Moving ahead
Results for the year ended 31 December 2012
Nigel Stein, Chief Executive | 26 February 2013
2012 overview
Good results
Sales up 13% to £6.9bn
All four divisions reported record profits
Management PBT up 19% to £497m
EPS up 17%; Dividend increased by 20%
Strategic acquisition of Volvo Aero completed
A GP7000 engine with parts manufactured by
GKN Aerospace Engine Systems
Good organic progress in all four divisions
All-wheel drive testing rig at GKN Driveline in
Lohmar, Germany
2
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Moving forward with the strategic agenda
Acquisition of Volvo Aero
Lead in chosen markets
Integration of Getrag Driveline
Products and Stromag
Leverage global
footprint
Increasing capacity in China
Technology driving
margin
New product introductions by
all divisions
Investment in Mexico
Operational excellence
Driving Lean manufacturing
further into business
Sustain above market
growth
All four divisions ahead of their markets
3
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Moving forward with financial metrics
Growth
+6%
• Growth above markets
Margin
increased to 8.1%1
BUSINESS
PERFORMANCE
• Three divisions within target
• GKN Driveline moving
towards target
8.4% excluding Volvo Aero
restructuring and acquisition charges.
1
ROIC
18.1%2
• Target >20%
• Each division made
progress
Increasing EPS,
Cashflow & Dividends
2
4
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Excluding Volvo Aero impact.
GKN Driveline
Change (%)
2012
Headline
2011
2013 Sales by product
Organic
Sales (£m)
3,236
2,795
16
7
Trading profit (£m)
Trading margin
235
7.3%
195*
7.0%*
21
14
£1,976m
£1,260m
AWD
Systems
39%*
* Trading profit in 2011 included Getrag acquisition-related charges of £3m
2011 trading margin 7.1% excluding charges
Increased sales and trading profit
CVJ
Systems
61%
AWD systems 39% of total sales (2011: 31%)
− Getrag margins now at divisional level
− Complete AWD System sold to three customers
− SUV sales strong; more GKN content per vehicle
* includes Transaxle Systems & eDrive
Continuing CVJ business wins
− 65% win rate; maintaining strong market share of approx. 40%
Margin key focus
− Progress in 2012; restrained by Japan and India
Global expansion
− Mexico; new forge, start of £65m investment over 3 years
− China; continued growth and expansion
5
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
The All-New Range Rover
GKN Driveline markets
GKN Driveline outgrew global market
GKN and market growth rates: 2012
%
Global production up 6%; GKN growth 7%
30
− Japan still distorted by earthquake unwind
− Organic growth in N. America 25%; China 23%
25
Market (units production)
25%
20
23%
GKN Driveline sales growth
(exc Getrag)
19%
18%
15
Europe: GKN outperformed a tough market
− 40%+ of Europe sales to premium brands
Europe and Japan forecast to be weak in 2013
and beyond
− Action to reduce costs underway in Europe and Japan
− c£20m charged to trading profit in Automotive
businesses predominantly in Q1
Expect good progress in rest of the world
10
7%
6%
5%
7%
6% 7%
5
1%
(1)%
(5)
(5)%
-5%
(10)
North
America
Europe
China
Japan
Brazil
India
Global
Source: IHS Automotive
Expected production changes in 2013*
(*External forecasts)
China
9%
India
8%
North America
3%
Brazil
3%
Europe
-3%
Japan
-12%
Global
2%
6
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
GKN Powder Metallurgy
Change (%)
2012
Sales (£m)
Trading profit (£m)
Trading margin
2011
Headline
Organic
874
845
3
7
87
10.0%
72
8.5%
21
26
Organic growth, margin increase
Double-digit margin for full year
3D measuring at GKN Sinter Metals
Leading technology; best footprint
− £120m new business awarded.
− ‘Design for PM’ maintains order momentum
− Won customer and industry awards
GKN Powder Metallurgy sales by origin
Targeting growth in North America and China
− N. America; Increasing business with Asian manufacturers
− China; new GKN Sinter plant now being built in Yizheng
Hoeganaes recovered well from 2011
7
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Asia
Pacific
9%
Europe
37%
Americas
54%
GKN Aerospace
Change (%)
2012*
Sales (£m)
Trading profit (£m)
Trading margin
2011
Headline
GKN Aerospace organic sales
growth 2012
Organic
1,584
1,481
7
8
177
166
2
6
11.2%
11.2%
* Excluding Volvo Aero impact.
