close up photo of futuristic 3d printer. micro and nano electronics b

Releasing the potential

Melrose Industries 29 September 2022 Update
Download PDF

Melrose Industries

Releasing the potential

Demerger review

Industrials

29 September 2022

Price

105p

Market cap

£4,243m

Net debt (£m) at 30 June 2022

1,294

Shares in issue

4,054

Free float

98.7%

Code

MRO

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(24.9)

(33.2)

(41.0)

Rel (local)

(19.9)

(29.4)

(37.7)

52-week high/low

179.6p

99.8p

Business description

Melrose Industries acquires underperforming industrial companies. It undertakes operational improvements through restructuring and investment before disposing of the assets. Deals are individually financed through new equity (and debt) with proceeds returned in cash post value realisation.

Next events

Trading update

Late November

Analyst

David Larkam

+44 (0)20 3077 5700

Melrose Industries is a research client of Edison Investment Research Limited

Melrose’s demerger of the automotive businesses and the listing of separate entities (NewCo and Melrose with Aerospace) will provide greater transparency of valuation. Using listed peer ratings for the two entities, we estimate a combined valuation per current Melrose share of c 200p. In addition, both companies will be able to accelerate their strategic pathways with greater potential access to capital markets. Melrose shares have declined 25% since the announcement of the demerger despite management reiterating full year expectations, suggesting some disappointment that a clean sale of the Automotive business and cash return has not been achieved. This has significantly increased the upside potential value realisation.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/20

7,723

(41)

(0.6)

0.75

N/A

0.7

12/21

7,496

252

4.1

1.75

25.6

1.7

12/22e

7,718

307

5.6

2.00

18.9

1.9

12/23e

8,334

466

8.8

2.75

11.9

2.6

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Demerger: Dividing to grow

Melrose is demerging its automotive businesses. Shareholders will own shares in the new company and Melrose, which will consist of the Aerospace operations and Melrose’s central ‘buy, improve, sell’ function. As a standalone company the automotive businesses (NewCo) will be able to undertake its own strategic direction and corporate transactions as it looks to capitalise on the shift to electric vehicles (EVs). Melrose shares will be released from the lower valuation that automotive stocks demand, which is expected to assist valuation. An improved valuation would also offer a platform for Melrose to undertake fresh deals. Assuming shareholder approval, the demerger is expected to become effective in early Q2/Q3 of 2023.

Forecast changes

Post interim results, our underlying profit expectations remain unchanged. We have marginally reduced our full year dividend forecast (2.0p from 2.25p) and increased anticipated net debt (£1.4bn from £1.2bn) due to the strength of the US dollar (52% of Melrose debt is dollar based) and higher working capital. In the light of current sterling weakness, we calculate a 5% positive impact to 2022 profit before tax (PBT) and 11% to 2023 if current rates (US$1.08, €1.12, CNY7.7) are sustained.

Valuation: Focus to release the value of Aerospace

Using quoted peer group valuations for 2022 through to 2025, when the end markets and operating margins are expected to have recovered, along with a cash flow valuation of the Aerospace Risk Reward Sharing Partnerships, provides a valuation of 133p for the New Melrose including Aerospace and 67p for the demerged Automotive group. This suggests a combined valuation of 200p, offering significant upside, which is escaping the current structure of the group and the inherent automotive discount. This is lower than our recent 246p sum-of-the-parts (SOTP) valuation, which was based on anticipated disposal multiples that should still be delivered as markets recover and appetite for corporate activity improves.

Demerger overview and investment summary

Melrose is splitting into two groups through the demerger of the automotive operations into a separately listed company. The full details of the demerger will have to wait for the prospectus, which is expected to be published following the announcement of 2022 full year results and the publication of the audited accounts, suggesting an effective date in early Q2/Q3 2023.

Rationale

The automotive businesses are largely restructured, suggesting that they should be entering the ‘sell’ phase of the Melrose strategy. However, the state of the automotive market with the well-documented supply chain issues and the time lag in passing through inflationary cost increases, has held back the anticipated margin recovery. At the same time, potential automotive buyers, where the best synergy benefits lie, are facing similar market issues and do not have strong balance sheets, hence are not inclined to undertake a significant acquisition. As a consequence, realising full value through a formal auction process is, at the current time, unlikely.

From a Melrose perspective, the lower multiples the market ascribes to automotive companies has clearly affected the group valuation. With management starting to consider the next ‘buy’ element of its strategy, the rating on the shares clearly has an impact on the ability to finance any purchase and increases the hurdles management would have to overcome to achieve the targeted return to shareholders.

With shareholders’ best interests in mind, management is not prepared to sell the automotive businesses, including Powder Metallurgy, cheaply, neither is it in its DNA to sit and wait for the markets to improve. Hence the decision to move to a demerger to provide a route forward for both businesses, both with a currency in the market to pursue their own corporate strategy, either acquisitive or acquired, and which should accelerate the value creation/realisation of both businesses relative to the status quo.

