GKN: Driving Growth: Delivering Results. Nigel Stein Finance Director & CEO Automotive

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1 GKN: Driving Growth: Delivering Results Nigel Stein Finance Director & CEO Automotive

2 GKN s Automotive and Powder Metallurgy Businesses TotalGroup sales 3.8bn 2006 Sales by Business Other Automotive OffHighway 334m 212m Aerospace 695m Powder Met 582m Driveline 2,019m Sales of 2.8bn Trading profits of 182m 30,000 employees More than 60 operations in 30+ countries 608m 2 DRIVING GROWTH DELIVERING RESULTS

3 GKN in Germany At the heart of GKN s automotive businesses Country with largest number of plants and automotive employees Technology leaders in Driveshafts Sinter Metals Many Torque products 3 DRIVING GROWTH DELIVERING RESULTS

4 GKN s Automotive Businesses - Driveline 2006 Sales 2.0bn 1.6bn 220m 160m 20m Driveshafts Torque IDS (Aftermarket) DUJ (Double Universal Joints) Driveshafts JVs Transferred to OffHighway Arthur Connelly Graeme Walford 4 DRIVING GROWTH DELIVERING RESULTS

5 GKN s Automotive Businesses - Driveline 2006 Sales 2.0bn 1.6bn 220m 160m 20m Driveshafts Torque IDS (Aftermarket) DUJ (Double Universal Joints) Driveshafts JVs 1.5bn 500m 2004 Classification Sideshafts Torque, IDS, DUJ and Propshafts 5 DRIVING GROWTH DELIVERING RESULTS

6 Driveline - IDS Sales of c 160m Supplier of aftermarket products to passenger car and truck markets, largely in Europe Including aftermarket driveshafts and propshafts Also sells specialty products eg ATV, marine, train and industrial driveshaft applications Re-manufacturing capability Good growth and profitability through focused strategy 6 DRIVING GROWTH DELIVERING RESULTS

7 GKN s Powder Metallurgy 2006 Sales 582m 506m 76m ( external)* Sinter Metals Hoeganaes Around 50% of Hoeganaes sales are internal to Sinter and therefore excluded on consolidation Andy Reynolds Smith 7 DRIVING GROWTH DELIVERING RESULTS

8 GKN s Automotive Businesses Other Automotive 2006 Sales 212m??m 87m??m 32m Subs Autostructures Cylinder Liners UK UK & US Closing (UK Closing) 34m 1m 58m JVs Chassis Systems JV (50%) Cylinder Liners China* Emitec JV (50%) * 60% GKN owned so accounted for as subsidiary 8 DRIVING GROWTH DELIVERING RESULTS

9 Other automotive businesses Autostructures (Inc. Chassis Systems JV) Cylinder liners (Inc. China - 60% owned JV) Regional niche business Supplies chassis and structural components Largely UK customer base Ford, Land Rover, Toyota Part is JV with Dana Steady performer but with limited growth opportunities UK business closing in 2007 Leaves small China based business ( now c 10m sales) and US machining Supplies truck market in US and China Growth opportunities but from a small base 9 DRIVING GROWTH DELIVERING RESULTS

10 Emitec leader in metallic substrates Joint venture between GKN and Siemens Ceramic Metallic Performance Back pressure Thermal conductivity Thermal resistance Packaging Durability?? Weight Overall cost / performance Cost effectiveness depends on engine, combustion and after treatment needs 10 DRIVING GROWTH DELIVERING RESULTS

11 The substrate is part of the emissions management system OEM Engine Raw Emissions OEM selects supplier at each stage Engine-Mgmt Canner Coater Substrate Electronics, Injection Exhaust System Chemistry Thermodynamics Raw Emissions Noise, Power Catalyst Efficiency Efficiency, Power Main Players: Main Players: Main Players: Arvin Meritor Johnson Matthey Ceramic numerous Englehart - Corning (USA) Degussa - NGK (Jpn) Metallic - Emitec - NSC 11 DRIVING GROWTH DELIVERING RESULTS

