Senior (SNR) Investor Update summary

Transaction overview

• Announced binding agreement to sell Aerostructures business to Sullivan Street Partners for up to £200 million (EUR 200 million), with £150 million (EUR 150 million) initial consideration and up to £50 million (EUR 50 million) earnout based on 2025 EBITDA performance.

• Initial net cash proceeds estimated at £100 million (EUR 100 million) before £12 million in transaction costs; net proceeds of £88 million expected.

• Transaction completion targeted by year-end 2025, subject to regulatory and customer approvals.

• Proceeds will be used to reduce net debt and fund a £40 million (EUR 40 million) share buyback program, to be executed over 12 months starting around December.

• Transaction is immediately accretive to operating profit margin and return on capital employed, with no tax expected on the transaction.

Strategic rationale and business impact

• Sale aligns with strategy to focus on fluid conveyance and thermal management (FCTM), simplifying the group and targeting structurally higher margins and sustained growth.

• Aerostructures comprised 5 businesses across 7 sites in Malaysia, Thailand, UK, and US, with c.1,800 employees and £272 million revenue in FY24.

• Post-transaction, group revenue drops from £977.1 million to £707.4 million, with improved group operating margin from 4.8% to 7.5%.

• Buyer is committed to investing in and growing the divested business, retaining leadership teams and supporting employees.

• Further performance and margin guidance will be provided at the half-year results in August.

Financial and shareholder returns

• Proceeds will strengthen the balance sheet, support a £40 million share buyback, and reduce debt.

• Earnout is based on EBITDA performance, with a linear progression between threshold and maximum; full earnout is achievable but requires strong performance.

• Potential earnout proceeds will be allocated based on future capital priorities.

• Capital allocation policy remains focused on debt reduction and shareholder returns.

• Recent refinancing includes $40 million private placement notes and a $50 million US revolving credit facility extended to June 2027.