Operational implications

Melrose structures its businesses as separate entities, reflecting the strategy to sell businesses once the ‘improve’ process has been completed. In addition, there are limited synergies between the Aerospace and Automotive businesses, which suggests no significant operational hurdles to overcome in forming two separate companies.

Melrose philosophy is to run decentralised head offices for its separate businesses, suggesting limited reorganisation of the corporate structure will be required. The group will have to restructure the financial arrangements as these rest at group level. Melrose is predominantly bank financed (plus a £300m bond maturing in 2032, which came with GKN). These facilities are due to be refinanced in 2023, limiting the additional cost associated with the demerger, albeit the refinancing is expected to account for around half of the estimated £100m total demerger fees.

Exhibit 1: Demerged companies overview

New Melrose

Demerged Automotive group

Operations

Primary activities

Aerospace

Automotive

Melrose 'buy, improve, sell'

2022 forecasts

Sales (£m)

2,716

5,002

Underlying EBIT (£m)

132

279*

EBITDA (£m)

282

539

Operating margin – pre-central costs (%)

6.5

6.4**

Recovery potential

Operating margin target – pre-central costs (%)

14+

11+**

Market recovery potential – 2022 to 2019 levels (x)

35

15

Operating profit uplift potential – from 2022 levels (x)

3

2

Financial structure

Net debt (£m)

600

900

Net debt/EBITDA on 2022 forecasts (x)

2.1

1.7

GKN UK Pension schemes

116% funded

116% funded

Source: Melrose, Edison Investment Research. Note: *Including associates. **Excluding Hydrogen storage business.

Valuation

Our valuation uses quoted peer group ratings for 2022 through to 2025, when the end markets and operating margins are expected to have recovered, along with a cash flow valuation of the Aerospace Risk Reward Sharing Partnerships (RRSPs). Net debt at demerger of £1.5bn is higher than our current 2022 year-end estimate due to additional demerger/refinancing costs expected in 2023.

Exhibit 2: Valuation

New Melrose inc Aerospace

Demerged Automotive group

Combined

Expected enterprise value (£m)

6,000

3,600

9,600

Net debt (£m)

600

900

1,500

Equity value (£m)

5,400

2,700

8,100

Value per share (p)

133

67

200

Source: Edison Investment Research

Note, this does not take into account the management incentive scheme, which matures in May 2023 and would if the shares were to trade at 200p be valued at c 2.5p a share.

This valuation is c 20% below our last SOTP valuation of 246p detailed in our note Aerospace rising following the capital markets presentation in June. The primary reason being that our SOTP valuation assumes cash disposal of the businesses and hence delivery of the control premium, whereas our 200p assumes purely listed corporate valuations.

Automotive demergers track record

Melrose will not be the first company to demerge its automotive operations. Indeed, ABB announced earlier in the year that it intends to demerge its automotive turbocharger business.

Exhibit 3 looks at some of the more recent transactions and performance of the new entities against the global auto components sector and the relative index (S&P for US/DAX for Germany). The overall result would appear positive, with both parent and demerged company outperforming the relative index. However, perhaps not surprising for single stocks, the range in performance is stark.

Exhibit 3: Demerger summary and performance

Date

Company

Demerged company

Activity

Performance 12 months from demerger (%)

Parent company

Demerged company

Auto components index

Market
(S&P/DAX)

October 2016

Johnson Controls

Adient Technology

Automotive seating

+3

+74

+30

+20

December 2017

Aptiv (previously Delphi Automotive)

Delphi Technologies

Powertrain Systems

-19

-70

-24

+3

July 2018

Autoliv

Veoneer

Active safety and restraint control automotive systems

+20

+13

+13

+7

October 2019

Nuance

Cerence

AI technology for the automotive sector

+108

+95

+0

+17

September 2021

Continental

Vitesco

Drivetrain and powertrain

-41

-16

-32

-18

Average performance

+14

+19

-3

+6

Source: Edison Investment Research, Refinitiv. Note: As at 20 September 2022.

It is also worth noting that three of these deals have led to corporate transactions within three years. Note, the Continental/Vitesco demerger was only completed 12 months ago.

Borg Warner acquired Delphi Technologies in 2020

Qualcomm acquired Veoneer in 2021

Microsoft acquired Nuance (the parent rather than demerged company) in 2021

Risks and sensitivities

The key differences for shareholders in owning two separate shares rather than a combined Melrose share include:

The demerger is subject to a shareholder vote. This is expected in Q223 once the full year 2022 accounts have been published and the demerger documentation can be completed.

Increased volatility of the individual companies. Each company will be heavily focused on a single industry, which is likely to lead to additional volatility for the individual companies than would be expected for the combined Melrose entity, albeit there was little evidence of this over the COVID-19 pandemic. Neither company will be excessively leveraged but the higher risk, particularly from the NewCo business, may increase debt costs.