%
Military
Commercial
20
15
15%
10
5
Strong organic growth - driven by commercial
Commercial sales up 15%; Military down 2%
− Driven particularly by higher sales in A320, A330 and B787
− Commercial increasing to >70% of sales in 2013
− Airbus and Boeing healthy order books
Composite aero-structures facilities opened in US and Mexico
(5)
(2)%
GKN Aerospace 2013 sales by market
(includes full year of Volvo Aero)
Benefits when A350 XWB moves to rate production
Military
<30%
− Start up costs of £11m in 2012; slightly less in 2013
Contract wins of $1.4bn
− Multiyear contract extension for UH-60 Blackhawk helicopter
− Additional B787 work: floor sections, wing ribs, seat tracks
− Transfer of Airbus supply chain contract in 2013; £100m sales
8
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Commercial
>70%
GKN Aerospace Engine Systems overview
Volvo Aero acquired; GKN Aerospace Engine
Systems created
Excellent strategic fit
− Creates a market leader in engine components
− Complementary technology
− Strengthens OEM relationships
Integration proceeding to plan
− Programme to drive operational improvements is on track
− Headcount reduction of 360 on schedule
− Plans to leverage GKN purchasing well underway
Mounting a TFE731 overhaul engine
2012 Q4 performance met expectations
− On schedule to meet guidance for 2013 sales and trading
margins in range (11-13%)
Inspection of a spool for an aircraft engine
9
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
GKN Land Systems
Change (%)
2012
Sales (£m)
Trading profit (£m)
Trading margin
2011
Headline
Organic
933
885
5
1
88
67*
31
23
9.4%
7.6%*
* Stromag trading profit in 2011 included acquisition-related charges of £5 million
2011 trading margin 8.1% excluding charges
Good financial performance
23% increase in profit on flat sales; margin up to 9.4%
Continuous flow production at
GKN Land Systems, Rockford, USA
− Mixed markets: agricultural steady; construction weak; Europe
industrial depressed
GKN Land Systems
Sales by origin 2012
Expansion in China and North America
− China; Liuzhou, investment adding agriculture product line and
centre for mining wheels
− N. America; focusing to increase Stromag sales in US market
Asia
Pacific
3%
Americas
23%
Focus on power management in niche markets
− Specialist technology meeting customer needs
− Design and manufacture of the drivetrain for Claas harvesters
− Double Clutch and Synchronizer for new Cummins Gearbox
10
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Europe
74%
Moving ahead
Results for the year ended 31 December 2012
Bill Seeger, Finance Director | 26 February 2013
Results summary
2012
£m
2011 Change
£m
£m
6,904
6,112
792
13.0
6% organic growth
Trading profit
557
468
89
19.0
£15m Volvo Aero
trading profit1
Trading margin (%)
8.1
7.7
40 bps
Profit before tax
497
417
80
19.2
Earnings per share (p)
26.5
22.6
3.9
17.3
Sales
1
Change
%
8.4% margin
pre Volvo Aero
Before £22m restructuring and other acquisition related charges
12
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
EPS up 17%
Group sales overview
Sales by division
Sales growth
£m
7,000
111
6,904
6
57
(16)
187
1%
8%
7%
580
7%
Organic
growth 6%
6,112
6,000
(133)
13
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
2012
Other
Land
Systems
5,500
Aerospace
£874m
Getrag
£339m
Stromag
£72m
Volvo Aero £191m
Powder
Metallurgy
GKN
Powder
Metallurgy
13%
Driveline
£1,775m
Group
£6,904m
+13%
6,500
Acq/Div
GKN
Aerospace
26%
£3,236m
GKN
Driveline
47%
FX
Volvo
Aero
£191m
GKN
Land
Systems
13%
2011
£933m
Group overview – geographical sales mix
Sales £6.9bn
Europe
Americas
Asia
47%
Group
Driveline
37%
Powder
Metallurgy
37%
38%
34%
29%
54%
54%
Aerospace
0%
20%
9%
46%
74%
Land Systems
15%
40%
23%
60%
14
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
80%
3%
100%
Trading profit growth
£m
600
Getrag
Stromag
Volvo Aero
550
Volvo Acq
£61m
£21m
£9m
£15m
£45m
£(22)m
17
557
Other/
Gallatin
2012
10
10
18
23
500
23
468
