GKN Aerospace Visit Filton and Western Approach Guy Stainer | 10th February 2015 GKN Aerospace Proprietary and Confidential GKN: A Tier 1 Supplier to the major OE manufacturers in Automotive, Aerospace and Land Systems markets Global engineering group Sales of £7.6 billion in 2013 (£5.6bn 9 mths to end Sept 2014, with 8.9% trading margin) GKN Aerospace A leading first tier supplier to the global aerospace industry. 48,000 people in more than 30 countries 2013 - Sales by division Land Systems (12%) £899m Other (1%) £104m Driveline (45%) £3,416m Aerospace (30%) £2,243m GKN Driveline A world leading supplier of automotive driveline systems and solutions. GKN Powder Metallurgy One of the world’s largest manufacturers of metal powder and sintered components. GKN Land Systems A leading supplier of engineered power management products, systems and services. Powder Metallurgy (12%) £932m All group financial data in this document relates to 2013 unless otherwise stated. Sales figures are presented on a management basis GKN Aerospace Proprietary and Confidential Clear strategy: five key elements Four strong divisions Creating long-term shareholder value Five strategic objectives Lead in chosen markets Growth target: Above market Growth Leverage global footprint Technology driving margin Margin Operational excellence BUSINESS PERFORMANCE Target: 20% Group target: 8-10% Cash Flow Sustain above market growth GKN Aerospace Proprietary and Confidential ROIC Increasing cash flow, EPS and dividends GKN Aerospace £2.2billion International Aerospace enterprise 32 sites, approx 12,000 people Daniele Cagnatel GKN Aerospace Aerostructures North America John Pritchard GKN Aerospace Aerostructures Europe Gavin Wesson GKN Aerospace Special Products Group Mike McCann GKN Aerospace Engine Systems GKN Aerospace Proprietary and Confidential Kevin Cummings CEO GKN Aerospace GKN Aerospace GKN Aerospace Proprietary and Confidential GKN Aerospace – World class product portfolio Aerostructures Engine structures Special products 45% of Sales 2013 50% of Sales 2013 5% of Sales 2013 Wing Fuselage Nacelle and Pylon Engine Systems and Services Engine structures Engine rotatives Transparencies and Protection Systems J-UCAS Fuselage A380 Fixed Trailing Edge B747-8 Exhaust B787 Anti-icing System A350XWB Rear Spar CH53K Aft Fuselage A400M Engine Intake V22 Fuel Tanks A330 Flap Skins B787 Floor Grid B767 Winglet HondaJet Fuselage B787 Cabin Windows B787 Inner Core Cowl Full Engine MRO and support Ariane 5 Exhaust nozzle GKN Aerospace Proprietary and Confidential F35 Canopy Market drivers bringing opportunities Drivers Requirement Solution Engine technology changes – Fuel price Noise legislation Increasing passenger travel in emerging markets Higher fuel efficiency hotter cores, lighter fans Better noise attenuation New materials –composite fans/cases, titanium replacing composites Increasing demand for aircraft Airlines renewing fleets sooner GKN Aerospace Proprietary and Confidential GKN opportunity GKN technology composite fans and cases for future large aircraft Strong position on geared turbo-fan Specialist titanium engine structures for next generation engines Winglets and future wings Light weight composite Increased new aircraft sales GKN Aerospace – well positioned for the future GKN Aerospace Proprietary and Confidential Technology – Targeted innovation Future product differentiation Future wing technologies Advanced fuselage Nacelle, pylon and exhaust Engine structures Engine rotatives Next generation composite processes Advanced metallic processes Advanced process development GKN Aerospace Proprietary and Confidential Transparencies and coatings Ice protection systems Welcome to GKN Aerospace Filton John Pritchard, CEO Aerostructures Europe GKN Aerospace Proprietary and Confidential Filton – A Century of aircraft manufacturing expertise 1910 British & Colonial Aeroplane Company founded at Filton – Bristol Boxkite first aircraft manufactured 2,000 aircraft built at Filton.: Bristol fighter, Bulldog, Blenheim, Scout, Bristol Aeroplane Company formed 1939 Factory doubles in size to become largest aircraft factory in the world Beaufighter first flight. Concrete runways installed 1945 Over 52,000 employees on payroll Brabazon Airliner first flight 1960 Britannia first flight Concorde British Aerospace – BAe 146 