Building Global Leaders
Nigel Stein
Chief Executive GKN Driveline
Redburn Partners Automotive Conference – 21 June 2011
Strategic goals
Building a portfolio of market leaders with:
leading market shares in chosen segments
above market growth in each Division
margins expanding through the target ranges
technology leadership - engineering for the future
Sales by region
Sales by division
Group 2010 sales £5,429m
£2,433m
£949m
£2,431m
£699m
£1,451m
£759m
Redburn Partners Automotive Conference – 21 June 2011
£2,049m
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Competitive advantage
Global positioning
Redburn Partners Automotive Conference – 21 June 2011
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GKN Driveline
Global leader in Automotive Driveline
2010 sales by region
Unrivalled capability – Global no 1
2010 sales by customer
Geely
Other
VW
Tata
Suzuki
Hyundai Kia
Renault Nissan
Honda
PSA
Fiat Chrysler
BMW
Mitsubishi
Ford
Toyota
GM
Redburn Partners Automotive Conference – 21 June 2011
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GKN Driveline
Global Leader in driveline systems and solutions
Global supply:
CVJ sideshafts
54 million units
Propeller shafts
2.4 million units
Torque management
1.5 million units
Geared products
1.2 million units
Manufacturing footprint:
44 locations in 21 countries
Engineering centres:
R&D: Germany, North America, Japan
14 product and application centres
Employees: 20,500
Source: GKN Driveline estimates
Redburn Partners Automotive Conference – 21 June 2011
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GKN Driveline – a systems and solutions provider
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GKN Driveline sales by product segment
CVJ Systems (sideshafts)
Used on >80% of light vehicles
Global market leader with
around 42% share
AWD Systems/Transaxle Solutions
AWD/4WD is 13% of market
2010
£2.4bn
Differentials on 100% of vehicles
Broad range of products,
technology and competition
eDrive Systems
Nascent market segment
Long-term growth expected
Product development focus
Source: GKN directional estimate; 2010 sales total, 2011 budgeted segment sales.
GKN Freight Services incl. in CVJ Systems
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Global light vehicle growth
Light vehicle growth in DEVELOPING regions
100.0
25.0
80.0
Vehicles (millions)
Vehicles (millions)
90.0
70.0
60.0
50.0
40.0
30.0
20.0
CAGR
2010 - 2014
20.0
15.0
10.0
5.0
Brazil
6.6%
Russia
9.0%
China
8.7%
India
12.4%
Developing
10.0
9.0%
0.0
0.0
2007 2008 2009 2010 2011 2012 2013 2014
2007 2008 2009 2010 2011 2012 2013 2014
Light vehicle growth in DEVELOPED regions
CAGR
2010 - 2014
Developing
Developed
Global
5.4%
9.0%
4.0%
5.9%
16.0
Vehicles (millions)
RoW
18.0
14.0
CAGR
2010 - 2014
12.0
North America
7.2%
8.0
West Europe
3.1%
6.0
Japan
1.6%
4.0
South Korea
2.3%
10.0
2.0
0.0
Developed
4.0%
Source: IHS Automotive Forecast, January 2011
Redburn Partners Automotive Conference – 21 June 2011
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GKN Driveline strategy
Leading driveline
systems and solutions provider
Profitable growth at above market rates
Continued
leadership
in CVJ
Sideshafts
Fast growth
in AWD and
Trans Axle
Products
TECHNOLOGY
OPERATIONS
PEOPLE
SPEED
Redburn Partners Automotive Conference – 21 June 2011
Develop
position in
hybrid and
electric
vehicles
Build on
established
position in
China
Strategic
customer
focus
Deployment of light-weight, efficient products
Systems expertise and grow electronics, electrical capability
Evolve global footprint and optimise cost
Competitiveness leverage growth in developing markets
Delivering value through people
Accelerate growth with acquisitions and alliances
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CVJ Systems – planning to outperform
Technology leadership
All-new, high-efficiency CVJ
Sideshafts for small vehicles and
low-cost platforms
Increasing global programmes
Best global footprint
Leadership in high growth regions
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Technology leadership
countertrack™ CVJs
high efficiency and reduced fuel consumption
SX8 50° - ‘premium’: Roll-out accelerating - target 3m in 2015
SX6 47° - ‘standard’: Target first launch in 2013
Face spline – advanced wheel-hub interface
Weight, backlash and assembly advantages
Launched on some BMW models
Tailored solutions for Asia’s growth markets
TATA Nano supply growing in India
New customers for 3-wheeler vehicles in India
Developing local sideshafts for domestic vehicles in China
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Global platform support
Ford B-Segment: Fiesta, Fusion, EcoSport, Figo
Mexico
• GKN: Villagrán
• Ford: Cuatitlan
• 115,000 vehicles/yr.
