Melrose Industries (MRO) investor relations material

Executive summary

• Achieved strong H1 2025 performance with 6% revenue growth, 29% higher operating profit, and improved free cash flow, despite supply chain and tariff disruptions.

• Multi-year transformation and restructuring programme nearing completion, supporting margin expansion and value creation.

• Structurally growing aerospace and defence markets, with a unique portfolio supporting OE and aftermarket growth.

• Safety and operational metrics improved, with a 14% reduction in incident rate and 22% fewer customer quality escapes.

• Interim dividend increased 20% to 2.4p per share; £71m of £250m share buyback completed.

Financial highlights

• Revenue up 6% year-over-year to £1.72bn, led by 11% growth in the engines division.

• Adjusted operating profit increased 29% to £310m, with margin expansion in both divisions.

• Free cash outflow improved by £91m to £54m, with cash flow supported by higher earnings and lower restructuring costs.

• Diluted EPS grew 30% to 15.1p; interim dividend of 2.4p per share, up 20%.

• Net debt at £1,404m, leverage at 2.0x EBITDA, after funding growth and buybacks.

Outlook and guidance

• Full-year 2025 guidance maintained at constant currency; revenue expected at £3,425–£3,575m, with 7% like-for-like growth.

• Aerospace operating profit guidance at £650m–£680m, representing ~25% growth and margins above 19%.

• Free cash flow guidance maintained at £100m+ for 2025, with clear path to £600m by 2029.

• Margin targets: >32% for engines, ~9% for structures; group operating profit guidance at £620m–£650m.

• Medium-term targets include £5bn revenue and £1.2bn+ adjusted operating profit by 2029.