#1Melrose Buy Improve Sell 2006 08 17 BEANSTORCY56 30YU Melrose Industries PLC Investor Day New sustainable technology driving above market growth Clear path to improve operating margins 20 May 2021 ZMOZZE 50092292#2Melrose Buy Improve Sell 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) this presentation or by reading the presentation slides, you agree to the conditions set out below. This presentation (including any oral briefing and any question-and-answer session in connection with it) is for information only. 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There are a number of factors that could affect the future operations of Melrose and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) changes in demand for Melrose's products; (b) currency fluctuations; (c) loss of market share and industry competition; (d) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; and (e) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as at the specified date of the relevant document within which the statement is contained. Melrose does not undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. Certain financial data has been rounded. As a result of this rounding, the totals of data presented in this presentation may vary slightly from the actual arithmetic totals of such data.#3Contents 1. Key messages from the Melrose CEO 2. Powder Metallurgy 3. Automotive 4. Closing remarks from the Melrose CFO 1#4Buy Improve Sell Melrose Key messages from the Melrose CEO 2#5Melrose Buy Improve Sell ● ● Key messages from the Melrose CEO GKN Automotive and Powder Metallurgy are both high quality businesses with leading market shares Both can profitably grow ahead of their markets Operating margin targets for both are achievable and well in progress Both businesses only require a partial market recovery to achieve their target operating margins Both have exciting new technology opportunities to enhance growth and improve their businesses Both businesses have substantial opportunities to reduce the impact of climate change through new technology 3#6Melrose Buy Improve Sell GKN GKN Powder Metallurgy Z ON HYDROGEN HYZHN GREEN SAFE COMPACT 4#7Melrose Buy Improve Sell Executive summary 00 M Global leader in Powder Metallurgy A clear path to improve to 14% operating margin¹, over two thirds of sales already above 14% margins Growth in the core business with market share gains, of which one third of the requirement to 2030 is already won Incremental high growth from exciting and sustainable new technologies 1. Requiring only a partial market recovery LO 5#8Melrose Buy Improve Sell Experienced team with a new approach -Executive leadership team Name Peter Oberparleiter Diego Laurent Guido Degen Wolfram Messner Matthias Voss Gottfried Rier Karl-Friedrich Roth Position Chief Executive Officer Chief Financial Officer Chief Operations Officer GKN Additive Chief Operations Officer GKN Sinter Metals Chief Operations Officer GKN Powders Chief Technology Officer & Quality Chief HR Officer & Risk Management Experience 30+ years 25+ years 30+ years 20+ years 20+ years 20+ years 30+ years 6#9Melrose Buy Improve Sell The world's #1 in powder metallurgy AN POWDERS #2 global producer of powder metal 300,000 tons of powder sold per annum 24% market share High volume steel powder for automotive and industrial applications Producer of advanced titanium and steel powders KAN SINTER METALS KN ONESINTER #1 global producer of precision powder metal parts 11 million parts/day 17% market share NON- PERFORMING Global leader in high precision metal component production PM partner from concept and design to full service production CORE GROWTH BUSINESS ADDITIVE A global market leader in 3D printing c.2 million parts per annum Components and materials for prototypes, medium series and aftermarket At the forefront of Additive Manufacturing technology <N> 7 HYDROGEN GREEN COMPACT Pioneering in safely storing green hydrogen Global market launch on 11 May 2021 Metal hydride storage solutions Safe and recyclable hydrogen energy storage systems FUTURE HIGH GROWTH BUSINESSES 7#10Melrose Buy Improve Sell Refocusing to OneSinter, the premium margin segment Revenue by segment 1. Not to scale c.+10ppts margin differential 18% 61% 21% 16% 66% 16% + Hydrogen¹ 10%+ 12% 78% 2018 2020 2030 Non-performing ■ OneSinter ■ Powder ■ Additive ● . Sinter business refocused into OneSinter and non-performing to drive efficiencies 16% non-performing already reduced to 10%, to become zero in next few years Active exit of certain lower margin products Growth focused on more complex, higher margin components Additive to grow strongly, further opportunity from Hydrogen Significant margin benefit from refocusing on higher precision applications, plans already well underway 8#11Melrose Buy Improve Sell Growth through share gains and new technologies (2019-2030) Net business wins¹ (13 already won) c.2 to c.3% CAGR 123 1. ● ● Reduction in ICE² -1 to -2% CAGR Market volumes³ 1.3% CAGR Growth in core business Market share gains minus exited business ICE: Internal combustion engine c.2% CAGR 2. 