Delivering the potential
Results for the year ended 31 December 2011
Nigel Stein, Chief Executive | 28 February 2012
2011 overview
GKN strategy
A year of strong growth
Sales up 13% to £6.1bn (10% underlying)
All four divisions reported at, or near, record profits
Leading in chosen markets
Management PBT up 15%
EPS up 9%; Dividend increased by 20%
Two important acquisitions completed
Stromag
Getrag Driveline Products
Good business metrics
Order wins, quality, new technology introduction
Gallatin
2
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Global footprint
Above market growth
Focussed on operational performance
GKN Driveline Accident Frequency Rate
(Number of lost time accidents per 1,000 employees)
One global safety and operational
standard
16
12
Safety is GKN’s number 1 priority
8
Group roll out for GKN Driveline’s thinkSAFE!
4
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Operational excellence is at the heart
of GKN success
Quality
GKN Driveline quality
(Parts Per Million)
25
Exacting product standards
20
Cost efficient Lean manufacturing
15
Just-in-time delivery
10
5
0
2006
2007
2008
2009
2010
We remain focussed on operational excellence as we grow
3
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
2011
GKN is growing
Strong growth over five years
Growth resumed after interruption of recession
Sales increased from £3.8bn in 2006 to £6.1bn in 2011
CAGR of 10%
Management sales, including acquisitions
7
CAGR 10%
6
5
£bn
4
3
2
1
2006
2007
2008
2009
2010
4
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
2011
Continuing growth above our markets
Estimated market
growth
GKN underlying
growth
GKN Driveline
+3%
+10%
GKN Powder Metallurgy
+3%
+13%
GKN Aerospace
+3%*
+4%
+15 to +20%
+21%
GKN Land Systems
* Weighted by GKN share of civil and military markets
2011: A year of strong growth – strategy in action
5
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Winning new business
Strong order books
GKN Driveline
− New and replacement business wins secured
in 2011 worth more than £500m in a full year
Production of a power
transfer unit (PTU) at
GKN Driveline Köping
GKN Aerospace
2010
Reported
Backlog
2011
Reported
Backlog
Airbus
3,552
4,437
Boeing
3,443
3,771
Total
6,995
8,208
− Won $3.5bn of contract extensions, new programme
wins and work scope extensions in 2011
− Civil and military work won
Reported order backlog from Airbus and Boeing
GKN Powder Metallurgy and GKN Land Systems
− Robust order replenishment in 2011
6
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
GKN Driveline highlights
Acquisition of Getrag Driveline Products
GKN world leader in all-wheel drive
AWD market growth is 1-2% above market
Market segments using proforma
Getrag Driveline Products
Transaxle & Others 7%
Broader product portfolio
AWD 31%
Global driveshaft leadership
CVJ/sideshaft 62%
Continuing expansion in emerging markets
− New plants in China and India
World leader in eDrive gearboxes
Access to Getrag electric drivetrain technology
Major customers for eTransmissions
Range Rover Evoque
7
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
GKN Powder Metallurgy highlights
Starting to deliver on division’s potential
Underlying sales grow by 13%, margin up to
8.5%1
£m
1000
Divisional sales and margin
%
8
800
Annualised sales wins exceed £100m
6
600
4
“Design for PM” gathering pace
400
One-way clutch for Mazda - unique geometry
200
Customer interest in PM is high - 48 “Tech Days”
2
0
0
-2
2006
2007
2008
Sales
2009
2010
2011
% ROS
Supply maintained throughout Gallatin shutdown
Recognition by major customers
Planetary Rotor Pump
1
10
Excluding Gallatin impact
8
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
GKN Aerospace highlights
Delivering on major civil platforms
Delivered first Airbus A350 XWB composite
wing spar set
Boeing 787 now in service
Combined 2011 Boeing and Airbus orders
2,224 aircraft
GKN shipset values
Airbus A380
$8.0m
Boeing 787
$2.6m
