Clear Vision
Strong Action
Sir Kevin Smith – Chief Executive
GKN FULL YEAR RESULTS – Year ended 31 December 2009
Highlights
Decisive and broad ranging actions – 2009 closed in a very
satisfactory way
Fourth quarter Group trading margin 6.5% – Automotive (including
Powder Metallurgy) and OffHighway breakevens down 20%
Net debt down £500m from half year to £300m – well below target
Aerospace delivers an excellent performance – headline sales up
48%, trading profit up 61%
Market share gains, major new programme wins and exciting new
technology launches across the Group
Intention to pay 2010 interim and final dividend
2
GKN FULL YEAR RESULTS – Year ended 31 December 2009
Results summary*
H1
£m
2009
H2
£m
Total
£m
2008
£m
2,174
2,294
4,468
5,272
(804)
Trading profit
23
129
152
258
(106)
Profit before tax
(8)
91
83
170
(87)
Free cash flow
23
113
136
(38)
174
1.1%
5.6%
3.4%
4.9%
(1.5%)
Sales
Trading margin
* All figures are on a Management basis, 2008 sales and trading profit at constant currency
3
GKN FULL YEAR RESULTS – Year ended 31 December 2009
Change
£m
Update on restructuring
Programme accelerated and expanded
Total programme: 15 facility closures – 7,000 job losses
2009 actions: 13 facility closures – 3,500 jobs lost
Costs of £108m – in year benefits £80m
Cash spend £93m
Short time working costs £24m
2010: one facility closure – 800 job losses
Costs of £31m – in year benefits £60m
Cash spend £67m
Short time working – costs £6m
Restructuring completes 2010 –
solid platform for strong improvements in performance
4
GKN FULL YEAR RESULTS – Year ended 31 December 2009
Light vehicle sales and production
Americas
Europe
24
22
24
22
20
- 16% -25%
18
16
14
- 14% -21% 20
14
12
10
8
6
4
2
6
4
2008
2009
10
8
6
4
4
2
0
2009
Sales
2
0
2008
2009
Production
Global light vehicle sales down 4% - production down 13%
Excluding China, sales down 12% - production down 22%
Fourth quarter global production 5% ahead of sales
5
+50% +46%
14
12
8
6
2008
22
20
18
16
12
10
2
0
0
- 9% -31%
18
16
14
16
China
24
24
22
20
18
12
10
8
Japan
GKN FULL YEAR RESULTS – Year ended 31 December 2009
2008
2009
Driveline
Subsidiaries & JVs (constant currency)
2009
£m
2008
£m
Increase/
(Decrease) %
Sales
Trading profit
1,992
16
2,620
104
(24)
(85)
Driveline sales decline £628m (24%), trading profit down £88m – 14% conversion rate
Significant regional differences in end market conditions
China – revenues increase 29%
India and Brazil revenues marginally ahead
North America, Europe and Japan – revenues decrease 29%
Progressive improvements throughout 2009
Q1
Q4
Sales £m
431
576
+145
Trading/profit/(loss) £m
(31)
34
+65
(7)
6
+13
Margin (%)
2009 restructuring actions - 4 plant closures and 1,200 job losses
6
GKN FULL YEAR RESULTS – Year ended 31 December 2009
Difference
Driveline
Integration of CVJ and Torque products business units
Sideshaft products
90% win rate on new and replacement business
Honda Civic, Ford CD4 and Fiat all in North America
Nissan Electric Vehicle Range - Japan
Third plant opened in China and SDS JV extended for 50 years
Fourth China plant built in 2010 and fourth Indian operation in 2011
AWD Products
Continuing good growth in All Wheel Drive solutions across all segments
Mini
Countryman
7
GKN FULL YEAR RESULTS – Year ended 31 December 2009
Dacia Duster
Driveline
Differential sales forecast – booked business
Differentials production to
commence in North America
Increased customer outsourcing
of more highly engineered
£m
products
Electric and hybrid product
solutions
50
45
40
35
30
25
20
15
10
5
0
Transmission for Peugeot
HYbrid4 – available 2011
Range of hybrid, electric and
plug-in developments including
French Government funded
consortia
8
2008
HYbrid4 transmission
GKN FULL YEAR RESULTS – Year ended 31 December 2009
2010
2012
Peugeot 3008
GKN Driveline External Sales by Customer
Other
VW Group
Chrysler
Tata Group
Suzuki Group
Hyundai Group
Honda
Renault Nissan Group
Mitsubishi Group
BMW Group
Toyota Group
PSA
GM Group
Ford Group
Fiat Group