3. IHS light vehicle production volumes 2019 2030 Plus New technology Additive & Hydrogen Core business growing ahead of market as share gains and market growth in general industrial and automotive more than offset headwinds from ICE² One third of required share gains already achieved High Growth Growing core business plus high growth from new technologies 9#12Melrose Buy Improve Sell GKN PM is well placed to gain market share in OneSinter GKN PM is the #1 player in segment, well placed to gain share GKN PM has been growing share and focusing on high value precision applications GKN (17%) ■Competitor A (~8%) ■Competitor B (~5%) ■Competitor C (~5%) ■Competitor D (~5%) ■Competitor E (~5%) ■Competitor F (~5%) Competitor G (~4%) Competitor H (~3%) Competitor I (~3%) Other (~40%) £120 million Annual share gains already achieved, one third of the requirement to 2030 Share gains in OneSinter take market share to just over 20% by 2030 GKN PM well placed to continue winning Fragmented market ✓ Global leader ✓ Competitive advantages High digital penetration Unique bespoke manufacturing assets including software Targeting higher value precision applications Potential for c.2 to c.3% CAGR from net new business wins, ½ already won 10#13Melrose Buy Improve Sell Content per vehicle ● ● ● Average PM content per vehicle¹ 14 ICE 15 PHEV 6 BEV Split of Powder Metallurgy sales (2020)² 47% 53% General industrial and automotive components Engine and transmission Currently BEV content per vehicle below ICE and hybrid, but increasing as traditional OEMs ramp up BEV production 1. Source: LEK, content per vehicle in kg (2018) 2. 2019 split of sales 45% general industrial and automotive components, 55% engine and transmission Expect by 2030 content per vehicle increases for BEV and core market growth to largely balance out declines in ICE Equal spread across ICE, hybrid and BEV for non engine and transmission components In addition business well placed to continue to gain market share Realistic plan to grow Powder Metallurgy longer term 11#14Melrose Buy Improve Sell Medium term outlook robust; gaining pace from new technologies Powder Metallurgy market¹ growth, 2019-2030 2019 Not to scale 2020 Revenue Profitability 1. Market sizes based on IHS data 2021 2022 2023 GKN PM core market mix (excl. AM & hydrogen) 2024 Securing today Core growth ahead of market Growth ahead of the market 2025 GKN PM market mix (incl. AM, excl. hydrogen) 2026 Achieve 14% operating profit margin, with only partial market recovery required 2027 Hydrogen represents a further growth opportunity 2028 An exciting and profitable future Market 2029 Additive >20% CAGR Maintain higher margins Core c.2% CAGR 2030 Focusing on the future High growth from new technologies 12#15Buy Improve Sell Melrose Global leader in powder metal solutions 13#16Melrose Buy Improve Sell Strategic evolution aligning with emerging megatrends ← GKN POWDER METALLURGY Strategically evolved amidst a shifting industry landscape to maintain a competitive advantage Distinct focus on technological investments Pivoting towards more commercially beneficial product categories 1967 ● GKN acquired Birfield Industries, with sinter plant in Italy 1998 ● ● 1997 Acquisition of Hoeganaes (Powders) Acquired Sinter Metals Inc., including German Krebsoege Group Formed GKN Sinter Metals and followed with several acquisitions in North America 2013/14 ● Started development of H₂ storage and Additive Manufacturing 2019 ● Expansion to Mexico ● 2020/21 ● . ● ● Acquisition of Forecast 3D California (US), a leading AM business Acquired by Melrose 2018 Ambitious and successful programme of margin improvement through refocusing and restructuring Refocused into OneSinter (2021) Launch of Hydrogen storage systems (May 2021) Acquired by Melrose, leading to an acceleration in restructuring with greater independence for GKN PM Start of the business refocusing 14#17Melrose Buy Improve Sell GKN Powder Metallurgy today Sinter industrial¹ 17% Powders 16% 1. Includes Sinter and Additive By end market Sinter Metals 17% Global Share Sinter automotive¹ 67% 2020 Revenue breakdown Powders 16% Non- performing 16% Additive 2% By segment Powders 24% Global Share OneSinter 66% Asia 18% Europe 32% RoW 6% By destination Global leader in AM Metal and Polymer parts A quality business with global leadership in its markets North America 44% 15#18Melrose Buy Improve Sell Long standing relationships with broad customer base Top powder customers A ANGELINI PHARMA CAPSTAN MASTERS IN THE ART OF POWDER METALLURGY Stackpole International BN BURGESS-NORTON MANUFACTURING COMPANY Miba *BorgWarner HITACHI BLACK& DECKER metaldyne METCO INDUSTRIAL Revenue by powder customers O Top sinter customers ■Top 5 customers (38%) ■Top 6-10 customers (14%) ■Top 11-15 customers (8%) ■Others (40%) DENSO Ford GETRAG BorgWarner PIERBURG SCHAEFFLER AN BOSCH gm STELLANTIS Whirlpool Revenue by sinter customers O Relationships with our top customers span on average 20 years >LINAMAR Power to Perform ■Top 5 customers (28%) Top 6-10 customers (15%) ■Top 11-15 customers (10%) ■ Others (47%) 16#19Melrose Optimised global footprint strategically located close to our customers Additive Manufacturing sites Sinter Metals manufacturing plants Powders manufacturing plants Buy Improve Sell MEXICO NORTH AMERICA 2 6 BRAZIL GERMANY 2 4 ITALY 2 ROMANIA TURKEY 1 INDIA 2 CHINA 2 29 manufacturing sites 3 global innovation centres c.6,600 employees 400+ engineers 17#20Melrose Buy Improve Sell Highly efficient process that delivers extreme precision Why Powder Metallurgy? Net shape product Low waste, not a subtractive process High precision Cost competitive ● ● ● ● 3 Compacting Mixed powder is compressed into desired shape and size 4 Sintering Moisture removal by application of heat and pressure 1 Metal Powders Various metal powders from GKN Powders per requirement 2 Mixing Metal powders are mixed with lubricant and alloying elements 5 Finished products GKM 10 Example products Powder Automotive Shock absorber Ensuring vehicle comfort and safety VVT sprocket Optimises camshaft/valve timing to increase efficiency Solenoids Convert electrical energy into linear motion Powder metal Advanced titanium and steel powders Industrial and other Valve plate Used for pressure control eMotor pulley Electric power assisted steering eMotor components Transverse flux motor with high torque density Planetary carrier Used to transfer high-power torque Filter cartridge Filtration of liquids and gases in industrial settings 18#21Melrose Buy Improve Sell Products • 100% of