First Quarter Results 2011
Q1 2011 - three months ended 31 March 2011
Overview
Market conditions in Q1 encouraging although tragic events in
Japan had some impact on Automotive
Good growth in Automotive and Land Systems divisions
Aerospace in line
All businesses making good progress
Sales increase 14% to £1,487m (Q1 2010: £1,306m)
Trading profit up 42% to £119m (Q1 2010: £84m)
Trading margin of 8.0%, up from 6.4%
Strong cash management continues with net debt of £169m
Q1 2011 - three months ended 31 March 2011
2
Automotive (including Powder Metallurgy)
Global light vehicle production increased by 4% - strongest markets
include, India, North America, China and European premium vehicles
30
26%
20
13%
% change
10
0
-10
7% 6%
-22%
India
North America
China
Western Europe
Japan
-20
-30
GKN’s sales up 17% to £890m (Q1 2010: £760m)
Strong recovery in trading profit, up 46% to £70m (Q1 2010: £48m)
Earthquake in Japan impacted profits by £3m and some disruption
likely for a number of months in Europe and North America as a result
of component supply problems
Q1 2011 - three months ended 31 March 2011
3
Land Systems
Markets continued to improve
Solid demand for mining and construction equipment
European agricultural equipment market recovering strongly
Sales up 27% at £220m (Q1 2010: £173m) – trading profit increased to
£18m (Q1 2010: £6m), with trading margin reaching 8.2%
Aerospace
Aerospace markets continued to perform in line with expectations
Ending of certain defence programmes, civil aircraft production growing
GKN Aerospace sales flat at £352m (Q1 2010: £353m) reflecting normal
seasonal activity levels
Trading profit £32m (Q1 2010: £32m)
Q1 2011 - three months ended 31 March 2011
4
2011 - Outlook
The outlook for GKN’s major markets is mainly positive, although we
expect some short term impact from disruption in the Japanese
automotive market and from supply chain shortages to our customers
outside of Japan
Notwithstanding this, we expect GKN to continue to make good
progress. The strength of our market positions and healthy order
books give confidence in our prospects for 2011 and beyond
All four divisions are well placed to achieve a period of sustainable
growth and margin improvement
GKN
Q1 2011 - three months ended 31 March 2011
Delivering Sustainable Growth
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Financial summary
Management Basis (1)
2011 Q1 £m
2010 Q1 £m
Change (%)
2010 FY £m
Driveline
673
580
16
2,433
Powder Metallurgy
217
180
21
759
Aerospace
352
353
(0)
1,451
Land Systems
220
173
27
699
25
20
25
87
1,487
1,306
14
5,429
Driveline
50
37
35
169
Powder Metallurgy
20
11
82
54
Aerospace
32
32
0
162
Land Systems
18
6
200
37
1
1
0
3
(2)
(3)
n/a
(14)
119
84
42
411
Interest
(9)
(11)
n/a
(40)
JV interest and tax
(3)
(2)
n/a
(8)
107
71
51
363
Other Businesses
Total sales
Other Businesses
Central Costs
Total trading profit
Profit before tax
Q1 2011 - three months ended 31 March 2011
Management Basis (1) – please see press release for definition
http://www.gkn.com/media/News/Pages/Interim-Management-Statement.aspx
6