant- As reported currency Revenue 82.3 77.7 5.9% 10.5% 1 Adjusted operating profit 15.6 12.5 24.8% 32.2% Margin % 19.0% 16.1% Performance commentary • Growth in the industrial, renewable energy and transpo
Slide 16: Seals and Bearings performance summary
Seals and Bearings performance summary % change from 1H 2020 £m 1H 2021 1H 2020 At organic constant- As reported currency Revenue 64.3 77.6 (17.1%) (12.2%) 1 Adjusted operating profit 10.7 15.5 (31.0%) (25.2%) Margin % 16.6% 20.0% Performance commentary • Ceramic armour declined as expected to £13m
Slide 17: Technical Ceramics performance summary
Technical Ceramics performance summary % change from 1H 2020 £m 1H 2021 1H 2020 At organic constant- As reported currency Revenue 117.1 126.8 (7.6%) 6.6% 1 Adjusted operating profit 12.1 12.2 (0.8%) 45.8% Margin % 10.3% 9.6% Performance commentary • Growth in the healthcare, renewable energy and sem
Slide 18: Environment, Social and Governance (ESG)
Environment, Social and Governance (ESG) Our purpose is to use advanced materials to make the world more sustainable and to improve the quality of life. Our aspiration Our 2030 goals2 Protect the • A CO2 net zero business by 20501 • 50% reduction in Scope 1 and Scope 23 environment CO2 emissions • U
Slide 19: CO2 emissions progress
CO2 emissions progress Absolute CO2 (Scope 1 and 2)1 17% reduction in absolute CO2 emissions on the prior year driven by improvements in: • Green energy procurement: transitions to 373 368 366 356 renewable and other carbon free energy sources 335 '000 metric tonnes • Behavioural changes: changes in
Slide 20: Growth opportunities in our faster growing markets
Growth opportunities in our faster growing markets Clean Energy Clean Transportation • Brush solutions for wind turbines • Brush and collector solutions • Ceramic and carbon for electrified rail and metro products enabling solar systems panel manufacture • Fire protection, pump and • Insulation and
Slide 21: Summary
Summary • The safety of our people is our priority and we continue to operate protection measures to keep our employees safe during the pandemic • Organic constant-currency revenue growth was 4.2%, with broad based growth across our healthcare, semiconductor, energy and industrial segments • Adjuste
Slide 22: Appendix
Appendix © Morgan Advanced Materials 22
Slide 23: Our strategy for growth
Our strategy for growth We have a strategy to ensure we are the leaders in our field, with the customer and materials insight to apply our capabilities quickly and effectively We apply these skills to a portfolio of businesses where: • Our technical expertise and differentiation is valued • We can o
Slide 24: End-market mix (as a % of revenue)
End-market mix (as a % of revenue) Transportation 6% Main markets by GBU 6% Chemical and petrochemical Thermal Ceramics 7% Healthcare Industrial, Chemical and petrochemical, Metals, 18% Automotive Energy 8% MMS Security and defence Aluminium (automotive), Copper (construction), Precious metals 45% 1
Slide 25: Divisional performance
Divisional performance Revenue Adjusted operating profit1 Margin £m £m % 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 Thermal Ceramics 174.7 175.3 21.2 13.5 12.1% 7.7% Molten Metal Systems 22.8 20.4 2.5 1.7 11.0% 8.3% Thermal Products division 197.5 195.7 23.7 15.2 12.0% 7.8% Electrical Carbon 82
Slide 26: Reported statutory figures
Reported statutory figures Six months ended 30 June 2021 Six months ended 30 June 2020 Results before Results before £m Specific adjusting Specific adjusting specific adjusting Total specific adjusting Total items items items items Revenue 461.2 - 461.2 477.8 - 477.8 Operating costs before amortisat
Slide 27: Specific adjusting items
Specific adjusting items £m 1H 2021 1H 2020 Impairment of assets (0.8) (63.4) Restructuring costs (0.6) (5.5) Net profit on disposal of business 5.1 - Total specific adjusting items 3.7 (68.9) • Specific adjusting items were a £3.7m gain (1H 2020: £68.9m loss) • Impairment losses of £0.8m were recog
Slide 28: Strong balance sheet and available liquidity
Strong balance sheet and available liquidity Facilities maturity profile £m 250 Headroom on banking covenants • Net debt to EBITDA excluding the 200 impact of IFRS 16: 0.5x (FY2020: 0.8x) 150 Significant liquidity • £200m undrawn RCF plus 100 available net cash and cash equivalents of £107.5m 50 Ave
Slide 29: Foreign currency impacts
Foreign currency impacts The principal exchange rates used in the translation of the results of overseas subsidiaries were as follows: 1H 2021 1H 2020 Closing Average Closing Average GBP to: rate rate rate rate USD 1.38 1.39 1.24 1.26 EUR 1.17 1.15 1.10 1.14 For illustrative purposes, the table belo
Slide 30: Adjusted earnings per share
Adjusted earnings per share £m 1H 2021 1H 2020 Profit/(loss) for the period attributable to shareholders of the Company 37.6 (27.4) (Profit)/loss from discontinued operations - (0.8) Profit/(loss) from continuing operations 37.6 (28.2) Specific adjusting items (3.7) 68.9 Amortisation of intangible a
Slide 31: MMorgan
MMorgan Cc Advanced Materials te. A i