Manganese Bronze Holdings PLC

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Manganese Bronze Holdings PLC

• Presentation June 2009

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Disclaimer This document, which has been
prepared by Manganese Bronze plc (the "Company"),
comprises the written materials/slides for a
presentation concerning the proposed Placing by
the Company. This document is not an
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available sources. Some of the information in
this document is still in draft form and has not
been verified and will only be finalised at the
time the combined prospectus and circular which
is being prepared in connection with he proposed
placing of up to 10m as contemplated herein (the
Placing) is finalised. None of the Company, its
advisers, or any other party is under any duty to
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Investment Highlights

• Core UK business impacted by the current economic
  conditions
• Procurement saving generating improved margin per
  vehicle in the UK
• Start of taxi production in China commenced
  January 2009
• Profit from sale of taxis in Non Asian markets
  - higher margin
• Longer term potential to further exploit the
  London Taxi brand

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Group strategy
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Strategic Issues

• Focused on regulated UK market
• High unit cost ruled out major international
  expansion
• But significant export interest
• UK market coming under pressure
• Environmental requirements
• De-regulation and increased competition,
  particularly in London

Our vision Make the London taxi a global brand
and sell a broad range of high quality vehicles
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UK update
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UK Strategy

• Develop green taxis
• Electric taxi in late 2009
• Hydrogen fuel cell fleet in use for 2012 Olympics
• Improve product value to driver
• Leverage lower costs from China to improve value
  proposition
• Utilise the JVs scale and capabilities to
  develop product

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LTI

• The largest predominantly British owned
  automotive manufacturer
• Producing the iconic London Taxi for 60 years
• Purpose built to withstand the unique taxi duty
  cycle
• Part of the best taxi service in the world

• Brand Values
• Purpose built
• Desirable
• Manoeuvrable
• Durable
• Safe
• Accessible
• Recognisable
• Iconic

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LTI Principal Activities

• Designs, manufactures, sells and finances the TX4
  London Black Taxi
• Owned dealerships in London, Birmingham,
  Manchester Leeds new and used sales, spares
  and service
• 5 franchised dealerships
• Finance arrangements and profit share agreement
  with Lloyds TSB
• Parts distribution through Unipart

MANN OVERTON LEEDS
MANN OVERTON MANCHESTER
LTI COVENTRY
MANN OVERTON BIRMINGHAM
MANN OVERTON LONDON
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Cost Efficiencies

• Overhead reduction
• Six week shutdown and reduced working time
• Reduced vehicle output from 16 per day to 12 per
  day running rate less than 2000 per annum
• 469 to 389 heads
• 10 pay abatement
• Reduced manufacturing breakeven point

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Shanghai LTI JV/International Update
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Geely Automobile

• Top 10 Chinese car manufacturer
• Targeting 2m car capacity by 2015
• Targeting 10 market share by 2015
• Privately owned
• Vertically integrated including design,
  engineering, manufacture of parts/engine/gearbox,
  Body in white and final assembly
• Profitable net margin 13
• Source www.geelyauto.com.hk

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Shanghai LTI

• Real partnership with Geely
• MBH 48 Geely (and its affiliates) 52
• Single shift capacity of 40,000 units
• Immediate focus on
• TX4
• TX4 based limousine
• Longer term option for other vehicle types
• UK plant benefits from low cost components
• MBH distributes TX4 outside Asian region and
  limousine saloon cars in UK

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Domestic China JV Opportunity

• Strategy managed by Geely
• Large market 1m licensed taxis
• Low cost Geely average cost of vehicle
  production c4k. Low end taxi retails at c10k
• High output 40,000 vehicles plant capacity on
  one shift with SOP January 2009
• Low investment leverage Geelys existing plant
  and press capability

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(No Transcript)
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International Markets Opportunity

• Strategy managed by MBH - develop new sales
  channels in markets outside Asia
• Market to established operators
• Create regulated taxi services in key cities or
  countries
• Longer term potential to further exploit London
  Taxi brand
• Large and diverse market
• 5 to 10 of cars get used as taxis
• Significant enquiry level for London Taxis (5-10k
  vehicles p.a.)
• Key initial target markets
• Middle East
• Egypt
• Central/Eastern Europe
• South America

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International Sales

• MoUs signed for 8,000 vehicles over three years
  with delivery starting mid 2009
• 2,000 MoUs converted to sales contracts
• Switch to firm sales contract from now on
• Order funding requirement
• European homologation
• Shanghai Motor Show
• International sales potential to exceed UK sales
  in 2009

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Group funding
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2008 Summary

• Operating loss before exceptional items and tax
  of 5.4 million (17 months ended 31 December
  2007 5.6 million profit)
• Exceptional costs of 8.1 million including 3.8
  million for the TX4 recall and non-cash
  accounting impairments of 3.2million in the US
  and 0.7 million in the UK resulting in a loss
  after tax of 12.3 million (17 months ended 31
  December 3.4m profit)
• Prototype production of the London taxi commenced
  at Shanghai LTI in June 2008
• On plan to meet aggressive component cost
  reduction targets for Chinese produced parts for
  UK production
• International marketing progressing to plan
  despite worsening market conditions.
  International vehicle sales scheduled to commence
  in second half of 2009, with a current indicative
  order book of 8,000 vehicles over the next three
  years

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IMS Update

• UK
• Government scrappage incentive scheme for
  scrapping vehicles that are at least ten years
  old includes purpose built taxi models and we
  have already registered for the scheme which
  commences on May 18th 2009
• Progress on China and International Sales
• Commercial production commenced in January 2009
  and the Shanghai built TX4 was launched at the
  Shanghai Motor Show in April 2009, following
  European homologation of the vehicle
• We have now ceased signing MoU's as vehicles are
  now ready to be built to contract. Over 2,000 of
  these vehicles signed historically under MoUs are
  now secured by firm contracts over three years

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Funding structure

• Lloyds Stocking loan - 13.0m (2007
  13.4m)
• HSBC Overdraft - 2.5m (2007 2.5m)
• Letters re funding
• Going concern
• Security pension
• Government support
• Facilities non-utilised at 31st December 2008 -
  8.4m

Balance sheet
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Equity Placing
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Equity Placing

• 10m gross new equity (c. 9.5m net )
• 9.5m firmly placed at announcement 0.5m
  available to be placed following announcement
• Placing with shareholders and new investors
• Approximately million new shares to be issued
  (c.25 of current share capital)
• Narrow discount to prevailing share price
• Prospectus/Circular to be posted on announcement
• General meeting follows two weeks later - placing
  completes on shareholder approval
• Disapplication of pre-emption rights
• Increase in share capital
• Related party transactions for placing with
  significant shareholders

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Conclusion

• Develop new Euro 5 compliant engine and meet new
  technological and environmental upgrades
• Support further business rationalisation
• Develop international sales of the London Taxi
  into new markets

A more suitable capital structure to support
future business opportunities
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Senior Team
Tim Melville-RossChairman
Mark Fryer Finance and Business Development
Director

John Russell Chief Executive
Peter Shillcock Chief Operating Officer
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Corporate Information

• Full UK listing
• FTSE Fledgling
• Current shares in issue 25 million
• Market cap c. 32 million
• Sector Industrial Engineering
• Broker Collins Stewart

• Top shareholders
• Toscafund 27.2
• Geely 22.7
• Hermes 16.1
• Lansdowne Partners 7.3

As at 19 May 2009
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The Iconic London Taxi