17 October 2023
MELROSE INDUSTRIES PLC
Engines Investor Event
Ahead of the Engines Investor Event taking place today and tomorrow in Trollhättan, Sweden, Melrose Industries PLC ("Melrose") publishes the following statement.
The Engines Investor Event in Sweden
A well attended Capital Markets Event was held in London in May 2023, immediately post the demerger, for Aerospace. This included new guidance for 2023 and 2025.
Melrose is today following up this event with a more in-depth Engines Investor Event to explain and showcase the full quality of this business which will deliver industry leading performance.
Current trading for the Engines business
Melrose can now confirm that the Engines adjusted operating margin this year will continue the outperformance seen in the first half of the year, against the 2023 target disclosed at the May Capital Markets Event. The full year margin for 2023 is therefore expected to be c.24%, beating the previous margin target by c.2 percentage points. This extra progress significantly underpins the 2025 targets by reducing the further required improvements from 6 percentage points (explained in May) to 4 percentage points. Melrose has full confidence that the 2025 targets will be achieved and current trading makes that more secure.
The biggest single reason for this outperformance is the continued strong aftermarket demand, at high margin, for the Engines business. A full Melrose trading update will be given in November, which is expected to continue this strong margin story.
The Engines Investor Event key messages:
· Melrose has become a focused aerospace business with 80% of profit expected to come from Engines and over 80% of this being from aftermarket
· Public guidance given in May is being exceeded
· Engines has OEM-level capability and responsibility for selected engines which gives more technical and commercial advantages than normal for a Tier 1 supplier
· Engines is a leading independent Tier 1 partner to all major engine OEMs with its lucrative and diverse RRSP portfolio providing balance and resulting opportunities
· Engines has strong long-term demand for its proprietary breakthrough technologies which will shape new ways for the industry to improve
· Two ongoing industry consequences of the recent GTF updates are likely, namely generally higher aftermarket pricing in a supply constrained industry and legacy engines potentially flying for longer - both of these will be beneficial to Melrose
All information from the Engines Investor Event will be available on the Melrose website after the event concludes.
Peter Dilnot, Aerospace Chief Executive (and Melrose CEO designate), said:
"The quality of our Engines business continues to shine through with margins exceeding expectations. The investor event this week will highlight our unique and diverse portfolio of engines contracts entering their lucrative aftermarket phase, together with strong demand for our proprietary breakthrough technology, such as additive fabrication. With positive momentum evident, we are confident of delivering strong returns and achieving our 30% margin target in the years ahead."
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Enquiries:
Montfort Communications: +44 (0) 20 3514 0897
Nick Miles +44 (0) 7739 701634 / Charlotte McMullen +44 (0) 7921 881800
miles@montfort.london / mcmullen@montfort.london
Investor Relations: Chris Dyett +44 (0) 7974 974690