Demerged automotive company (NewCo)

Activity profile

The new business will consist of the two automotive divisions and the nascent Hydrogen storage activity:

Driveline manufactures components for transferring power/torque from the engine to the wheels. The business is expanding from its traditional products such as sideshafts and propshafts to full torque management systems and components in the new EV world.

Powder Metallurgy manufactures specialist metal powders and sintered components predominantly for the automotive sector (78% of sales). Development includes powders for the nascent additive manufacturing industry and development of sintering for e-magnets for EVs.

Hydrogen storage is a nascent business using specialist metal hydride to store hydrogen. The business was developed by the Powder Metallurgy division reflecting the key ingredient of metal powders, hence the inclusion of this business despite its non-automotive profile.

Driveline will be the dominant business. Margins in the first half were particularly affected by the auto supply chain issues and the lag in recovering inflationary cost increases, which management expect to be recovered in the second half.

Exhibit 4: First half 2022 performance

Driveline (inc associates)

Powder Metallurgy

Hydrogen storage

Total

Sales (£m)

1,977

515

2,492

Operating profit (£m)

78

54

-6

126

Operating margin (%)

3.9

10.5

N/A

5.1

Source: Melrose

Market positions

A key strength of the automotive operations is their strong market-leading positions.

Exhibit 5: Driveline market position

Exhibit 6: Powder Metallurgy market position

Source: Melrose 2019 capital markets presentation

Source: Melrose 2022 business overview presentation

Exhibit 5: Driveline market position

Source: Melrose 2019 capital markets presentation

Exhibit 6: Powder Metallurgy market position

Source: Melrose 2022 business overview presentation

Recovery potential

Management is targeting operating margins of 14% for Powder Metallurgy and over 10% for Automotive, suggesting a blended margin of around 11% on an equivalent revenue basis (or over 10% including central admin costs). This compares to c 8% prior to acquisition by Melrose, as highlighted in Exhibit 7, suggesting improvements from the restructuring of c 300bp, which compares with management’s track record on past deals of 600bp expansion. Restructuring programmes are largely complete, although profitability has been affected by the state of the automotive market and the well-documented supply chain issues along with delays in recapturing inflationary cost increases, which is expected to reverse from H222.

Exhibit 7: Automotive businesses’ operating margins pre Melrose acquisition

Source: GKN financial reports

Corporate activity

The business has significant EV growth potential. However, as a standalone and focused pure play automotive group, the demerged business will be able to set its own corporate agenda.

Acquisition currency

The key for the business is growth in the new hybrid and EV platform environment. While certain products such as propshafts are likely to become obsolete, there is significant overall growth in the market potential, as Exhibit 8 shows. Key is the electric drive unit, which controls the power source and vectors the power to the wheels, effectively replacing the gearbox in an internal combustion engine powered vehicle. This is a fragmented market with systems and protocols still emerging. Being a standalone business will enable Automotive to acquire companies, providing additional technology or market share. For the Powder Metallurgy business, being the market leader with only 17% market share highlights the fragmented nature of the sector, offering consolidation opportunities. The cash generative nature of the Automotive businesses as margin recovery comes through will assist in funding the nascent Hydrogen storage business.

Our forecast is for net debt to EBITDA of 1.7x on 2022 forecasts, falling to 1.3x in 2023, providing some headroom for bolt-on deals, but any significant transaction is likely to require additional equity financing, which being a listed company will provide access to.

Exhibit 8: Electrification opportunities for Driveline

Source: Melrose corporate presentation

Acquisition target

The automotive market continues its metamorphosis with 2021 total deal value of $169bn from 1,369 transactions, according to Refinitiv. While a listing does not put a ‘for sale’ sign up, it offers the potential for equity/merger opportunities as well as a cash transaction. This is particularly important given the scale of the business relative to peers as reflected in the 2018 approach from Dana, which included equity as well as cash.

Valuation

Our valuation looks at the potential valuation relative to quoted automotive peers and at the potential take-out based on the 2018 offer from Dana and other recent automotive transactions.

Listed peer-based valuation

Exhibit 9: Peer group valuations

Market cap

EV/EBIT (x)

EV/EBITDA (x)

Operating margin

(£m)

2022

2023

2024

2025

2022

2023

2024

2025

2022

2023

2024

2025

American Axle

968

11.3

9.3

8.1

7.7

4.4

4.0

4.0

3.9

5.7%

6.2%

7.1%

7.3%

Borg Warner

7,801

7.6

6.5

5.6

5.1

5.1

4.5

4.2

3.9

9.8%

10.5%

11.2%

11.3%

Dana

1,888

13.3

8.8

7.0

6.1

6.1

4.9

4.2

3.8

3.2%

4.6%

5.5%

6.1%

Hyundai WIA

1,318

13.4

11.1

9.4

8.3

5.2

7.3

4.4

4.0

2.7%

3.5%

3.5%

3.5%

JTEKT

2,234

8.8

6.8

6.2

4.5

4.2

3.7

3.5

3.1

3.6%

4.4%

4.8%

6.2%

Magna

14,450

10.6

7.4

6.0

5.9

5.9

4.8

4.0

3.7

5.0%

6.5%

7.5%

7.4%

NTN

939

16.8

12.0

11.2

6.1

6.2

5.5

5.2

5.1

3.2%

4.2%

4.4%

7.6%

Nexteer

1,652

14.7

7.8

5.9

5.4

4.6

3.4

3.0

2.8

3.2%

5.5%

6.6%

7.0%

Average

12.1

8.7

7.4

6.1

5.2

4.8

4.0

3.8

4.5%

5.7%

6.3%

7.1%

Source: Refinitiv. Note: Priced at 20 September 2022.