Driveline a true global leader well positioned for recovery and growth
Source: Driveline Finance Report Dec. 2009
9
GKN FULL YEAR RESULTS – Year ended 31 December 2009
Powder Metallurgy
Subsidiaries (constant currency)
Sales
Trading profit
2009
£m
2008
£m
512
(7)
705
(3)
(Decrease)
%
(27)
(133)
Sales down £193m (27%) – losses increased by £4m
Sinter North America sales down £63m (28%), losses more than halved to £6m
Sinter Europe sales down £95m (30%), profit down £18m
Hoeganaes revenues down £34m (31%), profit slightly up
Progressive improvements through 2009
Q1
Q4
Sales £m
113
148
+35
Trading profit/(loss) £m
(12)
5
+17
(10.6)
3.4
+14
Margin (%)
2009 restructuring actions – 3 plant closures and 500 job losses
10 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Difference
Powder Metallurgy
Significant new programme wins and market share gains
£100m in annualised sales of new business, including £25m re-sourced from competitors
New technology applications to support strong growth
140
VVT
VVT
Differential Gear Set
Sales GBP (millions)
120
Gears
100
Soft Magnetics
80
60
40
20
Engine Gears
Ford Fox Engine Oil
Pump & Unit Balancer
Unit
0
Soft Magnetic Alternator
Armature
2008
2009
2010
2011
2012
2013
Ford Technology Excellence Award for engine gears
Development of world’s first powder forged differential gears
Powder Metallurgy the Global No 1 restructured and revitalised
11 GKN FULL YEAR RESULTS – Year ended 31 December 2009
2014
Aerospace
Subsidiaries & JVs (constant currency)
2009
£m
2008
£m
Sales
Trading profit
1,486
169
1,131
120
Increase
%
31
41
Aerospace markets in the main remained solid
US Defence market robust
Weak regional and business jet demand
Large commercial aircraft schedules resilient
Sales increased 31%, profits up £49m
First half profits helped by pension curtailment and one off
programme true up - £10m
Strong performance from Filton - £330m of sales and £40m trading
profit – normalised margin over 10%
Organic sales growth of 2%
Growth in military revenues of 8% - softening in civil sector with revenues
down 6%
12 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Aerospace
Strong second half performance– stability in schedules and restructuring
benefits
Sales £m
Trading profit/(loss) £m
Margin (%)
H1
H2
770
79
10.3
716
90
12.6
2009 restructuring activities – 2 facility closures and 600 redundancies
Additional significant composite and titanium structures on A350 and JSF
Shipset value:
A350 $350,000
JSF $400,000
A350 launch investment secured – facility commissioning continues to plan
13 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Aerospace
Excellent progress on technology contribution to Next Generation
Composite Wing (Airbus) and Environmental Lightweight Fan
(Rolls-Royce) programmes
Automated Fibre Placement
of Composite Fan Blade
(Rolls-Royce)
Completion of Out-of-Autoclave Cured
Wing Spar Demonstrator
(Airbus)
14 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Aerospace
Aerospace industry moving into new phase – fewer programme launches
and a focus on execution on new platforms
GKN position on new programmes with shipset values over $½ m
A350
A380 /GP7000
F-35/F-135*
CH53-K
A400M
B747-8
B787/GENX
Gulfstream 450
Embraer MSJ/MLJ
$M
0
1
2
3
4
5
6
7
8
9
Europe’s No 1 in Aerostructures – new programmes provide engine for growth
* Includes $500k for customer furnished material in LRIP planned to be contractor supplied in rate production
15 GKN FULL YEAR RESULTS – Year ended 31 December 2009
OffHighway
Subsidiaries & JVs (constant currency)
Sales
Trading profit
2009
£m
2008
£m
Decrease
%
361
(12)
628
47
(43)
(126)
OffHighway markets decline sharply through second quarter
Revenues down £267m (43%) – profits down £59m
Demand stabilises through second half at extremely low levels –
restructuring benefits support operating performance
Total four site closures and 1,400 redundancies – 31% of workforce
Sales £m
Q1
Q4
130
74
-56
2
(4)
-6
1.5
(5.4)
(6.9)
Trading profit/(loss) £m
Margin (%)
16 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Difference
