Cobham Regulatory News (COB)

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27 April 2017

Cobham plc

First Quarter Trading Update

Cobham plc ("Cobham" or "the Group") today issues a trading update covering the period from 1 January 2017 to 31 March 2017. This statement is issued ahead of Cobham's 2017 Annual General Meeting to be held today.

Progress to date

The Group's trading performance in the first quarter of the year was in line with the Board's expectations, albeit Q1 has over time become a relatively small proportion of the overall results for the year, given the historic trading bias towards June and December. As previously announced, Cobham is in the early stages of enhancing operational and financial discipline, prioritising control and execution, customer focus, leadership and simplification. The Group has also commenced its review of the breadth and shape of its portfolio and expects to provide an update to the market in its interim results expected to be published on 3 August 2017.

Balance sheet

Cobham is currently progressing its previously announced 2 for 5 fully underwritten rights issue, which is expected to raise gross proceeds of approximately £512.4m. This will deliver a strengthened balance sheet to support the operations of the Group. The Group expects to announce the results of the rights issue and the commencement of trading in the fully paid new ordinary shares on 5 May 2017. Completion of the rights issue is expected to be a significant step towards the Group's target net debt/EBITDA ratio of approximately 1.5x.

Outlook

Overall, the Board's expectations for Group performance this financial year remain unchanged and it reaffirms the previous guidance for 2017 as set out in the Preliminary Results published on 2 March 2017 and the Rights Issue Prospectus dated 28 March 2017.

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Enquiries:

Notes:

1. The Group includes within its published financial statements non-GAAP measures including underlying operating profit and underlying earnings results. The non-GAAP measures used do not include the impact of items which are not considered to reflect the day to day operating results of the Group. Underlying measures are therefore considered to provide a more comparable view year-on-year, having removed the distorting effects of the excluded items which are more clearly understood when presented separately.

Underlying operating profit has been defined as operating profit from continuing operations excluding the impacts of business acquisition and divestment related activity and business restructuring costs as detailed below. Also excluded are changes in the marking to market of non-hedge accounted derivative financial instruments, gains and losses arising on dividend related foreign exchange contracts and other items deemed by the Directors to be of an exceptional, non-operating nature including impairment of intangible assets.

Business acquisition and divestment related items excluded from underlying operating profit and underlying earnings include the amortisation of intangible assets recognised on business combinations, gains or losses arising on business divestments, adjustments to businesses held for sale, the writing off of the pre-acquisition profit element of inventory written up on acquisition and other direct costs associated with business combinations and terminated divestments. Non-underlying business restructuring costs relate to the restructuring of the Group's portfolio, which are incremental to normal operations. Where restructuring costs are incurred as a result of the ongoing execution of Group strategy, such costs are included within administrative expenses and are not excluded from underlying results.

In 2016 additional exceptional items were excluded from underlying operating profit and underlying earnings due to their unusual size and incidence. These arose out of the January 2017 Balance Sheet review and include revisions to the carrying value of assets, additional contract loss provisions and legal and other provisions.

2. This document contains 'forward-looking statements' with respect to the financial condition, results of operations and business of Cobham and to certain of Cobham's plans and objectives with respect to these items.

Forward-looking statements are sometimes but not always identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'targets', 'goal', or 'estimates'. By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or will occur in the future.

There are various factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies, political situations and markets in which the Group operates; changes in government priorities due to programme reviews or revisions to strategic objectives; changes in the regulatory or competition frameworks in which the Group operates; the impact of legal or other proceedings against or which affect the Group; changes to or delays in programmes in which the Group is involved; the completion of acquisitions and divestitures and changes in commodity prices, inflation or exchange rates.

All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to Cobham or any other member of the Group or persons acting on their behalf, are expressly qualified in their entirety by the factors referred to above. Cobham does not intend to update these forward-looking statements.

3. Cobham is a leading global technology and services innovator, respected for providing solutions to the most challenging problems, from deep space to the depths of the ocean. We employ around 11,000 people primarily in the USA; UK and Europe and Australia. We have customers and partners in over 100 countries, with market leading positions in: wireless, audio, video and data communications, including satellite communications; defence electronics; air-to-air refuelling; aviation services; life support and mission equipment.

Cautionary Statements

This announcement is not a prospectus and not an offer of securities for sale in any jurisdiction, including in or into the United States, Australia, Canada, Dubai International Financial Centre, Guernsey, Japan, Jersey, New Zealand, Singapore, Switzerland, South Africa or any jurisdiction where the availability of the rights issue (and any other transactions contemplated in relation to it) would breach any applicable laws or regulations (each an "Excluded Territory").

Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer of securities or commitment to make an offer whatsoever in any jurisdiction. Any offer to acquire shares pursuant to the rights issue will be made, and any investor should make his or her investment decision solely on the basis of the information that is contained in the rights issue prospectus (the "Prospectus") dated 28 March 2017 in connection with, among other things, the admission of ordinary shares of the Company ("Ordinary Shares") to the Official List of the UK Listing Authority and to trading on the main market for listed securities of London Stock Exchange plc. Copies of the Prospectus are available from Cobham plc, Brook Road, Wimborne, Dorset BH21 2BJ and on Cobham's website at www.cobhaminvestors.com. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

This announcement does not constitute or form part of, and should not be construed as, any offer, invitation, solicitation or recommendation to purchase, sell or subscribe for any securities in any jurisdiction and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with, or act as an inducement to enter into, any investment activity. Any purchase of Ordinary Shares in the rights issue should be made solely on the basis of the information contained in the Prospectus. The information in this announcement is subject to change. This announcement is for information and background purposes only and does not purport to be full or complete.

This announcement is not and does not contain an offer of securities for sale or a solicitation of an offer to purchase or subscribe for securities in the United States or any other Excluded Territory, or any other state or jurisdiction in which such release, publication or distribution would be unlawful. The securities to which this announcement relates (the "Securities") have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States unless registered under the Securities Act or pursuant to an exemption from, or a transaction not subject to, registration under the Securities Act. There will be no public offer of the Securities in the United States or any other jurisdiction. Subject to certain exceptions, the Securities may not be offered or sold in any other Excluded Territory or to, or for the account or benefit of, any national, resident or citizen of such countries. The distribution of this announcement and the offering of Securities in certain jurisdictions may be restricted by law. No action has been taken by the Company that would permit an offering of such Securities or possession or distribution of this announcement or any other offering or publicity material relating to such Securities in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company to inform themselves about, and to observe, such restrictions.

No statement in this announcement is intended as a profit forecast and no statement in this announcement should be interpreted to mean that underlying operating profit for the current or future financials years would necessarily be above a minimum level, or match or exceed the historical published operating profit or set a minimum level of operating profit.

The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.