Airbus A350
$2.5m
HondaJet
$0.5m
HondaJet contract to build all-composite
fuselage
New 150,000ft2 plant in Orangeburg, South
Carolina, USA, to be opened in 2012
CTAL joint venture with Rolls-Royce opened
Pre-production of composite fan blades underway
Airbus A350 XWB
9
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
GKN Land Systems highlights
Strong growth
End market sales split using proforma Stromag
Underlying growth driven by agricultural and
heavy construction markets
Industrial
30%
Agriculture
35%
Building a world leader in industrial
power management
Stromag acquisition
Leading engineer of industrial power
management components
Commercial vehicles
& Cars 24%
Construction &
Mining 11%
New competencies in new industries
− Hydraulic clutches
− Electro-magnetic brakes
− Flexible couplings
Broad base for future growth
Fendt Katana 65
10
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
2011: A year of strong growth
Strong financial performance
All four divisions reported at or near record profits
Improving margins
Strong growth
Strong base for future success
11
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Delivering the potential
Results for the year ended 31 December 2011
Bill Seeger, Finance Director | 28 February 2012
Results summary
Sales
Trading profit1
Trading margin (%)1
Profit before tax
Earnings per share (p)
1
2011
£m
2010
£m
Change
£m
Change
%
6,112
5,429
683
13
487
411
76
18
8.0%
7.6%
40bpts
5
417
363
54
15
22.6p
20.7p
1.9p
9
Excluding Gallatin impact £19m
13
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Group overview
Sales by division
Sales by region
Acq'ns &
Other
4%
£847m
+21%
GKN
Land
Systems
14%
GKN
Driveline
44%
£1,003m
+6%
Asia
16%
Group
£6,112m
+13%
Group
£6,112m
+13%
GKN
Aerospace
24%
£1,481m
+2%
£2,678m
+10%
£2,877m
+18%
GKN
Powder
Metallurgy
14%
Americas
37%
£2,232m
+9%
£845m
+11%
14
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Europe
47%
Sales growth
£m
£563m
6,500
148
14
6,112
Other
2011
52
6,000
97
252
21%
4%
13%
135
5,500
5,429
10%
(15)
Organic
growth
5,000
2010
FX
Acq/Div
Driveline
Powder
Metallurgy
Aerospace
15
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Land
Systems
Trading profit* growth
£77m
£m
-
500
31
19
450
487
6
21
411
400
2
(3)
350
300
2010
FX
Acq/Div
Driveline
Powder
Metallurgy
Aerospace
* Excluding Gallatin impact
16
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Land
Systems
Other
2011
Acquisitions and portfolio changes
Acquisitions
Portfolio changes
Getrag Stromag
£m
£m
Sales
Trading profit
Trading margin (%)
Acquisition related
charges1
Reported trading
profit
1
117
38
7
4
6.0%
10.5%
(3)
(5)
4
(1)
2011
Driveline Japan JV stake sold - sales
impact £27m, profit neutral
Aerospace Engineering Services sold
- sales £15m, broadly break even
2012
Exchange with JTEKT of
manufacturing and sales companies
in Thailand
Getrag - £2m acquisition costs; £1m inventory fair value adjustment.
Stromag - £2m acquisition costs; £3m inventory fair value adjustment.
17
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Light vehicle production vs GKN Driveline sales
%
25
22%
20
14%
15
10
16%
10%
10%
6%
5
2%
2%
3%
(5)
(10)
(15)
North America
Europe
China
Market (units production)
(13)%
Japan
GKN Driveline sales
18
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Global
GKN Driveline (excluding Getrag)
Trading Performance
Sales - £m
Trading profit - £m
Margin %
Return on invested capital %
2011
2010
Sales up 10% (£245m)
2,678
2,433
All geographic regions grew
191
169
7.1%
6.9%
17.0%
16.0%
CVJ Systems up 7% underlying
Strong growth in AWD Systems - up 19%
Sales by region
£876m
+3%
Underlying
+8%
Asia
33%
Americas
28%
Europe
39%
Sales by product
£758m
+14%
£1,941m
+5%
Underlying
+7%
CVJ
Systems
72%
£1,044m
+14%
£528m
AWD +19%
Systems
20%
Other* £209m
8%
+58%
* Transaxle, eDrive
19
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
GKN Powder Metallurgy
Trading Performance
2011
2010
845