the powder produced comes from recycled metal scrap • 99% of all PM products are recyclable Low waste production, not a subtractive process Strong focus on 3D Metal Printing and Hydrogen Storage to mitigate climate change issues ● Environmental, Social and Governance ● ● ● Hydrogen Storage committed with zero-emission-programmes 3D Metal printing is focusing on material and weight reduction based on topology optimised product designs CNS GREEN COMPACT APALARA SAU UDESHWA MANGAL MAMATA BALSADAN DREAM HOME PROJECT DONATED BY Ger GKN SINTER METALS PVT.LTD. PIMPRI PUNE Mamata Bal Sadan school supported by GKN PM in India for 10 years Environment Significant year-on-year improvement Water: Reduction of -5% in m³/shipped ton Waste: Reduction of -5% in kg/shipped ton Energy: Reduction of -2% kWh/shipped ton ● ● ● Social Responsibility Continued support to our communities with different projects (cash donations or community support activities) We are recognising good examples with our "Hearts of Gold" award ● ● ● ● Health & Safety Standards Significant reduction in safety incidents, with no major accidents for many years • Think Safe Training Programme - quarterly awareness programme Near Miss and Behavior Based Safety Programmes - above the industry benchmark 19#22Buy Improve Sell Melrose Clear path to 14% operating margin 20#23Melrose Buy Improve Sell Summary of 2020 financial performance Full year revenue and margin (£m, %) 16.6% 10.5%- 1. At constant currency 1,115 2019 Operating margin -12.2% 4.3% EBITDA margin 905 2020 Revenue 18% decline in sales in 2020¹ 6.3ppts drop in operating margin in 2020¹, strong recovery in H2 2020 2020 Pre-CAPEX cash conversion of 156% 2020 H1 vs. H2 Revenue (£m) Operating margin (%) H1 396 2020 H2 509 -0.8% 8.3% Accelerated strategic actions Concentration of product in core profitable plants, exit of certain lower margin products and focus growth on more complex, higher margin components Acceleration of indirect and overhead reductions, renegotiation of contracts and improved productivity Highly cash generative business, emerging from the pandemic stronger A +29% +9.1ppts 21#24Melrose Clear refocus and restructuring plan to deliver 14% margin target Buy Improve Sell Operating profit margin (%) 11.8% 2018 4.3% 1 2020 £1.2 bn Full-year revenue run-rate £0.9 bn 8.3% 2 H2 2020 1. Not in H2 2020 run rate 2. Assumes commodity prices at H2 2020 levels ~1.5- 1.75% I Actions realised¹ I ~2.0 - 2.25% Further improvement plans See details on next page ~2.0- 2.25% Partial market recovery 14.0% 3 Partial market recovery 1 Rapidly reacted to the pandemic Adopted flexible workforce from the first month ● ● ● Over two thirds of revenue already above 14% margin ● Further accelerated restructuring activities 314% operating margin target in sight² Annualised £1.0 bn All actions in place to continue improvement and deliver margin expansion All actions required to deliver 14% operating margin target underway, requiring only partial market recovery Maintained positive return on sales for 2020 2 Profit recovering whilst activity started to ramp back up Solid margin during H2, with additional benefits from improvement actions 22#25Melrose Projected improvements to achieve 14% margins Buy Improve Sell ● ● ● Refocusing ● £25m+ opportunity 30% realised M Commenced end of 2018 Focus of opportunities on higher precision applications Achieved £120 million of booked annual sales in new business through market share gain ● ● ● Restructuring ● £24m+ opportunity Extra margin from business in most profitable areas Closed two sites in the USA in 2018/19 • Streamlining European footprint ● Announced closure of Canadian transmission plant Sinter business refocused into OneSinter and non- performing to drive efficiencies Delivered £27 million of annualised cost benefits since 2019, with £22 million further improvement planned 80% realised Restructuring projects started in 2019 Various projects executed in all business areas, across geographies Right-sized business promoting a reduction of 400+ people from overheads, nearly 25% of total Streamlined support functions structures by digitising processes Reorganised Tech Centre in Germany, in order to accelerate development of new technologies whilst delivering cost efficiencies 23#26Buy Improve Sell Melrose High growth from new technologies 24#27Melrose Buy Improve Sell Additive Manufacturing ← ADDITIVE Differentiated Technology Aligned With Our Expertise 25#28Melrose Buy Improve Sell Opening new markets & applications 1. 2. 3. Consumer electronics Space SYNG AM enables next generation sound experience ~10,000¹ speakers GKN current specific opportunity Global market size Excluding GKN Hydrogen PYTHOM A PANGEA AEROSPACE - Next generation rocket engines and propulsion systems for commercial uses Industrial Kuepper olutions Next generation industrial burners +20% energy efficiency 300m² burners AM market growth projections strong >20% CAGR 2019-2030 GKN Additive should be 10% of the business³ by 2030 through organic growth Market progression from Prototypes → Production → End-to-end solutions Technology partners IDAM hp Fraunhofer ess RWTHAACHEN UNIVERSITY Customers P&G 52 KM SPORTMOTORCYCLES H3X FORTEM TECHNOLOGIES Singer AA PANGEA N senior Flexonics Schneider Electric FIT SYNG Parker (BOSCH DB BAHN ADDITIVE 26#29Melrose Buy Improve Sell Summary position We offer the full value chain ● Metal Powder ● 2013-2019 1. MJF: Multi Jet Fusion ■ 3D Design GKN Additive is a leading player in plastic and metal 3D printing With five production locations and over 65 printers, the business produces parts for many different markets & customers Serves local markets with the ability to scale globally through global digital network Also offers a huge variety of high-quality powders for additive manufacturing 2020-21 Dedicated R&D in Germany since 2013 Dedicated materials development in the US since 2014 GKN Additive Business Unit since 2017 DEVELOP 3D Printing Process ■ First-class Production systems I hun. Acquisition and integration of Forecast 3D 5 full manufacturing sites ready Full production readiness on Laser, Binder & Plastics MJF¹ PORTFOLIO READY Platforms / end-to-end solutions hig ■ end-to-end 2022 onwards YMENT SYST IATF 16949 GROW X N PAS 9100 ISO TS 16949 Exciting partnership with HP signed in 2018 Full digital end to end solutions Automated, digital development process Scale production capacity globally in plastics and metals ADDITIVE 27#30Melrose Buy Improve Sell Serving local markets in a global print network 1. 