OffHighway
New wheels products sold to first customers
49” to 63” diameter wheels after market sales - on test with two OEMs
“Profi-fit” low cost wheel to John Deere – full launch 2011
European production
high speed shafts in 2010
Strengthening fourth quarter order book and improving business
confidence provide first signs of recovery
Jan 2010 breakeven - first quarter expected to be profitable
17 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Summary
Decisive action secures solid platform for recovery
Restructuring programme successfully implemented
Financial capacity to develop and grow
Major businesses exceptionally well positioned for the future
Automotive Driveline – the global leader with the right products,
global footprint and customer base
Powder Metallurgy – the global leader restructured and revitalised
Aerospace – the European No1 with valuable positions on all major
new aircraft programmes
Helping shape the future of the industries in which we work
Facing that future with confidence and a clear vision
18 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Clear Vision
Strong Action
Bill Seeger – Finance Director
GKN FULL YEARRESULTS –Year ended 31 December 2009
Results Summary
2009
£m
2008
£m
Change
£m
Change
%
4,468
4,617
(149)
(3)%
152
221
(69)
(31)%
83
170
(87)
(51)%
Free cash flow
136
(38)
174
Net borrowings
(300)
(708)
408
Sales
Trading profit
Profit before tax(1)
(1)
Management basis – see footnote on slide 22
20 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Income Statement
2009
£m
2008
£m
4,223
4,376
129
201
(144)
(153)
(24)
(10)
2
-
Change in value of derivative & other financial instruments
76
(124)
Operating profit/(loss)
39
(86)
Post-tax JV earnings before impairment
18
16
Impairment reversals/(charges), post-tax
3
(10)
21
6
Interest (net)
(64)
(47)
Other net financing charges
(50)
(3)
(114)
(50)
(54)
(130)
Sales (subsidiaries)
Trading profit
Restructuring and impairment charges
Amortisation of non-operating intangibles arising on business
combinations
Profits and losses on sale or closures of businesses
Post-tax JV earnings
Net financing costs
Profit/(loss) before tax
21 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Income Statement
Management Presentation(1)
2009
£m
2008
£m
Sales (subsidiaries)
4,223
4,376
129
201
129
201
18
16
(64)
(47)
(64)
(47)
83
170
Trading profit
Restructuring and impairment charges
Amortisation of non-operating intangibles arising on business
combinations
Profits and losses on sale or closures of businesses
Change in value of derivative & other financial instruments
Operating profit
Post-tax JV earnings, before impairment
Interest (net)
Other net financing charges
Net financing costs
Profit before tax
(¹) Before restructuring and impairment charges, amortisation of non-operating intangible assets arising on business combinations, profits and losses on sale or closures of
businesses, change in value of derivative and other financial instruments and other net financing charges
22 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Impact of Currency
Translational – Sterling weakness in 2009 (average rates)
Effect on
Full Year average
2009
2008
Change
%
Sales
£m
Trading
profit
£m
US $
1.56
1.85
16
271
13
Euro
1.12
1.26
11
202
15
Yen
146
192
24
115
3
67
6
655
37
Other
Impact (subs & JVs)
Transactional - £(8)m impact in 2009
Translational impact on 2009 annual trading profit (including JVs):
1% move in Euro = £0.2m
1% move in US$ = £0.7m
23 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Sales
£m
6,000
330
655
5,000
4,617
4,468
13
50
4,000
(1,134)
(100)
(250)
(243)
3,000
(400)
(419)
(550)
(485)
Q1
Q2
Q3
Q4
2,000
1,000
0
2008
Currency Translation
Filton
24 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Underlying
2009
Trading Profit
£m 350
40
300
37
250
221
200
100
55
50
152
150
(9)
(50)
(146)
(100)
(150)
100
(83)
(109)
Q1
Q2
Q3
Q4
50
0
2008
Currency Translation
Filton
25 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Underlying
2009
Sales and Trading Profit: Driveline