759
72
54
8.5%
7.1%
16.7%
13.2%
Sales - £m
Trading profit - £m
Margin %
Return on invested capital %
Sales up 11% (£86m); organic up 13%
Broad based growth in all regions
Sinter sales up 13%; Hoeganaes up 4%
Sales by region
£399m
+9%
£345m
+13%
Europe
41%
North
America
47%
Sales by business
£704m
+13%
Asia/SA
12%
Sinter
£101m
+16%
20
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
£141m
Hoeganaes +4%
GKN Aerospace
Trading Performance
2011
2010
Sales up 2%; organic up 4%
1,481
1,451
Sales mix: Civil 58%; Military 42%
166
162
Margin %
11.2%
11.2%
Return on invested capital %
22.7%
23.3%
Sales - £m
Trading profit - £m
Y-o-Y
∆%
Military sales declined 7% - F22 and C17
Civil/Military sales
15
10%
10
5
(5)
Civil sales grew 10% - A320/330/380
Sales by market
Military
£626m
-7%
Europe
11%
Americas
31%
Europe
37%
(1)%
(4)%
(10)
2009-2010
Military
(7)%
2010-2011
Americas
21%
Civil
21
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Civil
£855m
+10%
GKN Land Systems (excluding Stromag)
Trading Performance
Sales - £m
2011
2010
847
699
68
37
8.0%
5.3%
29.5%
15.8%
Trading profit - £m
Margin %
Return on invested capital %
Sales up 21% (£148m)
Sales growth reflects:
−
−
−
−
Strong agricultural recovery (up 30%)
Construction & mining (up 38%)
Industrial (up 24%)
Growing Power Management and Wheels
& Structures
Sales by market
£338m
+30%
£110m
+38%
£231m
Agriculture
+4%
40%
Automotive
27%
C&M
13%
Sales by business
£330m
+30%
£242m
+6%
Wheels &
Structures
Aftermarket
39%
29%
Industrial
20%
£168m
+24%
22
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Power
Management
32%
£275m
+26%
Joint Ventures1
Trading Performance
2011
2010
366
355
49
44
13.4%
12.4%
Interest and taxation
(9)
(8)
Share of post-tax earnings
40
36
Sales - £m
Trading profit - £m
Margin %
Sales up 12% underlying
Strong improvement in Asia +11%;
Europe +15%
Largest JV: Driveline China up 17%
Sales by region2
RoW
5%
£94m
+15%
£247m
+11%
Europe
26%
Asia
69%
2
1
Included in Management results
23
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Excludes GKN
JTEKT disposal
Trading margins
2011
%
2010
%
Current
Target
Range
Driveline1
7.1
6.9
8-10
Powder Metallurgy2
8.5
7.1
8-10
11.2
11.2
10-12
Land Systems1
8.0
5.3
7-10
Group2
8.0
7.6
8-10
Aerospace
1
2
Trading margin excludes acquisitions
Excludes Gallatin impact
24
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Operating cashflow
2011
£m
2010
£m
Trading profit (subsidiaries)
438
367
Depreciation and amortisation
202
203
EBITDA
640
570
Working capital
(50)
(47)
(8)
3
(31)
(55)
(281)
(190)
Pension & other
(24)
(36)
Gallatin
(19)
-
Operating cashflow
227
245
Customer advances
Restructuring
Capital expenditure (tangible and intangible)
25
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Working capital
Average working capital % of sales
12
11.1%
11.5%
9.2%
% 9
6.8%
7.5%
6
2007
2008
2010
2011*
2007
2010
2011*
Working capital – segmental basis
£276m
£286m
£315m
Average working capital % of sales
11.1%
6.8%
7.5%
8.5x
9.4x
9.4x
Average productive inventory - turns
*
2009
Excluding 2011 acquisitions
26
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Capital investment
Tangible reinvestment ratio
2011
£m
2010
£m
207
135
28
24
Total tangible capex
235
159
Depreciation
192
193
Ratio (times) (exc. A350)
1.1x
0.7x
Intangible
2011
£m
2010
£m
Expenditure
20
16
A350
26
15
Total intangible capex
46
31
Amortisation
10
10
281
190
Tangible
Expenditure
1.5
1.2x
1.2x
1.1x
1.0
0.6x
0.7x
0.5
A350
0.0
2007
2008
2009*
2010*
2011*
Capex ratio 1.1x depreciation
A350 expenditure £128m to date
−
2011 peak year £54m; £33m 2012
2012 guidance: 1.2x* depreciation
Total expenditures
* Excluding A350
27
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Free cashflow
2011
£m
2010
£m
Operating cashflow
Dividends received (joint ventures)
Interest (net)
227
35
(43)
245
23
(46)
Tax
Pension partnership distribution
Other
(38)
(23)
(11)
(33)
(1)
Free cashflow
