GKN Capital Markets Day

Introduction
Nigel Stein | CEO GKN plc
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.

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Welcome to our 2013 Capital Markets Day

Every day, GKN products…

Capital Markets Day
Drive the wheels of hundreds of millions of the
world’s cars

Help thousands of aircraft fly

Deliver the power to move earth and harvest crops London

21 May 2013
Make the essential components for industries that
touch lives across the globe

GKN > Engineering that moves the world

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Excellent progress since our 2011 Capital Markets Day

2013 Consensus
Strong growth in sales and profit vs ∆%
2011 Actual

• Sales • +25%
Good organic growth • PBT • +37%

Three value enhancing acquisitions

− Volvo Aero

− Getrag Driveline Products

− Stromag

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Agenda and Presenters

1400 Overview/Strategy

1415 GKN Aerospace Nigel Stein

1520 GKN Land Systems

1550 Coffee Break Marcus Mike Martin Gerard

Bryson McCann Wänblom Lavery
1605 GKN Driveline

1720 GKN Powder Metallurgy

Andrew Steve Lars Peter
1755 Concluding Remarks Reynolds Markevich Christiansson Oberparleiter
/Q&A Smith

1830 Technology Showcase

1945 Dinner
Bill Seeger

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
GKN – what we are

Tier 1, sometimes Tier 2, supplier to large Global OEs

10 customers
50% of sales

Providing highly engineered components and solutions

where GKN:
designs
test & tunes
manufactures
supplies
to technically demanding standards, around the world

GKN - Trusted to perform

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Our strategy
Lead in
Be the best at what we do - focus
chosen #1 or 2 in our markets, or plan to get there
markets

Leverage Positioned close to our customers

global Strong in high growth markets
footprint Use established footprint to go faster

Technology Best products to meet customers needs

driving “Something special” to bring to our customers
margin Technology sustains differentiation

Safety is our No1 priority

Operational Excellence in everything we do
excellence Engage with our people

Achieve profitable growth ahead of our markets

Sustain above
Balanced approach: growth, margin and ROIC
market growth

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
A balanced approach to Growth, Margin and ROIC

Growth
above market

In all our markets

Target Margin ROIC

8% to 10% >20%

Appropriate targets for each Prioritised investment &

division capital allocation
Business
performance

Increasing EPS, cash

flow & dividends

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Leading in chosen markets

We operate in very large global markets

Aerospace Automotive Land Systems

• C30,000 large • 80m+ light vehicles • Agricultural, industrial

commercial aircraft a year and construction
will be built in next 20 equipment
years • Rising to 100m+ a
year, by 2018

With leadership positions in each market

• Composite • Driveline #1 • Leader in niche

Aerostructures #2 markets
• Sinter Metals #1
• Engine • Wheels #2
components #3 • Hoeganaes #2
• Transparencies #2

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Excellent global footprint

GKN Driveline – long

established leader

GKN Powder Metallurgy –

leader, but opportunity to do
more

GKN Aerospace – market

opportunity at early phase

GKN Land Systems –

opportunity to go faster

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Excellent global footprint

which we are expanding fast…

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Leading technology
GKN has the best technology for today’s markets

Dual clutch E-motor with soft

Intermediate Twinster AWD
magnetics
compressor case

And we are working on many projects for tomorrow…

Highly Complex
Shapes
using
Additive Layer
Additive layer manufatcuring

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Increasing technology resources
Gross engineering expenditure has run at
c.3% of sales for last few years
− Charged to P&L Engineering
% of sales
Increase
Spend since 2011
− Capitalised
− Funded by customers • £220m • 3% • +25%
− Funded by others

Objective - progressively increase to c.4%

of sales
% of spend
− And increase yield from what we spend
80% 15% 5%
• Supporting • Developing • Longer
todays new term R&D
Increase % of spend on activity for the activities products • 5+ years
longer term and • 2-5 years ahead
business ahead
wins
• 1-2 years

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
Operational excellence

Safety is our #1 priority

Standard Lean processes and culture across the Group

Culture of Continuous Improvement
Focus on Value streams and flow through the plant

Relentless focus on: quality, delivery, cost

Engaging with our people

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
GKN People

48,000 people working with a shared goal

To be the best

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GKN CAPITAL MARKETS DAY – 21 MAY 2013
We believe GKN can...

Out-grow its markets

Progress in the Margin range of 8-10%

Achieve targeted ROIC >20%

Maintain global leadership

Today we will tell you how…

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GKN CAPITAL MARKETS DAY – 21 MAY 2013