#1Melrose Buy Improve Sell 1 1 8 September 2022 1 Strictly private and confidential Melrose Industries PLC Section 1: Intention to demerge Automotive and Powder Metallurgy Section 2: 2022 Interim Results - six months ended 30 June 2022#2Disclaimer 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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As a result, any cost savings referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. By attending the presentation to which this document relates and/or by accepting this document you will be taken to have represented, warranted and undertaken that you have read and agree to comply with the contents of this notice. This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Melrose. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Melrose to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions including as to future potential cost savings, synergies, earnings, cash flow, return on average capital employed, production and prospects. These forward-looking statements are identified by their use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "objectives", "outlook", "probably", "project", "will", "seek", "target", "risks", "goals", "should" and similar terms and phrases. 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. Melrose Buy Improve Sell 2#3Buy Improve Sell Melrose Key messages The revenue and profit numbers included in this presentation are shown in round millions. Unless otherwise stated, growth metrics are at constant currency and adjusted for disposed businesses, material in size to a division, to ensure a like-for-like basis 3#4Key messages Intention to demerge Automotive and Powder Metallurgy: Melrose 2022 interim results: Establishing two independent UK quoted PLCs, an Automotive Group¹ ('DemergerCo') and Melrose with Aerospace, to give each their best positioning to deliver superior returns to shareholders, including from transformative acquisitions Melrose is trading in line with expectations for the full year. First half results are at the higher end of expectations, helping to de-risk the second half performance required to achieve full year expectations Justin Dowley, Chairman of Melrose Industries PLC, today said: "Since acquiring GKN in 2018 we have reinvigorated each business to achieve their potential. The proposed Demerger now gives each an exciting opportunity to individually grow shareholder value through organic growth and acquisition in both platforms. Meanwhile, we remain on track to meet our full year 2022 expectations with full inflation recovery and providing good momentum for the intended Demerger in the new year." Buy Improve 1. Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses Sell 4#5Buy Improve Sell Melrose Section 1: Intention to demerge the Automotive Group¹ Strategic rationale and timeline Shape of the two groups on demerger - six key points 1. ■ Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses LO 5#6Melrose Buy Improve Sell Intention to demerge the Automotive Group¹ Strategic rationale and timeline 1. Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses 6#7Strategic rationale and timeline Melrose Why Why now ▪ To separate the Melrose portfolio into: An Automotive Group¹, retaining senior Melrose guidance and support; and The Melrose Group continuing its "Buy, Improve, Sell" strategy, currently owning Aerospace ▪ This allows each Melrose shareholder to: - Enjoy enhanced value creation within the Melrose Group, from pursuing potential M&A in aerospace or its broader industrial "Buy, Improve, Sell" strategy Benefit from new M&A value creation opportunities for the Automotive Group¹, exploring consolidation within the automotive sector Benefit from greater flexibility, for each Group to pursue their own further independent growth strategies backed by their own balance sheets Retain the upside from continued end market recovery and announced improvement plans to reach the stated operating margin targets ▪ Automotive and Powder Metallurgy complete their required restructuring this year to hit their stated operating margin targets on a market recovery, and have substantially de-risked balance sheets ▪ There are existing opportunities for M&A in both the Automotive Group¹ and Melrose ▪ The appropriately conservative nature of Melrose's capital structure today allows each Group to operate with a capital structure suitable for its growth strategies and cost of capital Proposed timeline: formal launch of demerger Q1 2023; obtain shareholder approval Q2 2023; complete demerger process Q2/Q3 2023 Buy Improve 1. Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses Sell 7#8Melrose Buy Improve Sell Intention to demerge the Automotive Group¹ Shape of the two groups on demerger - six key points 1. Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses 8#9Shape of the two groups on demerger: Six key points Melrose ▪ Six key points (quantitative in nature and based on consensus¹ views for 2022) Buy Improve 2. Sell 1 2 2 3 4 LO 5 CO 6 The relative size of each Group The potential market recovery remaining Current margin targets, significant upside a. Melrose (Aerospace) b. Automotive Group2 (DemergerCo) Potential profit recovery remaining Cash generation dynamics transformed 1. This is not an internal Melrose forecast, it is a company compiled consensus from all 14 external analysts that cover Melrose, adjusting for the disposal of Ergotron where appropriate Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses UK pension schemes fully funded 9#10Key point 1: Relative size of each group Melrose 1. Consensus¹ views for 2022 (pre-central costs) Buy