2. ex Embedded in IND 4.0 BY Secure data transfer and printing Carlsbad FDM: Fused Deposition Modelling MJF: Multi Jet Fusion US, Carlsbad Laser, FDM¹, MJF² FORECAST: GLOBALLY and DIGITALLY CONNECTED Auburn Hills Bad Langensalza US, Auburn Hills Laser EUROPE, Bonn Laser Bonn ADD MANUFACTURING EXECUTION vantage SYSTEM EUROPE, Bad Langensalza Binder CHINA, Danyang Laser N Danyang ADDITIVE 28#31Melrose Buy Improve Sell Exciting new product line targeting Hydrogen storage AN» ONWYCH DOEN GREEN SAFE COMPACT HYMED GREEN SAFE COMPACT GKN HYDROGEN N> GKN HYDROGEN HY2MEGA New emerging market with wide variety of applications, huge growth opportunity GREEN SUFE COMPACT 29#32Melrose Buy Improve Sell We solve the hydrogen storage problem We store green hydrogen safely and use it for electric power, heat and mobility solutions RENEWABLE ENERGY Li-ion Batteries High Pressure Hydrogen, Low Pressure Hydrogen ←N» GKN HYDROGEN Safety Recyclability Lifespan Lithium-ion Battery Medium risk 5% current range of recyclability Medium < 10 years Cost advantage vs. battery storage for capacity over 200kWh High Pressure hydrogen Medium risk 70% issue is carbon fibre materials Medium > 10 years AN> Metal hydrides offer a safe storage solution AN» GKN HYDROGEN Low risk 100% just standar metals High > 15 years GKN HYDROGEN 30#33Melrose Buy Improve Sell The heart of the system: it's metal hydride storageN» Here we are at home: State-of-the-art technology made by us, the world market leader for metal powder solutions Metal powder Pressed metal pellets safe 100% recyclable H2 energy storage (<40bar at 60° / inherent) Most reliable system on the market GKN HYDROGEN 31#34Customers/ Partners Value Proposition Melrose Buy Improve Sell A modular system for many needs ● ● Biro Micro grids & residential buildings ● C+0 SIA GRÖNER GROUP BG Zurlinden Die 2000-Watt-Genossenschaft Clean Power - CO₂ optimized Increase renewable sources Avoid CO₂ penalties Safety Industry / transportation ● ● ● DUMA Engineering ● Durability Safety Compactness ● • Scalability Integration ● ● ● ● Power back-up STATE OF CALIFORNIA ENERGY COMMISSION CALIFORNIA ENERGY COMMISSION Safety Reliability Lifespan Zero Hazard ● Autonomy ● tempo TECO 2030 Robustness Safety • Flexibility ¡HAT Zero Hazard Digital accessibility 4 demonstrators in place, 11 more planned in 2021 AN> Nedstack PEM FUEL CELLS Strong strategic partnerships GKN HYDROGEN Enapter 32#35Melrose Buy Improve Sell Path to commercialisation Branding Product timeline Strategy Target Markets Develop & Launch 2021 Market launch AN> GKN HYDROGEN GKN Hydrogen 1.0 BETA Focus application/ markets Mega System 2022 Focus 49 Social Media You Tube + Partnerships Optimise Optimising + 2023 Growth with select customers > + Extension Scale Scaling-up AN» Scale with GKN Hydrogen A comprehensive strategy to make GKN Hydrogen a commercial success GKN HYDROGEN 33#36Melrose Buy Improve Sell Example market drivers for Hydrogen storage MARKET DRIVE % European Green Hydrogen Roadmap Europe taking leading role on green hydrogen after launching EU hydrogen strategy 1GW 2019 Storage & flexibility needs 1m tonnes green hydrogen 6GW 2020-2024 Safety requirements 10m tonnes green hydrogen 40GW Strong safety regulations and grid stability standards in most countries 2025-2030 AN» Funding & financial support Increase of renewables requires storage technologies to stabilise public grids and enable for flexibility Well positioned to gain some of this high growth opportunity - exact size to be determined Huge market activation funds for shift towards renewable energy available globally GKN HYDROGEN 34#37Buy Improve Sell Melrose Conclusion 35#38Melrose Buy Improve Sell Conclusion ** M Global leader in Powder Metallurgy A clear path to improve to 14% operating margin¹, over two thirds of sales already above 14% margins Growth in the core business with market share gains, of which one third of the requirement to 2030 is already won Incremental high growth from exciting and sustainable new technologies 1. Requiring only a partial market recovery 36#39Melrose Buy Improve Sell 33 KAY GKN Automotive C400 LLLLLL GTD 19 ETWIKST SPEEDEREN ENT & BREN 37#40Melrose Buy Improve Sell Executive summary 41 H M 17 Global leader in drive systems Transforming the business, with a clear path to >10% profit¹ Structural growth in our core business Well positioned to capture incremental electrification growth 1. Operating profit margin requiring only partial market recovery 38#41Melrose Buy Improve Sell Delivering on our promises What we said in 2019 We will drive operational performance We will focus on selective, profitable growth Where we stand today Ahead of original plan on lower sales We will invest in new electrification capabilities We will change the team, flatten the organisation and instil a more agile culture On track On track Completed GKN Automotive is delivering on all promises 39#42Melrose Buy Improve Sell New team with a new approach Executive leadership team Name Liam Butterworth Roberto Fioroni¹ James Pedder¹ Thierry Minel¹ Mark Gabriel Clare Wyatt¹ Markus Bannert¹ Shaoling