Exhibit 10: Demerged company automation valuation

Operating profit

2022e

2023e

2024e

2025e

Automotive

218

310

404

463

Powder Metallurgy

103

127

153

177

Central costs

(30)

(32)

(33)

(35)

EBIT

291

406

525

605

Depreciation

260

268

276

284

EBITDA*

551

673

800

889

EBIT Valuation

Multiple

12.1

8.7

7.4

6.1

Valuation (£m)

3,521

3,528

3,882

3,689

EBITDA Valuation

Multiple

5.2

4.8

4.0

3.8

Valuation (£m)

2,865

3,232

3,202

3,378

Source: Edison Investment Research. Note: *Including associates.

This would give an overall blended (average) valuation of £3,410m. Additional valuation should be ascribed to the Hydrogen storage business, which we have put at £150m (see below). Suggesting an overall enterprise value of £3.6bn.

Take-out valuation

This is based on the previous offer from Dana for the Driveline business and recent auto transaction valuations for the Powder Metallurgy business.

Driveline valuation

At the time of the Melrose offer for the GKN Group, Dana agreed to acquire its Driveline business. The total value of the deal was c $6.3bn split into equity cash and assumption of pension liabilities as shown in Exhibit 11.

Exhibit 11: Dana offer terms for DKN Driveline

Value ($bn)

Cash

1.8

Net pension liabilities

1.0

Equity - 133m new shares trading at $26.30/share

3.5

Total

6.3

Source: Dana

Our Driveline valuation assumes the price offered by Dana excluding the pensions figure. While the UK pension is significantly improved, the original Dana offer related primarily to the overseas schemes, which are largely unfunded and still remain in situ.

Powder Metallurgy

Melrose was widely rumoured to be looking to sell the business in 2018 for in excess of £1.5bn, prior to the travails of the automotive industry seen over recent years. Exhibit 12 highlights the valuation for two of the largest deals in the automotive sector in 2022.

Exhibit 12: Recent automotive transaction valuations

Acquirer

Target

Deal value

EV/EBIT

EV/EBITDA

ROS

Activity

Cummins

Meritor

$3.7bn

16.4

11.8

8.1%

Drivetrain, mobility, braking, aftermarket and electric powertrain solutions for commercial vehicle and industrial markets

Apollo Private Equity

Tenneco

$6.2bn

8.9

5.1

3.0%

Motorparts (range of components), Performance Solutions, Clean Air (catalytic converters) and Powertrain

Mean

12.7

8.5

Source: Edison Investment Research

Using the average EV/EBIT multiple of 12.7x would seem conservative given that Powder Metallurgy margins are expected to be around 10% in 2022 and therefore ahead of both targets. Based on 2022 forecast EBIT of £103m, this provides a valuation of £1.3bn ($1.5bn), which should prove conservative given the improvements and positive margin trajectory.

Putting this together with the Hydrogen business (see below) suggests a take-out valuation of £5.8bn.

Exhibit 13: Demerged group take-out valuation

Value

Driveline ($bn)

5.3

Powder Metallurgy ($bn)

1.5

Hydrogen($bn)

0.1

Total ($bn)

6.9

Total (£bn)

5.8

Driveline ($bn)

Powder Metallurgy ($bn)

Hydrogen($bn)

Total ($bn)

Total (£bn)

Value

5.3

1.5

0.1

6.9

5.8

Source: Edison Investment Research

Note that we have ascribed a valuation of £150m to the hydrogen storage business. This is a nascent technology company currently entering field trials, suggesting full commercialisation is still a number of years away, making any valuation somewhat subjective. The closest peer, in our view, is Hexagon Purus (HEXAB.SS), which supplies high-pressure cylinders for hydrogen storage along with battery packs for EVs and has a market capitalisation of c £600m. Hexagon is arguably more advanced than GKN Hydrogen, with sales for the current year expected to be £75m (GKN Hydrogen first commercial sales achieved in H222). To reflect the level of investment at over £10m a year and progress to trial units, we have pencilled in an arbitrary £150m. We appreciate this is an unstructured estimate reflecting the lack of information available and uncertainties.

Forecasts

The forecasts are provisional, reflecting the limited amount of information available until the demerger documentations are released. Numbers are pro forma although the demerger is not expected to become effective until the second half of 2023.