Europe
• GKN: Vigo, Spain
• Ford: Cologne, Germany
• 25,000 vehicles/yr.
Brazil
• GKN: Porto Alegre
• Ford: Camacari
• 240,000 vehicles/yr.
Ford Vehicle Assembly Plant
GKN Sideshaft Manufacturing Plant
GKN Product Engineering Center / Support Location
Redburn Partners Automotive Conference – 21 June 2011
India
• GKN: Chennai
• Ford: Chennai
• 115,000 vehicles/yr.
China
• GKN: GDC, Chongqing
• Ford: CFMA, Nanjing
• 85,000 vehicles/yr.
Thailand
• GKN: Rayong
• Ford: AAT, Rayong
• 50,000 vehicles/yr.
6 regions
630,000 vehicles/year
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Leadership in key growth regions
2010 positioning
Americas
Increasingly robust position in
growing North American market
Continuing steady growth
in Brazil
China *
Asia
Well positioned in rapidly
growing China market
GKN
Source: GKN estimates
Accelerating expansion
in India
* JV brand vehicles only
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Growth in AWD systems
Complete AWD systems capability
Propshafts - leading supplier of premium solutions
Launched DTF technology on Audi A8
New business wins with Volvo, Mercedes and Nissan
Growing in China and pursuing first win in India
AWD couplings, controls and ‘disconnects’
First EMCD launches in Europe: Dacia Duster, Mini Countryman
New more efficient EMCD gen. – two wins with Japanese OEMs
Pursuing AWD ‘disconnect’ opportunities in North America
Looking to grow position in geared products
2010 started PTU assembly in Shanghai
Reviewing FDU localisation in Thailand
GKN ‘system’ supply for the Dacia Duster (Renault)
Redburn Partners Automotive Conference – 21 June 2011
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Growth in Trans Axle Solutions
Global leader in differentials for performance and mobility
Shift from passive to active limited slip differentials
Market constrained by availability of brake-based systems
Electronic lockers a big success in North America
Expanding open differential business driven by
global transmission programs and outsourcing
Production now in Japan, China, Italy and the US
New opportunities in Brazil and India
Gears from GKN Sinter Metals for some applications
c.£160m
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Growth in eDrive systems
Global escalation of customer development activity
Variety of market growth scenarios
20% to 30% of vehicles with some electric drive element by 2020
Up to 10% penetration of xEV-types (GKN targets) by 2020
eAxle for PSA HYbrid4 launching in 2011
Pursuing opportunities with four other OEMs
eTransmissions for Hybrid and Electric Vehicles
Three product families – three program wins in Japan, Europe, US
More than 20 active enquiries globally
Advanced developments and alliances
Broaden market participation
Alternative eDrive solutions
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Summary - Driveline
Key growth drivers
Outperformance of the global CVJ business
Market growth in North America, China, India and Brazil
Broadening customer and product base in AWD and Trans Axle products
New product opportunities for drivetrain electrification
China as a special market in which to grow our presence
Strong relationships with customers underpin sustainability
Bolt-on acquisitions - focus on AWD and eDrive Systems
Well positioned to outperform global markets
Targeting 2% to 3% outperformance relative to market
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Powder Metallurgy (PM)
Hoeganaes
Powder
production
Sinter Metals
Component
manufacture
220,000 tons of powder
per year
6 billion parts
per year
plenty of applications
US no 1
22% global share
World no 1
16% global share
Redburn Partners Automotive Conference – 21 June 2011
Customers
Over 3,000 customers
globally
75% automotive
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Accelerated trend towards Design for PM
Efficient transmission
Reduced emissions
Energy efficiency
