Charles Paterson | SVP Business Development and Strategy
Nick Waters | CFO
Philip Swash | CEO Europe and Special Products Group
$3.5 billion International Aerospace enterprise
35 sites, 12,000 people
Marcus Bryson
CEO
GKN Aerospace
GKN Aerospace
North America
GKN Aerospace
Europe
GKN Aerospace
Engine Systems
Aerospace North America
Aerospace Europe & Special Products Group
Aerospace Engine Systems (Volvo Aero)
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
Lead in chosen markets
Building stronger strategic relationships
New customers
Leverage global footprint
Develop more business in Asia and Americas
Extend global value chain
Customer proximity
Technology driving margin
Operational excellence
Sustain above market growth
Innovation in key products
Process innovation
Partnering with customers on unique technologies
Improve safety performance
Class leading cost, quality, delivery
Fully implement Lean in whole value chain
Values – walking the talk
Increasing share with current customers
Partnering on new programmes
Bringing new technologies to market
Successful acquisitions
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
Excellent customer relationships
Globalise our business
Deliver customervalued innovation
Safe, lean operations
17% CAGR achieved
2005-2013
Market
Business
Mix
Sector
Customer Base
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
Aerostructures
53% of Sales 2012*
Wing Fuselage
Engine structures
42% of Sales 2012*
Nacelle and
Pylon
Engine Systems and Services
Engine structures Engine rotatives
Special products
5% of Sales 2012*
Transparencies and Protection
Systems
J-UCAS Fuselage
A380 Fixed Trailing Edge
B747-8 Exhaust
B787 Anti-icing System
A350XWB Rear Spar
CH53K Aft Fuselage
A400M Engine Intake
V22 Fuel Tanks
A330 Flap Skins
B787 Cabin Windows
B787 Floor Grid
B787 Inner Core Cowl
Full Engine MRO and support
B767 Winglet HondaJet Fuselage
Note: * Engine Systems proforma 12 months of 2012
Ariane 5 Exhaust nozzle
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
F35 Canopy
Sales by market 2012
Military
Commercial
30%
Customer sales E2013
70%
Military split
US
Europe
87%
13%
Note: Engine Systems proforma 12 months of 2012
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
Large commercial aircraft – record order backlog (8,500 aircraft, >$1 trillion).
30,000 aircraft forecast to be delivered
2013 to 2032
Civil rotorcraft and large business jets
– markets strengthening
Worldwide defence spending remains subject to budget cutbacks
Latest forecast growth rates –
2013 to 2018:
− Civil: 3% to 4% CAGR
− Military: Flat near term; Future uncertain
World passenger traffic growth 2012 – 2032
Aircraft production 2003 to 2022
Source: Airbus c 25% military
Notes: (2013$) Source: Teal Group
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
Drivers
Fuel price
Noise legislation
Increasing passenger travel in emerging markets
Requirement
Higher fuel efficiency
Better noise attenuation
Increasing demand for aircraft
Solution
Engine technology changes – hotter cores, lighter fans
New materials
–composite fans/cases, titanium replacing composites
Airlines renewing fleets sooner
GKN opportunity
GKN technology composite fans and cases for future large aircraft
Strong position on geared turbo-fan
Specialist titanium engine structures for next generation engines
Winglets and future wings
Light weight composite
Increased new aircraft sales
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
A320: neo Launch; Rate increase B737: MAX Launch; Rate increase
A350/B787: Production ramp-up A380/B747: stable
MRJ/C-Series/MS21: Market entry A330: Rate increase; 777/777X
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
F-35 JSF
Rate Readiness phase
A400M Atlas
Moving to production
F15
FMS
C130J
US multi-year and FMS
V22
Multi-year
F18 Super Hornet
Rate Stable
Blackhawk
US multi-year and FMS
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
X-47B Unmanned Combat Air
System - Demonstrator
Heavy Lift Assault/Transport
Rotorcraft (CH-53K)
NewGen Trainer
(T-X)
Unmanned Carrier Launched
Surveillance & Strike (UCLASS)
Armed Aerial /Joint Multi-
Role Helicopter
Long Range Strike Mission
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
Ship set values $m
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
Future wing technologies
Advanced fuselage
Future product differentiation
Nacelle, pylon and exhaust
Engine structures
Engine rotatives
Transparencies and coatings
Ice protection systems
Next generation composite processes
Advanced metallic processes
Advanced process development
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
New wing concepts
− High performance structural concepts
− Laminar flow enabling technologies
− Morphing structures
Advanced materials and processes
− Additive manufacture
− Advanced welding & fabrication
− Out-of-Autoclave curing
High-rate automation
− Robotic fibre placement
− Automated pick & place
− Rapid NDT
Creating a leadership position for the future