Improve Sell Melrose Group today: Adjusted results² £m Revenue EBITDA³ (pre-central costs) EBITDA³ margin % Operating profit (pre-central costs) Operating margin % Melrose central costs Operating profit (post-central costs) 1234 Consensus¹ 2022 7,635 919 12.0% 491 6.4% (57) 434 Melrose (Aerospace) c.1/3 VI Automotive Group4 (DemergerCo) c.2/3 Melrose (Aerospace) pre-central costs £m Revenue EBITDA³ (pre-central costs) EBITDA³ margin % Operating profit (pre-central costs) Operating margin % Automotive Group4 (DemergerCo) pre-central costs £m Revenue EBITDA³ (pre-central costs) EBITDA³ margin % Operating profit (pre-central costs) Operating margin % Consensus1¹ 2022 The split of the Melrose Group today (pre-central costs) using 2022 consensus¹ is approximately one-third Aerospace, two-thirds Automotive Group4 2,776 327 11.8% 183 6.6% Consensus¹ 2022 4,859 592 12.2% 308 6.3% 1. This is not an internal Melrose forecast, it is a company compiled consensus from all 14 external analysts that cover Melrose, adjusting for the disposal of Ergotron where appropriate Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance H1 2022) 3. Consensus¹ operating profit before depreciation and amortisation from subsidiaries and equity accounted investments (depreciation and amortisation calculated as 4. Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses 10#11Key point 2: Potential market recovery remaining Melrose 2. Further market recovery potential beyond 2022 consensus¹ (back to 2019 levels²) Buy Improve Sell Melrose Group today: Adjusted results³ £m Revenue EBITDA4 (pre-central costs) EBITDA4 margin % Operating profit (pre-central costs) Operating margin % Melrose central costs Operating profit (post-central costs) 1. 2. 3. 4. 5. 6. 7. Consensus¹ 2022 7,635 919 12.0% 491 6.4% (57) 434 Further market recovery potential beyond 2022 consensus¹ (back to 2019 levels²) Melrose (Aerospace) Group remaining recovery² of c.20% Further recovery² of c.35% (2019 revenue: £3.4bnº) Automotive Group5 (DemergerCo) Further recovery² of c.15% (2019 revenue: £5.6bn7) The pace of recovery in Aerospace continues to speed up with sales in the second quarter being 12% higher than the first quarter; with further recovery potential beyond 2022 consensus¹ of c.35% back to 2019 levels² The Automotive Group5 having initially recovered quickly from the pandemic, has seen trading constrained by supply chain disruption, with further recovery potential beyond 2022 consensus¹ of c. 15% back to 2019 levels² This is not an internal Melrose forecast, it is a company compiled consensus from all 14 external analysts that cover Melrose, adjusting for the disposal of Ergotron where appropriate Recovery to 2019 revenue volume levels calculated on a like-for-like basis Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance Consensus¹ operating profit before depreciation and amortisation from subsidiaries and equity accounted investments (depreciation and amortisation calculated as 2x H1 2022) Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses As shown on slide 9 of the GKN Aerospace Investor Day presentation, dated 8 June 2022, adjusting for divestments and both completed and announced site closures Excluding the uplift in revenue from current year inflation headwinds being fully recovered 11#12Key point 3a: Current margin targets in Melrose (Aerospace) - significant upside Melrose 3a. Aerospace on track to meet recently upgraded operating margin target Buy Improve Sell 1. 2. 3. £m Melrose (Aerospace) Adjusted results¹ pre-central costs Revenue EBITDA³ (pre-central costs) EBITDA³ margin % Operating profit (pre-central costs) Operating margin % Consensus² 2022 2,776 327 11.8% 183 6.6% VI Melrose (Aerospace) Implied target EBITDA margin 18%+ Announced target operating margin 14%+ Achieving the Aerospace target operating margin of 14%+ on market recovery, implies a target EBITDA margin of 18%+ Required restructuring projects to achieve target margins in Aerospace on a market recovery materially complete in 2023 Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance This is not an internal Melrose forecast, it is a company compiled consensus from all 14 external analysts that cover Melrose, adjusting for the disposal of Ergotron where appropriate Consensus² operating profit before depreciation and amortisation from subsidiaries and equity accounted investments (depreciation and amortisation calculated as 2x H1 2022) 12#13Key point 3b: Current margin targets in the Automotive Group¹ (DemergerCo) - significant upside Melrose 3b. The Automotive Group¹ on track to meet operating margin targets 1. Buy 2. Improve 3. Sell 4. £m Automotive Group¹ (DemergerCo) Adjusted results² pre-central costs Revenue EBITDA4 (pre-central costs) EBITDA4 margin % Operating profit (pre-central costs) Operating margin % Consensus³ 2022 4,859 592 12.2% 308 6.3% IS Automotive Group¹ (DemergerCo) Implied target EBITDA margins 16%+ Auto 15%+; PM 20% Announced target operating margins 11%+ Auto 10%+; PM 14% Achieving the Automotive Group¹ target operating margin of 11%+ (GKN Automotive 10%+; GKN Powder Metallurgy 14%) on market recovery, implies a target EBITDA margin of 16%+ Required restructuring projects to achieve target margin in the Automotive Group¹, on a market recovery, complete this year Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance This is not an internal Melrose forecast, it is a company compiled consensus from all 14 external analysts that cover Melrose, adjusting for the disposal of Ergotron where appropriate Consensus operating profit before depreciation and amortisation from subsidiaries and equity accounted investments (depreciation and amortisation calculated as 2x H1 2022) 13#14Key point 4: Potential profit recovery remaining Melrose 4. Potential profit recovery remaining beyond 2022 consensus¹ (if recovering to 2019 revenue²) Melrose Group today: Adjusted results³ £m Revenue EBITDA4 (pre-central costs) EBITDA4 margin % Operating profit (pre- central costs) Operating margin % Melrose central costs Operating profit (post-central costs) 1. 