Qiu¹ John Webb¹ Position 1. Joined after April 2019 Chief Executive Officer 30+ years Chief Financial Officer Chief of Staff President Driveline & Aftermarket Dirk Kesselgruber¹ President ePowertrain President GKN Automotive China Chief Procurement Officer Chief Commercial Officer Chief Communications Officer Experience & background Chief Human Resources Officer 25+ years WABCO GOOD YEAR 10+ years 25+ years 30+ years Technologies 20+ years BAIN & COMPANY 25+ years Valeo FAGOR KN GKN AUTOMOTIVE 25+ years RBS Morgan Stanley ABInBev (HELLA 20+ years SCHAEFFLER TR thyssenkrupp 25+ years MARS A Agile Lean and simplified decision making processes Bold Culture of swift and decisive action Selective Pursuit of profitable growth opportunities New team driving sustainable value creation 40#43Melrose Buy Improve Sell Addressable market growth presents a significant opportunity 1.3% Vehicle CAGR Production 1. 2. eDrive systems & components AWD² systems & components Sideshafts Propshafts Market¹ eDrive systems eDrive components (Not to scale) ePowertrain Source: IHS Market sizes based on IHS light vehicle production data and GKN addressability & pricing assumptions All-Wheel Drive ~10% CAGR Driveline ~1% CAGR Total addressable market 2019 Total addressable market 2030 Well positioned for profitable growth ahead of market GKN >2x market Growth more than double the market rate for vehicle production 41#44Melrose Buy Improve Sell Financial outlook delivers both profitability & growth GKN Automotive revenue growth vs. market¹, 2018-2030 Global LV production (Not to scale) 2018 2019 2020 2021 2022 2023 2024 2025 Revenue GKN Automotive revenue² Profitability Securing today Grow with the market >10% operating profit margin with partial market recovery 2026 2027 2028 2029 2030 Source: IHS 1. Market sizes based on IHS data and GKN addressability & pricing assumptions 2. Derived by applying GKN product mix to market forecasts Focusing on the future >2x market growth Maintain higher margin Margin expansion followed by profitable growth 42#45Buy Improve Sell Melrose GKN Automotive Overview 43#46Melrose Buy Improve Sell Global leader in drive systems ...trusted partner for (90%) of global OEMs¹1 Global sales 2019 £4.7 bn ...content on 50% of vehicles² 108 ...ranks #1 in Driveline 1. Global OEMs are those with manufacturing locations in multiple regions 2. Vehicles refers to individual nameplates of global OEMs FOTED 44#47Melrose Buy Improve Sell A balanced business following market dynamics 1. 2. 3. 4. Product mix¹ 2019 eDrive Other AWD² 25% 2% 72% Driveline³ Strong mix of conventional & new technologies Customer mix¹ Includes JVs at GKN share All-Wheel Drive Includes Niche, Motorsports, and Aftermarket Internal combustion engine (ICE), battery electric vehicle (BEV) 2019 | J G K 5% 5% H 6% 6% L F 7% Others 7% 7% E A 15% 11% D 13% 13% Balanced customer C B Propulsion mix4 2019 Full hybrid- (4%) Mild hybrid (5%) 2025 Full hybrid BEV 15% 11% Mild hybrid 29% 90% BEV (1%) 45% portfolio A globally balanced business across products, customers and propulsion types ICE ICE Aligned with market; future propulsion agnostic 45#48Melrose Buy Improve Sell GKN Automotive works with 90% of global OEMs Americas Ford agit GMC BUICK Jeep CHRYSLER ACURA 37% of 2020 sales¹ Europe CHEVROLET Cadillac LINCOLN INFINITI. DODGE Pure-play EV OEMS PORSCHE (11) Audi 1. Sales splits includes JVs at GKN share JAGUAR ROLLS R LUCID NIKOLA MOTOR COMPANY M AMBORGHIN BUGATTI VOLVO LAND -ROVER 35% of 12% of 2020 sales¹ Asia-Pacific 2020 sales¹ China RENAULT BENTLEY Mercedes-Benz CITROEn ASTON MARTIN LFA PEUGEOT ROME FIAT C VAUXHALL smart GOD RIVIAN TOYOTA HONDA D HYUNDAI TATA MITSUBISHI MOTORS (ΚΙΛ) DAIHATSU ISUZU MARUTI SUZUKI DATSUN mahindra GENESIS NISSAN BOLLINGER MOTORS mazda SUZUKI LEXUS SUBARU PERODUA STREETSCOOTER SAIC JMC DFM ROEWE |荣威 e.GO QOROS GEELY CHANGAN 广汽集团 GAC GROUP LEVC HAVAL 16% of 2020 sales¹ 北汽集团 BAIC Group 长城汽车 Great Wall Motors JAC MOTORS 上汽大通 MAXUS * ΑΓΓΙVAL Strongly positioned with traditional and emerging OEMs across all regions 46#49Melrose GKN Automotive - global presence 51 Manufacturing sites 9 Americas 21 Europe 21 Asia Pacific 6 Technology and innovation centres Head office UK Buy Improve Sell Global, localised manufacturing footprint 47#50Melrose Buy Improve Sell Long established position in China GKN Automotive in China >30 years of experience and profitable growth Established joint venture with Hasco in 1988 In 2013, agreed to extend the SDS joint venture for 50 years Leading positions in sideshafts and AWD modules Emerging position in eDrive; 9 live or launch-phase eDrive programs £1.2bn 2020 sales¹ 1. JV sales at 100% of which GKN has 50% share >40% market share, sideshafts 5,000+ employees 10 Production sites Balanced customer mix Revenue by customer (2019) I G H 4% 4% F K 3% 4% 5% E Others 2% 3% 5% 9% 8% 13% C 27% A 13% Balance of global and local players Strong customer relationships with both global & local players Uniquely positioned to capture growth in the largest xEV market globally B 48#51Melrose Buy Improve Sell Sustainability 49#52Melrose Buy Improve Sell Driving a sustainable future for our industry Driving electrification of the industry We are a major force in electrification 19 years of eDrive system development Efficient, sustainable driveshafts Investing in innovative solutions 2021 R&D spend >£100m on the development of future generations of eDrive system & sideshaft solutions for electrification ● ● ● Delivering material benefit 180k tonnes CO₂ saving from 2020 eDrive sales¹ New technology constantly improving emissions performance Advanced eDrive cooling & control Improved AWD² transmission efficiency Lighter and more efficient sideshafts ● ● 2. نه ● 1. CO₂ saving from sale of >200k eDrive products All-Wheel Drive ● 50#53Melrose Buy Improve Sell