GKN Driveline. Business overview and strategy. Steve Markevich CEO GKN Driveline

Transcription

1 GKN Driveline Business overview and strategy Steve Markevich CEO GKN Driveline

2 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. 2

3 GKN Driveline An excellent global footprint GKN Driveline end billion Sales c.22,000 Employees 45 Plants 22 Countries Mexico United States U.K. France Spain Italy Slovenia Turkey Sweden Poland Germany India China Thailand South Korea Taiwan Japan Manufacturing plant Joint Venture Colombia Singapore Malaysia Corporate office / Engineering centre Brazil Australia 3

4 GKN Driveline performing as the market leader Delivering on a commitment Clear and compelling strategy Integrated Getrag AWD into Driveline Technology roadmap aligned to market needs Global customers with strategic relationships Selective wins with pricing discipline Prioritised investments Integrated global network people, process, systems, standards, etc. Creating distinct competitive advantage 4

5 Driveline sales m Sales growth above market 3,500 3,000 Acquisition of Getrag Driveline in Q4, ,500 2, Global light vehicle production index (2007 = 100) 1, , Organic growth of c.5% above market driven by: Leading positions and share gains in growth markets Global customer mix and premium brands Increasing share and content of AWD 5

6 Unrivalled driveline product and systems capability Market leader in CVJ sideshafts and AWD systems Future hybrid and electric drivetrains CVJ Systems All-Wheel Drive 61% of Sales 39% of Sales 6

7 Leading positions in our core product segments CVJ Sideshafts GKN NTN Nexteer Hyundai WIA Wanxiang/Neapco Propshafts GKN Dana IFA Rotorion American Axle JTEKT AWD PTU/FDU AWD Couplings Performance Diffs Electric Axle* GKN Magna Dymos Hyundai Wia American Axle JTEKT BorgWarner GKN Honda Magna (inc. WIA JV) GKN Eaton American Axle Dana JTEKT GKN Magna American Axle BorgWarner Linamar Source: GKN estimated rankings on 2013 basis; excludes in-house. *Emerging product segment 7

8 Balanced global footprint with excellent regional balance Sales by region of origin 2012 Sales growth by region Europe Customer mix Export demand AWD acquisition m Asia 29% Europe 37% Americas NA market strength CVJ share gain AWD acquisition Brazil slowed by vehicle imports m Americas 34% Asia Strong growth in China Japan weaker m

9 Operational excellence on a global scale Global best practices Simplifying global supply chains Mexico Relentless focus on waste reduction World class quality disciplines Defect parts per million (ppm) China

10 Expanding capability for high growth markets CVJ Key investments Mexico Sideshaft capacity expansion and new forge Poland Sideshaft capacity expansion. Russia Under review. China Sideshaft capacity expansion. Add propshafts AWD Investment supports global growth India Ramp-up new Pune plant and expand Oragadam. United States Propshaft capacity expansion. New 4WD FDU supply. Italy AWD and edrive capacity expansion Thailand Sideshaft capacity expansion. Add propshafts and 4WD FDUs Sweden AWD capacity expansion China Extension of SDS JV to AWD and edrive products 10

11 Full driveline capability in China SDS JV now includes AWD and edrive Systems GKN Torque Shanghai now part of SDS Participating in rapidly growing SUV and AWD market Expanding local engineering capability GKN Driveline sales (China with SDS at JV share) m manufacturing plants 3,800 people GKN/SDS locations OEM plant locations 11

12 Well positioned with global customers and platforms Sales by customer 2012 Others, 20% VW Group, 15% Volvo Car - Geely, 4% JLR-TATA, 5% Renault- Nissan, 11% GM, 10% Mitsubishi, 5% BMW, 4% Toyota, 6% FIAT Ford, 10% Chrysler, 10% Footprint aligned with customer needs Value of global reach and scale Common platforms with optimised designs Strategic relationships with early involvement Global account management and program launch capability Mega-platforms an opportunity to accelerate global growth 12

13 The leading component, solutions and systems supplier Components Selective growth (BRIC) and disciplined with market opportunities Global customer and manufacturing footprint Solutions Greater deployment of advanced technology products Fuel-efficient, light-weight, high performance Systems Strategic development partner Next generation AWD systems and electric drivetrains 13

14 Market leadership in CVJ systems Global shares 2012 Other Selective wins, controlled growth Reducing fixed cost structure In-house Wanxiang/ Neapco Wia Kofco Nexteer NTN GKN 41% Optimising LCC sourcing strategy Recovering material costs / inflation Driving operational excellence Favourable capacity / competitor dynamic Strong margin management actions GKN positioning in key growth regions N. America China India Brazil GKN Driveline 14

15 RWD vehicles FWD vehicles Technology leadership in CVJ systems Progressing with roll-out of new light-weight, fuel-efficient CVJ technology GKN Driveline SX8 Lighter and smaller package space 1% fuel saving / CO 2 reduction 50 for premium applications 3 MILLION/YEAR GROWING TO 8 MILLION IN 2018 GKN Driveline VL3 Lighter (up to 3.8kg per car set) Packaging space reduction (9%) Higher power transfer and efficiency TARGET TO LAUNCH IN