Dividends paid to equity shareholders
147
(85)
188
(23)
Getrag & Stromag (net of cash acquired)
Currency and other
(444)
(5)
(16)
Movement in net debt
(387)
149
Net debt
(538)
(151)
28
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
UK post-employment accounting deficit
Inflation
Discount
Rate Assumption
%
%
Assets
£m
Liabilities
£m
Deficit
£m
Dec 2011
2,391
(2,663)
(272)
4.7
3.0
Dec 2010
2,364
(2,448)
(84)
5.4
3.35
£m
Cash payments (£m)
0
2011
2012
Service cost
29
29
Deficit
23
30
Total
52
59
(84)
(200)
109
(23)
(272)
Other
Net Deficit
2011
(274)
(400)
Net Deficit
2010
Change in
Discount Rate
Change in
Inflation
Assumptions
29
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Net assets
Dec 2011
£m
Dec 2010
£m
3,100
2,462
6
18
Post-employment obligations
(868)
(600)
Net debt
(538)
(151)
(76)
(42)
1,624
1,687
Net operating assets
Current and deferred tax
Derivative financial instruments
Net assets
30
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Return on invested capital
30%
Land Systems
25%
Aerospace
20%
ROIC
%
Group Target > 20% (bt)
Driveline
15%
Powder Metallurgy
Group WACC - 12% (bt)
10%
Group ROIC
5%
0%
2007
2008
2009
Trading profit
Average invested capital
ROIC (before tax)
2010
2011
2007
2011*
309
465
2,041
2,536
15.1%
18.3%
* Excludes 2011 acquisitions
31
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Tax
2011
2010
Cash tax
13%
13%
Book tax
16%
11%
Unrecognised deferred tax assets
−
£393m down £238m from 2009
Cash tax c.15%
−
Book tax c.20%
£m
700
%
35
£631m
30
600
Guidance for 2012
−
Unrecognised Deferred Tax Assets
£469m
500
25
£393m
400
20
300
15
2013-2014 trend
200
10
−
Cash tax moving towards 20%
100
5
−
Book tax moving towards 28%
0
0
2009
2010
2011
Unrecognised deferred tax assets
Cash Tax Rate
32
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Dividends
2011
2010
Interim dividend per share
2.0p
1.5p
Final dividend per share
4.0p
3.5p
Total dividend per share
6.0p
5.0p
EPS increase of 9%
Dividend per share increase 20%
EPS cover 3.8x – normalised free cash flow cover 2.1x
33
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Summary
Sales grew in excess of markets for each division
Margins and return on invested capital improved
Cashflow generation underpinned growth and our progressive
dividend
A strong year for all businesses
34
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Delivering the potential
Results for the year ended 31 December 2011
Nigel Stein, Chief Executive | 28 February 2012
Strong businesses
World leading positions
Driveshafts
All-wheel drive (AWD)
eDrive
Sinter components
Composite aero-structures
Industrial power management devices
Global reach
Europe
eTransmission
Americas
Composite fan blade
Asia
GKN Driveline
GKN Powder Metallurgy
Divisional sales
by region
GKN Aerospace
GKN Land Systems
0%
20%
40%
60%
80%
Driving for above market growth
36
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
100%
Diverse markets – common drivers
Diversity
Group 2011 sales by market sector
Geography, markets and customers
Agriculture Construction
& Mining 2%
6%
Common drivers
Manufacturing businesses focussed on
operational excellence
Large global customers
Demanding technology and quality standards
Industrial 9%
Automotive
59%
Aerospace
24%
Engineering solutions
Lightweight materials
Fuel efficiency
Electrification / electro-mechanical
Skilled and innovative engineers
Driving customer service
37
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Exploiting technology positions
Increased investment in technology
Increase from current 3% of sales
Focus on customer needs
Aim to deliver enhanced returns
Automated fibre placement machine
GKN Aerospace, UK
Technology excellence
Leadership in disconnect AWD solutions
Developing eDrive gearboxes
“Design for PM”
Composite expertise including for aero engines
Electro-mechanical capability
Chevrolet Corvette Pinion gear cut in
dry cutting machine
GKN Driveline Newton, NC USA