Driving a sustainable future for our business Ensuring the long term sustainability of our business Driving a more sustainable environment A core ethos of environmental improvement Global plant environmental accreditation 2020 annual energy savings of 13M kWh Investing in our people and our communities >£10m spent on training over the last 3 years Global community support during COVID-19 ● ● ● ● Responsibly managing our business Exemplary ethical and compliance record, supported by well embedded compliance framework, culture and training ● A code of practice to ensure suppliers conduct business ethically, respectfully & sustainably 51#54Melrose Buy Improve Sell Driving a sustainable future for our industry and our business Ensuring the long term sustainability of our business Driving electrification of the industry Source: Simply Sustainable Action orientated Standards IⒸ Transformational Uniquely our business ? Listens to stakeholders Commercially, risk & opportunities aligned Suitably ambitious Through 2021 we will develop a multi year sustainability roadmap 52#55Buy Improve Sell Melrose Clear path to best-in-class profitability 53#56Melrose Buy Improve Sell Summary of 2020 financial performance 1. 2. Full year revenue and margin¹ (£m, %) ● 11.6% 7.3% 4,949 2018 Operating margin 12.6% 7.7% 4,739 2019 EBITDA margin 8.5% 2.2% 3,797 2020 Revenue 19% decline in sales in 2020² <30% decremental margins² 2020 Pre-CAPEX cash conversion of 153% 2020 H1 vs. H2 EBITDA margin includes depreciation and amortisation from equity accounted investments At constant currency Revenue (£m) Operating margin (%) H1 1,541 -4.2% 2020 H2 2,256 6.5% A +46% +10.7 ppts COVID-19 response actions Shut down manufacturing plants in line with OEMs Accelerated cost reductions in indirect and in SG&A Severe impact from COVID-19 enabling accelerated transformation Direct workforce flexibility demonstrated to manage demand fluctuations 54#57Melrose Buy Improve Sell On track to meet communicated profitability targets Operating profit margin (%) 7.3% 2.2% 1 2018 2020 Full-year revenue run-rate £4.9 bn £3.8 bn 1. 2. Assumes 30% drop-through margin Full Potential impact refers to net savings 6.5% 2 H2 2020 £4.5 bn ~2.5- 3.0% Further "Full Potential"1 ~1.0 - 1.5% Volume uplift to hit 10% ROS² See details on next page >10% 3 Partial market recovery ■ ■ 2 Full Potential already delivering 2020 H2 operating profit margin approaching 2018 levels at lower sales (-9%) ■ Successfully navigated COVID-19 Maintained positive return on sales for 2020 Utilised flexible adjustments to headcount and plant closures to match OEM production demand 3 On track to grow margin to 10% Further Full Potential value identified to take operating profit margin over 10% with only partial market recovery (sales below 2018 levels) ■ Clear path to double digit margins 55#58Melrose Buy Improve Sell Further "Full Potential" defined to enable >10% margin ambition Procurement £60-70m Incremental savings¹ Global purchasing strategy leveraging scale Best cost country sourcing optimisation Re-design for cost Operations- £35-45m Incremental savings¹ Smart automation Vertical integration (make vs buy) Best cost country footprint optimisation ● 1. Incremental savings are net cumulative values from 2021 to 2023; they refer to unrealised value from initiatives defined in 2019, plus value associated with subsequently defined initiatives ● Fixed Cost £30-35m Incremental savings¹ Capacity optimisation Streamlined global operating model Expansion of Global Business Services £125-150m of additional net savings to be realised 56#59Buy Improve Sell Melrose Rapidly changing market 57#60Melrose Buy Improve Sell Key market drivers for GKN Automotive TO Automotive industry dynamics NEW NORMAL Key drivers of market performance COVID-19 recovery Share of investment between megatrends (CASE¹) Industry consolidation + 1. Connected, Autonomous, Shared, Electric Most relevant automotive megatrend for GKN ● ● CASE Electrification ● Widespread adoption by 2030 Strong OEM commitments to electrify Regulatory push (Europe, China, US) Emergence of new players Major dynamics impacting our industry, with electrification particularly relevant for our business and offering a significant opportunity 58#61Melrose Buy Improve Sell XEVS¹ will become mainstream over the next decade... Source: IHS 1. 2. 3. Global light vehicle2 electrification forecast Actual/projected global light vehicle production 75m 96m 3% 4% 89m 2% 94% 2019 BEV and FCEV³ 5% 92% 2020 PHEV and Full Hybrid³ 13% 11% 76% 102m 21% 15% 64% 2030 ● ● XEV refers to vehicles with any degree of electrification Includes passenger cars and light commercial vehicles Internal combustion engine (ICE), plug-in hybrid electric vehicle (PHEV), battery electric vehicle (BEV), fuel cell electric vehicle (FCEV) Electrification is expected to progress significantly faster post-pandemic The main electrification regions are Europe and China, with North America expected to accelerate By 2030, >35% of vehicles expected to be full hybrid or battery electric Mild hybrid to grow strongly medium term, but expected to be a bridging technology only 2025 Mild Hybrid and ICE³ Current industry forecasts predict considerable xEV growth 59#62Melrose Buy Improve Sell ...and the pace of change is accelerating Selected major XEV product announcements IHS 2030 LV production forecast 13% 12% 75% +6m BEVs 2019 Projection¹ BEV and FCEV PHEV and Full Hybrid Mild Hybrid and ICE 21% 15% -64% Current Projection VOLKSWAGEN AG Source: IHS 1. Projection assumed at the time of the 2019 investor presentation TOYOTA Ford VOLVO DAIMLER M GM Full-electric vehicles are expected to account for more than 70 percent of VW's European vehicle sales by 2030 Toyota plans to sell 5.5 million electric vehicles by 2030, including hybrids and fuel-cell vehicles Ford of Europe became the first major automaker in the region to announce it would only sell full-electric passenger cars by 2030 Volvo aims to exclusively sell electric vehicles by 2030 Daimler announced plans to invest USD 85bn through 2025 to accelerate the transformation towards electrification and digitization Mini will have an exclusively electric model range by the mid-2030s according to BMW GM aims to stop selling gasoline powered passenger cars by 2035 OEM announcements indicate an even faster pace not yet captured in industry forecasts 60#63Melrose Buy Improve Sell Comprehensive electrification stage product coverage Full-hybrid & PHEV 1. 