Sales £m
Sales - £m
Trading profit - £m
Margin %
2009
2008
1,992
2,268
16
0.8
88
Underlying change %
600
576
400
3.9
474
431
-34%
511
+13%
-19%
-43%
200
Sales down 43% in first quarter
0
Weak mature markets
Q1
European sales begin to recover
Region profitable in second quarter
Q2
Q3
Trading Profit £m
40
Mature market sales begin to recover
Division profitable in third quarter
34
20
14
0
Lower cost base and sales recovery
Fourth quarter margin of 5.9%
Q4
(20)
(1)
(31)
(40)
Q1
26 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Q2
Q3
Q4
Sales and Trading Profit: Powder Metallurgy
Sales £m
Sales - £m
Trading profit - £m
2009
2008
512
618
(7)
(2)
Underlying change %
150
125
100
Margin %
(1.4)
(0.3)
75
135
113
116
-46%
-41%
Q1
Q2
148
+13%
-20%
50
25
Sales down 46% in first quarter
0
Europe sales begin to recover
Region profitable in second quarter
Q4
Trading Profit £m
North America and Europe sales up
10
Division profitable in third quarter
5
Restructuring benefits and improved sales
Fourth quarter margin of 3.4%
Q3
2
5
Q3
Q4
0
(2)
(5)
(10)
(12)
(15)
Q1
27 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Q2
Sales and Trading Profit: Aerospace
Sales £m
1,600
2009
2008
1,486
1,002
169
105
1,200
10.5%
1,100
1,500
330
25
1,486
Underlying
2009
1,400
Sales - £m
Trading profit - £m
Margin
11.4%
1,300
129
1,002
1,000
Sales reached £1.5B
Civil 52% of sales
900
800
700
2008
Filton, large commercial
aircraft
Defence 48% of sales
Combat aircraft, helicopters,
military transport
Currency
Filton
Trading Profit £m
200
9
169
Underlying
2009
40
150
105
15
100
Key items
50
Filton integration
Investment in new programmes
0
28 GKN FULL YEAR RESULTS – Year ended 31 December 2009
2008
Currency
Filton
Sales and Trading Profit: OffHighway
2009
2008
Sales - £m
361
553
Trading profit - £m
(12)
40
Margin %
(3.3)
7.2
Sales £m
Underlying change %
150
125
130
100
-21%
92
75
-47%
50
65
-56%
74
-49%
25
0
Sales down 21% in first quarter
Q1
Q2
Q3
Q4
Division profitable
Trading Profit £m
Sales off ~50% over balance of year
Agricultural markets weaken
Construction and mining soft
Signs of stability in fourth quarter
4
2
2
0
(2)
(4)
(4)
(4)
(6)
(6)
(8)
Q1
29 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Q2
Q3
Q4
Joint Ventures
2009
£m
2008
£m
245
241
Trading profit
23
20
Interest and Taxation
(5)
(4)
Share of post-tax earnings, before impairments
18
16
Sales
Includes Driveline’s Chinese JVs, Emitec, Chassis Systems and other smaller JVs
Sales flat and profits up
Driveline China sales up 23%, supported by incentive programmes
Emitec sales down 39%, truck and car segment weakness in Europe
30 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Trading Profit Margins
H1
2009
%
H2
2009
%
Full Year
2009
%
Full Year
2008
%
Target
range
%
(3.5)
4.4
0.8
3.9
8-10
Other Automotive
(10.4)
4.3
(1.7)
1.1
6-10
Powder Metallurgy
(6.1)
2.5
(1.4)
(0.3)
8-10
Aerospace
10.3
12.6
11.4
10.5
10-12
OffHighway
(0.9)
(7.2)
(3.3)
7.2
7-10
1.1
5.6
3.4
4.8
8-10
Driveline
Group
31 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Group Restructuring Initiatives
Income Statement Charge
2010
£m
2009
£m
2008
£m
-
(9)
(139)
Redundancy Costs
(8)
(86)
(14)
Short-time working
(6)
(24)
(2)
Reorganisation
(23)
(22)
(4)
Total Restructuring & Impairment
(37)
(141)
(159)
Cash Impact
(67)
(93)
(4)
Impairment (subs & JVs)
32 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Net Financing Costs
2009
£m
2008
£m
(57)
(47)
(7)
-
(50)
(3)
(114)
(50)
5.2x
8.0x
Net interest payable
Bond buy back premium
Other net financing charges
Net financing costs
EBITDA/Net interest ratio
Net interest up due to balance sheet hedging suspension
£124m bond buy back in December ’09
Saves £21m in interest, £9m in 2010
Net interest ratio well clear of bank covenant (3.5x)
33 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Tax – Key Items
Cash tax rate
29% - exceeds “20% or below” guidance
Impact in 2009 of where the profits were made
Expected to return to “20% or below” in 2010
Book tax rate
