GKN. Overview and introduction. 26 February 2013

Transcription

1 GKN Overview and introduction 26 February 2013 Updated 28 August 2013

2 Strategy Four strong divisions Creating long-term shareholder value Lead in chosen markets Growth target: Above market Leverage global footprint Technology driving margin Operational excellence Margin Group target: 8-10% BUSINESS PERFORMANCE ROIC Target: 20% Sustain above Increasing cashflow, EPS and dividends market growth 2

3 Financial overview 2012* Sales Profit before tax ROIC 6,904m 2011: 6,112m 497m 2011: 417m 18.1% 2011: 18.3% Earnings per share Total dividend Net debt 26.5p 2011: 22.6p 7.2p 2011: 6.0p 871m 2011: 538m *Numbers presented on a management basis 3

4 Delivering to our markets We have four operating divisions: GKN Driveline and GKN Powder Metallurgy that focus on the automotive market; GKN Aerospace; and GKN Land Systems. Every division is a market leader, each outperforming its markets, giving unrivalled expertise and experience in delivering cutting-edge technology and engineering to our global customers: Sales by division Other 1% GKN Driveline A world leading supplier of automotive driveline systems and solutions, including all-wheel drive. GKN Powder Metallurgy The world s largest manufacturer of sintered components, predominantly to the automotive sector. 1,775m (Volvo Aero 191m) 933m Land Systems 13% Aerospace 26% Powder Metallurgy 13% 874m Driveline 47% 3,236m GKN Aerospace A leading first tier supplier to the global aviation industry focussing on aerostructures, engine systems and products and specialty products. GKN Land Systems A leading supplier of technologydifferentiated power management solutions and services to the agricultural, construction, industrial and mining sectors. 4

5 Global engineering Strong global presence, operating in over 30 countries across five continents Build and maintain strong relationships with key global equipment manufacturers and OEMs Diversity in end markets Construction Agriculture and Mining 5% 2% Industrial 6% Aerospace 26% Automotive 61% 2,634m Sales by region 1,058m Asia 15% Americas 38% Europe 47% 3,212m Approx 1%: John Deere Suzuki GE PSA Caterpillar Rolls-Royce Lockheed Honda BMW Group 2% Sales by customer* Other 42% Volvo Cars 2% Mitsubishi 2% *excluding Volvo Aero VW Group 8% Toyota Group 3% EADS (Airbus) 8% Ford 6% GM Group 6% Renault Nissan 6% Fiat Chrysler Boeing 5% 4% Tata Group United 3% Technologies 3% 5

6 GKN Aerospace - markets and customers Market Business Mix Sector Customer base 6

7 GKN Aerospace World class product portfolio A380 Fixed Trailing Edge J-UCAS Fuselage B747-8 Exhaust B787 Cabin Windows B787 Anti-icing System A350XWB Rear Spar CH53K Aft Fuselage A400M Engine Intake V22 Fuel Tanks F35 Canopy A330 Flap Skins B787 Floor Grid B787 Inner Core Cowl Engine Structures Engine Rotatives AW101 Canopy Fuel Transportation Silicone Seals B767 Winglet HondaJet Fuselage Ariane 5 Exhaust nozzle Full Engine MRO & Support HondaJet Cockpit Window Fuel tanks Flying Surfaces Fuselage Sections Nacelle & Pylon Engine Products & Services Transparencies & Coatings Protection Systems 7

8 GKN Aerospace well positioned for the future Ship set values $m 8

9 Changing shape of the business Sales by market Customer sales Americas 18% Americas 17% Europe 12% Honeywell, 3% Bombardier, 2% Spirit, 3% Others, 19% Airbus Commercial, 28% Military 30% Commercial 70% Europe 53% Rolls-Royce 4% GE, 8% Lockheed, 5% UTC, 13% Boeing Military, Airbus 11% Military 1% Boeing Commercial 3% 2012 figures include pro forma Volvo Aero 9

10 Summary GKN Aerospace Proven track record of growth and margin progression into 11% - 13% range (2012: 11.2%, excluding Volvo Aero) Strong position on existing programmes with increasing build rates New programmes now set to ramp-up production Technology development remains a focus and is positioning GKN for future programmes Volvo Aero acquisition brings strong engine component technology and good positions on most engine programmes GKN Aerospace is now ranked no. 3 globally on both aerostructures and aero-engine components 10

11 GKN Driveline Sales by region Unrivalled capability global no 1 Asia 29% Europe 37% Americas 34% Sales by customer Tata Group 5% Volvo Cars 4% Mitubishi Group 5% Other 24% Toyota Group 6% Ford Group 10% VW 15% Renault- Nissan 11% Fiat Chrysler 10% GM Group 10% 11