450
(12)
400
2011
FX
Acq/Div
Driveline
Powder
Metallurgy
Aerospace
15
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Land
Systems
Margin and return
Margin
ROIC
1
2012
%
2011
%
2012
%
7.3
7.1
16.0
14.7
Powder Metallurgy
10.0
8.5
19.8
16.7
Aerospace 1
11.2
11.2
23.0
22.7
Land Systems
9.4
8.1
21.3
17.9
Group
8.1
7.7
18.1
16.2
Driveline
IN THEIR TARGET RANGE
(1) Excludes Volvo Aero (2) 2011 ROIC pro forma for 2011 acquisitions
Note: 2011 Driveline and Land Systems margins exclude acquisition fees
16
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
2011
%
2
Return on invested capital
ROIC%
before tax
20%
Group Target > 20%
18.1%
16.2%
15%
Trading Profit
Group ROIC
Av. Invested Capital
Group WACC - 12%
ROIC %
10%
5%
2007
2008
2009
2010
2011
2012
(1) Excludes Volvo Aero (2) 2011 ROIC pro forma for 2011 acquisitions
17
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
2012
£m
2011
£m
564
496
3,113
3,055
18.1%
1
16.2%
2
Volvo Aero
Acquisition enterprise value
Q4 Trading
£m
Consideration cash paid (net)
446
Working capital refinancing
85
Pension buy-out
54
Est. completion payment
62
Working capital refinancing and
pension buy-out complete
Final completion payment being
negotiated
Provisional goodwill arising on the
acquisition £38m
£m
Sales
191
Trading Profit
Margin
Restructuring
15
7.9%
(19)
Acquisition related charges (net)
(3)
Reported trading profit
(7)
Margin 7.9% Q4 2012
Restructuring accelerated to deliver
2013 savings
Expected 11-13% 2013 margin
18
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Operating cash flow
GKN
Base
£m
Volvo
Aero
£m
2012
£m
2011
£m
Trading profit (subs)
515
(7)
508
419
Deprec’n & amort’n
227
8
235
202
EBITDA
742 (+19%)
1
743
621
Working capital
(72)
36
(36)
(58)
(319)
(15)
(334)
(281)
Other flows
(27)
-
(27)
(55)
Operating cash flow
324
22
346
227
Working capital refinancing
-
(85)
(85)
-
Pension buy-out
-
(54)
(54)
-
324
(117)
207
227
Capital expenditure
19
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Free cash flow
GKN
Base
£m
Volvo
Aero
£m
2012
£m
2011
£m
324
(117)
207
227
41
-
41
35
Interest (net)
(58)
(10)
(68)
(43)
Tax
(62)
-
(62)
(38)
Pension partnership
(30)
-
(30)
(23)
(2)
-
(2)
(11)
213
(127)
86
147
(101)
-
(101)
(85)
-
137
137
-
(2)
(446)
(448)
(444)
(14)
7
(7)
(5)
96
(429)
(333)
(387)
(871)
(538)
Operating cash flow
Dividends received (JVs)
Other
Free cash flow
Dividends
Share placement (net)
Acquisitions
Currency and other
Movement in net debt
Net debt
20
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Capital investment
Tangible reinvestment ratio
2012
£m
2011
£m
267
207
4
28
Total tangible capex
271
235
Depreciation
218
192
Ratio (times)
1.2x
1.1x
Intangible
2012
£m
2011
£m
Expenditure
42
20
A350
21
26
A350 expenditure £153m to date
Total intangible capex
63
46
2013 guidance
Amortisation
17
10
334
281
Tangible
1.5x
1.2x
1.1x
1.2x
A350
1.0x
0.6x
Expenditure
0.7x
0.5x
0.0x
2008
2009*
2010*
2011*
2012
Capex ratio 1.2x depreciation
−
1.2x depreciation for tangible capex
−
Intangible spend c.£60m
Total expenditure
* Excluding A350
21
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Pension actions
UK scheme separated to focus on investment and de-risking
UK inflation hedging
Aerospace St. Louis (US) transfer to multi-employer scheme
Buy-out of Volvo Aero historical pension liability
UK triennial valuation begins in April 2013
Pension partnership review
22
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Group post-employment accounting deficit
Assets
£m
Liabilities
£m
Deficit
£m
Dec 2012
2,759
(3,737)
(978)
Dec 2011
2,693
(3,561)
(868)
£m
(200)
2011
Service cost
44
38
Unfunded scheme
payments
16
16
8
13
Partnership distribution
30
23
Total*
98
90
Incremental payments
Unfunded up £129m
(600)
(403)
(532)
(800)
121
(868)
35
22
(978)
(1,200)
2012
(446)
(465)
(400)
(1,000)
2012 DB cash payments (£m)
(288)
* Excludes Volvo Aero buy-out
(1,400)
Net Deficit Assumption Asset outUS
Dec 2011