17% - lower than the Group’s weighted average tax rate
Volatility in the Group’s book tax rate will continue
Unrecognised deferred tax losses of over £400m
34 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Operating Cash Flow
2009
£m
2008
£m
129
201
206
176
97
(4)
Strategic restructuring
(99)
(28)
Movement in post-employment obligations
(45)
(25)
-
8
288
328
35
7
(153)
(204)
28
-
198
131
Trading profit (subs)
Inventory
£130m
Depreciation and amortisation
Change in working capital and provisions
Other
Subtotal
Proceeds from sale of fixed assets*
Capital expenditure (tangible and intangible)
Government refundable advances
Operating cash flow
Capex 0.7x
* A400M investment realisation
35 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Free Cash Flow
2009
£m
2008
£m
198
131
15
24
(56)
(48)
(5)
-
(15)
(45)
(1)
(100)
Free cash flow
136
(38)
Rights issue (net)
403
-
(111)
(1)
AgustaWestland final proceeds
-
18
Close out of balance sheet hedges
-
(230)
Currency & other
(20)
49
Net movement in borrowings
408
(202)
(300)
(708)
Operating cash flow
Dividends received (joint ventures)
Interest (net)
Bond buy back interest
Tax
Dividends paid (including minorities)
Acquisitions, disposals and investments
Net borrowings
36 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Financing: Strengthened Balance Sheet
Capital Structure
Financing Available
Rights issue raised
£403m (net)
Secured funding on
A350
UK Revolving credit
facilities repaid
£228m
EIB £80m
2012 Bond buy back
£124m
HMG £60m
Near Term Agenda
£350m RCF
expiring
July 2010
£201m Bonds
maturing May 2012
Committed UK
facilities £709m
UK cash balance
£186m
Substantial
headroom exists
Objective: investment grade rating
37 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Net Assets
Dec 2009
£m
Jun 2009
£m
Dec 2008
£m
2,363
2,394
2,709
(52)
(80)
(109)
Post-employment obligations
(996)
(990)
(834)
Net borrowings
(300)
(800)
(708)
Derivative financial instruments
(43)
(44)
(130)
Net assets
972
480
928
Return on average invested capital
6%
4%
9%
Net operating assets
Current & deferred tax
38 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Post-employment Obligations Accounting
Deficit - UK
Assets
Liabilities
Deficit
Dec 2009
Jun 2009
Dec 2008
£m
£m
£m
1,930
1,745
1,759
(2,440)
(2,294)
(2,043)
(510)
(549)
(284)
Accounting: Change vs first half 2009
Market rally improved asset values
However … liabilities increased
Discount rate (6.2% € 5.7%)
Deficit decreased
Funding
Deficit funding of £11m in 2010 from 2007 valuation
Triennial funding valuation April 2010
39 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Dividends
No final dividend – 2009
Reinstatement for 2010 interim and final
Commensurate with earnings
Based on outlook for end markets
Progressive policy
Earnings cover ratio target ~ 2.5x in medium term
Measured approach linked to cash generation
40 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Results Summary
H1
£m
H2
£m
2009
£m
2,174
2,294
4,468
Trading profit
23
129
152
Profit before tax
(8)
91
83
Free cash flow
23
113
136
(800)
(300)
(300)
Sales
Net Borrowings
41 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Outlook
Outlook for major markets broadly positive – some uncertainty around
second half demand
Automotive
Improvement in global automotive production
Close correlation between sales and production
Re-balancing of mix towards medium and larger vehicles
Aerospace
US defence market solid – F-22 rundown
Civil aerospace risk of further schedule cuts second half
Encouragement from successful first flights of A400M, Boeing 787
and Boeing 747-8
OffHighway
Some signs of improvement – particularly heavy construction and
mining
Expectations for steady although modest recovery
42 GKN FULL YEAR RESULTS – Year ended 31 December 2009
GKN’s Performance
Automotive
Automotive businesses to make strong progress
Improving end market demand, more normal mix and further
restructuring benefits
Margins steadily improving
Aerospace
Revenues broadly level with 2009
F-22 rundown offset by increases on new programmes