Using today’s GKN as the platform for the future
38
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Technology drives margins
Group margin
9
Continued margin improvement
Progress after recession
8
Reached Group target range
% 7
Increased targets for three divisions
6
5
4
3
2005
2006
2007
2008
2009
Current
target
New
target
GKN Driveline
7.1%
8-10%
No change
GKN Powder Metallurgy
8.5%
8-10%
9-11%
GKN Aerospace
11.2%
10-12%
11-13%
GKN Land Systems
8.0%
7-10%
8-11%
8-10%
Accelerated
progress
into range
Group
1
1
2011
margin
2010
2011
8.0%(1)
Excluding Gallatin impact
39
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Balanced approach to increase shareholder value
%
20
18
16
14
12
10
8
6
4
2
0
Group return on invested capital1
GKN Land Systems
Growth
2006
2007
2008
2009
2010
2011
Target for ROIC is 20%+
Business
Performance
Margins
Increasing EPS and
Dividends
1
Pre 2011 acquisitions
40
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Return on
invested
capital
Different divisional priorities
Each division faces different challenges
GKN Land Systems
GKN Land Systems
GKN Aerospace
Growth
GKN Driveline
GKN Powder Metallurgy
Business
Performance
Margins
Increasing EPS and
Dividends
41
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Return on
invested
capital
Different divisional priorities
Each division faces different challenges
GKN Land Systems
GKN Driveline
Growth
ROIC
Growth
Priority
Margin
Selective in the business
we win
GKN Driveline
Ease back on 2011
growth levels
Business
Performance
Robust on price
Focus on costs
Margins
More bought-in content
Increasing EPS and
Dividends
42
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Return on
invested
capital
Different divisional priorities
Each division faces different challenges
GKN Land Systems
GKN Powder Metallurgy
Growth
Margins
Growth
Priority
ROIC
Selective about growth
GKN Powder Metallurgy
− More design for PM
Selective where we expand
− Grow in China
Business
Performance
Margins
Increasing EPS and
Dividends
43
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Return on
invested
capital
Different divisional priorities
Each division faces different challenges
GKN Aerospace
ROIC
GKN Land Systems
GKN Aerospace
Margins
Growth
Priority
Growth
Added content
Broader componentry
− Including composites for
aero engines
Priority for acquisition
opportunities
Business
Performance
Margins
Increasing EPS and
Dividends
44
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Return on
invested
capital
Different divisional priorities
Each division faces different challenges
GKN Land Systems
GKN Land Systems
GKN Land Systems
ROIC
Margins
Growth
Priority
Growth
Reshaping around
power management
Grow into markets
beyond agriculture and
construction
Business
Performance
Margins
Increasing EPS and
Dividends
45
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Return on
invested
capital
Outlook
GKN expects 2012 to be another year of good progress
Macroeconomic environment remains uncertain
Global light vehicle production should grow 5%
− GKN Driveline and GKN Powder Metallurgy expected to show further improvement
Growth in civil aircraft production expected to more than offset reductions in
US military aircraft demand
− GKN Aerospace expected to maintain sales growth in 2012
On-going strength in European agricultural equipment and global
construction markets
− GKN Land Systems should continue to improve
Overall, the Group should make further progress with the added benefit
of a full-year contribution from the recent acquisitions
46
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Deliver GKN’s potential
Market leadership and above market growth
Excellent global footprint
Maintain diversity
Lead in operational excellence
Exploit technology to drive and sustain margins
Take balanced approach between growth, margin and ROIC
Generate long-term shareholder value
47
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Appendix
