GKN Powder Metallurgy
London
Peter Oberparleiter I CEO Powder Metallurgy I 6 May 2015
Agenda
Introducing GKN Powder Metallurgy
Lead in
chosen
markets
− We have travelled a long way in ten years
Leverage
global
footprint
Sustaining our momentum
− Design for PM and geographic expansion
Technology
driving
margin
Future Growth
− Application of innovative technology
Operational
excellence
Delivering the GKN strategy
Sustain
above market
growth
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Introducing GKN Powder Metallurgy
Industry leader: Vertically integrated powder to parts capability
GKN Hoeganaes
GKN Sinter Metals
- Powder production -
- Component manufacture -
280,000 tons of
powder per year
11 million parts
produced daily
Many applications
World no.2 with
23% global share
World no. 1
18% global share
GKN POWDER METALLURGY, 6 MAY 2015
Helical PM Pulley
for Electric Steering
3
Powder metallurgy products in automotive
Transmission
Planetary Carriers
Engine
Start-Stop
21% of sales
transmission
components
Drivetrain
Differential Gears
(Forged PM)
27% of sales
engine
components
Body & Chassis
Shock Absorber
Components
Engine
Variable Valve Timing
Components
Body & Chassis
Electric Power Steering
Components
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Market split and customer base
GKN Powder Metallurgy
Customers
Sales by sector
- Diverse customer base -
Hoeganaes *
16%
Sinter
Americas
41%
3000 customers
>80% automotive
<20% industrial
Sinter Asia
8%
Top 20 customers cover
ca. 60% of sales
£165m annualized new
and replacement
business in 2014
Sinter
Europe
35%
£916m total sales in 2014
Americas and Europe relatively
balanced
Opportunities to expand in
Asia-Pacific
* Excludes intercompany sales
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Expanding global presence
EUROPE
5
8
2
USA & CANADA
2 12
4
JAPAN
CHINA
1
2
1
INDIA
1
2
BRAZIL
1
SOUTH AFRICA
1
Corporate/Sales/Engineering Centre
Manufacturing Plant Sinter M.
Manufacturing Plant Hoeganaes
7000 employees
Manufacturing in 9 countries
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1
Strong positions in powder and parts
GKN Hoeganaes
Drivers
Powder production
GKN Sinter Metals
Market dynamics
Sinter market
GKN
23%
Hoeganaes
AB
GKN
18%
Strong technology
providers preferred
Growing opportunities
for global players
Sumitomo
QMP
Hitachi
PM growth outperforms
automotive market
Fine
Sinter
Porite
Kobelco
JFE Steel
Corporation
Metaldyne
Miba
PMG
GKN is global no. 2
GKN is market leader
Top 5 powder manufactures
>80% of the market
Top 8 sinter companies
60% of the market
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2005 – 2014: Turnaround followed by growth
£1.0
30%
£0.8
billions
20%
£0.6
10%
£0.4
0%
£0.2
£0.0
-10%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Sales
Margin
Restructured and delivering
operational efficiency
Design for PM enhancing
margin
Geographic expansion
Strong growth ahead of the
market
ROIC
60%
40%
20%
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
-20%
GKN Growth
Auto Market Growth
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2005 – 2014: Turnaround followed by growth
Restructured and delivering
operational efficiency
GROWTH
4.5% CAGR
Design for PM enhancing
margin
Geographic expansion
MARGIN
Business
performance
2% to 11%
Strong growth ahead of the
market
ROIC
3% to 22%
Cash generation
£302m in 5 years
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Sustaining momentum
Expanding geographic footprint
Lead in
chosen
markets
Technology driving margin
− Automotive trends driving Design for PM
− Benefits of powder-to-part integration
Process leadership and operational excellence
Leverage
global
footprint
Technology
driving
margin
Operational
excellence
Sustain
above market
growth
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Expanding geographic footprint
Upgrading capability
Building capacity in key Asian market
USA
MEXICO
Under
consideration
Upgrading process
capability
CHINA
Digitising shopfloor
Today no. 7  2018 no. 2
Enhancing Design
for PM
Original plant moved
and expanded
INDIA
Today no. 1
Second plant onstream
Capacity in place to