changes performance Curtailment
Funded
Currency
and
other
Net Deficit
Dec 2012
Unfunded
23
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Interest and financing
700
2012
£m
2011
£m
Maturity profile
600
500
Net interest payable
(52)
(42)
Other net financing charges
(26)
(19)
400
300
200
Net financing costs
(78)
(61)
100
£m 0
2013
Increased net interest payable driven by
acquisitions
−
Net interest guidance 2013 c.£80m
Other net financing charges
−
IAS19 change; increase 2012 by c.£20m
−
Partnership structure change – potential 2013
increase by c.£14m
2014
EIB
2015
RCF 2016
2016
2017
RCF 2017
2018
2019
Bond 2019
2020
Bond 2022
Volvo Aero financing
−
£140m equity placing
−
£450m 10 year bond
2013 RCF refinanced
Next required funding 2016
24
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
2021
2022
Tax update
2012
2011
Cash tax
12%
13%
Book tax
16%
16%
Unrecognised deferred tax assets
−
−
£204m: down £189m in 2012
Balance focused in UK and US
Unrecognised Deferred Tax Assets
%
£m
700
35
£631m
600
Guidance for 2013
500
−
Cash tax rate c.17%
400
−
Book tax rate c.20%
30
£469m
25
£393m
300
20
£204m
15
200
10
100
5
0
0
2009
2010
2011
2012
Unrecognised deferred tax assets
Cash tax rate
25
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Dividends
2012
2011
Interim dividend per share
2.4p
2.0p
Final dividend per share
4.8p
4.0p
Total dividend per share
7.2p
6.0p
EPS increase of 17% - dividend up 20%
FCF pay-out (pre Volvo Aero) 55%
Progressive dividend policy driven by:
−
−
EPS growth
FCF generation
26
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Summary
Sales growth above market
Margins and return on invested capital improved
Cash generation increased
Dividend increase reflects performance
Overall a year of very good progress
27
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Moving ahead
Strategy and outlook for 2013
Nigel Stein, Chief Executive | 26 February 2013
Growing markets, strong capabilities and clear strategy
Growing
markets
Strong
capabilities
•
80m+ light vehicles per
annum and growing
• Relationships with global
customers
•
c30,000 large commercial
aircraft in next 20 years
• Focused technology
•
• Operational excellence
Rising demand for
efficient power
management
Lead in chosen
markets
Leverage global
footprint
Technology driving
margin
Operational
excellence
Sustain above
market growth
29
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Lead in chosen
markets
All-wheel drive systems
+
GKN Aerospace
Composite aero structures
Engine systems
+
GKN Land Systems
GKN Driveline
CVJ driveshafts
GKN Powder Metallurgy
Market leadership
Sintered metal components
Powder metal
+
Power management
(agriculture, mining,
construction, industrial)
30
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
+
Leverage global
footprint
Investing in growth markets
Ensuring we are located to serve customers in high
growth regions
Strong automotive positions in Brazil, India, China and
North America
Aerospace strong in support of its customers
GKN Chinese employees, inc. JVs
6,000
5,000
4,000
3,000
China expansion continues
2,000
5,500 employees in 2012
1,000
Two GKN Driveline facility extensions
New GKN Powder Metallurgy plant in Yizheng
under construction
2008
2009
GKN Land Systems investing in Liuzhou
Building from Driveline’s strong position in China
−
−
−
−
Driveline: 7 manufacturing sites
Land Systems: 2 manufacturing sites
Powder Metallurgy: 2 sites and one under construction
Aerospace: MOU signed
31
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
CHINA
2010
2011
2012
GKN Aerospace
GKN Powder
Metallurgy
GKN Driveline
Continuing technology development
GKN Driveline VL3
− Lighter (up to 3.8kg per car set) ,
− packaging space reduction (9%)
− Higher power transfer and efficiency
Integrated carrier housing and
one-way clutch assembly
+
− Weight savings and reduced complexity
− Improved transmission through the
ability to handle higher torque loads
