NEWS RELEASE
GKN plc
Interim Management Statement
18 April 2012
GKN plc, the global engineering business that serves the automotive, aerospace and land systems
markets, today issues the following Interim Management Statement covering the period since
1 January 2012.
Overview
Market conditions in the first quarter have been consistent with expectations at the time of our 28
February 2012 statement, with global light vehicle production up 4%, civil aerospace improving and
further growth in the agricultural and construction/mining markets.
Management basis
Sales
Trading profit
Trading margin (%)
Profit before tax
(1)
2012
Q1
£m
2011
Q1
£m
Change
(%)
1,742
1,487
17
142
119
19
8.2%
8.0%
0.2pts
125
107
17
GKN has continued to make good progress with sales for the three months ended 31 March 2012
totalling £1,742 million, a 17% increase over the comparable period in 2011, or an 8% increase on
an underlying basis. The increase in sales from acquisitions less divestments was £143 million.
Helped by a strong performance from both the 2011 acquisitions, trading profit increased to £142
million, representing a 19% increase, with a margin of 8.2%. Margin improvement was achieved in
all four divisions. Profit before taxation was £125 million, up 17% over the comparable period in
2011.
Net debt at 31 March 2012 was £625 million (31 December 2011: £538 million), reflecting the
previously announced higher capital expenditure to support growth in the business and the
expected seasonal increase in working capital.
Outlook
Overall, the outlook for GKN’s markets remains in line with our February statement.
Summary
Nigel Stein, Chief Executive, GKN plc, commented:
"GKN has made an excellent start to the year with sales up 17% and margin improvement in all
four divisions. Last year’s acquisitions, Getrag Driveline Products and Stromag, have been
successfully integrated and both made a strong contribution. Despite some macro-economic
uncertainty, we expect 2012 to be a year of good progress for GKN based on our market
leadership positions, advanced technology and extensive global footprint."
Page 1 of 4
Divisional Markets and Performance
Automotive Market
Global light vehicle production increased by 4% in the first quarter to 20.4 million vehicles, with
good growth in Japan (+49%), North America (+15%) and India (+5%) more than offsetting
declines in Brazil (-10%), Europe (-8%), and China (-4%).
GKN Driveline
Sales
Trading profit
Trading margin (%)
2012
Q1
£m
2011
Q1
£m
Change
(%)
847
673
26
64
50
28
7.6%
7.4%
0.2pts
GKN Driveline’s first quarter sales increased 26% to £847 million. Underlying sales increased 8%,
with GKN Driveline significantly outperforming global light vehicle production and achieving growth
in every major market except Brazil. Trading profit increased 28% to £64 million. GKN Driveline’s
trading margin was 7.6%, with the acquired Getrag Driveline Products business performing
strongly.
GKN Powder Metallurgy
Sales
Trading profit
Trading margin (%)
2012
Q1
£m
2011
Q1
£m
236
217
9
22
20
10
9.3%
9.2%
0.1pts
Change
(%)
GKN Powder Metallurgy’s first quarter sales increased 9% to £236 million, benefiting from good
growth in North American automotive production and new programme launches across the
Division. Trading profit was £22 million with the trading margin improving to 9.3%.
GKN Aerospace
Sales
Trading profit
Trading margin (%)
2012
Q1
£m
2011
Q1
£m
370
352
5
36
32
13
9.7%
9.1%
0.6pts
Change
(%)
GKN Aerospace markets continued to perform in line with expectations with the ramp-up of a
number of civil programmes more than offsetting the decline in military sales. Sales increased 5%
to £370 million. Trading profit increased 13% to £36 million and the trading margin improved to
9.7%.
Page 2 of 4
GKN Land Systems
Sales
Trading profit
Trading margin (%)
2012
Q1
£m
2011
Q1
£m
Change
(%)
264
220
20
26
18
44
9.8%
8.2%
1.6pts
GKN Land Systems markets have continued to improve, with solid demand for mining and
construction equipment and the European agricultural equipment market performing robustly.
GKN Land Systems sales were up 20% at £264 million, an increase of 8% on an underlying basis.
Trading profit was £26 million and the trading margin improved substantially to 9.8%, reflecting a
significant improvement in the underlying business and the impact of the Stromag acquisition,
which performed well during the period.
Half Year Results Announcement
The Group intends to issue its half year results announcement on 31 July 2012.
Notes
(1)
Financial information set out in this announcement, unless otherwise stated, is presented on a
management basis which aggregates the sales and trading profit of subsidiaries (excluding certain
subsidiary businesses sold and closed) with the Group’s share of the sales and trading profit of joint
ventures. References to trading margins are to trading profit expressed as a percentage of sales.
Management profit or loss before tax is management trading profit less net subsidiary interest
payable and receivable and the Group’s share of net interest payable and receivable and taxation of
joint ventures. These figures better reflect performance of continuing businesses. Where
appropriate, reference is made to underlying results which exclude the impact of
acquisitions/divestments as well as currency translation on the results of overseas operations.
Further information:
Analysts/Investors:
Guy Stainer
Investor Relations Director
GKN plc
T: +44 (0)207 463 2382
M: +44 (0)7739 778187
E: guy.stainer@gkn.com
Media:
Chris Fox
Group Communications Director
GKN plc
T: +44 (0)1527 533238
M: +44 (0)7920 540051
E: chris.fox@gkn.com
Page 3 of 4
Cautionary Statement
This announcement 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.
Notes to Editors
GKN plc is a global engineering business serving the automotive, aerospace and land systems
markets. It has operations in more than 30 countries, around 44,000 employees in subsidiaries
and joint ventures and had sales of £6.1 billion in the year ended 31 December 2011. GKN plc is
listed on the London Stock Exchange (LSE: GKN).
Page 4 of 4