2. Buy 3. Improve 4. Sell 5. 6. Consensus¹ 2022 7,635 919 year 12.0% 491 6.4% (57) 434 Further profit recovery potential (if recovering from 2022 consensus¹ to 2019 revenue²) Melrose (Aerospace) c.3x increase in operating profit5 c.2.5x increase in operating profit5 Automotive Group6 (DemergerCo) c.2x increase in operating profit5 Both Groups show substantial profit potential uplift if recovering from 2022 consensus¹ to 2019 revenue²; Aerospace c.3x; Automotive Group6 c.2x Restructuring projects required complete in the Automotive Group this year and materially complete in Aerospace next This is not an internal Melrose forecast, it is a company compiled consensus from all 14 external analysts that cover Melrose, adjusting for the disposal of Ergotron where appropriate Recovery to 2019 revenue volume levels calculated on a like-for-like basis Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance : H1 2022) Consensus¹ operating profit before depreciation and amortisation from subsidiaries and equity accounted investments (depreciation and amortisation calculated as Represents mathematical uplift to 2022 full year consensus¹ adjusted operating profit when target operating margins are achieved on pre-COVID-19 sales volumes Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses 14#15Key point 5: Cash generation dynamics transformed Melrose 5. All GKN businesses have self-funded their restructuring projects from operational cash generation Buy Improve Sell 123 Cash generation since acquisition (pre-interest and tax)¹ 2. £1.2bn¹ GKN businesses All GKN businesses cash generative in Melrose ownership Melrose (Aerospace) Automotive Group² (DemergerCo) £0.4bn £0.8bn The capital structure for DemergerCo is intended to be similarly conservative to that employed by Melrose currently All GKN businesses have been cash positive on a stand alone basis with their cash generation qualities transformed since acquisition Since acquisition, the GKN businesses have generated £1.2 billion¹ of surplus cash after £0.7 billion of restructuring and £0.5 billion of pension contributions Expected further lifetime cash inflow of c.£18.5 billion on 19 Aerospace engine contracts (NPV3 of c.£5 billion) 1. £1.2 billion of cash generated in the GKN businesses, post-restructuring, post-pension contributions and pre-interest and tax Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses 3. Using a foreign exchange rate of USD:GBP of 1.30:1 and calculated using the midpoint between a debt related discount rate of 5% (NPV c.£7 billion) and a GKN Aerospace pretax weighted average cost of capital discount rate of 10% consistent with data in the Melrose Industries PLC 2021 Annual Report (NPV c.£3.5 billion) 15#16Key point 6: UK pension schemes now fully funded Melrose 6. GKN UK pension schemes in surplus; commitment delivered ahead of schedule Buy Improve Sell 1. 2. 3. At GKN acquisition (2018) 81% funded¹ at acquisition At 30 June 2022 116% funded¹ Melrose (Aerospace) 116% funded ¹ Automotive Group² (DemergerCo) IFRS accounting funding level Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses Excludes GKN UK Post Retirement Medical Scheme 116% funded¹ GKN UK pension schemes³ funding level transformed into an accounting surplus of £292 million; split broadly two thirds Aerospace, one third Automotive Group² Both new Groups are 116% funded on an accounting basis at 30 June 2022 and are legally aligned to the businesses Ongoing funding of £15 million per annum into both Aerospace and Automotive Group² schemes 16#17Summary: Shape of the two groups on demerger Melrose 1 2 3 4 5 6 1. 2. 3. Buy 4. Improve 5. Sell 6. 7. Relative size of the new groups Significant market recovery² remaining Significant margin upside Further profit recovery4 potential remaining All GKN businesses cash generative since acquisition5 GKN UK pension schemes fully funded Melrose (Aerospace) c.1/3 c.35% Operating margin 6.6% 14%+ EBITDA margin 11.8%³- →18%+ c.3x increase in operating profit £0.4bn cash generated Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses Recovery to 2019 revenue volume levels calculated on a like-for-like basis 116% funded6 Automotive Group¹ (DemergerCo) c.2/3 c.15% Operating margin 6.3% 11%+ EBITDA margin -16%+ 12.2%³- c.2x increase in operating profit £0.8bn cash generated 116% funded6 Consensus operating profit before depreciation and amortisation from subsidiaries and equity accounted investments (depreciation and amortisation calculated as 2x H1 2022) Represents mathematical uplift to 2022 full year consensus7 adjusted operating profit when target operating margins are achieved on pre-COVID-19 sales volumes Cash generated post-restructuring, post-pension contributions and pre-interest and tax IFRS accounting funding level This is not an internal Melrose forecast, it is a company compiled consensus from all 14 external analysts that cover Melrose, adjusting for the disposal of Ergotron where appropriate 17#18Melrose Buy Improve Sell Section 2: Interim results Melrose Group highlights and cash generation Business update 18#19Melrose Buy Improve Sell Interim results Melrose Group highlights and cash generation 19#20Interim results: Melrose Group highlights Melrose Continuing operations Revenue Operating profit/(loss) Profit/(loss) before tax Diluted earnings per share Net debt¹, 3 Leverage¹, 3 ■ ■ I ■ ■ I I Adjusted¹ results 2022 £m 3,878 171 128 2.2p 1,294 1.8x Buy Improve Sell 2021² £m 1. 