12 GKN Driveline sales by product segment 2012 CVJ Systems (sideshafts) Used on approx. 85% of light vehicles Global market leader with around 41% share AWD Systems/Trans Axle Solutions AWD/4WD is 14% of market Differentials on 100% of vehicles Broad range of products, technology and competition edrive Systems Nascent market segment Long-term growth expected Product development focus ,236m CVJ Systems AWD Systems TransAxle Solutions edrive Systems Other CVJ Systems (sideshaft) All-wheel drive (PTU disconnect) TransAxle Solutions (elocker) edrive (eaxle) Global leader in driveline systems and solutions 12

13 Global light vehicle growth forecast to continue Vehicles (m) CAGR Asia 5.1% Americas 3.5% Europe 2.8% RoW 7.6% Global 4.3% Source: IHS Automotive Forecast, January 2013 Vehicles (m) Vehicles (m) Vehicles (m) Europe Americas Asia Germany France UK Italy Spain US Canada Mexico Brazil China Japan India S Korea Thailand CAGR % 0.5% 1.2% 3.0% 6.5% CAGR % -4.4% 6.2% 5.9% CAGR % -2.9% 10.0% -0.8% 3.5% 13

14 GKN Driveline summary Key growth drivers Outperformance of the global CVJ business Broadening customer and product base in AWD and Transaxle products New product opportunities for drivetrain electrification China as a special market in which to grow our presence Strong relationships with customers underpin sustainability Exceptionally well positioned to outperform global markets Targeting 2% outperformance relative to market Target margin range of 8% to 10% (2012: 7.3%) 14

15 GKN Powder Metallurgy Hoeganaes Powder production GKN Sinter Metals Component manufacture Customers 220,000 tons of powder per year Six billion parts per year Plenty of applications Over 3,000 customers globally US no 1 and 22% global share World no 1 18% global share 75% automotive 15

16 GKN Powder Metallurgy Divisional sales by region of origin Global PM market share GKN Sinter Metals Sales by customer Sinter - Rest of world 8% Hoeganaes 17% Sinter Europe 35% Sinter Americas 40% 2% 2% Others (<2%) 37% 2% 3% 3% GKN 18% Miba 4% Sumitomo 7% Fine Sinter 6% Hitachi 6% Porite 5% Metaldyne 5% Other 62% Ford 10% GM 7% ZF 5% Fiat Chrysler 4% VW Group 3% Hilite 4% Bosch 2% Linamar 3% 2012 sales: 874m Trading margin: 10.0% Top seven cover more than 50% of the market Top eight customers cover a third of business 12% industrial customers 16

17 Accelerated trend towards design for PM Key growth drivers Automotive products Fuel efficiency Reduced emissions Electrification P-Rotor Pump components Differential gears Torque converter Weight and space saving Sales by product type Hoeganaes 17% Variable valve timing components Industrial products Magnetic clutches Sintered components - industrial 10% Sintered components - automotive 73% Connecting rod Pneumatic silencer Surgical instruments Parts for prosthetic knee joints Rotor parts 17

18 GKN Powder Metallurgy summary Key growth drivers Value of PM content per vehicle outgrowing market Continued market growth in Europe and North America with accelarated growth in India, Brazil and China Increasing penetration in industrial markets Unique parts and powder position supports rapid exploitation of design for PM Bolt on acquisition potential to strengthen global positioning and new technology GKN Powder Metallurgy targets growth 2%-3% above market with continued margin expansion (2012: 10.0%; target range 9-11%) 18

19 GKN Land Systems Sales: 933m Market leading positions Power Take Off (PTO) Shafts Wheels Powertrain Services & Solutions 23% Power Management 41% World no.1 global supplier of agricultural take off shafts World no.1 global supplier of offhighway wheels Wheels & Structures 36% High Speed Shafts World no.1 global supplier of high speed primary driveshafts Clutches and Brakes World no.1 global supplier of dual clutch industrial transmissions 19

20 GKN Land Systems integrated Powertrain components Clutches PTO shafts Gearboxes 20

21 GKN Land Systems Sales by market Sales by region of origin Sales by customer Construction & Mining 11% Industrial 27% Auto Aftermarket 12% Agriculture 39% Structures 11% RoW 3% Americas 23% Europe 74% Other 63% John Deere 9% Case New Holland 7% Tata 5% Caterpillar 4% Claas 4% VW Group 1% Agco 3% Ford Group 2% JCB 2% 21

22 GKN Land Systems - summary A strong market focused growth platform in place Key growth drivers Leverage customer relationships to expand in existing markets Rapid geographic expansion Moving into new markets industrial and renewables Development of aftermarket capability across markets Exploit Group technology and develop market leadership in electro mechanical power management Targeting organic growth 3% to 4% above global market and expanding margin into target range of 8-11% (2012: 9.4%) 22

23 GKN summary Well positioned to deliver sustainable growth following the completion of significant restructuring initiatives Delivering shareholder value through a balance of Growth in excess of the markets Improving margins Return on invested capital Additional growth through strategic, bolt-on acquisitions with the purpose of adding capability, market position and global footprint 23

24 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. 24