Full Year 2025 Melrose Industries PLC Earnings Call Transcript
Key Points
- Melrose Industries PLC (MLSPF) delivered a strong financial performance in 2025 with an 8% increase in sales and a 240 basis point improvement in margins.
- The company achieved positive free cash flow of GBP125 million, marking a significant inflection point in its financial journey.
- Melrose Industries PLC (MLSPF) announced a new share buyback program, reflecting confidence in meeting its 2029 targets.
- The engines division showed robust growth, with a 15% increase in revenue and a 27% rise in operating profit, driven by both OE and aftermarket contributions.
- The company completed its multi-year transformation program, resulting in a 600 basis point improvement in margin to 18% and a positive cash flow position.
- The airframes division experienced only 3% revenue growth, constrained by ongoing supply chain challenges affecting civil OEM production rates.
- The company faced operational issues at a manufacturing site in the Netherlands, impacting productivity and profitability.
- Despite strong aftermarket performance, the GTF program remains cash absorbing due to ongoing PMI inspection costs and development investments.
- Supply chain disruptions continue to pose challenges, affecting the ramp-up of civil airframe production.
- The company is still dealing with the financial impact of the powder metal issue, with GBP68 million in cash costs reported for 2025.
Hello everyone and welcome to Melrose results for 2025. We appreciate you joining us to reflect on a transformational year and to talk through the exciting path we have for the future. We have lots of value to unlock, especially given strong demand and what we have done over the last few years to reposition our business.
The key message today is that we are executing our plan. We've got a clear strategy to create shareholder value, and we are getting on with it.
We delivered a strong performance in 2025. There's no doubt that we're operating in a complex and dynamic global environment, and against this backdrop our operating profit was up, driven particularly by engines and defense.
We also delivered our cash target with positive free cash flow of GBP125 million, and this represents a really important inflection point in our journey. Good commercial and operational progress continued to be made, and we also completed our multi-year transformation program.
So this all gives us some very
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