2. 3. 3,719 196 114 1.8p 950 1.3x Statutory results 2022 £m First Half Trading Highlights for the Melrose Group Melrose is trading in line with expectations for the full year First half results are at the higher end of expectations, helping to de-risk the second half performance required to achieve full year expectations 3,594 (317) (358) (6.3)p n/a n/a 2021² £m 3,431 (156) (275) (3.4)p n/a The Group recorded an adjusted¹ earnings per share of 2.2 pence, 22% higher than the same period last year. The statutory loss per share in the Period was 6.3 pence per share (2021: 3.4 pence per share) n/a Group net debt¹ at 30 June 2022 was £1,294 million (31 December 2021: £950 million; equivalent to £1,017 million at like-for-like exchange rates) The Group selectively increased its investment in working capital in the Period, to support expected growth and address constrained supply chains. In addition, prior to the Period end, the Group completed £119 million of the £500 million programme to buy back Melrose shares Group leverage¹ at 30 June 2022 was 1.8x, or 1.6x if excluding the early buy back of shares before the Period end and prior to Ergotron proceeds being received in July Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance Results for the period ended 30 June 2021 have been restated for discontinued operations Comparatives for Balance Sheet measures are at 31 December 2021 An interim dividend of 0.825 pence per share (2021: 0.75 pence per share) is declared, 10% up on the previous period The disposal of Ergotron completed post the half year, on 6 July, for total proceeds of £519 million 20#21Interim results: Melrose Group cash generation in the first half Melrose Free cash flow¹ Cash flow £m Adjusted EBITDA² Lease obligation payments Positive non-cash impact from loss-making contracts Movement in working capital Adjusted operating cash flow (pre-capex) Net capital expenditure¹ Net interest and tax paid Defined benefit pension contributions - ongoing contributions Trading net other Dividend income from equity accounted investments Cash flows from operations discontinued in the Period Adjusted free cash flow¹ Restructuring Free cash flow¹ ■ I I Group H1 2022 349 (24) (17) (195) 113 (79) (95) (11) (24) 29 16 (51) (53) (104) Buy Improve Sell Reconciliation of opening to closing net debt¹ Reconciliation of net debt¹ £m Net debt¹ brought forward Adverse foreign exchange movement Net debt¹ at 30 June 2022 foreign exchange rates Net cash flow from acquisition and disposal related activities Free cash flow¹ in the Period Dividends paid to shareholders Buy back of own shares Net debt¹ at 30 June 2022 Net debt¹ of £1,294 million at closing exchange rates of US $1.22 and €1.16 Working capital increased by £195 million in the first half due to selectively funding growth, supply chain inefficiencies and normal seasonal impacts With Sterling weakening, particularly against the US Dollar, at current exchange rates this adds £100 million to £150 million to net debt¹ since the beginning of the year. This does not materially impact the bank leverage calculation which is calculated using like-for-like exchange rates Group H1 2022 (950) (67) (1,017) (10) (104) (44) (119) (1,294) 1. Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance 2. Calculated excluding EBITDA from equity accounted investments 21#22Melrose Buy Improve Sell Interim results Business update: well positioned for strong profit growth 22#23Business update: H1 2022 versus H1 2021 Adjusted¹ results Continuing operations £m Melrose Aerospace Automotive Powder Metallurgy Other Industrial² Central Total Aerospace Automotive Powder Metallurgy H1 2022 Revenue 1,366 1,997 515 Buy Improve 1. Sell 2. 3,878 H1 2022 Operating profit/(loss) 67 78 54 (6) (22) 171 H1 2022 Operating margin 4.9% 3.9% 10.5% 4.4% H1 2021 Revenue 1,219 1,965 535 3,719 H1 2021 Operating profit/(loss) 41 121 64 (4) (26) H1 results reflect positive Aerospace momentum, a challenging automotive market and underlying business improvement 196 H1 2021 Operating margin 3.4% 6.2% 12.0% 5.3% Revenue up 11% as civil market recovers; encouraging momentum with Q1 up 6% and Q2 up 17% Adjusted operating profit up 65% and margins increased by 150bps to 4.9% Revenue boosted by pricing and material surcharges; volumes down 3% due to continued supply chain issues for OEMs Margins down 230bps due to volume and timing of inflation recovery within 2022; progress expected in H2 Revenue boosted by pricing and material pass through; volumes down 9% due to supply chain constraints and exiting low margin business Margins down 150bps due to lower volumes; successfully offset inflation fully year to date Positive momentum from H2 2021 with active management of inflation impacts and supply chain issues; on track for full year Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance Other Industrial comprises GKN Hydrogen (investment phase) 23#24Positive momentum from H2 2021 Melrose ■ Revenue £m 2000 1800 1600 1400 1200 1000 800 600 400 200 0 H1 21 Automotive Buy Improve Sell H2 21 H1 22 Inflationary revenue increase 7 6 5 do N 1 0 Operating margin % Automotive volumes 9% higher than H2 2021; sales inflated by higher pass through (primarily raw materials) Operating margins 100bps higher than H2 2021 £30 million H1 inflation recovery lag expected to be delivered in H2 2022 (equivalent to additional 150bps on H1 