2. 3. Segment Product Driveline ePower- train Sideshafts Propshafts AWD¹ systems & components eDrive systems & components Share of '19 sales² All-Wheel Drive Other sales 1% in 2019 Dedicated hybrid transmission (DHT), electric drive unit (EDU) 59% 13% 25% 2% ICE & 48V N/A DHT, 3-in-1 EDU³ BEV & FCEV N/A 3-in-1 EDU³ GKN Automotive covers all stages of electrification with modular & scalable systems Covered Partially covered Not applicable 61#64Melrose Buy Improve Sell Significant opportunity in electrification 1. 2. ● ● ● ● ICE Front wheel drive Rear wheel drive 2-Wheel Drive £100-£400 2 sideshafts Differential gearset 2 sideshafts Rear drive unit Propshaft Content per vehicle FWD¹ RWD² ● BEV £1100-£1300 2 sideshafts 1 electric drive unit ● ● ● ● ● ICE 4-Wheel Drive £500-£1200 2 front sideshafts 2 rear sideshafts Propshaft Power transfer unit Rear drive unit ● ● SANIZE BEV £2500-£3000 2 front sideshafts 2 rear sideshafts 2 electric drive units Content lost with electrification Content partly or fully moves into eDrive Content gained or maintained with electrification Electrification will increase GKN Automotive's potential content per vehicle 62#65Melrose Buy Improve Sell Impact of electrification on GKN Automotive's portfolio Sideshafts 59% Front and rear sideshafts Increasing number & size of sideshafts per vehicle, plus higher technological content for XEVS Negative impact on sales GKN Automotive product portfolio Propshafts 13% Front and rear propshafts No propshafts required in BEVS AWD 25% Power transfer units Final drive units Reduced number of AWD components in BEVs Share of 2019 revenues eDrive Positive impact on sales Electrification is a significant growth opportunity 2% eDrive systems & components ↑ High value systems required in electrified powertrains 63#66Buy Improve Sell Melrose Driveline - Sideshafts 64#67Melrose Buy Improve Sell Product snapshot - Sideshafts Overview Products 2019 sales contribution AWD 25% Front and rear sideshafts eDrive Other 2% 13% Propshafts 59% Sideshafts £2.8 bn Source: IHS 1. Outlook figure is a projection for 2019 - 2030 addressable market CAGR Status today Impact of electrification Product ICE & 48V Market outlook¹ +2% Sideshafts Propshafts AWD eDrive FH & PHEV Technology leadership with high intimacy with global and emerging xEV OEMs. A profitable business with sustainable cash generation BEV & FCEV Increased torque and power on XEV driving larger sizes and further refinement. Growing prevalence of AWD increasing vehicle content OOO Increase of addressable market value slightly ahead of light vehicle production '19 - '30 CAGR Strong position in sideshafts today to be leveraged to win additional xEV business S 65#68Melrose Buy Improve Sell Clear technology leadership in sideshafts GKN Automotive advantage £ Long history of innovation Leading efficiency, superior NVH¹, low weight and a broad product portfolio developed over decades of product technology leadership Intimacy with the OEM engineering community Close relationships at all OEMs and reputation for tailored advanced solutions and high flexibility as well as complete vehicle systems expertise Global cost competitiveness Industry leading scale and recent footprint adjustments provide customers with premium quality products at a competitive cost level XEV drive optimisation GKN has developed a suite of technologies tailored to the unique needs of XEV, focusing on efficiency & silent operation 1. Noise, vibration & harshness An updated, agile commercial approach fits the needs of both xEV units of established players and new pure play customers GKN Automotive is optimising its industry leading sideshafts for xEVs 66#69Melrose Buy Improve Sell Sideshaft market leadership across all electrification stages Stage BEV & FCEV Full-hybrid & PHEV ICE & 48V Example vehicle 2020 Jaguar l-Pace Volvo XC90 Global sideshaft addressable market share BMW 3 Series 30-35% 35-40% 40-45% 2030 >40% share across all electrification stages GKN Automotive is the preferred sideshaft supplier for OEMs across all stages of electrification 67#70Buy Improve Sell Melrose Driveline - Propshafts 68#71Melrose Buy Improve Sell Product snapshot - Propshafts Overview Products Front & rear propshafts 2019 sales contribution AWD eDrive Other 2% 25% 13% £620 m Propshafts 59% Source: IHS 1. Outlook figure is a projection for 2019 - 2030 addressable market CAGR Sideshafts Status today Impact of electrification Market outlook¹ -1% '19'30 CAGR Product Sideshafts Propshafts business to continue to drive cash inflow Propshafts Market and technology leadership in profitable and cash generative business AWD eDrive ICE & 48V FH & PHEV Components are relevant through hybridisation, but will gradually decline with increased BEV penetration Addressable market projected to decline marginally up to 2030 BEV & FCEV OOO 17 69#72Buy Improve Sell Melrose ePowertrain - All Wheel Drive (AWD) 70#73Melrose Buy Improve Sell Product snapshot - All Wheel Drive Source: IHS Overview Products Power transfer units 2019 sales contribution £1.2bn AWD eDrive Other 2% 25% 13% Final drive units Propshafts 59% 1. Differentials, diff lockers, disconnects, torque