Exhibit 14: Profit and loss, Automotive NewCo (£m)

2022e

2023e

2024e

2025e

Sales

Automotive

3,961

4,278

4,492

4,626

Powder Metallurgy

1,031

1,103

1,181

1,263

Hydrogen

10

15

25

63

Group sales

5,002

5,396

5,697

5,952

Operating margin

Automotive

5.5%

7.3%

9.0%

10.0%

Powder Metallurgy

10.0%

11.5%

13.0%

14.0%

Automotive margin pre-central costs

6.4%

8.1%

9.8%

10.9%

Hydrogen

(120%)

(100%)

(60%)

(16%)

Group margin

5.6%

7.2%

8.9%

10.0%

Operating profit

Automotive

218

310

404

463

Powder Metallurgy

103

127

153

177

Hydrogen

(12)

(15)

(15)

(10)

Central costs

(30)

(32)

(33)

(35)

Underlying EBIT

279

391

510

595

Intangible amortisation

(200)

(200)

(200)

(200)

Restructuring costs

(75)

(50)

(25)

EBIT

4

141

285

395

Bank interest

(70)

(72)

(70)

(60)

IAS19

(5)

(5)

(5)

(5)

PBT

(71)

64

209

329

Underlying PBT

204

314

434

529

Tax reported

0

(15)

(52)

(82)

Adjusted tax

(45)

(72)

(109)

(132)

Tax rate reported

22%

23%

25%

25%

Tax rate underlying

22%

23%

25%

25%

Reported profit after tax

(71)

49

157

247

Adjusted profit after tax

159

241

326

397

Minority interest

(2)

(2)

(2)

(2)

Profit attributable to shareholders (Reported)

(73)

47

155

245

Profit attributable to shareholders (Adjusted)

157

239

324

395

Source: Edison Investment Research

Exhibit 15: Cash flow, Automotive NewCo (£m)

2022e

2023e

2024e

2025e

Operating profit

279

391

510

595

Profit from associates

(60)

(63)

(66)

(69)

Depreciation

260

268

276

284

EBITDA

479

595

719

809

Net change in WC

(50)

(59)

(45)

(38)

Restructuring

(75)

(50)

(25)

0

Pension etc

(15)

(15)

(15)

(15)

Other adjusting items

(20)

(20)

(20)

(20)

Operating cash flow

369

451

614

736

Net interest

(70)

(72)

(70)

(60)

Dividends received (Ass & JVs)

54

57

60

63

Total tax paid

(36)

(58)

(87)

(106)

Net CAPEX

(286)

(295)

(303)

(313)

Free cash flow

(19)

84

213

320

Acquisitions & disposals

Equity dividends paid

(50)

(63)

(89)

(111)

Shares issued/(repurchased)

Net cash flow

(69)

21

124

208

Exchange rate differences

Other non-cash

Net cash/(debt) b/fwd

(900)

(879)

(755)

Movement in net debt

(69)

21

124

208

Net cash/(debt)

(900)

(879)

(755)

(546)

Finance leases (FRS 16)

(170)

(197)

(194)

Total net cash/(debt)

(1,049)

(952)

(740)

Net debt/EBITDA (x)

1.7

1.3

1.0

0.6

Source: Edison Investment Research

Continuing company: Melrose

Activity profile

Post demerger, the Melrose group will consist of Aerospace and the Melrose corporate ‘buy, improve, sell’ function.

Aerospace operating company

The business has strong market positions in the engines and fragmented airframe components sectors. The business is over 40% exposed to defence with the large civil business orientated towards narrow-bodied aircraft. A key strength of the business is its composite technology, offering the potential of lighter fuel saving components.

Exhibit 16: Sales by activity (2021)

Exhibit 17: Activity overview

Source: Melrose

Source: Melrose

Exhibit 16: Sales by activity (2021)

Source: Melrose

Exhibit 17: Activity overview

Source: Melrose

Melrose central function

The central Melrose team is responsible for delivering the ‘buy, improve, sell’ strategy. This will include oversight of the improve/restructuring of the Aerospace activities, although these programmes are all expected to be underway by the end of 2022. Management focus is therefore likely to shift towards the next acquisition target, providing the next leg in the Melrose journey, albeit timing will depend on the share price and the impact on cost of capital given management’s key metric for shareholder IRRs.

Recovery potential

Management is targeting 14%+ operating margins for Aerospace on a fully recovered end market, a target that was increased from 12%+ earlier in 2022 as the restructuring progresses. Restructuring programmes are all underway or completed, low margin business has been exited while future defence activity is being focused on higher margin ‘design to build’ activities. In terms of end markets, external forecasts are for civil airframe deliveries to return to pre-pandemic levels in 2024, led by the narrow-bodied market, while defence continues to grow, including F35 fighter deliveries, which is a key programme for GKN Aerospace. In addition, civil flying hours are also expected to return to pre-pandemic levels by 2024 or 2025, which will drive the aftermarket and GKN Aerospace RRSPs and engines revenues.