Delivering the potential
48
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Statutory income statement
Sales (subsidiaries)
Trading profit
Restructuring and impairment charges
2011
£m
2010
£m
5,746
5,084
419
367
-
(39)
Change in value of derivative and other financial instruments
(31)
12
Amortisation of non-operating intangible assets arising on
business combinations
(22)
(19)
UK Pension scheme curtailment
-
68
Gains and losses on changes in Group structure
8
(4)
374
385
Post-tax joint venture trading
40
36
Joint venture exceptional and non-trading items
(2)
(1)
Share of post-tax earnings of joint ventures
38
35
Interest (net)
(42)
(40)
Other net financing charges
(19)
(35)
Net financing costs
(61)
(75)
Profit before tax
351
345
Profit before tax – Management Basis excluding Gallatin impact
436
363
Profit before tax – Management Basis including Gallatin impact
417
363
Operating profit
49
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Trading profile*
2010
2011
H1
£m
H2
£m
FY
£m
H1
£m
H2
£m
FY
£m
2,988
3,124
6,112
2,701
2,728
5,429
1,333
1,345
2,678
1,189
1,244
2,433
Powder Metallurgy
435
410
845
378
381
759
Aerospace
723
758
1,481
734
717
1,451
Land Systems
444
403
847
359
340
699
-
155
155
-
-
-
Trading profit
247
240
487
202
209
411
Driveline
94
97
191
82
87
169
Powder Metallurgy
39
33
72
26
28
54
Aerospace
80
86
166
80
82
162
Land Systems
39
29
68
19
18
37
-
3
3
-
-
-
8.3%
7.7%
8.0%
7.5%
7.7%
7.6%
223
213
436
175
188
363
Management Basis
Sales
Driveline
Getrag and Stromag
Getrag and Stromag
Margin %
Profit before tax
* Excluding Gallatin impact
50
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Impact of currency
Translational:
Effect on:
Average Rate
2011
2010
Change
%
Sales
£m
Trading
Profit
£m
US $
1.60
1.55
3.2%
(55)
(5)
Euro
1.15
1.16
(0.9)
13
1
Real
2.68
2.72
(1.5)
4
1
Yen
128
136
(5.9)
27
2
10.37
10.47
(1.0)
2
-
(6)
(2)
(15)
(3)
Renminbi
Other
Impact (subs & JVs)
Translational impact on 2011 trading profit (including JVs):
1% move in euro = £1.2m; 1% move in US dollar = £1.5m
51
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Post-employment obligations – accounting deficit
UK
£m
Americas
£m
Europe
£m
ROW
£m
Total
£m
2,391
248
31
23
2,693
(2,663)
(469)
(383)
(46)
(3,561)
(272)
(221)
(352)
(23)
(868)
2,398
249
31
22
2,700
(2,454)
(393)
(384)
(43)
(3,274)
(56)
(144)
(353)
(21)
(574)
2,364
245
28
23
2,660
(2,448)
(399)
(369)
(44)
(3,260)
(84)
(154)
(341)
(21)
(600)
2011 Full Year
Assets
Liabilities
Net Deficit
2011 Half Year
Assets
Liabilities
Net Deficit
2010 Full Year
Assets
Liabilities
Net Deficit
52
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Proforma trading results – impact of 2011 acquisitions
Sales:
Base
Getrag
Stromag
Total Group
Trading profit:
Base (inc Gallatin £19m)
Getrag
Stromag
Acquisition related charges
Total Group
Trading margin %
ROIC
1
2
2011
as
reported
Full
year
adjustment
2011
proforma
basis1
5,957
117
38
6,112
336
81
417
5,957
453
119
6,529
465
7
4
(8)
468
7.7%
18.3%2
19
9
28
465
26
13
(8)
496
7.6%
16.2%
Assuming the acquisitions of Getrag and Stromag had been completed on 1 January 2011.
Excluding 2011 acquisitions
53
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Tax charge analysed by “Cash Tax”
Tax analysis
2011
2010
Weighted average of tax rates
31%
32%
(18)%
(19)%
“Cash Tax” rate
13%
13%
Net deferred tax and tax provision
movement
(4)%
(6)%
Tax impact of equity movements
(mainly pensions)
7%
4%
Book Tax rate
16%
11%
Impact of tax losses, utilisation of
deferred tax assets
54
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
Stable within +/-3% range
Target: 20% or below
Movement based on deferred
tax asset recognition
Contacts
Bill Seeger
Finance Director
Guy Stainer
Investor Relations
Tel +44 (0) 20 7463 2382
guy.stainer@gkn.com
55
RESULTS FOR YEAR ENDED 31 DECEMBER 2011
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.
56
RESULTS FOR YEAR ENDED 31 DECEMBER 2011