margin) ■ ■ Revenue £m 600 500 400 300 200 100 0 H1 21 Powder Metallurgy H2 21 Inflationary revenue increase H1 22 14 Improvement actions position businesses to continue upward margin trajectory as supply constraints ease 12 10 8 CO 4 2 0 Operating margin % Powder Metallurgy volumes 12% higher than H2 2021; sales uplifted by material pass through and early price increases Operating margins 430bps higher than H2 2021 Above expected drop through from higher volumes due to pricing action, productivity and mix 24#25Active management in challenging markets Offsetting inflation Managing supply chain Accelerating restructuring Melrose Buy Improve Sell ■ Aerospace Fully offset YTD; initiatives underway to mitigate future risk Industry impacted by wider challenges especially in the engines market; GKN deliveries under control All required projects to hit 14%+ operating margin target now largely underway; accelerating completion to end of 2023 ■ Automotive Partially offset YTD; with unrecovered £30 million in H1 due to time lag; will be fully offset by year end Semi-conductors and China lockdown constrained H1; supply chain issues starting to ease All required projects to hit 10%+ operating margin target complete by end of 2022 E ■ Powder Metallurgy Fully offset YTD; raw material price surcharge mechanisms in place Semi-conductors constrained automotive market in H1; supply chain issues starting to ease All required projects to hit 14% operating margin target complete by end of 2022 Selectively invested c.£200 million in working capital in H1 to support upcoming growth, mitigate supply chain issues and deliver plant rationalisation Continued investment for future growth with promising opportunities in sustainable aviation, electric vehicles, additive manufacturing and hydrogen 25#26Bioe GKN Aerospace 1. Based on adjusted H1 2022 revenue for all continuing businesses ** 35% of Melrose¹ 26#27Aerospace: overview Melrose £m Revenue EBITDA EBITDA margin % Operating profit Operating margin % 3 2 Buy Improve Sell Revenue by business 1 123 Adjusted¹ results H1 2022 1,366 1 Civil³ (36%) 2 Engines (34%) 3 Defence³ (30%) 139 10.2% 67 Balanced portfolio, well positioned for narrowbody recovery and business jet growth 4.9% Growth vs H1 2021 11% 22% 1.0ppts 65% 1.5ppts ■ 2 ■ Industry continues to be impacted by post COVID-19 issues; but market recovery gaining pace Sales growth of 11% versus H1 2021 - up 6% in Q1 and 17% in Q2 65% increase in operating profit; margins up 150bps Excellent Engines performance; Civil ramping-up to meet higher OEM build rates; Defence demand positive, but requires most operational improvement All required major restructuring projects underway to reach 14%+ operating margin target on market recovery Revenue by source ● 1 1 OE (90%) 2 Aftermarket (10%) Predominantly OE driven, with structural growth from engines RRSP contracts and attractive aftermarket 3 2 1. Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance According to manufacturing country of origin 3. Civil and Defence relates to the airframes and components businesses Revenue by region² 1 Europe (exc UK) (45%) 2 North America (33%) 3 UK (19%) 4 Asia (3%) Providing vital technology to an enviable portfolio of global customers 27#28Aerospace: highlights Melrose Market recovery well underway and GKN gaining momentum Civil market anticipated to continue to improve throughout 2022; narrowbody ramping-up and winning opportunities in business jets Engine OEMs facing supply chain challenges; however, GKN engine deliveries largely on track Repositioning the business to focus on higher margin "design to build" positions and growth in attractive aftermarket and repair Business improvement actions underway, accelerating restructuring Operational improvements in quality and delivery - customer quality improved by 34% versus H1 2021¹ and further gains to come Material and labour shortages, inflation and energy cost increases are being successfully offset; work underway to mitigate future risk Footprint rationalisation on track - major projects in Nordics, Netherlands and US to be substantially complete by the end of 2023 Ongoing investments in technology to drive sustainable future of flight Strong progress on core technology including additive manufacturing, fan blade repair, composites and Wing of Tomorrow design Development work ongoing on next generation engines including CFM RISE and P&W GTF Major contributor to next generation aircraft including electric, hydrogen and eVTOL platforms (e.g. Eviation Alice and Vertical) Well positioned for sustained profit growth and excellent cash generation Expecting growth² of ~7% blended CAGR to 2030, faster rebound to 2025 (>10% CAGR) Clear path to 14%+ target operating margin on a full market recovery Engines RRSPs and aftermarket set to generate good margins and very strong cash flows as flying hours increase; expected lifetime cash inflow of c.£18.5 billion on 19 engine contracts (NPV3 of c.£5 billion) I ■ I I I ■ ■ ■ ■ I 1. Buy Improve 2. Sell 3. As measured by reported customer 'escapes' Growth rates based on Cirium, Teal and US Congressional Budget Office applied to GKN portfolio Using a foreign exchange rate of USD:GBP of 1.30:1 and calculated using the midpoint between a debt related discount rate of 5% (NPV c.£7 billion) and a GKN Aerospace pretax weighted average cost of capital discount rate of 10% consistent with data in the Melrose Industries PLC 2021 Annual Report (NPV c.£3.5 billion) 28#29GKN Automotive 1. Based on adjusted H1 2022 revenue for all continuing businesses S AK AUTOMOT VERPEN 52% of Melrose¹ 29#30Automotive: overview Melrose £m Revenue EBITDA³ EBITDA3 margin % Operating profit Operating margin % 3 1 O 2 Adjusted¹ results H1 2022 1. Buy Improve 2. Sell 3. 