GKN Powder Metallurgy London
Peter Oberparleiter I CEO Powder Metallurgy I 6 May 2015
GKN POWDER METALLURGY, 6 MAY 2015 2
Agenda
Introducing GKN Powder Metallurgy
− We have travelled a long way in ten years
Sustaining our momentum
− Design for PM and geographic expansion
Future Growth
− Application of innovative technology
Lead in chosen markets
Leverage global footprint
Technology driving margin
Operational excellence
Sustain above market growth
Delivering the GKN strategy
GKN POWDER METALLURGY, 6 MAY 2015 3
World no.2 with
23% global share
World no. 1
18% global share
Introducing GKN Powder Metallurgy
GKN Hoeganaes - Powder production -
GKN Sinter Metals - Component manufacture -
11 million parts
produced daily
Many applications
280,000 tons of
powder per year
Industry leader: Vertically integrated powder to parts capability
Helical PM Pulley
for Electric Steering
GKN POWDER METALLURGY, 6 MAY 2015 4
Powder metallurgy products in automotive
21% of sales
transmission
components
27% of sales
engine
components
Engine
Variable Valve Timing
Components
Transmission
Planetary Carriers
Body & Chassis
Electric Power Steering
Components
Drivetrain
Differential Gears
(Forged PM) Engine
Start-Stop
Body & Chassis
Shock Absorber
Components
GKN POWDER METALLURGY, 6 MAY 2015 5
Market split and customer base
£916m total sales in 2014
Americas and Europe relatively
balanced
Opportunities to expand in
Asia-Pacific
Sinter Americas
41%
Sinter Europe
35%
Sinter Asia 8%
Hoeganaes 16%
GKN Powder Metallurgy Sales by sector
Customers - Diverse customer base -
3000 customers
>80% automotive
<20% industrial
Top 20 customers cover
ca. 60% of sales
£165m annualized new
and replacement
business in 2014
* Excludes intercompany sales
*
GKN POWDER METALLURGY, 6 MAY 2015 6
USA & CANADA
CHINA
EUROPE
Manufacturing Plant Hoeganaes
Manufacturing Plant Sinter M.
Corporate/Sales/Engineering Centre
4 2 12
Expanding global presence
2 5 8
BRAZIL
1
SOUTH AFRICA
1
1 1 2
JAPAN
1
7000 employees
Manufacturing in 9 countries
INDIA
2 1
GKN POWDER METALLURGY, 6 MAY 2015 7
Strong positions in powder and parts
GKN Sinter Metals Sinter market
GKN
18% Hoeganaes AB
QMP
Kobelco
JFE Steel Corporation
Strong technology
providers preferred
Growing opportunities
for global players
PM growth outperforms
automotive market
Drivers Market dynamics
GKN is market leader
Top 8 sinter companies
60% of the market
GKN is global no. 2
Top 5 powder manufactures
>80% of the market
GKN Hoeganaes Powder production
GKN
23%
Sumitomo
Hitachi
Fine Sinter
Porite
PMG Miba Metaldyne
GKN POWDER METALLURGY, 6 MAY 2015 8
2005 – 2014: Turnaround followed by growth
-10%
0%
10%
20%
30%
£0.0
£0.2
£0.4
£0.6
£0.8
£1.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
bill
ions
Sales Margin ROIC
-20%
0%
20%
40%
60%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
GKN Growth Auto Market Growth
Restructured and delivering
operational efficiency
Design for PM enhancing
margin
Geographic expansion
Strong growth ahead of the
market
GKN POWDER METALLURGY, 6 MAY 2015 9
2005 – 2014: Turnaround followed by growth
Restructured and delivering
operational efficiency
Design for PM enhancing
margin
Geographic expansion
Strong growth ahead of the
market
ROIC
3% to 22%
GROWTH 4.5% CAGR
MARGIN 2% to 11%
Business
performance
Cash generation £302m in 5 years
GKN POWDER METALLURGY, 6 MAY 2015 10
Expanding geographic footprint
Technology driving margin
− Automotive trends driving Design for PM
− Benefits of powder-to-part integration
Process leadership and operational excellence
Sustaining momentum
Lead in chosen markets
Leverage global footprint
Technology driving margin
Operational excellence
Sustain above market growth
GKN POWDER METALLURGY, 6 MAY 2015 11
INDIA
Today no. 1
