GKN Capital Markets Day
Introduction
Nigel Stein | CEO GKN plc
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 CAPITAL MARKETS DAY – 21 MAY 2013
Welcome to our 2013 Capital Markets Day
Every day, GKN products…
Capital Markets Day
Drive the wheels of hundreds of millions of the
world’s cars
Help thousands of aircraft fly
Deliver the power to move earth and harvest crops
London
21 May 2013
Make the essential components for industries that
touch lives across the globe
GKN > Engineering that moves the world
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Excellent progress since our 2011 Capital Markets Day
Strong growth in sales and profit
2013 Consensus
vs
2011 Actual
Good organic growth
• Sales
• PBT
Three value enhancing acquisitions
− Volvo Aero
− Getrag Driveline Products
− Stromag
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
∆%
• +25%
• +37%
Agenda and Presenters
1400
Overview/Strategy
1415
GKN Aerospace
1520
GKN Land Systems
1550
Coffee Break
1605
GKN Driveline
1720
GKN Powder Metallurgy
Nigel Stein
1755
Concluding Remarks
/Q&A
1830
Technology Showcase
1945
Dinner
Marcus
Bryson
Mike
McCann
Martin
Wänblom
Gerard
Lavery
Andrew
Reynolds
Smith
Steve
Markevich
Lars
Christiansson
Peter
Oberparleiter
Bill Seeger
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
GKN – what we are
Tier 1, sometimes Tier 2, supplier to large Global OEs
10 customers
50% of sales
Providing highly engineered components and solutions
where GKN:
designs
test & tunes
manufactures
supplies
to technically demanding standards, around the world
GKN - Trusted to perform
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Our strategy
Lead in
chosen
markets
Be the best at what we do - focus
#1 or 2 in our markets, or plan to get there
Leverage
global
footprint
Positioned close to our customers
Strong in high growth markets
Use established footprint to go faster
Technology
driving
margin
Best products to meet customers needs
“Something special” to bring to our customers
Technology sustains differentiation
Operational
excellence
Safety is our No1 priority
Excellence in everything we do
Engage with our people
Sustain above
market growth
Achieve profitable growth ahead of our markets
Balanced approach: growth, margin and ROIC
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
A balanced approach to Growth, Margin and ROIC
Growth
above market
In all our markets
Target Margin
8% to 10%
ROIC
>20%
Appropriate targets for each
division
Prioritised investment &
capital allocation
Business
performance
Increasing EPS, cash
flow & dividends
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Leading in chosen markets
We operate in very large global markets
Aerospace
Automotive
Land Systems
• C30,000 large
commercial aircraft
will be built in next 20
years
• 80m+ light vehicles
a year
• Agricultural, industrial
and construction
equipment
• Rising to 100m+ a
year, by 2018
With leadership positions in each market
• Composite
Aerostructures #2
• Engine
components #3
• Transparencies #2
• Driveline
#1
• Sinter Metals #1
• Hoeganaes
#2
• Leader in niche
markets
• Wheels
#2
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Excellent global footprint
GKN Driveline – long
established leader
GKN Powder Metallurgy –
leader, but opportunity to do
more
GKN Aerospace – market
opportunity at early phase
GKN Land Systems –
opportunity to go faster
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Excellent global footprint
which we are expanding fast…
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Leading technology
GKN has the best technology for today’s markets
Intermediate
compressor case
Dual clutch
Twinster AWD
E-motor with soft
magnetics
And we are working on many projects for tomorrow…
Highly Complex
Shapes
using
Additive Layer
manufatcuring
Additive layer
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Increasing technology resources
Gross engineering expenditure has run at
c.3% of sales for last few years
−
−
−
−
Charged to P&L
Capitalised
Funded by customers
Funded by others
Engineering
Spend
% of sales
• £220m
• 3%
Objective - progressively increase to c.4%
of sales
• +25%
% of spend
− And increase yield from what we spend
Increase % of spend on activity for the
longer term
Increase
since 2011
80%
15%
• Supporting
todays
activities
and
business
wins
• 1-2 years
• Developing
new
products
• 2-5 years
ahead
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
5%
• Longer
term R&D
• 5+ years
ahead
Operational excellence
Safety is our #1 priority
Standard Lean processes and culture across the Group
Culture of Continuous Improvement
Focus on Value streams and flow through the plant
Relentless focus on: quality, delivery, cost
Engaging with our people
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
GKN People
48,000 people working with a shared goal
To be the best
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
We believe GKN can...
Out-grow its markets
Progress in the Margin range of 8-10%
Achieve targeted ROIC >20%
Maintain global leadership
Today we will tell you how…
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GKN CAPITAL MARKETS DAY – 21 MAY 2013