GKN plc Overview. 21 st November 2012

Transcription

1 GKN plc Overview 21 st November 2012

2 Strategic Goals Building a portfolio of market leaders with: leading market shares in chosen segments above market growth in each division margin expanding through the target ranges technology leadership engineering for the future Sales by division Sales by region 885m 1,003m 1,481m 2,795m 2,232m 2,877m 845m Total 2011 Sales 6,112m 2

3 Global Positioning As of 1 Oct 12: Nearly 50,000 employees in over 35 countries 3

4 GKN Driveline From driveshaft to driveline repositioned globally 2011 sales by region Unrivalled capability global no 1 Asia 31% Europe 40% Americas 29% 2011 sales by customer 4

5 GKN Powder Metallurgy 2011 sales by region 0% Sinter - Rest of world 7% Hoeganaes 17% Sinter Americas 38% Sinter Europe 38% 2011 sales by customer 5

6 Land Systems 2011 sales by market Market Leading Positions 2011 sales by customer 6

7 GKN Aerospace 2.2bn 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) 7

8 GKN Aerospace 8

9 GKN Aerospace Previous Key key growth Growth events Events: St Louis-2002 Secure military position Major Boeing Military relationship Pilkington Aerospace-2004 Secure Military Transparency leadership Stellex-2005 Complimentary to St. Louis Boeing Commercial position on B787 Teleflex-2007 Extend to engine hot section Secure major GE relationship Rolls-Royce Composite Fan Blade JV-2008 Positioning for Next Gen Single Aisle Strategic Partnership with RR Filton-2009 Major capability expansion and A350 position Strategic position with Airbus Volvo Aero-2012 Engine system engineering and manufacturing addition Strategic partnerships with all engine OEM s 9

10 GKN Aerospace Strong sales and margin delivery Newly acquired Volvo Aero expected 2012 sales of 670m 10

11 GKN Aerospace World class product portfolio 11

12 Airframe and special product portfolio Winglets Wing Leading & Trailing Edge Assemblies Integrated Floor Structures Vertical/Horizontal Tail Planes Composite Fuselage Structures Commercial & Military Commercial Military Wing Structures & Surfaces Metallic Fuselage Structures Canopies & Windows Nacelle Systems Ice Protection for Wings & Engines Fuel & Flotation Systems 12

13 GKN engine product portfolio Commercial & Military Commercial Military Composite & Metallic Fan Blades Blisks/IBR s Diffusers Turbine Casings Exhaust Systems HPIP Structures Composite & Metallic Fan Cases Tail Bearing Housing Composite Fan Inlet Frame Inner Core Fairings Compressor Cases Engine Ducts Compressor & Turbine Vanes & Blades 13

14 Newly Acquired Volvo Aero engine product portfolio Commercial & Military Commercial Military Shafts Combustor Structure Compressor Rotors Turbine Structures Metallic Fan/Compresor Cases LPT Cases Fan/Compressor Structures Guide Vanes 14

15 Technology Targeted innovation 15

16 Acquisition of Volvo Aero

17 Volvo Aero acquisition transaction overview Strong financial rationale Enterprise Value SEK 6.9bn ( 633m) Consideration of 513m 140m equity placing (c.5%) and 10- year 450m bond 6.3x expected 2012 Volvo Aero EBITDA 0.9x expected 2012 sales of 670m Expect in first full year* Accretive to management EPS Margin to meet GKN Aerospace target of 11-13% Generate ROIC above GKN s WACC of 12% Excellent strategic fit Creates a market leader No.3 in engine components Business has invested heavily to secure positions on new engine programmes Combines complementary product and technology focus Access to well-respected engineering capability Creates a balanced GKN Aerospace structures and engine products Strengthens and broadens OEM relationships. Value enhancing acquisition for GKN Note: 1 = SEK10.9 * Nothing in this presentation is intended to be a profit estimate for any period or a forecast of future profits and statements relating to earnings accretion should not be interpreted to mean that the earnings per GKN share for the current or future financial periods will necessarily match or exceed its historical published earnings per share. 17

18 Volvo Aero leading producer of aero-engine components Designs, engineers and manufactures components and sub-assemblies for aircraft engine turbines Key customers are all the major aero engine manufacturers Employs some 3,000 people, including 500 engineers Based in Sweden, Norway and USA Focus on civil aerospace Sales of c. 600m in 2011 Invested heavily to secure positions on new engine programmes 290m over last 4 years Positions on most major civil aerospace platforms will benefit as build increase Risk and revenue sharing partner (RRSP) business model, provides life-ofprogramme participation Significant aftermarket content providing profitable long-term revenue streams High-quality customer base Government, 14% Source: FY11, Management information, excludes rental income Source: FY11, Management information, excludes rental income Note: MTU represents joint programmes with PW 18

19 Combination of complementary technologies Volvo Aero: Lightweight metallic New technologies Optimised fabrication Weld simulation Automated laser welding Metal deposition Advanced machining and automation capabilities could be transferred to GKN US sites Additive layer technology good match to GKN s current development GKN: Composites High performance structures Composite fan blades (JV with Rolls-Royce) Composite fan cases Advanced manufacturing Advanced fibre placement Environmental technology Winglets Multifunctional technologies Electro-thermal ice protection Volvo Aero: Turbine structures Volvo Aero: Compressor rotors GKN: Composite fan frame GKN: Composite fan blades 19

20 Transaction strengthens GKN Aerospace GKN Aerospace product and market mix Sales before 1.5bn Sales before OEM Relationships Sales pro forma 2.1bn Sales pro forma Other 7% Government, 4% Balanced business Increased civil Broader customer mix 2011 data. Source: GKN Aerospace 2011 results, 2011 Volvo Aero internal financial information (excludes rental income) 20

21 A leading business with high-quality revenue streams GKN Group sales GKN Group trading profit 1 Before Before Pro forma Pro forma 2011 data. Source: GKN 2011 management information, Volvo Group 2011 Annual Report 1 Trading profit excluding corporate costs and impact of Gallatin Greater aerospace contribution 21 21

22 Summary GKN Aerospace Proven track record of growth and margin progression into 11% - 13% range 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 Filton acquisition and integration very successful and A350 capabilities now being proven Volvo Aero brings strong engine component technology and good positions on most engine programmes 22