GKN Overview
28 February 2012
Strategic goals
Building a portfolio of market leaders with:
leading market shares in chosen segments
above market growth in each division
margin expanding through the target ranges
technology leadership – engineering for the future
2011 - Sales by region
2011 - Sales by division
Other
2%
£885m
£1,003m
Land
Systems
14%
Asia
16%
Driveline
46%
£1,481m
£2,795m
£2,232m
Americas
37%
Aerospace
24%
Powder
Met
14%
£845m
Total 2011 Sales
£6,112m
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Europe
47%
£2,877m
Global positioning
44,000 employees in over 30 countries
Note: excludes Getrag and Stromag site locations
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
GKN Driveline
From driveshaft to driveline – repositioned globally
2011 sales by region
Asia
31%
Unrivalled capability – global no 1
Europe
40%
Americas
29%
2011 sales by customer
VW
16%
Other
24%
RenaultNissan
12%
Tata Group
3%
BMW Group
4%
Mitubishi
Group
6%
Toyota Ford
Group
6% Group
8%
GM
Group
10%
Fiat
Chrysler
11%
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
GKN Driveline
Global leader in driveline systems and solutions
Global supply:
CVJ sideshafts
60 million units
Propeller shafts
3.0 million units
Torque management
2.0 million units
Geared products
1.3 million units
Manufacturing footprint:
51 locations in 23 countries
Engineering centres:
R&D: Germany, North America, Japan
14 product and application centres
Employees: 22,000
Source: GKN Driveline estimates
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Getrag Driveline Products
Getrag acquisition strategically compelling and financially sound
Complementary customer portfolio
Strong operating base and balanced global footprint
2010 sales by region (£m) – geared products
250
2010 sales by customer (£m) – geared products
200
400
150
Other
100
Ford
Land Rover
300
50
0
North America
Europe
GKN
Asia
Volvo
200
Getrag
Secures global leadership in all-wheel drive systems
and components
eDrive technology licence principally for Europe and
North America
100
GM
Mitsubishi
0
Getrag
Transaction:
Other
BMW
Fiat
Nissan
Consideration £280m
2010 revenues £380m EBITDA £50m
Completed 30 September 2011
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
GKN
GKN Driveline sales by product segment
CVJ Systems (sideshafts)
CVJ Systems
Used on >80% of light vehicles
AWD Systems
Global market leader with around 41%
share
Transaxle Solutions
eDrive Systems
AWD Systems/Trans Axle Solutions
AWD/4WD is 13% of market
Differentials on 100% of vehicles
2011
£2,795m
Broad range of products,
technology and competition
eDrive Systems
Nascent market segment
Long-term growth expected
Product development focus
Data includes proforma Getrag Driveline Products
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Global Light Vehicle Growth Forecast to Continue
Light vehicle growth in DEVELOPED regions
CAGR
2010 - 2016
5.9%
2.0%
-1.4%
0.5%
Developed
2.4%
Light vehicle growth in DEVELOPING regions
CAGR
2010-16
RoW
CAGR
2010 - 2016
5.2%
4.8%
Developing
7.5%
9.5%
7.4%
Developed
2.4%
Global
4.6%
9.5%
Developing
Source: IHS Automotive Forecast, January 2012
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
7.5%
Driveline – summary
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
Exceptionally well positioned to outperform global markets
Targeting 2% to 3% outperformance relative to market
Target margin range of 8% to 10% (2011: 7.0%; 7.1% excluding Getrag)
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Building Global Leaders – Powder Metallurgy
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 and
22% global share
World no 1
18% global share
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Customers
Over 3,000 customers
globally
75% automotive
Powder Metallurgy process
Powder Metallurgy (PM) is a highly cost effective method of producing complex,
high performance parts
Powder
manufacture
No 1 in US
Component
manufacture
No 1 in world
18% share
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Powder Metallurgy division
Total divisional sales by
region of origin
Sinter Rest of
world
7%
Hoeganaes
17%
Fiat
Chrysler
3%
GM
6%
ZF
5%
Sumitomo
7%
VW Group
2%
Fine Sinter
6%
Other
70%
Hitachi
6%
2%
2%
• Powder Metallurgy 2011 sales
£845m
Ford
8%
GKN
18%
Others
(<2%)
37%
Sinter
Americas
38%
Sinter
Europe
38%
Sinter Metals sales by
customer
Global PM Market share
2%
3%
3%
Miba
4%
Porite
5%
• Top 7 cover more than 50%
of total market
Linamar
2%
Bosch
2%
Metaldyne
5%
• Top 8 customers cover 30%
of business
• 25 % industrial customers
• Trading margin 8.5%
Hilite
2%