vectoring 2. Outlook figure is a projection for 2019 - 2030 addressable market CAGR Sideshafts Status today Impact of electrification Product Market outlook² -2% Sideshafts Propshafts AWD Recognised technology and innovation leadership providing a platform for eDrive growth eDrive ICE & 48V FH & PHEV All AWD products are relevant through hybridisation, with many of the components and sub-systems¹ migrating into eDrive solutions '19 - '30 CAGR AWD provides core technology capabilities for eDrive systems BEV & FCEV Ooo Electrification impact partially offset through premiumisation (more 4WD) & stable transmission components business 71#74Buy Improve Sell Melrose ePowertrain - eDrive 72#75Melrose Buy Improve Sell Product snapshot - eDrive Overview Products eDrive components 2019 sales contribution £95 m AWD eDrive Other 2% 25% 13% eDrive systems Propshafts 59% Source: IHS 1. Outlook figure is a projection for 2019 - 2030 addressable market CAGR Sideshafts Product Impact of electrification Sideshafts Propshafts AWD eDrive ICE & 48V FH & PHEV Status today A rapidly growing business that offers competitive systems or components and has delivered >1.5 million units to date BEV & FCEV Market outlook¹ +20 - 30% '19'30 system and component sales) CAGR GKN is optimally positioned to capture growth from electrification 17 Acceleration of electrification pushing the number of full hybrid or battery electric vehicles to 30-40% by the end of the decade Significant growth from the first half of the decade expected (both full OOO 73#76Melrose Buy Improve Sell Flexible approach to eDrive solutions eDrive components Source: IHS ● ● ● Addressable market (£ bn) 4.0 0.2 2018 2030 Higher margin potential Leverage of GKN Automotive's AWD heritage capabilities Active component supply also an option Tier 1 or Tier 2 role Integrated eDrive systems ● ● ● ● Addressable market (£ bn) eDrive portfolio allows GKN to be flexible and selective 14.0 0.5 2018 2030 Higher total addressable market Lower margin potential GKN Automotive has invested heavily in full eDrive system capabilities Tier 1 role with OEM as system supplier 74#77Melrose Buy Improve Sell eDrive capability development Key GKN Automotive advantages AWD heritage capability Industry-leading high efficiency transmission systems and features Leading provider of systems control software and driving dynamics experience Trusted partner in vehicle system integration, incl. hardware, software and NVH¹ DELTA Organic capability expansion E-motor development since 2007 provides ability to design, manufacture and integrate 300+ software engineers with balanced footprint ● ● Technology collaboration Expertise and scale of a leading global electronics player combined with GKN's systems integration capability ● eDrive system components 1. Noise, vibration & harshness Gearbox E-Motor Inverter Software Integration GKN Automotive strategy covers all components of an eDrive system Covered Partially covered 75#78Melrose Buy Improve Sell eDrive system competence GKN Automotive eDrive system Gearbox ● ● ● NVH¹ optimised and highly efficient Complete & mature features: parklock, disconnect, torque vectoring etc. Decades of GKN experience 1. Noise, vibration & harshness Electric Motor ● 5 ● Highly efficient and scalable design Compact package Designed & manufactured by GKN Automotive Inverter ● Drives the eMotor & controls the system Collaboration with Delta Electronics Jointly developed architecture for HW and SW modularity Software ● Software = Functionality 101 ● Proven and mature SW platform based on in-production AWD systems ● LINIJ LILIJ Integration Fast growing software engineering workforce in balanced footprint Technologically advanced offering across all eDrive system components ● Leveraging AWD systems and integration capabilities Ensuring best performance on vehicle level 76#79Melrose Buy Improve Sell Customer adoption of GKN Automotive eDrive solutions Selected vehicles equipped with GKN Automotive eDrive systems Peugeot 3008 HY4 FIAT 500e Nissan Cube Porsche 918 Spyder 2002/ 2012 Mitsubishi Outlander BMW i8 Volvo XC90 Recharge BMW 225xe / X1 xDrive 25e Opel Grandland X London Taxi e.Go Life Streetscooter m C Peugeot 3008 Hybrid Citroen DS7 e-Tense RR Evoque / LR Discovery Sport Jeep Compass / Renegade 4xe Fiat 500e 2020+ Ford Mustang Mach E Lincoln Corsair Hybrid Leading German OEM >1.5 million vehicles to date powered by our eDrive systems or components 77#80Melrose Buy Improve Sell Conclusions 78#81Melrose Buy Improve Sell Conclusions 41 H M 17 Global leader in drive systems Transforming the business, with a clear path to >10% profit¹ Structural growth in our core business Well positioned to capture incremental electrification growth 1. Operating profit margin requiring only partial market recovery 79#82Buy Improve Sell Melrose Closing remarks from Melrose CFO 80#83Melrose Buy Improve Sell Closing remarks from the Melrose CFO ● ● ● ● ● Two clear and powerful strategies have been outlined All numbers are based on external market data, applying the GKN Auto and Powder Metallurgy product mixes, not internal forecasts. CAGR's are from 2019 to 2030, as 2019 is a fair baseline, they would clearly be higher if starting from 2021 Both strategies highlight the 'Improve' stage of the Melrose "Buy, Improve, Sell" strategy Both show high quality businesses with market leading positions Both have realistic margin targets ● '10% plus' for Automotive 14% for Powder Metallurgy Both have exciting new technology and expectations of above market growth to 2030 GKN Automotive positioned to grow at more than double the market rate for vehicle production GKN Powder Metallurgy is gaining market share Both show businesses that improve their, and their customers', impact on climate change Well positioned to deliver substantial value 81