GKN Automotive
Introduction and markets
Andy Reynolds Smith | CEO, GKN Automotive
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
GKN Automotive – “Emotional Engineering”
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
GKN Automotive – Well positioned as the global markets develop
Global markets
Customers and platform trends
Legislation and technology
AWD market outlook
Sustaining growth above market
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Two leading global businesses
GKN Driveline
The world’s largest supplier of light
vehicle driveline products and
systems
GKN Powder Metallurgy
The world’s largest supplier of
powdered metal components to
automotive and industrial markets
£3,236m sales in 2012
£874m sales in 2012
45 operations
34 operations
22 countries
14 countries
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
2013 global market – 50% of production now in Asia
82.7m vehicles
20%
19%
3%
24%
5%
3%
10%
5%
6%
5%
China – Largest
single market
Source: GKN analysis of IHS Automotive Forecast, February 2013
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Substantial growth opportunities in global markets
Global light vehicle production
Incremental
growth by region
2013 to 2018
Million vehicles
82.7
87.5
93.2
97.4
100.6
103.6
Others
ASEAN
5%
S.America
8%
N America
8%
20.9m
vehicles
India
12%
2013 2014 2015 2016 2017 2018
Source: IHS Automotive LV forecast Feb. 2013, GKN analysis.
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Europe
17%
China
42%
Substantial growth opportunities in global markets
Light vehicle production by region 2013 - 2018 (million units)
North America
Europe
2.2%
US & Canada
2.0
West Europe
5.2%
-0.4%
2.7
8.3
8.1
2018
2013
2018
2.1
East Europe
4.0
2.9
Japan
Russia
4.0%
Mexico
CAGR
2013
4.5
6.0
4.6
13.1
13.0
13.7
S. Korea
16.0
14.1
11.9
2007
2013
2018
2007
2013
0.4%
4.3
2018
China
2013
4.4
2018
28.8
7.7%
South America
India
6.4%
10.2%
4.5
6.1
ASEAN
6.7
4.4%
10
19.9
4.1
5
4.5
5.6
2013
2018
0
2013
2018
2013
2018
2013
Source: IHS Automotive LV forecast Feb. 2013, GKN analysis.
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
2018
Global production by region of OEM base
European and Asian OEMs crucial globally
35
Vehicle production (millions)
30
25
20
15
10
5
0
2001
2003
West Europe
2005
2007
2009
Japan
2011
China
2013
2015
2017
North America
Source: GKN analysis of IHS Automotive Forecast, February, 2013. Global OEMs
split into regional constituents, where design and sourcing lead is apparent.
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
2019
South Korea
Vehicle segment and platform trends
Share of
Growth
2013-2018
Sub-Mini (A)
9%
Small (B)
17%
Lower Med. (C)
22%
Upper med. (D)
7%
2007 (70.6m)
Executive (E)
3%
2013 (82.7m)
MPV
SUV
19%
Pickup
4%
LCV's
10%
5
10
15
20
Light Vehicle Production (m)
120
100
27%
Other
80
60
40
20
28%
32%
21%
29%
39%
15%
25
2007
Large
platforms
500k-1m
58%
52%
Mega
platforms
1m+
0
9%
2018 (103.6m)
0
The rise of mega-platforms
Million vehicles
Global light vehicle production
by segment
2013
2018
Small and medium platforms outperform
due to Asia influence
SUVs drive continuing AWD growth
Mega-platforms an important driver
Source: IHS Automotive LV Forecast February 2013
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Focus on lightweight, fuel efficiency and electrification
Global tightening of legislated CO2 and fuel economy targets
GKN Driveline solutions for
fuel efficient drivelines
GKN PM solutions for
fuel efficient powertrains
Source: An, Earley, Green-Weiskel, iCET (2011), 19th Session UN
Commission on Sustainable Development
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
16
13.7m vehicles
14
11.7m vehicles
7.2% CAGR
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• Popularity of small SUVs and crossovers
• Continuing segment shift from 4WD
• China growing fast - trebles in period
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8
AWD
6
4
2
0
2010
Technology migration
Vehicles (millions)
Growth of global AWD and 4WD vehicle markets
Premium
4WD
0% CAGR
Standard
4WD
2011
2.1% CAGR
• Growth offset by shift of
some platforms to AWD
• No growth
2012
2013
2014
2015
2016
2017
Attractive growth in AWD – volumes, content and systems.
GKN is market leader with full capability
Source: IHS Automotive LV forecast Feb. 2013, GKN analysis.
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
2018
Automotive priorities
Lead in
chosen
markets
Leverage
global
footprint
Technology
driving
margin
Operational
excellence
Global footprint expansion aligned
to market
Global customers and mega
platforms
Increasing content of AWD
Design for Powder Metallurgy
Lean, agile and competitive
Sustain above
market growth
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GKN CAPITAL MARKETS DAY – 21 MAY 2013