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
• Volvo integration
• A350XWB – exit development phase, ramp-up
• B787 – production ramp-up
• F35 – production ramp-up
• Technology insertion in new platforms
• Cost base management
• Lean deployment throughout value chain
• Military budgets - C130J, C17
• Customer price pressure
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
Growth c.2% above market
Good position on existing and new commercial programmes
On the right military platforms
Margin range
11% to 13%
GKN technologies bringing customer value
Balance between partnerships and long-term agreements
Lean deployment throughout value chain
Business performance
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES OCTOBER 2013
ROIC
>20%
Capital allocation
Effective make or buy
Requires time to recover
Volvo Aero and new programme investments
1910
British & Colonial Aeroplane Company founded at Filton
– Bristol Boxkite first aircraft manufactured
1949
First flight of the Brabazon
1960’s & 1970’s
Concorde
146 Regional Jet Fuselage
– fully equipped and tested
Tornado machined components
A310 trailing edge
1980’s & 1990’s
First A321 fuselage section delivered
Airbus A330/340 major sub-assemblies, Leading edge & trailing edge
Outer wing box
2000’s
A380 components and trailing edge assembly
A400M components, leading and trailing edge
Today - GKN Aerospace Filton
Manufacture of major sub-assemblies and components for every Airbus aircraft
Dassault wing moveables design build package
JSF machined components
Other customers include Rolls Royce, Cobham, BAE Systems
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Sales: £350m
Workforce >1,750 including >100 Design
Centre Engineers
Facilities: 105,000sqm
Programmes:
Large Civil
Military Transport
Biz Jet
Military Fast Jet
Major Assembly
& Integration
Wing Box
Leading Edge
Trailing Edge
Machined Primary Structural
Components
Gear Ribs
Pintle Fitting
Rib Centre of Excellence
Structural Sub-
Assembly
Flight Control Surfaces
Shroud Box
Fixed Shroud
Wing
Systems
Fuel
Anti-Ice
Bleed Air
Pneumatics
Hydraulics
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES JULY 2 2013
Facility Investment
£23M capital investment
Filton Engineering Centre established
New Technology investment
Industrial Relations
Establish GKN identity
Revised working practices
Extended Customer Base
Increased to 8 customers
Design & Build work packages
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES JULY 2 2013
GKN AEROSPACE EUROPE – Metallics Centre of Excellence
GKN specialises in the design and manufacture of large complex Aircraft structures. We apply the latest generation of automation to new customer programmes and seek to continuously improve our current product range.
We support a wide range of fixed & rotary wing programmes across civil, business jet, military fast jet and transporter platforms.
Product Expertise Key Processes
Integrated Aerostructures: incl Leading & Trailing Edge, Wing
Box, Flight Control Surfaces &
Airframe Assemblies
Structural sub-assemblies: incl D-Nose, Shroud Box, Fixed
Shroud, Aft Pylon Fairings, Door
Frames & Nacelle structures
Automated Spar Drilling & Fettling
Automated Riveting & Fastening
Determinate Assembly
Interchangeablility (ICY)
Laser Tracking
Robotic Assembly
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES JULY 2 2013
2
1
GKN AEROSPACE EUROPE – Metallics Centre of Excellence
GKN capabilities are recognized for its expertise in design and manufacture of high speed aluminium and hard metals machining.
Our products support a wide range of fixed & rotary wing programmes across civil, business jet, military fast jet and transport platforms.
Product Expertise Key Processes
Hard Metal incl Landing gear ribs, Pintle fittings, Catcher brackets, Flap tracks, Pylon fittings
Soft Metal incl wing tank ribs,
Wing tank ribs, Leading and
Trailing edge brackets, Track ribs,
A-frames, Rib posts, access panels
5 Axis machining
Automated NDT
Robotic finishing
000
Co-ordinate measurement
In house programming in NCL,
CATIA & CADDS 5
Automated treatments
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES JULY 2 2013
2
2
GKN AEROSPACE EUROPE – Metallics Centre of Excellence
GKN Aerospace is a world-class supplier to the aerospace industry, manufacturing a wide range of precision pipes, ducts and complex fabricated components.
Our products support a wide range of fixed & rotary wing programmes across civil, business jet, military fast jet and transport platforms.
Product Expertise Key Processes
Aircraft systems:
Slat track cans, Ducting incl
NACA, Bleed air, Anti-ice, fuel and
Hydraulic pipes
Metal forming: incl Door beams, Wing brackets, Sub spars
2D & 3D laser profiling
Heat Treatment
Resistance welding
Electron Beam Welding
Fluid cell & Draw forming
Reverse engineering
Surface treatments
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES JULY 2 2013
2
3
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INVESTOR AND ANALYST VISIT TO GKN AEROSPACE SITES JULY 2 2013