Composite manufacture
− Carbon fibre composite wing
+
spars manufactured
to extreme
tolerances
32
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Technology
driving margin
BEST IN CLASS CUTS WEIGHT AND
REDUCES SIZE
ONE OF THE MOST
COMPLEX DESIGN
FOR PM
COMPONENTS MADE
COMPOSITE
LEADERSHIP –
CUTS WEIGHT IN
AERO-STRUCTURES
GKN Land Systems
GKN Driveline
GKN Aerospace
Strong technology from acquisitions
Intermediate Compressor
Case
+
− Featuring advanced additive
manufacturing technology
All-wheel drive disconnect
− More efficiently disconnects AWD
components +from the drivetrain
− Benefit of AWD with efficiency of
two wheel drive
Technology
driving margin
DEVELOPED AND
MANUFACTURED BY
VOLVO AERO
GETRAG DRIVELINE
PRODUCTS
COMPLEMENTED
EXISTING TECHNOLOGY
Double clutch
− Oil and gas industry’s first double
clutch technology
for industrial
+
gearboxes
− Transfers high torque in a
compact design
33
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
DEVELOPED AND
MANUFACTURED BY
STROMAG
Operational
excellence
Driving operational excellence
Lean enterprise
In 2012, some 60% of the Group’s turnover was generated
through structured Lean value streams
Provides improved quality performance benefits in better
efficiency, lead time and inventory reduction
Supply chain management
Group expertise is optimising our supply chain
GKN employee operating the computer-controlled
press at GKN Driveline, Trier, Germany
Safety
4
3.5
3
2.5
2
1.5
1
0.5
0
2012 accident frequency rate
January
February
March
April
May
June
July
August
September
October
November
December
Group-wide introduction of
employee programme and
auditing regime helped to
improve performance
A safety briefing taking place at GKN Aerospace’s
Western Approach facility in the UK
34
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Summary
Consistent global approach
Delivering results
Confidence for the long term
35
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Outlook
GKN expects to make good progress in 2013
− Benefiting from the full year contribution of Volvo Aero
GKN Driveline and GKN Powder Metallurgy expected to show some further improvement
− Q1 impacted by lower market demand in Europe and restructuring charges of around £20m
GKN Aerospace: Volvo Aero expected to meet guidance for first year sales and margins
− Growth in commercial expected to broadly offset military slowdown and transfer of UK supply contract
GKN Land Systems expected to be flat
Expecting 2013 to be a year of good progress for GKN
36
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Appendix
37
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Statutory income statement (including Volvo Aero)
2012
£m
2011
£m
6,510
5,746
Trading profit
508
419
Change in value of derivative and other financial instruments
126
(31)
Amortisation of non-operating intangible assets arising on
business combinations
(37)
(22)
5
8
(37)
-
63
-
628
374
Post-tax joint venture trading
41
40
Joint venture exceptional and non-trading items
(3)
(2)
Share of post-tax earnings of joint ventures
38
38
Interest (net)
(52)
(42)
Other net financing charges
(26)
(19)
Net financing costs
(78)
(61)
Profit before tax
588
351
Sales (subsidiaries)
Gains and losses on changes in Group structure
Reversal of inventory fair value adjustment
Pension scheme curtailment
Operating profit
38
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Trading profile
Management Basis
H1
H2
FY
H1
H2
FY
3,459
3,445
6,904
2,988
3,124
6,112
1,664
1,572
3,236
1,333
1,462
2,795
Powder Metallurgy
465
409
874
435
410
845
Aerospace
770
814
1,584
723
758
1,481
Volvo Aero
-
191
191
-
-
-
512
421
933
444
441
885
Trading profit
293
264
557
224
244
468
Driveline1
121
114
235
94
104
198
Powder Metallurgy
47
40
87
39
33
72
Aerospace
86
91
177
80
86
166
-
15
15
-
-
-
Volvo Aero: charges
(4)
(18)
(22)
-
-
-
Land Systems1
52
36
88
39
33
72
8.5%
7.7%
8.1%
7.5%
7.8%
7.7%
266
231
497
200
217
417
