GKN - Moving the world. Nigel Stein, Chief Executive, GKN plc JP Morgan Cazenove Capital Goods Conference,14 June 2012

Transcription

1 GKN - Moving the world Nigel Stein, Chief Executive, GKN plc JP Morgan Cazenove Capital Goods Conference,14 June 2012

2 Strategic overview GKN s strategy Lead in chosen markets Leverage global footprint Technology driving margin Sustain above-market growth Creating long-term shareholder value JPM Cazenove June

3 Strong businesses World leading positions Driveshafts All-wheel drive (AWD) edrive Sinter components Composite aero-structures Industrial power management devices etransmission Composite fan blade Global reach GKN Driveline Europe Americas Asia GKN Powder Metallurgy GKN Aerospace Divisional sales by region GKN Land Systems 0% 20% 40% 60% 80% 100% Driving for above market growth JPM Cazenove June

4 Technology drives margins % Group margin Continued margin improvement Progress after recession Reached Group target range Increased targets for three divisions margin Current target New target 1 Excluding Gallatin impact GKN Driveline 7.1% 8-10% No change GKN Powder Metallurgy 8.5% 8-10% 9-11% GKN Aerospace 11.2% 10-12% 11-13% GKN Land Systems 8.0% 7-10% 8-11% Group 8.0% (1) 8-10% Accelerated progress into range JPM Cazenove June

5 Balanced approach to increase shareholder value GKN Land Systems Growth TARGET: Above-market growth TARGET: 8-10% margins Margin Business Performance Return on invested capital Increasing EPS and Dividends TARGET: ROIC 20%+ JPM Cazenove June

6 Different divisional priorities GKN Aerospace GKN Land Systems GKN Land Systems Growth GKN Driveline Margin Business Performance Return on invested capital GKN Powder Metallurgy Increasing EPS and Dividends JPM Cazenove June

7 GKN Driveline global leader in driveline Sales 2,795m; Trading margin 7.0% including acquisitions & disposals Global driveshaft leadership. Continuing expansion in faster growing emerging markets Particular strength in China, India, Brazil Market segments (using proforma Getrag Driveline Products) Transaxle & Others 7% Getrag Driveline Products acquisition creates AWD leader Added content per vehicle, growth 1-2% above market Opportunities in emerging markets World leader in edrive gearboxes Investing in the future 5-10 years ahead Priority Margin improvement Further develop AWD systems approach Pricing initiatives more selective Driving down costs AWD 31% CVJ/sideshaft 62% JPM Cazenove June

8 Automotive markets Global light vehicle production increased by 4% in Q strongest markets include Japan, North America and India while Brazil, Europe and China fell 50 49% 40 % change % Japan North America India % China Europe Brazil % -8% -10% Strong recovery in Japan following disruption caused by earthquake/tsunami in March 2011 Production in China more positive for non-domestic OEMs European premium vehicles remain strong JPM Cazenove June

9 GKN Powder Metallurgy - Global leader in Powder Metal parts6 Sales 845m; Trading margin 8.5% Starting to deliver on division s potential Unique position with both Powder and Sinter technology and capability Design for PM gathering pace higher margin Value of PM content per vehicle outgrowing market m % Divisional sales and margin Priority Drive up ROIC Accelerated growth in India, Brazil and China Sales % ROS Increasing penetration in industrial markets JPM Cazenove June

10 GKN Aerospace World class composite capability6 Sales 1,481m; Trading margin 11.2% Delivering on major civil platforms Delivered first Airbus A350 XWB composite wing spar set Boeing 787 now in service HondaJet contract for composite fuselage New plant in Orangeburg, S. Carolina, USA. Priority Deliver growth Strong platform on existing programmes (Boeing & Airbus backlog of aircraft) Increasing build rates as new programmes gradually ramp up production Technology development for future programmes (e.g. Rolls-Royce JV for composite fan blades) Aero engines focus for capability development Airbus A380 Boeing 787 Airbus A350 HondaJet GKN shipset values $8.0m $2.6m $2.5m $0.5m JPM Cazenove June

11 GKN Land Systems Building a world leader in industrial power management Sales 885m; Trading margin 7.6% including acquisitions & disposals Industrial power management focus Stromag acquisition New competencies in new industries Industrial 30% End market sales split (using proforma Stromag) Agriculture 35% Priority Deliver growth Fundamentals for agricultural, construction and industrial markets good Population, urbanisation, diet, automation Moving into new markets industrial and renewables Rapid geographic expansion Develop broader systems and solutions supplier Commercial vehicles & cars 24% Construction & Mining 11% JPM Cazenove June

12 GKN is growing Strong growth over five years Growth resumed after interruption of recession Sales increased from 3.8bn in 2006 to 6.1bn in 2011 CAGR of 10% 2011 each division grew ahead of its markets 7 6 Management sales, including acquisitions CAGR 10% bn JPM Cazenove June

13 First quarter 2012 trading update Market conditions in Q1 consistent with expectations at the time of the announcement of the 2011 results Global light vehicle production up 4%, civil aerospace improving and further growth in agricultural and construction/mining markets All businesses making good progress, underlying sales up 8% Management basis 2012 Q1 m Change Sales 1,742 17% Trading Profit % Trading Margin (%) 8.2% 0.2pts Profit before Tax % JPM Cazenove June

14 Summary GKN s strategy Lead in chosen markets Leverage global footprint Four strong businesses Clear strategy Excellent basis for future success Technology driving margin Sustain above-market growth Creating long-term shareholder value JPM Cazenove June

15 Disclaimer Cautionary Statement This presentation contains forward looking statements which are made in good faith based on the information available at 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. JPM Cazenove June

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