4. 1,997 190 9.5% 78 3.9% Revenue by destination Growth vs H1 2021 (3%)² (22%) -2.6ppts A truly global presence with a long established position in China (37%) -2.3ppts Europe (34%) North America (34%) 3 Asia (28%) 4 ROW (4%) Growth vs H2 2021 9%² 6% -0.2ppts 43% 1.0ppts ■ Semi-conductor shortages continued to result in schedule volatility and supply disruption Volumes down 3% versus H1 2021, up 9% versus H2 2021 Inflation impacts being managed, further £30 million H1 headwind to be recovered in H2 (equivalent to additional 150bps on H1 margin) Cost base restructured significantly with more benefits to flow through Gaining momentum in electrification with core sideshaft product and eDrive solutions - £2.6 billion new wins in H1 with record share in EVs Revenue by vehicle type 1 2 3 1 BEV & FCEV4 (6%) 2 Full hybrid (10%) 3 Mild hybrid (13%) 4 ICE (71%) A trusted partner for 90% of global OEMs, content on 50% of vehicles sold Life of programme business wins Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance Underlying volumes; revenue adjusted for pricing and material surcharge mechanisms used to recover inflationary pressures Including depreciation and amortisation from equity accounted investments Battery Electric Vehicles & Fuel Cell Electric Vehicles 3 2 1 BEV & FCEV4 (44%) 2 Full hybrid (11%) 3 Mild hybrid (7%) 4 ICE (38%) Pure electric wins over 40% (versus 35% in 2021); 55% including full hybrid (versus 50% in 2021) 30#31Automotive: highlights Melrose Strong underlying demand continues to be constrained by industry supply issues Sales continue to be constrained by ongoing supply chain shortages; significant level of pent-up demand remains Demand volatile in H1 with OEM changes at short notice; customer cancellations 'in-month' reducing going into H2 Strong bookings with £2.6 billion of lifetime revenue new business wins in H1 - 19% higher than H1 2021 Well positioned to capture incremental electrification growth Substantial market share gains in core Driveline products on electric vehicles and hybrids - promising future mix Next generation high voltage inverter developed - offers increased efficiency, performance and sustainability Increasing proportion of new business wins in EVS - including eDrive components and systems Actively managing inflation impacts and demand fluctuations with operational agility Addressing issues from raw material, freight and labour shortfalls (e.g. Covid China lockdown) Decisive actions being taken to offset inflation through further cost reductions, procurement initiatives and pricing recoveries Time lag effect means that financial performance will be second half weighted Transforming the business with a clear path to 10%+ target operating margin Ongoing cost saving actions with new global indirect cost projects initiated and closure of Birmingham plant completed in H1 Business well placed to achieve target operating margin once supply constraints ease Driving a cleaner, more sustainable world ▪ Leading technology contributes to the electrification and decarbonisation of the industry Intensive efforts to make products lighter and more efficient to reduce environmental impact I ■ ■ I I I ■ ■ ■ ■ ■ ■ Buy Improve Sell 31#32Automotive: dual path electrification growth Melrose Above market growth from differentiated core products required for xEV¹ ■ GKN electric vehicle/hybrid portfolio ▪ Increased torque and power requirements driving increased specifications plus increasing number of sideshafts per vehicle Core sideshafts 85% of new wins² Higher technological differentiation, with premium content resulting in market share gains Buy Improve 1. Sell 2. Front/rear sideshaft SANIER ■ eDrive systems & components Strong growth from new eDrive solutions required for xEV¹ Flexible approach to eDrive solutions; eDrive components sold separately or fully integrated eDrive systems Invested heavily in capabilities, including software and integration Electric drive unit 15% of new wins² Electrification increases content per vehicle underpinning growth above the market for vehicle production XxEV refers to vehicles with any degree of electrification Represents share of new wins for BEV, FCEV and full hybrid vehicles, which comprise 55% of the total life of programme business wins in H1 2022 32#33தீப்ப்பம் GKN Powder Metallurgy 1. Based on adjusted H1 2022 revenue for all continuing businesses 13% of Melrose¹ 33#34Powder Metallurgy: overview Melrose £m Revenue EBITDA³ EBITDA3 margin % Operating profit Operating margin % 2 3 123 Adjusted¹ results H1 2022 1 515 84 16.3% 54 10.5% Revenue by segment Growth vs H1 2021 (9%)² (11%) -0.9ppts 1 OneSinter (76%) 2 Powder (22%) 3 Additive (2%) (14%) -1.5ppts Competitive advantage from integrated powder production and sintering businesses Growth vs H2 2021 12%² 45% 3.6ppts 94% 4.3ppts 3 2 ■ 1 ■ ■ Semi-conductor shortages continue to impact automotive demand; other sectors less impacted Volumes down 9% versus H1 2021, partially driven by exiting low margin US business; volumes up 12% versus H2 2021 Inflation impacts successfully offset year to date by actions taken, confident of continued margin protection Restructuring actions well advanced, cost base addressed significantly with more benefits to come Exciting opportunities in electric vehicles - including new sintered components and structural growth in EV motor magnets Revenue by destination 1 North America (44%) 2 Europe (33%) 3 Asia (18%) 4 ROW (5%) #1 global leader - well spread geographically Buy Improve 2. Sell 1. Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance Underlying volumes; revenue adjusted for pricing and material surcharge mechanisms used to recover inflationary pressures 3. Including depreciation and amortisation from equity accounted investments Revenue by market type 2 1 1 Automotive components (28%) 2 Transmission (27%) 3 Engine (23%) 4 Industrial (22%) Good exposure to recovering automotive sector, increasingly powertrain agnostic, and general industrial market 34#35Powder Metallurgy: highlights Melrose Automotive market constrained by supply chain, focused growth initiatives gaining traction Revenue impacted by automotive supply chain issues; significant pent-up demand remains Continued market share gains in electrification and higher-margin precision components ■ Strong sales growth in additive - up 42% versus H1 2021; new facility opened in Auburn Hills, US Strong operational performance in challenging market Inflation impacts successfully offset year to date ▪ Productivity projects delivering benefit in H1, more to follow Excellent momentum with winning new business opportunities in electric vehicles Capturing growth in core EV components where sintered parts provide higher strength and lower weight (e.g. e-Differentials) Good progress with capturing breakthrough structural growth in local-to-local e-Magnet production for EVS Clear path to improve to 14% target operating margin Margin progression via restructuring, commercial strategy and productivity improvements Continued business mix shift towards higher margin, differentiated precision components, including in EVS Restructuring projects necessary to achieve target operating margin are largely complete, residual projects in process of being executed ■ ■ I ■ I 1 ■ ■ Buy Improve Sell 35#36Powder Metallurgy: exciting e-Magnets opportunity Growth in electric vehicles is demanding new supply chains for specialist components Structural market growth Melrose e-Magnets requirement GKN capability ■ Buy Improve Sell GKN Powder Metallurgy uniquely positioned as world leading manufacturer of metal powders and sintered parts Global e-Magnet market for EVS is estimated at €3 billion¹; Europe and America growth expected to be ~25% CAGR¹ Currently 90% of global e-Magnet production is in China Increasing need for local-to-local high quality production to ensure stable, sustainable supply Powder manufacture ■ H Specialist metal powders using range of raw materials #2 global producer of powder metals, #1 in America ■ 1. Estimated market size and CAGR to 2030 based on external market forecast ■ Sintering Net shape product and trend to more complex shapes #1 global producer of precision powder metal parts POWDER METALLURGY PERMANENT ■ MAGNETS O Finished product Reliable local supply, existing trusted OEM partnerships ■ Unrivalled automotive experience, established global local-to-local footprint Significant new opportunity for profitable growth driven by structural demand in electric vehicles and need for more local supply chains 36#37Sustainability: decarbonising technology Melrose Aerospace Improving efficiency and sustainability of current aircraft: Wing of Tomorrow Buy Improve Sell Additive manufacturing - intermediate compressor case Developing next generation of alternative power aircraft: Alice electric aircraft UAM electric Automotive 1. Noise, vibration & harshness Producing driveline solutions tailored to electric vehicles: High efficiency, high torque, low NVH¹ sideshaft Developing a range of eDrive systems for electric/hybrid vehicles: 2-in-1 eDrive system 3-in-1 eDrive system Powder Metallurgy Focusing on supporting vehicle electrification: e-Differentials e-Magnets Commercialising additive manufacturing (AM) across sectors: Intricate metal powder AM Plastic AM Providing focus and investment to make our businesses more sustainable and valuable 37#38Demerger recap Melrose Strong market positions Good underlying demand Margin expansion trajectory Proven cash generation Acquisition opportunities Buy Improve Sell ■ ■ ■ ■ ■ ■ ■ ■ Melrose (Aerospace) Leading global tier one supplier on major civil and defence platforms Attractive engine contracts with excellent long-term cash flows Civil market recovery well underway; positive mix with repair and aftermarket expansion Expected revenue CAGR of 7% to 2030; faster growth to 2025 Clear path to recently announced target operating margin for Aerospace of 14%+ All required restructuring to achieve margin target will be substantially complete by the end of 2023 Excellent cash flow dynamics, business has been cash positive since acquisition Secured aftermarket cash flow from engines RRSPs of £18.5 billion Continuing successful "Buy, Improve, Sell" strategy to create shareholder value Ability to proactively pursue opportunities in aerospace and beyond I ■ ■ ■ ■ ■ Automotive (DemergerCo) #1 in Driveline with ICE, hybrid and EV technology leadership; supplies 90% of OEMs #1 in supply of precision powder metal parts and #2 in global powder metal production Significant pent-up demand after 18 months of semi-conductor shortages Electrification provides incremental growth in existing core products and new EV solutions On track to achieve target operating margins for Automotive of 10%+ and Powder Metallurgy of 14% Required restructuring to achieve operating margin targets will be complete this year Strong cash flow dynamics with both businesses having been cash positive since acquisition Cash generation qualities transformed with rigorous working capital practices Independent access to capital to pursue value enhancing automotive M&A opportunities