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04 March 2021 07:00 Download the pdf

Full Year Results

Melrose Industries PLC today announces its audited results for the year ended 31 December 2020.



Adjusted1 results

Statutory results





Continuing operations










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  • Trading was at the top end of management expectations throughout the second half of 2020. Excluding Aerospace, the other divisions on average achieved increased second half revenue over 2019 of 2%2 and 9%2 in the final quarter
  • Adjusted1 free cash generation was £628 million, 6% higher than 2019, prior to £172 million of restructuring costs. In achieving this cashflow investment levels in R&D and new products have been protected and working capital levels significantly improved, with more to come
  • The strong cash generation resulted in Group net debt1 reducing by over £400 million (13% of net debt) to £2.85 billion at the end of 2020 (31 December 2019: £3.3 billion). Year end leverage1 was 4.1x EBITDA, but annualising the second half performance the proforma leverage1 was approximately 3.2x EBITDA
  • The Group made an adjusted1 operating profit of £340 million in 2020. The statutory operating loss was £338 million; of the £678 million adjusting items, only £178 million were cash items, almost all related to restructuring
  • Savings from restructuring projects underway in GKN are expected to improve the 2021 trading performance by approximately £125 million, with more to come
  • The accounting deficit on the GKN UK defined benefit pension schemes has been cut by over 80% from £0.7 billion just before acquisition to £0.1 billion
  • A sale process for Nortek Air Management has commenced; the business is trading very strongly, but there can be no certainty a disposal will be completed
  • An Investor Day for GKN Automotive and Powder Metallurgy will be held on 20 May which will focus on the significant improvements made to the businesses, and their sustainable growth prospects from exciting new technologies
  • A final dividend is proposed of 0.75 pence per share for 2020 given the excellent cash generation achieved in the year. The Board recognises the importance of dividends to shareholders and is pleased Melrose has returned to paying a dividend. A progressive dividend policy is intended to be reintroduced for future periods


  • No recovery has been seen in the civil aerospace market and this is not expected to change in 2021. Sales for the division were down 27%2 in 2020 compared to last year, which was within the expected range. Good progress is being made in adapting this business to the current demand levels, improving working capital and continuing to develop new technologies by investing heavily in R&D
  • Sales and margins recovered sharply in the second half of 2020 in Automotive and Powder Metallurgy. The second half adjusted1 operating margins of Automotive recovered to 6.5% and Powder Metallurgy recovered to 8.3%.  The final quarter of 2020 saw sales ahead of Q4 2019 although overall sales for the year were down
  • Nortek Air Management is trading very strongly with sales for 2020 up 5%2 year on year. Margins are also growing and reached 17.3% in the second half of the year, doubling since acquisition

Justin Dowley, Chairman of Melrose Industries PLC, said:

“Whilst the COVID-19 crisis has had a major detrimental effect this year, Melrose has generated record cash flows and continued to invest to improve our businesses.  All of this positions the Group well for a good recovery and strong performance in the future. Amidst these difficult conditions, Melrose has also managed to significantly reduce the £1 billion GKN UK pension scheme funding deficit that we inherited at the time of acquisition.”

1. Described in the glossary to the Preliminary Announcement and are considered by the Board to be a key measure of performance
2. Growth is calculated at constant currency against 2019 results


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