16 The making of the global leader in AWD Systems Major milestones 1985 Commercialisation of the viscous coupling begins becomes a global industry standard for AWD in 1990s 2011 GKN acquires Getrag Driveline Products 2011 Launch of 1 st electric axle 2013 Will launch 1 st AWD disconnect system GKN establishes Torque Shanghai 2004 GKN acquires Tochigi Fuji Sangyo 2013 GKN s SDS JV expanded to include AWD 16

17 Globally balanced sales and customer profile in AWD 423m 453m 384m Americas Europe Asia Based on 2012 sales 17

18 Vehicle driveline content increasing Front-Wheel-Drive (FWD) Rear-Wheel-Drive (RWD) with independent suspension Front sideshafts Directional Value Index Rear sideshafts Rear Propshaft * Rear Final Drive Unit * Limited slip differentials (LSD) sometimes fitted in Rear FDU 18

19 Vehicle driveline content increasing All-Wheel-Drive (AWD) Front sideshafts Four-Wheel-Drive (4WD) with independent suspension Front Axle * Front sideshafts Coupling Rear Final Drive Unit Power Transfer Unit Propshaft Rear sideshafts Directional Value Index Front Propshaft Transfer Case (incl. Coupling or TMD) Rear Propshaft * Rear Final Drive Unit Rear sideshafts * Option fitment of Limited Slip Differential (LSD) or Locker 19

20 Growing demand for AWD Consumers like AWD Safety, assured driving, performance and image OEMs like AWD Improves vehicle performance and image Sellable feature with content and margin Both want acceptable fuel economy and CO2 Front-wheel drive Traditional All-wheel drive 20

21 Technology roadmap addresses legislative challenges The challenge of tougher legislation for emissions and fuel efficiency EU Legislation 130gCO2/km 95gCO2/km 75gCO2/km GKN Driveline s technology response Today s AWD Optimised AWD Disconnect AWD Hybrid/electric AWD Fuel / CO2 Improvement < 1.5% 4% to 5% 20% - 40% GKN can influence market technology uptake systems capability important 21

22 Positioned to continue outperforming the market Global LV market growth Mega-platforms and AWD growth and content Mega-platforms AWD systems content GKN Driveline target growth c.2% ahead of market Unrivalled global positioning Geographic footprint Broad customer base Strength in growth markets Technology leadership / increasing AWD content Response to tighter legislation Customer co-developments Fuel-efficient products Globally competitive Increasingly lean and agile cost structure 22

23 GKN Driveline All-Wheel Drive Systems Lars Christiansson MD GKN Driveline Köping & Bruneck

24 Joining GKN Driveline s AWD business Highlights personal observations Köping and Newton plants integrated from October 2011 Worked together early to adopt best practices Cultural fit with focus on safety and excellence Expanded product and development capability Well-received by customers business continuing to grow High employee satisfaction 24

25 Technology leadership in AWD 25

26 Technology leadership in AWD Three key technologies for GKN Driveline AWD Disconnect systems Electric axle & hybrid AWD Full AWD systems integration Link to video 26

27 AWD Disconnect The best of both worlds Traditional AWD is less fuel efficient than 2WD Additional weight Drag, friction and churn losses AWD Disconnect Eliminates many of the losses Improved fuel efficiency Seamless connect and disconnect 3 customer launches in 2013/14 27

28 Mainstream AWD disconnect application Targets broad market for SUVs and Crossovers Challenging technology development with major fuel efficiency benefits 28

29 Premium AWD disconnect application With a twin-clutch, TWINSTER rear-drive module for enhanced vehicle dynamic Unique GKN capability 29

30 AWD hybrid with electric axle Full AWD performance GKN patented disconnect system (e-axle in-use only when needed) Hybrid functionality Electric-only driving (short range) 40% fuel efficiency improvement 7 customer programmes launched or under development Source: PSA 30

31 New product launch 2-speed electric axle Launching 2014 Performance & efficiency 31

32 Unique full AWD systems capability Design, manufacture and sourcing of components Complete development, test and validation capability Vehicle dynamics tuning, software & electronic controls Customer co-developments 32

33 Summary Technology leadership is aligned with market trends for fuel efficiency and low CO2 AWD disconnect systems launching this year Growing customer interest in hybrid AWD with electric axle Unique AWD system capability GKN has the product and the technology Important and successful acquisition of Getrag Driveline gives GKN a market leading AWD footprint 33

34 GKN Driveline Conclusion Andy Reynolds Smith CEO, GKN Automotive

35 GKN Driveline summary Growth c.2% above market AWD volumes with higher content Excellent position in growth markets Global footprint serving megaplatforms Margin range 8% to 10% Selective business wins Disciplined pricing behaviour Operational excellence Lean cost structure Business performance ROIC >20% Strategic outsourcing policy Prioritised investment Disciplined capital allocation Strong cashflow 35