GKN Powder Metallurgy
Powder to parts
Peter Oberparleiter | CEO, GKN Powder Metallurgy
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
Powder Metallurgy – Technology without boundaries
Improved
endurance
and thermal
Conductivity
Extreme
tolerances
Ability to
produce
features
previously
requiring
secondary
processes
Net shape
forming
capabilities
Use of
lightweight
materials
Reduced part
complexity
utilizing less
components
Capability to
design-in
weight
reduction
features
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
95% material
utilization
Recycled
Raw
Materials
Less energy
consumption
with reduced
processes
GKN Powder Metallurgy – the industry leader
Hoeganaes
Powder production
240,000 tons of powder
per year
Global # 2
22% global share
Sinter Metals
Component manufacture
6 billion parts per year
many applications
Global # 1
18% global share
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Diverse customer base
75% automotive/
25% industrial
3,000 customers
globally
GKN Powder Metallurgy – Global presence
GKN Powder
Metallurgy 2012
c.6,600
employees
£874m sales
20%
34 locations
14 countries
26%
49%
HC
Europe
19%
1%
15%
Sweden
England
North America
Canada
United
States
Germany
France
Spain
China Premium
Italy
Romania
Japan
China
Sinter
India
10%
13%
46%
South America
Brazil
4%
Argentina
India
Manufacturing Plant Sinter
Manufacturing Plant HC
Corporate Office / Engineering Centre
South Africa
Hoeganaes Sinter
Market shares
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Source: GKN estimates
Leading market positions in powder and parts
Powder market
Market
dynamics
GKN Hoeganaes
22%
Höganäs
QMP
Kobelco
JFE
PM growth
outperforms markets
Market concentration
ongoing – financially
strong global
technology players
preferred
Mega-platforms are
growing opportunity
for global players
Top 3 Powder companies cover
70% of the market
Sinter market
GKN Sinter Metals
18%
Sumitomo
Fine
Sinter
Hitachi
Metaldyne
Top 8 Sinter companies cover
60% of the market
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Customer base and growing geographic spread
Sinter Metals sales by customer
9%
Ford
Hoeganaes
17%
6%
GM
ZF
5%
Fiat Chrysler
4%
Non
Volkswagen
Automotive
3%
Hilite
Linamar
PM sales by region
Sinter North
America
36%
Sinter Asia
and South
America
12%
4%
3%
62%
Bosch
2%
Other
Top 20 customers cover c.60% of sales
25% non-automotive customers
Sinter
Europe
35%
Good progress to develop
balanced sales in the regions
Asia Pacific and South America – a solid
position but still work to do
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Footprint in high growth markets
70
Million Vehicles
60
Brasil
China
Russia
Mexico
India
Growing presence and capability
in the key emerging markets
50
40
30
20
10
0
2013
2018
India
Today # 1
Extending Capacity
New Greenfield plant under
review
Brazil
China
Today # 7  2018 # 2
Expansion of existing facility
New plant opening Q4/2013
Develop powder capability
Today # 2
Plan for Expansion in 2014
Mexico and Russia under review
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Operational excellence
Every day we ….
Every day we ….
Ship 17m parts to
c.3,000 customers
Manufacture 17m parts in
34 plants
Quality
Value streams
Continue to drive Zero Defect Strategy
Increase share of fully sustained value
streams
Continuous
improvement
60
50
40
30
20
10
0
Cover inflation
Margin progress
100%
75%
50%
25%
Cost leadership
0%
2007 2008 2009 2010 2011 2012
2007 2008 2009 2010 2011 2012
ppm
implemented
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
planned
Awards and special recognitions in 2012
TATA Quality Award
GM Supplier Award 2012
Schaeffler Supplier of the
Year Award 2012
Tecumseh Supplier
Award 2012
Safety Award (by
professional associat.
of wood and metal)
50 Million Synchronizer
Hubs in 2012
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Industry growth trends driving new PM applications
Industry drivers
Climate protection
Energy efficiency
Renewable energy
Environmental
legislation
Electrification
Light weight
Alternative
propulsion
Technology trends
Highly efficient
powertrains
PM applications
Differential gears
VVT (Variable
Valve Timing)
Electric Power
Steering (EPS)
systems
Softmagnetic parts
Hydrogen storage
Transmission gears
Alu Camshaft caps
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
New E-Motors with SMC
Strong Alignment with Market Technology Trends
CAGR 2013-2018
50
45
VVT
9.6%
Start-stop
19.9%
EPS systems
8.4%
7+ speed
transmissions
22.8%
Vehicle Technology Adoption [million]
40
35
30
25
20
15
10
5
0
2012
2013
2014
2015
2016
2017
2018
Four product groups represented c.15% of 2012
turnover
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Source: IHS + autobeats.com 2012
Unmatched engineering capability from Powder to Parts
More than 400
engineers worldwide
More than 500
patents globally
Increasing spend in
engineering from 3% of
sales to 4%
50 customer TechDays
Fotos TechDays
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Design for PM – Drives margins
“…is the design and application of products using the unique characteristics of powder
metal to produce parts which cannot be made economically using alternative technologies.”
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Design for PM – Capturing the value with unique capability
Unique materials
Technically enhanced
powders (TEP)
Advanced processes
Advanced forming and
furnace technology
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Design for PM – Creating new opportunities
One-way clutch
Unique joining /
Creative design
Differential
gears
Soft magnetic
components
Creative designs/
Advanced processes
Hydrogen purification
Unique material porosity
Advanced processes/
Extreme forming
2018
2006
Highly complex
shapes
Aluminium cam caps
Unique material /
light weight
Sensor fixtures
Extreme forming/
Advanced processes
E-Motors with SMC
Creative designs/
Advanced processes
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Creative design /
Advanced processes
Including Additive
layer
Design for PM – New product launches
Electric powered steering
helical pulleys
Differentiators:
Netshape transmission gear
34° helical
Differentiators:
Extreme forming
Net shape
Net shape
Multi part substitution
More durable and best surface accuracy
Reduced noise and vibration
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
GKN Powder Metallurgy market outperformance
LV Market
m vehicles
Global LV market growth
PM Market
GKN Powder Metallurgy
outperformance c.3% above LV market
Unique “Design for PM”
capability
− Innovative design
− Technically enhanced powders
− Advanced process technology
2013
104
2018
5.6
£m
PM market growth driven by
new technology trends
83
4.3
2013
Global manufacturing and
engineering footprint
− Product and process engineering
capability in all regions
− Growing presence in high growth
markets
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GKN CAPITAL MARKETS DAY – 21 MAY 2013
2018
Market Share Gain
− Market concentration ongoing
− Mega-platforms awarded to
global PM players
GKN Powder Metallurgy summary
Growth c.3%
above LV market
Targeting new markets
Focus on growth product
groups
Expand global footprint
ROIC
>20%
Margin range
9% to 11%
Design for PM
Selective business wins
Operational continuous
improvement
Business
performance
Strong cashflow
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GKN CAPITAL MARKETS DAY – 21 MAY 2013

Maximize asset utilization

Balanced investment