Exhibit 18 highlights the margins pre-Melrose acquisition. The 14%+ target represents a c 400bp increase from the average over the six years pre-acquisition and c 200bp above previous peak, within Melrose track record for 600bp improvement.

Exhibit 18: Aerospace operating margins pre-Melrose acquisition

Source: GKN financial reports

Valuation

Our valuation for the business is split into three elements: the ongoing aerospace activities, RRSPs and central Melrose function.

Aerospace valuation

Aerospace manufacturing business is valued against a quoted peer group. Note that the valuation uses earnings post central costs attributable to the Aerospace business but not to the corporate Melrose function.

Exhibit 19: Peer group valuations

Market cap

EV/EBIT (x)

EV/EBITDA (x)

Operating margin

(£m)

2022

2023

2024

2025

2022

2023

2024

2025

2022

2023

2024

2025

Arconic

2,257

6.6

5.7

5.0

4.7

4.6

4.1

3.7

3.2

5.9%

6.7%

7.3%

7.2%

FACC

271

36.7

19.0

12.2

8.3

9.9

7.8

6.3

5.0

2.5%

4.3%

5.9%

7.7%

Magellan

296

17.8

8.3

6.3

5.6

9.4

6.5

4.7

4.2

3.4%

6.7%

7.6%

8.3%

MTU

7,343

16.5

13.7

11.9

10.2

11.1

9.2

8.5

7.6

11.2%

11.8%

12.6%

13.8%

Senior

549

27.1

14.8

10.8

8.7

9.8

7.4

6.2

6.1

3.3%

5.5%

6.9%

8.1%

Spirit

2,452

n/a

17.4

8.9

6.4

26.0

9.6

6.0

4.9

-2.0%

5.4%

8.7%

10.2%

Triumph

618

13.7

13.6

11.3

9.6

12.0

10.0

9.1

8.5

12.1%

11.7%

12.8%

14.1%

Median

17.1

13.7

10.8

8.3

9.9

7.8

6.2

5.0

3.4%

6.7%

7.6%

8.3%

Source: Refinitiv. Note: Priced at 20 September 2022.

Our valuation uses the median valuation although note that the margins at Melrose Aerospace are already above the peer average with full recovery expected to be at ‘best-in-class’ levels, suggesting a conservative valuation metric is being used.

Exhibit 20: Continuing Melrose valuation

2022e

2023e

2024e

2025e

Sales

2,716

2,938

3,151

3,466

Operating margin (pre-central costs)

6.5%

8.8%

11.5%

14.0%

Operating profit

177

259

362

485

Aerospace central costs

(10)

(10)

(10)

(11)

Melrose central costs

(35)

(37)

(39)

(41)

EBIT

132

211

313

433

Depreciation

150

155

160

165

EBITDA

281

366

472

598

EBIT Valuation

Multiple

17.1

13.7

10.8

8.3

Valuation (£m)

2,856

3,405

3,801

3,937

EBITDA Valuation

Multiple

9.9

7.8

6.2

5.0

Valuation (£m)

3,139

3,147

3,174

3,196

Source: Edison Investment Research

The overall average suggests a median of £3.2bn. Note that the fully recovered margin in 2025 would arguably warrant a rating closer to MTU (EV/EBITDA 7.6x) and Triumph (EV/EBITDA 8.5x). An increase from the sector mean of 5.0x to 7.0x would add over £1bn to the valuation.

RRSPs

The Aerospace Risk Reward Sharing Partnership is a long-term contractual cash flow based on aftermarket expectations and is valued on a discounted cash flow (DCF) basis. The company’s view is that the discount rate should be between the group’s cost of capital and debt, which we estimate would equate to a valuation of £4.5bn. We use Melrose’s cost of capital to provide a valuation of £3.5bn and reduce this by £700m or 20% to avoid double counting, as RRSPs account for c 17% of Aerospace sales, giving a valuation of £2.8bn.

Exhibit 21: RRSSP DCF valuation

 

Debt

Mid-point

Melrose cost of capital

Discount rate (%)

5.0

7.5

10.0

NPV (£bn)

6.7

4.5

3.5

Source: Melrose, Edison Investment Research

Melrose central operations

The Melrose head office is responsible for delivering the ‘buy, improve, sell’ strategy and subsequent deals to GKN. While there is arguably an option value as existing shareholders will be entitled to participate in future transactions, we have not attempted to place a value on this and assumed zero value. Head office costs are expected to be running at c £37m per annum.

Overall

Our overall valuation comes to £6bn. This should prove conservative as the margin recovery comes through and the business increasingly commands a premium rating to the sector.

Exhibit 22: Melrose valuation

£bn

Core aerospace

3.2

RRSPs

2.8

Central Melrose operations

0.0

Total

6.0

Core aerospace

RRSPs

Central Melrose operations

Total

£bn

3.2

2.8

0.0

6.0

Source: Edison Investment Research

Forecasts

The forecasts are provisional, reflecting the limited amount of information available until the demerger documentations are released. Numbers are pro forma although the demerger is not expected to become effective until Q2/Q3 2023.