Consolidation opportunities within the automotive sector to be explored Compelling equity story for both future businesses 38#39Melrose Buy Improve Sell Appendices 39#40Melrose Buy Improve Sell Intention to demerge the Automotive Group¹ Structure 1. Comprises the Automotive, Powder Metallurgy and Hydrogen group of businesses 40#41Structure ■ Melrose ■ ■ GKN Automotive and GKN Powder Metallurgy¹ businesses intended to be separated from the Group into DemergerCo, an independent company headquartered in the UK with shares listed on the premium segment of the Official List and admitted to trading on the Main Market of the London Stock Exchange Proposed separation by way of a demerger of new ordinary shares in DemergerCo directly to Melrose shareholders Melrose will continue to own GKN Aerospace, will retain its London headquarters and UK listing and trusted "Buy, Improve, Sell" strategy for future acquisitions either in aerospace or in the wider international industrial arena Melrose Group DemergerCo Group Aerospace Current Structure Shareholders Melrose Indu ries PLC Automotive Buy Improve 1. Including GKN Hydrogen Sell Powder Metallurgy Post-Demerger Structure Shareholders Melrose Industries PLC Aerospace Shareholders DemergerCo PLC Automotive Powder Metallurgy 41#42Structure Melrose DemergerCo board Led by an independent non-executive chairman with selected non-executive directors in line with UK Corporate Governance Code CEO and Finance Director of GKN Automotive will assume these roles on the DemergerCo board Melrose CEO and Finance Director will take up additional executive directorship roles on the DemergerCo board, whilst retaining their Melrose roles Dividend policy DemergerCo expected to introduce a progressive annual dividend policy ■ ■ I Buy Improve Sell 42#43Buy Improve Sell Melrose Interim results 43#44Reconciliation between statutory and adjusted¹ results Melrose Continuing operations £m Statutory operating loss Amortisation of intangible assets acquired in business combinations Restructuring costs Impairment of assets Exchange movements not hedge accounted Other Adjustments to statutory operating loss Adjusted¹ operating profit Continuing operations Statutory revenue Share of equity accounted investments Adjusted¹ revenue Statutory results ▪ The IFRS measure of results includes certain items which are significant in size or volatility or by nature are non-trading or non-recurring, or are items released to the Income Statement that were previously a fair value item booked on an acquisition Adjusted¹ results The Melrose Board considers the adjusted results to be an important measure to monitor how the businesses are performing because they achieve consistency and comparability when all businesses are held for the complete reporting periods I Buy Improve Sell 1. Restructuring costs £m Aerospace Automotive Powder Metallurgy Other Industrial Corporate Total Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance Total (317) 223 82 20 154 9 488 171 Income Statement charge 52 19 10 1 82 Cash spent in H1 2022 53 1 54 £m 3,594 284 3,878 Cash spent in period 14 26 12 1 53 44#45Foreign exchange forward looking Melrose Exchange rates Average rates Closing rates Income Statement volatility - Translational impact Impact on adjusted¹ operating profit of a 10% strengthening² of: £m USD EUR 5 Movement in adjusted¹ operating profit % impact on adjusted¹ operating profit I → ■ 25 1. Buy Improve 2. Sell 3. 6% 1% HY 2022 USD 1.30 1.22 CNY 8 2% EUR 1.19 1.16 Other³ 10 2% HY 2021 USD 1.39 1.38 EUR 1.15 1.16 Increase in debt Transactional FX hedges taken out to provide appropriate short and medium-term cover: Next 12 months: c.90% covered 12 to 24 months: c.60% to 80% covered FY 2021 USD 1.38 1.35 Balance Sheet volatility Impact on debt of a 10% strengthening² of: £m USD EUR 1.16 1.19 Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance 10% strengthening against all currencies Assuming all other currencies strengthen against Sterling by 10% at the same time 83 EUR Group debt drawn in UK, US and Euro currencies to protect leverage, based on a mix of approximately 52% USD, 26% EUR and 22% GBP 40 45#46Some helpful data for 2022 Melrose Continuing operations Item Adjusted¹ operating profit Central costs Free cash flow¹ Underlying effective tax rate Net finance costs: Bank and loan related Lease obligation related Amortisation of debt arrangement costs Pension interest Depreciation and amortisation: Subsidiaries² Equity accounted investments Capital expenditure Pension payments - ongoing contributions (global) Restructuring costs Non-controlling interest Number of shares in issue at 30 June 2022 Weighted average number of shares in period Adjusted¹ EBITDA: H1 2022 including equity accounted investments For leverage covenant purposes (12 months) 1. Buy Improve 2. Sell 3. Income Statement H1 2022 adjusted¹ results £171 million £22 million (includes a divisional LTIP charge of £3 million) N/A 22% (£31 million) (£6 million) (£5 million) (£2 million) (£202 million) (£13 million) N/A N/A (£82 million) £3 million 4,260 million 4,366 million £386 million £702 million Cash Flow H1 2022 adjusted¹ results N/A Described in the glossary to the 2022 Interim Financial Statements and considered by the Board to be a key measure of performance Includes £1 million of depreciation and amortisation within the Corporate segment Full year ongoing pension contributions will include the £30 million annual contribution payable to the GKN UK pension schemes in H2 (£19 million) (£104 million) N/A (£42 million) £202 million N/A (£79 million) (£11 million) ³ (£53 million) £nil N/A N/A N/A N/A 46