Driving dynamics
Industrial
Electrification
New products and
design for PM
increase to c.40%
of sales in 2015
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Summary - Powder Metallurgy
Key growth drivers
Value of PM content per vehicle outgrowing market
Continued market growth in Europe and North America with
accelarated growth in India, Brazil and China
Increasing penetration in industrial markets
Unique parts and powder position supports rapid exploitation of
design for PM
Bolt on acquisition potential to strengthen global positioning
and new technology
Powder Metallurgy set to outperform market growth with
continued margin expansion
2 to 3% above powder metallurgy market
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GKN Aerospace
Market
Business
mix
Sector
Customer base
Redburn Partners Automotive Conference – 21 June 2011
GKN Aerospace – world class product portfolio
Composites
Metallic
structures
Engine
products
Nacelles
Canopies and
transparencies
F/A-22 Titanium
Aft Boom
Exhaust systems
Gulfstream G100/G150/
Dassault Falcon 50EX
A400M Composite
Wing Spar
A330 Trent
700 Fan
Cowl Door
Main Landing Gear
Beam Assembly
Canopies and
windshields for military
applications
Fan modules
GEnx Composite Fan Case
Fan
blades
F-135 Fan Inlet Case
F-35 JSF Titanium
Bulkhead
Redburn Partners Automotive Conference – 21 June 2011
B787 passenger
windows
Bombardier Dash 8 - 400
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GKN Aerospace – well positioned for the future
Blackhawk
*
A400M
B747-8
*
F18
F-35
V22
*
C130J
C17
HTF7000
A380
*
*
*
A350
B787
*
A330
A320
*
*
CH53-K
*
1
* Life of programme
2
3
4
5
6
7
8
Significant proportion of life of programme
(Ship set values $m)
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Summary - Aerospace
Proven track of growth and margin progression
Strong platform on existing programmes with increasing build rates
New programmes now set to ramp up production
Technology development focused on positioning for future programmes
Aero engines focus for capability development
Targeting compound sales growth of 8 to 10% for a number of years
and further margin expansion
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Land Systems
Exploiting GKN capabilities
2010 revenue:
£699m
2015 target
revenue: £1.5bn
Power
Management
(sales £190m)
High
Performance
Structures
(sales £253m)
Aftermarket
and Services
(sales £256m)
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Market leading positions
Power Take Off (PTO) Shafts
Wheels
World no1 global supplier
of agricultural power
take off shafts
World no1 global supplier
of off-highway wheels
High Speed Shafts
Attachment Systems
World no1 global
supplier of high
speed primary
drive shafts
Redburn Partners Automotive Conference – 21 June 2011
Leading European
supplier of implement
attachment systems
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Summary – Land Systems
A strong market focused growth platform in place
Key growth drivers
Leverage customer relationships to expand in existing markets
Rapid geographic expansion
Moving into new markets – industrial and renewables
Development of aftermarket capability across markets
Exploit Group technology and develop market leadership in electro mechanical
power management
Targeting organic growth 3 to 4% above global market and expanding
margin into target range
Acquisitions to build capability and secure £1.5bn revenue goal in 2015
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Summary
Strong sustainable growth from each division in excess
of market
Expansion of division margins through target ranges
Free cash flow and balance sheet strength supports growth and
progressive dividend
GKN
Delivering Sustainable Growth
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Building Global Leaders
Nigel Stein
Chief Executive GKN Driveline
Redburn Partners Automotive Conference – 21 June 2011