Exhibit 23: Profit and loss, Melrose inc Aerospace (£m)

2022e

2023e

2024e

2025e

Aerospace sales

2,716

2,938

3,151

3,466

Aerospace operating margin (pre-central costs)

6.5%

8.8%

11.5%

14.0%

Aerospace operating profit

177

259

362

485

Aerospace central costs

(10)

(10)

(10)

(11)

Melrose central costs

(35)

(37)

(39)

(41)

Underlying EBIT

132

211

313

433

Intangible amortisation

(250)

(250)

(250)

(250)

Restructuring costs

(100)

(150)

(75)

(25)

Other

EBIT

(218)

(189)

(12)

158

Bank interest

(48)

(48)

(59)

(60)

IAS19

(5)

(5)

(5)

(5)

PBT

(271)

(242)

(77)

93

Underlying PBT

79

158

248

368

Tax reported

0

0

0

(23)

Adjusted tax

(17)

(36)

(62)

(92)

Tax rate reported

22%

23%

25%

25%

Tax rate underlying

22%

23%

25%

25%

Reported profit after tax

(271)

(242)

(77)

70

Adjusted profit after tax

61

122

186

276

Minority interest

(2)

(2)

(2)

(2)

Profit attributable to shareholders (Reported)

(273)

(244)

(79)

68

Profit attributable to shareholders (Adjusted)

59

120

184

274

Source: Edison Investment Research

Exhibit 24: Cash flow, Melrose inc Aerospace (£m)

2022e

2023e

2024e

2025e

Operating profit

132

211

313

433

Depreciation

150

155

160

165

EBITDA

282

366

473

598

Net change in WC

(50)

(55)

(53)

(79)

Restructuring

(100)

(150)

(75)

(25)

Pension etc

(15)

(15)

(15)

(15)

Other adjusting items

(10)

(10)

(10)

(10)

Operating cash flow

107

136

319

469

Returns & servicing of finance

(48)

(48)

(59)

(60)

Total tax paid

(14)

(29)

(50)

(74)

Net capex

(165)

(171)

(176)

(182)

Free cash flow

(70)

(112)

34

154

Acquisitions & disposals

Equity dividends paid

(30)

(30)

(49)

(73)

Shares issued/(repurchased)

Net cash flow

(150)

(141)

(15)

81

Exchange rate differences

Other non-cash

Net cash/(debt) b/fwd

(600)

(741)

(756)

Movement in net debt

(150)

(141)

(15)

81

Net cash/(debt)

(600)

(741)

(756)

(675)

Finance leases (FRS 16)

(200)

(200)

(200)

Total net cash/(debt)

(941)

(956)

(875)

Net debt/EBITDA (x)

2.1

2.0

1.6

1.1

Source: Edison Investment Research

Forecasts and foreign exchange

The interim results were in line with expectations with no change to guidance. The US dollar has been strong for much of the year providing a benefit to Melrose and has been joined by sterling’s recent precipitous falls. Hence, it is worth reviewing the potential impact on our forecasts.

Profit and loss impact

Given the global reach and local manufacturing, particularly in Automotive, translation provides the greatest influence on the P&L. The impact on adjusted operating profit of a 10% movement in key currencies against sterling is shown in Exhibit 25.

Exhibit 25: Translational impact

Source: Melrose. Note: ¹Melrose definition of underlying operating profit. ²10% strengthening against all currencies. ³ Assuming all other currencies strengthen against sterling by 10% at the same time.

It is also worth noting there will be additional impact from:

Transactional impact. The transactional impact is expected to be limited over the short to medium term given the level of forward cover of c 90% for the next 12 months and c 60–80% covered for the subsequent 12 months.

Interest charge. The group’s debt profile is orientated towards the US dollar (52%). Hence, we estimate that the translational impact at the operating profit will be reduced by c 1% at the PBT level, based on a 10% movement in average US dollar rates (6% impact on operating profit reduced to 5% at the PBT level). The impact from movement in the euro will be less than half this at the net interest level.

Balance sheet/debt impact

There is a straight translational impact reflecting the make-up of Melrose debt.

Exhibit 26: Debt foreign exchange exposure

Percentage of group debt (%)

Impact of 10% movement in currency (£m)

US$

52

83

22

40

£

26

N/A

Source: Melrose

Current potential impact

The following table provides our estimate of the potential impact on Edison’s forecasts if current rates (US$1.08, €1.12, CNY7.7) prevail longer term.