Risk of further civil softening in second half
Double digit margins maintained
OffHighway
Some increase in revenues and solid improvement in profits
43 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Outlook
Restructuring completes 2010 – benefits in line with
previous guidance
Dividend distribution on 2010 interim and final earnings
With expected improving global economies, Group will
make significant progress in 2010
Well positioned for a strong and sustained recovery
44 GKN FULL YEAR RESULTS – Year ended 31 December 2009
APPENDIX
GKNFULLYEARRESULTS–Yearended31December2009
2009 Trading Profile
Q1
2009
£m
Q2
2009
£m
Q3
2009
£m
Q4
2009
£m
FY
2009
£m
1,079
1,095
1,103
1,191
4,468
Automotive
455
498
542
614
2,109
Powder Metallurgy
113
116
135
148
512
Aerospace
381
389
361
355
1,486
OffHighway
130
92
65
74
361
Trading profit/(loss)
(13)
36
51
78
152
Automotive
(35)
(2)
15
36
14
Powder Metallurgy
(12)
(2)
2
5
(7)
Aerospace
34
45
43
47
169
OffHighway
2
(4)
(6)
(4)
(12)
(29)
21
36
55
83
Subs & JVs
Sales
Profit/(loss) before tax1
(1)
Before restructuring and impairment charges, amortisation of non-operating intangible assets arising on business combinations, change in value of derivative and
other financial instruments and other net financing charges
46 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Summary of Restructuring Actions and Benefits
Workforce
Actions
Charges
Cash Spend
Benefits
Cost
Reduction
Facilities
Impairment
STW
Cost
Reduction
STW
Cost
Reduction
Impairment
STW
Cost
Reduction
Heads
Plants
£m
£m
£m
£m
£m
£m
£m
£m
2008
2,800
1
139
2
18
2
2
2
6
1
2009
3,460
13
9
24
108
24
69
10
76
71
26
60
-
2010
800
1
-
6
31
6
61
2011
-
-
-
-
-
-
25
-
-
17
Total
7,060
15
148
32
157
32
157
12
108
149
47 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Post-employment obligations – Accounting
Deficit
UK Americas Europe
RoW
£m
£m
£m
£m
Total
£m
1,930
215
27
18
2,190
(2,440)
(355)
(352)
(39)
(3,186)
(510)
(140)
(325)
(21)
(996)
1,745
180
26
17
1,968
(2,294)
(310)
(315)
(39)
(2,958)
(549)
(130)
(289)
(22)
(990)
1,759
202
29
19
2,009
(2,043)
(401)
(353)
(46)
(2,843)
(284)
(199)
(324)
(27)
(834)
2009 Year End
Assets
Liabilities
Deficit
2009 Half Year
Assets
Liabilities
Deficit
2008 Year End
Assets
Liabilities
Deficit
48 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Capital Investments
2009
£m
2008
£m
Tangible expenditure
139
191
Depreciation
195
166
Ratio (times)
0.7
1.2
Capex/depreciation ratio at
0.7x target
Focused 2009 capex on
growth opportunities
2009
£m
2008
£m
Intangible expenditure
14
13
increase – South America
Amortisation
11
10
Driveline business – Japan
153
204
Total expenditures
49 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Automotive capacity
£32m investment in A350
Tax charge analysed by “Cash Tax”(%)
Tax Analysis
2009
2008
Future Guidance
Weighted average of tax rates
31%
30%
Stable within +/-3% range
Adjustments – tax losses, timing
differences and withholding taxes
(2)%
(13)%
Driven by profit profile &
available tax losses
“Cash Tax” rate
29%
17%
Target: 20% or below
Net deferred tax on profit/provision
movement
(21)%
3%
Volatile due to DT asset
recognition/usage and tax
settlements
Tax impact of FX gains/losses on
intra-group funding
9%
(19)%
Volatile due to £ movement
against €/$
Book Tax rate
17%
1%
Continued volatility
50 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Sales and Trading Profit: Other Automotive
Sales - £m
Trading profit - £m
Margin %
Sales £m
Underlying change %
2009
2008
117
176
(2)
2
30
(1.7)
1.1
20
40
38
31
24
24
-59%
-55%
Q1
Q2
+19%
-30%
10
Improving position in second half
0
Volumes up - Chassis Systems
& Emitec
Second half profitable
Benefit of headcount reductions
Cost saving initiatives
Q3
Q4
Trading Profit £m
3
2
1
1
(1)
(1)
(3)
(4)
(5)
Q1
51 GKN FULL YEAR RESULTS – Year ended 31 December 2009
Q2
Q3
Q4
Contacts
Bill Seeger
Finance Director
Guy Stainer
Investor Relations
Tel +44 (0) 20 7463 2382
guy.stainer@gkn.com
52 GKN FULL YEAR RESULTS – Year ended 31 December 2009