fuselage production, Tornado components 1980 A310 Trailing Edge A320 Wings A321 Fuselage section 2008 A330 / 340: major sub-assemblies F1-11 refurbishment GKN Aerospace Proprietary and Confidential A380 Fixed Trailing Edge GKN Aerospace Filton – What We Do Today Sales: £387m 2009 Workforce: >1,800 Programmes: Large Civil: Airbus A320 family, A330, A380, Boeing 787 Military Transport: A400M Business Jet: Dassault Falcon 5X Military Fast Jet: Joint Strike Fighter Filton Engineering Centre established Over 200 design and engineering specialists Today Additive Manufacturing Centre Horizon Project EcoHVP GKN Aerospace Proprietary and Confidential Key Capabilities Major Assembly and Integration: Wing Box Leading Edge Trailing Edge Flight control surfaces Machined Structural Components Ribs Gear ribs Pintle Fitting Advanced Systems Fuel Hydraulic Pneumatic Anti-Ice and Bleed Air GKN Aerospace Proprietary and Confidential GKN Filton – A Growing Business Investing in the Future New Customers Joint Strike Fighter Dassault Boeing Triumph Facilities > £30M capital investment since 2009 £30M projected over next 3 yrs (~70% on increasing capacity) Filton Engineering Centre established New technology investment – Linear Friction Welding & Additive Manufacture People Safety Employee engagement Education and Community support Apprenticeship programmes – supporting the site infrastructure & ensuring we are fit for the future GKN Aerospace Proprietary and Confidential GKN Additive Manufacturing What is Additive Manufacturing? Traditional machining removes material to create parts Machined from solid - high waste levels Design constrained by machine capability Additive Manufacture creates parts layer by layer – 3D printing Only uses the material you need - less waste Design no longer constrained by conventional manufacturing processes Allows design for functionality A revolutionary set of technologies – not evolutionary Phased introduction is implicitly required Secondary derivative structure before primary optimised Need to pin variables to gain acceptance Process and material are now linked like never before Big challenge to the industry in evaluation How to certify New and novel QA techniques required GKN Aerospace Proprietary and Confidential Site Tour Integrated Machining Facility A380 Fixed Trailing Edge Additive Manufacturing Centre GKN Aerospace Proprietary and Confidential Welcome to GKN Aerospace Western Approach Steve Colebrook 10th February 2015 Safety – GKN Core Value • Please stay with your host at all times • Remain within designated gangways whilst on production floor • PPE rules to be respected at all times • Keep hands-off raw material and cured carbon • No Test Fire Alarm schedule for today • Emergency Exits are clearly identified, remain with your host and follow them to the Muster point Have a Safe and Enjoyable visit 2 GKN Western Approach • £170M invested in new state-of-the-art composite wing structures manufacturing and assembly facility • Over 30,000m2 of floor space 3 Advancing GKN Capabilities on A350XWB Western Approach – GKN’s Centre of Excellence for major composite primary structure components First Advanced Fibre Placement spar manufacture – largest composite part in GKN First FTE automated moving assembly system Fully integrated product teams working closely with customer and supply chain 4 A350 Fixed Trailing Edge Design Outer Spar Mid Spar Inner Spar 3 Spars total over 27m in length with an accuracy of +/- 0.3mm Total weight of spar carbon is 1230kg/aircraft FTE assembly weighs 1800kg The FTE is 7% of total wing weight and supports 10x its own weight First “large scale” assembly operation undertaken by GKN 5 Spar Process Flow Goods In Mandrel Preparation Autoclave Cure Router Transfer to Cure Tool Advanced Fibre Placement Non Destructive Testing Paint Rib-Post Assy To Assembly 6 Assembly Process Flow Spar and Details MRS & ORS Robot Drill Load to Jig IRS 5 Axis Drill Move Bolt & Assemble Despatch Spar Integration Digital Scan Joint 7 Robotic drill & Integrate Integration Jig – Port & Stbd 8 FTE in Jig Customer 9 Wing Static Test 10 A400M Atlas 11 ATL Manufacture 12 A400M Spar Manufacture 13 A400m Stiffeners – Composite Details 14 Tour of Western Approach Visits to: Advanced Composites Centre of Excellence Automated Assembly Facility Thank you for your visit 15