Exhibit 27: Potential impact from currency movements on Edison forecasts

Average rates in current forecasts

Assumed long-term rates (vs £)

Movement of average rates relative to current assumptions

Implied impact on financials

2022

2023

2022

2023

US$

1.30

1.08

6%

17%

+4%

+10%

1.15

1.12

(3%)

3%

(0.3%)

+0.3%

CNY

8.5

7.7

7%

9%

+1%

+2%

Other

+1%

+1%

Underlying operating profit

+6%

+13%

Interest

(1%)

(2%)

Underlying profit before tax

+5%

+11%

Source: Edison Investment Research

Exhibit 28: Financial summary for Melrose Group (pre demerger)

£m

2020

2021

2022e

2023e

2024e

Year to 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

7,723

7,496

7,718

8,334

8,848

Cost of Sales

(6,858)

(6,394)

(6,483)

(6,917)

(8,848)

Gross Profit

865

1,102

1,235

1,417

0

EBITDA

 

 

521

734

831

1,016

1,250

Operating profit (before amort. and excepts.)

 

 

141

375

431

626

850

Amortisation of acquired intangibles

(472)

(452)

(452)

(452)

(452)

Exceptionals

(156)

(374)

(250)

(200)

(100)

Share-based payments

Reported operating profit

(487)

(451)

(271)

(26)

298

Net Interest

(182)

(123)

(124)

(160)

(160)

Joint ventures & associates (post tax)

0

0

0

0

0

Exceptionals

Profit Before Tax (norm)

 

 

(41)

252

307

466

690

Profit Before Tax (reported)

 

 

(669)

(574)

(395)

(186)

138

Reported tax

114

172

0

0

0

Profit After Tax (norm)

(27)

197

240

359

517

Profit After Tax (reported)

(555)

(402)

(395)

(186)

138

Minority interests

(3)

(4)

(2)

(2)

(5)

Discontinued operations

32

1,283

0

0

0

Net income (normalised)

(30)

193

238

357

512

Net income (reported)

(526)

877

(397)

(188)

133

Average Number of Shares Outstanding (m)

4,858

4,695

4,272

4,054

4,054

EPS - normalised (p)

 

 

(0.6)

4.1

5.6

8.8

12.6

EPS - normalised fully diluted (p)

 

 

(0.6)

4.1

5.6

8.8

12.6

EPS - basic reported (p)

 

 

(11.0)

18.7

(9.3)

(4.6)

3.3

Dividend (p)

0.75

1.75

2.00

2.75

3.75

Revenue growth (%)

(20.0)

2.0

2.3

8.6

7.0

Gross Margin (%)

11.2

14.7

16.0

17.0

0.0

EBITDA Margin (%)

6.7

9.8

10.8

12.2

14.1

Normalised Operating Margin

1.8

5.0

5.6

7.5

9.6

BALANCE SHEET

Fixed Assets

 

 

13,515

11,438

11,086

10,794

10,392

Intangible Assets

9,299

7,437

6,985

6,533

6,081

Tangible Assets

3,133

2,528

2,628

2,788

2,838

Investments & other

1,083

1,473

1,473

1,473

1,473

Current Assets

 

 

3,165

2,584

2,608

2,698

2,774

Stocks

1,126

893

903

942

975

Debtors

1,658

1,184

1,197

1,249

1,293

Cash & cash equivalents

311

473

473

473

473

Other

70

34

34

34

34

Current Liabilities

 

 

3,363

3,124

3,051

3,120

3,176

Creditors

2,456

2,051

2,074

2,163

2,239

Tax and social security

188

142

142

142

142

Short term borrowings

165

462

462

462

462

Other

554

469

373

353

333

Long-term Liabilities

 

 

6,207

3,358

3,577

3,586

3,197

Long-term borrowings

2,926

903

1,398

1,486

1,207

Other long-term liabilities

3,281

2,455

2,179

2,100

1,990

Net assets

 

 

7,110

7,540

7,065

6,785

6,793

Minority interests

29

33

33

33

33

Shareholders' equity

 

 

7,081

7,507

7,032

6,752

6,760

CASH FLOW

Operating Cash Flow

521

734

831

1,016

1,250

Working capital

371

62

(99)

(62)

(51)

Exceptional & other

(9)

(321)

(335)

(250)

(130)

Tax

(14)

(65)

(68)

(107)

(172)

Net operating cash flow

 

 

869

410

330

597

896

Capex

(265)

(225)

(450)

(500)

(400)

Acquisitions/disposals

(11)

2,693

500

0

0

Net interest

(127)

(137)

(60)

(94)

(92)

Equity financing

0

(730)

(500)

0

0

Dividends

0

(69)

(78)

(91)

(125)

Other

Net Cash Flow

466

1,942

(259)

(88)

279

Opening net debt/(cash)

 

 

3,283

2,847

950

1,387

1,475

FX

7

40

(150)

0

0

Other non-cash movements

(37)

(85)

(28)

0

0

Closing net debt/(cash)

 

 

2,847

950

1,387

1,475

1,196

Source: company accounts, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Melrose Industries and prepared and issued by Edison, in consideration of a fee payable by Melrose Industries. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Melrose Industries and prepared and issued by Edison, in consideration of a fee payable by Melrose Industries. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Share this with friends and colleagues