increase sales 3x
current level by 2018
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Automotive trends driving Design for PM
Legislation
Energy efficiency
Renewable energy
EPS (ELECTRIC
POWER STEERING)
ALUMINIUM
CARRIER 7+
VVT
(CAM PHASING)
TRANSMISSION
GEARS
VARIABLE VANE
PUMPS
START/STOP
Light weight
Fuel efficient
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Electrification
12
Design for PM
CAGR
Product
2015-2019
Design and application of
products using the unique
characteristics of powder
metal
VVT
(Cam phasing)
4.5%
Parts which cannot be
made economically using
alternative technologies
EPS
(Electric power
steering)
4.8%
Start/Stop
17.6%
Transmissions
7+ speeds
16.5%
Key to driving margin
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Benefits of powder-to-parts integration
Selecting the right powder ensures optimum product
Technically Enhanced Powder (TEP) delivers advanced products
Sales in TEP increased by 15% in 2014
Steel & Low Alloy Powder
Powder Forge Powders
Increasing complexity
•
ANCORBOND
AncorTech Lean Alloys
AncorTech High Density
AncorTech Magnetics
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Process leadership and operational excellence
Process technology
Advanced data management
Advanced forming and
bionic tools
Continuous
improvement
Operational excellence
Programme management
Leading process
technology linked to
advanced data
management
Driven by GKN Lean
processes
Global programme
management
60
50
40
30
100% of EU
presses and
forges datalinked
20
10
0
2007 2008 2009 2010 2011 2012 2013 2014
ppm
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Innovation
Advanced powders
Additive manufacturing
Hydrogen storage
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Horizon scan
HYDROGEN STORAGE
> £5bn
GEARS
> £2bn
VVT
EPS
Start/
Stop
ADDITIVE
MANUFACTURING
> £5bn
SMC/
eMOTORS
> £1bn
PM market today
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Advanced powders
Technical qualities
give access to new
markets
•
•
•
•
Drives margin
enhancement
Automotive
Medical
Aerospace
General energy
Enhances product quality
and manufacturing
efficiency
Creates new
opportunities
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Additive manufacturing
Design freedom
increases value
ATOMIZED AND GAS
ATOMIZED POWDERS
Unique expertise in
powder, product design
and manufacturing
Aerospace likely key
market
TOPOLOGY
OPTIMIZATION
CAD FILE
PART
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Hydrogen storage
Safe and compact
storage for industrial use
HIGHLY REACTIVE & EASY
TO HANDLE MATERIAL
Partnered with McPhy
Solid state
METAL POWDER
COMPACT
Effective challenger gas
and liquid storage
HYDROGEN METAL HYDRIDE
STORAGE TANK
Gas tank
27 litre
700 bar
0 oC
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Liquid tank
14 litre
1 bar
-252oC
H2 metal hydride
12 litre
30 bar
20oC
GKN Powder Metallurgy delivering the GKN strategy
Lead in
chosen
markets
• Industry leading powder and sinter company
Leverage
global
footprint
• Expanding global footprint in Asia
Technology
driving
margin
• Design for PM
• Focus on growth product groups
Operational
excellence
• Continuous improvement
Sustain
above market
growth
• Growing faster than automotive market
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GKN Powder Metallurgy
A great business to be in
Innovative technology
Strong operations
No shortage of opportunities
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GKN Powder Metallurgy
London
Peter Oberparleiter I CEO Powder Metallurgy I 6 May 2015
Disclaimer
Cautionary statement
This presentation contains forward looking statements which are made in good faith
based on the information available at the time of its approval. It is believed that the
expectations reflected in these statements are reasonable but they may be affected
by a number of risks and uncertainties that are inherent in any forward looking
statement which could cause actual results to differ materially from those currently
anticipated. Nothing in this document should be regarded as a profits forecast.
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