£m
Sales
Driveline
Land Systems
Volvo Aero: trading
Margin
Profit before tax
1
2011
2012
2011 trading profit excludes acquisition related charges (Driveline £3m, Land Systems £5m)
39
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Impact of translational currency
Effect on 2012
Average Rate
Change
Sales
Trading
Profit
2012
2011
%
£m
£m
US $
1.58
1.60
(1.3)
24
2
Euro
1.23
1.15
7.0
(114)
(9)
Real
3.09
2.68
15.3
(33)
(3)
Yen
126
128
(1.6)
6
-
Renminbi
9.99
10.37
(3.7)
11
2
Rupee
84.6
74.7
13.3
(17)
(2)
(10)
(2)
(133)
(12)
Other
Impact (subs & JVs)
Translational impact on 2012 trading profit (including JVs):
1% move in euro = £1.3m; 1% move in US dollar = £2.4m
40
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
GKN Driveline
Trading Performance
2012
2011
Sales - £m
3,236
2,795
235
198
-
(3)
235
195
Trading margin
7.3%
7.1%
Reported margin
7.3%
7.0%
16.0%
14.7%
Trading profit - £m
Acquisition charges - £m
Reported trading profit - £m
ROIC
1
Sales up 16% (£441m); organic growth
7%
Broad based market outperformance
Broadening product mix; AWD 39%
Getrag margins around division level
1
Includes pro forma adjustment for Getrag
Sales by region
£925m
+6%
Asia
29%
Americas
34%
Sales by product
£1,115m
+19%
£1,260m
+8%
AWD
Systems2
39%
Europe
37%
£1,976m
+6%
CVJ
Systems
61%
£1,196m
-1%
2
Growth rates presented at constant currency
41
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
Includes AWD Systems, Transaxle and eDrive
GKN Powder Metallurgy
Trading Performance
2012
2011
874
845
87
72
Sales - £m
Trading profit - £m
Margin
10.0%
8.5%
ROIC
19.8%
16.7%
Sales up 3% (£29m); organic growth 7%
Strong North American automotive
markets
Margin increased to double digits
ROIC progression reflects improved
profitability
Sales by region
£108m
+19%
Sales by product
£149m
+6%
Asia/SA
13%
Hoeganaes
17%
£441m
+9%
£325m
+1%
Europe
37%
North
America
50%
£88m
+2%
Industrial
10%
Automotive
73%
Growth rates presented at constant currency
42
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
£637m
+7%
GKN Aerospace (excluding Volvo Aero)
Trading Performance
2012
2011
Sales - £m
1,584
1,481
177
166
Trading profit - £m
Margin
11.2%
11.2%
ROIC
23.0%
22.7%
Commercial programme sales growth
Sales up 7% (£103m), organic growth
8%
Commercial sales grew 15%
Lower Military programme production
rates
Sales by market & origin
35
Military
£614m
-2%
30
25
20
Europe
Americas 12%
27%
15
10
Americas
24%
5
0
£m
B777
B787
A320
A330
Europe
37%
Commercial
£970m
+15%
A380
Growth rates presented at constant currency
43
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
GKN Land Systems
Trading Performance
2012
2011
933
885
88
72
-
(5)
88
67
Trading margin
9.4%
8.1%
Reported margin
9.4%
7.6%
21.3%
17.9%
Sales - £m
Trading profit - £m
Acquisition charges - £m
Reported trading profit - £m
ROIC
1
Sales up 5% (£48m); organic growth 1%
Agriculture sales growth 9%
Industrial sales partially impacted by
military contract reductions
Pricing actions and productivity
improvements drive margin progression
1
Includes pro forma adjustment for Stromag
Sales by market
£107m
-11%
£250m
-7%1
Sales by business
C&M
11%
Industrial
27%
£219m
-4%
Agriculture
39%
£333m
+2%
Automotive
23%
Growth rates presented at constant currency
£366m
+9%
PSS*
23%
Power
Management
41%
£381m
+2%
Wheels &
Structures
36%
£210m
-5%
44
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012
* Powertrain Systems & Services
Post-employment obligations: accounting deficit
UK
£m
Americas
£m
Europe
£m
ROW
£m
Total
£m
2,522
181
36
20
2,759
(2,846)
(282)
(39)
(38)
(3,205)
(324)
(101)
(3)
(18)
(446)
(17)
(62)
(451)
(2)
(532)
(341)
(163)
(454)
(20)
(978)
(259)
(182)
(1)
(23)
(465)
(13)
(39)
(351)
-
(403)
(272)
(221)
(352)
(23)
(868)
2012 Full Year
Assets
Funded Liabilities
Funded Deficit
Unfunded Liabilities
Net Deficit
2011 Full Year
Funded Deficit
Unfunded Liabilities
Net Deficit
45
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012