Melrose Mergers and Acquisitions Presentation Deck
Summary: 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
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