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
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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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Powder Metallurgy – summary
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 targets growth 2%-3% abovemarket with continued
margin expansion (2011: 8.5%; target range 9-11%)
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
GKN Aerospace
A leader in composites and lightweight structures and a substantial
part of the Group
No 1 in Europe
Sales and margin development
12%
1.6
1.4
10%
1.2
Proven competitiveness
Strategic partner
Shipset values ($m)
Major new programmes
UCAS – partnership with
Northrop Grumman
8
7
8%
1
0.8
6%
6
5
4
0.6
4%
0.4
2%
0.2
3
2
1
0
0%
2003 2004 2005 2006 2007 2008 2009 2010 2011
Sales £bn
0
Margin
Filton Acquisition Jan 2009
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
GKN Aerospace
Market
Business
mix
Sector
Customer base
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
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
B787 passenger
windows
F-35 JSF Titanium
Bulkhead
Bombardier Dash 8 - 400
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
GKN Aerospace – well positioned for the future
A320
*
A330
*
B787
*
A350
A380
HTF7000
*
*
CH53-K
*
C17
C130J
*
*
V22
F-35
F-18
*
B747-8
A400M
*
Blackhawk
0
1
2
3
4
5
6
7
Ship set values $m
* Life of Programme
Significant proportion of life of programme
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
8
Strong programme base
£m
Aerospace
A400M
JSF
1,700
B787
A350
Blackhawk
1,400
F18
1,100
B737
B777
C130J
F15
A380
A330/340
800
A320
~0
2011
2012
2013
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
2014
Changing shape of the business
Customer Sales
2011
Sales by Market
2011
Honeywell, 2%
Europe
11%
Americas
31%
Bombardier,
2%
Others, 17%
Airbus Civil,
30%
Spirit, 3%
Europe
37%
Rolls-Royce
3%
GE, 5%
Americas
21%
Boeing Military,
16%
Lockheed, 5%
Military 42%
UTC, 13%
Civil 58%
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Airbus
Military
Boeing 1%
Civil
3%
Summary - Aerospace
Proven track record 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 mid-high single digit sales growth for a number of
years and further margin expansion (2011: 11.2%; target range 11-13%)
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Land Systems long-term market trends and drivers
Growing population,
urbanization, diet
change, global warming,
changing global threats
Changing
military
environment
Scarcity of
resources, land,
water, oil
Increased
mass
transport
Renewable
energy
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Land Systems
Exploiting GKN capabilities
Customer Sales
2011: £885m
Aftermarket &
Services
27%
Market Leading
Positions
Power
Management
35%
Wheels &
Structures
38%
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Products for agriculture machinery
Clutches
PTO shafts
Wheels
Hydromech Transmission
Gearboxes
Gearbox applications
Clutch applications
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
PTO shaft applications
Land Systems
Major supplier to agricultural and construction equipment
manufacturers
Sales by market
Sales by region of origin
Sales by customer
RoW
4%
Construction
& Mining
11%
John Deere
8%
Case New
Holland
7%
Tata
6%
Agriculture
35%
Industrial
30%
Americas
22%
Caterpillar
5%
Europe
74%
Commercial
Vehicles & Cars
24%
Claas
4%
Other
60%
Agco 3%
Ford Group
2%
Daimler
Group
1%
Includes proforma Stromag
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
VW Group
2%
JCB
2%
Land Systems - summary
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 of 8-11% (2011: 7.6%; 8.0% excluding Stromag)
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
GKN summary
Well positioned to deliver sustainable growth following the
completion of significant restructuring initiatives
Delivering shareholder value through a balance of
Growth in excess of the markets
Improving margins
Return on invested capital
Additional growth through strategic, bolt-on acquisitions with the
purpose of adding capability, market position and global footprint
GKN
Delivering Sustainable Growth
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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012
Disclaimer
Cautionary Statement
This presentation contains forward looking statements which are
made in good faith based on the information available to 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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GKN OVERVIEW PRESENTATION – 28 FEBRUARY 2012