MELROSE INDUSTRIES PLC
AUDITED RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Melrose Industries PLC (“Melrose” or the “Group”) today announces its audited results for the year ended 31 December 2022.
Highlights
| Adjusted 1 results | Statutory results | |||
| 2022 | 2021 2 | 2022 | 2021 2 | |
| Continuing operations | £m | £m | £m | £m |
| Revenue | 8,191 | 7,263 | 7,537 | 6,650 |
| Operating profit/(loss) | 480 | 317 | (236) | (493) |
| Profit/(loss) before tax | 384 | 194 | (307) | (660) |
| Diluted earnings per share | 7.0p | 3.1p | (5.4)p | (10.3)p |
| Net debt 1 | 1,139 | 950 | n/a | n/a |
| Leverage 1 | 1.4x | 1.3x | n/a | n/a |
| Dividend | 2.325p | 1.75p | n/a | n/a |
Group
§ Melrose traded ahead of expectations in 2022 on sales growth, profit and cash generation
§ The Group recorded an adjusted1 earnings per share of 7.0 pence (2021: 3.1 pence), 126% higher than last year. The statutory loss per share was 5.4 pence (2021: 10.3 pence)
§ Cash generation exceeded expectations, with a particularly strong second half performance, and therefore Group net debt1 of £1.14 billion was lower than expected
§ The timetable for the demerger of the Dowlais Group3 is on track, with completion expected on 20 April 2023, subject to shareholder approval on 30 March 2023. Documents relating to the demerger are expected to be published tomorrow
§ Melrose will hold an Investor Event for Aerospace on Wednesday 17 May in London
§ A second interim dividend of 1.5 pence (50% increase on last year’s final dividend) will be paid on 18 April just prior to the proposed demerger. This will replace the final dividend which would normally be approved at the 2023 AGM. The total full year dividend for 2022 is 2.325 pence (33% increase on last year)
Melrose Industries PLC Stratton House 5 Stratton Street London W1J 8LA Tel: 020 7647 4500 Fax: 020 7647 4501
Registered in England & Wales Registered no: 09800044 Registered office: 11th floor The Colmore Building Colmore Circus Queensway Birmingham
West Midlands B4 6AT
Melrose (Aerospace)
| Melrose (Aerospace) adjusted1 results | 2022 | 2021 |
| Revenue | £2,957m | £2,543m |
| Operating profit (pre-PLC costs) | £186m | £112m |
| Operating profit margin | 6.3% | 4.4% |
| EBITDA (pre-PLC costs) | £330m | £258m |
| EBITDA margin | 11.2% | 10.1% |
§ Aerospace is experiencing continued strong momentum and market recovery with 11%4 sales increase in 2022 and a very positive outlook, resulting in confidence that its performance will significantly exceed expectations in 2023 and beyond
§ Demand is very robust, despite some sector supply challenges, with a blended market forecast growth rate of over 15%5 for 2023. In particular, the outstanding Engines business continues to outperform and is very well positioned to benefit from the recovery of the aerospace industry
§ Adjusted1 operating profit of £186 million was up 51%4 from volume and business improvement actions; extensive restructuring is underway to deliver further gains. The statutory operating loss was £134 million (2021: £196 million)
Dowlais3
| Dowlais3 adjusted1 results | 2022 | 2021 |
| Revenue | £5,234m | £4,720m |
| Operating profit (pre-PLC costs) | £332m | £256m |
| Operating profit margin | 6.3% | 5.4% |
| EBITDA6 (pre-PLC costs) | £620m | £556m |
| EBITDA6 margin | 11.8% | 11.8% |
§ Results are slightly above the top end of the range indicated in the announcement on 19 January 2023 with revenue up 7% 4 in the year driven by price increases and growth, particularly in target electrification markets. In line with the latest automotive industry forecasts, the outlook for 2023 is approximately 3%5 volume growth
§ Adjusted1 operating profit of £332 million was up 24%4 driven by strong operational performance, restructuring gains and successfully offsetting inflation. The statutory operating profit was £33 million (2021: loss of £98 million)
§ Automotive new business wins were over £5 billion in the year, representing a book-to-bill ratio7 of 128% continuing the very successful track record of orders coming in ahead of annual revenue
Justin Dowley, Chairman of Melrose Industries PLC, today said:
“We are delighted with these results, and everything is on track for the demerger . We consider a restructured Aerospace business to be one of the best businesses Melrose has ever owned. We are confident that a combination of restructured and refocused high class Engines and Structures businesses, and overall aerospace market recovery, positions these businesses for a significantly better than expected performance in 2023 and beyond.”