12 A growing market In Mio EURO Approximately 1.25bn Euro today and growing, split 75/25 ceramic / metallic DRIVING GROWTH DELIVERING RESULTS

13 Emitec today a global business Sales & Engineering Manufacturing Gothenburg Moscow Detroit Lohmar Eisenach Seoul Tokyo Fountain Inn Vietnam Bejing Osaka Taipeh Puna In all major markets where aftertreatment demand is growing 13 DRIVING GROWTH DELIVERING RESULTS

14 Driven by legislation eg Heavy Duty Trucks 14 DRIVING GROWTH DELIVERING RESULTS

15 Sector development Total Market 2004 Pass.Car, LKW <3,5t; Truck > 3,5t ,3% p.a Total Market 2007 Pass.Car, LKW<3,5t; Truck > 3,5t ,2% p.a Total Market 2010 Pass. Car, LKW<3,5t /3 Wheeler Pass.Car, Truck<3,5t Truck > 3,5t Utility Truck > 3,5t Non Automotive 6 15 DRIVING GROWTH DELIVERING RESULTS

16 250 Emitec s turnaround delivered and new growth phase begins Mn Euro Growth DRIVING GROWTH DELIVERING RESULTS

17 Significant growth in Truck and heavy duty diesel 100% Sales mix Truck and heavy duty diesel 90% 80% 70% 60% 50% PassCar Gasoline PassCar Diesel Truck Retrofit Diesel 2-Wheeler 40% 30% 20% 10 % 0% DRIVING GROWTH DELIVERING RESULTS

18 Global Automotive Market As the world s population continues to expand And income levels rise in the developing world Demand for cars continues to grow 18 DRIVING GROWTH DELIVERING RESULTS

19 Global Light Vehicle Growth 2002 to Production Volume (m) Compound Annual Growth Rate m 40 Vehicles 3.3% DRIVING GROWTH DELIVERING RESULTS Total Vehicles Source: Based on Global Insight January 2007 Vehicle Forecast

20 Cars are becoming ever more sophisticated Even if smaller and lighter Or based on Hybrid and other new technology Nissan March Chery Tiggo 6 Lexus RX400H 20 DRIVING GROWTH DELIVERING RESULTS

21 GKN now active in wider driveline market Total market driveline components 16.8bn CVJ market 3.5bn - GKN share around 40% GKN s presence Live axles 35% CVJ Driveshafts 21% Market leader Growing presence Propshafts 7% Not a target Transfer cases 12% PTUs 5% Final Drive 15% TMDs 5% Source: DRI, GKN Driveline estimates 21 DRIVING GROWTH DELIVERING RESULTS

22 GKN is a technology leader- both in Driveshafts the new idea for ball plunge joints combined sets of angled and straight tracks 22 DRIVING GROWTH DELIVERING RESULTS

23 Engineering Innovation & New Products in Torque GKN innovates and rapidly develops bespoke technology products to satisfy customer requirements in driveline and powertrain recent examples: Electronic Differential Lock Other examples of areas of recent new product development: Couplings & TMDs Electro-hydraulic TMD actuation E-Motor driven axles Gear development Electronic Torque Vectoring Planetary Gear Oil Pump (with GKN Sinter Metals) Face Gear Differential 23 DRIVING GROWTH DELIVERING RESULTS

24 And GKN is well placed to benefit from geographic trends Growth Static Static Growth Static Growth Growth Growth 24 DRIVING GROWTH DELIVERING RESULTS

25 Sales to US manufacturers GKN Group Sales 2006 Automotive - Row US auto Sales on GM, Ford and Chrysler NA vehicles Non auto Non Auto Automotive US Auto Sales 25 DRIVING GROWTH DELIVERING RESULTS

26 In summary GKN s automotive businesses are well positioned for growth Leading technology Excellent global footprint Strong customer relationships An experienced team - committed to winning! 26 DRIVING GROWTH DELIVERING RESULTS

27 GKN: Driving Growth: Delivering Results