Expanding geographic footprint
MEXICO
Under
consideration
CHINA
Today no. 7 2018 no. 2
Original plant moved
and expanded
Second plant onstream
Capacity in place to
increase sales 3x
current level by 2018
USA
Upgrading process
capability
Digitising shopfloor
Enhancing Design
for PM
Upgrading capability Building capacity in key Asian market
GKN POWDER METALLURGY, 6 MAY 2015 12
Energy efficiency Renewable energy Legislation
VVT
(CAM PHASING)
START/STOP
EPS (ELECTRIC
POWER STEERING)
ALUMINIUM
CARRIER 7+
TRANSMISSION
GEARS
Automotive trends driving Design for PM
VARIABLE VANE
PUMPS
Fuel efficient Electrification Light weight
GKN POWDER METALLURGY, 6 MAY 2015 13
Design for PM
Design and application of
products using the unique
characteristics of powder
metal
Parts which cannot be
made economically using
alternative technologies
Key to driving margin
Product CAGR 2015-2019
VVT
(Cam phasing)
4.5%
EPS
(Electric power
steering)
4.8%
Start/Stop 17.6%
Transmissions
7+ speeds
16.5%
GKN POWDER METALLURGY, 6 MAY 2015 14
Benefits of powder-to-parts integration
AncorTech Magnetics
Selecting the right powder ensures optimum product
Technically Enhanced Powder (TEP) delivers advanced products
• Sales in TEP increased by 15% in 2014
AncorTech High Density
ANCORBOND
AncorTech Lean Alloys
Powder Forge Powders
Steel & Low Alloy Powder
Incre
asin
g c
om
ple
xity
GKN POWDER METALLURGY, 6 MAY 2015 15
Operational excellence Programme management
Leading process
technology linked to
advanced data
management
Driven by GKN Lean
processes
Global programme
management
Continuous
improvement
Process technology Advanced data management
Process leadership and operational excellence
Advanced forming and
bionic tools
100% of EU
presses and
forges data-
linked 0
10
20
30
40
50
60
2007 2008 2009 2010 2011 2012 2013 2014
ppm
GKN POWDER METALLURGY, 6 MAY 2015 16
Advanced powders
Additive manufacturing
Hydrogen storage
Innovation
GKN POWDER METALLURGY, 6 MAY 2015 17
SMC/
eMOTORS
> £1bn
Horizon scan
GEARS
> £2bn
ADDITIVE
MANUFACTURING
> £5bn
HYDROGEN STORAGE
> £5bn
PM market today
EPS
VVT
Start/
Stop
GKN POWDER METALLURGY, 6 MAY 2015 18
Advanced powders
Technical qualities
give access to new
markets
• Automotive
• Medical
• Aerospace
• General energy
Drives margin
enhancement
Enhances product quality
and manufacturing
efficiency
Creates new
opportunities
GKN POWDER METALLURGY, 6 MAY 2015 19
Additive manufacturing
CAD FILE PART
TOPOLOGY
OPTIMIZATION
ATOMIZED AND GAS
ATOMIZED POWDERS
Design freedom
increases value
Unique expertise in
powder, product design
and manufacturing
Aerospace likely key
market
GKN POWDER METALLURGY, 6 MAY 2015 20
Hydrogen storage
HYDROGEN METAL HYDRIDE
STORAGE TANK METAL POWDER
COMPACT
HIGHLY REACTIVE & EASY
TO HANDLE MATERIAL
Safe and compact
storage for industrial use
Partnered with McPhy
Solid state
Effective challenger gas
and liquid storage
Gas tank 27 litre
700 bar
0oC
Liquid tank 14 litre
1 bar
-252oC
H2 metal hydride 12 litre
30 bar
20oC
GKN POWDER METALLURGY, 6 MAY 2015 21
Lead in chosen markets
Leverage global footprint
Technology driving margin
Operational excellence
Sustain above market growth
• Industry leading powder and sinter company
• Expanding global footprint in Asia
• Design for PM
• Focus on growth product groups
• Continuous improvement
• Growing faster than automotive market
GKN Powder Metallurgy delivering the GKN strategy
GKN POWDER METALLURGY, 6 MAY 2015 22
A great business to be in
Innovative technology
Strong operations
No shortage of opportunities
GKN Powder Metallurgy
GKN Powder Metallurgy London
Peter Oberparleiter I CEO Powder Metallurgy I 6 May 2015
GKN POWDER METALLURGY, 6 MAY 2015 24
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.
Disclaimer